Page # 1
LABOUR LAW - WINTER 2003
Introduction
 Labour law is concerned with the legal regulation of work (people who work in the home, provide
services for their family – not covered by labour law)
 Work is the integral and fundamental means through which an individual obtains the necessaries of life
(Employment plays a significant role in most people’s lives)
o 75% of ones income comes from labour
o 9% comes from gov’t transfers
o 7.3% comes from investment income
 There are 3 ways that the employment relationship can be structured/regulated
(1) Common Law Contract of Employment – Individual Contract of Employment
Creator/Source  the courts
Administration  the courts
Legitimacy
 notions about individual freedom (freedom to contract)
(2) Minimum Standards Regime – Everyone who’s an employee is entitled to these
Creator/Source  statutes passed by legislatures that set out minimum standards that apply to
classes of employees that cover the wide range of issues
Administration  administrative boards/bodies (Labour Relations Board, Human Rights Board)
Legitimacy
 derived from notions of fairness and elements of democracy (maximizes
individual autonomy and freedom)
Note: imposed to protect against socially unacceptable agreements – unsafe work, low wages, long hours
(3) Collective Bargaining – A body of law created to arrange an agreement collectively for all employees
Creator/Source  statutes (mainly) but some common law
Administration  administrative boards/bodies (not courts) (Labour Relations Board)
Legitimacy
 notions of fairness, need for a level playing field, freedom of association
Historical Development of Labour Law
(1) Unfree Labour (Feudalism) to Master & Servant Regime (1000-1600)
 Slave relationship evolved into the feudalism surf/lord relationship
 Feudal regime (status based – born into unfree status and hierarchical) from which emerged
master/servant regime (highly regulated and coercive)
(2) Master & Servant to Liberal Voluntarism (1600-1877)
 1800 and onward in Canada
 Employees were thought to enter into contracts of employment freely, however remuneration and
working standards were poor (hours of work established by law, wages fixed by magistrates, had to
serve in seven year apprenticeship, contract for one year)
 Statutes that created criminal sanctions for violations within the employment relationship
 Coercion (if don’t work, criminal sanction) and protection (wage recovery – employee could go to
magistrate to order employer to pay wages they were due)
Page # 2
(3) Liberal Voluntarism to Industrial Pluralism (1877-present day)
 The employment relationship began to reflect market place characteristics of supply and demand
 Better remuneration, the proliferation of minimum standards legislation (legislature imposes certain
terms and conditions – safety, hours of work), and the existence of CB regimes
 Terms and conditions not set out by statute – but to be negotiated by the parties
Labour Law and the Charter of Rights and Freedoms
 when it came into force, there was considerable debate over its potential implications – especially with
respect to equality rights, freedom of expression, and freedom of association
 the Charter doesn’t specifically deal with labour rights in its content, however many argue that the
rights it guarantees speak to many labour law issues, i.e. picketing, unionization, equality
 Unfortuantely though, the Charter has had very little impact on schemes of labour relations. The
Charter has largely upheld existing schemes of legislation
Delisle v. Canada
Narrow interpretation of Freedom of Association. S. 2(d) does NOT guarantee implementation of
certain labour relations regime where claimants can exercise their S. 2(d) rights (freedom to
associate) on their own
Facts: Member of RCMP posing a challenge to collective bargaining statute that excludes the RCMP from
participating b/c they are public employees and also excluded from the private sector (excluded from
any collective bargaining scheme). Claims it violates freedom of association. Any bargaining must
occur in an informal, voluntary way
Court: Constitutional protection of freedom of association would only kick in if there was some law preventing
from joining an organization. (I.e. could challenge it under S. 2(d) that it interfered with employees
freedom to join and independent employee satisfaction)
 NO obligation on gov’t to implement scheme for its employees to exercise collective rights
 Court also states there was no violation of s. 15 b/c distinction was not based on enumerated or analogous
grounds. Furthermore, there are good policy reasons to exclude RCMP from collective bargaining
Dunmore
 Indicates that the Charter may begin to play a larger role
Facts: Individual farm workers and union organizers challenge the exclusion of agricultural workers from
Ontario’s statutory labour relations scheme as a violation of their freedom of association and equality
rights under the Charter.
Issue: Is the Agricultural Employees Protection Act, 2002 Constitutional?
Does the exclusion of agricultural workers from the OLRA violate S. 2(d) of the Charter (i.e. what is the
state’s responsibility under S. 2(d) of the Charter)?
Court: State action can sometimes apply to private actors
The exclusion of agricultural workers from the OLRA violates freedom to associate (S. 2(d))
Before Dunmore
 Agricultural worker were excluded from the OLRA. Protection ONLY for individual’s right (not the
right of the collective)
 Four part test: S. 2(d) freedom of protection protects…
1. Protects the freedom to establish, belong to, and maintain an association
2. Does not protect an activity solely on the ground that the activity is a foundational or
essential purpose of an association
Page # 3
3. Protects the exercise in association of the constitutional rights and freedoms of individuals
4. Protects the exercise in association of the lawful rights of individuals
 Only meant to protect individuals in pursuit of their common goals (i.e. some activities can only be done
collectively – the activity done by group should be protected)
Dunmore Summary
Issue 1 – Dunmore had extended the scope of freedom of association (no longer needed to protect individual
rights, some group activities are protected as well)
Issue 2 – SCC doesn’t just impose a duty not to interfere, but in some situations, there might also be a positive
duty on the state to facilitate such activities
Issue 3 – why did exclusion of Agricultural workers from LRA violate freedom of association?
 The exclusion in this circumstance had the effect of encouraging private actors from interfering with
agricultural workers…they were picked out
 Agricultural workers had a greater need for protection due to historical disadvantage
 Freedom to organize lies at the core of freedom of association (para. 37)
 Without protection, agricultural workers couldn’t exercise their freedom (i.e. couldn’t associate)
Issue 4 – section 1 analysis
i. Objective: Sufficiently important objective: protection of family farm and ensuring farm productivity
ii. Proportionality
a. Rational connection
 For family farm there might be a connection but no rational connection for the prevention of economic
harm to the agricultural sector
b. Minimal Impairment
 The complete exclusion fails on the minimum impairment test  there could have been lesser
restrictions to achieve the objectives (you could have just excluded agricultural workers on small family
owned farms & it wasn’t necessary to exclude these workers from all aspects of the LRA)
Issue 5 – Does the AEPA (this act is on line) comply with the requirements of Dunmore?
 What does the AEPA provide for agricultural workers?
 S.5 – factors that should be taken into account
 The association has the opportunity to make representations and the employer must listen to the
association’s representations
 Where the workers live on the farmer’s property – the association should be able to contact the people
they want to organize
 S. 8 – 10 – prohibits employers form interfering with the agricultural employees’ right to associate.
(there is a limit on the employer’s right to prevent union organizers from contacting workers living on
their property)
 Not sufficient, things are missing:
o Collective bargaining rights – the employer has to read/listen, but that is all – there is no
positive obligation to bargain.
o Exclusion from statutory collective bargaining, including compulsory recognition and
bargaining
Key Points of Dunmore:
 Widens the scope of s.2(d) to include collective activities
 Recognizes that the state may have a positive obligation to protect associational activity against
interference by private actor
 Positive assessment of trade union freedoms
 Does not constitutionalize the right to compulsory recognition and bargaining or the right to
strike
Page # 4
International Labour Organization (ILO)
 Membership in the ILO is not compulsory but most countries are (175 member states)
 An attempt to establish a more universal and international set of labour laws that all member countries
would both subscribe to and enforce – by passing of a number of international conventions binding on
the countries that chose to ratify them (Canada has ratified 30–including freedom of association)
What does it mean to be bound by the convention?
A complaint can be lodged with the ILO that a government is in violation of a convention that has been ratified.
The ILO appoints an investigative committee who makes a determination as to whether there has been a
violation, and then it issues its findings. There isn’t really a sanction (only that the government is in violation of
a convention that has been ratified)
What is the efficacy of the ILO in Canada?
The committee has investigated a number of alleged violations in Canada. However, by the time the results of
an investigation are released, Canadian interest in the matter at issue has often fizzled out or it garners little if
any media attention in order to effect change
Note: It has little direct impact – hasn’t stopped violations of conventions ratified in Canada
Since 1998, the ILO has attempted to reassert itself. There was an ILO declaration of fundamental labour
principles passed by the organization. It was said to be binding on all members with or without ratification.
The declaration included principles such as:
(1) freedom of association (collective bargaining), (2) elimination of forced/compulsory labour, (3) abolition of
child labour, and (4) elimination of racial discrimination in respect of employment. However, the inability of
the organization to enforce such principles over and above the use of moral persuasion make its efficacy
questionable at best.
North American Agreement on Labour Cooperation (NAALC)
 NAALC is a side deal to NAFTA that codifies 11 labour principles (pg 97) that are reflective of 2 major
themes:
o Collective bargaining and freedom of association, right to organize, right to bargain, right to strike
o Technical labour standards: minimum standards, protection against forced labour, equal pay for
equal work, etc. (see list)
Note: NAALC does not bind a government to create laws to advance these principles, rather it
forces the member countries to ensure the prudent enforcement of the laws that already exist which
pertain to these 11 principles
How is the NAALC enforced?
 There are 3 tiers of enforcement
o Collective bargaining rights issues can only go to tier 1
o Other 8 principles can go to tier 2
o To go to tier 2, the matter must be both (1) trade related and (2) an issue covered by the labour
laws in each of the 3 respective countries
Has the NAALC been effective?
In terms of effectiveness of the scheme, in terms of looking like a court, NO, nothing has even gotten close to
third tier of enforcement but the scheme may have indirect effects – a scheme for activists to pressure the
government. It’s a mechanism to try to influence public discourse on what is acceptable and what is not
Page # 5
The Collective Bargaining Regime & the Constitution
 Jurisdictional arguments arose fairly frequently during the inception of collective organization of labour
because the power to legislate with respect to labour was not specifically enumerated under either head
of power in the Constitution.
 The federal gov’t claimed that they had authority to legislate with respect to labour under their residual
power to legislate for the Peace, Order, and Good Gov’t of the Nation (POGG) while the provincial
gov’t argued that the authority to legislate with respect to labour fell under their power to legislate with
respect to property and civil rights (s.92(13))
Peace, Order and Good Government
Toronto Electric Commissioners v. Snider [1925] A.C. 396, [1925] 2 D.L.R. 5 (PC)
• Privy Council held that feds didn’t have residual jurisdiction over labor relations (only in respect of federal
service and in federally regulated industries)
• Therefore struck down the Industrial Disputes Investigation Act
• looked at possibility of s.91(2), which reserves for feds competence over “regulation of trade and
commerce” - however, court stated that s. 92(2) granted feds power over general trade and commerce, not in
respect of particular disputants who happened to be engaged in trade and commerce
• also struck down the Industrial Disputes Investigation Act b/c ruled that legislation enacting
compulsory conciliation was properly categorized as pertaining to property and civil rights – a
provincial power
• also, not validated as being Act for the POGG – the fact that the Industrial Dispute Resolution Act
was to the general advantage of the nation was viewed as an insufficient justification to include
under the POGG power
Result of Snider was that it recognized that to enact labor legislation was to pass a statute in respect of
property and civil rights and accordingly is a provincial power
Note:
After Snider, the Industrial Disputes Resolution Act was amended to apply solely to the operation of
industries within federal legislative authority - further amendments made it applicable to provincial
industries where it had been adopted by the province - by 1932 all provinces had done so except PEI thus, Privy Council’s decision not well received
Labour Relations in the Federal Sphere:
Reference Re Hours of Labor [1925] S.C.R. 505
 decided that power to enact labour relations legislation was held concurrently by province and the
federal government
 provincial could cover labour relations where property and civil rights were involved, but federal leg.
could legitimately cover labour relations falling within heads of federal power
Note:
Today there is no question about validity of Canada Labor Code - among other things serves as basic
federal collective bargaining statute
When the CLC is invoked, it is treated as having authority to regulate inter-provincial railways,
telegraphs, shipping, and telephones, and not civil rights and property
 part 1 postpones right to strike or lock out until efforts to conciliate are made
 applies to employees who are employed upon or in connection with the operation of any “federal
work, undertaking or business” or to trade unions composed of such employees
Page # 6
What does federal work mean?
Federal work means any work, undertaking or business which is within the legislative authority
of the Parliament of Canada, and includes variety of areas listed in S. 2 of Code. In order for the federal
regime to govern, it must be shown that the parties are in fact engaged in a federal undertaking. This is a
very complicated analysis
R. v. Ontario Labor Relations Board, Ex Parte Dunn (1963), 39 D.L.R. (2d) 346 (Ont. H.C.)
Facts: Labour dispute over whether Northern Electric Company was governed by OLRA. Bell
Co. was clearly a federal undertaking and they owned most of Northern and bought most
of their supplies from it – as such the argument that the close connection Bell had with
Northern brought Northern within the federal scheme failed
Court: Provincial The court decided that b/c Bell could purchase supplies elsewhere, the two entities were not
completely “inseparable” and therefore Northern should be governed by OLRA
Communications:
Canadian Communications Structures and Ironworkers (1992) (Ont. L.R.B.)
Facts: • Company (CCSI) operating exclusively in Ontario installing, testing, maintaining and servicing
steel structures for use by admittedly federal undertakings. When union applied for certification,
employer argued that b/c work was integrally related to federal undertaking, OLRB lacked
jurisdiction
• union replied that mode of construction was wholly within provincial competence
Board: • Federal the “physical and operational connection” between the subsidiary and the core undertaking
was such that CCSI was an integral part of it
• Dunn was distinguished on basis that CCSI supplied much wider variety of services
In order for a non-federal undertaking to be drawn within the scope of federal jurisdiction, the “physical
and operational connection” between the subsidiary and core undertaking must be such that it is an
integral part of it. There must be a sufficient operational link
R.C.A. Victor Employees’ Association v. R.C.A. Victor Co. Ltd. (1968), 4 C.L.L.C. 16,040 (CLRB)
Facts: • union applied for certification for unit of service technicians working on installation and servicing
of Canada-wide communications system
Board: • Provincial. Application dismissed - work was not an integral part of the system and therefore did
not come within the scope of the federal code
Fishing:
B.C. Provincial Council United Fisherman and Allied Workers Union v. B.C. Packers Ltd. (Fed. C.A.)
Facts: • judgment by lower court prohibited CLRB from hearing several applications for certificate
Court: • appeal dismissed on basis that regulation of matters incidental to the conduct of fishing business,
such as labor relations, fell under provincial jurisdiction
Page # 7
Postal Work:
Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers and M & B Enterprises Ltd. (S.C.C.)
Facts: • employer of employees engaged in transport of mail operated under contract with Canada Post also carried on business in field of private transport
SCC: • Federal. Held that where company’s main business entitled work for Canada Post, the limited use
of a licence permitting it to transport household goods was insufficient to give jurisdiction to the
Saskatchewan Labor Relations Board
Canada Post Corp. and C.U.P.W. (Sheldon Manly Drugs Ltd.) (1987)-The Shoppers Drug Mart Case
Issue: • whether federal jurisdiction extended to pharmacy’s retail postal outlet, established pursuant to a
franchise contract with Canada Post
Board: • drew upon principles outlined in SCC decision in Northern Telecom Ltd. v. C.W.O.C.
