SUPREME
COURT OF CANADA
Citation: Isidore Garon ltée v.
Tremblay; Fillion et Frères (1976) inc. v. Syndicat national des
employés de garage du Québec inc., [2006] 1 S.C.R. 27, 2006 SCC 2
|
Date: 20060127
Docket: 30171,
30172
|
Between:
Isidore Garon ltée
Appellant
v.
Syndicat
du bois ouvré de la région de Québec inc. (C.S.D.)
Respondent
‑ and ‑
Jean-Pierre
Tremblay, in his capacity as arbitrator of grievances
Intervener
and between:
Fillion et Frères
(1976) inc.
Appellant
v.
Syndicat
national des employés de garage du Québec inc. (C.S.D.)
Respondent
Official English Translation
Coram:
McLachlin C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish and Charron JJ.
Reasons for
Judgment:
(paras. 1 to 64)
Dissenting
reasons:
(paras. 65 to 195)
|
Deschamps J. (Bastarache, Binnie and Charron JJ.
concurring)
LeBel J. (McLachlin C.J. and
Fish J. concurring)
|
______________________________
Isidore Garon ltée v. Tremblay; Fillion et Frères (1976)
inc. v. Syndicat national des employés de garage du Québec inc., [2006]
1 S.C.R. 27, 2006 SCC 2
Isidore Garon ltée Appellant
v.
Syndicat du bois ouvré de la région de Québec inc. (C.S.D.) Respondent
and
Jean‑Pierre
Tremblay, in his capacity as grievances arbitrator Intervener
- and -
Fillion et Frères (1976) inc. Appellant
v.
Syndicat national des employés de garage du Québec inc. (C.S.D.) Respondent
Indexed as: Isidore Garon ltée v. Tremblay;
Fillion et Frères (1976) inc. v. Syndicat national des employés de
garage du Québec inc.
Neutral citation: 2006 SCC 2.
File Nos.: 30171, 30172.
2005:
February 16; 2006: January 27.
Present:
McLachlin C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish and
Charron JJ.
on appeal from
the court of appeal for quebec
Labour relations — Grievances — Jurisdiction of arbitrator — Notice
of termination — Incorporation of general law rules into collective agreement —
Unionized employees laid off after business closed — Notice of termination of
employment complying with minimum statutory employment standards — Grievances
claiming additional termination pay based on general law — Whether arbitrators
have jurisdiction to determine whether notice given meets requirements of Civil
Code of Québec — Whether notice of termination provided for in art. 2091
of Civil Code of Québec applies to collective labour relations scheme — Civil
Code of Québec, S.Q. 1991, c. 64, arts. 2091, 2092.
G and F notified their employees that they would cease operating their
businesses and gave each of them a notice that complied with the time
requirement established by the Act respecting labour standards (“A.L.S.”).
There was no clause in either collective agreement dealing with the closing of
the business, although G’s agreement did provide that the employer had to give
notice as provided for in the A.L.S. in the event of a layoff for more
than six months. By way of grievances, the unions representing both groups of
employees contended that the notice of termination was not given in reasonable
time within the meaning of art. 2091 of the Civil Code of Québec (“C.C.Q.”)
and claimed compensation equivalent to four weeks’ salary per year of
service for each employee. The arbitrators dismissed the employers’
preliminary objections, finding that they had jurisdiction to decide the
grievances and to determine whether the notice given met the requirements of
arts. 2091 and 2092 C.C.Q. In the Superior Court, F’s
application for judicial review was allowed, while G’s was dismissed. The
Court of Appeal set aside the first Superior Court decision and affirmed the
second. It concluded that the arbitrators had jurisdiction to hear the grievances
because the rule set out in arts. 2091 and 2092 had been implicitly
incorporated into the collective agreements.
Held (McLachlin C.J. and LeBel and Fish JJ.
dissenting): The appeals should be allowed.
Per Bastarache, Binnie, Deschamps and Charron JJ.: If
a rule is incompatible with the collective labour relations scheme, it cannot
be incorporated into the collective agreement and must be disregarded. If the
rule is found to be compatible and if it is a supplementary or mandatory norm,
the arbitrator will have jurisdiction to apply it. The fact that individual
contracts are subordinate to the collective scheme allows collective interests
to be reconciled with individual interests in situations where it is possible
for the latter to subsist without hindering the proper conduct of collective
relations. The mechanism of incorporating compatible mandatory norms and the
use of implicit conditions ensure that the collective scheme is a coherent
legal scheme. Thus, not everything set out in the C.C.Q. is implicitly
incorporated into collective agreements — only that which is
compatible. [24‑30]
In this case, the arbitrators do not have jurisdiction to hear the
grievances filed by the unions. There are three reasons why the rule in art. 2091 C.C.Q.
is incompatible with the collective labour relations scheme. First, the
conditions of employment of unionized employees are bargained collectively in
advance by the union and the employer, while the notice provided for in the C.C.Q.
is agreed on as an individual matter when employment is terminated. Notice of
termination is undeniably a condition of employment, and apart from the minimum
standards laid down by the A.L.S., its length is a matter to be
determined in the bargaining process between the union and the employer. The
parties’ failure to specify in the collective agreement what will happen if the
business closes does not make the general law relating to individual contracts
of employment applicable. The consensual aspect and individual nature of the
art. 2091 notice of termination and the time when its sufficiency is
determined, namely after the employment is terminated, are three essential
features of the C.C.Q.’s rule that show that it is incompatible with the
collective scheme. Second, the right of employees to claim reasonable notice
of termination under the general law is the counterpart of the employer’s right
to terminate the employment relationship by providing pay in lieu of notice,
without having to show good and sufficient cause. Since the employer’s right
to dismiss is limited in the collective labour relations context and
reinstatement is the most common remedy, it follows that the employee’s right
under art. 2091 to reasonable notice is inapplicable. Lastly, the legislative
history of art. 2091 also leads to the conclusion that the legislature did
not intend to incorporate the notice provided for in the article into the
collective scheme. The proposal made before the C.C.Q. was enacted that
the new Code serve as the general framework for all labour relations, whether
individual or collective, was rejected. The courts should not impose their
vision where the legislature has chosen not to impose the rule set out in
art. 2091 C.C.Q. in the context of the collective scheme. [9]
[32] [35‑47] [51‑57]
Per McLachlin C.J. and LeBel and Fish JJ.
(dissenting): Although the certification of a union in a company
transforms the dynamics of labour relations, as employees lose their freedom of
contract, this does not mean that the rules of the C.C.Q. regarding
individual contracts of employment cease to apply and are no longer part of the
implicit content of the collective agreement. An individual contract continues
to exist after a union is certified and a collective agreement is in place.
Because labour legislation, as prolix and complex as it may be, does not cover
all aspects of labour relations, even in a collective context, the rules of the
C.C.Q. supplement that legislation and make up for any silences or gaps in
the collective agreement. The rights arising out of an individual contract of
employment and the rights protected by the collective scheme can be harmonized
in a manner consistent with the hierarchy of legal rules. [115] [133]
[140] [175]
In principle, the collective agreement contains all the conditions of
employment expressly included by the parties during the collective bargaining
process, but the parties’ ability to freely negotiate the substantive standards
that will govern them is limited by the obligation to respect, or incorporate
into the agreement, the rights and values protected by the charters and the
legal rules imposed by the legislature, including certain general principles of
law, particularly those that are of public order. There are several Quebec
statutes containing labour law provisions that are of public order, including
the A.L.S., which sets out minimum standards that all collective
agreements must meet, and the C.C.Q. Under arts. 2091 and 2092 C.C.Q.,
an employee is entitled to reasonable notice of termination and may not
renounce that right. Since arts. 2091 and 2092 C.C.Q. are of
directive public order and since the collective agreement cannot contain
provisions that are contrary to public order (s. 62 of the Labour Code),
an arbitrator hearing a grievance on such a matter must assess the sufficiency
of the compensation paid in lieu of notice of termination in light of the C.C.Q.
[141] [177] [190]
Here, the arbitrators appointed in the two cases have jurisdiction to
hear the grievances. There is nothing to prevent employees governed by a
collective agreement from being entitled to reasonable notice under the C.C.Q.
Far from being incompatible with the collective labour law scheme,
arts. 2091 and 2092 C.C.Q. supplement it and provide a remedy to
employees who lose their jobs without being adequately compensated by their
employer. Two situations can arise. Where, as in G’s case, the collective
agreement contains a provision referring to the notice of termination to which
employees will be entitled if the business closes or in some other situation,
the arbitrator must determine whether the measure provided for in the agreement
(here, the reference to the notice of termination provided for in the A.L.S.)
complies with art. 2091. If the arbitrator finds that the union’s
grievance is justified, the arbitrator can then require the notice of
termination that he or she considers reasonable. Where, on the other hand, as
in F’s case, the agreement is silent about the compensation in lieu of notice
of termination to be paid to employees if the business closes, the arbitrator
must determine whether, having regard to art. 2091, the minimum notice of
termination provided for in s. 82 A.L.S. is sufficient or
whether the circumstances of the case call for a longer period. [189] [192‑193]
Cases Cited
By Deschamps J.
Referred to: Weber v. Ontario Hydro, [1995]
2 S.C.R. 929; New Brunswick v. O’Leary, [1995]
2 S.C.R. 967; Parry Sound (District) Social Services
Administration Board v. O.P.S.E.U., Local 324, [2003]
2 S.C.R. 157, 2003 SCC 42; McGavin Toastmaster Ltd. v.
Ainscough, [1976] 1 S.C.R. 718; Noël v. Société d’énergie de
la Baie James, [2001] 2 S.C.R. 207, 2001 SCC 39, aff’g
[1998] R.J.Q. 2270; Syndicat catholique des employés de magasins de
Québec Inc. v. Compagnie Paquet Ltée, [1959] S.C.R. 206; Canadian
Pacific Railway Co. v. Zambri, [1962] S.C.R. 609; St. Anne Nackawic
Pulp & Paper Co. v. Canadian Paper Workers Union, Local 219,
[1986] 1 S.C.R. 704; Hémond v. Coopérative fédérée du Québec,
[1989] 2 S.C.R. 962; McLeod v. Egan, [1975]
1 S.C.R. 517; Douglas/Kwantlen Faculty Assn. v. Douglas College,
[1990] 3 S.C.R. 570; Cuddy Chicks Ltd. v. Ontario (Labour
Relations Board), [1991] 2 S.C.R. 5; Voice Construction Ltd.
v. Construction & General Workers’ Union, Local 92, [2004]
1 S.C.R. 609, 2004 SCC 23; Standard Broadcasting
Corp. v. Stewart, [1994] R.J.Q. 1751; Garcia Transport Ltée v.
Royal Trust Co., [1992] 2 S.C.R. 499; Alberta Union of
Provincial Employees v. Lethbridge Community College, [2004]
1 S.C.R. 727, 2004 SCC 28; Graphic Communications Union
Local 255‑C v. Quebecor Jasper Printing Ltd. (2002),
333 A.R. 204, 2002 ABQB 959; Asbestos Corp. v. Cook,
[1933] S.C.R. 86.
By
LeBel J. (dissenting)
Parry Sound (District) Social Services Administration Board v.
O.P.S.E.U., Local 324, [2003] 2 S.C.R. 157,
2003 SCC 42; Canadian Broadcasting Corp. v. Canada (Labour
Relations Board), [1995] 1 S.C.R. 157; Canadian Merchant
Service Guild v. Gagnon, [1984] 1 S.C.R. 509; Noël v. Société
d’énergie de la Baie James, [2001] 2 S.C.R. 207,
2001 SCC 39; Weber v. Ontario Hydro, [1995]
2 S.C.R. 929; St. Anne Nackawic Pulp & Paper Co. v.
Canadian Paper Workers Union, Local 219, [1986]
1 S.C.R. 704; Regina Police Assn. Inc. v. Regina (City) Board of
Police Commissioners, [2000] 1 S.C.R. 360, 2000 SCC 14;
New Brunswick v. O’Leary, [1995] 2 S.C.R. 967; Quebec
(Commission des droits de la personne et des droits de la jeunesse) v. Quebec
(Attorney General), [2004] 2 S.C.R. 185, 2004 SCC 39; Syndicat
catholique des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée,
[1959] S.C.R. 206; McGavin Toastmaster Ltd. v. Ainscough, [1976]
1 S.C.R. 718; Hémond v. Coopérative fédérée du Québec, [1989]
2 S.C.R. 962; CAIMAW v. Paccar of Canada Ltd., [1989]
2 S.C.R. 983; Association catholique des institutrices du district
no 16 Inc. v. Commissaires d’écoles pour la municipalité de la
paroisse de St‑Athanase, [1947] B.R. 703; Quebec (Commission
des normes du travail) v. Campeau Corp., [1989] R.J.Q. 2108; McLeod
v. Egan, [1975] 1 S.C.R. 517; Garcia Transport Ltée v. Royal
Trust Co., [1992] 2 S.C.R. 499; Doré v. Verdun (City),
[1997] 2 S.C.R. 862; Machtinger v. HOJ Industries Ltd., [1992]
1 S.C.R. 986; Farber v. Royal Trust Co., [1997]
1 S.C.R. 846; Centre hospitalier Régina Ltée v. Labour Court,
[1990] 1 S.C.R. 1330; Tremblay v. Syndicat des employées et
employés professionnels‑les et de bureau, section locale 57,
[2002] 2 S.C.R. 627, 2002 SCC 44; Alberta Union of
Provincial Employees v. Lethbridge Community College, [2004]
1 S.C.R. 727, 2004 SCC 28; Dupré Quarries Ltd. v. Dupré,
[1934] S.C.R. 528; Rock Forest (Ville) v. Gosselin, [1991]
R.J.Q. 1000; Schacter v. Centre d’accueil Horizons de la jeunesse,
[1997] R.J.Q. 1828; Allen v. Alberta, [2003]
1 S.C.R. 128, 2003 SCC 13.
Statutes and Regulations Cited
Act respecting collective
agreement decrees, R.S.Q., c. D‑2, s. 11.
Act respecting industrial accidents and
occupational diseases, R.S.Q., c. A‑3.001, ss. 4, 256, 257,
259.
Act respecting labour standards, R.S.Q.,
c. N‑1.1, ss. 1(4), (7), (10), 40, 52, 55, 60, 78, 82, 83, 93,
94, 128.
Act respecting occupational health and safety,
R.S.Q., c. S‑2.1, ss. 4, 227.
Act to add the reformed law of obligations to
the Civil Code of Québec, Draft Bill, 2nd Sess., 33rd Leg., 1988,
art. 2157.
Act to amend the Act respecting labour standards
and other legislative provisions, S.Q. 2002, c. 80, s. 49.
Act to secure handicapped persons in the
exercise of their rights with a view to achieving social, school and workplace
integration, R.S.Q., c. E‑20.1.
Canadian Charter of Rights and Freedoms .
Charter of human rights and freedoms,
R.S.Q., c. C‑12.
Charter of the French language, R.S.Q.,
c. C‑11, ss. 41 to 50.
Civil Code of Lower Canada, art. 1668.
Civil Code of Québec, S.Q. 1991,
c. 64, preliminary provision, arts. 9, 11 et seq., 1373, 1377 et
seq., 1385, 1386, 1388, 1417, 1418, 1426, 1434, 1439, 2091, 2092, 2085 to
2097.
Interpretation Act, R.S.Q., c. I‑16,
ss. 41.3, 41.4.
Labour Code, R.S.Q., c. C‑27,
ss. 1(a), (d), (f), (k), (l), 21, 22,
32, 41, 43, 45, 47, 47.2, 53, 58, 62, 63 to 67, 100.12, (a), (f),
100 to 102, 107, 109, 139, 139.1, 140.
Minimum Wage Act, R.S.Q., c. S‑1.
National Holiday Act, R.S.Q., c. F‑1.1.
Public Service Act, R.S.Q., c. F‑3.1.1.
Authors Cited
Baudouin, Jean‑Louis, et Pierre‑Gabriel Jobin.
Les obligations, 6e éd. Cowansville, Qué.:
Yvon Blais, 2005.
Béliveau, Nathalie‑Anne. Les normes du
travail. Cowansville, Qué.: Yvon Blais, 2003.
Bich, Marie‑France. “Contrat de travail et
Code civil du Québec — Rétrospective, perspectives et expectatives”, dans
Service de la formation permanente du Barreau du Québec, Développements
récents en droit du travail. Cowansville,
Qué.: Yvon Blais, 1996, 189.
Bich, Marie‑France. “Du contrat individuel
de travail en droit québécois: essai en forme de point d’interrogation” (1986),
17 R.G.D. 85.
Blouin, Rodrigue, et Fernand Morin. Droit
de l’arbitrage de grief, 5e éd. Cowansville, Qué.:
Yvon Blais, 2000.
Doucet, René. “La résiliation du contrat de
travail en droit québécois” (1974), 9 R.J.T. 249.
Gagnon, Robert P. Le droit du travail
du Québec, 5e éd. Cowansville,
Qué.: Yvon Blais, 2003.
Gagnon, Robert P., Louis LeBel et
Pierre Verge. Droit du travail, 2e éd. Ste‑Foy,
Qué.: Presses de l’Université Laval, 1991.
Laporte, Pierre. La réintégration du salarié:
Nouvelles perspectives. Montréal: Wilson & Lafleur, 1995.
McLeod, Neil R. “Severance Pay at
Arbitration: A Union Viewpoint”, in William Kaplan et al., eds., Labour
Arbitration Yearbook 1998. Toronto: Butterworths –
Lancaster House, 1998, 269.
