By Marc Ouellet and Louise Béchamp
On November 27, 2009, in two cases involving Wal-Mart (Plourde v. Wal-Mart Canada Corp. and Desbiens v. Wal-Mart Canada Corp.), the Supreme Court of Canada rendered its much-awaited decision on an employer’s right to close operations for alleged antiunion reasons.
The Supreme Court decisions rule that Wal-Mart could close one of its stores following the unionization of its employees. Essentially, the court confirmed the principle by which an employer can overturn the presumption against it, established by section 17 of the Quebec Labour Code, by simply showing that the decision to close is “real and definitive.” This is possible even though the reasons behind the closing could be viewed as “socially reprehensible.”
Section 17 of the Code creates a presumption of intent on the employer’s part when a sanction or measure (for example, a termination) is imposed while employees are participating in union activities. The presumption is that the measure was imposed because of the union activities unless the employer can show otherwise.
In a split decision (six judges versus three), the Supreme Court confirmed the principle that Wal-Mart could permanently close one of its stores for whatever reason. It said the former employees could not obtain reinstatement through the remedies provided by section 15 and following of the Code, and more particularly from the presumption established by section 17.
On the other hand, the Supreme Court did state that its ruling doesn’t mean that an antiunion employer can close down “without adverse financial consequences, including potential compensation to the employees who have thereby suffered losses.”
On this point, the Court recognizes that employees do have the right, under sections 12 to 14 of the Code, to claim and prove that the closure of their employer’s business results from antiunion motives. These sections of the Code prohibit employers from hindering the union’s activities or imposing a sanction upon an employee for union activities. When that is proven, the Labour Relations Commission may fashion an appropriate remedy including damages.
By opening the door for unions to file complaints based on sections 12 to 14 of the Code when an employer closes its operations while union rights are being exercised, the evidence will no longer focus on the reasons for which employees were terminated. Rather, the focus will be on the reasons and motives of the closure itself. Absent the benefit of the section 17 presumption, it’s to be expected that the burden to prove antiunion motivation will rest upon the union and employees. It will be interesting to see how the Wal-Mart Supreme Court decisions will be interpreted and applied in the future by the Labour Relations Commission. Especially interesting will be what types of remedy the Commission will be ordering if and when a union succeeds in proving that the closure of the business was in fact based on antiunion reasons.