• in decision upheld by Federal Court of Appeal, board ruled that the “practical and functional
relationship between the services provide by Canada Post and Shoppers was such that, though in
principle a provincial undertaking, the franchisee was an integral part of a core federal
undertaking’s business
A provincial operation which is generally not a federal undertaking can be held to be a federal
undertaking if the operation is an integral part of a core federal undertaking’s business
Canada Post Corp. and C.U.P.W. (Rideau Pharmacy Ltd) (1989) - applied Shoppers Drug Mart Case:
• main issue was union’s successorship rights with respect to employees of franchisee
• applying Shoppers, CLRB affirmed its jurisdictional competence
Case: Muir’s Cartage Ltd. and C.U.P.W. (1992), 17 C.L.R.B.R. (2d) 182. - applied Shoppers
Facts: • Canada Post contracted with private carriers to pick up, sort and deliver parcel mail, work
which was previously performed by bargaining unit employees. Union alleged the
implementation of new parcel service constituted sale of business and alternatively that
Canada Post and carriers constituted single employer. Muir disputed federal Board’s
jurisdiction
Board: •
concluded that postal service offered by Muir’s was indispensable to Canada Post’s parcel
program and that the links between them were “multifaceted and continuous” - there was
therefore a strong practical and functional rel’p
Native People:
Four B Manufacturing Ltd. v. United Garment Workers (1980), 30 N.R. 421 (S.C.C.)
Facts: • Native people operated shoe manufacturing business. Operated in Ontario on reserve under
licence by Minister of Indian Affairs. Licence obligated owners give employment preferences
to natives. Also received financial assistance from federal ministry
Court: • Provincial ruled that in respect of bargaining unit comprising company employees, the
CLRB had no jurisdiction
• notwithstanding s.92(24) of BNA Act, the primary federal jurisdiction over native people did
not extend to the regulation of the company’s labor relations
Re. While Band Council and Carpenters Provincial Council of Saskatchewan (1982) (Sask. C.A.)
Facts: • Pursuant to federal grant, Band Council hired several member of band, resident on reserve to
carry out home construction and renovation
Court: • relied heavily on Four B Manufacturing, Board granted union’s application for certification
CA
• on appeal, was held that the direct participation of the Band Council as employer brought the
employees within exclusive federal jurisdiction
Page # 8
Celtic Shipyards (1988) Ltd. v. Marine Workers’ and Boilermakers’ Industrial Union (BCLRB)
Facts: • Celtic and Band brought variety of jurisdictional objections - claimed that undertaking was
infused with “Indianness” in the sense that its activities were inseparable from those of the
Band as a whole, including the exercise of its aboriginal right to fish
Board: • citing Northern Telecom and Four B Manufacturing, the Board decided that the
undertaking was an “ordinary industrial activity”, not a federal business, and that Musqueam
involvement was inadequate to remove it from provincial jurisdiction
The federal jurisdiction over native people does not extend to the area of labour relations except for
where there is direct participation of natives as the employer. Mere involvement will not suffice
Trucking/Transport:
Exalta Transport Corp. and General Teamsters, Local 362 (1992), 18 CLRBR (2d) 95
Facts: • union attempted under the CLC to certify drivers employed by 3 interrelated truck transport
businesses
Board: • took the accepted approach - to include in federal jurisdiction any operation the extraprovincial aspect of which is continuous and regular, and hence which connects provinces
within the meaning of the BNA Act
• integrated undertaking’s extra-provincial business was sporadic - application dismissed
DHL Int’l Express Ltd. and General Teamsters, Local 362 (1994), 27 CLRBR (2d) 95
Facts: • union brought federal certification application in respect of employer’s employees. Employer
ran courier and freight delivery business and argued that each branch office was merely local
shipper that subcontracted the actual interprovincial and international transport of goods
Board: • concluded that was national and international network of interconnected facilities, employer
itself constituted an indivisible federal undertaking
•
regardless, the regular and continuous extra-provincial operations conducted by the
Calgary Branch were sufficient to bring it into federal sphere
Included in federal jurisdiction are any operations the extra-provincial aspect of which is
continuous and regular, and hence which connects provinces. Sporadic involvement will not suffice
How does a worker file a claim under the ESA?
 Operation of the ESA is meant to be simple - aggrieved party files with Employment Standards
Branch
 Offence for employer to seek to discipline employee who alleges contravention of Act or tries to
enforce their rights under the Act (s.76(1) & (2))
 ESO (employment standards officer) investigates - empowered to be supplied with all relevant info
(S. 63, 64)
 If the ESO finds for the complainant – they make assessment and notify employer that it is required to
pay employee what is due (s.65)
 if fail to comply, Ontario Court will issue order to pay
 can seek review of decision (s.68) - first though must pay money assessed as owing to Director of
Employment Standards
 Independent referee is then appointed by Director and full hearing held - referee may make binding
order, enforceable in the same way as an ESO’s (ss.68(7), 69(3))
 if employee dissatisfied with Officer’s findings, s/he may apply for review
Page # 9
 review cannot be refused and adjudicator is appointed from the recently created Office of
Adjudication (ss.67(2)-(7))
 s.2(2) of Act specifically provides that it doesn’t apply to persons employed within federal
jurisdiction
 certain parts of Act also exclude domestic servants, lawyers, dentists, etc., commercial fishermen,
agricultural workers, and others
Page # 10
Special Topics: I. Collective Bargaining II. Appropriate Bargaining Units III. Unfair
Labour Practices
I. Collective Bargaining & the Ontario Labour Relations Act
 Starting point is – the individual contract of employment
 In Canada – for workers to obtain collective voice, they have to opt into the CB scheme
 This is done by forming a union that is certified by a labour relations board (note: an employer
can decide to recognize a union that is not certified)
 I.e. unions can’t force employers to recognize them, Labour Relations Board has to first certify
the union (which represents a group of employees defined by the Board as an appropriate
bargaining unit)
 There are two ways that a union can become the bargaining agent for the bargaining unit for the
purpose of CB: 1. Voluntary Recognition of Union by Employer 2. Certification
Legal Framework for Certification
Who is covered by the OLRA (S. 1(3), S. 3))
 The only people who can take advantage of the Act are employees, except those excluded in S.
1(3), S. 3
S. 1(1) Employees includes dependent contractor (includes some people who are technically not
employees but in similar situations to employees)
S. 1(3) Non-Employees No person shall be deemed to be an employee (a) who is a member of
the architectural, dental, land surveying, legal or medial profession, or (b) who exercises
managerial functions, or is employment in matters relating to labour relations
S. 3(3) Non-Application This Act doesn’t apply to (a) domestic employed in a private home (b) person
employed in agriculture, hunting or trapping (c) person employed in agriculture or horticulture
Certification Process
 The scheme works such that the union applies to be certified
 The two parties that are involved are the union and the employer (in order to make a successful
application, union has to establish that they’re a legitimate union. They must comply with
definition of union)
s.1(1) Trade Union an organization composed exclusively of “employees” formed for the purposes that
include the regulation of the employer-employee relations and free from influence of
management (I.e. has to be formed for purpose of regulating relations b/n workers and employers)
 the OLRA places limits on the types of organizations that can be certified as a trade union
 s.15 if any employer or employer’s organization has participated in its formation or
administration or has contributed financially or other support OR if it discriminates against any
person because of any prohibited grounds as listed in the Ontario Human Rights Code or the
Charter
Note: This section exists to prevent an employer from ensuring the certification of a union of its own
making – eg. sweetheart deals
Note: This section is also consistent with S. 54 which states that collective bargaining agreements
should not serve to discriminate on the basis of prohibited grounds
Page # 11
Bargaining Unit Determination
Bargaining Unit
 the constituency of employees from which the trade union must obtain majority support in order
to be certified as the exclusive bargaining agent for those employees for CB purposes
 The OLRB is vested with the authority under the OLRB to certify a trade union as the exclusive
bargaining agent for a group of employees referred to as the appropriate bargaining unit
 Employees and unions can’t just determine the bargaining unit in order to force an employer to
bargain collectively
 How is the bargaining unit defined?
o Example: How do you organize the University Faculty to be covered by a union?
 S. 8(2) – If board determines that 40% of individuals in the bargaining unit proposed in
application for certification are members of the union at the time the application was
filed, the board will order a representation vote among the individuals in the voting
constituency
 1. Need a minimum of 40% of employees to support it
 2. Have to apply to Labour Relations Board to be certified (S. 7(1))
o How do you define the bargaining unit? What if the employer wants both Full Time and Part
Time Faculty to make up the bargaining unit and the union organizer only wants it to be FT
o To determine the unit – everyone is included in the voting constituency (both FT and PT) and
the appropriate bargaining unit is determined later (i.e. FT + PT or just FT)
o If FT = 50 and PT = 50 and only 35 FT vote and bargaining unit is both FT and PT, they
don’t pass the threshold (40%) 35/100 doesn’t equal 40% of bargaining unit
o However, if the bargaining unit is just FT and 35 members vote, then they pass the 40%
threshold 35/50 = over 40%
o The certification process determines the bargaining unit of employees represented by the
union
o Board have developed well-established policies as to what is considered an appropriate
bargaining unit
 Note: The unit for organizational purposes will be the unit that will exist for bargaining
purposes (therefore might be problems after the organization stage)
Page # 12
Determining the Bargaining Unit
What are factors to consider in determining the scope of a bargaining unit?
For the Trade Union
(1) A common interest among the employees included in the unit (union wants to avoid internal
conflict).
 I.e. easier to work with a particular group (FT) b/c they already exist as a community.
Whereas, if you bring PT’s they might have different concerns than the FT – more
difficult for union to service them
(2) Ensure that the unit can be organized and managed in an efficient and functional fashion –
are there too many employees or not enough?
 I.e. small group of employees might have less power to negotiate then bigger group
 Many small units might affect bargaining power as opposed to having one large unit
(3) Can the bargaining unit generate a sufficient amount of revenue (dues) to make representation
a viable undertaking
 Unions are a business, they provide a service, which has a cost through dues
 The union needs enough money from dues to cover to make representation possible
(4) Will the unit garner a sufficient amount of leverage to obtain a collective agreement that
addresses their concerns
 Want a group of employees that union can get the majority support for the union
For the Employer
(1) They want a unit that does not garner significant amount of leverage in the bargaining
relationship (i.e. want a bargaining unit that’s going to lose, larger number makes it harder to
get majority support)
(2) The creation of a unit that does not share a common interest
(3) The desire to reduce the amount of bargaining units so as to ensure industrial peace – eg.
more units, the greater the threat for strike or drawn out negotiations
 They don’t want many little groups in order to have industrial peace (more units, greater the
threat for strike or long negotiations) b/c they won’t know when one group might strike. Thus
want FT and PT together
For the Labour Relations Board
(1) A community of interest
(2) Nature of the work performed
(3) Skills of the employees
(4) Functional coherence or interdependence of the work groups
(5) History of collective bargaining for this group and groups in similar circumstances
(6) Organizational structure of the Employer
Note:
Note:
A majority of the criteria the Board uses in assessing the appropriateness of a bargaining unit tend
to depend on employer, so although the Board may appear neutral, in reality the process may not
be so neutral
It is within the power of the board to determine the bargaining unit (S. 9(1)). Thus, the wishes of
the employee is only one factor that the board will look at in determine the unit (not absolute
freedom of association)
Page # 13
Appropriate Bargaining Unit S. 7(1)
s.7(12) Proposed Bargaining Unit. The application for certification should include a written description
of the proposed bargaining unit, including an estimate of the number
s.7(14) if the employer disagrees with the description of the proposed bargaining unit, the employer may
give the Board a written description of the bargaining unit that the employer proposes and shall
do so within 2 days of receipt of the application
Note: S. 8(1) The board decides the voting constituency for the representation vote and can take into
account the descriptions of the proposed bargaining unit of both the employer and the union
Voting Constituency – Number of Employees who can vote S. 8
s.8(1) Voting Constituency the Board may determine the voting constituency to be used for a
representation vote (certification vote) and in doing so they can take into account
(a) the description of the proposed bargaining unit
(b) the description of the bargaining unit proposed by the employer
s.8.1(1)
Disagreement by employer with union’s estimate. If the employer disagrees with a trade
union’s estimate of the voting constituency, the employer may give the Board notice of their
disagreement
s.8.1(4) if a dispute arises as to the parameters of a bargaining unit under subsection (1), a certification
vote will be conducted that reflects the most inclusive boundaries, the votes being sealed and
segregated until such time as the discrepancies between the employer and trade union are settled
Limits on the Employees who can be included in the constituency S. 9
s.9(1) Board to Determine Appropriateness of unit. The Labour Relations Board has the authority to
determine the appropriate unit of employees to be included in the bargaining unit
o Has to be more than 1 employee
s.9(2) Certification pending resolution of composition of bargaining. If there is a disagreement as to
the composition of the bargaining unit, but the board is confident that the final resolution will not
affect the certification process, the Board has the authority to certify the unit pending the final
composition of the unit
s.9(3) Craft Units. Employees who exercise technical skills/crafts that are distinguishable from other
employees should bargain separately and apart from other employees within a trade union (I.e.
craft unit is an appropriate bargaining unit)
s.9(4) & (5)
Note:
Note:
Note:
engineers/dependent contractors should bargain separately but the Board may allow
their inclusion if the Board is satisfied that they wish to be included
pre-NDP, the OLRA said that security guards could only be unionized separately from other employees and
could not be represented by a union that represented other employees - therefore, only security guard
unions representing only security guard units
this was rolled back by NDP - allowed both general unions to organize security guards and also allowed
them to be in larger units if they chose to be
the Conservatives introduced s.14 of the OLRA - if employer objects to guards being included in larger
groups, then Board investigates to decide if there would be a conflict of interests so as to exclude the
guards from the larger group (s.14(5))
Page # 14
Standard Bargaining Unit
Sack & Mitchell “Ontario Labour Relations Board: Law and Practice”
 The Board’s policy has been to exclude from the bargaining unit those persons employed at or
above the lowest existing managerial level at the time of the application
 Eg. Standard Production Unit – made up of all employees in municipality except foreman,
person above rank of foreman, lowest level of management, office and sales staff
 The method of payment does not have an impact on bargaining unit determination, therefore
salaried and hourly employees may be in the same unit
 Inclusion of employees who perform both bargaining and non-bargaining work will depend on
whether their exclusion will deprive them of collective bargaining rights
 The Board won’t define bargaining units by way of gender (the sex of the person working within
the scope of the job described in the certificate is irrelevant)
 The Board generally does not exclude seasonal workers from bargaining units but has done so in
the tobacco industry
 The Board has taken the view that casual, short-term, temporary, and probationary
employees should be included in the same unit as permanent employees
 The Board has taken the view that part-time should be separate from full-time employees
because they have a separate community interest as stated by the Board in Leon’s Furniture
Limited – however, the determination will always depend on whether there is a common interest
(thus PT and FT can be in the same bargaining unit if there’s a community interest)
 Student employees should not be excluded from the bargaining unit unless their term of
employment is for the purposes of co-op or exclusively during the duration of the summer
vacation period
 For dependent contractors, security guards, formen, homeworkers see page 131-32
Note:
A heavy onus lies on any party seeking to persuade the Board to deviate from the
standard bargaining units which have proven to be appropriate
Page # 15
Competing Policies in Determining the Bargaining Unit
United Steel Workers of America v. Security Services Ltd.
 In making any determination with respect to a bargaining unit, the OLRB considers how it should
balance competing policy goals by making reference to the Hospital for Sick Children case
which stated
The determination of an appropriate bargaining unit has become an elaborate, time
consuming and expensive process for deciding a relatively simple question… “Does the unit
which the unit seeks to represent encompass a group of employees with a sufficiently
coherent community of interest that they can bargain together on a viable basis without
causing a serious labour relations problem for the employer”
 The Board went on to say in USWA that the process should become flexible and that there is “no
single unique and indisputable appropriate unit”
A trade union need not seek the most comprehensive or appropriate bargaining unit. The union
has a degree of flexibility in deciding what unit to organize. As long as the unit it seeks does not
generate serious labour relations difficulties for the employer, the union will be granted the unit it
applies for
Note:
The Board’s willingness to be flexible in its determination of an appropriate bargaining unit does
not necessarily equate to larger units being certified. Statistics show that 73% of the certifications
in 1998-99 included units of less than 40 workers while less than 10% of all units certified in
1998-99 were over 100 employees
Can employees unite with whomever they like in order to establish a bargaining unit?
