Ivanhoe inc. v. UFCW, Local 500

Ivanhoe inc. v. UFCW, Local 500
Collection
Supreme Court Judgments
Date
2001-07-13
Neutral citation
2001 SCC 47
Report
[2001] 2 SCR 565
Case number
27121
Judges
McLachlin, Beverley; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; Iacobucci, Frank; Major, John C.; Bastarache, Michel; Arbour, Louise
On appeal from
Quebec
Subjects
Administrative law
Labour law
Notes
SCC Case Information: 27121
Decision Content
Ivanhoe inc. v. UFCW, Local 500, [2001] 2 S.C.R. 565, 2001 SCC 47
Ivanhoe inc., Service d’entretien Empro inc.
and La Compagnie d’entretien d’édifice Arcade Ltée Appellants
v.
United Food and Commercial Workers, Local 500,
Labour Court, Réal Bibeault (in his capacity as labour
commissioner), Labour Commissioner General and
Judge Bernard Prud’homme (in his capacity as judge
of the Labour Court) Respondents
and
Distinction Service d’entretien inc. (in continuance
of suit for Prestige Maintenance inc.), 2621-3249
Québec inc. (in continuance of suit for Service
d’entretien Laurier) and Moderne Service
d’entretien d’immeubles inc. Mis en cause
and between
Distinction Service d’entretien inc.
(in continuance of suit for Prestige Maintenance inc.) Appellant
v.
United Food and Commercial Workers, Local 500,
Réal Bibeault (in his capacity as labour commissioner),
Labour Commissioner General, Judge Bernard Prud’homme
(in his capacity as judge of the Labour Court) and Labour Court Respondents
and
Ivanhoe inc., Service d’entretien Empro inc.,
Compagnie d’entretien d’édifice Arcade ltée,
2621-3249 Québec inc. (in continuance of suit for
Service d’entretien Laurier) and Moderne Service
d’entretien d’immeubles inc. Mis en cause
and between
Ivanhoe inc. Appellant
v.
United Food and Commercial Workers, Local 500,
Labour Court, Jean Boily (in his capacity as labour
commissioner), Labour Commissioner General and
Judge Bernard Prud’homme (in his capacity as judge
of the Labour Court) Respondents
and between
United Food and Commercial Workers, Local 500 Appellant
v.
Ivanhoe inc., Service d’entretien Empro inc.,
Compagnie d’entretien d’édifice Arcade ltée,
Distinction Service d’entretien inc.
(in continuance of suit for Prestige Maintenance inc.)
and 2621-3249 Québec Inc.
(in continuance of suit for Service d’entretien Laurier) Respondents
and
Réal Bibeault (in his capacity as labour commissioner),
Judge Bernard Prud’homme (in his capacity as judge of
the Labour Court) and Moderne Service d’entretien
d’immeubles inc. Mis en cause
Indexed as: Ivanhoe inc. v. UFCW, Local 500
Neutral citation: 2001 SCC 47.
File No.: 27121.
2000: October 30; 2001: July 13.
Present: McLachlin C.J. and L’Heureux‑Dubé, Gonthier, Iacobucci, Major, Bastarache and Arbour JJ.
on appeal from the quebec court of appeal
Labour law -- Transfer of operation of part of undertaking -- Subcontracting of janitorial services -- Definition of undertaking -- Legal relationship between successive employers -- Degree of autonomy subcontractors given -- Theory of retrocession -- Contract for janitorial services awarded to new subcontractors -- Decision of labour commissioner finding transfer of operation of part of undertaking and transferring certification but not collective agreement to new subcontractors -- Whether commissioner adopted functional definition of undertaking and rejected requirement for legal relationship between former and new employer – Whether commissioner may transfer certification and refuse to transfer collective agreement -- Labour Code, R.S.Q., c. C-27, s. 45.
Labour law -- Certification -- Transfer of operation of part of undertaking -- Subcontracting of janitorial services -- Petition for cancellation of certification -- Interest required -- Whether former employer has interest required for presenting petition for cancellation of certification despite having no employees -- If so, whether certification granted in respect of former employer may be cancelled during term of transfer of operation -- Labour Code, R.S.Q., c. C-27, s. 41.
Administrative law -- Judicial review -- Standard of review -- Labour Court -- Standard of review applicable to decisions of Labour Court in relation to whether undertaking alienated or operated by another -- Labour Code, R.S.Q., c. C-27, ss. 45, 46.