Morin, Fernand. “Effets combinatoires de deux
codes: Code du travail et Code civil du Québec” (1994),
49 Relat. ind. 227.
Morin, Fernand. “Le contrat de travail: fiction et
réalité!”, dans Service de la formation permanente du Barreau du Québec, Développements
récents en droit du travail. Cowansville, Qué.: Yvon Blais,
2005, 179.
Morin, Fernand. “Pertinence, cohérence et
conséquences de l’arrêt Parry Sound”, dans Service de la formation
permanente du Barreau du Québec, Développements récents en droit du travail.
Cowansville, Qué.: Yvon Blais, 2004, 29.
Morin, Fernand, et Jean‑Yves Brière. Le
droit de l’emploi au Québec, 2e éd. Montréal: Wilson
& Lafleur, 2003.
Nadeau, Denis. “L’arrêt Morin et le
monopole de représentation des syndicats: assises d’une fragmentation” (2004),
64 R. du B. 161.
Otis, Louise. “L’ordre public dans les relations
de travail” (1999), 40 C. de D. 381.
Québec. Ministère de la Justice. Commentaires
du ministre de la Justice — Le Code civil du Québec: Un mouvement de société,
t. I et II. Québec: Publications du Québec, 1993.
Verge, Pierre. “Faut‑il ‘nommer’ le contrat
de travail?” (1988), 29 C. de D. 977.
Verge, Pierre. “Le contrat de travail selon le Code
civil du Québec: pertinence ou impertinence?” (1993), 24 R.G.D. 237.
APPEAL from a judgment of the Quebec Court of Appeal (Rothman and
Rousseau‑Houle JJ.A. and Biron J. (ad hoc)), [2004]
R.J.Q. 58, [2004] R.J.D.T. 15, [2003] Q.J. No. 18478 (QL),
affirming a decision of Martin J., D.T.E. 2001T‑220, dismissing
an application for judicial review of an interim arbitration decision, [2001]
R.J.D.T. 304. Appeal allowed, McLachlin C.J. and LeBel and
Fish JJ. dissenting.
APPEAL from a judgment of the Quebec Court of Appeal (Rothman and
Rousseau‑Houle JJ.A. and Biron J. (ad hoc)), [2003] Q.J.
No. 18474 (QL), SOQUIJ AZ‑50210482, reversing a decision of
Alain J., [2001] R.J.Q. 700, [2001] R.J.D.T. 615, [2001] Q.J.
No. 1169 (QL), allowing an application for judicial review of an interim
arbitration decision. Appeal allowed, McLachlin C.J. and LeBel and
Fish JJ. dissenting.
Robert Dupont, Suzanne Thibaudeau and Laurent Lesage,
for the appellant Isidore Garon ltée.
Guy Dion, Jasmin Marcotte, Sébastien Gobeil
and Benoît Mailloux, for the appellant Fillion et Frères (1976)
inc.
Georges Marceau and Johanne Drolet, for the
respondents.
No one appeared for the intervener.
English version of the judgment of Bastarache, Binnie, Deschamps and
Charron JJ. delivered by
1
Deschamps J. — A
number of unionized employees who had been dismissed filed a grievance in which
they claimed termination pay under art. 2091 of the Civil Code of
Québec, S.Q. 1991, c. 64 (“C.C.Q.”). The employer had
given notice of termination of employment in accordance with s. 82 of the Act respecting
labour standards, R.S.Q., c. N‑1.1 (“A.L.S.”). The issue
is whether art. 2091 C.C.Q. applies to the collective labour
relations scheme. For the reasons set out below, my opinion is that it does
not.
1. Facts
2
The appellants in both cases before us closed their businesses. On
November 24, 1997, Fillion et Frères (1976) inc. (“Fillion”) notified
all its employees that it would cease operating its car dealership by
January 16, 1998 at the latest; some of the employees’ jobs were
to be terminated on December 19, 1997 and the rest on
January 16, 1998. The collective agreement then in effect at Fillion
did not provide for what would happen if the business closed. On
April 15, 1999, Isidore Garon ltée (“Garon”) informed all its
employees that it would close its hardware business on June 19, 1999
due to financial problems. There was no clause in Garon’s collective
agreement dealing with the closing of the business; however, the agreement did
provide that, in the event of a layoff for more than six months, the employer
would have to give notice as provided for in the A.L.S.
3
The notice given by both employers complied with the time requirement
established by s. 82 A.L.S. However, the unions representing both
groups of employees claimed that the notice of termination was not given in
reasonable time within the meaning of art. 2091 C.C.Q. They
claimed compensation equivalent to four weeks’ salary per year of
service for each employee.
2. Decisions Below
4
Before the arbitrators, the employers made some preliminary
objections. They argued that the arbitrators had no jurisdiction to
decide the grievances absent a connection with the collective agreement. In
their interim decisions, the arbitrators found that they had jurisdiction to
determine whether the notice given met the requirements of arts. 2091 and
2092 C.C.Q. Denis Tremblay, the arbitrator who heard the
grievance against Fillion, relied on Weber v. Ontario Hydro, [1995]
2 S.C.R. 929, and New Brunswick v. O’Leary, [1995]
2 S.C.R. 967. He found that the C.C.Q. can complement the
collective agreement where the agreement is silent on a matter that concerns
the employees and their employer. Jean‑Pierre Tremblay, the
arbitrator who heard the grievance filed by Garon’s employees, found that he
could determine whether the reference in clause 8.02(c) of the collective
agreement to the notice provided for in s. 82 A.L.S., and the nine
weeks’ notice of termination given by the employer, met the reasonableness test
in arts. 2091 and 2092 C.C.Q. ([2001] R.J.D.T. 304).
5
The appellants applied for judicial review of the interim arbitration
decisions. Fillion’s application was allowed, while Garon’s was dismissed.
The different outcomes can be attributed to differences between the collective
agreements in question. Alain J. quashed the arbitration decision rendered in
the Fillion case ([2001] R.J.Q. 700). In his opinion, since the
collective agreement was silent regarding the closing of the business and
notice of termination, the grievance was not arbitrable, as the effect of Weber
and O’Leary was not to give grievances arbitrators jurisdiction over
disputes not arising out of the interpretation and application of the
collective agreement. He said that an arbitrator will have the power to
interpret a statute pursuant to s. 100.12 of the Labour Code, R.S.Q.,
c. C‑27 (“L.C.”), only where there is an arbitrable
grievance. Accordingly, the arbitrator could not interpret arts. 2091 and
2092 C.C.Q. to settle the dispute between the parties because he
did not have jurisdiction to hear the grievance. In the Garon
case, Martin J. declined to quash the arbitrator’s interim decision
(D.T.E. 2001T-220). He relied on the clause in the collective agreement
referring to the provisions of the A.L.S. in the event of a layoff
for more than six months, and he found that the grievance arose out of the
interpretation and application of the collective agreement and that
s. 100.12 L.C. allows an arbitrator to rely on a law of
general application, such as the C.C.Q., to decide a grievance. Both
judgments were appealed.
6
The Court of Appeal found that the rule set out in arts. 2091 and
2092 C.C.Q. had been implicitly incorporated into the collective
agreements. It relied on this Court’s recent decision in Parry Sound
(District) Social Services Administration Board v. O.P.S.E.U., Local 324,
[2003] 2 S.C.R. 157, 2003 SCC 42, and concluded that the
arbitrators had jurisdiction to hear the grievances ([2004] R.J.Q. 58 and
[2003] Q.J. 18474 (QL)).
7
The employers appealed to this Court.
3. Analysis
8
The issue in this appeal is whether the notice of termination provided
for in the C.C.Q. applies under the collective labour relations scheme.
The articles in question read as follows:
2091. Either party to a contract
with an indeterminate term may terminate it by giving notice of termination to
the other party.
The notice of termination shall be given in
reasonable time, taking into account, in particular, the nature of the
employment, the special circumstances in which it is carried on and the
duration of the period of work.
2092. The employee may not
renounce his right to obtain compensation for any injury he suffers where
insufficient notice of termination is given or where the manner of resiliation
is abusive.
9
For half a century, the interplay between the rights arising out of an
individual employment relationship and the rights arising out of collective
labour relations has been marked by two trends in the case law, which appear to
have met head on in this appeal. According to the first line of cases, the
general law and individual negotiation have no place in matters relating to
conditions of employment in the collective labour relations
context (3.1). In the second line of cases, the minimum employment
standards set out in various employment‑related statutes, the substantive
rights and freedoms provided for in human rights legislation and the principles
of the Canadian Charter of Rights and Freedoms have been incorporated
into collective agreements (3.2). To determine which of the rules from
the case law — exclusion or inclusion — will guide the decision in the
instant case, the basis for those rules must be explained. I will begin with
an overview of the two lines of cases. This will reveal the common thread that
can be used to reconcile the two trends (3.3) and will make it possible to
identify three reasons why the rule in art. 2091 C.C.Q. is
incompatible with the collective scheme: the conditions of
employment of unionized employees are bargained collectively by the union and
the employer, while the notice provided for in the C.C.Q. is agreed on
as an individual matter when employment is terminated (3.4.1); the notice
of termination to which an employee is entitled in the context of an individual
contract of employment is connected with the employer’s right to dismiss an
employee, whereas this right is limited by the collective agreement under the
collective scheme (3.4.2); and the legislative history of the provision shows
that the legislature did not intend to make all the rules relating to
individual contracts of employment applicable to the collective
scheme (3.4.3).
3.1 First Line of Cases: Exclusion of
the General Law and Shelving of Individual Rights in the Collective Labour
Relations Context
10
The first line of cases recognizes the autonomy of labour law, which is
statute law of a social nature and which, as a result, supplants the general
law:
The common law as it applies to individual employment contracts is no
longer relevant to employer‑employee relations governed by a collective
agreement which, as the one involved here, deals with discharge, termination of
employment, severance pay and a host of other matters that have been negotiated
between union and company as the principal parties thereto.
(McGavin Toastmaster Ltd. v. Ainscough, [1976]
1 S.C.R. 718, at p. 725)
In a recent
case, Noël v. Société d’énergie de la Baie James, [2001]
2 S.C.R. 207, 2001 SCC 39, the Court reaffirmed this
conclusion:
A collective framework supersedes the traditional contractual process,
which is based on individual relations between the employer and its
employees. [para. 43]
11
Like collective labour relations law itself, this line of cases is a
reaction to the economic liberalism underlying the general law of
contracts: P. Verge, “Le contrat de travail selon le Code civil
du Québec: pertinence ou impertinence?” (1993), 24 R.G.D. 237,
at p. 242; see also F. Morin and J.‑Y. Brière, Le droit
de l’emploi au Québec (2nd ed. 2003), at pp. 74 and 1461.
In seeking to equalize the balance of power between employers and employees,
freedom of contract is dispensed with, and exclusive representation by the
union and predominance of the collective agreement replace individual
negotiation between an employer and an employee: Syndicat catholique
des employés de magasins de Québec Inc. v. Compagnie Paquet Ltée,
[1959] S.C.R. 206, at p. 212.
12
In addition, recognizing the benefits for both the employee and the
employer of continuity in the employment relationship, the courts have
dispensed with the general law rules that stand in the way of that continuity.
This is the approach that this Court took in finding, in Canadian Pacific
Railway Co. v. Zambri, [1962] S.C.R. 609, and McGavin
Toastmaster, that the principles of breach and repudiation of contract were
inapplicable in the collective labour relations context. In both of those
cases, this Court adopted an interpretation that subordinated individual rights
to the collective scheme.
13
As well, in St. Anne Nackawic Pulp & Paper Co. v. Canadian
Paper Workers Union, Local 219, [1986] 1 S.C.R. 704, at
p. 718, the Court held that rights which at common law would flow from a
master‑servant relationship do not qualify for enforcement in the
traditional courts in the collective labour relations context. The entire law
of employer‑employee relations is subsumed in the collective labour relations
scheme.
14
Since these principles are based on respect for the integrity of the
collective scheme, they apply to claims made by both employers and
employees. For example, in Hémond v. Coopérative fédérée du Québec,
[1989] 2 S.C.R. 962, three long‑time employees brought an
action in the Superior Court to assert their seniority rights, which they
argued were vested rights. They had been promoted to foremen positions and as
a result were excluded from the bargaining unit. Shortly after being promoted,
they were demoted to labourer positions. In the interim, a new collective
agreement had been signed under which they lost their seniority when they were
demoted. They argued that the new agreement could not be set up against them
and that their seniority was a personal right. The Court rejected their
argument, stating that, under a collective labour relations scheme, no
seniority rights can exist as personal rights outside the collective agreement:
Seniority rights are subject to the collective bargaining process like
any other employee right. In the context of labour relations it would be
singular, to say the least, for these rights to be absolutely and irremediably
raised to the level of vested rights. When a collective agreement exists,
individual rights are for all practical purposes superseded. As
Laskin C.J. said at p. 725 of McGavin Toastmaster Ltd. v.
Ainscough, [1976] 1 S.C.R. 718, in which the Court adopted a rule
stated in Syndicat catholique des employés de magasins de Québec Inc. v.
Compagnie Paquet Ltée, [1959] S.C.R. 206: “The common law as it
applies to individual employment contracts is no longer relevant to employer‑employee
relations governed by a collective agreement . . . .”
[p. 975]
15
That decision was necessary to preserve the integrity of the collective
labour relations scheme, which ultimately serves to protect employees. As
Mailhot J.A. of the Quebec Court of Appeal said in Noël v.
Société d’énergie de la Baie James, [1998] R.J.Q. 2270, a
decision affirmed by this Court:
[translation]
These nuances must not make us lose sight of the fact that labour law remains
governed by its own principles. The legislature has created a scheme of
exclusive legal representation. It must be honoured in all its dimensions.
The collectivization of labour relations protects employees and creates an
appropriate balance of power in their relations with their employer. For all
practical purposes, employees who benefit from such collectivization no longer
have individual rights. [p. 2275]
16
A desire to achieve an outcome favourable to the employees in a
particular case cannot dictate which principles apply. The collective scheme
must survive disputes involving individual rights and yet remain coherent.
Employees will be better protected by a harmonious scheme than by an amalgam of
mutually incompatible rules. Indeed, the objective of protecting employees is
also at the heart of the second line of cases, which favours incorporating into
the collective scheme the norms set out in the Charter, in human rights
legislation and in certain labour relations statutes.
3.2 Second Line of Cases: Incorporation
into the Collective Agreement of the Norms Set Out in the Charter, Human Rights
Legislation and Certain Labour Relations Statutes
17
The second line of cases, which originated with McLeod v. Egan,
[1975] 1 S.C.R. 517, culminated in Parry Sound.
18
In McLeod, a clause in the existing collective agreement allowed
the employer to require that an employee work more than 40 hours per
week. Notwithstanding the provisions of the Employment Standards Act,
which limited the work week to 48 hours, the employer had required an employee
to work more than the 48 hours he had already worked. The Court held that the
employer’s right was limited by the Act:
By the operation of the statute, the right to require overtime beyond
48 hours per week from any individual employee had been taken away from
the employer and became subject to the rights of the employee under
s. 11(2). [p. 524]
19
Then, in Weber, at para. 56, quoting Lord Denning’s
comment that “[t]here is not one law for arbitrators and another for the court,
but one law for all”, the Court adopted the exclusive jurisdiction model for
arbitrators. In that case, the Court stated that arbitrators apply the law of
the land, “be it the common law, statute law or the Charter”
(para. 61). (See also: Douglas/Kwantlen Faculty Assn. v. Douglas
College, [1990] 3 S.C.R. 570, and Cuddy Chicks Ltd. v. Ontario
(Labour Relations Board), [1991] 2 S.C.R. 5.)
20
There are two advantages to this model. First, by basing the
arbitrator’s jurisdiction on the essential character of the parties’ dispute
rather than the legal framework in which it arises, the model ensures that the
arbitration process “which the various labour statutes of this country have
established [is not] duplicated and undermined by concurrent actions” (Weber,
at para. 58). Second, it allows employees to assert their rights in a
prompt, inexpensive and informal way. This line of cases is based on the
desire to group together all employee recourses that may be submitted to an
arbitrator. The arbitrator will therefore determine the parties’ substantive
rights and obligations by applying the relevant labour relations legislation.
21
Parry Sound was decided in the same spirit. In that case, a
probationary employee who had been discharged shortly after returning from
maternity leave filed a grievance alleging discrimination. The Court had to
decide whether such a grievance was authorized notwithstanding a clause in the
collective agreement that allowed probationary employees to be discharged for
any reason satisfactory to the employer and denied those employees access to
arbitration. To make a finding on the arbitrator’s jurisdiction, the Court had
to determine whether there was a connection with the collective agreement
(para. 19). The Court stated the following (at paras. 26 and 28):
Management rights must be exercised not only in accordance with the
express provisions of the collective agreement, but also in accordance with the
employee’s statutory rights. . . .
. . .
[T]he substantive rights and obligations of employment‑related
statutes are implicit in each collective agreement over which an arbitrator has
jurisdiction. A collective agreement might extend to an employer a broad right
to manage the enterprise as it sees fit, but this right is circumscribed by the
employee’s statutory rights.
22
These principles were also cited in Voice Construction Ltd. v.
Construction & General Workers’ Union, Local 92, [2004]
1 S.C.R. 609, 2004 SCC 23, at para. 32.
23
The respondents rely on this line of cases.
3.3 Reconciling the
Two Lines of Cases
24
The solutions adopted in the two lines of cases may seem
contradictory: on the one hand, the general law is excluded because
the collective scheme takes precedence; on the other, certain external norms
are implicitly included in the collective agreement. However, this impression
does not stand up to analysis. While the first line of cases addresses the
supplanting of individual rights that are incompatible with collective labour
relations, the second relates primarily to the arbitrator’s power to apply
provisions that are implicitly included in a collective agreement. In the
first line of decisions, the right relied on is incompatible with the
collective scheme, while in the second, the norm is not only compatible with
the collective agreement, but is also incorporated into it. For example, in Parry
Sound, the application of the Ontario Human Rights Code to the
employee was not disputed. The issue was the arbitrator’s power to apply it. Parry
Sound did not reverse Paquet, McGavin, Hémond or Noël.