 Attempts by employees to unite with whoever they want affects determination of the unit
 Some employees may wish to preserve their religious, political, or cultural distinctions, but in
CUPE v. Board of Education Toronto, O.B. Shime stated:
the Board is not prepared to admit all such distinctions because to do so
would result in unnecessary fragmentation of employees…an employer would
be faced with lengthy and expensive bargaining while trade unions may find it
impossible to carry on viable and meaningful collective bargaining
I.e. Board can’t account for all these differences
 In both the 1985 Canada Post Application (for an amalgamation of CUPW and the Letter
Carriers Union) and BC Ferry Corp. v. BC Gov’t Employees’ Union the OLRB emphasized that
the there was a need to guard against the fragmentation of employees among more than one
bargaining unit, especially when the threat of competitive bargaining and the sequential shutdown
of essential services is real
 In these cases the Board’s objective is to configure the units in such a way as to provide the
employer with the flexibility to manage its operations more effectively and efficiently
Page # 16
Nova Scotia “Michelin Bill”
 The “Michelin Bill” was passed by the Nova Scotia legislature in order to appease the Michelin
Corporation and protect the money they had invested in plant expansion. The bill allowed a
manufacturer who operated two or more “interdependent” plants within the province to apply for
a determination that the appropriate bargaining unit should be one that must include employees
from both interdependent plants
 The result of this bill was that it essentially prevented the unionization of either plant because
obtaining certification of a unit that spanned two plants with over 200 miles between them proved
to be a task that the United Rubber Workers, Canadian Labour Congress, and CAW were unable
to achieve
Bargaining Unit Determination in the Financial Sector
 Controversial policy choices have arisen in the determination of appropriate bargaining units for
certification in the financial sector
 In Kitimat v. Bank of Nova Scotia (1959) the Canadian Labour Relations Board decided that a
single branch was not an appropriate bargaining unit
 In SORWIC v. CIBC (1977) SORWIC persuaded the CLRB that a single branch for all bank
workers was an appropriate unit (i.e. all employees of a certain employer – all bank tellers of
CIBC in Toronto – this would be very difficult)
o However in 1978, SORWIC asked the CLRB to cancel 24 of its 26 units given that the
union felt it would not have sufficient economic power to influence CIBC in the event of
a strike given it only had certification of 6 of the over 1800 branches
 Most recently, the CLRB has certified a cluster of local branches within a geographic boundary as
seen in Rimouski v. National Bank of Canada (1985)
 The OLRB was seemingly prepared to follow this decision in National Trust (1986) however
when the question came before the Board again in Union of Bank Employees v. National Trust
(1988) the OLRB chose to adhere to the established practice of single branch bargaining units in
financial institutions
Alternative Bargaining Structures
 Mandatory Province Wide Bargaining – Construction (once employees are certified, they
are brought into industry and province wide CA)
 Decree System – Have to get an agreement with the employers that represent a significant
proportion of the industry. Then the gov’t can issue a decree that certain terms and
conditions apply to that industry (Eg. Industrial Standards Act)
 Post-Certification Amalgamation of Bargaining Units (1993 – NDP) – Union apply to
Labour Relations Board to combine two or more units from same employment. I.e. can
bring a new store into the already existing bargaining unit
Collective Bargaining in Specific Craft Industries & Construction
 Collective bargaining in these types of scenarios are industry wide, and once employees obtain
certification, they are brought into industry and province wide collective agreements
 Unionized contractors claim that this reduces their competitiveness against non-unionized
workplaces
 The provincial gov’t has proposed a number of amendments to the OLRA that would allow
certain unionized contractors in certain geographical areas to apply to the OLRB to essentially
opt out of the industry wide collective agreement to the extent that it makes them uncompetitive
Page # 17
Page # 18
Trade Union Certification
How does a trade union get recognized as a bargaining agent for a bargaining unit?
 Even though employees have a right to join a trade union (s.5), collective bargaining is not
automatic. There are two ways that a trade union can become the exclusive bargaining agent for
the bargaining unit for the purposes of collective bargaining:
(1) Employer’s voluntary recognition of the union as exclusive bargaining agent
 The employer must agree to recognize the trade union for the purposes of establishing a collective
bargaining relationship – this is usually done in writing s. 7(3)
 The trade union must be at arm’s length from the employer as stated in s.15
(2) Certification of the trade union as an exclusive bargaining agent by the OLRB after
representation vote under s. 10(1) – 40% of the individuals in the bargaining unit
 This requires a union to sign up a majority of employees in a unit as members of the trade union
and apply to the OLRB for certification
 The OLRB will then inquire as to the appropriateness of the bargaining unit, and if so, a
representation vote is held and if a majority is obtained the trade union is certified and the union
can compel the employer to meet for the purposes of reaching a collective agreement
 I.e. The board will certify a union as the bargaining agent of the employees in a bargaining unit
(which is determined by the Board to be appropriate for CB if more than 50% of the employees in
the unit vote for the trade union in the representation vote)
Note:
the Board no longer awards automatic certification if there is 55% bargaining unit membership
support for the union applying for certification (since ’95)
Note:
if employer found by Board to have committed unfair labor practice such as to make it likely that
representation vote would not reveal true wishes of employees, Board may order another
representation vote under s. 11 but it can no longer order automatic certification
Steps to apply in certification:
 The union has to sign up a majority of employees in a unit as members
 The board then inquires whether the unit of employees organized by the union is appropriate
for purpose of CB
 If majority of employees in the bargaining unit voting supports union – Certification
 The union can then compel the employer to meet with them to make a CA
 S. 7(1) Once the union has sufficient support, they can apply to the board to be certified as
the bargaining agent of the employees
 S. 7(12) the application for certification has to include a written description of the proposed
bargaining unit including the number of people in the unit
 S. 7(13) – The union has to show that it has the support of the majority of the employees in
the unit. I.e. has to present evidence of the membership that people have signed up
 Note: At that point the e/er may propose a different bargaining unit than the one suggested. I.e.
all full-time AND part-time faculty
 The Board may take into account the proposed bargaining unit of the union (employer)
Page # 19
Statutory Sections that apply to the Certification Process
s.1(1) statutory definitions
s.5
every person is free to join a trade union of the person’s own choice and to
participate in its lawful activities
s. 7
only a trade union may bring an application for certification
s.15
if any employer or employer’s organization has participated in a trade union’s
formation or administration or has contributed financially or other support OR if
it discriminates against any person because of any prohibited grounds as listed in
the Ontario Human Rights Code or the Charter
s.7(9) when a union withdraws an application before a representation vote, the Board may refuse a
subsequent application for up to a year (or less if it so determines)
s.8(2) if the Board determines that 40% or more of the individuals in the bargaining unit
proposed are members of the union, the Board shall direct a representation vote be
taken within the voting constituency
s.8(5) unless the Board directs otherwise, the representation vote must be done within 5
business days after the day the application for certification is filed with the OLRB
s.8(6) the voting procedure must be done in a secret ballot manner
s.10(1) the Board shall certify a trade union if more than 50% of the ballots cast in a
representation vote are in favour of a trade union
s.10(2) the Board shall dismiss a certification application if a trade union gets less than
50% of the ballots cast in a representation vote
s.10(3) states the board shall not consider another application for certification for at
least one year if it has already dismissed an application for certification
Bill 139
 proposes that if two attempts to certify have been abandoned by a trade union within a 6 month
period, a one year cooling off period should be implemented
o these limits apply to both the union who made the initial application and any subsequent
unions who may desire certification
Page # 20
Decertification
 Once a trade union has been certified or voluntarily recognized, it is given some security as the
exclusive bargaining agent for the unit subject to either a decertification vote or attempts by a
subsequent trade union to raid the unit
 The security its given – there are only certain windows of opportunity where employers can opt
out (be decertified) or another union can apply to be certified for the same group of employees
Note
Unlike certification, there are no mandatory bars for repeated decertification applications
Statutory Sections that apply to the Decertification Process
S. 7 When a union can apply to certify. Certification applications can’t be considered while the
conciliation process is going on or during the currency of an existing CA, except during ‘open
periods’ in the statute (S. 7(7), S. 67)
s.62 Termination of Bargaining Rights. States that if a raid is under way and an application is made
by the trade union performing the raid, then the union that previously held the bargaining agent
position ceases to be the bargaining agent for said bargaining unit
s.63(1) Application for Termination, no agreement. If a trade union does not make a collective
agreement with the employer within one year after its certification, any member of the unit may apply
to the Board for a declaration that the trade union no longer represents the unit (i.e. Repudiation by
employees)
s.63(3) the Board may direct a re-representation vote if 40% of the bargaining unit indicate a wish not to
be represented by the trade union currently certified. (threshold reduced in 1995 from 45% to 40%)
If a majority vote is won then certification is gone
s.63(16) the Board may dismiss an application for decertification if the Board is satisfied that the
employer or an agent thereof initiated the application or engaged in threats, coercion or intimidation
s.67(1) If a union hasn’t made a CA within one year after its certification and a conciliation officer has
been appointed, no application for certification (raid) or declaration that the trade union no longer
represents the employees in the bargaining unit shall be made until
(a) 30 days after Minister has released to the parties the report of conciliation board or mediator
(b) 30 days after Minister has released to parties a notice that it’s not advisable to appoint a
conciliator
(c) 6 months after the strike or lock-out has commenced
s.68(1) where a trade union declares that by reason of merger or amalgamation, it is the successor of a
trade union that was the bargaining agent for the bargaining unit, the Board may declare that the
successor has, or has not acquired the rights of its predecessor, or the Board may dismiss the
application
Bill 139
 proposes the Ministry create a guide that outlines procedures necessary to decertify a trade union
which in turn employers would be forced to post in the workplace
 there is no mention of a reciprocal obligation to create or post a guide to certification – an
obvious reflection of the provincial gov’t’s sentiments towards unionization
Page # 21
UNFAIR LABOUR PRACTICES – S. 70
 the purpose of the unfair labour provisions is to lend some force to the freedoms expressed in s. 5
of the LRA and therefore protect the integrity of the CB process
 unfair labour practices are said to have a chilling effect on the organizing drive in that they
deprive employees of the ability to choose freely to be represented by a trade union either in a
membership card campaign or in a representation vote
 The following deals with unfair labour practices while there’s a union organizing drive
 Before OLRA – it used to be a crime for workers to join a union (Liberal Voluntarism)
 It was later lawful (not a crime) but employees didn’t have the right to join in the sense that they
weren’t prevented from joining. (employers weren’t stopping them from joining unions)
 Industrial Pluralists View: the freedom to associate = the freedom to be punished at hands of you
employer (thus not really freedom)
 Argued: for freedom to associate to be meaningful, need to restrict rights and privileges of
employers and create legally enforceable rights for workers to organize and exercise their
freedom of association
 Response: OLRA – it creates a protective space for workers to be able to associate
Statutory Sections that apply to Unfair Labour Practices – S. 70
 S. 70, 72, 73(1) and 76 – Unfair Labour Practices by Employers
 S. 71, 73(2), 76 and 77 – Unfair Labour by the Union
 S. 70 – 77 – Provides the protective space. It prohibits employer interference with employee
organizing activities. However it allows the employer freedom of speech but not to interfere with
formation, selection, organization of union
s.70
No employer…shall participate in or interfere with the formation, selection or
administration of a trade union or the representation of employees by a trade union or
contribute financial or other support to a trade union, but nothing in this section shall be
deemed to deprive an employer of their freedom of expression so long as the employer
doesn’t use coercion, intimidation, threats, promises or undue influence
s.72
No employer shall
(a) refuse to employ or to continue to employ a person or discriminate against a person in regard
to employment or any term or condition of employment because the person was a member of
the trade union
(b) impose any condition in a contract of employment or propose the imposition of any condition
that restrain an employee or a person seeking employment from becoming a member of a
trade union or exercising their rights under this Act
(c) seek by threat of dismissal, or any other kind of threat, financial penalty, or by any other
means to compel an employee to become or refrain from becoming/continuing to be or cease
to be a member of a trade union
Note:
Any violation of s. 72 is also considered a violation of s. 425 of the Criminal Code and
punishable as a summary offence
s.73(1) Employers cannot collectively bargain or enter into a collective agreement with any other trade
union while a trade union continues to possess the right to represent the employees of that
bargaining unit
Page # 22
s.76
No person, trade union or employer can use intimidation or coercion to make or discourage an
employee from becoming a member of a trade union
s.77
This Act does not authorize any person to attempt to persuade an employee to join or refrain from
joining a trade union while at work during working hours
s.87(1) & (2)
Any witness testifying for the purposes of this act is protected from retribution from the
employer and or the trade union
s. 96
Authorizes the OLRB to investigate, report and a devise remedy for any violations of this Act
S. 71
Unions not to interfere with employer’s organizations.
No union shall particpate in or interfere with the formation or adminstration of an employer’s
organization or contribute fiancial or other support to an employer’s organization
S. 73(2)
Trade Unions not to interfere with bargaining rights
No union shall, so long as another trade union continues to be entitled to represent the
employees in a bargaining unit, bargain with or enter into a collective agreement with an
employer or an employer’s organization on behlf of or or purporting, designed or inetneded to
be bindin on the employees in the bargaining unit
S. 76
Intimidation and Coercion
No person, union or employer’s organization shall seek by intimidation or coercion to compel
any person to become or refrain from exercising any other rights or from performing any
obligations under this Act
S. 77
Persuasion during working hours
Nothing in this Act authorizes any person to at the place at which an employee works to use
intimidation or coercion to join or refrain from joining a union while at work during working
hours
Enforcement of Legislative Provision - S. 96
How does a trade union substantiate an allegation of an unfair labour practice?
 S. 96(5) Burden of Proof. The employer has the onus to show that their actions weren’t
motivated by anti-union animus
 To substantiate complaint alleging unfair labour practice, its sufficient for the trade union to show
that the employer’s actions were in part directed at lawful union activity Barrie Examiner
(1975) – I.e. there can’t be any anti-union motive
 Reversal of onus on employer to establish: (1) the reasons given for discharge (bad employee) are
the only reasons and (2) these reasons don’t have any anti-union motive
 If the above are shown – then no violation of the act
 S. 104, S. 102 – Prosecution. The board must consent to prosecution
 S. 425 CC – its criminal for employer to use threats and intimidation or other coercion
Page # 23
Application of OLRA
Union Access vs. Employer Access
How does the union or employer get access to the constituent parties in order to get their vote?
 Employer: Unlimited access to employees (knows their names and contact information)
 Union: Starts with no access or information (not entitled to get their names or info by law)
1. Union Access
i. Non-employee organizers
Can non-employee organizers enter the employment work place for purposes of a certification drive?
No, generally they cannot - subject to the exception articulated in s.13 of the OLRA
S. 13 Right of Access. Where employees of an employer reside on the property of the employer, or on
property to which the employer has the right to control access, the employer shall…allow the
representative of the union access to the property on which the employee reside for purpose of
attempting to persuade employee to join the union
 An employer’s right to exclude (property rights) and s. 77 would suggest that a non-employee
trade union organizer has no legal right to enter the workplace, however s.13 creates an exception
in circumstances where an employee resides in the same place where he/she works. Trade unions
may secure a right to access by way of application to the OLRB
 Very difficult for unions trying to organize employees to get general information about the
people they’re trying to organize Stewart – Union tried to organize employees to unionize
hotel. Union hired a consultant who tried to bribe an honest employee to get employees names.
He was criminally charged for theft of property of the names. Conclusion: not property
 Can’t go onto employer property to talk with voters, have to apply to OLRB for permission
 Can go to entrance of employer’s property as long as they’re not disrupting work
ii. Non-employee organizers and publicly owned private property
Can non-employee organizers enter employer premises that are generally open to the public (i.e. if the
store is in a mall)?