Administrative law -- Judicial review -- Standard of review -- Labour Court -- Standard of review applicable to decisions of Labour Court in relation to cancellation of union’s certification -- Labour Code, R.S.Q., c. C-27, ss. 41, 139.
Ivanhoe is a property management company. It handled janitorial services at its buildings itself until 1989, when it contracted those services to Moderne. All of Ivanhoe’s janitorial employees were then transferred to Moderne. The labour commissioner granted a motion under s. 45 of the Labour Code for recognition of the transfer of the certification and collective agreement to Moderne. In 1991, when its contract with Moderne was about to expire, Ivanhoe invited bids for a new janitorial contract. Moderne did not bid, but it signed a new collective agreement with its janitorial employees. Ivanhoe decided to engage four contractors, and when Moderne’s contract expired it dismissed the entire janitorial staff responsible for Ivanhoe’s buildings. There is no legal relationship between Moderne and the four contractors, which employed their own staff and used their own equipment. The work performed by the contractors’ employees was the same as the work that had been done for Moderne and previously for Ivanhoe.
The union applied again under s. 45 to have the certification and the collective agreement signed with Moderne transferred to the contractors. Ivanhoe applied under s. 41 of the Code to have the union’s certification cancelled with respect to itself. The labour commissioner allowed the motion under s. 45 in part and found that the certification that originally covered Ivanhoe, but not the collective agreement signed by Moderne and the union, had to be transferred to the new contractors. A second commissioner dismissed the petition for cancellation of the certification. The Labour Court affirmed the commissioners’ decisions. It found that operation of part of an undertaking had been transferred -- the right to operate the janitorial services -- and that s. 45 had to be applied since the tests in Bibeault had been met. The requirement that there be a legal relationship between successive employers had also been met since when the Moderne contract expired, Ivanhoe resumed its legal authority over the part of the undertaking which had been operated by another, and transferred it afresh to the contractors. The Labour Court dismissed the union’s appeal regarding the transfer of the collective agreement with Moderne because that agreement had lapsed when the contract expired and could not be transferred to the new contractors. It also refused to transfer the last collective agreement signed by Ivanhoe with the union that had expired in 1989. With respect to the petition for cancellation of the certification, the Labour Court concluded that a company which contracts out work cannot rid itself permanently of the certification during a period when an undertaking is temporarily operated by another. The Superior Court dismissed the applications for judicial review brought by the union, Ivanhoe and three of the contractors. The Court of Appeal affirmed that decision.
Held (Bastarache J. dissenting in part): The appeals should be dismissed.
Per McLachlin C.J. and L’Heureux-Dubé, Gonthier, Iacobucci, Major and Arbour JJ.: Under the pragmatic and functional approach adopted by this Court, the standard of review to be applied to decisions relating to s. 45 of the Labour Code must be patent unreasonableness. Although Bibeault held, in 1988, that the applicable standard was correctness, there have been major changes since that time. First, the labour commissioners have developed their own expertise in this regard; most importantly, s. 46 of the Code itself has been amended. By amending that section, the legislature made an unequivocal statement that its intent was to give the commissioner exclusive jurisdiction to determine whether an undertaking had been alienated or was being operated by another. As well, the standard of review applicable to decisions relating to the application of s. 41 of the Code is patent unreasonableness. The relevant factors in determining the standard of review, and particularly the full privative clauses set out in the Labour Code, confirm this.
In Bibeault, this Court concluded that there must be a consensual legal transfer of the undertaking from one employer to another and adopted the organic definition of an undertaking. That decision was based on a very particular fact situation and was intended to put an end to the debate that had divided the Labour Court on these two questions. The conclusions in Bibeault regarding the definition of an undertaking and the legal relationship that must exist between the former employer and the new employer must be understood in that context. After the decision in Bibeault, the Labour Court has developed interpretive policies regarding the two issues that are accepted and followed by virtually all of its members. The existence of a settled consensus in a specialized administrative tribunal acting within its jurisdiction should be a factor in favour of a very high degree of deference on the part of the superior courts. In a situation like this, judicial deference makes it possible both to respect the decision-making autonomy of administrative tribunals and to ensure consistency and predictability of the law. This ideal balance should only be disturbed by the superior courts where there are clearly absurd or irrational results.