The principle that emerges from that case is that, if a rule is incompatible
with the collective labour relations scheme, it cannot be incorporated and must
be disregarded, as was the case in McGavin, Hémond and Noël.
If the rule is found to be compatible and if it is a supplementary or mandatory
norm, as in McLeod, Weber and Parry Sound, the arbitrator
will have jurisdiction to apply it.
25
Before determining whether the norm is supplementary or mandatory, its
compatibility must be ascertained. How do we determine whether a provision or
rule is compatible? What rights are supplanted by the collective scheme?
Underlying the first line of cases is the desire to give precedence to
collective bargaining for all conditions of employment. If the right claimed
can be characterized as a condition of employment, it cannot be negotiated
individually by the employer and the employee. The union alone performs this
task, and it must do so for the employees collectively.
26
What is a condition of employment? The question was asked by this Court
in Paquet. The provision at issue was characterized as a condition of
employment on the basis that it had a real connection with the contract of
employment (p. 211). Since, in that case, check‑off was directly
related to the regulation of employer‑employee relations, the Court held
that the provision was a condition of employment. Because of the monopoly on
representation, no room was left for individual negotiation. All employees,
whether or not they were members of the union, were subject to check‑off.
27
The precedence given to the collective scheme is sometimes taken to mean
that freedom of contract is abrogated once a collective agreement is concluded:
Paquet, at p. 212. However, it is clear that the employment
relationship arises only when the employee accepts the employer’s offer to hire
him or her. There is therefore no source in either Canadian case law or
legislation for the theory that individual contracts are completely abolished
in the context of the collective scheme. The individual contract does not
cease to exist, but is simply suspended. When a union’s certification is
revoked, the individual contract becomes effective again and once again becomes
the only tool for managing the employment relationship. If it no longer
existed, the employee would have to be rehired, which is not the case. When
the collective scheme ends, this does not terminate the employment
relationship. During the term of the collective agreement, however, the
individual contract of employment cannot be relied on as a source of rights.
28
Not everything is set out in the collective agreement, of course. For
instance, the agreement usually does not define the general law concepts on
which the rules agreed to by the union and the employer are based. The
collective agreement does not operate in a vacuum. The general law is relevant
for the purposes of interpreting the conditions of employment contained in the
agreement.
29
The fact that individual contracts are subordinate to the collective
scheme allows collective interests to be reconciled with individual interests
in situations where it is possible for the latter to subsist without hindering
the proper conduct of collective relations. My approach differs from that of
LeBel J., who adopts the position taken by Professor Morin, in which
the hierarchy of sources is reversed. In Professor Morin’s view, the
individual contract subsists and the C.C.Q. applies, subject to any
valid exceptions expressly set out in the Labour Code, in other
legislation and in the collective agreement: F. Morin, “Effets
combinatoires de deux codes: Code du travail et Code civil du Québec”
(1994), 49 Relat. ind. 227, at p. 245. Thus, in his
view, the collective agreement is superimposed on the individual contract.
With respect, this position presupposes, for Quebec, an approach to collective
labour relations law that disregards this Court’s decisions and is contrary to
the position adopted in Parry Sound. According to that case, the
collective agreement provides a framework into which mandatory norms are
incorporated. Furthermore, I do not think that this solution is necessary, as
LeBel J. says, since the mechanism of incorporating compatible mandatory
norms and the use of implicit conditions ensure that the collective scheme is a
coherent legal scheme. Also, as I will explain later, the approach advocated
by Professor Morin and adopted by my colleague was proposed before the
enactment of the C.C.Q. but was rejected.
30
Thus, not everything set out in the C.C.Q. is implicitly
incorporated into collective agreements — only that which is compatible.
In the case at bar, the question is whether or not the provisions in issue are
compatible.
31
To find the common thread, we must, as in McLeod, identify a
connection between the arbitrator’s jurisdiction and a condition of employment
that is expressly set out in or implicitly incorporated into the collective
agreement. The arbitrator has jurisdiction over all disputes that can be
connected with the collective agreement through their factual context and will
decide those disputes by referring to the express or implicit rules of the
agreement. However, a rule cannot be incorporated into the collective
agreement where, as in McGavin, Hémond and Noël, the rule
does not lend itself to such incorporation, which, in my opinion, is the case
here.
3.4 Incompatibility of
Compensation Under Article 2091 of the Civil Code With the Collective
Scheme
32
The rules governing collective labour relations constitute a body of law
whose governing principles are distinct from the rules that serve as
foundations for the individual contract of employment in Quebec civil law. The
very nature of notice of termination demonstrates that it is not compatible
with a context in which a collective agreement exists. Notice of termination
is essentially agreed to on an individual basis when employment is terminated,
whereas collective conditions of employment are necessarily agreed to in
advance by the union and the employer. The way termination of employment is
dealt with under the two schemes also demonstrates the gulf that divides them.
The right to notice of termination is the counterpart of the employer’s right
to dismiss an employee bound by an individual contract. This right is
incompatible with the collective labour relations context. Moreover, the
legislative history provides additional confirmation that the courts should not
impose their vision where the legislature has chosen not to impose the rule set
out in art. 2091 C.C.Q. in the context of the collective
scheme.
3.4.1 Individual
Agreement on Notice of Termination and Collective Bargaining of Conditions of
Employment
33
While Quebec’s general law of contracts is still influenced by the
consensual approach that originally characterized it, the law relating to
collective labour relations prohibits such an approach where conditions of
employment are concerned (except, of course, where the collective agreement
authorizes specific agreements).
34
In the civil law, a contract is formed by the exchange of consents
(art. 1385 C.C.Q.), which involves the acceptance of an offer
(art. 1386 C.C.Q.) that contains all the essential elements of the
proposed contract (art. 1388 C.C.Q.). A contract may be modified
only with the agreement of the parties (art. 1439 C.C.Q.).
Article 2085 C.C.Q., which deals specifically with the contract of
employment, incorporates these concepts:
2085. A contract of employment is a
contract by which a person, the employee, undertakes for a limited period to do
work for remuneration, according to the instructions and under the direction or
control of another person, the employer.
According to
the very language of this article, agreement must be reached on conditions of
employment to enter into a contract of employment. It cannot be said that a
contract of employment exists if there is no agreement on remuneration. This
goes to the root of the contract.
35
Likewise, notice of termination is undeniably a condition of
employment. At a time when employment is regarded as a source of personal
fulfilment, suspension and termination of employment are important aspects of
the conditions of employment. Like the terms and conditions that apply to
disciplinary dismissal, the conditions for administrative or discretionary
dismissal are clearly connected with the contract of employment.
36
The right to notice provided for in art. 2091 C.C.Q. is a
personal right, and what it consists of depends on the individual circumstances
of the employee who claims it. As Baudouin J.A. said in Standard
Broadcasting Corp. v. Stewart, [1994] R.J.Q. 1751 (C.A.):
[translation] What
constitutes reasonable notice of termination under a contract with an
indeterminate term is basically a question of fact that will turn on the
circumstances of the specific case, and it will be assessed on the basis of a
number of known parameters: the nature and importance of the position; whether
the employee left another job to take the position; the employee’s age, years
of service and experience; how easy or difficult it is to find an identical or
similar position; subsequent efforts to find work; and whether or not there
were serious grounds for the dismissal. [Footnote omitted; p. 1758.]
37
Not only must notice of termination be determined individually, but the
employee may not agree on it in advance. Because of the imperative rule set
out in art. 2092 C.C.Q., notice of termination must be assessed at
the time it takes effect, that is, when the employment terminates (see Garcia
Transport Ltée v. Royal Trust Co., [1992] 2 S.C.R. 499, at
pp. 530‑31).
38
Under a collective scheme, on the other hand, conditions of employment
are not negotiated individually by the employer and the employee. Three of
this Court’s decisions, McGavin, Hémond and Noël, state
the rule that “[c]ertification, followed by the collective agreement, takes
away the employer’s right to negotiate directly with its employees” and to
“negotiat[e] different conditions of employment with individual employees” (Noël,
at para. 42). The objective of this prohibition and of its corollary,
exclusive union representation, is to improve the employee’s position in the
balance of power with the employer. Collective conditions of employment are
even negotiated for future employees. Relativity of contract, one of the
linchpins of the civil law contract, is excluded by the role assigned to the
union. In the collective scheme, the employee agrees to work under the
conditions negotiated by the union, which is not the employee’s mandatary but
is designated by law to negotiate conditions of employment.
39
Apart from the minimum standards laid down by the A.L.S., the
length of notice of termination is therefore a matter to be determined in the
bargaining process between the union and the employer. As
N. R. McLeod states:
While the parties to collective bargaining have
frequently chosen in the past to leave termination rights unstated, or have
been content to be governed by minimum statutory provisions that have
overriding application to all employees, whether unionized or not, the failure
to expressly address severance pay does not change its status as a proper subject
for collective bargaining. The omission of a provision for severance pay in
the collective agreement does not convert it into a right governed by common
law principles extraneous to the collective agreement.
(“Severance Pay at Arbitration: A Union Viewpoint”, in W. Kaplan et
al., eds., Labour Arbitration Yearbook 1998 (1998), 269, at p. 274)
40
The parties’ failure to specify in the collective agreement what will
happen if the business closes does not make the general law relating to
individual contracts of employment applicable:
[T]he theory of the residual common law right of employees to pay on
termination of employment cannot be reconciled with the principle that
severance is properly the subject matter of collective bargaining. Labour
relations boards have prohibited employers from unilaterally implementing
severance pay programs. They have stated that the terms associated with the
severance of employment are fundamental conditions of employment and are within
the exclusive purview of the trade union to bargain. Furthermore, to allow the
employer to act unilaterally in this area would be to unfairly diminish the
effectiveness of the union and undermine its role as bargaining
agent. . . . [p. 274]
41
The terms and conditions applicable to termination of employment
therefore fall within the natural scope of union‑employer bargaining on
conditions of employment. McGavin illustrates the obverse of the
problem before us here. In that case, it was in fact severance pay provided
for in the collective agreement that the employees were claiming and that the
employer refused to pay, arguing that a repudiation of the collective agreement
had terminated the employees’ rights. The decision shows that the terms and
conditions applicable to termination of employment are a valid part of the
conditions of employment included in a collective agreement, which, by
definition, is agreed to on behalf of all employees before the employment is
terminated. This is a clear case in which the collective scheme supplants the
individual contract of employment.
42
In short, the notice of termination required by art. 2091 C.C.Q.
cannot be incorporated into a collective agreement. It is a condition of
employment determined on an individual basis, and it cannot be negotiated in
advance or negotiated by a third party and then imposed on the employee.
43
The respondents would like to read the preliminary provision of the C.C.Q.
as indicating that the C.C.Q. must apply to every employment
relationship. The preliminary provision reads as follows:
The Civil Code of Québec, in harmony with the
Charter of human rights and freedoms and the general principles of law, governs
persons, relations between persons, and property.
The Civil Code comprises a body of rules which, in
all matters within the letter, spirit or object of its provisions, lays
down the jus commune, expressly or by implication. In these matters,
the Code is the foundation of all other laws, although other laws may
complement the Code or make exceptions to it.
44
In my opinion, the argument is not persuasive. For the C.C.Q. to
take precedence, there must be a matter that falls within the letter, spirit or
object of its provisions. It seems to me that the argument based on the
preliminary provision of the C.C.Q. relies on circular reasoning.
45
Moreover, the claims filed in the Fillion and Garon cases illustrate the
internal contradiction between the individualized notice based on the
individual’s specific characteristics and employment experience on the one hand
and the collective labour relations context on the other. The claims filed by
the unions do not recognize the individual nature of the right provided for in
art. 2091 C.C.Q. The unions are not asking the arbitrator to
determine or assess the appropriate notice of termination for each employee
based on each employee’s personal circumstances. Rather, they are
claiming four weeks’ notice per year of service for each and every employee,
regardless of their individual situations. Under the C.C.Q., the claims
have to be made by the employees themselves and must be based primarily on the
specific characteristics of each employee. The unions’ claims therefore
violate the spirit of art. 2091 C.C.Q.
46
Imposing an obligation to determine reasonable notice within the meaning
of art. 2091 C.C.Q. on an individual basis would also violate the
spirit of the collective labour relations scheme. Some commentators go so far
as to say that for an employer to offer its employees different, individualized
conditions of employment without negotiating with the union would constitute an
unfair labour practice: see McLeod, at p. 270.
47
If the rule that all conditions of employment must be negotiated by the
union and the employer is considered in parallel with the rule that notice of
termination is basically individual and cannot be waived by the employee, it is
clear that the two schemes are incompatible. The consensual aspect and
individual nature of notice of termination and the time when its sufficiency is
determined, namely after the employment is terminated, are three essential
features of the C.C.Q.’s rule that show that notice of termination is
incompatible with the collective scheme. Under a collective scheme, this
condition of employment is negotiated with the union, not the employee, is negotiated
for all employees or for various classes of employees, not individually, and is
agreed on when the collective agreement is entered into, not when the
employment is terminated. But there are other considerations.
3.4.2 Conflicting
Approaches to Continuity of Employment
48
The approach taken to the continuity of the employment relationship is
another fundamental difference between the law governing individual employment
relationships and the law governing collective labour relations. The latter
seeks to preserve the continuity of the employment relationship, which is not
the aim of the C.C.Q.
49
Reinstatement is normally what arbitrators order where the employer‑employee
relationship is still viable: Alberta Union of Provincial Employees v.
Lethbridge Community College, [2004] 1 S.C.R. 727,
2004 SCC 28, at para. 56. In addition, in the case of dismissal
or prolonged layoff, the certification is not revoked and the collective
agreement is not terminated. Thus, employees who are laid off can exercise any
residual rights they may have under the collective agreement, such as the right
of recall; likewise, should the undertaking they work for be alienated or
operated by another, dismissed employees can benefit from the protection of
s. 45 L.C., because the certification and the collective agreement
survive.
50
The approach taken to the termination of an individual contract of
employment is completely different. As P. Verge writes:
[translation] Not only
does [the Civil Code] thus not favour relationships for an indeterminate term,
but, taking quite a liberal approach, it also preserves the employer’s power
(and, formally, the employee’s power, although it is not really identical) to
terminate a contract for an indeterminate term by giving the employee
reasonable notice of termination (art. 2091), provided, according to
general principles, that there is no abuse of rights.
(“Le contrat de travail selon le Code civil du Québec:
pertinence ou impertinence?”, at p. 245)
51
The right of employees to claim reasonable notice of termination under
the C.C.Q. is the counterpart of the employer’s right to terminate the
employment relationship by providing pay in lieu of notice, without having to
show good and sufficient cause. The fact that it is possible to resiliate a
contract of employment by giving notice, without having to provide reasons,
emerges, a contrario, from art. 2094 C.C.Q.:
2094. One of the parties may, for a
serious reason, unilaterally resiliate the contract of employment without prior
notice.
52
Articles 2091 and 2094 C.C.Q. provide statutory recognition
of the employer’s power to resiliate the contract of employment unilaterally;
they make it possible to sever the employment relationship definitively, and
they exclude the obligation to reinstate: M.‑F. Bich, “Contrat
de travail et Code civil du Québec — Rétrospective, perspectives et
expectatives”, in Développements récents en droit du travail (1996),
189, at p. 284.
53
Since the employer’s right to dismiss is limited in the collective
labour relations context and, on the contrary, reinstatement is the most common
remedy, it follows that the employee’s right to reasonable notice is
inapplicable in such circumstances. This is, in fact, the reasoning applied in
the other provinces of Canada, where an employee governed by a collective
agreement cannot claim compensation based on the common law right to reasonable
notice: Graphic Communications Union Local 255‑C v.
Quebecor Jasper Printing Ltd. (2002), 333 A.R. 204,
2002 ABQB 959, at paras. 14 and 16.
54
Given the fundamental differences between the general law of contracts
and the law governing collective labour relations, and with a view to
preserving the coherence of the different labour law schemes, care must be
taken, where provisions of the C.C.Q. are incompatible with the
collective labour relations scheme, not to apply them to that scheme.
Articles 2091 and 2092 C.C.Q. are examples of rules that are
incompatible with the collective scheme.
55
The legislative history of art. 2091 C.C.Q. also leads to
the conclusion that the legislature did not intend to incorporate the notice
provided for in the article into the collective scheme.
3.4.3 Legislative History of
Article 2091 C.C.Q.
56
Article 2091 C.C.Q. codifies the case law developed under the
Civil Code of Lower Canada (“C.C.L.C.”). The predecessor of
art. 2091, art. 1668 C.C.L.C., provided for notice of
termination for only certain classes of employees: domestics, labourers
and so on. The length of the notice varied depending on the period of
service. To fill the gaps left by the Code for other classes of employees, the
Quebec courts developed the rule that either of the parties to a contract of
employment with an indeterminate term could terminate it at any time by giving
reasonable notice to the other party: Asbestos Corp. v. Cook,
[1933] S.C.R. 86. The new Civil Code codifies this rule
in art. 2091 and does not change its substance: Commentaires du
ministre de la Justice — Le Code civil du Québec: Un mouvement de
société (1993), vol. II, at p. 1315.
