Doorey's Workplace Law Blog

Two of Canada’s largest unions, the CAW and CEP,  have been discussing a merger for some time.  Information about the merger can be found on the New Union Project website. Earlier this year, the two unions released a discussion paper setting out underlying themes that would guide the discussions and the future union.   One part of that document emphasized the need for unions to become more relevant to workers who do not presently work in unionized workplaces.  For example, the document said that the “new union would define itself as a force fighting for all workers, not just its own members” and that it would “offer services and support to nonunion workers engaged in struggles and conflicts.”

Yesterday, the media was reporting some news on the progress of talks.  One news bite that emerged was the proposed new union’s intent to offer a form of associate membership to workers who are not employed at a workplace organized by the new union.  Here is a story from the Toronto Star by Tony Van Alphen, and a column by Thomas Walkom.  The Super Union is talking about offering a menu of benefits to people who join, including subsidized health care and legal advice.  Maybe child care too?  I’ve argued before that Canadian unions need to do more of this. So, I am fully supportive of the idea of associate union membership that would involve unions providing useful services to make life somewhat easier for any worker.

I also think that the law offers unions potential to aid workers in nonunion workplaces in other ways. Unions can try to make collective representations on behalf of any workers who join, regardless of whether their workplace is unionized.  As it stands now, the Supreme Court has found (in Dunmore and B.C. Health Services)  that the Charter of Rights and Freedoms guarantees workers: (1) a right to join unions; and (2) to make “collective representations” to their employers, a right which includes a requirement for the employer to consider the representations “in good faith” and possibly to “bargain in good faith”; and (3) a right of workers not be disciplined or dismissed for exercising these rights.  This is a form of Constitutional minority unionism (what I call, the “Thin Model of Freedom of Association”). One day soon, we may learn that this Constitutional model includes also some form of a right to strike.

So far, this model applies only to agricultural workers in Ontario (under the Agricultural Employees Protection Act), and to all government employees, since the Charter applies directly to them.  The Court has not yet declared that the Thin Model of FA also applies to other private sector employees.  Those workers still only have collective bargaining rights if a majority union is granted a license to represent them under Labour Relations legislation, usually following a heated contest in which the employer attempts to dissuade the employees from exercising their collective bargaining rights.

As I have argued before, it no longer makes sense to say that private sector workers can only exercise their Constitutional associational rights if they are able to join a majority, certified union.   Although the Court has said that the Charter does not protect any particular model of collective bargaining, I suspect the Supreme Court intends that all workers must have the ability to access at least the Thin Model of freedom of association, even if some workers still have the potential to access thicker rights of associate available in general Wagner-style labour relations legislation (such as the duty to bargain in good faith and the right to strike).

The question is whether unions can make any use of the Thin Model of Freedom of Association in the private sector.

The plans of the Super Union to attract new members by offering useful services beyond formal collective bargaining and contract administration is a start.  Now imagine that the Super Union is able to attract 40% of Canadian Tire employees in Ontario by offering a menu of useful benefits.  The union doesn’t have majority support, so it cannot get legally certified under labour relations legislation. However, what if the Union approaches Canadian Tire head office with a demand to engage in collective representations on behalf of the 40 percent of employees who are its members?  Maybe the union wants CT to contribute some amount to the health benefit fund being accessed by CT employees.  CT would probably tell the union to go to hell, which will form part of the factual record demonstrating how private sector workers in the retail sector have no meaningful ability exercise their Charter rights.  CT’s response might also irritate CT employees, who might believe the union’s request was fair and reasonable.  If nothing else, this little dispute would demonstrate to the workers that it is the union providing the benefits, and the employer refusing to contribute.   Score one for the union’s image.

At this point, perhaps a new Charter challenge would be launched.  It might assert that the legal model requiring that retail workers join a ‘certified union’ in order to exercise their Charter rights ‘substantially interferes” in the ability of Canadian Tire employees to exercise the Thin Model of Freedom of Association guaranteed by the Charter.  Would that argument succeed?  Don’t know.  Are retail workers comparable to agricultural workers in terms of their inability to access collective bargaining under the Labour Relations Act?   Maybe. Certainly the retail industry has always had very low union density.  As far as I am aware, there are not presently any Canadian Tires unionized under the standard labour relations model.  Or Walmarts, Loews, Home Depots, Starbucks, bank branches, McDonalds’, and so on.  Also, if the Court takes seriously what has repeatedly said,  that Section 2(d) [freedom of association] must be interpreted in a manner consistent with international labour law, it may be sympathetic to the argument. ILO law requires that government’s ensure that workers have the ability to engage in collective bargaining, even when there is no majority union.