The labour commissioner and the Labour Court had the authority, by virtue of the Labour Code and the decisions of this Court, to assess the respective importance of the various components of the undertaking and to conclude in this case that the transfer of a right to operate, combined with the transfer of functions, was sufficient to result in s. 45 being applied, under the organic definition of an undertaking. The only requirement that those decisions impose in respect of identifying an undertaking or part of an undertaking for the purpose of applying s. 45 is that an organic rather than a functional definition of an undertaking be adopted, although in some cases similarity of functions may still be decisive, where the undertaking has no other special characteristics. The tests that are to be applied in defining the concept of an undertaking, in the context of the transfer of certification, therefore vary with the specific circumstances of each case and the administrative tribunals charged with applying s. 45 enjoy wide discretion in determining and weighing the factors they apply in defining an undertaking and are at liberty to develop specific tests to respond to the situation in a given industry. With regard to subcontracting of janitorial services, after Bibeault, the Labour Court developed tests to be used in order to make consistent determinations as to whether the operation of part of an undertaking had been transferred. Where part of the operation is transferred, it is simply not necessary that the portion of the activities transferred be essential to the purpose of the undertaking as a whole. The only requirement laid down by Bibeault is actually that the elements that characterize the essence of the part of the undertaking be transferred. On the question of the degree of autonomy that must be granted to the transferee in order for it to be concluded that an undertaking has been transferred, where the main characteristic of the part of the undertaking operated by another consists, as it does in this case, of the specific right to operate on the premises of the main undertaking, the part transferred cannot enjoy wholly autonomous existence. In such a situation, it is sufficient that the transferee be legally independent and be responsible for the work performed by its employees, even if the transferor continues to exercise administrative or legal control under a contract. Otherwise, there could be no transfer of the operation of part of an undertaking’s support services. In this case, that was the approach adopted by the Labour Court. That approach is a reasonable interpretation of s. 45 which does not conflict with Bibeault.
Nor does transferring the certification to the four new contractors when the contract with Moderne expired conflict with the requirement that there be a legal relationship between successive employers, which was laid down in Bibeault -- a case in which the certification was not, as it was in this case, originally granted in respect of the party which had contracted out the work. To give effect to the purpose of s. 45 in cases involving the temporary transfer of the operation of an undertaking, the Labour Court developed the theory of retrocession, according to which a certification originally granted in respect of the transferor remains with it, but is temporarily inactive during the period of operation by another and is then transferred to the successive subcontractors. An essentially temporary transfer of the operation of an undertaking therefore does not operate to permanently terminate the certification. Under that theory, when its contract with Moderne expired, Ivanhoe took back responsibility for its undertaking and was once again bound by the certification, which was then transferred to the new contractors. The fact that there was no formal juridical act of alienation when the transfer of operation to Moderne expired is not an insurmountable barrier to transfer of the certification, since the transfer of operation of an undertaking which results in s. 45 applying can take different legal forms. In the instant case, the undertaking was transferred by way of a retrocession agreed upon by the parties in advance at the time the term of the transfer was negotiated. The interpretation by the Labour Court of the requirement that there be a legal relationship between successive employers and of its application to situations in which an original certification has been granted in respect of the transferor is a reasonable exercise of its jurisdiction. The fiction of the potential employer that the Labour Court has developed allows s. 45 to be applied without it being necessary for the party that contracted out the work to actually take back the operation of the undertaking that had been transferred.
Although, generally speaking, transfer of both the collective agreement and the certification will follow from a decision finding that an undertaking has been alienated or is being operated by another, the decision of the labour commissioner and of the Labour Court to transfer only the certification to the new contractors is not patently unreasonable. By enacting s. 46 of the Labour Code, the legislature gave the responsibility for settling difficulties arising out of the application of s. 45 to labour commissioners and the Labour Court. Those authorities must settle these issues, which are central to their specialized jurisdiction, on a daily basis. The solution adopted in this case allows the new employers, which are bound by the certification, to enter into negotiations with the association of employees without being bound by an agreement signed by one of their competitors, or by an agreement that has become obsolete. The fact that there are other solutions that could have been adopted, some of which would have enabled the employees to keep their jobs, is insufficient to justify judicial review. The recognition by the legislature and the courts that there are many potential solutions to a dispute is the very essence of the patent unreasonableness standard of review, which would be meaningless if it was found that there is only one acceptable solution. Since the principles that are applied do not result in absurdity, judicial review will be appropriate only where the results are clearly irrational.