57
If the legislature had intended notice of termination to apply under the
collective scheme, it would have been a simple matter for it to act on some of
the recommendations made before the C.C.Q. was enacted. One such
proposal was that the C.C.Q. act as the general framework for all labour
relations, whether individual or collective. The draft bill introduced in
1987, An Act to add the reformed law of obligations to the Civil Code of
Québec, contained the following proposal:
2157. A contract of employment may be
supplemented by an order or decree, ordinance, regulation or collective
agreement.
58
This proposal was criticized on the basis that a collective agreement
does not supplement a contract of employment. The collective agreement [translation] “is the source of the
employee’s entire negotiated employment scheme”: P. Verge, “Faut‑il
‘nommer’ le contrat de travail?” (1988), 29 C. de D. 977, at
p. 981. The language of art. 2091 C.C.Q. does not embrace
this all‑encompassing view of contracts of employment. On the contrary,
the spirit of the new article is incompatible with the collective scheme. The
additional protection provided by art. 2092 C.C.Q. and the concept
of public order it incorporates show that the purpose of the provision is to
protect employees who are in an inferior bargaining position.
59
To say that an employee is isolated or vulnerable when he or she is
represented by a union would be an affront to organized labour. It appears,
rather, that the Quebec legislature chose to reject the superimposition
proposed in the draft Civil Code because it was aware, generally, of the
situation in Quebec and, more specifically, of the criticism made when the
1987 draft was introduced.
60
I think it is relevant to note that the protection provided by
arts. 2091 and 2092 C.C.Q. does not appear to come under
directive public order as LeBel J. seems to suggest. In my opinion, this
protection is similar to the protection considered by the Court in Garcia
Transport. The distinction between directive public order and protective
public order is relevant in determining what sanction applies. A clause that
is contrary to directive public order is absolutely null (art. 1417 C.C.Q.)
and may not be confirmed (art. 1418 C.C.Q.). Since this question
is not directly in issue here, it need not be examined in detail. I will
simply point out that the purpose of the protection is more to protect
vulnerable workers and restore contractual fairness than to protect the
collective interest (on the distinction between directive and protective public
order, see J.‑L. Baudouin and P.‑G. Jobin, Les
obligations (6th ed. 2005), at paras. 146‑47).
Furthermore, the vulnerable party is sufficiently protected by the rules
associated with protective public order, since that party cannot renounce his
or her right before it crystallizes: Garcia Transport. Also, a
finding that there are provisions of directive public order would mean that the
parties could not negotiate a final settlement, since the reasonableness of any
such settlement would always be reviewable by a judge.
61
That being said, the rules governing the collective scheme remain
distinct from those applicable to individual contracts. The provisions of the C.C.Q.
apply only where there is no incompatibility. Where there is no
incompatibility and the provision can be considered to be implicitly included
in the collective agreement, an arbitrator will have jurisdiction to decide
disputes relating to it. The Quebec legislature has set out the standards of
general application in the A.L.S., which expressly governs both
schemes: ss. 1(4) and 93 A.L.S. If, at the
time of the reform, the legislature had intended to give a scope such as this
to the provisions of the C.C.Q. that apply to contracts of employment,
it would have kept the criticized wording or at least have been as explicit as
in the A.L.S. An opportunity in fact arose when the A.L.S. was
amended (S.Q. 2002, c. 80, s. 49) by adding the division
entitled “Notice of Collective Dismissal”. If the legislature had intended
individualized notice to be the norm in cases of collective dismissal, it would
have specified this at the time and would not have established a collective
standard. Where the legislature has chosen not to merge the two schemes, I
believe that it is not the role of this Court to do so.
4. Conclusion
62
Harmonizing the rules of the general law with the rules of the
collective scheme remains a necessity to which individual interests must
yield. This is a matter on which there is universal agreement. Even an author
who advocates giving pre‑eminence to the individual contract of
employment in the collective labour relations context stresses this point:
[translation] Harmonizing
all these legal rules — the rules in the C.C.Q. and in employment‑related
statutes and the acts thereunder — requires that special attention be given to
their respective purposes and functions within the corpus of employment law.
An employment‑related statute cannot validly be adapted without first
considering the implications of the changes for employment law as a whole.
(F. Morin, “Le contrat de travail: fiction et
réalité!”, in Développements récents en droit du travail (2005), 179, at
p. 186)
63
This case clearly demonstrates that there is no reason to exclude every
connection with the civil law. However, the facts of the case illustrate the
need to identify the factors from which it can be concluded that a particular
provision of the C.C.Q. can be incorporated into a collective
agreement. The analysis must be sufficiently thorough to determine the long‑term
disadvantages that may result from inappropriately importing a provision. Only
this concern with preserving the internal coherence of the two schemes will
ensure that they can function harmoniously. Although the provisions of the C.C.Q.
regarding notice of termination may be more advantageous than the provisions of
the A.L.S. in specific cases, all the provisions of the C.C.Q.
cannot be implicitly incorporated into the collective agreement. In the
absence of such incorporation, the arbitrator has no jurisdiction to hear the
grievances.
64
For these reasons, I would set aside the judgments of the Court of
Appeal, restore the Superior Court’s judgment in the Fillion case, set aside
the Superior Court’s judgment in the Garon case and allow the motions to quash
the arbitration decisions, with costs throughout.
English version of the reasons of McLachlin C.J. and LeBel and Fish JJ.
delivered by
LeBel J.
(dissenting) —
I. Introduction
A. Nature of the Case
65
This appeal concerns an application for judicial review of two
arbitration awards. This Court must determine whether a grievances
arbitrator has jurisdiction to hear a claim under art. 2091 of the Civil
Code of Québec, S.Q. 1991, c. 64 (“C.C.Q.”), for
termination pay following the closing of a business and the layoff of its staff
where there is no express reference to termination pay in the applicable
collective agreement. With respect, I would find that the arbitrators have
jurisdiction and would affirm the decisions of the Quebec Court of Appeal to
this effect.
B. Origin of the Case
1. Isidore Garon ltée
66
For several years, the appellant Isidore Garon ltée (“Garon”) operated a
hardware business specializing in the sale of construction materials. It
had signed a collective agreement expiring on June 30, 2000 with the
respondent Syndicat du bois ouvré de la région de Québec inc.
67
On April 15, 1999, the appellant informed its employees that
the business would be shut down for economic reasons on June 19, 1999
and gave them nine weeks’ notice of termination of employment
(Exhibit R‑2). In so doing, it was complying with
clause 8.02c) of the collective agreement, which provided that the Act respecting
labour standards, R.S.Q., c. N‑1.1 (“A.L.S.”),
s. 82, would apply in the event of a layoff for six consecutive
months or more.
68
On April 28, 1999, the respondent union filed a collective
grievance (Exhibit R‑4) under the collective agreement on behalf of
the 12 employees who had been dismissed, claiming additional compensation
under art. 2091 C.C.Q. That provision gives the parties to a
contract of employment with an indeterminate term the right to resiliate it
unilaterally, subject to reasonable notice of termination:
2091. Either party to a contract with an
indeterminate term may terminate it by giving notice of termination to the
other party.
The notice of termination shall be given in
reasonable time, taking into account, in particular, the nature of the
employment, the special circumstances in which it is carried on and the
duration of the period of work.
69
On May 3, 1999, the appellant replied that it would not take
action on the grievance. The business was then closed as scheduled on
June 19, 1999.
2. Fillion et Frères inc.
70
The appellant Fillion et Frères (1976) inc. (“Fillion
et Frères”) operated a new and used motor vehicle sales and repair dealership
in the Québec area. It was bound to the respondent Syndicat national des
employés de garage du Québec inc. by a collective agreement expiring on
November 2, 1997.
71
On November 20, 1997, Fillion et Frères resiliated its sales
and service agreement with the Ford manufacturing company. A few days later,
on November 24, 1997, the appellant informed its employees that the
business would gradually cease operating and would close for good on January 16, 1998.
It gave them notice of termination of employment the same day. A first group
of employees, composed of Daniel Giroux, Jocelyn Trépanier and
Roger Nadeau, would be laid off on December 19, 1997. The second
group, composed of Stéphane Giroux, Jean‑François Fillion,
Roger Laplante, Denys Fillion and Denis Buteau, would then be
laid off on January 16, 1998 (Exhibit S‑10).
72
On December 3, 1997, the respondent union was informed that
the business had resiliated its sales and service agreement with Ford and that
the employees had received notice of termination of employment in accordance
with s. 82 A.L.S. (Exhibit S‑11). On
January 16, 1998, the business did indeed cease operating
completely. The same day, the respondent union filed a collective grievance
(Exhibit S‑2) under the collective agreement on behalf of the eight
employees who had been dismissed, claiming additional compensation under
art. 2091 C.C.Q. All the employees covered by the collective
grievance, except Denys Fillion, then filed individual grievances
(Exhibits S‑3 to S‑9).
C. Judicial History
1. Isidore Garon ltée
a. Grievance
Arbitration
73
The parties chose Jean‑Pierre Tremblay to be the arbitrator.
When the arbitration began, the appellant Garon made a preliminary objection,
arguing that the arbitrator did not have jurisdiction to settle the grievance
because the claim was based solely on the C.C.Q. and did not expressly
or inferentially arise out of the collective agreement. It added that the
rules on individual contracts of employment set out in the C.C.Q. could
not be incorporated into the collective agreement and were inapplicable in a
context in which a collective agreement was in force.
74
In his award dated October 31, 2000, the arbitrator dismissed
the employer’s objection and found that he had jurisdiction to decide the
grievance ([2001] R.J.D.T. 304). In his view, the grievance was based on the collective
agreement, which provided that the applicable notice of termination was that
set out in s. 82 A.L.S. As a result, the determination of the
reasonableness of that notice under arts. 2091 et seq. C.C.Q.
was within his exclusive jurisdiction. He found that clause 10.09 of the
collective agreement and s. 100.12(a) of the Labour Code,
R.S.Q., c. C‑27 (“L.C.”), conferred broad jurisdiction on
him, giving him the incidental authority to interpret and apply the provisions
of the C.C.Q. Finally, he added that arts. 2091 et seq. C.C.Q.
were of public order and that he had to apply them pursuant to s. 62 L.C.
As of yet, however, the arbitrator has not decided whether the employees were
entitled to compensation in the circumstances of the case.
b. Judicial Review in
the Superior Court
75
On December 6, 2000, the appellant filed an application for
judicial review of the arbitration award. On February 6, 2001,
Martin J. dismissed the application and confirmed that the arbitrator had
jurisdiction, since s. 100.12(a) L.C. provides that an
arbitrator may have recourse to any law of general application to settle a
grievance under a collective agreement (D.T.E. 2001T-220).
2. Fillion et Frères inc.
a. Grievance Arbitration
76
On February 22, 2000, the appellant Fillion et Frères
announced that it wanted to make two preliminary objections before the
arbitrator relating to the admissibility of the grievances. First, it argued
that the arbitrator had no jurisdiction to hear the grievances because no
provision of the collective agreement applied expressly or inferentially to the
case. Second, it submitted that the grievances were prescribed because they
had been filed more than 15 business days after the employer’s decision.
77
In his award dated August 25, 2000, the arbitrator,
Denis Tremblay, stated that this Court’s recent decisions had extended the
jurisdiction of arbitrators to the point where everything that actually arose
out of the employer‑employee relationship was now within the jurisdiction
of a grievances arbitrator, regardless of the legal basis for the claim. Since
the collective agreement was silent about notice of termination, the arbitrator
found that s. 82 A.L.S. had been properly applied but that its
supplementary role could not deprive the parties of a claim under
arts. 2091 and 2092 C.C.Q. He found that those provisions of the C.C.Q.
had to be regarded as having been incorporated into the collective
agreement because they were of public order. In his view, the arbitrator thus
retained inherent jurisdiction to interpret and apply them as if they were an
integral part of the agreement. In this context, he was of the opinion that a
connecting clause in the collective agreement was not necessary. On the
question of prescription, he concluded from his interpretation of
clause 6.02 of the collective agreement that time had started to run on
the day the business closed, not when the employer informed the employees of
the closure. As of yet, however, the arbitrator has not decided the grievances
on their merits.
b. Judicial Review in the Superior Court
78
The appellant Fillion et Frères filed an application for judicial review
of that award solely as regards the jurisdiction of the grievances arbitrator.
On March 9, 2001, Alain J. allowed the application and found that the
arbitrator did not have jurisdiction ([2001] R.J.Q. 700). The trial
judge’s view was that the dispute in this case did not arise out of the
interpretation, application, administration or violation of the collective
agreement because that agreement was silent about notice of termination. The
employer’s obligation was therefore limited to what was set out in the public
order provisions of the A.L.S. As a result, there were no grounds for a
grievance.
3. Quebec Court of
Appeal
79
The Court of Appeal heard the two appeals at the same time and rendered
its decisions on December 9, 2003. It found that a dispute will be
arbitrable only if its essential character comes within the jurisdiction of a
grievances arbitrator. However, in its view, this principle does not mean that
an arbitrator has the power to apply and interpret only express provisions of a
collective agreement.
80
Since arts. 2091 and 2092 C.C.Q. are of public order,
the Court of Appeal concluded that they were implicitly incorporated into the
collective agreements pursuant to s. 62 L.C. Accordingly, it held
that the arbitrators had jurisdiction to hear and decide the grievances at
issue. It therefore dismissed Garon’s appeal ([2004] R.J.Q. 58) and allowed
the appeal by the union in the Fillion et Frères case ([2003] Q.J. 18474
(QL)). It ordered that both cases be referred back to the respective
arbitrators to be decided on their merits.
4. Appeal to This
Court
81
On May 6, 2004, the appellants were granted leave to appeal to
this Court from the judgments of the Quebec Court of Appeal ([2004] 1 S.C.R.
viii and x).
II. Analysis
A. Issue
82
This appeal concerns the extent of a grievances arbitrator’s
jurisdiction to apply art. 2091 C.C.Q. when there is a
collective agreement in force following the certification of an association of
employees under the L.C. To establish this, we must consider the nature
of the connection between a collective agreement and an individual employment
relationship under a collective labour relations scheme to determine whether an
arbitrator can rule on the application of art. 2091 C.C.Q. In
other words, does the collective nature of the relationship established by a
collective agreement exclude the individual rights granted under art. 2091
C.C.Q. from the implicit content of the agreement and thus from the
jurisdiction of the grievances arbitrator?
B. Positions of the Parties
1. Employers
a. Isidore Garon ltée
83
Relying on the judge‑made principle that the general law as it
applies to individual contracts of employment is no longer relevant to employer‑employee
relations governed by a collective agreement, the appellant Garon submits that
arts. 2091 and 2092 C.C.Q. cannot apply or provide a basis for
the collective grievance. It argues that the creation of the collective labour
relations scheme excludes the general law rules that apply to individual
contracts of employment where those rules interfere or are incompatible with
the scheme. In this case, the appellant believes that arts. 2091 and
2092 C.C.Q. are inapplicable because they confer rights that are
incompatible with the scheme established by the L.C. and the collective
agreement. It notes, for example, that art. 2091 C.C.Q. recognizes
the parties’ right to resiliate an individual contract of employment
unilaterally without a serious reason, provided that reasonable notice of termination
is given, whereas clauses 10.09(2) and 11.01 of the collective agreement
and s. 100.12(f) L.C. provide for the reinstatement of an
employee who has been dismissed without a good and sufficient reason.
84
The appellant adds that the employee’s right to reasonable notice of
termination is inseparable from the employer’s right to resiliate the contract
of employment unilaterally. The negation of one necessarily negates the
other. Finally, the appellant is of the view that arts. 2091 and 2092 C.C.Q.
are not of public order and do not create mandatory labour standards, even
though art. 2092 provides that employees may not renounce the rights given
to them by art. 2091.
b. Fillion
et Frères inc.
85
The appellant Fillion et Frères also argues that the general law
applicable to individual contracts of employment, as set out in the C.C.Q.,
does not apply when the parties are governed by the collective labour relations
system, primarily because the legal schemes in question are incompatible. It
further submits that the general law remains inapplicable even where the
collective agreement is silent on a particular point, as in this appeal.
86
While the appellant acknowledges that a grievance may be arbitrable in
the absence of an express provision in the collective agreement, it points out
that the essential character of the dispute must expressly or inferentially
arise out of the interpretation, administration or performance of the
collective agreement. In this case, the appellant argues, the grievances are
based solely on the provisions of the C.C.Q. and are therefore not
arbitrable.
87
Finally, the appellant argues that the A.L.S. contains all the
minimum, absolute standards of public order that apply to all employees,
whether unionized or not, and that must be adhered to and applied by all
employers under Quebec law (ss. 1(4) and 93 A.L.S.).
Accordingly, it submits, when the legislature chose to put art. 2091 in
the C.C.Q. rather than the A.L.S., it deliberately gave only non‑unionized
employees the right to reasonable notice when their employment is terminated.
2. Unions
88
The respondent unions filed a joint factum in this Court. They argue that
arts. 2091 and 2092 C.C.Q. are of public order and that the clauses
of the collective agreement therefore cannot derogate from them (art. 9 C.C.Q.;
s. 62 L.C. and s. 41.4 of the Interpretation Act,
R.S.Q., c. I‑16). As a result, an arbitrator can apply and
interpret those provisions to ensure that the collective agreement complies
with them. The respondents add that, even where the collective agreement is
silent on the matter, the provisions in question are deemed to be included in
the agreement and the employer is obliged to comply with them in exercising its
general management right, which is sufficient to make the grievance arbitrable.
89
The respondents argue that the individual contract of employment
subsists between an employee and an employer even when there is a collective
agreement. Accordingly, the provisions relating to individual contracts of
employment are applicable to matters not covered by the collective agreement.
