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United Food and Commercial Workers, Local 503 v Wal‑Mart Canada Corp.
Supreme Court of Canada
Hearing: 06-12-2013 Judgment: 27-06-2014
Full case name	United Food and Commercial Workers, Local 503 and Wal-Mart Canada Corporation and Conseil du patronat du Québec inc., Alliance of Manufacturers & Exporters Canada, also known as Canadian Manufacturers & Exporters, Canadian Association of Counsel to Employers and Confédération des syndicats nationaux
Citations	[2014] 2 SCR 323, 2014 SCC 45 (CanLII)
Docket No.	34920
Court membership
Reasons given
Majority	LeBel J., joined by McLachlin C.J. and Abella, Cromwell, and Karakatsanis JJ.
Dissent	Rothstein and Wagner JJ.

United Food and Commercial Workers, Local 503 v Wal-Mart Canada Corp. is a 2014 Supreme Court of Canada decision addressing unfair labour practice remedies in the context of the closure of a workplace.

Background

In 2001, Wal-Mart Canada opened a location in the arrondissement of Jonquière in Saguenay, Québec. In 2004, an all-employee unit at the Jonquière Wal-Mart was certified by the Commission des relations du travail du Québec as United Food and Commercial Workers Local 503, thereby creating the first unionized Wal-Mart store in North America. In 2005, when Wal-Mart and UFCW Local 503 could not conclude a collective agreement, the Union applied for contract arbitration under the Québec Labour Code. In response, Wal-Mart informed the Québec Minister of Employment and Social Solidarity of its intentions to close the Jonquière store, and did so a few months later, thereby terminating the employment of all of the location's employees. Wal-Mart attempted to justify its actions by asserting that the closure was affected "for business reasons". Conversely, the Union believed the closure was a direct, vindictive response to its certification, and commenced legal proceedings against Wal-Mart.

The Union claimed that the store closure violated s. 59 of the Code, which stipulates that "[f]rom the filing of a petition for certification and until the right to lock out or to strike is exercised or an arbitration award is handed down, no employer may change the conditions of employment of his employees without the written consent of each petitioning association and, where such is the case, certified association". The arbitrator concluded in favour of the Union, and found that the closure of the Jonquière Wal-Mart constituted a change in the conditions of employment contrary to s. 59, and that Wal-Mart had not adduced any evidence demonstrating that the closure was consistent with its ordinary course of business. The matter was submitted to the Superior Court of Québec for judicial review and ultimately upheld. However, the findings of the arbitrator were subsequently overturned by the Québec Court of Appeal, which, despite dissenting over the proper scope of application of s. 59, asserted that the section was otherwise inapplicable in the circumstances. The Union then appealed to the Supreme Court of Canada.

Decision

The Supreme Court of Canada was tasked with determining whether s. 59 of the Code is applicable in the context of the closure of an establishment and the termination of all employees in the bargaining unit.

Writing for the majority, Justice LeBel held that the fundamental purpose of s. 59 of the Code is to uphold the right of association. The section functions not merely to preserve the status quo between the parties, but to ensure the parties bargain in good faith. S. 59 preserves the ability of employees to exercise their rights in the course of collective bargaining and agreement by freezing the conditions of employment as they existed at the time of the certification of the union, including how the employer exercised its management power, and preventing the employer from affecting undue influence on the association-forming process. The majority further noted that s. 59 does not require proof of an anti-union animus on the part of the employer, as the language of the section is predicate solely on a modification of the conditions of employment.

The Court establishes that the burden of demonstrating that a unilateral change to the conditions of employment has been made rests on the applicant union, which must show that:

1. a condition of employment existed on the day the petition for certification was filed or a previous collective agreement expired;
2. the condition was changed without its consent; and
3. the change was made between the start of the prohibition period and either the first day the right to strike or to lock out was exercised or the day an arbitration award was handed down, as the case may be.

The Court clarified the definition of a "condition of employment" for the purposes of s. 59 as "anything having to do with the employment relationship on either an individual or a collective level". This elucidation does not mean that s. 59 deprives the employer of their power to go out of business either in part or completely, and, by extension, to resiliate the contracts of employment of some or all of its employees. However, the section does require that the employer exercises its power in a manner consistent with its "normal management practices". Should the employer succeed in adducing evidence that impugned change in conditions of employment constituted an exercise of the employer's power “in a manner consistent with the rules that applied previously and with the employer’s usual business practices from before the freeze”, or was consistent with what a "reasonable employer" would have done in the circumstances where it is "difficult or impossible to determine whether a particular management practice existed before the petition for certification was filed", an arbitrator may permit the change.

As the appellant Wal-Mart was unable to demonstrate that the closure of the Jonquière location was executed in a manner consistent with its "normal management practices", the Supreme Court upheld the arbitrator's initial decision and held that the closure and the resiliation of the contracts of employment of all of the employees constituted a change in the conditions of employment, thereby permitting an application of the statutory freeze period provided for in s. 59 of the Code.

The Supreme Court also distinguished the facts before them from an earlier case derived from the same factual scenario, Plourde v Wal-Mart Canada Corp., 2009 SCC 54. In that case, the Court held that employees could not seek a remedy under s. 15 of the Code, which provides for the reinstatement of an employee dismissed for union involvement, as the location had closed, and further, that closure is a legitimate defence for an employer accused of violating any of ss. 15 though 19 of the Code. As s. 59 is not predicated on the possibility of reinstatement or the existence of an operating business, the Supreme Court held that the ruling in Plourde cannot serve to suggest that the closure of a business obstructs the application of the remedy in s. 59.

At paragraph 60 the Court highlighted the broader applicability of its decision beyond Québec in pointing out that the "mechanism codified in s. 59 is by no means specific to Quebec, as it exists in all provinces of Canada and at the federal level…In all the general labour relations schemes in Canada, therefore, although the employer does not lose its right to manage its business simply because of the arrival of a union, it must, from that point on, exercise that right as it did or would have done before then…If the employer does not exercise its prerogatives consistently, it is liable to whatever penalty the arbitrator considers appropriate in the circumstances". For example, the Nova Scotia Trade Union Act provides at s. 35(b) that "[w]here notice to commence collective bargaining has been given…the employer shall not, without consent by the certified or recognized bargaining agent or by the Board, increase or decrease rates of wages or alter any other term or condition of employment of employees in relation to whom notice to bargain has been given". An application of the current case to the Nova Scotia provision would suggest that, in order to demonstrate that no condition of employment has been altered, an employer would have to adduce evidence showing the decision was consistent with their "normal management practices".

Dissent

Rothstein and Wagner JJ.'s dissent focused on the perceived incompatibility of s. 59 and business closure, suggesting that to permit s. 59 to apply in the context of a business closure would effectively deprive an employer of the right to close their business, which is restricted only by the requirement that the employer demonstrate that the closure was "genuine and definitive". An arbitrator cannot force a business to reopen, and although arbitrators have the power to award damages, this would be inconsistent with s. 59, as "it would not restore the balance between the parties or facilitate the conclusion of a collective agreement".

External links

• Full text of Supreme Court of Canada decision available at LexUM and CanLII