Ivanhoe was entitled to submit its petition for cancellation of the certification under s. 41 of the Labour Code despite the fact that it had no employees. Recognizing that Ivanhoe has the necessary interest to present the petition does not mean that Ivanhoe is being regarded as a “present employer”. The mere fact that an employer’s name appears on the certificate of certification is sufficient in itself to give the employer the interest that is needed to present a petition for cancellation. The Labour Court, acting within its jurisdiction, has laid down rational tests for determining the employer in respect of which, in the event of a temporary transfer of the operation of an undertaking resulting in the application of s. 45, the representativeness of the union should be verified for the purpose of determining whether the certification should be cancelled. The employer that contracted out the work will be free to seek cancellation if it takes back control of its undertaking; for the term of the transfer, however, the transferee to which the certification actually applies must present the petition if it believes that the association no longer represents the majority of the employees in the bargaining unit. Since it is reasonable to conclude that an employer cannot rid itself of a certification by arranging for a temporary transfer of the operation of an undertaking, it may be equally appropriate to deny it cancellation of the certification during the period covered by the transfer, on the ground that the fact that it has no employees results precisely from the temporary transfer of the undertaking. Such an approach permits consistent application of ss. 41 and 45 of the Code to temporary transfer situations. That approach, which was adopted by the labour commissioner and the Labour Court in this case, is not patently unreasonable. Lastly, on the question of the time period prescribed for presenting the petition for cancellation, the labour commissioner implicitly accepted that the calculation of the time period must be based on the last collective agreement signed by Ivanhoe rather than on the agreements that its transferees might have made. In so doing, the commissioner and the Labour Court made a decision that was entirely within their jurisdiction to make. That approach to calculating the time period is consistent with the principles laid down by the Labour Court, which provide that collective agreements negotiated by subcontractors cannot be binding on the party that contracted out the work. However, although Ivanhoe presented its petition at the proper time, the commissioner had the authority to deny it on the merits because the certification was in effect in respect of another employer, Ivanhoe’s transferee, on a temporary basis.
Per Bastarache J. (dissenting in part): A legal relation between successive employers is required in order to trigger successorship provisions. On the law as it has been modified by Ajax, there need not be a strict mutual, intentional, or consensual transfer. The legal relation between successive employers can be based on a mere historical connection. Here, the legal relation required in order to establish a sufficient organizational nexus is not satisfied and the successorship provision should not be triggered. There is no history of any corporate connection or evidence of any kind of relationship between the party who would be, for the purpose of s. 45 of the Labour Code, the “new employer” and the party who would be the “former employer”. The present case is rather a situation in which one contractor loses his contract to another with whom he has no connection.
Bibeault’s definition of “undertaking” for the purpose of s. 45 of the Labour Code, unchanged by Ajax, cannot consist merely of work, tasks or functions performed by the employees under the former employer. Something more must be sold or operated by another in order for the successorship provision to be triggered. To allow mere functions to constitute an undertaking in situations where there is nothing else to be passed amounts to a return to a purely functional definition of undertaking which was prohibited in Bibeault. The factual distinction between the present case and Bibeault is not material to Bibeault’s prohibition of the functional definition of an undertaking. An agreement to ignore Bibeault or to undermine the organic definition in Bibeault should not acquire the force of law simply because the Labour Court has agreed to do it and has more or less consistently taken that approach. It is patently unreasonable to use an approach to the definition of an undertaking that is inconsistent with Bibeault.
The concept of “potential employer” or retrocession -- where upon the termination of Moderne’s contract, the undertaking would have returned to Ivanhoe in order to be re-transferred to the four new contractors -- is a patently unreasonable interpretation of s. 45 and is in no way supported by the text of that provision. The provision itself gives no indication that it is meant to apply to more than the last two actual employers in a line of successive employers. This is particularly true in this case where no employees are being transferred and Ivanhoe, the potential employer, to which the undertaking would be returned, has no employees to receive the benefit of the transferred certification. Moreover, retrocession is an entirely fictional operation. While the law admits of instances of “legal fiction”, it is not acceptable in the context of labour legislation. Ivanhoe ceased being the employer of the janitorial staff when it transferred all of those employees to Moderne. When the contract between Ivanhoe and Moderne came to an end, these employees were dismissed by the latter and Ivanhoe did not become their employer again. Ivanhoe did not re-enter the business of performing these janitorial services and the new companies performing the work did not include any Moderne or former-Ivanhoe employees. It is patently unreasonable to keep the certification alive through an artificial interpretation of s. 45. Although Ivanhoe retained the power to consign the undertaking at the end of the contract and could, without the concept of retrocession, have used short-term or temporary contracts to evade collective agreements, this is how s. 45 is written. There is no ambiguity and its scope is well defined.