 In Eatons v. RWDSU (1985) the OLRB held that the shopping mall owner’s property rights, even
if exercised in a non-discriminatory manner, were subject to the OLRA and that organizational
efforts should be permitted
 The mall owner not allowed to exclude – have to permit the organizers to access restaurants and
other such facilities – could only refuse access if it could be proven that trade union activity was
interfering with the normal course of business
 In Manitoba – statutory right to go onto public property, UNLESS business owner could show a
legitimate business reason not to let union organizers on the public property. Without a legitimate
business reason to exclude – they were interfering with union activity
 Rule: Can’t exclude union organizers from privately owned, publicly used property
 Exception: Some precedent for labour boards to interfere with certain kinds of property rights
So, it is possible for trade union organizers to have access to third party property as long as their
use of said property does interfere with the normal course of business
Page # 24
iii. Employee Organizer and Access
Can an employer limit access to employee organizers (I.e. In-House Employee Organizations)?
 Employers may be able to challenge the right of employees to discuss unionization during nonworking hours if such discussion interferes with its legitimate business interests United Steel
 S. 77 Persuasion During Working Hours specifies that there’s nothing in the OLRA that
authorizes organizing activity to occur during working hours. Can’t use OLRA to argue the right
to organize allows the workers to organize during working hours
Workers v. Adam’s Mine (1983) - Employees can discuss unionization during non-working hours
(unless its disrupts business)
 Non-Working Hours. Employer who attempts to restrict organizing activities during employees
non-working hours is presumptively unreasonable unless employer can show that this activity is
having disruptive effect on business (fairly specific harm - very disruptive effect)
 Production takes precedence – thus if work is disrupted by non-working hour union activity – it’s
not allowed
 Working Hours. Rules preventing solicitation and distribution of info during working hours are
presumptively valid - union cannot argue this organizing isn’t adversely affecting business
Working Hours – employers can prohibit organizing activities on premises
Non-working Hours – Employers can’t prohibit organizing activities unless they can show it
disrupts business production
Note:
The balancing of property rights and the right to organize is an extremely delicate one that is not
easily decided
Unfair Labour Practice During Life of CA
Can unfair labour practices occur during the life of a collective agreement?
 Where a collective agreement is already in place and an unfair labour practice is alleged, the
conduct may also be a breach of the collective agreement
 In such instances, there may be an overlap between binding grievance arbitration and the OLRB,
but the OLRB will assume jurisdiction if grievance arbitration would be ineffective IBEW v.
Rogers Cable (1992)
Page # 25
2. Employer Access
 Union starts from point where it has no access and uses OLRA to get access
 Employer starts with unlimited access, that OLRA is needed to limit the access
K-Mart Canada Limited (Peterborough) [1981] O.L.R.B. Rep. 60. - Union certified b/c of Unfair
Labour Practice of Employer
Facts: •
organizing campaign going on secretly (most effective when employer unaware of this) by
meeting employees at local hotel. K-Mart becomes aware of this and initiates various
techniques to get to bottom of organizing drive and defeat it. Management did three things
that were anti-union activities: 1. Surveillance, 2. Group meetings, 3. Individual meetings
Issue:
Were these things unfair labour practices?
Board:
Union was certified b/c of unfair labour practices by employer
 The surveillance of the union organizers, the subjection of e/ees to repeated small meetings and
their continued exposure to the watchful eye of senior management, would reasonably have
caused many e/ee who might otherwise have supported the union to not
 K-Mart deprived the e/ees of the ability to choose freely whether or not they want to be
represented by a union
Result: The Board therefore exercised its remedial power under S 79 to restore the union
Reason:
Is surveillance an unfair labour practice?
 normally surveillance of a general nature is permissible in that management can use various less
intrusive surveillance techniques to ascertain what is going on in the workplace
 however, placing employees under “overt surveillance” so as to isolate them from their coworkers and intimidate not only the workers subject to the surveillance but others as well is
an abuse of the employer’s access to the employees and goes beyond the normal purpose of
trying to maintain business
 covert surveillance attempts have historically been deemed an unfair labour practice Radio Shack
 Here: Surveillance was to discourage union activity (to isolate the organizer b/c of union
association) – not legal (Excessive use of employer access)
Are employee meetings an unfair labour practice?
 A series of meetings designed to divide employees into smaller groups along with meetings
attended by very senior management who argued the employer’s point of view were deemed to be
an unfair use of employer access
o Problem with the meetings is their context: Captive audience (could leave but didn’t
want to draw attention), Intimidating Environment (management present at meetings),
Small groups not large groups (improper and coercive), Recurring meetings
o
o
(more than one meeting)
Problems with their content: Implied Threats (if you support the union, things
will get worse)
These intense meetings and circulation of senior management on daily basis to engage
conversations regarding unionization is excessive use of access
o Bottom Line: Becomes a form of oppressing the employees using fear and coercion, thus
unlimited access has to be restricted
 compared to the Walmart Case:
o Walmart routinely had employee meetings every day 15 minutes before their shift while
K-Mart did not so K-mart was deemed an unfair labour practice
Page # 26
o
K-mart identifies the extreme, but it is difficult to determine what exactly is acceptable
behviour
In general, it is perfectly acceptable for an employer to meet with employees provided they are not
held in an intensified in manner (like K-Mart) and provided management does not break them
down into small groups, haunting with senior management, etc. Further, surveillance of general
nature is acceptable, but singling workers out is not acceptable
Wal-Mart Canada Inc (1997) – unfair labour practice
Note: they learned from K-Mart and thus weren’t as obvious with anti-union activity
Facts
Wal-Mart was in operation in Windsor for two years. Rumblings of an organization drive arose
so management began an initiative to combat the potential threat. Employer was attempting to
avoid the “K-mart” errors. In-house organizers managed to get 80% of employees to sign union
cards until Wal-Mart discovered the campaign. Once it was found out, the card signing stopped
(union could only get 7 more employees). They had already gotten over 40% of the unit to
support it such that a vote to certify could go through – only 43 voted for the union and 151 voted
against
Issue: Did Wal-Mart unfairly use their unlimited access to intimate the employees such that the
employees would not vote for the union even if they wanted? Unfair Labour Practice?
Board Although Wal-Mart didn’t discipline, harass or fire any of the union in-house organizers, the
employer was found to have contravened the Act. Therefore the board certified the union under
S. 11
S. 11 Certification where act contravened. Upon the application of a union, the Board may order
another representation vote if (1) an employer contravenes the Act, and (2) the result of the
contravention is that a prior vote didn’t likely reflect the true wishes of the employees in the
bargaining unit and (4) the union has membership support adequate for the purposes of CB in a
unit found to be appropriate for CB
Analysis:
Did management meetings with employees amount to an unfair labour practice?
 The meetings were found not to be an unfair labour practice because they were part of the
normal course of business (they happened everyday). The conduct was found to be marginal and
did not cross the “threshold of unfairness”
 In one of the meetings, an employee who was anti-union stated their views, the meeting ended
before a union sympathizer had an opportunity to speak – the OLRB stated that the employer
ought to have provided union organizers a chance to speak, or at the very least distanced
themselves from the sentiments of the employee – while the company did not make threats, it
allowed threats to be made while it was in control of the meeting which made it seems as though
the threats were theirs – as such the conduct sufficiently crossed the “threshold of unfairness”
 The anti-union employee speech had a chilling effect on the union drive
 Note: “The line b/n legitimate employer persuasion and unlawful intimidation or undue
influence” has to be determined on the facts of each case
What about repeated and persistent personal contact b/n employees and management?
 Sending out employers to mingle with employees isn’t a good idea and will usually be found by
the OLRB to be unfair labour practice – employer could be held accountable
 Risky response for company to have made to the union’s organizing drive – unfair labour practice
Page # 27
 Personal contact was initiated by employer, not employee, in order for the employer to determine
who supported the union
What about threats/ incentives articulated or not articulated by the employer?
 Crude and outright threats will obviously be an unfair labour practice
 However, difficulty arises in this case in that the answers given by the company were arguably
understated threats (eg. Will the store shut down? No answer – implies the store will shut down)
 The fact that the employer refused to answer a number of pivotal questions with respect to the
consequences of unionization resulted in feelings of intimidation and fear. The OLRB stated that
the employer cannot solicit questions and then refuse to answer them. By specifically not
reassuring employees that the store would not close, the employer knew exactly what they were
doing. It was a subtle and effective threat
Note:
The OLRB points to the fact that every determination will depend on the unique facts of
every scenario – there are no hard and fast rules as to how to determine if an employer’s
conduct is an unfair labour practice
Examples of Unfair Labour Practices:
United Rubber et al. v. General Foam and Cushion
Facts: • Complaint that company terminated Ms. Aarons for union activity
Board: • dismissed complaint - complainant did not substantiate claim
Ratio: • It is onus of employer to prove on balance of probabilities that it did not have
knowledge of union and activities and therefore could not have been motivated by it, or
that in spite of its knowledge, it acted without anti-union motive
OCA Workers v. Syncrude Canada Ltd and Gulf Oil Canada Ltd (1978), 78 CLLC 16
Facts: • Union complained that publication of newspaper article reporting on employers’ conference
where management scheme was discussed which sought to exclude possibility of
unionization
Board: • Dismissed the Complaint
Mere expression of employer’s preference through the news not wrongful interference
United Cement et al. v. GTE Sylvania Canada Limited 79 CLLC 16, 193 (Ont. LRB)
Facts: • Looked like union has requisite support for certification. Petition circulated at lunch time
against union which casts doubt on likelihood of success. Union asked Board to ignore, return
to pre-petition situation, and to automatically certify without vote. Argued employer unfairly
interfered with organizing drive
Board: • Complaint rejected. Not certified
An address by plant manager urging employees to give careful consideration to
certification proceedings and indicating disappointment that they had found it advisable
to join was neither intimidating nor coercive - people signing petition expressed genuine
change of heart
United Food and Commercial Workers v. Hayloft Steakhouse, [1987] OLRB Rep.717
Facts: • 3 employees were individually questioned about their involvement in the union’s organizing
drive. All employees were offered one-time lump sum bonuses which were given out in
individual meetings with their manager. One employee on finding out that management was
aware of union organizing and names of those signed on, circulated petition against union
Board: • meetings held in manner that everyone would find out about them
Page # 28
•
•
•
comments made by manager and bonuses constituted intimidation and coercion and
violated s.72 of Act
the situation in which the petition originated (knew that bonuses were given to employee
against the union) held to have rendered it involuntary
Result: certified the union w/out the representation vote
Ed Klassen Pontiac Buick GMC (1994) Ltd. v. Teamsters (1995), 95 CLLC (BCLRB)
Facts: • When Board issued notice of application for certification, employer conducted department
meetings. Expressed disappointment at having let employees down, encouraged them to
participate in representation vote in such way “as to enable everyone to remain friends”
Union complained of unfair labour practice
Board: • Employers cannot use captive audience meetings to imply negative impact of
unionization on business
• however, Act specifically protects right of employer to communicate statements of fact
or opinion reasonably held about business, including relationship with employees, even
where statements cause union to lose support
• complaint dismissed
Seafarers’ International Union v. Dome Petroleum Ltd. (1978), 79 CLLC 16,192 (CLRB)
Facts: • Union wished to approach employees on employers’ vessels operating in Arctic. Employer
refused access. CLC recently amended to allow unions access not only to employees living in
isolated areas on premised owned by employer but also on premised controlled “by any other
person”
Board: • exercised discretion to allow union access, even though boarding ship without owner’s
consent constituted trespass under Canada Shipping Act
Toronto Typographical Union v. Accutext Ltd, [1980] OLRB Rep.131.
Facts: • 6 member bargaining unit certified. Within 3 months, two employees terminated and two
more laid off. Union filed s.96 complaint alleging violation of s.72(a) of Act (which states
that employers are not to interfere with employee’s rights)
Board: • Employer satisfied the board that significant downturn in business and required
company to reduce its costs and to take other measure in response
•
LRA does not protect employees from unfair or unreasonable actions of
employers if those actions are not tainted by anti-union motive
Service Employees Union v. Doral Construction Limited, [1980] OLRB Rep. 310.
Facts: • Union alleged that the decision to contract out the bargaining unit employees work was
lockout as per s.1(1) of LRA and asked for declaration under s.101 (Declaration and direction
by Board in respect of unlawful lockout).
Board: • union unsuccessful
• For an employer’s act to constitute lockout, the purpose of employer “must be to compel
or to induce an alteration either in employee behaviour or conditions of employment (ie.
concession from employees)”
• here, act was irrevocable - not lockout - where no future employment possible, employees
could not make any concessions
• however, did say that one reason for conduct was anti-union animus - might lead to s.96
remedy
Page # 29
United Brother of Carpenters et al. v. Nepean Roof Truss Limited, [1988] - Plant closing is an unfair
labour practice
Facts: •
Board: •
Union began organizing in 1984. Three unfair labour practice complaints filed for massive
anti-union motivated layoffs. Employees reinstated. May 1985 two more complaints filed for
failure to bargain in good faith (s.17) and for alteration of wages once notice of intent to
bargain was received (s.86). On July 1986, Board directed 1st CA be imposed. Sept.1986,
application for termination of union’s bargaining rights by employee dismissed by Board.
Ongoing refusal to deduct dues was violation of Act. Plant burned down.
As the owners were company’s directing and controlling minds, and as they were
personally involved in blocking negotiation and terminating workers to get rid of union,
could be held personally liable under s.70, s.72, and s.76
United Automobile, Aerospace and Agriculture v. Fleck Manufacturing Company, [1978]
Facts: • Protracted and bitter strike for first CA. Company history of health and safety related
violations. Once the union was certified, almost immediately company notified the employees
that it was unwilling to deal with the union. The union therefore planned to strike. On hearing
of pending strike, VP of Fleck warned union members police would be brought in, bats used
to get workers through the picket lines
Board: • on basis of these announcements, the Board granted consent to prosecute VP, company and
police constable involved
The union used the possibility of prosecution to bargain in negotiating the first contract
Note: • however, due to ensuing strike and years of antagonistic labour relations, employer packed up
and relocated in Mexico
Service Employees International Union v. Kennedy Lodge Inc., [1984] - Contracting out to avoid CA
wage rate has also been a major part of unfair labour practice
Facts: • Union certified. Employer contracts out. Main reason was to avoid CA agreement wage rate.
Board: • since the employer chose to have core function performed on premises by subcontractor
with resulting termination of large number bargaining unit employees, it had
terminated the employees in violation of Act
• also held that these were related employers - therefore contracted out firm bound by CA
Food and Service Workers of Canada v. Federated Building Maintenance Company [1985] OLRB
Facts: • O&Y owners of two buildings. Tenants had to arrange own cleaning, many contracted out
with Federated. About 17% of Federated employees worked at O&Y buildings. The union
negotiated the first CA which was used for 2 years. They made a second 2 year CA. After a
strike, a third was made. Some evidence that O & Y were involved as ‘resource’ for
Federated in negotiations. Union filed to have two organizations declared one employee for
purposes of Act - to bind each to CB obligations of the other - otherwise, if Federated loses
the contract on these buildings, union wouldn’t be the bargaining agent for the cleaners
Board: • dismissed application - two corporations were separate entities and could not be joined
Radio Shack and USWA (1994) - contracting out unfair labour practice
Facts: • During peak Christmas sales, company repeatedly makes use of temporary personnel
supplied by agency. CA specifically says company’s right to arrange for subcontracting.
