Supreme Court Alters the Balance of Power Between Labour and Business

On June 27, 2014, the Supreme Court released a decision that will affect every employment relationship across Canada.  In United Food and Commercial Workers, Local 503 v. Wal Mart Canada Corp., a 5-2 majority of the Court held that an employer – in this case Wal-Mart – is prohibited from permanently shutting down its business during the collective bargaining process, unless it can demonstrate that the business closure was consistent with “normal management practices.” The arbitrator at the Quebec Labour Relations Board had found that the store closure was not done in the ordinary course of business and was therefore unlawful. The Supreme Court of Canada agreed.

The Court was interpreting section 59 of the Quebec Labour Code, but the decision will apply to every province, since each has a similar law. Canadians will undoubtedly be divided with the result, but there can be little doubt that prospective employers will now look upon Canada less favourably and will be less likely to open a business here. Indeed, the closure of a store will rarely, if ever, be consistent with “normal management practices,” and the practical reality is that Canadian businesses are now almost completely precluded from closing up shop during the collective bargaining process.

United Food is a classic example of the judicial policymaking that results when the Court interprets the law by appealing to some overarching grand purpose instead of sticking solely to the text and relying on traditional methods of statutory interpretation.

Section 59 of the Code states that, from the time that a union petitions for certification until the right to lock out or strike has been exercised or an arbitrator has imposed a collective agreement, the employer must not “change the conditions of employment.” The crux of the majority’s decision is that a business closure naturally changes the conditions of employment. Taken in complete isolation, the majority’s position could feasibly hold water; but when viewed in its proper statutory context, it is abundantly clear that section 59 is premised on a business that continues to exist. It assumes that there remains an “employer” with “employees” who are engaged in an ongoing process of collective bargaining that will end either with a lockout, a strike or an imposed collective agreement. As Justices Rothstein and Wagner point out in their powerful dissent, “The closure of a business…means that the right to lock out or to strike can never be exercised and that an arbitration award imposing a collective agreement will never be applicable.”

The majority’s decision also flies in the face of a very recent precedent that is directly on point. Plourde v. Wal‑Mart Canada Corp. is a 2009 decision that concerned the very same Wal-Mart store closure. The application in that case had been brought under sections 15 to 19 of the Code. The majority held that these sections do not apply to a store closure and that, “[t]he appropriate remedy in a closure situation lies under ss. 12 to 14 of the Code.”  Under sections 12 to14, the employees must demonstrate an anti-union animus, unlike section 17 which presumes an anti-union animus. The majority noted that if employees could proceed under sections 15 to 19 and were no longer required to demonstrate an anti-union animus, it would significantly alter the balance of power between employees and employers that had been intended by the legislature.

The majority in United Food deals with the precedent in Plourde by saying that it is inapplicable since it was interpreting sections 15 to 19, not section 59. This completely misses the point. The decision in Plourde was based on the recognition that section 15 presumes an “ongoing place of employment,” and therefore does not apply to a store closure – an analysis that is equally applicable to section 59. More importantly, the essence of the decision in Plourde is that, where employees seek damages in the context of a store closure, they should have to demonstrate an anti-union animus, as required by sections 12 to 14. By the same token, if employees are permitted to bring the application under section 59, then they will be able to bypass the anti-union animus requirement, and the burden will rest with the employer to demonstrate that the store closure was consistent with “normal management practices.”

The five justices who formed the majority in United Food include the three dissenters in Plourde – Justices LeBel, Abella and Cromwell. With respect, to quote the dissenters, the decision is an attempt “revive the position adopted by the dissent in Plourde.” The decision “undermines the principle of stare decisis“ and employees will now be able to circumvent the unambiguous language in sections 12 to 14 that require proof of an anti-union animus.

On a more fundamental level, the majority’s reasoning in United Food underscores the problem with “purposivism” – the modern method of interpreting statutes, in which judges go beyond the ordinary meaning of the words and look to some underlying legislative “purpose.” The purpose of a statutory provision is certainly important, but it should flow from the meaning of the text, not the other way around. If we look at the words in section 59 in their full context, as the dissent did, then the purpose becomes evident. The section is clearly meant to ensure that the status quo is maintained during the bargaining period; hence why it prohibits an employer from altering the conditions of employment during that period.

The majority rejected this textually-grounded purpose and opted for a much broader and loftier purpose- “to foster the exercise of the right of association” – which it then used to justify its expansive reading of section 59. And this is where the decision really becomes problematic, since there is no evidence that the majority’s chosen purpose was in fact the “true” purpose behind the law – and indeed, the majority relied primarily on an academic article to support this alleged purpose. Even if the Court could point to a debate in the Quebec Assembly where this purpose was spelled out by one or more of the MPPs, how do we know that the others who voted on the Bill agreed with that purpose? How do we know that there were not other purposes at play that were equally or more important in the minds of some or all of the legislators?

In other words, the search for a legislative purpose that goes beyond the ordinary meaning of the text will typically be an elusive one, since it requires judges to infer or guess what a hundred or more individuals were thinking at the time the law was passed. If a court can interpret a statute based on a legislative purpose that cannot be proven or disproven, then it will essentially have carte blanche to ignore the legislature and give whatever meaning to the law it sees fit.

The Supreme Court has faced a lot of unfair criticism in recent months for doing nothing more than applying the law; but in United Food, it went beyond the ordinary meaning of the statute and effectively rewrote the law. The basic problem with the decision is not that it produces a “bad result.” It is that this result was entirely of the Court’s own making.