Of course, even if the Thin Model of Freedom of Association applies to all employees, it is unclear that this will make a huge difference in Canadian employee relations. It certainly hasn’t transformed the agricultural sector in Ontario.  Many people believe that absent a right to strike, a right to engage in collective representations is meaningless. Maybe.  But most workers in Canada don’t presently have a legal right to strike anyways, and likely won’t ever under the existing Labour Relations model requiring majority unions.  Nor is it clear that most workers want to strike, even if given the option.  The CAW and CEP should be credited with thinking outside of the box in order to make the labour movement more relevant to the 80 percent or so of private sector workers who are not represented by a union.

What do you think about the idea of unions offering associate memberships to any worker as a way of providing useful benefits outside of collective bargaining?

Do you think the right to make “collective representations” to employers on behalf of a minority of workers, without a right to strike, is of any potential benefit to workers or unions?

Back when I practiced law for a living, some of my favorite cases involved sorting out whether provincial or federal labour & employment laws applied. I remember working on a case in B.C. that involved ‘water taxis’ that carried shipping employees to and from their boats. Is that work ‘integral to the federal undertaking of shipping’? If so, the water taxi drivers were covered by the Federal Canada Labour Code, otherwise they were governed by B.C. provincial legislation.  I also litigated the question of whether the people who answer the phones when shoppers call into The Shopping Network were federally regulated because they worked for a television channel.

These cases are great fun for lawyers, but trying to explain the law to clients is less fun. The ‘derivative jurisdiction” cases can be confounding to explain to non-lawyers. Last week, the Supreme Court of Canada revisited this law in a case called Tessier Ltee v. Quebec de la sante et da law securite du travail.  It’s a good case to use to provide a quick summary of the law of division of powers.

Introduction to the Issue

We need to know whether provincial laws or federal (Ottawa) laws apply to an employment relationship.  The issue can be complex because the Canadian Constitution Act, which defines the division of powers, doesn’t assign ‘employment’ expressly to either the Feds or the provinces. Section 91 of the Constitution tells us what the Feds have power over, and Section 92 list provincial powers. For some workplaces, these sections provide the answer.  For example, since Section 91 says that the Feds have jurisdiction over banking, postal services, and extra-provincial or international navigation and shipping, employers that work exclusively in these industries are governed by Federal law.  But it becomes less clear what jurisdiction applies to many other workplaces not directly listed.

In a 1925 decision called Toronto Electric Commissioners v. Snider, it was ruled that legislation relating to labour and employment law fell ‘presumptively’ within the jurisdiction of provinces under the Section 92(13) power, “property and civil rights”. Thirty years later, in a case called Reference re Industrial Relations and Disputes Investigation Act [the Stevedores Reference), the Supreme Court clarified the law by finding that  provincial laws apply to a business, unless:

1.   The business was in an industry directly assigned to Federal authority in Section 91 (i.e. banking, extra-provincial or international shipping, postal, etc);

2.   The employees are employed by the Federal government;  or

3.   The employees at issue performed work that was ‘integral to a federal undertaking’.

This latter situation is the ‘derivative jurisdiction’ I mentioned above, and it has been the source of much litigation over the years.  How do we know when a business is ‘integral to a federal undertaking’?  Are airline baggage people at Pearson Airport integral to the federal undertaking of airline navigation?  Are custodians who clean the airports?  How about workers who repair runways, or do the security screening?

Facts in Tessier Ltee

Tessier was seeking to avoid a provincial health and safety statute that assessed it a fee, so it argued it was governed by Federal jurisdiction.  Tessier is a heavy equipment rental company operating in Quebec, which would presumptively fall within provincial jurisdiction. However, in 2005-06, approximately 14% of its revenue derived from performing stevedoring services (loading and unloading ships).  Based on this, Tessier argued it was Federal, since stevedoring is integral to the Federal undertaking of shipping.

Issue:   Is Tessier federally regulated because 14% of its work involved performing stevedoring services for federally regulated shipping companies?

Supreme Court of Canada:   No.

There are three ways that the derivative jurisdiction test can render an otherwise provincial company a federally regulated one.

“First, … federal labour regulation may be justified when the services provided to the federal undertaking form the exclusive or principal part of the related work’s activities (Stevedores Reference; Letter Carriersí Union of Canada).”