Union brings grievance that temps doing same work as bargaining unit members and subject
to same supervision
Arb: • decided for union despite indicia of employment relationship between the workers and
agency, the substance was one of hiring
Page # 30
Unfair Labour Practice Remedies – S. 11
s.11(1)
Certification where act contravened. Upon application of a trade union, the OLRB may
order another representation vote if
1. employer contravenes the Act
2. the representation vote did not represent the true wishes of employees
3. repealed
4. the trade union has a sufficient membership in the bargaining unit
s.11(2)
No Certification where act contravened. Upon application of an interested person, the
OLRB may order another representation vote if
1. trade union contravenes the Act
2. the representation vote did not represent the true wishes of employees
s.11(5)
Additional Power. The OLRB may do anything to ensure that a new representation vote
ordered represents the wishes of the employees in the bargaining unit
Enforcement of Remedy for Unfair Labour Practice S. 96
S. 96
Procedure when allegation of unfair labour practice has been made
1. Complaint Filed
2. S. 96(1) Inquiry by labour relations Officer – Labour Relations officer is appointed to inquire
into the matter complained of
3. S. 96(3)
The labour relations officer reports the results of his inquiry to the Board
4. An agreement b/n the parties how to deal with the situation is made. This when most disputes
are resovled. If not resolved…
5. S. 97(5) Burden of Proof (reverse onus) employer has to prove no anti-union animus for
firing employee or for whatever the alleged unfair labour practice was
6. S. 96(7) Effect of Settlement. If the proceeding is settled (through labour relations officer or
otherwise) and the terms of the settlement are in writing and signed by the parties, the
settlement is binding on the parties, the trade unions, employer etc. and it has to be complied
with according to its terms
s. 96(4) Remedy for Discrimination. The OLRB has the authority to order remedial actions like
(a) cease and desist orders (an order directing the employer, union or employee to stop doing the
act complained of
(b) an order to rectify the act or acts complained of
 these refer only to compensatory awards and do not include punitive damages
 the goal of any orders should be geared towards rectifying the harm so as to allow the trade
union to obtain a fair representation vote
 I.e. posting notices – saw it in Wal-Mart and K-Mart. Board can order the employer to post
notices in prominent areas of the work place stating things such as; employer violated the
Act, and employees have right to organize without interference and employer won’t interfere
with board’s right to organize
(c) an order to reinstate an employee with compensation or to compensate for loss of earnings
instead of re-hiring or other employment benefits
s.98(1)
Interim Orders. The OLRB can make interim orders concerning procedural matters
Note: the board can’t order reinstatement as an interim remedy
Page # 31
Onus of Proof in Unfair Labour Practice
Who bears the onus of proof in alleged unfair labour practice violations like discharge, discrimination,
threats, intimidation?
s.96(5) the burden of proof that an employer did not act in any way contrary to this Act lies upon the
employer
 United Rubber Workers of America v. General Foam (1979) states that the onus of proof lies
with the employer to show that, on a balance of probabilities, it did not have knowledge of union
activities and therefore could not have been motivated by any anti-union animus in discharging
the employee and that the reasons given for the discharge are the only reasons for the discharge
Examples of Remedial Action Taken by OLRB

In K-Mart, the OLRB ordered the employer to give the union access to employee addresses and
access to the store during working hours as well as access to the bulletin boards in the workplace
 In National Bank of Canada case, the CLRB ordered the employer to create a $144,000 fund to
go towards educating employees about their unionization rights however, the SCC struck order
down stating it was not rectifying in nature
 In Plaza Fibreglass, the OLRB ordered an employer to re-open its operations after locking its
employees out and closing up shop during negotiations of its second collective agreement.
However, this order was never realized and is an example of how difficult it is for the Board to
compel an employer so focused on usurping a union to comply with its orders
Remedy of Automatic Certification
 Automatic certification was implemented in 1972 to recognize the fact that it was extremely
difficult to combat an employer who was focused on anti-union animus
 In order for the OLRB to order auto certification, like in K-Mart, the trade union had to show
(1) anti-union animus
(2) the conduct prevented the true wishes of employees from being known in the
representation vote
(3) there was sufficient support that already existed for the union
 In 1993, the NDP eliminated the requirement that trade union’s had to show adequate support
before obtaining auto certification
 There was however a concern that auto certification did not always create an environment that
was conducive to the establishment of a first collective agreement – in 1995, the PC’s repealed
such legislation and stated that auto certification should only be utilized as a last resort
 The OLRB introduced new 4 part test that had to be met in order for auto certification
(1) Unfair labour practices
(2) The conduct prevented the true wishes of employees from being known in the
representation vote
(3) Was there a viable alternative other than auto certification
(4) Was there sufficient support that already existed for the union
 There was significant political fallout from the Wal-Mart decision, so in response, the PC’s
passed the Economic Development and Workplace Democracy Act (Wal-Mart Bill)
 The “Wal-Mart Bill” eliminated the OLRB’s power to order automatic certification in the
event that an employer’s conduct was so severe that the true wishes of the employees would
not be reflected by a representation vote
Page # 32
Statistical Analysis of Certification Numbers
 During the NDP term of office, the number of applications for certifications increased by 13%
and the success rate increased by 11% - there was a 25% overall increase in certification as
compared to the previous Liberal period (had a significant + effect)
 During the PC term of office, the number of applications and successful certifications dropped by
31% as compared to the Liberal period
 In 1995, there was a burst of certification applications just before the NDP was ousted out of
office and the PC’s were elected in a land slide
Page # 33
THE EMPLOYMENT RELATIONSHIP
Who is an Employee?
 Typically an employee is a person who works pursuant to a contract of employment to serve the
employer, the consideration being remuneration (monetary payment)
 Most employment relationships do not fit neatly into a classical definition of what an employment
relationship is or is not
 There are a number of factors that need to be taken into consideration such as
o Ownership of the means of production, materials, premises
o Control over assets
o Who directs the labour process
o Chance for profit & risk of loss
Not a matter of who falls into the employee category but who should be protected. I.e. independent
contractors aren’t employees but they should be protected
Bottom Line: The arrangements that are made to have work performed vary quite widely and at a
certain point, we move away from a paradigm case (where there’s no argument it’s an employment
relationship) to a relationship where the worker is providing service on a different basis
Profit Sharing – Partner or Employee
What happens if there are profit sharing plans?
 A profit sharing scheme does not necessarily make someone a partner according to the
Partnership Act s.3(2) Seamone v. Boehner (1951)
Matter of Rosenburg (1979)–son was partner not employee b/c of way was treated while employed
Facts: • Father employed his son. Dad died. Heirs claimed son was only employee and limited to
reasonable compensation for managing father’s business. Son said partner and entitled to all
profits from business. No formal agreement
Court: • Son was partner - look at treatment of son during tenure in firm to determine partner
• looked to statements made by father in regards to son being partner, survey of books which
credited son with half profits as well as salary
Today • sure they carried on business in common with view to profit (s.2) but we would need to know
if they shared gross returns or gross profits (s.3(2) and (3)) and if any qualifications on the
sharing (s.3(a)-(c)).
Seamone v. Roehner (1951) – employee not partner, capital and profits under employer control
Facts: • Taxi driver promised 25% of gross earnings from operation of own car
Court: • Employee, not a partner - management, capital and interest in property and general profits of
business were clearly in plaintiff’s hands
Team Delegation of Labour Tasks – Employee or Not
 The fact that workers exercise some limited control over the labour process does not necessarily
exclude them from employee designation
Page # 34
Statistical Overview of Employment
1931-’71 self-employment decreases dramatically from 26% to 10% as a result of a decline in primary
industry (agriculture). I.e. agriculture used to be called self-employment, but wasn’t anymore
thereby accounting for decrease
1991-’98
this trend has slowly reversed and in 1998, self-employed level was 17% (i.e. went back up)
1990-’97
55% of the job growth was in the area of self-employment
1990’s
More than half the jobs that were created in the 1990’s were self-employment (people
creating their own jobs)
 There are two kinds of self-employed workers
1. Self-employed individuals who employ others (i.e. businesses)
2. Own account self-employed individuals (people who work for themselves – plumber)
 Most of the growth has been in own account self-employment
o 12% of the workforce in 1998 were own account
o 5% were self-employed who employ others
 on average, own account self-employed are worse off than employees who work for an
employer – making about 2/3 of what employees make
o 35% made less than $15,000 while only 17% employees made that little
o 60% of own account self-employed make less than $40 000
o Own account self-employees make less than employees and work longer hours
 there is also a gendered effect with respect to self-employment
o 75% of women are own account self-employed, while 60% of men are (i.e. men are more
likely to be self employed, not own account)
o there is also a significant wage gap between own account men and women
 own account self-employed women tend to be concentrated in the services and sales sector (low
income) while men concentrated in the more lucrative construction and transportation industries
 In the year 2000, there has been a decrease in self-employment – the first time since 1986
Page # 35
Distinguishing: Employee or Not
How do you distinguish who is an employee and who is not?
(1) Common Law & Def’n of Employee
 The most common test used was the “Control Test” - if under the control of another then
classified as an employee
o this made sense for many reasons - historical link to the idea of master and servant roles
o idea of vicarious liability – generally employer is liable for the actions of employees because
they are a part of the greater enterprise which is controlled by the employer (control notion)
o recently the courts have said that the “control test” is too general – as such, there is a need for
a multi-factor test – thus there has been an abandonment of the bright line rule and therefore
an abandonment of any steadfast rules to decide who is an employee
Ready Mix Concrete (1968) – independent contractors not employees applies four factor test
Facts: Case involves the interpretation of a written contract. Company made and sold cement - policy
was to carry on this part of business separate from delivery. Latimer was a driver and company
called them “Owner-drivers”. In order to acquire vehicle, Latimer was required to enter into hirepurchase agreements. Company was given right to acquire vehicle on expiration or termination of
agreement. Truck had company name and colours and to be used exclusively for business
purposes. No set hours, no fixed meal breaks but drivers had to be “available” for company use at
all times of day or night. Drivers wore uniform issued by company, complied with company rules
while on premises “as if was an employee.” Company prescribed how deliveries to be made but
did not specify method of driving trucks, routes to follow or discharge of concrete at delivery site.
Drivers were responsible for repairs but had to use company mechanics. Drivers could also hire
other drivers to cover for them if they were not available on a certain day
Issue: Contract of Service (i.e. employee)?
Held: The drivers were found to be independent contractors, not employees
Reason:
They owned the means by which they delivered coal, they paid all expenses of the trucks
including wages of extra help they employed, came to the yard when they wanted and were
allowed to work for other people. They were paid for deliveries per ton, not by the hour
Court:
Has difficulty trying to decide what would make this relationship incompatible with that of an
employment relationship
Refers to
Montreal Locomotive (Privy Council)(1947) – Four Factors
(1) control,
(2) ownership of tools,
(3) chance of profit,
(4) risk of loss
 court said each part of the test was not conclusive and that each piece of the puzzle had to be
assessed in light of the other
 incompatible with contract of service: “duties imposed by contract are not such as to make it one
of service - it is a contract of carriage” - ownership of assets, chance of profit and risk of loss in
business of carriage are his and not the company’s
o Freedom – is what allows person to be an independent contractor. Must be shown to have
freedom enough in performance of obligations to qualify as independent contractor – he has
enough
o is free to decide whether will maintain vehicle by own labour of those of another
o free to use another’s services to drive the vehicle when he is away
Page # 36
o
o
Rule:
free to choose where will buy fuel or any other requirements
it is true that company is given special powers to ensure he runs business efficiently, keeps
proper accounts and pays bills
A man does not stop running his own business on his own account just because he may
agree to run it efficiently or he chooses to accept/abide by some rules or regulations of
another
Us v. Silk (1946) – Economic Reality Test
 outlines the economic reality test to determine employment relationship
o investment in facilities
o permanency in the relationship
o skill required in independent operation
o degrees of control
o opportunity of profit or loss
Facts:
Issue:
Held:
Ratio:
Test:
Note:
Silk sold coal using two kinds of workers: 1. unloaders and 2. drivers. The unloaders moved
coal from railway to bins. They came to the yard when they wanted and were given a wagon
to unload it. They provided their own tools and were paid per ton that they unloaded
were they ‘employees’ under the Social Security Act?
The unloaders were employees, not independent contractors and the drivers were
independent contractors
It’s the total situation, including the risk undertaken, the control exercised, the
opportunity to profit…that marks the driver-owners as independent contractors
Whether the men were employees was based on the ‘economic reality’
It is important to note that the case law comes out all over the map with respect to
this issue – who’s an employee
 Some advocate a functional approach – in that the court should determine what is at stake in
making the determination and what the appropriate decision should be given the circumstances
(i.e. instead of looking at who an employee is, rather should look at who should be covered)
 The case law leaves us with a continuum - where do we draw the line at employee or independent
contractor – eg owner-operator drivers - are these independent business people with individual
contracts for transportation or are they in economic reality employees
a. Vicarious Liability
 Vicarious Liability only applies to employees, not independent contractors
 It is important to know who is an employee for the purpose of CL b/c of Vicarious Liability. At
CL, Vicarious Liability applies to employees, not to independent contractors (employer can be
held responsible for employee (only if employee/employer relationship)
 The employer should be held liable for the employee’s act b/c
o Employee (agent) act was an act of employer (principle) – thus employer should be liable
o Employer can better financially assume the risk (employer can spread the loss through
insurance and higher prices)
o Deterrence – employer can exert more control to make their practice safer (prevent future
harm by decreasing accident by efficient organization and supervision)
o Risk creator should bear cost when harm materializes (it’s the employer that puts that has the
risks into the community – thus the employer’s responsibility)
Page # 37
671122 Ontario Ltd. V. Sagaz - Purposive approach – is the person in business on their own
account? If yes, contract for services
Fact:
Original supplier (respondent) suffered loss when replaced as Canadian Tire’s car seat cover
supplier. This happened b/c a bribe was paid by a rival supplier’s consultant to the head of
Canadian Tire Automotive Division
Issue:
Is rival automotive supplier (appellant) vicariously liable for the conduct of it’s consultant who
was hired to assist in securing Canadian Tire’s business?
Note:
Only vicariously liable if consultant was an employee, not an independent contractor
Held:
Rival Supplier not vicariously liable for consultant (not employee)
Reason: Consultant not an employee of the supplier, but an independent contractor
Although there is no universal test to determine whether a person is an employee or an
independent contractor, the central is – Was the consultant in business on his own account?
Here:
Look at whether person is performing services on his own account. In order to determine this
look at:
1. level of control employer has over worker’s activities
2. whether the worker provides own equipment
3. whether the worker hires his own helpers
4. degree of financial risk that the worker takes
5. the amount of responsibility for investment and management the worker has
6. the opportunity for profit in the performance of their tasks
Note:
Organization Test: If worker is Integral Part of Business, then it’s a contract for services (i.e.
an employee)
Purposive Approach: There’s no test to determine whether a person is an employee or independent
contractor. Have to ask whether the person performing the service is in business on his own account
or for someone else’s business
Factors: 1. Control employer has over worker activity, 2. Owns equipment, 3. Hires own helpers,
4. Degree of financial risk, 5. Degree of responsibility for investment and management, 6. Opportunity for
profit
Public Policy Concerns – (1) employee protection (2) employee/employer interests (3) public
What are some of the Public Policy concerns?
 Employee-Employer Interests: The law is seeking to protect certain interests – like the unequal
bargaining power relationship that exists in a typical employee/employer relationship – the law
does not want one party thrusting unfair conditions on the other
 Employee Protection: There are a variety of interests to account for – like it might be attractive
for the employee not to be subject to normal employee deductions taken directly off their pay
check (time value of money) – it may also be more advantageous for an employer to allow
independent contractors to handle their own deductions etc.
 Public Protection: however, do we want people scamming by not paying EI, CPP, etc. - most of
our revenue raising activities are based on characterizing employees in certain ways and then
taxing them
 therefore it seems there are 3 main interests at work - employees protection, employee/employer
interests and public protection
Page # 38
b. Workers Compensation
Lee v. Lee’s Air Farming (1960 - P.C.) at 239 – public policy concern in determining employee or not
Facts: • Highlights shamming concerns. Claim made under workers comp. By widow of pilot. He
crashed while doing business for a company. The company claims that he wasn’t a worker.
Owns all the shares. Lee worked solely and continuously for the employer as both a
governor-director for life and a chief pilot. Articles of association specifically classify the
governor-director as a “servant of company.”