In addition, since neither the expiry of the collective agreement nor the
exercise of the right to strike or to lock out ends the employment
relationship, the individual contract of employment remains a contract with an
indeterminate term unless the parties expressly provide otherwise. Finally,
since the A.L.S. establishes only a minimum standard, an employee can
claim more under art. 2091 C.C.Q. if that minimum does not
represent reasonable notice of termination in the circumstances. This is
because the right to reasonable notice is a rule of public order.
C. Standard of
Judicial Review
90
This appeal raises the question of whether the arbitrator has the power
to apply arts. 2091 and 2092 C.C.Q. to decide the grievances.
This is a question of law relating to the arbitrator’s jurisdiction.
Accordingly, as the parties recognized in this Court, the applicable standard
of review is correctness (see Parry Sound (District) Social Services
Administration Board v. O.P.S.E.U., Local 324, [2003]
2 S.C.R. 157, 2003 SCC 42, at paras. 21‑22 and
83, and Canadian Broadcasting Corp. v. Canada (Labour Relations Board),
[1995] 1 S.C.R. 157, at para. 49).
D. Legislative Framework
91
Labour law is governed by numerous legal rules from various sources,
which can be classified based on the role they play. Some of them deal with
collective labour relations and allow conditions of employment to be determined
through collective bargaining. Others address individual employment
relationships, that is, the specific relationship between a worker and an
employer. Still others guarantee minimum conditions of employment.
92
It is important to begin by identifying the many rules that make up the
legislative framework applicable to the parties’ legal situation so that the
application of these standards can be harmonized by determining how they
interact to maintain the coherence of Quebec’s labour law scheme. This
discussion will therefore deal solely with the rules at issue in this appeal.
1. Collective Labour Relations
93
In the sectors that come under the constitutional jurisdiction of the
National Assembly of Quebec, collective labour relations are governed primarily
by the L.C. It contains, inter alia, the legal rules that govern
the establishment of conditions of employment through collective bargaining and
ensure that the resulting collective agreements are applied. The scope of the L.C.
is limited, however, by the definitions of “employer” and “employee” in
ss. 1(k) and (l) L.C.
94
The C.C.Q. and a number of specific statutes, including the A.L.S.,
may influence the content and result of collective bargaining. However, the
application of these legal rules, which often relate to individual employment
relationships, may vary with the collective labour relations context. We will
return to this question when dealing with the effects of a collective agreement
on individual employment relationships.
a. Certification
95
Certification, which is now granted by the Commission des relations du
travail, authorizes an association of employees (s. 1(a) L.C.)
to represent a group of employees, the appropriate bargaining unit, for the
purpose of establishing a collective employment scheme. Whether a union is
certified ultimately depends on its representative nature, since it must have
the support of a majority of the employees who make up the bargaining unit
(ss. 21 and 32 L.C.).
96
Certification gives the union an exclusive right of representation. The
union thus becomes the only party authorized to represent all present and
future employees in the bargaining unit for an indeterminate period
(ss. 22, 41 and 43 L.C.). The exclusivity of union representation
is also the basis for the union’s other rights, including the right to receive
the union dues the employer must collect (s. 47 L.C.).
97
In return, the union assumes a duty of fair representation, that is, it
“shall not act in bad faith or in an arbitrary or discriminatory manner or show
serious negligence in respect of employees comprised in a bargaining unit
represented by it, whether or not they are members” (s. 47.2 L.C.).
This duty must be discharged in all the union’s collective representation
activities, whether during bargaining or in applying a collective agreement
(see Canadian Merchant Service Guild v. Gagnon, [1984] 1 S.C.R.
509, and Noël v. Société d’énergie de la Baie James, [2001]
2 S.C.R. 207, 2001 SCC 39).
b. Collective Agreement
98
The L.C. defines a “collective agreement” as “an agreement in
writing respecting conditions of employment made between one or more certified
associations and one or more employers or employers’ associations” (s. 1(d)
L.C.). As the main source of the substantive norms governing the
parties’ relationship, it is the “law of the parties”. It is binding on all
present and future employees contemplated by the certification during its term,
as specified by the agreement or by statute (ss. 65, 66 and 67,
para. 1 L.C.).
99
The concept of conditions of employment is a very broad one, covering
hiring, the performance of work and the consideration received for it, as well
as termination of employment and union rights. However, s. 62 L.C.
limits the parties’ freedom to bargain by rendering null any provisions of a
collective agreement that are contrary to public order or prohibited by law.
We will elaborate on the nature, effects and content of the collective
agreement in the sections that follow.
100
When a collective agreement is reached, the right to strike and to lock
out is temporarily suspended (ss. 58, 107 and 109 L.C.) to ensure
the stability of the parties’ relationship for the term of the agreement.
Thus, neither the union nor the employer can unilaterally alter the conditions
of employment of the employees in the bargaining unit before the collective
agreement expires and the right to strike and to lock out is acquired.
c. Grievance Arbitration
101
Section 100, para. 1 L.C. provides that disputes
respecting the interpretation and application of collective agreements in force
must be submitted to the grievance arbitration procedure:
100. Every grievance shall be submitted to arbitration in the
manner provided in the collective agreement if it so provides and the certified
association and the employer abide by it; otherwise it shall be referred to an
arbitrator chosen by the parties or, failing agreement, appointed by the
Minister.
Section 1(f) L.C.
defines a “grievance” as “any disagreement respecting the interpretation or
application of a collective agreement”. In other words, whenever the rights
claimed arise out of the collective agreement, grievance arbitration is the
exclusive forum with the requisite jurisdiction to enforce those rights, unless
the parties are able to reach a settlement. The difficult problem that then
arises, to which the courts have devoted a great deal of attention, is how to
identify situations and rights that arise out of the collective agreement and
are therefore within the jurisdiction of an arbitrator.
102
In Weber v. Ontario Hydro, [1995] 2 S.C.R. 929,
McLachlin J., writing for the majority, developed a test for determining
“when employees and employers are precluded from suing each other in the courts
by labour legislation providing for binding arbitration” (para. 37).
McLachlin J. accepted the exclusive jurisdiction model, under which, if
“the dispute, in its essential character, arises from the interpretation,
application, administration or violation of the collective agreement”
(para. 52), then “the claimant must proceed by arbitration and the courts
have no power to entertain an action in respect of that dispute”
(para. 50).
103
The reasoning of McLachlin J. in that case expanded on the
reasoning of Estey J. in St. Anne Nackawic Pulp & Paper Co. v.
Canadian Paper Workers Union, Local 219, [1986] 1 S.C.R. 704, in which
the Court had refused to allow actions to be brought in the courts to claim
damages arising out of an illegal strike called by a union in violation of a
collective agreement. Such actions would make it impossible to achieve the
objectives of the collective labour relations scheme established by the
legislature:
The collective agreement establishes the broad
parameters of the relationship between the employer and his employees.
This relationship is properly regulated through arbitration and it would, in
general, subvert both the relationship and the statutory scheme under which it
arises to hold that matters addressed and governed by the collective agreement
may nevertheless be the subject of actions in the courts at common law. . . .
The more modern approach is to consider that labour relations legislation
provides a code governing all aspects of labour relations, and that it would
offend the legislative scheme to permit the parties to a collective agreement,
or the employees on whose behalf it was negotiated, to have recourse to the
ordinary courts which are in the circumstances a duplicative forum to which the
legislature has not assigned these tasks. [pp. 718‑19]
104
To determine whether the dispute arises out of the collective agreement,
two factors must be considered: (1) the nature of the dispute and
(2) the ambit of the collective agreement. In Weber,
McLachlin J. stated that in St. Anne Nackawic the Court had
insisted that “the analysis of whether a matter falls within the exclusive
arbitration clause must proceed on the basis of the facts surrounding the
dispute between the parties, not on the basis of the legal issues which may be
framed” (para. 43). In Regina Police Assn. Inc. v. Regina (City) Board
of Police Commissioners, [2000] 1 S.C.R. 360, 2000 SCC 14,
however, the Court found it appropriate to point out, in comments by
Bastarache J., that only those disputes which expressly or inferentially
arise out of the collective agreement are capable of being excluded from the
jurisdiction of the civil courts:
While McLachlin J. embraced the exclusive
jurisdiction model, she emphasized that the existence of an employment
relationship, per se, does not grant an arbitrator the jurisdiction to
hear or decide a dispute. Only those disputes which expressly or inferentially
arise out of the collective agreement are foreclosed to the courts: see Weber,
at para. 54. [para. 24]
105
The principles established in Weber have been reaffirmed and
applied by this Court on numerous occasions (New Brunswick v. O’Leary,
[1995] 2 S.C.R. 967; Regina Police Assn.; Parry Sound;
Quebec (Commission des droits de la personne et des droits de la jeunesse) v.
Quebec (Attorney General), [2004] 2 S.C.R. 185, 2004 SCC 39
(“Morin”)). In Morin, however, the decision of the majority of
this Court imposed a restriction on the model that assigns exclusive
jurisdiction to the grievances arbitrator, finding that the Quebec Human Rights
Tribunal had concurrent jurisdiction over cases involving alleged
discrimination in the formation of the collective agreement and the alleged
invalidity of the agreement on that ground.
106
Since Morin, certain authors have discussed how the majority in
that case applied the principles established in Weber (see
D. Nadeau, “L’arrêt Morin et le monopole de représentation des
syndicats: assises d’une fragmentation” (2004), 64 R. du B. 161).
Their criticism is that, by finding that employees could directly challenge the
validity of certain provisions of the collective agreement, this Court failed
to have regard to the basic test, namely whether a dispute expressly or
inferentially arises out of the agreement. From this perspective, the solution
adopted in Morin would thus be irreconcilable with the principles,
frequently recognized by this Court, of the union’s monopoly on representation
and the exclusive jurisdiction of the grievances arbitrator (see, inter alia,
Syndicat catholique des employés de magasins de Québec Inc.
v. Compagnie Paquet Ltée, [1959] S.C.R. 206; McGavin Toastmaster
Ltd. v. Ainscough, [1976] 1 S.C.R. 718; Hémond v. Coopérative
fédérée du Québec, [1989] 2 S.C.R. 962; and Noël). Despite the
concerns that have been expressed, however, Morin does not provide any
indication that this Court intended to fundamentally change the approach it
established in Weber.
107
The procedure and rules of evidence that apply to grievance arbitration
are set out in very general terms in ss. 100 to 102 L.C.
Subject to a few restrictions, arbitrators have the authority under
s. 100.2, para. 1 L.C. to determine the rules of
procedure and evidence that will apply. Section 100, para. 3 L.C.
states that, except where provided to the contrary, the rules in the L.C.
relating to grievance arbitration prevail over any incompatible provisions of
any collective agreement. Arbitrators are also subject to the standards
imposed by the charters, the provisions of public order in the C.C.Q.
and the rules of natural justice.
108
Section 100.12 L.C. lists the powers of arbitrators in the
exercise of their duties. In particular, para. (a) gives
arbitrators the important power to “interpret and apply any Act or regulation
to the extent necessary to settle a grievance”, a power that is highly relevant
to these appeals. The arbitration award, which is declared to be without
appeal, binds the parties and, where such is the case, any employee concerned
(s. 101 L.C.). It is also protected by the privative clauses set
out in ss. 139, 139.1 and 140 L.C.
2. Individual Relationships
109
Under the general law, the rules governing individual employment
relationships apply to the conditions on which such a relationship exists,
continues, is carried out and is terminated. The relationship is between one
person (the employee) and another person (the employer) under whose direction
he or she works. When the civil law of Quebec was reformed in 1994,
the C.C.Q. codified the legal framework for this relationship in
arts. 2085 to 2097. The relationship is established by the formation of a
contract of employment, which is defined in art. 2085 C.C.Q.:
2085. A contract of employment is a
contract by which a person, the employee, undertakes for a limited period to do
work for remuneration, according to the instructions and under the direction or
control of another person, the employer.
Of course,
this nominate contract is also subject to the general rules of contracts
(arts. 1377 et seq. C.C.Q.).
110
Pursuant to art. 9 C.C.Q., a contract of employment, like
any other agreement, cannot derogate from the provisions of the C.C.Q.
that are of public order. In accordance with the preliminary provision of the C.C.Q.,
various employment‑related statutes set out other applicable rules that
complement or make exceptions to the C.C.Q. or establish minimum
standards to be met. Where the contract of employment between the parties is
silent, the conditions of employment and the rights and obligations of the
employer and the employee will therefore be determined by those various
statutes and the rules found in the C.C.Q.
3. Minimum Standards
111
The freedom of contract originally favoured by the general law
intensified the inevitable imbalance of power that existed when conditions of
employment were being established by an employee and an employer. Its
consequences compelled the legislature to pass many statutes laying down
minimum thresholds below which the parties could not negotiate. The standards
set out in those statutes are the starting point for negotiating more
advantageous conditions.
112
The A.L.S., which is of critical importance because of its scope
and social significance, is one of those remedial statutes. It is the
product of a reform that the Quebec legislature began in 1974 by creating
a task force to review the Minimum Wage Act, R.S.Q., c. S‑1,
which had established a large number of mandatory conditions of employment.
The final result of that reform was the Act respecting labour standards,
which was passed and assented to in 1979. Major amendments were
subsequently made to that statute, including a reduction in the period of
uninterrupted service needed to file a complaint regarding dismissal without
good and sufficient cause (see N.‑A. Béliveau, Les normes du
travail (2003), at pp. 1‑6). Section 93 A.L.S.
provides that an exception to the Act may be made only where one of its
provisions so allows, although s. 94 A.L.S. authorizes the parties
to a contract of employment or collective agreement to negotiate more
advantageous conditions. These provisions confirm that these legal
standards are minimum standards of public order. This means that a collective
agreement can grant an employee a more advantageous condition of employment
than is provided for in the A.L.S. but cannot deprive the employee of
such a condition, or it will be absolutely null.
113
However, the definitions of “employer” and “employee” in the A.L.S.,
which apply to both collective labour relations and individual employment
relationships (ss. 1(7) and (10) A.L.S.), are broader in scope
than the L.C.’s definitions of the same concepts. As a result, the
A.L.S. applies to employees who do not have the status of employees
under the L.C. and therefore cannot benefit from the collective
representation scheme established by the L.C. The A.L.S.
provides for many minimum conditions of employment, including the minimum wage
(s. 40), the length of the regular workweek (s. 52), overtime pay (s. 55),
paid statutory general holidays (s. 60) and the right to a weekly rest
period (s. 78).
114
A number of other statutes establish minimum standards, but they are not
at issue in this appeal (see, for example: Act respecting industrial accidents
and occupational diseases, R.S.Q., c. A‑3.001; Act respecting
collective agreement decrees, R.S.Q., c. D‑2; Act to secure
handicapped persons in the exercise of their rights with a view to achieving
social, school and workplace integration, R.S.Q., c. E‑20.1; National
Holiday Act, R.S.Q., c. F‑1.1; Public Service Act,
R.S.Q., c. F‑3.1.1; and Act respecting occupational health and
safety, R.S.Q., c. S‑2.1).
E. Nature and Effects of a Collective
Agreement
115
When a collective agreement comes into force, it naturally affects the
content of the legal relationship between the employer and its employees.
This appeal concerns the hierarchy and nature of the rights protected by labour
law rules, and the jurisdiction of an arbitrator. Our interpretation of this
Court’s decisions on these points leads us to conclude that the rights arising
out of an individual contract of employment and the rights protected by the
collective scheme can be harmonized in a manner consistent with the hierarchy
of legal rules.
1. State of the Case Law
116
Paquet was the first decision that discussed the nature of a
collective agreement and its effects on the existence of individual contracts
of employment. In that case, this Court had to determine whether a compulsory
check‑off clause for union dues (Rand Formula) that applied to all
employees in the bargaining unit, whether or not they were union members, could
lawfully be included in a collective agreement as a condition of employment (s. 47
L.C. now provides that the employer has a legal obligation to withhold
union dues).
117
Judson J., writing for the majority, began by determining the
union’s status in negotiating and signing the collective agreement. In his
view, the certified association was a contracting party and not merely the
mandatary of the employees in the bargaining unit:
If the relation between employee and union were that
of mandator and mandatary, the result would be that a collective agreement
would be the equivalent of a bundle of individual contracts between employer
and employee negotiated by the union as agent for the employees. This
seems to me to be a complete misapprehension of the nature of the juridical
relation involved in the collective agreement. The union contracts not as
agent or mandatary but as an independent contracting party and the contract
it makes with the employer binds the employer to regulate his master and
servant relations according to the agreed terms. [Emphasis added;
p. 214.]
118
In Paquet, at p. 212, Judson J. stressed the importance
of the union’s exclusivity as the sole negotiator for the employees in the
bargaining unit:
The union is, by virtue of its incorporation under
the Professional Syndicates’ Act and its certification under the Labour
Relations Act, the representative of all the employees in the unit for the
purpose of negotiating the labour agreement. There is no room left for private
negotiation between employer and employee. Certainly to the extent of the
matters covered by the collective agreement, freedom of contract between master
and individual servant is abrogated. The collective agreement tells the
employer on what terms he must in the future conduct his master and servant
relations.
119
In subsequent decisions, this Court sought to interpret Judson J.’s
comments that “[t]here is no room left for private negotiation” and that
“freedom of contract . . . is abrogated” by suggesting that
individual contracts of employment were abolished once a collective agreement
was reached. The interpretations of those comments must be considered in the
context of a complete analysis of the complex ties between an individual
employment relationship and a collective agreement under a collective labour
relations scheme.