“Second, this Court has recognized that federal labour regulation may be justified when the services provided to the federal undertaking are performed by employees who form a functionally discrete unit that can be constitutionally characterized separately from the rest of the related operation. In Northern Telecom 2, for example, the installers were functionally independent of the rest of Telecom.”  That case involved a distinct unit of NT employees who performed vital installation and service work for Bell Canada, a federally regulated entity.

This case represented a third scenario:  where employees perform work that is vital to a federal undertaking, but the employees performing that work do not form a distinct unit within the business.  In that situation, the Court said, the employees would not fall under federal jurisdiction “if the work represents an insignificant part of the employees’ time or is a minor aspect of the essential ongoing nature of the operation”.

In this case, only a small portion (14%) of Tessier’s business involved performing stevedoring services to federal undertakings, and the employees who performed this work did not represent a distinct unit within Tessier.  Those employees were fully integrated into Tessier’s workforce–one day they performed stevedoring services, another day they performed work that was clearly provincial in nature.

Therefore Tessier was governed by provincial labour and employment laws.

Issues for Consideration

Which of the following employers would be governed by Federal laws?

A mechanics’ garage whose employees spend 25% of their time repairing trucks owned by a federally regulated national trucking company, and 75% of their time repairing cars dropped off by the public?

A security company with two divisions: (1) Home security systems; and (2) Banking security systems, which includes guarding the movement of cash to and from ATMs owned by federally regulated banks?  Would it matter if the employer assigns employees to one division only, as opposed to moving employees around each day?

Can you see how these issues can become complicated?  Fun stuff.

I still meet HR professionals who believe that the employer can simply change employment contract terms unilaterally, without the employee’s agreement.  They cannot, as we have discussed here various times before (i.e. see here)

The latest case to reinterate this point is Loyst v.  Chatten’s Better Hearing Service, released last week by the Ontario Superior Court.

Basic Facts

In a small workplace, the relationship between the Owner and the Office Manager began to sour. The Owner informed the Office Manager that, moving forward, she would no longer be the Office Manager, and instead would be an accountant.  Moreover, she would no longer be entitled to attend business trips, which had been a standard perk for many years, and she would no longer be eligible for bonuses.  The Owner also said that he would not abide by an agreement to offer the employee a 15% share in the company after 5 years.

The Office Manager made it clear that she did not accept any of those changes.  The Owner responded by telling her to pack her stuff and leave, which she did.  The company asserted various positions in its defence to the lawsuit:  (1) that the employee quit; (2) that the employer had just cause due to the Office Managers’ poor management style; and (3) that information obtained after her termination about a conversation the Office Manager had with a client (complaining about the Owner) constituted just cause.

Issue: Was the Office Manager wrongfully dismissed?

Court’s Reasoning

The Employee was wrongfully dismissed.  She did not quit, because a quit must be “clear and unequivocal” and, “To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention”.  Here, there was no such clear intention to resign expressed in the facts.

This was a case, like the well-known decision in Wronko v. Western Inventory, in which the employer attempted to unilaterally amend fundamental terms of the employment contract and was met by a non-agreeable employee.  The Court of Appeal in Wronko made clear that an employer faced with a refusal by the employee to agree to an amendment of contract terms must either leave the contract untouched, or it must terminate the contract as a whole by giving the legally required amount of notice, and then renegotiate a new contract.  Here, the employer simply told the employee that if she doesn’t like the revised terms, she can leave.  That amounts to a fundamental breach of the employment contract, and a wrongful dismissal.

The Court allowed in the evidence about the alleged conversation between the employee and a client, even though the employer was not aware of this conversation at the time it dismissed the employee.  This is consistent with earlier rulings finding that employers can rely on new evidence obtained after the dismissal to argue just cause.  But here, the Court found that the conversation was just the normal grumblings of an employee and not grounds of dismissal without notice.

Remedy

Since the employee had  a 5 year employment term contract, she was entitled to all wages for the remainder of the 5 year period, which had about 30 months left on it, plus GST, from which was deducted monies she already received for termination pay and income she earned from other sources since her termination.  She was also entitled to receive the value of 15% of the company, which amounted to $180, 000.

Issue for Discussion

The Owner here claimed that the Office Manager’s attitude posed a threat to business relations and therefore that she should not be interacting with clients.  So he tried to introduce changes to keep her away from clients. This strategy did not work out very well for the employer.

Is there anything the Employer could have done differently to achieve its goal of keeping an employee away from clients when the employee would not agree to that arrangement?