Court: • This person is employee - not worried about fraud b/c didn’t kill himself for workers comp so
seems to stress the public policy concerns
Ratio: • Directors and other such persons may be employees as well as directors
WCAT Decsision No. 186/95 (1995, OLRB) at p239
Facts: • Survivors benefits under workers comp. Husband and friend sole share owners and hire all
staff. After 1987 wife did all work and died on job. Hearing officer says no workers comp
coverage b/c she wasn’t paid. Appealed. Argument meant to pay but not enough money to
Board: • an employee - nature of the family business was such that sporadic pay cheques
corresponded to their “business reality”
• broad interpretation of Act supported conclusion that deceased had contract of service
Pizza Pizza Case – 872538 Ontario Inc.– employee therefore employer had to pay contributions (EI)
Facts: • Pizza Pizza drivers paid $1.50 for deliveries. Schedule made week before based on
employee’s availability. Had to honour schedule - if unavailable, could get someone else to
drive for them. Each driver signed contract. Minister of Revenue wants EI contributions
levied on these employees
Court: • tax court says these are employees
• they bear risk of loss and chance of profits (tips), can drive as fast as they want
• but Pizza Pizza controls their drivers - sure they own their own cars, but they are deeply
integrated and there is not much of a chance of profit
Stork Diaper
Facts: The business of the Defendants is the home supply of diapers. There’s work-related injury to a
delivery driver for Stork Diaper who had been hired under a contract that purported to identify
her as an independent contractor. Work-related injury and sued. When she sued, Stork Diaper
claimed that she was an employee and thus remedy was worker’s compensation. Note: no EI,
CPP payments, no tax was withheld and no overtime. The driver didn’t own the truck, wore
uniform and was given a route but not told in what order to make deliveries. Home deliveries
integral to business. Thus, the truck drivers have an essential element of the business
Issue: Are the drivers independent operators or employees that look independent?
Held: New test to determine employee or independent contractor
A business reality test involving a consideration of factors such as: (1) ownership of
equipment, (2) Compensation paid to the worker (fixed rate or variable with profit or risk
of loss), (3) Business indicia (advertisings, business cards, agents or independent operators),
(4) control over when or where the work is done, (5) The parties intentions to be an agency
agreement, employment agreement, contract for services, contract of service
These factors will help determine the character of the relationship – the business reality
What is the nature of the relationship b/n the parties, considering all factors that impact the relationship
Ratio: it’s the substance, not the form, of the relationship that makes a person a ‘worker’ or an
‘independent contractor’
Page # 39
(2) Social Wage Protection
 If a person is an employee – then their employer has to deduct money from their pay and
contribute to these plans
 Social wage protection – EI, CPP, Workers Comp and Tax
 Employees benefit from these protections
 Policy Rationale for such programs:
o Social Safety Net – people underestimate risk and thus don’t make proper preparations for
future
o Want to compel people to enter these programs
o Workers are getting wages – it’s in another form
o Compelling workers to do what they might otherwise not, for their own good (i.e. saving for
retirement – CPP)
Ready Mix Concrete - Employer has to make contributions to insurance for their employees. If not
employees but independent contractors, no contribution
Facts: Interpretation of a contract b/n a company and a driver. Company (Ready Mix) kept their
business of making concrete separate from business of delivering concrete. The company
therefore started a delivery scheme in which they had ‘owner-drivers’ working under contracts.
(contract: the drivers had to buy the trucks through the company, wear uniforms, trucks had to be
in company colours and have the company’s logo on it, no set hours for drivers but had to be
available at all time, books had to be done by an accountant approved by the company, all repairs
to the truck had to be approved by the company, wage by mile, if driver unavailable someone else
could work for them)
Issue: Were drivers employees such that employer had to contribute to National Insurance Plan?
Court: Independent contractors not employees. The employer therefore didn’t have to deduct money
for the NIP
Problem: The court didn’t adopt a purposive approach (i.e. they didn’t look at whether this is someone
who should be covered by a national insurance scheme). Rather, looked at whether they were
an employee or not
(a) Tax Case
 Employee or independent contractor is relevant to tax (I.e. an employer doesn’t have to deduct for
payroll taxes or CPP if worker isn’t an employee but independent contractor)
 Thus, employer changing worker from employee position to contract-deductions avoided
 Employee benefits from this b/c if classified as ‘self-employed’ and not ‘employee’, they can
deduct expenses that they couldn’t deduct as an employee
Thompson Canada
Facts: As news carriers became classified as employee – gov’t (Minister of National Revenue) wanted
to deduct tax (i.e. if employees then employer has to make deductions for CPP and EI, money
then goes to Minister). Employer refused to pay deductions, claimed the newspaper carriers
weren’t employees. Minister held that they were employees and thus deductions by employer
were required
Issue: Are the newspaper carriers employees or independent contractors?
Held: NOT employees (Montreal Test)
Note: no purposive approach (didn’t look at whether carriers were vulnerable such that they should be
protected by being allowed social welfare assistance)
Note: newspaper carriers are employees for some purposes (when they have to pay) but not others
Page # 40
(3) Employment Standards Act & Def’n of Employee
s.1
Employee includes a person who,
(a)
performs any work for an employer for wages
(b)
supplies services to an employer for wages
(c)
who receives training from a person who is an employer
(d)
a person who is a homeworker
and includes a person who was an employee
Note: “Wages” Monetary remuneration available from employer to employee (circular definition)
s.1
Employer includes,
(a)
an owner, proprietor, manager, superintendent, overseer, receiver or trustee of any
activity, business work, trade, occupation, profession, project or undertaking who has
control or direction of, or is directly or indirectly responsible for, the employment of a
person therein, and
(b)
any person treated as one employer under S. 4, and includes a person who was an
employer;
S. 3
Who Act applies to. The standards in this Act apply to an employee and their employer if
(a) the employee’s work is performed in Ontario
(b) the employee’s work is performed in and outside Ontario but the work outside Ontario is a
continuation of that in Ontario
S. 3(2)-(6) Statutory Exclusions Federal jurisdiction (S.3(2)), Diplomatic personnel (S. 3(3)),
Crown employees (S. 3(4)), Other exceptions (S. 3(5)) such as: 1. Secondary school students
performing work under a work experience program authorized by the school board
2. An individual performing work under a program approved by a college or university
I.e. ESA applies to non-excluded employees
s.5
No employer, employee shall contract out of the ESA and any contracting out is void
Note: Can get out of ESA by calling the contract of employment something else
s.5(2) The terms and conditions of a collective agreement that are higher than the prescribed ESA
minimums shall prevail
The definition of employee doesn’t extend to many professions. Thus, might be an employee
but not subject to some of the Act
Reg. 285, S. 2(1) Exemptions from certain parts of the act: architecture, law, professional engineering,
accounting, surveying…
 Note: The purpose of the Act is to regulate suppliers of services who are tied to another person
under an employment relationship, not to the supply of services by independent businessmen
Reg 285
 I.e. Employees should be protected by the Act – minimum standards such as: work hours,
overtime, minimum wage, vacation, termination of employment
Page # 41
Employees – As Defined by Adjudicators
Who are employees is left to adjudicators to define
Becker’s Milk (1973) – What constitutes employee within meaning of ESA
Facts:
Beckers wants number of employees designated managers, or independent contractors in
order to avoid paying certain statutory benefits (i.e. the Act only applies to employees)
Issue:
Were the workers employees (thus protected by the Act) and if so were they managers (thus
excluded by the Act)?
Held (ESA): Employees not Independent Businessmen
 these are employees and not independent businessmen - while they do provide some
independent type managerial functions, they continued to perform several services for their
employer Becker’s Milk.
 ESA Board uses the common law test for employment relationship - doesn’t simply subscribe to
the control test but rather uses a factor test in which control is one element - in the Montreal
Locomotive (1. control, 2. lack of ability to profit, 3. risk of loss, 4. ownership of tools)
 Here: the control by the company over the workers, the lack of ability to profit or risk of loss and
the fact that they didn’t own the tools – show they are employees of the company
o Although manager could hire and fire store help, they are employees of the company and
not the manager
o The managers were trained by the company – implies that they’re not skilled
labourers contracting out their labour
o
Company can terminate relationship with store manager
Reasoning:
(1) starts with statute - says statute doesn’t apply to everyone providing services, only to those people
who provide services to an employer
 employer must exercise control (this is crucial for distinguishing an employment relationship)
over the person rendering services
(2) Is Becker’s Milk an Employer or the Managers?
 looks at chance of profit/risk of loss
 capacity to employ others/ power to hire & fire
 how the contract for supply of services can be terminated
 who controls inventory
 who decides hours of work
 degree of supervision
 manner of payment
 All these factors are considered b/c the Act “provides no guidance on this matter” as to what factors
indicate whether a person supplying work or services is doing so as an independent businessman or
an employee (i.e. can sometimes be an employee or an independent businessman)
 It seems the intent of the ESA Board is to extend the protection of the ESA to these managers b/c they
are the type of vulnerable people the Act was originally intended for – thus, the definition or test they
use is in some respects purposive or mindful of the desired outcome
o The definition of employee is expansive
o It seems the context drives the result rather than a rule of thumb definition
o Note: when this case was decided – a person was a manager if they exclusively did
managerial functions. I.e. “work must be exclusively managerial”
 These workers did other functions (i.e. stock shelves) and were therefore not managers
and allowed protection of ESA
o Now: Person can be manager without having to exclusively perform managerial functions –
can perform other functions and still be considered manager and thus excluded from ESA
Page # 42
Sooters Studios Ltd. (1991) – followed Becker
ESA
Employees not Independent Businessmen
• Sooters owned premises and was sole supplier. Operators of business outlets were held to be
managers, not individual businesspersons under the “organization test”
• managers authority to hire and fire was not inconsistent with the managers status as
employees (following Beckers)
Loeb Inc. and Groulx (1992)
Facts: • Disgruntled franchisee. Groulx claimed he was nothing but glorified manager not
independent businessman
Adjud: • Groulx loses - said he had independence with regard to remuneration, authority to hire and
fire, prerogative to disregard Loeb’s suggestions and choice about product lines and hours of
operation
(4) Ontario Labour Relations Act & Def’n of Employee
 The Act provides no definition of “employee” so one must refer to arbitral case
 S. 1(1) “Employee” includes a dependent contractor
 The Act only says who is excluded from the Act (S. 3) but not who an employee is (thus
determined by case law)
Toronto Drywall (1976) - employee determined expansively so many people will be protected
Facts:
Certification application in the drywall industry. Applicants wants to certify bargaining unit
of painters. Respondent (Drywall) claims the painter’s aren’t employee’s of the respondent
but are independent contractors and thus outside of LRA
Issue:
Are drywallers employees or independent contractors who would then fall outside OLRA?
Board:
Employees not independent contractors
 OLRB concluded that the drywallers were employees - this was a contract of service and not
contract for service, thus they are included in the bargaining unit
 Note: Adjudicator decides employee expansively (to include many people in order to be protected
by the OLRA)
 Little purposive reading – they don’t explain why the workers are employees
 without a written contract or a definition, the OLRB looks to the CL test to determine if the drywallers
are employees, applying the four fold test (Montreal Test)
o look at definition section of Act - no definition of independent contractor
o contract says relationship to be one of independent contract - not determinative
o finds no written contract and no evidence of oral one
o method of fixing the rate for a job appears to vary depending on who is involved - there is
little actual bargaining - however the absence or presence of bargaining is not indicative of a
relationship of employer/employee or of two contracting parties dealing at arm length
 OLRB looks to the common law
o explicitly rejects Sima Ltd (1963) which stated the control test was determinative in assessing
if a worker is an employee – rather the OLRB applies the four factors listed in the Montreal
Locomotive Test:
(1) Control
- not directly supervised by respondent
- look like independent contractor but employer still has some control - can move
them around (tells them where to work)
Page # 43
- look at economic independence b/c control not strictly defined
- not able to sell services to others - bound to owner
- also, owner requires continuous and interrupted production from these persons being bound strictly sounds like employment
(2) Ownership of tools
- more capitalized employee is, the more likely they are independent contractors
- they said the tools used here were very common, materials were provided, money
received was closer to wages than profits, etc.
- OLRB found trucks not to be a tool used either as necessary part of work or as tool of
the trade
- not determinative
(3) Risk of Loss
- there is none, owner supplies and delivers materials, get materials they exactly need
(4) Chance of Profit
- harder and faster work, more money made - like any incentive program
OLRB & the def’n of Employee: Public Policy Concerns
 Once again, it seems that the context is driving the outcome rather than a rule of thumb definition
of employee – it seems like the OLRB is looking at whether this group of people ought to be able
to engage in collective bargaining
 if good social purpose is met by classifying these workers as employees, then the OLRB will
likely take that route
o if goal is to redress the balance of power in bargaining relationship – it seems the
OLRB may be more inclined to classify individuals in weaker positions as employees
b/c they would benefit the most from the collective bargaining scheme
 It is also important to note that this decision may also have been driven by the fact that there was
tremendous turmoil in the construction industry at the time and a reduction in wage competition
with independent contractors (by classifying them as employees) was a desired outcome
 The above cases – how adjudicators decide who was an employee
 Trend emerged – they apply the multi-factor test (Montreal)
 The way the test is applied depends on what type of case it is. I.e. the factors will be applied
differently in a vicarious liability case than in an ESA or CB (OLR) case
 Why is it more important to find a worker is an employee in CB and not Vicarious liability case
(why would they want to bring these employees under the Act?)
o CB is there to help vulnerable employees, thus should extend CB to workers in an employeelike situation. They should be covered by the Act – given the protection of it
o This might have influenced the court to apply the Montreal factors in a more expansive way
(more workers would be employees and therefore covered by the Act)
Page # 44
Dependent Contractors
 Parliament amended the OLRA since the Toronto Drywall case - included in employees now is
the classification of individuals as dependent contractors
 Dependent Contractor – a person whether or not employed under a contract of employment (thus
contract of employment not relevant – could be another contract), whether or not they have tools
owned by the dependent contractor, who performs work or services for another person on terms
that the dependent contractor is in a position of economic dependence upon that person
 It looks more like an employee relationship than an independent contractor
 This measure shows legislature wanting to extend the benefits of the collective bargaining
scheme to another group of individuals who it thinks are worthy of that protection - this group of
people closely resemble employees (not independent but not employee)
s.1
“employee” includes dependent contractor
“dependent contractors” a person, utilizing their own tools or machinery or not, who performs
work or services for another person for compensation on such conditions that the contractor is in
a position of economic dependence and under an obligation to perform duties – so much so, that
the contractor more closely resembles an employee rather than an independent contractor
Toronto Star
Facts:
Newspaper carriers signed contracts identified them as independent contractors. They
provided their own vehicles, were charged wholesale prices for papers they delivered and
were credited with retail sale price. No uniforms, allowed to use people to deliver for them,
could organize their route. Paper had to be delivered by certain hours. Newspaper delivery
people were always thought of independent contractors – NOW the establishment of
economic dependency allows them to be considered employees entitled to protection of LRA
Issue:
Are the newspaper carriers dependent contractors or independent businessmen?
Held:
Employees
Board:
 Multi-factor test – To determine whether a contractor is independent or dependent – focus on
structure of the relationship and whether it produces economic dependence
 Test: Is the relationship such that the terms and conditions of the relationship make them
economically dependent on the employer (economic dependence has to come from terms
and conditions of the relationship)
 Factors to consider in determining economic dependency:
o Duration of relationship
 if it’s an on-going relationship more likely to lead to economic dependence
 If service is limited (specific and definable in time – short period of time) –
independent contractor
o Profit
 Is profit from investment (independent) or from selling person’s labour (dependent)
o Part Time/Opportunity for Profit
 opportunity for profit outside the relationship doesn’t determine if the person is an
independent or dependent contractor (can make money from other sources)
 Just b/c the worker works for someone else on their time off doesn’t make them an
independent contractor (can work part time elsewhere and still be dependent
contractor)
 It only matters if there’s economic dependence within the relationship. Are the
workers dependent on the employer in this relationship – if yes, then dependent
Page # 45
Seven-Eleven Taxi Ltd (1976) – OLRB – drivers were independent not dependent contractors
Facts:
These individuals want to be certified. However, most employees are owner-drivers
Issue:
Are these people dependent contractors or owners?