120
McGavin Toastmaster is one of the decisions cited in support of
the theory that individual contracts are abolished. In that case, an illegal
strike by employees had precipitated the closure of a business. The
employer, claiming that the employees had violated their individual contracts
of employment by participating in the illegal strike and had thus terminated
their employment, refused to pay them the severance pay provided for in the
collective agreement. The issue was therefore whether the strike had terminated
the employment relationship. This Court found that the very nature of the
collective labour relations scheme precluded such a result. In the opinion of
Laskin C.J., the collective agreement could not be treated as “a mere
appendage of individual [employment] relationships” (p. 724). He refused
to accept a general law (common law) rule that would have contradicted a
fundamental principle of the collective labour relations scheme established by
the legislature:
The reality is, and has been for many years now
throughout Canada, that individual relationships as between employer and
employee have meaning only at the hiring stage and even then there are
qualifications which arise by reason of union security clauses in collective
agreements. The common law as it applies to individual employment
contracts is no longer relevant to employer‑employee relations governed
by a collective agreement which, as the one involved here, deals with
discharge, termination of employment, severance pay and a host of other matters
that have been negotiated between union and company as the principal parties
thereto. [p. 725]
121
Since the subject matter of the dispute was governed by the provisions
of the collective agreement and by specific legislation applicable to
collective labour relations, the Chief Justice concluded that the general
law could not be applied to support the position that the individual contracts
of employment had been terminated because the strike was illegal and had
resulted in the employees’ work not being performed:
Neither this Act [the Mediation Services Act] nor the companion Labour
Relations Act could operate according to their terms if common law concepts
like repudiation and fundamental breach could be invoked in relation to
collective agreements which have not expired and where the duty to bargain
collectively subsists. [pp. 726‑27]
122
In St. Anne Nackawic, in which the employer claimed
damages for the harm it suffered as a result of the shutdown of its business
caused by an illegal strike by employees in one of the bargaining units, the
question of the relationship between the collective labour relations scheme and
the general law arose once again. Since the legislation included a binding
arbitration clause, it was necessary to determine whether the ordinary courts
had jurisdiction to hear the claim.
123
Estey J., writing for this Court, reaffirmed that the collective
agreement and collective labour relations legislation take precedence over the
rules of general law:
From the above survey of the cases, a general
consensus is evident. The courts have no jurisdiction to consider claims
arising out of rights created by a collective agreement. Nor can the courts
properly decide questions which might have arisen under the common law of
master and servant in the absence of a collective bargaining regime if the
collective agreement by which the parties to the action are bound makes
provision for the matters in issue, whether or not it explicitly provides a
procedure and forum for enforcement. [Emphasis added; p. 720.]
124
A few years later, in Hémond, this Court had to decide whether
foremen who returned to a bargaining unit were entitled to the seniority rights
provided for in the agreement that had been in effect at the time they left the
unit. Those rights had not been incorporated into the agreement that was in
effect when they rejoined the bargaining unit. Recognizing that the agreement
regulated the content of the individual employment relationships,
Gonthier J. adopted the comments of Laskin C.J. in McGavin
Toastmaster and Judson J. in Paquet, adding:
When a collective agreement exists, individual rights are for all
practical purposes superseded. [p. 975]
125
In CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R. 983, the
Court had to decide whether the terms and conditions of employment set out in a
collective agreement continued to apply when the agreement expired. The
union’s argument was that the individual contracts of employment resumed
operation when the collective agreement expired. After stating that the
conclusion that “individual contracts of employment no longer arise if the
parties are in a collective bargaining relationship” was “inescapable since the
decision . . . in McGavin Toastmaster” (p. 1006),
La Forest J. concluded that the “collective agreement displaced the
common law of individual employment” (p. 1007), even where the agreement
was no longer in existence, as long as the union remained certified:
The operative factor, it seems to me, is the ongoing duty on the
parties to bargain collectively and in good faith. So long as that obligation
remains, then the tripartite relationship of union, employer and employee
brought about by the Code displaces common law concepts. The termination
of the collective agreement has no effect on the obligation of the parties to
bargain in good faith imposed by [the British Columbia Labour Code].
The union retains its certification as the representative of the employees
whether a collective agreement is in force or not. The scheme of the Labour
Code, requiring the union and the employer to bargain collectively as the
expiry of a collective agreement approaches (ss. 62 and 63) does not leave
any room for the operation of common law principles. [pp. 1007‑8]
126
More recently, in Noël, this Court had to determine whether an
employee could personally appeal against an arbitration award. Noting that
only the union had the authority to do this pursuant to the principle of
exclusive representation in Quebec law, this Court confirmed that the
collective scheme takes precedence over the individual framework:
A collective framework supersedes the traditional contractual process,
which is based on individual relations between the employer and its
employees. [para. 43]
127
While some of the passages reproduced above have been used to support
positions that rule out the survival of the individual contract when labour
relations are governed by a collective scheme, I do not think they need to be
given this scope in present‑day Quebec labour law. Some of the comments
made by this Court in the decisions in question have often been quoted out of
context and without regard to all the circumstances in which they were made.
Moreover, the position that the C.C.Q.’s rules regarding individual
contracts of employment become totally irrelevant in the context of a
collective agreement would have consequences that are sometimes strange or that
are difficult to reconcile with what is needed for the proper functioning and
coherence of the labour relations system in Quebec. I will return to this
point.
128
It is true that individual contracts cannot derogate from the provisions
of the collective agreement in a manner that defeats the effects of the
collective labour relations scheme, since those provisions take precedence in
determining the actual content of the conditions of employment, subject to provisions
of public order. In the decisions discussed above, this Court favoured
recognizing the certified union’s exclusive right of representation and the
regulatory effect of the collective agreement in relation to individual
contracts of employment. For example, it is correct to say that the collective
scheme leaves no room for individual negotiation between employer and
employee. The certified association’s exclusivity as the employees’
representative must remain intact at all times (Paquet and Noël).
Other important principles must also be adhered to at all times: the duty to
bargain collectively and in good faith (Paccar), the binding nature of
grievance arbitration (St. Anne Nackawic), the effect of the right to
strike being exercised and the return to work (McGavin Toastmaster), and
the requirement that there be only one collective agreement which, during its
term, is binding on all the workers included in the bargaining unit (Hémond).
129
However, recognizing the certified union’s exclusivity and assigning a
regulatory function to the collective agreement does not resolve the question
of the implicit obligational content of that agreement and, in some cases, the
employment relationships to which it applies. Nor does it completely
resolve the question of how this scheme relates to the general law set out in
the C.C.Q. and the principles of the civil law system it governs.
A number of judgments support the position that Quebec’s collective labour law
scheme does not completely preclude the application of the general law but
rather preserves at least a supplementary role for it when specific statutes
and the collective agreement do not provide answers to the questions asked.
130
In 1947, the Quebec Court of Appeal stated this
view in Association catholique des institutrices du district no
16 Inc. v. Commissaires d’écoles pour la municipalité de la paroisse de St‑Athanase,
[1947] B.R. 703. At that time, it stressed the principle that the
collective agreement has a regulatory effect:
[translation]
It is apparent from the trial judge’s reasons that he saw an inconsistency
between a collective labour agreement and the provisions of the Education Act
stating that teachers must be hired by individual contract. This is clearly a
mistake. A collective labour agreement is not a collective contract of
employment. It does not take the place of a contract of service but rather
establishes conditions of employment that will be deemed to be part of the
individual contracts of employment. [p. 712]
131
In a case involving the application of the provisions of the A.L.S.
relating to notice of dismissal, Quebec (Commission des normes du travail)
v. Campeau Corp., [1989] R.J.Q. 2108, the Quebec Court of Appeal
recognized the position that the individual contract of employment and the
collective agreement coexist. Referring to the opposing position,
Chevalier J. (ad hoc) stated the following:
[translation]
With respect, I find this reasoning to be incorrect. It confuses the concepts
of collective agreement and individual contract of employment and is based on
the principle that they cannot coexist. In short, this reasoning presupposes
that, when a collective agreement comes into force, it supplants every
individual agreement that may exist at the time and prevents any future
employee from contracting with the employer on any subject whatsoever, even on
a subject for which the collective agreement makes no provision.
Rather strangely, supporters [of this
position] . . . rely, inter alia, on the same two
decisions of the Supreme Court of Canada, in which they claim to find
justification for their conclusions: Syndicat Catholique des Employés de
Magasins de Québec Inc. v. Cie Paquet Ltée and McGavin Toastmaster Ltd.
v. Ainscough.
A careful examination of these two decisions will
persuade the reader that the Supreme Court did not reject the idea that the
individual contract and the collective agreement can coexist. [Citations
omitted; pp. 2112‑13.]
132
Chevalier J. also referred to comments made by
Professor René Doucet in an article entitled “La résiliation du
contrat de travail en droit québécois” (1974), 9 R.J.T. 249. In
that article, Professor Doucet challenged the position that the individual
contract ceases to have effect in the context of a collective bargaining
scheme:
[translation]
. . . a collective agreement is not a collective contract of
employment or a combination of individual contracts. It therefore does
not terminate or take the place of the individual contract of employment. That
contract continues to be the normal method of becoming an employee. The hiring
of an employee, and the termination of his or her employment, are matters governed
by the individual contract of employment. The collective agreement establishes
standards, working conditions and procedures that must be followed by the
parties and are binding on the employees. Those standards, conditions and
procedures may cancel or alter the terms set out in the individual contract of
employment, but that contract remains in effect to the extent that it has not
been so altered by the collective agreement.
According to the case law, the conditions of
employment set out in the collective agreement are deemed to be part of
individual contracts. This does not mean they are incorporated into the
individual contract of employment. That contract subsists as the instrument
that ties the employee to the business and thus as an act by which the employee
adheres to the rules found in the collective agreement. [p. 263]
133
The impact of the collective agreement on the individual employment
relationship is indeed substantial. However, there remains, at the very
least, an individual act under which the employee is hired, and its effect, in
any case, survives should the certification and the collective agreement cease
to have effect.
2. Impact on
Individual Relationships
134
Several of the fundamental principles that structure collective labour
law significantly change the dynamics of the individual relationships
previously established between the employer and the employees. The
legislative framework governing the collective labour relations scheme discussed
above creates three basic institutions that confirm the unique nature of that
scheme: certification, which gives the union an exclusive right of
representation, the collective agreement, which becomes the law of the parties,
and grievance arbitration, which is the preferred forum for resolving disputes.
135
Since the certified union now has a monopoly on representation and
bargaining, the employee and the employer can no longer agree on conditions
that differ from those set out in the collective agreement. The principle of
freedom of contract in the workplace, which applies in conformity with the
framework established by the C.C.Q. and specific statutes, becomes
totally irrelevant. The L.C., which now governs the parties, that is,
the employer and the certified association, requires them to negotiate
diligently and in good faith (s. 53). To negotiate conditions of
employment individually becomes legally impossible.
136
However, defining the true nature of a collective agreement continues to
be a delicate task, despite all the efforts made by the courts. In Parry
Sound, this Court attempted to define it as follows:
. . . this willingness to consider factors other than the
parties’ expressed intention is consistent with the fact that collective
bargaining and grievance arbitration has both a private and public
function. The collective agreement is a private contract, but a contract that
serves a public function: the peaceful resolution of labour
disputes. [Reasons of Iacobucci J., at para. 30 (emphasis in
original).]
. . .
Although these labour agreements are entered into
under the collective bargaining framework established by the Labour
Relations Act, 1995, they are essentially private contracts of
significant public importance. [Reasons of Major J., at para. 95.]
137
The collective agreement is binding on the certified union and the
employer during its term. The collective will of the union replaces the
individual will of the employees, whose employment scheme becomes the
agreement. The collective agreement also establishes temporary peace in the company.
Once it is signed and comes into force, the use of pressure tactics such as
strikes and lock‑outs is prohibited during its term. This stability in
labour relations is one of the primary objectives of the collective scheme. It
is in the interest of the workers as well as the employer and the company’s
customers. McGavin Toastmaster illustrates the importance of this
objective: general law remedies cannot be used to argue that the collective
agreement has been repudiated, even where there has been a breach of an
obligation as fundamental as the prohibition against striking.
138
As I noted above, one of the institutions that is most characteristic of
collective labour relations is obviously the grievance arbitration procedure.
Disagreements respecting the interpretation and application of the collective
agreement will therefore fall under the jurisdiction of an arbitrator, not of
the ordinary courts.
139
However, it is important to properly distinguish two concepts: the
survival of the individual contract of employment and the employee’s residual
freedom of contract. Although employees are not allowed to participate
individually in negotiating a contract with the employer under the collective
scheme, this does not mean that no such contract exists.
140
An individual contract continues to exist after a union is certified and
a collective agreement is in place. This result is necessary because it
explains the legal basis of the various obligations imposed on the employer and
the employee, and also because labour legislation, as prolix and complex as it
may be, does not cover all aspects of labour relations, even in a collective
context. The rules of the C.C.Q. supplement that legislation and make
up for any silences or gaps in the collective agreement.
F. Content of the Collective Agreement
141
In principle, of course, the collective agreement contains all the
conditions of employment expressly included by the parties during the
collective bargaining process. However, the parties’ ability to freely
negotiate the substantive standards that will govern them is limited by the
obligation to respect, or incorporate into the agreement, the rights and values
protected by the charters and the legal rules imposed by the legislature, including
certain general principles of law, particularly those that are of public order.
1. Parry Sound and the
Implicit Content of the Collective Agreement
142
In Parry Sound, the majority of this Court favoured a broad view
of the content of the collective agreement, despite its silence, by implicitly
incorporating certain statutory rules into it. That was an Ontario case, of
course, and the statutes applied were not the same as the ones being examined
in this appeal. However, the legislative framework that governs this
appeal does not prevent us from drawing significant analogies with the
situation considered in Parry Sound and the principles established in
that decision.
143
In Parry Sound, a probationary employee was discharged when she
returned from maternity leave. Alleging that she had been discriminated
against in violation of the collective agreement, she filed a grievance against
her employer. Before the arbitrator, the employer argued that the grievance
was not arbitrable because the collective agreement gave the employer a
management right that allowed it to discharge a probationary employee for any
reason satisfactory to it. Also, the agreement expressly provided that the
discharge of a probationary employee was not subject to the grievance
procedure. The issue in the appeal was therefore “whether the substantive
rights and obligations of the Human Rights Code are incorporated into a
collective agreement” (para. 14).
144
Relying on McLeod v. Egan, [1975] 1 S.C.R. 517,
Iacobucci J., writing for the majority, found that the substantive rights
and obligations of the Human Rights Code are incorporated into each
collective agreement over which an arbitrator has jurisdiction:
Under a collective agreement, the broad rights of an employer to manage
the enterprise and direct the work force are subject not only to the express
provisions of the collective agreement, but also to statutory provisions of the
Human Rights Code and other employment‑related statutes.
[para. 23]
145
In McLeod, an employee had filed a grievance after his employer
disciplined him for refusing to work in excess of 48 hours in a week. The
collective agreement did not expressly limit the employer’s management right
and therefore did not prevent the employer from requiring an employee to work
more than 48 hours per week. Unlike the arbitrator, who had dismissed the
grievance, this Court held that the employer’s management rights were limited
not only by the collective agreement but also by mandatory legislative
provisions.
146
In Parry Sound, Iacobucci J. also recognized that the
collective agreement may give the employer a broad right to manage the
operations of the business. However, that power is limited by the
employees’ statutory rights even where the collective agreement is silent on
the subject.
As a practical matter, this means that the
substantive rights and obligations of employment‑related statutes are
implicit in each collective agreement over which an arbitrator has
jurisdiction. A collective agreement might extend to an employer a broad right
to manage the enterprise as it sees fit, but this right is circumscribed by the
employee’s statutory rights. The absence of an express provision that prohibits
the violation of a particular statutory right is insufficient to conclude that
a violation of that right does not constitute a violation of the collective
agreement. Rather, human rights and other employment‑related statutes
establish a floor beneath which an employer and union cannot contract.
As a result, the substantive rights and obligations
of the parties to a collective agreement cannot be determined solely by
reference to the mutual intentions of the contracting parties as expressed in
that agreement. Under McLeod, there are certain terms and conditions
that are implicit in the agreement, irrespective of the mutual intentions of
the contracting parties. More specifically, a collective agreement cannot
be used to reserve the right of an employer to manage operations and direct the
work force otherwise than in accordance with its employees’ statutory rights,
either expressly or by failing to stipulate constraints on what some
arbitrators regard as management’s inherent right to manage the enterprise as
it sees fit. The statutory rights of employees constitute a bundle of rights
to which the parties can add but from which they cannot derogate.
[paras. 28‑29]
147
Iacobucci J. therefore refused to give effect to
clause 8.06(a) of the collective agreement, which provided that the
discharge of a probationary employee was not subject to the grievance
procedure. In his opinion, the incorporation of s. 5(1) of the Human
Rights Code into the collective agreement implicitly gave this class of
employees the right to equal treatment without discrimination. The
discriminatory discharge of a probationary employee therefore violated the
collective agreement. Since the Ontario legislation required that every
collective agreement contain a binding arbitration clause for all differences
arising under the agreement, clause 8.06(a) was void as contrary to the
legislation (para. 35).
148
In the opinion of Iacobucci J., the power of an arbitrator to
interpret and apply human rights legislation and other employment‑related
statutes confirmed their incorporation into the collective agreement
(s. 48(12)(j) of the Labour Relations Act, 1995, S.O. 1995,
c. 1, Sch. A, to the same effect as s. 100.12(a) L.C.).
Although the grievance must be arbitrable for an arbitrator to have this power,
it is sufficient if the dispute inferentially arises out of the collective
agreement:
But even if it is true that a dispute must be
arbitrable before an arbitrator obtains the power to interpret and apply the Human
Rights Code, it does not thereby follow that an alleged contravention of an
express provision of a collective agreement is a condition precedent of
an arbitrator’s authority to enforce the substantive rights and obligations of
employment‑related statutes. [Emphasis in original; para. 48.]