The Ontario Human Rights Tribunal issued a decision last week that caused my eyebrows to raise ever so slightly. The decision involved  an application for reconsideration of an earlier decision in which the Tribunal dismissed a complaint under Section 45.1 of the Code.  That is the section that allows the Tribunal to dismiss a human rights complaint when another tribunal has already dealt with the substance of the human rights complaint.

It’s not last week’s reconsideration decision that provoked a brow movement, but the original Tribunal decision.  It ruled that a decision by the OLRB finding the employer violated various sections of the ESA has dealt with the substance of the human rights complaint, and therefore it dismissed the human rights complaint.

What’s somewhat peculiar about this case is that no human rights issue was raised before the OLRB (as far as I can tell), nor was any human rights remedy ordered.

Should it matter when relying on Section 45.1 to dismiss a human rights complaint whether human rights issues were actually considered by the other tribunal?

Basic Facts in Shi v. Holcim (Canada)

The employer announced that the employees in the tax group would be required to work as much OT as necessary to meet certain end of year deadlines, including working weekends and for 12 straight days.  Shi said she had family responsibilities, and couldn’t work all of the hours required, including the weekend work, although she did offer to work from home.  The ESA allows a maximum of 48 hours work in a week (Section 17) and 8 hours in a day,  Section 18 requires that employees be given 24 hours off work each work week, so 12 straight days of work is illegal too.

After Shi complained about the hours, she was dismissed with notice for “not being a good fit”.  Shi filed two complaints, one alleging a violation of the ESA provisions prohibiting reprisals for insisting that the employer comply with the ESA, and the other under the HRC alleging that the imposition of long overtime hours and unusual weekend work constituted constructive discrimination on the basis of family status, marital status, and an illegal reprisal for complaining about the human rights violation.

The ESA Complaint Succeeds

The Ontario Labour Relations Board found a violation of Section 74 (the no ‘reprisals’ section’), deciding that the employer had failed to establish that its reasons for dismissing Shi were unrelated to concerns she raised about the unlawful requests to work hours beyond the ESA limits.  It also found that the employer had failed to pay overtime for some 15 hours of OT worked by the employee in violation of Section 22.  There is no consideration in the OLRB decision about whether the requirements to work weekends and long overtime periods amounted to constructive discrimination under the Human Rights Code.

Human Rights Complaint Dismissed

Under Section 45.1 of the Code, the Tribunal can dismiss a complaint if: “another proceeding has appropriately dealt with the substance of the complaint.” The Tribunal, citing a case called Gomez v. Sobey’s, noted that this section permitted the Tribunal to dismiss a complaint when the “reasons in the other decision dispose of the human rights issues before the Tribunal”. In Gomez, an arbitrator had considered in detail whether the Code had been violated, and the Tribunal therefore found that a Section 45.1 dismissal was warranted.

In the case of Shi, on the other hand, the OLRB did not consider at all whether the Code had been violated.  The discrimination issue did not come up.  The OLRB focused on whether the ESA’s reprisal section had been violated.  Nevertheless, the Human Rights Tribunal dismisses Shi’s complaint under Section 45.1, finding that the OLRB had dealt with the substance of the human rights complaint:

I find that the Application should be dismissed pursuant to section 45.1. In both the OLRB proceedings and the Application, the applicant raised concerns about the amount of overtime, where she would work that overtime and alleged that she was terminated for raising these concerns.  It is clear from both the August 2011 OLRB decision and the November 2011 OLRB decision that the same facts and same issues were at play in those proceedings as raised in the Application. The OLRB heard evidence and rendered decisions which, in my view, appropriately dealt with the substance of the issues in this Application.

Issues for Discussion

What do you think of that reasoning?

Did the OLRB deal fully with the “issue” of whether a demand by the employer to work excessive amounts of overtime and weekends constitutes a violation of Section 5 and/or Section 11 of the Human Rights Code because it adversely effects workers with family responsibilities?

Even if it did not consider whether the employer had violated the Code, is it enough that the factual basis of both complaints overlap?

Is it enough to dismiss a complaint under Section 45.1 of the Code that most of the remedies sought under the human rights complaint have, or could have been, ordered by the OLRB, even though the OLRB never considered the Code?