Board:
Independent contractors, not dependent contractors – they are owners
 decision was based on an analysis of their economic dependence - they have “informal
arrangement” so they are not dependent contractors
 finding based on lack of obligation to perform any duties on behalf of company and lack of
exclusivity
 drivers just rented radios and gave a retainer for a removable light – drivers did not have to rely
on the radio to pick up fares - although this is where a majority of them came from
 owner provides own vehicle, pay repairs, insurance, licence, works on own discretion
 The problem is that a different adjudicator, using the same facts and test, may come to exactly the
opposite conclusion
 However, recent decisions have chosen different interpretations of dependent contractor
Diamond Taxi Ass’n (Toronto) Ltd. and RWDSU (1992)
Facts:
Industry characterized by lease and lease management arrangements among owners,
operators and drivers. In return for fees paid, brokerages provided dispatch and account
services to the drivers who in turn derived a majority of their revenue from such services.
Brokers exercised control over drivers through a system of disciplinary sanctions. Brokers
also regulated colours and styling of cars. Drivers made no payments to EI, CPP, or WC or
income taxes. Diamond’s contract with drivers stated that owner-drivers weren’t employees
Board:
Dependent not independent contractors
 In context of taxi industry, the Seven Eleven case has been superceded
 drivers were dependent contractors and applications for certification were granted
 “what is significant is that the owner-members regularly and consistently derive substantial
portion of their income from a single entity which exercises detailed control over the performance
of their work”
Hamilton Yellow Cab Co. and RWDSU (1987)
Facts:
Similar to Diamond Taxi
Board:
 reinforce the economic dependence addressed in the Act is such that it puts the person in roughly
the same economic position as an employee who must face the perils of the labour market
 the nature of business relationship at issue must be roughly analogous to employer and employee
 here, since the drivers were continually generating a majority of their revenue from the
brokerages which exercised a detailed control over their work, they were more like
employees than independent contractors
Rule: Dependent contractors are those persons who are roughly in the same economic position as
an employee who must face the perils of the labour market
If the contractor regularly and continually generates most of its revenue from a single entity
that exerts detailed control over its actions, it is said to be dependent and therefore falls
under the auspices of the OLRA
Page # 46
OLRB – Exclusion of Managerial Employees
 Not all employees are covered – some workers who are employees are excluded
s.1(3) For the purposes of the OLRB, no person shall be deemed to be an employee
(a) who is a member of the architectural, dental, land surveying, legal or medical profession
(b) who, in the opinion of the Board, exercises managerial functions or is employed in a
confidential capacity in matters relating to labour relations
Note:
In craft units, the first level of supervision is included in the definition of employee – perhaps
because in craft units, all employees share some ownership of their work so the first level of
supervision is not that big of a jump so as not to be included in the definition of employee for the
purposes of the OLRA
I.e. someone designated as foreman but doing work alongside other craft workers was included in
the union – they weren’t overseeing other workers and were therefore employees
Note:
Manager not defined in the Act
To determine if worker is manager or employee look at:
1. Nature of authority – extent which worker makes decision that affect economic lives of
employees, which might cause conflict of interest (i.e. right to hire, fire, promote…)
2. Extent of Authority – managerial functions have to be exercised by the person, not enough to
have them
Onus is on employer to establish that worker does managerial functions within OLRA
Case: Pre-Con Murray Limited (1965)
 non-working foremen and persons above that rank are generally excluded from the application of
the Act as management
 the question is always “does the person exercise managerial functions”
Children’s Aid Society of Ottawa - To determine whether an employee is manager or not – done on
case-by-case basis
Facts: Application for certification by bargaining unit. Employer claims they can’t be certified b/c not
all members of the unit are employees within meaning of OLRA (S. 1(3)(b))
Issue: Are they employees within meaning of OLRA or are they managers and thus excluded?
Held: Supervisors aren’t employees, they exercise managerial functions and are thus excluded from Act
Ratio: Workers who exercise managerial functions are excluded from CB
Reason: To ensure that people in bargaining unit aren’t faced with conflict of interest b/n their
responsibilities and obligations as manager and their responsibilities as member of union or
employees in bargaining unit
Board: Supervisors aren’t employees b/c:
 Nature and Extent of Authority
o The supervisors monitor employee performance and initiate disciplinary responses where
needed
o They have a part in performance appraisal which affects employee promotion and hiring
o They do supervisory work full time and almost no bargaining unit work
Page # 47
The Corporation of the District of Burnaby and CUPE (1974)
 Rationale for the exclusion of managerial staff from the bargaining unit – conflict of interest
 Purpose: to ensure that people who are within the bargaining unit aren’t faced with conflict of
interest b/n their responsibilities and obligations as management and their responsibilities as
union members or employees in bargaining unit
 The supervisors may form bonds with those people in the bargaining unit - this solidarity may
disturb the loyalty bond to management - even if separate bargaining unit, this solidarity will
create problems (employers need complete loyalty of lower level management (those who work
b/n employers and employees) – if these lower level mangers were allowed to union – no loyalty
 The opposite may also occur in that people may still have loyalty to management and such loyalty
may negatively impact on union effectiveness
Are these reasons sufficient to justify a separate bargaining unit for management or excluding them
altogether?
 The problem is that these people do indeed represent a fairly large chunk of employees (the
percentage of supervisory employees in relation to production workers is higher in US)
 given the large number of people involved and the fact that some management starting to
restructure their organizational set up, some Boards are starting to rethink their ideas
Case: Hydro-Electric Power Commission of Ontario, [1969] OLRB Rep. 669
Facts:
Distinction between managerial employees and others made more difficult due to increase in
technology and sophisticated management tools
Board:
 look to whether a person performs functions which relate to or bear upon the improvement of
public relations efficiency, productivity, or cost
 OLRB’s in-depth analysis serves to expand the protection of OLRA to persons, who in the past
would have been denied protection
 are they in fact controlling or determining the process or are they merely implementing a process
which has been predetermined by some person in management
 independent discretion over policy making/setting makes you a manager
 just because an employee provides a recommendation that is ultimately followed, it does not
make that employee management - although a recommendation may be the basis of the decision
taken, it is the decision to implement the recommendation which can correctly be described as the
managerial function - if the employee actively participates in these decisions, they may be said to
exercise managerial functions within meaning of s.1(3)(b)
Case: Falconbridge Nickel Mines Limited (1966) - OLRB
Facts:
Most of the people in the dispute have more than one function
Issue:
What responsibilities make someone a manager? Were the additional responsibilities
managerial or incidental?
Board:
 it is the weight attached to functions which determine on which side of line they fall
Page # 48
 employees must be primarily engaged in supervision - not merely incidental, but integral – are
they a conduit of management or are they themselves exercising effective control?
 when assessing person’s duties and responsibilities the Board does not look at any one function in
isolation but views all functions in their entirety - titles alone not much help
 if the person is primarily engaged in supervision and direction of employees, the fact that they
may occasionally perform work similar to rank and file employees does not derogate from their
prime function as a manager
United Steelworkers of America v. Cominco Ltd. (1980)
 Board says older approach of excluding front line personnel is no longer necessary b/c there is no
longer this inherent conflict between being union member and being loyal to the company - there
should be no absolute rule
 There needs to be a more refined test to determine when there would be a real conflict of
interest to allow management to be part of the union
o do they have power to hire, fire, promote, discipline,
o are they involved in purchasing of tools and material, job allocation and setup,
o are you involved in collective bargaining on employers side, do you have effective
control in these areas
 this decision allows the Board to move one level up on the management chain to include
more employees in union - lowest level front-line supervisor can be included in the union (at
least in this case)
o not in same bargaining unit as production unit employees b/c there is a different
community of interests
Rule: If a majority of the worker’s time is occupied by tasks similar to those performed by the
rank and file in the bargaining unit, and the person has no effective control over employees,
but is merely a conduit of management, the worker cannot be said to be performing a
managerial function under the Act
If the worker primarily does managerial work, and has effective control over employees,
and from time to time performs regular, rank and file tasks, that worker will be deemed to perform
a managerial function for the purposes of the Act (doesn’t have to exclusively perform managerial
functions)
OLRB and Other Exclusions
Who else is excluded from the Collective Bargaining regime?
 Domestic workers, those employed in agriculture and hunting, police, firefighters, teachers, OPP,
provincial judges are all excluded under s. 3 of the OLRA
 Persons employed in a “confidential capacity” are also excluded from the collective bargaining
legislation Transair Ltd.(1974)
 Confidential Employee Exclusion: To be excluded have confidentiality in relation to “matters
relating to industrial relations”, thus:
o 1. Access to matters such as contract negotiations
o 2. Access to the information can’t be accidental – has to be part of employees job
o 3. Disclosure of the information has to have negative affect on employer’s industrial
relations interests
Page # 49
Who is an Employer?
(1) Common Law Borrowed Servant
 Borrowed Servant: Person (A) is under contract of employment with employer (B) but an
arrangement is made so that A is sent to do work for C. While working for B, A causes injury
 Issue: Who is liable – B or C?
 The most common situation in which this issue arises is through vicarious liability issues –
courts are not worried about the protection of employment rights but rather protection of third
parties seeking to be able to claim compensation from organization that is vicariously liable for
the negligent acts of their employee
Case:
Facts:
Issue:
Court:



McKee v. Dumas (1976), 12 OR (2d) 670 (CA) – Vicarious Liability
Eddy forest has CA with the union. Contract b/n Eddy Forest and Daoust for timber hauling.
Eddy contracts its out the transportation needs of his business to Daoust but the driver,
Dumas comes from Eddy’s workforce. Use Daoust trucks to do this. Driver drives negligently
and crashes into train causing $650,000 damage. Under Highway and Traffic Act the driver of
vehicle is responsible - they try to sue Eddy Forest products
Is Eddy Forest Products the employer such that he is vicariously liable for the negligence of
the defendant?
Eddy is liable
General employer – the person with direct employment relationship
Temporary employer - other entity employee may be working with for period of time
Employee is referred to as the “borrowed servant”
Who is in a better position to exercise real control in this situation?
 Eddy had the effective control of the employee - Daoust took the driver Eddy provided, Daoust
didn’t control how people were effectively driving, Eddy had effective right to discipline
o only real connection the driver had to Daoust was that he was driving their truck
 The courts will also look at which bargaining unit the employees belong, who holds themselves
out to be the employer, the duration of the employment, who issues the paychecks etc.
Ratio: •
General employer remains vicariously liable for the borrowed servant unless they can
prove that the temporary employer was exercising effective control over the employee
Page # 50
(2)
Employment Standards Act & Borrowed Servant
 here we are not concerned with third parties ability to be compensated, but rather who is
liable to pay to the employee the minimum standards
s.1
“employer” includes
(a) any owner, proprietor, overseer etc. who has control or direction, or is directly or indirectly
responsible for the employment of a person
(b) any associated or related corporations or associations treated as one employer
under s.12, who has control or direction, or is directly or indirectly responsible
for the employment of a person
and includes anyone who was an employer.
s.12
Related or associated corporations will be treated as one employer for the purposes of this Act, if
the intent or effect of their arrangement (eg. create many subsidiaries) is to defeat, either directly
or indirectly, the true intent and purpose of this Act
(3)
Parent-Subsidiary Relationship
 Which of two entities is the employer
People’s Department Store Case
Facts: • People’s is subsidiary of Mark’s & Spencer. Problem is who is the employer, b/c if M&S is
the employer, then the employee is entitled to severance and if not, no entitlement b/c
People’s isn’t big enough (ESA S. 64(1) – Entitlement to severance pay if over 2.5 million)
Issue:
Is Marks and Spencer the employer?
Court: • applies the control test and determines that the employer is People’s, don’t get the pay
As long as the subsidiary is the one who exercises effective control over the employees, and not the
parent company, then the proper employer is the subsidiary
Note:
It is possible to be deemed an employer for the purposes of one Act and not another
(4)
Employer-Agency Relationship - OLRA
 Tripartite Relationship – An employment agency supplies workers to clients
o Agency has contract with commercial clients
o Agency has contract of employment with employee
o Client and worker don’t have a contract
 The matter at issue is who is the employer, the business for which the employee is providing the
services or the agency who has a contract with the business to provide manpower?
(a) Contractualist Approach: Person who has right to control not actual control is the employer
 The employer is the person who has the right to control, not the person who has effective control
(agency is the employer)
Page # 51
Templet Services (1974) – OLRB – Agency (person with right to control) is the employer
Facts: • Installation of library shelving, temporary job, so bring in workers to do the work. Hired
workers through Templet Services. Union who has bargaining rights with the business claims
these people are part of bargaining unit - they should have that protection of the collective
agreement
Board:
 looks at two factors set out in Belcourt Construction (Ottawa) Limited Case
i) employee must be under duty of rendering personal service to the employer
ii) employer must have the right to control the employee’s work, either personally or by another
employee or agent
 here, the worker has the contractual relationship, legal relationship with the agency and none with
the business
 the question is not who has effective control, but rather who has the right to control – it is vested
with whom the contractual relationship exists
 using the contractualist analysis, it would follow that the agency is the employer
(b) Functionalist Approach: Person who has actual control, not the right to control is the employer
 The employer is the person who has ACTUAL control – not the right to control
 From functionalist point of view, the contractual approach is problematic
o If agency is deemed employer, the worker will never be able to exercise their right to union
membership - given the reality of this relationship, not likely to happen because workers are
spread out over a variety of employment areas it makes unionization of the agency literally
impossible
o Furthermore, if employer able to contract in workers through agencies, this will allow them to
eliminate unionized positions - therefore, for the preservation of CB rights, this structure
could be problematic
 as such, there has been a shift away from the reasoning of Templet Services – the OLRB uses a
frame of reference that tends to facilitate and preserve bargaining rights - thus applying the
fundamental control test (i.e. functionalist approach)
Who has actual control of operations, degree of employee integration, who sets the rules, pay, etc.
Not just who, in law, is responsible, but rather who is in effective control of the employee - generally
where the work is performed is the business and employer.
Pointe Claire v. Quebec [1997] - endorsed the functional control test – person who has actual
control is the employer
Facts:
City of PC hired employees through temp agency. Employee in question was hired on two
assignments, one 6 weeks other 18 weeks. The structure of the contract – Agency paid
employee and invoiced the City. Employee on daily basis supervised by City and non-wage
working conditions (start times, breaks, etc.). Union made application to have temp declared
to be member of bargaining unit (they’re performing unionized work, they’re employees and
therefore should be included in the bargaining unit) - unhappy about temp worker being not
bound by terms and conditions - trying to preserve CB rights, etc.
Issue:
For the purposes of the LRA are temporary agency workers employees of the client or
employees of the agency?