The forced or artificial nature of this interpretation of s. 45 can be seen with respect to two other issues. First, if the retrocession argument was sound, the collective agreement would have been included with the certification. In order for the operation of the successorship provision to be meaningful, one must follow the other. Yet, every decision-maker in this case has held that the collective agreement entered into by Moderne and the union could not be transferred back to Ivanhoe in order to be re-transferred to the four new employers along with the certification. To allow the certification but not the collective agreement to pass indicates that this is not a situation in which the successorship provision should apply at all. Second, commitment to the retrocession interpretation of s. 45 creates difficulty in the application of s. 41 of the Labour Code, which allows for the cancellation of the certification of a union that no longer comprises the absolute majority of the employees in the bargaining unit for which it was certified. The need to avoid defeating the initial purpose of the retrocession interpretation of s. 45 leads to an illogical position with respect to s. 41 in which the giver of work is treated both as the present employer -- i.e., potential employer -- for the purposes of making the request to cancel the certification and as the former employer in the decision to determine union support in relation to the temporary employer.
Cases Cited
By Arbour J.
Followed: Lester (W.W.) (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 740, [1990] 3 S.C.R. 644; Ajax (Town) v. CAW, Local 222, [2000] 1 S.C.R. 538, 2000 SCC 23, aff’g (1998), 41 O.R. (3d) 426; National Bank of Canada v. Retail Clerks’ International Union, [1984] 1 S.C.R. 269; Sept-Îles (City) v. Quebec (Labour Court), [2001] 2 S.C.R. 670, 2001 SCC 48; Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982; considered: Pasiechnyk v. Saskatchewan (Workers’ Compensation Board), [1997] 2 S.C.R. 890; General Motors Products of Canada Ltd. v. Kravitz, [1979] 1 S.C.R. 790; Montreal Tramways Co. v. Léveillé, [1933] S.C.R. 456; Dobson (Litigation Guardian of) v. Dobson, [1999] 2 S.C.R. 753; distinguished: U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Entreprises Rolland Bergeron inc. v. Geoffroy, [1987] R.J.Q. 2331; referred to: Université McGill v. St-Georges, [1999] R.J.D.T. 9; Syndicat des employées et employés professionnels et de bureau, section locale 57 v. Commission scolaire Laurenval, [1999] R.J.D.T. 1; Syndicat des cols bleus de Ville de St-Hubert v. Ville de St-Hubert, [1999] R.J.D.T. 76, leave to appeal refused, [1999] 3 S.C.R. xii; Syndicat des employés de la Communauté régionale de l’Outaouais v. Collines-de-l’Outaouais (Municipalité régionale de comté des), [1999] R.J.D.T. 97; Union des employées et employés de la restauration, métallurgistes unis d’Amérique, section locale 8470 v. Ultramar Canada inc., [1999] R.J.D.T. 110; Maison L’Intégrale inc. v. Tribunal du travail, [1996] R.J.Q. 859, leave to appeal refused, [1996] 3 S.C.R. xi; Canadian Union of Public Employees Local 963 v. New Brunswick Liquor Corp., [1979] 2 S.C.R. 227; Fraser v. Public Service Staff Relations Board, [1985] 2 S.C.R. 455; Canada (Attorney General) v. Public Service Alliance of Canada, [1993] 1 S.C.R. 941; Toronto (City) Board of Education v. O.S.S.T.F., District 15, [1997] 1 S.C.R. 487; Centre communautaire juridique de l’Estrie v. Sherbrooke (City), [1996] 3 S.C.R. 84; Syndicat national des employés de l’aluminium d’Arvida inc. v. J.