149
However, Parry Sound did not incorporate all the substantive
rights and obligations set out in all employment‑related statutes into
all collective agreements. What it included in them was legislation that
was, in light of Iacobucci J.’s comments, of public order.
150
Parry Sound thus took a broad approach to defining a grievance
and, as a result, a broad view of the scope of an arbitrator’s exclusive
jurisdiction. From then on, [translation]
“the right to arbitral review would arise whenever a violation of provisions of
public order was validly raised in relation to all employees governed by a
collective agreement” (F. Morin, “Pertinence, cohérence et conséquences de
l’arrêt Parry Sound”, in Service de la formation permanente du Barreau
du Québec, Développements récents en droit du travail (2004), 29, at
p. 34).
151
As Parry Sound illustrates, fundamental rights and freedoms
figure prominently in the public order provisions of employment‑related
statutes that are incorporated into the collective labour law scheme. In
Quebec, the rights and values guaranteed by the Canadian Charter of Rights
and Freedoms and the Charter of human rights and freedoms, R.S.Q.,
c. C‑12, are therefore necessarily part of the implicit obligational
content of collective agreements. Since this case does not deal with the
applicability of such rights, I will limit my analysis to the other sources
that, because they are of public order, are imposed on the parties to
collective agreements in Quebec and become part of the implicit obligational
content of those agreements.
2. Obligational Content
of Collective Agreements in Quebec
a. Public Order
152
In Quebec, the parties’ freedom to negotiate the conditions of
employment included in a collective agreement is limited, first of all, by
statutory provisions of public order, as set out in s. 62 L.C.:
62. The collective agreement may contain any provision
respecting conditions of employment which is not contrary to public order or
prohibited by law.
Thus, as the Quebec Court of Appeal pointed out in the judgment under
consideration here, the principle of incorporation of rules of public order
recognized in Parry Sound is already found in the Quebec legislation:
[translation]
In Quebec labour law, the implicit incorporation of rules of public order is
expressly provided for in s. 62 of the Labour Code. [para. 43]
Where a clause in a collective agreement is inconsistent with a
provision of public order, the clause will be null, although the collective
agreement will not be invalidated (s. 64 L.C.). In actual fact,
s. 62 L.C. restates a rule that applies to the entire Quebec legal
system and is found in the Interpretation Act (ss. 41.3 and 41.4).
In Quebec labour law, the rules set out in provisions of public order are
either minimum standards to which the parties can add by agreement or standards
that are deemed to be incorporated as is into every collective agreement and
that cannot be derogated from. However, Quebec civil law does recognize more
than one kind of public order. The first distinction is between political and
moral public order and social and economic public order.
153
The first category contains the rules made in the interest of society.
Generally speaking, an individual cannot waive the application of these rules,
since they were not made in favour of the individual only (see Garcia
Transport Ltée v. Royal Trust Co., [1992] 2 S.C.R. 499). For
example, rules of political and moral public order defend the state and
individuals against certain individual actions (see J.‑L. Baudouin
and P.‑G. Jobin, Les obligations
(6th ed. 2005), at para. 144). Thus, the C.C.Q.
prohibits certain contracts relating to the human body, which are sanctioned by
absolute nullity (arts. 11 et seq. C.C.Q.;
art. 1417 C.C.Q.).
154
Social and economic public order is generally characterized by state
legislative intervention relating to the production, distribution or
consumption of goods and services in order to prevent or mitigate the effects
of social or economic imbalances in certain types of contractual activity
(Baudouin and Jobin, at para. 145). A distinction is usually made between
rules of directive social and economic public order, which cannot be waived and
whose violation is sanctioned by absolute nullity, and rules of protective
social and economic public order, which are subject to relative nullity because
the beneficiary of such a provision can waive its benefits.
155
Labour law is a field in which the legislature has established a
considerable number of rules of social and economic public order. As is
probably the case in other provinces, the Quebec legislature has established a
complex legal framework designed to remedy what is seen as an unequal balance
of power between the employer and the employee. Statutes have therefore been
passed setting out minimum labour standards and thus limiting the parties’
freedom of contract (see L. Otis, “L’ordre public dans les relations de
travail” (1999), 40 C. de D. 381, at p. 384). We have
already explained that the A.L.S. (ss. 93 and 94) and ss. 100
to 102 L.C. relating to grievance arbitration
(s. 100, para. 3) are of public order. The L.C. and
several specific statutes contain many other provisions of public order that
apply in the collective labour relations context, including: ss. 47, 47.2
and 63 L.C.; ss. 41 to 50 of the Charter of the French
language, R.S.Q., c. C‑11; s. 4 of the Act respecting
industrial accidents and occupational diseases; s. 11 of the Act
respecting collective agreement decrees; ss. 4 and 227 of the Act
respecting occupational health and safety.
156
The distinction between protective and directive economic public order
is sometimes a fine one. The first of these categories is generally considered
to include statutes whose essential role is to protect individuals. Statutes
that set out rules to protect individuals but whose primary objective relates
to the interests of society as a whole would fall into the second category.
However, as Baudouin and Jobin state in Les obligations:
[translation] . . . these
ideas of directive public order and protective public order are sometimes
difficult to clearly distinguish, since the statute may sometimes, in
protecting individuals, seek also to regulate a set of social or economic
relationships. [para. 147]
Since employees generally cannot renounce the protection conferred on
them, and since the purpose of legislative intervention is usually to give
labour law an economic direction that will benefit society as a whole, such
statutes are, in general, more likely to fall into the category of directive
social and economic public order.
157
Generally speaking, for a statute or one of its provisions to be of
public order, it must say so expressly. The C.C.Q. does not take this
approach, however, since it simply provides that civil rights must be exercised
in accordance with the rules of the Code that are of public order, without
specifically identifying the rules in question (art. 9 C.C.Q.).
How a provision is characterized will therefore depend on how the language of
the provision is interpreted and what role is assigned to it in the structure
of legal institutions.
b. General Law (Jus
Commune)
i. Applicability of
the C.C.Q.
158
As stated in its preliminary provision, the C.C.Q. recognizes the
fundamental nature of the civil law as the jus commune of Quebec and of
the C.C.Q. as the foundation of many specific laws:
The Civil Code of Québec, in harmony with the
Charter of human rights and freedoms and the general principles of law, governs
persons, relations between persons, and property.
The Civil Code comprises a body of rules which, in
all matters within the letter, spirit or object of its provisions, lays down
the jus commune, expressly or by implication. In these matters, the
Code is the foundation of all other laws, although other laws may complement
the Code or make exceptions to it.
159
In Doré v. Verdun (City), [1997] 2 S.C.R. 862,
Gonthier J. referred to the fundamental nature of the C.C.Q. as the
jus commune of Quebec in commenting on the preliminary provision of
the C.C.Q.:
This provision explicitly states that the Civil Code is the jus
commune of Quebec. Thus, unlike statute law in the common law, the Civil
Code is not a law of exception, and this must be taken into account in
interpreting it. It must be interpreted broadly so as to favour its spirit
over its letter and enable the purpose of its provisions to be achieved.
[para. 15]
160
In an article entitled “Effets combinatoires de deux
codes: Code du travail et Code civil du Québec” (1994), 49 Relat.
ind. 227, Professor F. Morin also analyses the first paragraph of
this provision. His view is that the specificity of collective labour
relations law does not require that this field of law be removed from the
general body of Quebec private law. Indeed, it deals with the same kinds of
legal relations involving persons, property and contracts:
It should be remembered that labour law, just like its component
related to collective labour relations, is concerned with persons (employee and
employer), relations between these same persons and the properties to which
these relations are directed or which result from these
relations. [p. 234; English translation taken from an English summary
of the article, entitled “The Combined Effects of the New Québec Civil Code and
the Québec Labour Code”, at p. 249 of the same volume.]
161
With regard to the second paragraph of the preliminary provision, the
relevant question is whether the L.C. and the collective scheme in
labour law are matters within the letter, spirit or object of the provisions of
the C.C.Q. The commentaries of the Minister of Justice on the C.C.Q.
include remarks that are relevant to this point:
[translation] One of the
objectives of this paragraph is to promote a dynamic interpretation of the
Civil Code and encourage the use of its provisions to interpret and apply other
legislation and fill any gaps in that legislation, where it relates to
matters or makes use of concepts or institutions that come under the Civil Code.
[Emphasis added.]
(Commentaires du ministre de la Justice — Le Code
civil du Québec: Un mouvement de société (1993), vol. I, at
p. 1)
162
The principle stated here by the preliminary provision can easily and
legitimately be applied to Quebec’s collective labour law scheme. Even when
interpreted and applied as a whole, the collective agreement and the L.C.
are not sufficient to create a complete, coherent legal framework. As a
result, the rules and principles stated in the C.C.Q. must often be used
to interpret and implement Quebec’s labour law scheme, even in its collective
aspects.
ii. Need to Apply the C.C.Q.
163
Some provisions of the C.C.Q. are not merely useful but essential
in defining the content of collective labour relations. Rights and
obligations inherent in all employment relationships, and even in collective
relations, are thus made explicit by the C.C.Q. Despite the significant
role it plays, the L.C. does not set out all the rules that govern
collective labour relations in Quebec. Nor is it a completely autonomous legal
scheme. The collective agreement between the parties establishes a set of
contractual standards within the enterprise, but it too does not cover all
aspects of an employment relationship. Some aspects, such as the
employer’s power of direction and control, and personnel management, usually
remain the prerogative of the employer, whether or not the collective agreement
so provides. Even more fundamentally, the creation of the employment
relationship between an employee and an employer is not provided for in the L.C.
or, frequently, in the collective agreement. For the employer‑employee
relationship to be recognized, it must materialize through a juridical act that
retains its individual nature, subject to the collective agreement provisions
that sometimes govern it. The relationship between the employer and the
employee is therefore necessarily created by an individual act.
164
What is included in a collective agreement is the result of the
collective bargaining process, but the agreement does not necessarily provide
for everything. Since collective agreements are dependent on a process in
which the parties may fail to address some aspects of their relationship, some
omissions are inevitably found in them. As F. Morin and J.‑Y. Brière
write in Le droit de l’emploi au Québec (2nd ed. 2003):
[translation] . . .
employment law must be able to draw on a general and generous source that can
serve as a basis for remedying its inevitable interstices, omissions and
silences. [p. 268]
165
The provisions of the C.C.Q. relating to contracts of employment
(arts. 2085 to 2097) illustrate this need. Although some collective
agreements reproduce the basic obligations set out in those articles, others do
not. If those provisions were inapplicable, the effects would be
incongruous. There would then be no basis for the employer’s power of
control over the employee (art. 2085 C.C.Q.) or the employer’s
obligation to pay the remuneration fixed and take all appropriate measures to
prevent the risk of harm (art. 2087 C.C.Q.). The employee’s
obligation to act faithfully and honestly and to show discretion
(art. 2088 C.C.Q.) provides another example: employers would
be surprised and concerned if it was not an implicit part of their employees’
obligations.
166
Other provisions of the C.C.Q. may also prove essential to the
proper conduct of collective labour relations. For example, the
principles of the general theory of obligations and the common rules of
contract interpretation may apply to collective agreements.
167
In this context, pursuant to art. 1434 C.C.Q., the
agreement binds the parties “not only as to what they have expressed in it but
also as to what is incident to it according to its nature and in conformity
with usage, equity or law”. The interpretation of the agreement must also take
into account “the nature of the contract, the circumstances in which it
was formed, the interpretation which has already been given to it by the
parties or which it may have received, and usage” (art. 1426 C.C.Q.).
In short, the general law makes certain legal rules that are necessary for
implementing the collective agreement part of the implicit content of the
agreement, notwithstanding its silence.
c. Harmonizing the
Legal Sources of the Collective Bargaining Scheme
168
Parry Sound demonstrated the need for provisions of public order
that protect employees, in that case fundamental rights and freedoms, to be
“incorporated” into collective agreements. In the context of the C.C.Q.,
the use of the term “incorporate”, while helpful in conceptualizing the way the
various sources are integrated, is not entirely accurate. It is more
appropriate to say that the various sources of labour law are harmonized to
form a complete legal framework:
[translation] The parties
negotiate the specific terms and conditions of their employment scheme, which
is superimposed on, supplements or extends the conditions of employment
initially guaranteed to everyone by the charters and employment‑related
statutes. As a result of this harmonization of the legal rules from two
different sources, it becomes possible to achieve the aims of the law: order,
stability, consistency and fairness for both parties and for the employees
concerned.
(Morin, “Pertinence, cohérence et conséquences de
l’arrêt Parry Sound”, at p. 39)
169
Harmonizing the various sources that make up Quebec labour law
inevitably involves establishing a hierarchy. It must be determined when the
rules established by a collective agreement or the rules set out in legislation
will take precedence.
170
In the context of the C.C.Q., art. 9, which draws a
distinction between provisions of public order and provisions that supplement
intention, is at the basis of this hierarchy. Thus, a juridical act, such as a
collective agreement, cannot derogate from the rules of the C.C.Q. that
are of public order. There is also a similar provision among the general
provisions on obligations (art. 1373 C.C.Q.). For the
purposes of the C.C.Q., therefore, this rule is the corollary of
s. 62 L.C., which specifically states that the provisions of a
collective agreement may not be contrary to public order. In accordance with
the principle of freedom of contract on which the Quebec law of obligations is
based, the parties are free to derogate from rules that are not of public
order. Since there is no general rule for determining which articles of the C.C.Q.
are of public order, each provision will have to be considered individually,
when it must be applied, to establish its nature.
d. Notice of Termination of a Contract of
Employment: A Matter of Public Order
171
As we have seen, arts. 2085 to 2097 C.C.Q. govern
contracts of employment. Such contracts may be for a fixed term or an
indeterminate term (art. 2086 C.C.Q.), but
art. 2085 C.C.Q. prohibits a contract for life. When a
contract is for an indeterminate term, either party may terminate it unilaterally
without a serious reason, provided that the other party is given reasonable
notice of termination (arts. 2091 and 2094 (a contrario) C.C.Q.).
172
Compensation will usually, especially when the employer terminates the
contract, be paid in lieu of notice of termination of employment. Such
compensation will represent the employee’s earnings for the length of the
notice of termination. To determine the length of the notice period, a court
must take account of the circumstances of each case, the character of the
employment, the employee’s length of service, the employee’s age and the
availability of similar employment having regard to the employee’s experience,
training and qualifications (see Machtinger v. HOJ Industries Ltd.,
[1992] 1 S.C.R. 986, at p. 999; Farber v. Royal Trust Co.,
[1997] 1 S.C.R. 846, at para. 48).
173
Under art. 2092 C.C.Q., employees may not renounce their
right to obtain compensation for any injury they suffer where the notice of
termination is not reasonable. Since such compensation is vital and is
considered an essential element of the contract of employment, the legislature
has made it a matter of public order for employees, who are very often in a
vulnerable position when they lose their jobs.
174
Since its wording excludes any possibility of renunciation,
art. 2092 C.C.Q. must be regarded as a provision of directive
social and economic public order. It should be noted that the right to
reasonable notice of termination is of public order only for employees.
Although the legislature could have provided that neither party could renounce
the right and thus confirmed that an employee’s departure can also cause injury
to an employer, it chose to have this apply only to employees.
G. Application of the Legal Principles to
the Facts at Issue
175
The outcome of this case depends on how the various sources of
collective labour law in Quebec are harmonized. It is true to say that the
certification of a union in a company transforms the dynamics of labour
relations. Indeed, the employees lose their freedom of contract.
However, this in no way means that the rules of the C.C.Q. regarding
individual contracts of employment cease to apply and are no longer part of the
implicit content of the collective agreement.
1. Jurisdiction of the Arbitrator — Connection
Between the Individual Claim and Collective Relations
176
Under s. 100.12(a) L.C., a grievances arbitrator has
the power to interpret and apply any statute to the extent necessary to settle
a grievance. This Court’s decision in Parry Sound clearly established
that an arbitrator has jurisdiction to interpret the provisions of employment‑related
statutes that are implicitly included in a collective agreement. Obviously,
not all the substantive rights set out in labour legislation are implicitly
included in collective agreements; only those from which an employer cannot
derogate are so included. For example, in Parry Sound, the employer
could not deprive one of its employees of the protection against discrimination
guaranteed in the Human Rights Code. This Court wrote:
The statutory rights of employees constitute a bundle of rights to
which the parties can add but from which they cannot derogate. [para. 29]
177
In Quebec, as we have seen, the substance of the principles stated in Parry
Sound is provided for in legislation: s. 62 L.C. renders null
any provision of a collective agreement that is contrary to public order.
Along with the charters, as I have noted, there are several Quebec statutes
containing labour law provisions that are of public order. In particular, the A.L.S.
sets out minimum standards that all collective agreements must meet. In
addition to specific statutes, the C.C.Q., which is the general
foundation of all other laws, cannot be disregarded. The C.C.Q.
contains provisions of public order that apply directly to labour
relations. Under arts. 2091 and 2092 C.C.Q., an employee is
entitled to reasonable notice of termination and may not renounce that right.
It must therefore be determined whether the right is incompatible with the
collective labour relations scheme, in which case the union could not assert
the right for the benefit of the employees it represents.
2. Collective Nature of the Dismissal and
Individual Assessment of Its Consequences
178
In the appellants’ submission, the employee’s right under the C.C.Q. to
notice of termination, which is agreed on individually with each employee, is
incompatible with the collective labour relations scheme, which is
characterized by collective conditions of employment agreed on in advance by
the union and the employer. In advancing this argument, the appellants are
mistaken as regards the nature of the collective labour relations scheme and of
the very diverse rules that govern termination of the employment relationship
or the right to employment.
