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The recent Supreme Court of Canada case, United Food and Commercial Workers, Local 503 v. Wal-Mart Canada Corp., deals with the limit of an employer’s rights during the certification process. This decision may give employers cause to think twice before deciding to close their doors in order to avoid unionization in Canada.

In 2001, Wal-Mart opened its Jonquière location. In August of 2004, the Commission des relations du travail certified United Food and Commercial Workers, Local 503 (the ‘Union’), as the bargaining agent for the Wal-Mart employees working at that establishment. As the Union and Wal-Mart could not agree on a first collective agreement, the Union applied to the Minister of Labour to have an arbitrator settle the dispute. Wal-Mart then decided to terminate the employment contracts of its nearly 200 employees working at the location, and subsequently closed its doors on April 29, 2005, claiming this decision was ‘for business reasons’.

Believing that the decision was instead based on anti-union considerations, the Union filed a grievance against Wal-Mart, alleging that the dismissal of the employees constituted a change in their conditions of employment, in violation of the Quebec Labour Code (‘Code’).

The arbitrator, Jean-Guy Ménard, concluded that the termination of all of the employees’ contracts constituted a prohibited unilateral change in the conditions of their employment. This award was affirmed by the Superior Court, but overturned on Appeal. The majority of the Supreme Court of Canada considered the arbitrator’s award reasonable and thus, unreviewable. The Court reaffirmed that the phrase ‘condition of employment’ is given a large and liberal interpretation. It is a flexible concept that encompasses ‘anything having to do with the employment relationship on either an individual or a collective level’ [TRANSLATION].

What this means for employers across Canada, is that they do not lose their right to manage their business simply because of the arrival of a union, but must, after such arrival, exercise that right as they did or would have done before then. Employers will now need to think twice before deciding to close the doors of a location in order to avoid unionization.

For more information, read my full article, Think Twice Before Closing: Supreme Court of Canada Addresses Employer Rights During The Certification Process.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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