-R. Théberge ltée, [1965] R.D.T. 449; Centrale de Chauffage enr. v. Syndicat des employés des Institutions religieuses de Chicoutimi inc., [1970] R.D.T. 344; Barnes Security Service Ltd. v. Association internationale des machinistes et des travailleurs de l’aéroastronautique, section locale 2235, [1972] T.T. 1; Syndicat des salariés de service d’entretien v. Montcalm Carpets Specialists Ltd., [1981] T.T. 273; Entrepôts Schenker ltée v. Travailleurs canadiens de l’alimentation et d’autres industries, section locale P-766, [1981] T.T. 420; Mode Amazone v. Comité conjoint de Montréal de l’Union internationale des ouvriers du vêtement pour dames, [1983] T.T. 227; Jack Schwartz Service Station v. Teamsters Local Union 900, [1975] T.T. 125; Vitriers-travailleurs du verre, section locale 1135 de la Fraternité internationale des peintres et métiers connexes v. Vetroform inc., [1990] T.T. 514; Syndicat des travailleurs de l’énergie et de la chimie, section locale 115 v. Fornet inc., [1991] T.T. 413, motion for evocation allowed, [1992] R.J.Q. 445; Syndicat des employés du Cégep du Vieux-Montréal v. Clair et Net ltée, [1992] T.T. 85; Syndicat des employés du Cégep du Vieux-Montréal v. Service d’entretien d’immeubles Staff 2000 inc., D.T.E. 93T-665; Gatineau (Ville de) v. Syndicat des cols bleus de Gatineau, [1992] T.T. 599; Syndicat des employés des commissions scolaires de la régionale Chauveau v. Groupe Admari inc., [1991] T.T. 351; Université McGill v. Union des employées et employés de service, section locale 800, D.T.E. 95T-296; Entreprises Chando-net enr. v. Union des employées et employés de service, section locale 800, [1992] T.T. 620, motion for evocation dismissed, Sup. Ct. Quebec, No. 200-05-002218-928, December 23, 1992; Luc Construction inc. v. Syndicat des employés de Ville de Brossard, [1992] T.T. 589; Coopérants (Les), Société mutuelle d’assurance-vie v. Syndicat des employés de coopératives d’assurance-vie, D.T.E. 87T-300; Collège d’enseignement général et professionnel de Limoilou v. Syndicat du personnel de soutien du Collège de Limoilou, L.C. , No. 200-28-000041-90, October 11, 1990; Syndicat des travailleurs du Holiday Inn Ste-Foy v. Prime Hospitality inc., [1991] T.T. 40; Conciergerie C.D.J. (Québec) inc. v. Fraternité canadienne des cheminots, employés des transports et autres ouvriers, section locale 277, D.T.E. 92T‑1043; Syndicat des employés de la Ville de Brossard v. Services d’entretien Fany inc., [1995] T.T. 423; Commission scolaire Laurenval v. Lalonde, [1997] R.J.Q. 983; Rosemère (Ville de) v. St-Arnaud, D.T.E. 97T-1039; Domtar Inc. v. Quebec (Commission d’appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756; Tremblay v. Quebec (Commission des affaires sociales), [1992] 1 S.C.R. 952; Adam v. Daniel Roy Ltée, [1983] 1 S.C.R. 683; Union des employés de service, service locale 298 v. Syndicat national des employés de la Commission scolaire régionale de Baie-des-Chaleurs, [1973] T.T. 332; Distribution Réal Chagnon inc. v. Prud’homme, J.E. 90-1027; Syndicat des employés de coopératives d’assurance-vie v. Les Coopérants, [1991] R.J.Q. 1248; Emballages industriels Vulcan ltée v. Syndicat des travailleurs de l’énergie et de la chimie, section locale 106, [1991] T.T. 29; Syndicat des salariées et salariés cléricaux et techniques de l’amiante v. LAB, société en commandite, D.T.E. 94T-13, motion for evocation dismissed, Sup. Ct. Quebec, No. 200-05-003286-932, February 23, 1994; Groupe des ex-salariés de Transbéton v. Groupe des ex-salariés de Transmix, [1999] R.J.D.T. 513; Syndicat des travailleurs de S.O.S. v. Syndicat international des travailleurs et travailleuses unis de l’alimentation et du commerce, section locale 502, [1992] T.T. 109; Union internationale des travailleurs unis de l’alimentation et du commerce, section locale 301 W v. Brasserie Molson-O’Keefe, D.T.E. 91T-914; Syndicat national des employés de l’alimentation en gros de Québec inc. v. Épiciers unis Métro-Richelieu inc., D.T.E. 85T-114; Syndicat des employées et employés professionnels et de bureau, section locale 57 v. Centre financier aux entreprises du Sud-Ouest de Montréal, D.T.E. 2000T-113; Metro Capital Group ltée v. Hamelin, [2000] R.J.D.T. 491; Syndicat national des employés de l’alimentation en gros de Québec inc. v. Épiciers unis Métro-Richelieu