Rarely does a Canadian Labour case make headlines across the country. Rarer still does one make headlines in the United States. But the Supreme Court of Canada’s decision in Plourde v. Wal-Mart Canada Corporation, which was released towards the end of November, has attracted interest on both sides of the boarder. People saw the case as a show-down of sorts: the world’s largest retailer pitted against one of Canada’s largest unions; and at stake, many people felt, was Wal-Mart’s ability to close its newly unionized store without liability, and workers’ rights to unionize without facing intimidation and reprisals.

What resulted, however, was a Supreme Court of Canada decision on a very narrow technical point.

The Facts

On August 2, 2004, UFCW Local 503 was certified as bargaining agent for the workers at Wal-Mart’s store in Jonquiere, Quebec. After a number of unsuccessful bargaining sessions, the Union asked the Quebec Minister of Labour to appoint an arbitrator to determine the terms of the collective agreement between the parties. On the day the Minister agreed to appoint an arbitrator, Wal-Mart announced its decision to close the store and terminate the employment of all its 190 workers.

A flurry of complaints and law suits ensued. Among them were complaints by a number of store employees brought under section 15 of the Quebec Labour Code, which provides:
Where an employer…dismisses, suspends or transfers an employee, practices discrimination or takes reprisals against him or imposes any other sanction upon him because the employee exercises a right arising from this Code, the Commission may
(a) order the employer or a person acting for an employer or an employers’ association to reinstate such employee in his employment, within eight days of the service of the decision, with all his rights and privileges, and to pay him as an indemnity the equivalent of the salary and other benefits of which he was deprived due to dismissal, suspension or transfer.

A complaint under s. 15 carries a presumption, contained in s. 17, that the employee was dismissed (or the action was taken against him) because he exercised his rights under the Labour Code, and the burden of proof is placed upon the employer to establish that it dismissed the employee for “good and sufficient reason.”

The Decision

The majority of the Supreme Court of Canada framed the issue before it very narrowly: was the procedure under ss. 15 to 17 of the Labour Code available to a dismissed employee in circumstances where a store no longer exists and, more specifically, does an employee in those circumstances have the benefit of the presumption in s. 17 that the loss of his job was a “sanction” imposed for an unlawful motive, namely union busting.
 
In writing for the majority, Justice Binnie elected to follow a long line of case law holding that there exists no law in Quebec that obliges an employer to remain in business. Furthermore, once an employer decides to close its business, even for socially reprehensible reasons, the dismissals that follow are legitimate, in part because reinstating an employee to a closed workplace is simply not possible. The Court could find no reason to reverse this line of case law in the Wal-Mart situation.

The majority was careful to point out, however, that by closing its workplace in the face of a union organizing drive, an employer does not escape liability. It is still open to a union or an employee to claim that the employer committed an unfair labour practice by closing its business, and the labour board is free to provide an appropriate remedy to the affected employees. All the Supreme Court of Canada was saying was that the union or the employee could not use ss. 15 to 17 of the Labour Code as a vehicle for the complaint.   
 
Implications

What does the Supreme Court of Canada’s decision mean to us? The answer is, in my opinion, not very much. The Supreme Court of Canada’s decision, by its own admission, was a technical and narrow one. It likely will not have a significant impact on labour law outside Quebec. Most jurisdictions in Canada, including Ontario, provide protection for employees of businesses that choose to close for anti-union motives. This was made clear in an earlier decision of the Ontario Labour Relations Board in Academy of Medicine, where it noted the destructive effect these types of closures have on employees’ rights to organize, rights that the Labour Relations Act is designed to protect:

….The unfair labour practice sections of the Act, taken together, constitute a general prohibition against any kind of anti-union conduct. These sections are designed to protect the basic right of employees to join a trade union and to participate in its lawful activities, as well as the right of unions to organize and represent employees, free from employer inter-ference. It is difficult to conceive of conduct more destructive of these rights than a perma¬nent closure of a business, based not upon legitimate business considerations but upon an employer's simple refusal to operate with a trade union. If the Board were to hold that such conduct is permissible under the Act, it would be giving carte blanche to employers, such as the respondent, with a "discontinuance" capacity to frustrate the policy which the Statute so clearly prescribes. The respondent's threat to close its Call Answering Service if the union was successful constitutes a clear violation of The Labour Relations Act. It would be strange indeed if the total effectuation of that threat — the permanent discontinuance of its Answering Service — did not also constitute a violation.. It would be stranger still if an em¬ployer violates the Act by firing some of its employees for their union membership or activity, but not by firing them all.
 
While many are tempted to trumpet the Wal-Mart case as a big win for anti-union employers, in reality it did little to change the law here in Ontario, or in the rest of Canada. It is unlikely that the impact of the Wal-Mart will go much beyond the sections of the Quebec Labour Code that were in issue. Employers should not take the decision as an indication that they can, with impunity, avoid a union by simply closing the business down. Employees have a right to organize without fear of harassment or reprisals. Interfering with that right could land an employer in hot water.  

David J. Spears is an Associate lawyer with BrazeauSeller.LLP. David practices in the areas of Employment & Labour Law. David can be reached at 613-237-4000 ext. 207 or at dspears@brazeauseller.com. For more information about David, please visit www.brazeauseller.com.