Walmart prevails in Québec labor case: Business Closure is not an unfair labor practice
Supreme Court of Canada confirmed that a Québec employer cannot be forced to continue to operate its business as a result of allegations of unfair labor practices.
Martine Bélanger , Rachel Ravary and Claire Ezzeddin of McCarthy Tétrault reported that in August 2004, a union was certified to represent the employees of a Wal-Mart store in Jonquière Québec. The Jonquière store was the first Wal-Mart store in North America to be unionized. In April of 2005, after collective agreement negotiations broke down, the Minister of Labour appointed an arbitrator to settle the first collective agreement. On the same day, Wal-Mart announced that it was closing its Jonquière store, leading to the termination of all store employees.
A number of proceedings arose out of the closure of the Jonquière store, mostly alleging that the store closure was a measure undertaken by Wal-Mart as a part of a broader union avoidance and union-busting strategy. Gaétan Plourde was one of several employees to file a complaint under ss. 15 to 17 of the Québec Labour Code, claiming to have lost his job because of his union activities and seeking an order to be reinstated in his position.
Sections 15 to 17 of the Labour Code provide a specific complaint mechanism for employees who consider that they have been dismissed, suspended, transferred or discriminated against, or that they have been the victim of reprisals or any other sanction, because they have exercised a right under the Code. Under s. 17, there is a simple presumption in favour of the employee if the Commission is satisfied that the employee did in fact exercise a right under the Code. It is then up to the employer to rebut the presumption by demonstrating that the measure was justified by another "good and sufficient reason". Section 15 sets out specific remedies that may be ordered by the Labour Relations Commission if a complaint is upheld, notably, in the case of a dismissal, reinstatement with full compensation for lost salary and benefits.
In the circumstances, an order of reinstatement would effectively have forced the reopening of the store. However, Plourde argued that even if the closure was permanent and genuine, it constituted a violation of his freedom of association and should be reversed on that basis.
The Labour Relations Commission dismissed the complaint. The Commission upheld what it said to be a long-established principle in Québec that the genuine and permanent closure of a business, regardless of the reason for the closure, constitutes a good and sufficient reason under s. 17. Based on the evidence presented, it found that the Jonquière store was permanently and definitively closed and, on that basis, that Wal-Mart had successfully rebutted the presumption, thereby defeating the s. 15 complaint. The Commission rejected Plourde's argument that freedom of association could provide a basis for forcing an employer to continue to operate a business. The Québec Superior Court dismissed the application for judicial review, and the Québec Court of Appeal refused the application for leave to appeal. Leave to appeal to the Supreme Court of Canada was granted. The Supreme Court dismissed the appeal. The Court held that, in the case of a permanent closure of a business, terminated employees cannot bring a claim against their employer under ss. 15 to 17 of the Labour Code alleging that they were dismissed because they exercised their rights under the Code, regardless of the motives for the closure.However, despite its findings with respect to ss. 15 to 17 of the Labour Code, the Supreme Court made it clear that employees and unions in this situation are not without recourse. In particular, the Court maintained that the recourses for unfair labour practices under ss. 12 to 14 of the Code can be exercised against an employer who closes a business for anti-union reasons.