inc., [1987] T.A. 333; Syndicat des employés de la Commission scolaire des Deux-Rives v. Commission scolaire de la Jonquière, [1990] T.T. 419; Syndicat des professionnels et des techniciens de la santé du Québec v. Syndicat des employés du C.L.S.C. de la Guadeloupe, D.T.E. 86T-759; Syndicat des employés du Carrefour des jeunes de Montréal v. Union des employés de service, section locale 298, [1990] T.T. 398; Centrale des unions indépendantes de l’industrie de l’automobile v. Fraternité canadienne des cheminots, employés du transport et autres ouvriers, section locale 300, [1982] T.T. 340; Rothmans, Benson & Hedges inc. v. Travailleurs unis de l’alimentation et du commerce, section locale 501, D.T.E. 87T-976; Syndicat québécois des employées et employés de service, section locale 298 v. Syndicat des employées et employés des services sociaux du Centre jeunesse Laval, [2001] R.J.D.T. 134.
By Bastarache J. (dissenting in part)
Ajax (Town) v. CAW, Local 222, [2000] 1 S.C.R. 538, 2000 SCC 23; Lester (W.W.) (1978) Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local 740, [1990] 3 S.C.R. 644; U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048; Mode Amazone v. Comité conjoint de Montréal de l’Union internationale des ouvriers du vêtement pour dames, [1983] T.T. 227; Syndicat des employées et employés professionnels et de bureau, section locale 57 v. Commission scolaire Laurenval, [1999] R.J.D.T. 1; Université McGill v. St-Georges, [1999] R.J.D.T. 9; Entreprises Rolland Bergeron inc. v. Geoffroy, [1987] R.J.Q. 2331.
Statutes and Regulations Cited
Civil Code of Québec, S.Q. 1991, c. 64, ss. 617, 1218 to 1255, 1242, 1279, 1440, 1442, 1444 to 1450, 1814, 2447.
Labour Code, R.S.Q., c. C-27, ss. 22c), d), 41 [am. 1983, c. 22, s. 23], 45, 46 [repl. 1990, c. 69, s. 2], 52.2, 58 [am. 1983, c. 22, s. 28], 59, 139 [repl. 1982, c. 16, s. 5; am. 1983, c. 22, s. 93; am. 1985, c. 12, s. 93, am. 1990, c. 4, s. 232], 139.1 [am. 1982, c. 16, s. 6], 140 [repl. idem, s. 7].
Authors Cited
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APPEALS from judgments of the Quebec Court of Appeal, [1999] R.J.Q. 32, [1999] R.J.D.T. 30, [1998] Q.J. No. 3663 (QL), affirming a judgment of the Superior Court, D.T.E. 94T-1219, dismissing motions for evocation against judgments of the Labour Court, [1993] T.T. 493 and [1993] T.T. 600, upholding decisions of the labour commissioners, D.T.E. 92T-1305. Appeals dismissed, Bastarache J. dissenting in part.
Serge Benoît and Monique Lagacé, for the appellants/respondents/mis en cause Ivanhoe inc., Service d’entretien Empro inc. and la Compagnie d’entretien d’édifice Arcade ltée.
Jean-Marc Brodeur, for the appellant/respondent/mis en cause Distinction Service d’entretien inc.
Robert Laurin, for the respondent/appellant United Food and Commercial Workers, Local 500.
Benoît Belleau, for the respondent Labour Court.
English version of the judgment of McLachlin C.J. and L’Heureux-Dubé, Gonthier, Iacobucci, Major and Arbour JJ. delivered by
Arbour J. —
I. Introduction
1 These appeals were heard together with Sept‑Îles (City) v. Quebec (Labour Court), [2001] 2 S.C.R. 670, 2001 SCC 48, in which reasons are pronounced with this decision. The central issue is whether the Quebec Labour Court has adopted an interpretive policy with respect to the application of s. 45 of the Labour Code, R.S.Q., c. C‑27, regarding the operation by another of an undertaking, that is in conflict with the decisions of this Court, and more specifically with U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048. For the reasons that follow, I find that the approach taken by that court is not inconsistent with the decisions of this Court and constitutes a reasonable interpretation of the provisions which that specialized agency is instructed to apply. Accordingly, the decisions of the administrative tribunals in this case should not be varied and the appeals should be dismissed.
