The Supreme Court of Canada has issued a decision concluding that a Quebec Wal-Mart’s closure amounted to an unfair labour practice under Quebec’s Labour Code.
Wal-Mart opened a store in Jonquiere, Quebec in 2001. In 2004, the United Food & Commercial Workers’ Union was certified to represent the store’s employees. After a number of months of unsuccessful bargaining, the Union applied for appointment of an arbitrator to settle the dispute. A week later, Wal-Mart informed the Minister of Employment that it intended to close its establishment for business reasons, and followed through on this plan in April 2005.
Following the store’s closure, the Union brought a series of complaints against Wal-Mart and alleged that the decision to close was grounded in anti-union sentiment. The Union alleged that the dismissal of the employees was a violation of the Code and, more specifically, the statutory freeze provision prohibiting alteration of conditions of employment during collective bargaining.
An arbitrator held that Wal-Mart was not able to establish the closure was made in the “ordinary course of business”, and concluded the termination of all employees during this period violated the Code. The Quebec Court of Appeal subsequently overturned the arbitrator’s decision, finding the provision preventing the alteration of conditions of employment did not apply to an employer’s right to close its business.
The Supreme Court of Canada restored the arbitrator’s decision. An important consideration for the Supreme Court was the arbitrator’s finding that sufficient evidence established Wal-Mart’s decision was not consistent with its past practices, nor with those of a reasonable employer in the same circumstances. Examples included the store having met all performance objectives up to the time of closure, and bonuses being promised prior to the bargaining dispute. Having made such findings, the Supreme Court affirmed the arbitrators view that the decision to close the store was not exempt from the Code provision at issue.
The Supreme Court remitted the matter to the original arbitrator to determine the appropriate remedy. It remains to be seen what remedy will be awarded to the Union and the former employees of the closed store. No Labour Relations Board or arbitrator has ever ordered an employer to re-open a closed operation, so any remedy will likely focus on monetary damages.
While labour legislation in jurisdictions across Canada does not prohibit employers from closing unionized operations for valid business reasons, closures can be challenged on the basis of anti-union sentiment motivating, in whole or in part, the closure. While it will only be unusual cases where such a challenge is made, this case represents a reminder that employers need to be prepared to justify any such closure on the basis of valid and demonstrable business reasons.
If you have any questions about unfair labour practices, or any other questions relating to workplace law, please do not hesitate to contact a Mathews Dinsdale lawyer.
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