On this last point, note that Section 104 of the ESA grants an employment standards officer and the OLRB authority to reinstate an employee dismissed in violation of Section 74 (Reprisal). Therefore, since the OLRB had authority to order damages for violations of the ESA, including reinstatement, does that mean that there is nothing left that the Human Rights Tribunal could order, beyond what the OLRB could grant Shi?  [Consider the remedial powers of the Human Rights Tribunal (in Section 45.2)]

I’m currently revising and updating my little pamphlet called The Canadian Charter of Rights and Freedoms and Workplace Law: A Guide for Beginners. That piece is only 2 years old, yet is sadly out of date already.  Given the volume of Charter cases dealing with labour issues these days, writing a ‘where we are at’ piece is like trying to take a snap shop of a speeding train!

Yesterday, I considered an Alberta decision about freedom of expression and collective bargaining activities.  Also this week, the Ontario Court of Appeal decided another Section 2(d) case, this one involving the provisions of the Ontario Labour Relations Act that govern the construction industry.  That case is called Independent Electricity System Operator v. Canadian Union Skilled Workers.

The construction industry is governed by a special labour relations regime for a variety of practical and historical reasons.  A key difference in that regime, compared to the normal labour law regime that governs most workplaces, is that collective bargaining usually operates at the sectoral or industry level, and then collective agreements bargained at that level are applied to individual employers who use unionized workers.

Key Facts

Section 127.2 of the OLRA says essentially that the Board may declare that an employer is a ‘non-construction employer’, which is an employer that does not sell construction services.  If the Board decides that an employer is a ‘non-construction employer’, then that employer is no longer governed by the construction part of the Act, and:  (1) any union that represents construction employees of that employer no longer does so; and (2) any construction collective agreement that applies to an employee of that employer no longer applies.

In this case, an employer  called Independent Electricity System Operator (“EO”) was found by the Board to be a ‘non-construction employer’ because it did not sell construction services, nor did it employ any unionized construction workers.  However, EO had been bound historically to construction collective agreements which prohibited it from contracting out certain types of work to nonunion contractors. This benefited the unions and their members indirectly, because it meant that EO could only contract out to contractors who would use union members. A ‘non-construction’ employer declaration would remove those restrictions on contracting out. But the Labour Board refuses to issue the ‘non-construction employer’ declaration and instead ruled that Section 127.2 was unconstitutional.  The Board ruled that, by effectively voiding a collective agreement and the union’s statutory right to bargain with EO, the legislation ‘substantially interfered with the process of collective bargaining’ in violation of Section 2(d), as explained in B.C. Health Services.

Issue: Does Voiding a Construction Collective Agreement and Representation Rights of a Construction Union upon a delcaration of a ‘non-construction employer’ violate Section 2(d) freedom of association?

DECISION:  No Charter Violation.

The Court of Appeal ruled that it does not, and thus it over ruled the OLRB.  Relying on Fraser, the Court noted that it is only laws that ‘substantially interfere” with the ability of workers to act collectively to achieve workplace goals.  The Court said there was a big difference between what happened in B.C. Health Services and what happens under Section 127.2.  In B.C. Health, the legislation ripped up collective agreements and prohibited bargaining over certain issues in the future.  Section 127.2 does void construction collective agreements as they apply to a newly declared ‘non-construction employer’,  however that is because “the employer is no longer a construction employer”.

According to the Court, Section 127.2 does not prohibit future collective bargaining at the non-construction employer, it simply requires unions to start over–to get certified or ‘voluntarily recognized’ as the representative of the employees of the employer under the non-construction sections of the Act, and then to try and bargain a first collective agreement in the normal manner.  The fact that the construction collective agreement no longer applies to EO, and as a result, EO need not use only unionized contractors in the future, might result in lost job opportunities for the unionized workers doesn’t matter.  The Charter does not protect “employment opportunities”.

Outcome

The facts in this case were unusual in the sense that EO did not actually have any employees doing construction, and it employed no union members, yet it was still bound by the construction collective agreement because of a decision issued years earlier.  This makes the claim that ‘employees’ freedom of association was violated by a Section 127.2 tenuous.  Would the outcome be different if EO did employ some union members covered by a construction collective agreement?

The Court here emphasized that Fraser confirmed that Section 2(d) does not protect access to any particular model of labour relations. One possible implication of this decision is that it confirms that a government can decide to void a collective agreement established under one regime favourable to unions,  place the employees under another less favourable regime, and require the employees and the union to start over from scratch.

Does this mean, for example, that the Ontario government could pass a law decertifying all existing unions, and voiding all existing collective agreements bargained under the existing Labour Relations Act machinery, as long as the employees affected have the ability to start over under another labour relations regime, such as the much weaker regime created under legislation like the Agricultural Employees Protection Act?