2 The jurisdiction of commissioners and of the Labour Court in interpreting and applying s. 45 of the Labour Code is the crux of these appeals. This provision having been a subject of considerable debate in Quebec labour law, I shall reproduce it before proceeding:
45. The alienation or operation by another in whole or in part of an undertaking otherwise than by judicial sale shall not invalidate any certification granted under this code, any collective agreement or any proceeding for the securing of certification or for the making or carrying out of a collective agreement.
The new employer, notwithstanding the division, amalgamation or changed legal structure of the undertaking, shall be bound by the certification or collective agreement as if he were named therein and shall become ipso facto a party to any proceeding relating thereto, in the place and stead of the former employer.
II. The Facts
3 Ivanhoe inc. is a property management, development and investment company primarily engaged in managing shopping centres. It handled its own interior and exterior building maintenance until 1989. On May 23, 1974, the United Food and Commercial Workers union, local 500 (the “union”) was certified to represent the janitorial staff at Ivanhoe’s shopping centres in Quebec. The parties signed a number of collective agreements, including the last one which was to be in effect from May 23, 1986 to May 22, 1989. On March 6, 1989, Ivanhoe decided to contract out the janitorial services at its shopping centres to Moderne Service d’entretien d’immeubles inc. (“Moderne”), under a contract that was to run until August 31, 1991. The 68 full-time and 18 part‑time janitorial employees were transferred to Moderne.
4 The union applied under s. 45 of the Labour Code for recognition of the transfer of the certification and collective agreement to Moderne. The motion was not opposed and labour commissioner Gareau granted it in a decision dated May 22, 1991, and corrected on July 11, 1991. The union negotiated a collective agreement with Moderne that was in effect from May 22, 1989 to May 22, 1991. On July 5, 1991, when its contract with Moderne was about to expire, Ivanhoe invited bids for a new contract. Moderne did not bid, but on August 29, 1991, two days before its contract expired, it signed a collective agreement effective until May 22, 1994.
5 As a result of the bids that it received, Ivanhoe decided to engage four companies (the “contractors”): Service d’entretien Empro inc., Compagnie d’entretien d’édifices Arcade ltée, Prestige Maintenance inc. (now represented in continuance of suit by Distinction Service d’entretien inc.) and Service d’entretien Laurier enr. (now represented by 2621‑3249 Québec inc.). All of these companies specialize in janitorial services, and they are in competition with one another. Each of them signed a contract with Ivanhoe that took effect on September 1, 1991 and ended on August 31, 1993. For each of the companies, Ivanhoe was only one of a number of customers.
6 On August 31, 1991, Moderne’s contract expired and it dismissed the entire janitorial staff responsible for Ivanhoe’s buildings. None of those employees was hired by the contractors who took over building maintenance the following day. It is admitted that there is no legal relationship between Moderne and the contractors, which employed their own staff and used their own equipment. The work performed by the contractors’ employees was the same as the work that had been done for Moderne and previously for Ivanhoe.
7 On September 25, 1991, the union applied under s. 45 to have the certification and the collective agreement signed with Moderne transferred to the contractors. On January 14, 1992, Ivanhoe applied under s. 41 of the Labour Code to have the union’s certification cancelled with regard to itself.
III. Previous Decisions
A. Commissioner Bibeault (s. 45), D.T.E. 92T-1305
8 The commissioner found that the certification that originally covered Ivanhoe had to be transferred to the new contractors. In his view, subcontracting janitorial services could amount to operation by another of part of an undertaking, with the result that s. 45 of the Labour Code would apply. When the contract with Moderne expired, Ivanhoe once again became the potential employer and could transfer its certification to the contractors. On the other hand, the collective agreement that had been signed with Moderne lapsed when the contract expired, and it could not be transferred to the new contractors. When the first transfer of the operation of the undertaking terminated, the previous situation was restored, and the fresh transfer was made by Ivanhoe, rather than Moderne.
B. Commissioner Boily (s. 41), September 24, 1992
9 Commissioner Boily held that, as a result of the decision of commissioner Gareau finding that Ivanhoe’s rights an