179
The fact that the union bargains on behalf of all employees rather than
only one is not the deciding factor in these cases. Bargaining in a
unionized workplace is not done solely for the employees as a whole. For
example, the collective scheme does not imply that a collective agreement
cannot legitimately establish differences among classes of employees based on
relevant objective factors such as seniority, training or the nature of their
work, subject to the prohibitions against discrimination found in the Quebec
Charter (see R. P. Gagnon, Le droit du travail du Québec
(5th ed. 2003), at p. 484). As the respondents point out, the
collective labour relations scheme was created to equalize the balance of power
in negotiating conditions of employment, not to require that those conditions
be identical for all employees. In addition, the implementation of a
collective agreement often requires both individual action and collective
action. Some grievances are individual, while others are collective (see
R. Blouin and F. Morin, Droit de l’arbitrage de grief
(5th ed. 2000), at pp. 169‑70).
180
Moreover, a union often has to negotiate on behalf of an employee on an
individual basis, for example in a dismissal case. In fact, unions are
sometimes criticized for failing to take account of the specific interests of
certain employees and thus neglecting their duty of representation set out in
s. 47.2 L.C. In Centre hospitalier Régina Ltée v. Labour Court,
[1990] 1 S.C.R. 1330, this Court, per L’Heureux‑Dubé J.,
wrote the following:
. . . even when the union is acting as a defender of an
employee’s rights (which in its estimation are valid), it must take into
account the interests of the bargaining unit as a whole in exercising its
discretion whether or not to proceed with a grievance. The union has a
discretion to weigh these divergent interests and adopt the solution which it
feels is fairest. However, this discretion is not unlimited. Simply saying
that the union has the right or power to “sacrifice” any grievance, which it
feels is valid at that stage, during negotiations with the employer, in order
to obtain a concession of better working conditions or other benefits for the
bargaining unit as a whole, would be contrary to the union’s duty of
diligent representation of the employee in question. On the other hand,
completely rejecting the possibility that the union and the employer may settle
a great many grievances in negotiations for a new collective agreement, or on
other occasions, would be to ignore the reality of labour relations.
[Emphasis added; p. 1349.]
I relied on L’Heureux‑Dubé J.’s comments to state the
following in a recent decision of this Court:
. . . when carrying out its duty of representation in
collective bargaining, a certified union often has to deal with the
consequences of the history and problems of the group it represents.
Interests may have been created, legal situations may have crystallized,
commitments may have been made. In such a situation, even though the duty of
representation is carried out in the present, but from the perspective of the
foreseeable future of the agreement to be negotiated, the union will
sometimes have to take those interests or rights into account when deciding on
the approaches to which the agreement will give form and effect for the future.
[Emphasis added.]
(Tremblay v. Syndicat des employées et employés professionnels‑les
et de bureau, section locale 57, [2002] 2 S.C.R. 627,
2002 SCC 44, at para. 21)
181
In the collective labour relations context, therefore, the parties will
not inevitably negotiate conditions that apply uniformly to all employees,
without regard for individual situations. It is the union’s exclusive
right to represent the employees that is the crucial element of the collective
labour law scheme, not the number of employees on whose behalf the union
acts. This Court recognized the importance of the principle that the
union has a monopoly on representation in McGavin Toastmaster, Hémond
and Noël. The answers to the questions at issue in those cases
could have jeopardized the integrity of the principle that the certified
association is the employees’ sole representative. It is in this sense that a
situation involving incompatibility with the collective labour relations scheme
would arise. The outcome of this appeal does not call this principle into
question: it is the union itself that is claiming the right to reasonable
notice of termination on behalf of the employees it represents.
3. Right to
Reinstatement and Right to Reasonable Notice of Termination
182
In the appellants’ submission, allowing employees covered by a
collective agreement to claim the right to reasonable notice of termination
under art. 2091 C.C.Q. would not only be incompatible with the
collective labour law scheme but would also challenge a historical trade‑off
between the rules of that scheme and the rules applicable to individual
contracts of employment. According to this argument, the employee’s right to
reasonable notice of termination is the counterpart of the employer’s power to
terminate the contract without a serious reason. Since an employer under a
collective scheme can be required to reinstate an employee (s. 100.12(f) L.C.)
and can no longer terminate the contract unilaterally, the appellants submit
that it would be inconsistent to give employees the right to reasonable notice
of termination under the C.C.Q. Unfortunately, this argument unduly
simplifies the nature and effects of the connections between the individual
employment relationship and collective labour relations.
183
The appellants’ position presupposes that all employees working in a
collective labour relations setting have a right to reinstatement and that the
employer’s disciplinary power is always subject to the requirement of good and
sufficient cause. This is not the case, however. For example, temporary or
probationary employees generally do not have the same protection against
dismissal without good and sufficient cause. This Court’s decision in Parry
Sound provides a very clear example of a situation in which a unionized
employee did not have such protection because of her status as a probationary
employee. Does this mean that all such employees can never have the right to
reasonable notice of termination, even though the employer cannot be required
to reinstate them and the counterpart argument no longer applies?
184
Although reinstatement is, as a general rule, the remedy preferred by
grievances arbitrators in the case of employees who are protected against
dismissal without good and sufficient cause, it will not be imposed
automatically. Financial compensation will sometimes be substituted for
reinstatement in situations where the employee’s return might poison the work
environment. This Court confirmed the legitimacy of choosing such a remedy in
a recent decision (Alberta Union of Provincial Employees v. Lethbridge
Community College, [2004] 1 S.C.R. 727, 2004 SCC 28).
185
The circumstances of the instant case also illustrate the limitations of
the appellants’ argument. When a business closes, the question whether
employees should be reinstated is no longer relevant. All that remains to be
discussed is compensation for termination. The historical trade‑off
relied on by the appellants, namely that the right to reasonable notice of
termination is the necessary counterpart of the power to terminate the contract
of employment unilaterally, is therefore no longer at issue.
186
Moreover, the argument that there is incompatibility because of the
difference in continuity of employment between the individual and collective
schemes presupposes not only that employees who work in a collective setting
are certain to be reinstated, which is not the case, but also that the
principles of labour law preclude reinstatement outside that setting. This
premise is also inaccurate. Under the A.L.S., any employee who is
credited with more than two years of service for an employer and is
dismissed without good and sufficient cause can challenge his or her dismissal
and seek to be reinstated in the company (s. 128, para. 1(1)). In Le
droit de l’emploi au Québec, Morin and Brière explain the scope of this
remedy:
[translation] The
objective of this measure is to give employees who are not governed by a
collective agreement an effective mechanism to obtain reinstatement. In light
of this objective, reinstatement must be the preferred remedy and should
readily be granted. . . . To depart from the principle of
reinstatement, the Commission must have exceptional circumstances before
it. . . . [Citations omitted; p. 1237.]
For many employees, the incorporation of the principle of reinstatement
into the A.L.S. has a significant impact. Section 128 A.L.S.
considerably reduces the discretion that the C.C.Q. gives employers to
terminate a contract of employment unilaterally by paying compensation
equivalent to reasonable notice of termination. This change confirms the
intention of the Quebec legislature to extend reinstatement to the realm of
individual employment relationships.
187
There are other Quebec statutes that provide for the reinstatement of
employees outside the context of a collective agreement. The Act respecting
industrial accidents and occupational diseases (ss. 256, 257 and 259)
does so in cases where an employer dismisses a worker because he or she has
suffered an employment injury or exercised one of the rights provided for in
that statute.
188
Finally, some Quebec authors even argue that the classic civil law view
that mandatory performance of a contract of employment is impossible because of
the personal nature of the contract, a view supposedly confirmed by this Court
in Dupré Quarries Ltd. v. Dupré, [1934] S.C.R. 528, is no longer
relevant with the advent of large‑scale business and the increase in the
number of depersonalized jobs in which the worker’s identity is of little
significance (see M.‑F. Bich, “Du contrat individuel de travail en
droit québécois: essai en forme de point d’interrogation” (1986), 17 R.G.D.
85; R. P. Gagnon, L. LeBel and P. Verge, Droit du
travail (2nd ed. 1991), at pp. 139‑40 and 164‑67;
P. Laporte, La réintégration du salarié: Nouvelles perspectives
(1995)). While it has not adopted this argument, the Quebec Court of Appeal
has not been unreceptive to questioning the basis of that decision (see Rock
Forest (Ville) v. Gosselin, [1991] R.J.Q. 1000, and Schacter v.
Centre d’accueil Horizons de la jeunesse, [1997] R.J.Q. 1828).
189
In short, the incompatibility argument made by the appellants regarding
the application of the mechanisms of reinstatement and protection against
dismissal without good and sufficient cause does not provide an accurate
picture of the parties’ situation. The employee’s right to reasonable notice
of termination is not the essential counterpart of the employer’s power to
terminate the contract of employment unilaterally. There is therefore nothing
to prevent employees governed by a collective agreement from being entitled to
reasonable notice under the C.C.Q. Far from being incompatible with the
collective labour law scheme, arts. 2091 and 2092 C.C.Q. supplement
it and provide a remedy to employees who lose their jobs without being
adequately compensated by their employer.
4. Assessment by an
Arbitrator of the Effects and Sufficiency of the Collective Measure
190
Since arts. 2091 and 2092 C.C.Q. are of directive
public order and since the collective agreement cannot contain provisions that
are contrary to public order (s. 62 L.C.), an arbitrator hearing a
grievance on such a matter must assess the sufficiency of the compensation paid
in lieu of notice of termination in light of the C.C.Q.
191
In Regina Police Assn. and in Allen v. Alberta, [2003]
1 S.C.R. 128, 2003 SCC 13, this Court confirmed that arbitrators
have broad jurisdiction over labour disputes. In Parry Sound, this
Court stated that their jurisdiction extends to assessing the sufficiency and
validity of the clauses of the collective agreement in light of the public
policy provisions of other employment‑related statutes. In Quebec, as we
saw above, the legal framework of collective labour relations derives from a
variety of sources and frequently makes use of the rules of the civil law
proper. It is therefore entirely appropriate and essential that grievances
arbitrators be able to take account of the provisions of public order in the C.C.Q.
that are relevant to the application of collective agreements.
192
As the instant appeals illustrate, two situations can arise before an
arbitrator. In the first, the collective agreement contains a provision
referring to the notice of termination to which employees will be entitled if
the business closes or in some other situation. This is the case of the
collective agreement with the appellant Garon. An arbitrator asked to decide a
grievance in such circumstances will have to determine whether the measure
provided for in the agreement (here, the reference to the notice of termination
provided for in the A.L.S.) complies with art. 2091 C.C.Q. If
the arbitrator finds that the union’s grievance is justified, the arbitrator
will then be able to require the notice of termination that he or she considers
reasonable.
193
The collective agreement with the appellant Fillion et Frères is an
example of the second situation, in which the agreement is silent about the
compensation in lieu of notice of termination to be paid to employees if the
business closes. Where there is no provision to this effect, an
arbitrator asked to decide a grievance will have to determine whether, having
regard to art. 2091 C.C.Q., the minimum notice of termination
provided for in s. 82 A.L.S. is sufficient or whether the
circumstances of the case call for a longer period.
194
To summarize, in both these cases, the grievances arbitrator will have
to determine whether the measures provided for in the collective agreement
comply with the provisions of public order set out in other employment‑related
statutes. The arbitrator will then be acting within his or her exclusive
jurisdiction in applying the collective agreement and the implicit content
thereof, as the Quebec Court of Appeal recognized.
III. Disposition
195
For all these reasons, I would dismiss the appeals and affirm the
decisions of the Quebec Court of Appeal. Costs should be awarded to the
respondents.
APPENDIX
Legislative Provisions and Clauses of the Collective Agreements
A. Civil Code of Québec,
S.Q. 1991, c. 64
2091. Either party to a contract with an
indeterminate term may terminate it by giving notice of termination to the
other party.
The notice of termination shall be given in
reasonable time, taking into account, in particular, the nature of the
employment, the special circumstances in which it is carried on and the
duration of the period of work.
2092. The employee may not renounce his
right to obtain compensation for any injury he suffers where insufficient
notice of termination is given or where the manner of resiliation is abusive.
B. Act respecting labour standards,
R.S.Q., c. N‑1.1
82. . . .
This section does not deprive an employee of a right
granted to him under another Act.
83. An employer who does not give the notice prescribed by
section 82, or who gives insufficient notice, must pay the employee a
compensatory indemnity equal to his regular wage excluding overtime for a
period equal to the period or remaining period of notice to which he was
entitled.
The indemnity must be paid at the time the
employment is terminated or at the time the employee is laid off for a period
expected to last more than six months, or at the end of a period of six months
after a layoff of indeterminate length, or a layoff expected to last less than
six months but which exceeds that period.
The indemnity to be paid to an employee remunerated
in whole or in part by commission is established from the average of his weekly
wage, calculated from the complete periods of pay in the three months preceding
the termination of his employment or his layoff.
C. Collective Agreement
dated February 29, 1996 between Isidore Garon ltée and the Syndicat
du bois ouvré de la région de Québec Inc.
[translation]
4.03 Validity of the Agreement:
The nullity of any of the provisions of the agreement under any present
or future statute shall not affect the validity of the other provisions of the
agreement, but such provision or provisions shall be amended to give effect to
the said statute.
8.01 Employees:
The Employer shall give written notice to any employee who is laid off
and shall provide a copy of the said notice to the Union.
10.01 Grievance:
“Grievance” means any disagreement respecting the interpretation or
application of the collective agreement.
10.03 The employee shall, alone or accompanied by
the employee’s shop steward, the business agent or the Union, submit the
grievance in writing to the Employer or the Employer’s designated
representative within ten (10) business days after the circumstances
that led to the grievance occurred or became known.
10.08 Disagreement:
Any disagreement respecting a condition or conditions of employment for
which provision is not made in the agreement may be discussed and settled using
the grievance procedure in the agreement.
10.09 Powers of Arbitrator:
1.‑ The arbitrator has the power to confirm a
decision of the Employer that is in accordance with the provisions of the
agreement or to set aside a decision of the Employer that is not in accordance
with the provisions of the agreement.
If the incident that led to the grievance causes the employee to lose
or be deprived of rights, wages or financial benefits provided for in the
agreement, the arbitrator may order that the employee be reimbursed for such
loss or deprivation in whole or in part, with or without interest at the legal
rate.
2.‑ In the case of disciplinary action, the
arbitrator has jurisdiction to uphold, set aside or vary the disciplinary
action and order that the employee be reinstated, with all rights and
privileges, in the job the employee held, with or without full or partial
reimbursement for lost wages.
3.‑ The powers of the arbitrator are limited to
settling grievances within the meaning of the agreement. However, the
arbitrator has no power to add, remove or amend any provision of this
agreement.
4.‑ The decision of the arbitrator shall be final and
binding on the parties. It must be applied within
fourteen (14) days unless another time is set by the arbitrator.
D. Collective Agreement
of December 1994 between the Corporation des concessionnaires d’automobiles
de la régionale de Québec and the Syndicat national des employés de garage du
Québec Inc.
[translation]
6.02 Grievance
Any grievance may be submitted for investigation and settlement in
accordance with the procedure set out below:
In all cases, the employee shall first submit his or her grievance to
the union, which shall decide what action to take.
First (1st) step
Any employee acting alone or through his or her shop steward or union
representative, or the union, may submit a grievance in writing to the employer
or the employer’s authorized representative within
fifteen (15) business days of the date on which knowledge of the
circumstances that gave rise to the grievance was obtained.
. . .
6.03 Collective Grievance
A collective grievance may be submitted by the union at the first step
to the employer or the employer’s authorized representative within the period
of fifteen (15) business days referred to in paragraph 6.02, provided
that the grievance is signed by at least one of the employees concerned, by a
shop steward or by the union.
6.05 Powers of the Arbitrator
1. The arbitrator may decide the rules of
evidence and procedure and has the power to confirm a decision of the employer
that is in accordance with the provisions of the collective agreement or to set
aside a decision of the employer that is not in accordance with the provisions
of the agreement.
The arbitrator may make any decision that is necessary as a result of a
violation of this agreement. The balance of probabilities rule shall apply to
the arbitrator.
If the incident that led to the grievance causes the employee concerned
to lose or be deprived of rights, wages or financial benefits provided for in
the agreement, the arbitrator may order that the employee be reimbursed for
such loss or deprivation in whole or in part, with or without interest.
2. In the case of grievances relating to
disciplinary or non‑disciplinary sanctions, the arbitrator has
jurisdiction to uphold, set aside or vary the reprimand, suspension or
dismissal or to substitute therefor the decision that the arbitrator deems fair
and equitable. Where the arbitrator does not uphold the employer’s decision,
the arbitrator has jurisdiction to order that the employee be reinstated with
all rights in the job the employee held, with compensation not exceeding the
employee’s lost wages with the employer or any lesser compensation the
arbitrator may award. However, that compensation shall be determined having
regard to what the employee may have earned in other employment since being
dismissed or while suspended.
3. The powers of the arbitrator are limited to
settling grievances within the meaning of the agreement. However, the
arbitrator has no power to add, remove or amend any provision of this
agreement.
Appeals allowed with costs, McLachlin C.J. and LeBel and Fish JJ. dissenting.
Solicitors for the appellant Isidore Garon
ltée: Heenan Blaikie, Montréal.
Solicitors for the appellant Fillion et Frères
(1976) inc.: Fasken Martineau DuMoulin, Québec.
Solicitors for the
respondents: Melançon Marceau Grenier et Sciortino, Montréal.