Court:
Quebec Labour Court - found employee to be employee of the Client City, not the agency
Page # 52
Reason:
SCC:
The client was the employer not the agency b/c they had control over the employee’s working
conditions and the performance of the employee’s work
Upheld Court’s decision that City was Employer and not the agency. Agreed that the
standard of review is patent unreasonableness - could only interfere with Labour Court if it
was a jurisdictional error and that findings were patently unreasonable - no reasonable person
applying the law could make this decision
 however, they also provide own view on the appropriate approach for handling these questions in effect, they reject the legal control test as “who has authority in law” to “who has control
of the employee”
 The SCC prefers the broader, comprehensive approach – they look at a variety of things; the
totality of the relationship and the actual relationship rather than the legal relationship (therefore
employers might be liable even where there’s no contract)
 the SCC seems to be most concerned with who has control of the “day to day” operations –
whoever has day to day control is the best one to be collectively bargaining with
Lamer - “where there is splitting of employer’s identity, the more flexible approach allows for
consideration of who has the most control and effective control - selection process, hiring, training,
“supervision, remuneration, integration into business, discipline”
Preferred approach – functionalist/comprehensive test - who exercises effective control over the
employee, including the selection process, hiring, firing, training, supervision, remuneration,
integration into business, discipline, etc. This may change depending on the purpose for which you
are examining and considering it and a difference in the definition is not absurd
(5)
Related Employers under the ESA
 In determining who is the employer – there’s policy balancing that takes place:
o Freedom of individuals to organize their business
o Public Policy to protect workers
 Related Employees – a single entity is treated as one entity if:
1. Associated or related activities or business
2. Intent or Effect to defeat purpose of ESA
 Related employer comes up when a business becomes insolvent and the employers then become
involved in the same business
 Effect: it overrides the contractual relationship. Says “hey there are other entities that can be held
liable”
 Statute overrides the CL obligations and will treat these single entitles as one entity and therefore,
jointly and severally liable
 Employees are free to organize their enterprises however they decide
 However, if they organize in order to avoid the statute, the arrangement won’t be legal
S. 4(1) Separate Persons Treated as One Employer if
(a) associated or related activities or business are carried on through an employer and one or
more other people, and
(b) if the intent or effect of their arrangement (eg. create many subsidiaries) is to defeat, either
directly or indirectly, the true intent and purpose of this Act
S. 4(2)
the employer and the other person described in S. 4(1) shall be treated as one employer
Page # 53
S. 4(3)
S. 4(2) applies even if the activities or businesses aren’t carried on at the same time
S. 4(5)
People treated as one employer are jointly and severally liable for any contravention of the
Act and for wages owed to an employee
550551 Ontario Ltd. v. Framingham (1991) - Bilt-Rite Case – related employers and thus jointly and
severally liable
Facts:
Actual owners, the Silver family, create a web of corporate entities to carry on furniture
manufacturing, distribution and sales business. Number of corporations created to do this.
However, in a sense this is all one operation. Company goes under and leaves employees
hanging - all kinds of outstanding obligations (almost $3.9M). Employees want to try and
find a pocket where some of the assets of this firm are hidden - look to who is the employer they want to argue that all of the firms involved in the operation are actually one employer
and Mr. Silver is personally the employer - all related and therefore all jointly and severally
liable
Issue:
Are these entities related employers so that the employees can get the money they’re owed?
Court:
Related Employers. The employers were jointly and severally liable to the employers. The
Silvers were not held personally liable, they were not part of the related employer provision
 In order to be treated as a related employer under S. 4(1) of the ESA, the court has to find:
1. They carry on business with one or more employer (common ownership)
2. The ‘effect’ of defeating the Act
 Court looks to see if there was (1) a close relationship or inter-dependence b/t the entities, (2) a
common ownership or control, and (3) intent or effect of defeating the purposes of the act.
 1. Inter-dependence
 Companies: There seems to be a functional interdependence of all of the companies - all part of
the manufacturing process – the problem is that Ontario 550551, the only entity that had any
assets left, owns land and leases it to the other entities – perhaps not a significant enough interdependence
 Land: Further analysis shows that mortgages placed on the property were in the name of some of
the other entities, and that the rents charged to the other entities were lower than market value –
thus, there was a cause to link them as a related employer for the purposes of the Act. One lease
which shows functional and common integration
 2. Element of Common Ownership: The Silvers own all the companies
 3. Effect: The Court stated that you don’t have to show that there was an intent to defeat the
ESA, all that has to be shown is that the effect of organizational structure serves to defeat the
purposes of the Act
 Here: The effect is to defeat the employees from being able to realize the protection of the Act
 However, 550551 Ontario was stripped of its assets by time decision was rendered - therefore,
there is no way to get their money - no obvious assets anymore, therefore…
 Liability of the Shareholders: Employees want to get to Mr. Silver - he has assets - ESO had
made a finding that he was a related employer – however, Court did not accept this part of ESO
findings - he was never a sole proprietor - he only operated the business through corporations and
they were not prepared to lift the corporate veil in this case to hold Mr. Silver personally liable
 the “use of the word ‘individual’ in s.12 is for sole proprietor” - if wanted to include individual in
this sense now, it had to be clear and unambiguous wording to be able to do so
 Note: The ESA was amended, S. 12 is now S. 4. Under S. 4 – can’t use the related employer
provision to go after shareholders (individuals can’t be personally liable)
Page # 54
Under the provisions for related employers, it is not necessary to show an intent to defeat the
purposes of the legislation to find related employers. However, the reading of “individual” in s.12 of
the Act should be contained to sole proprietors and not those individuals who have always
maintained an independence from the organization
Note: s.4(4) of the new ESA makes it clear that directors/shareholders of a corporation
cannot be deemed a related employer or held personally liable for any debts of the
corporation unless it is a partnership and shares are held for the purposes of that
partnership
Note: Insolvency raises issues o f a constitutional nature since bankruptcy is under the jurisdiction of
the feds. S.136(1)(d) of the Bankruptcy and Insolvency Act provides that an employee has a
statutory claim against the property of a bankrupt corporation for services rendered – wages,
salary or commissions – during the six months before the bankruptcy to a maximum of $2,000,
and in the case of traveling salesmen, $1,000. Subject to the rights of secured creditors,
employees rank 4th in priority of payments – so the likelihood of securing monies is low
In response to this problem, the Report of the Commission of Inquiry into Wage Protection in Insolvency
Situations suggested that employers provide both personal guarantees and security for unpaid wages
along with the creation of a wage insurance fund to be financed by the public through a consolidated
revenue fund. The revenue from this fund could come from premiums paid by employers on their
payroll. The NDP created a Wage Protection Plan that allowed employees to claim up to $5,000 from the
fund for unpaid wages but the PC’s abolished the program
Lian J. Crew Group – not related employers
Facts: Garment sewing industry. There’s a chain of sub-contracting through which clothes are
manufactured. Often when it comes time to pay the workers at the bottom, the contractors (the
people above them) are out of business. In order for people at bottom to have a remedy, want to
be able to go up the chain of retailers who initiated the contracting to be held liable. The plaintiff
in this case sewed garments for a woman who’s principle was another company who got work
from somewhere else who gave the clothes to the retailer (J. Crew). P claims she’s owed $5000.
Claimed D’s breached ESA and entitled to unpaid wages
Issue: Are they related employers such that the people at the bottom can go after the entities together?
Court: No. This is an integrated industry b/c they operate through a network of contracts. That however,
doesn’t make them common or related businesses. They’re operating at arm’s length from each
other – no common contracts
Reason:
Although ESA is remedial legislation designed to protect economically vulnerable people in
the labour market, there’s resistance to extending the remedial ESA too far
Extending liability to the top of the chain is too much. It’s for legislature to decide if they want to
extend liability
Policy Reasons for not extending liability: 1. retailer would be liable for all employees of the
entities with who the retailer has contracted and the entitles with who those entities have subcontracted and 2. It would eliminate homeworkers
Note: Even though S. 12(1) expands meaning of “employer” to include people who are
“associated or related” to the principal employer when the “intent” or “effect” of such an
arrangement is to defeat either directly or indirectly the purpose of the Act, won’t extend it too far
The courts won’t read the scope of the employment standards legislation up to the top, this is for
the legislature to decide
Page # 55
Related Employers under the OLRA – S. 1(4)
(6)
 To protect trade unions from mere changes in form rather than substance, collective bargaining
legislation provides that associated employers under common control and direction may be
treated as a single employer for the purposes of collective bargaining
s.1(4) where in the opinion of the OLRB associated or related activities or business are carried on,
whether simultaneously, under common control or direction, the OLRB may, upon the
application of any person, trade union, or council of trade unions, treat the corporations,
individuals, associations, or combinations thereof as constituting one employer for the
purposes of this Act and grant such relief by way of declaration or otherwise my be appropriate
Note:
The board has discretion to hold two or more entities related employers under the Act
There has to be a sound labour relations purpose and it won’t exercise its discretion where
holding them related employers would weaken the CB structure or undermine the Act
Note:
In Ellwall and Sons Construction (1978) & John Hayman and Sons (1984) the OLRB
emphasized that a sound labour relations purpose must be advanced by the issuance of a
declaration under s.1(4) and it will decline to exercise its discretion in circumstances that will
serve to weaken the collective bargaining schemes of the Act
Thus, a declaration will be issued when meaningful collective bargaining requires consolidation of
employer functions performed by different entities Diamond Taxicab Ass’n (1995)
In order to obtain a declaration under s.1(4) of the OLRA, trade unions must be able to answer the
following questions:
(1) Is a declaration necessary to protect and preserve established bargaining rights?
[Re ONA and Deer Park Villa (1994)]
(2) What are the employees’ wishes? [A&P Co.(1981)]
(3) Has the union acted with due diligence to safeguard its bargaining rights against erosion? [Farquar
Construction (1978)]
(4) Are the employees of the related employer already represented by another trade union which has had a
long and stable relationship with the employer? [Zaph Construction (1977)]
(5) Has another trade union applied for certification in respect of the related employer’s employees?
[Zaph Construction (1977)]
Page # 56
(7)
Related Employers in Common Law
Downtown Eatery
Facts: Business carried on through many companies (similar to Bilt-Rite). The principals are operating a
strip club through many principals that they own and control. The employee is employed by one
specific entity which is part of these companies. He’s wrongfully dismissed and sues his legal
employer and gets judgment (remedy) against the individual employer. When he tries to collect,
there’s nothing there. Employee seeks to get judgment from all the companies, not just the one
with which he had contractual relation
Issue: Are the companies related employers (held as one employer) such that the employee can get
remedy for wrongful dismissal?
Trial: Employee couldn’t go after the other companies b/c no contract b/n employee and the related
employers
CA:
One employer, therefore employee can go after related employers
 Recognizes the ‘common employer doctrine’ and in doing so rejects the contract nexus as
essential to establish employment relationship
 The contractual argument is too narrow upon which to build a CL of employment. Contract is
just one factor to consider in the employer/employee relationship
Related entities not in contracts of employment still found to be employers (under the statute) now
is coming into CL
(8)
Employment Standards Act & Successor Employers
 Problems of identifying the employer also arises when an employee seeks to rely on statutory
protections in situations where the employer sells or contracts out part of its business – these
matters may or may not be controlled by the contract between the buyer and seller
 Issue: Who is responsible for obligations to employees when the employer sells the business?
 Under S. 9(1), the ESA treats employees of a business that has been sold as if they never
stopped working – their length of service continues from the previous employer to the
successor employer
 Note: only if the purchaser hires the existing employees, is there a continuation for the
purpose of ESA
 Exception: Janitorial Services. When the contract is over, they put the contract back up for
bid. If the company that had hired them before wins the bid the rights of the workers follow
(i.e. seniority) if the new contractor doesn’t keep the old company, there’s a cost for not (i.e.
severance and termination pay)
Continuity of Employment
S. 9(1) Sale of business
If an employer sells a business to a purchaser who employs an employee of
the seller, the employment of the employee shall not be terminated for the purposes of this Act
and his employment with the seller shall be deemed to have been employment with the purchaser
for the purpose of any subsequent calculation of the employee’s period of employment
I.e. it preserves continuity of employment if employee is hired by successor – if not hired by
successor, selling employer is liable for termination/severance pay
Page # 57
S.9(2) Exception S. 9(1) doesn’t apply if the day on which the purchaser hires the employee is more
than 13 weeks after the earlier of his last day of employment with the seller and the day of the
sale employee of the employer, the employer shall comply with the notice of termination
provisions in the Act
S. 9(3) Definition. “sells” includes leases, transfers or disposes of in any other manner and “sale” has a
corresponding meaning
S. 9(4) Predecessor Acts. For the purposes of S. 9(1), employment with the seller includes any
employment attributed to the seller under this section or a provision of a predecessor Act dealing
with sale of businesses
S. 10(1)
New Building Services Provider. This section applies if the building services provider for a
building is replaced by a new provider and an employee of the replaces provider is employed
by the new provider
S. 10(2)
The employment of the employee shall be deemed not to have been terminated and his
employment with the replaced provider shall be deemed to have been employment with the
new provider for the purpose of any subsequent calculation of the employee’s period of
employment
Note: S. 10 protects workers who may lose their jobs when the contractor that employs them is replaced
by another contractor
Note: O.Reg. 287.01 – limits “building services provider” to 1. services that relate to the building with
respect to (i) parking garage or lot and (ii) concession stand and 2. property management
services for the building. The regulation says who are employees that the new provider
doesn’t have to comply with Termination and Severance of Employment of the Act.
Therefore, it doesn’t give much protection
(9)
The OLRA & Successor Employers (Collective Bargaining)
 The successor rights provisions of the OLRA recognize the necessity of preserving both the
bargaining rights and collective agreements in situations where there has been a sale of the
business (protect employees)
 Successor rights only apply if there’s a 1. sale 2. of business
 The board has to determine whether there has been a sale or not
 Issue: is it contracting out or sale of business?
S. 91(1) “Business” includes a part or parts thereof
“Sells” includes leases, transfers and any other disposition
s. 69(2) Successor Employer Where an employer who is bound by or is a party to a collective agreement
with a trade union sell his/her or its business, the person whom the business has been sold is, until
the OLRB otherwise declares, bound by the collective agreement
Where a person sells his/her or its business during an application for certification or termination
of bargaining rights to which the employer is a party before the OLRB, the person to whom the
business has been sold is, until the OLRB declares otherwise, the employer for the purposes of the
application
Page # 58
s.69(12)
Power of Board to Determine if Sale The OLRB has the authority to determine if a business
has been sold by one employer to another and its decision is final and conclusive for the
purposes of the Act
s.69(13)
Where a trade union alleges that the sale of a business has occurred, the employer shall
adduce at the hearing all facts within their knowledge that are material to the allegation
CUPW v. Muir’s Cartage (1992) – difficult to determine if there was a sale of business
 Discerning b/n contracting out, sale of a business, and integration of related employers is difficult
 The OLRB must find both that (1) there was a sale & (2) there was a sale of a business
 S.69(13) puts the onus of adducing evidence on the employer since they have access to all the
material information/evidence
What does sale of a business mean
The interpretation of phrase “sale of a business” depends upon how successor rights are conceptualized
 Functional Approach – don’t need to determine sale of business for successor rights to apply
 Instrumental Approach – have to determine sale of business for successor rights to apply
1. Functional Approach – prevalent in Quebec
 Successor rights can be seen as flowing from the certification of the bargaining agent such that
the certification gives workers proprietary right over the work function – thus the union may
assert this right no matter who’s employees perform the work or how the employer came by the
work (i.e. the certification attaches to work – wherever the work goes certification, CA, follows)
 Not necessary to determine sale of bus. or contracting out. It’s unionized work and stays that way
2. Instrumental Approach
 Successor rights can be seen as attaching to a business such that there must be some disposition
of the business in order for successor rights to follow. In Terminus Maritime (1983) the CLRB
unanimously agreed that bargaining rights attach to a business and not to a work function (i.e.
successor rights follow the business)
 If business is contracted out, then the CA doesn’t follow
 If business is sold – successor rights follow
Bibeault (1989) S.C.C. – instrumental approach successor rights follow the business
Facts: Two subcontractors succeeded each other in two agreements given to them by same principal.
There was no legal relationship b/n the subcontractors
SCC: Instrumental Approach Union didn’t have successor rights. Successor rights attach to business
and not bargaining unit
 The operation of the undertaking by another (i.e. sale) must establish by way of voluntary
transfer of rights a legal relationship b/n successive employers. There was no relationship b/n
the subcontractors (the transfer of subcontracting relationship b/n subcontractors doesn’t fall
within scope of successor rights provisions)
Note: SCC struck out the functional approach of labour boards. They weren’t letting the labour boards
pursue a broader approach
In order for successor rights to apply, an alienation (sale) of the business must occur. The alienation
of the business to another must establish, by voluntary transfer of rights, a legal relationship
between successive employers
Page # 59
 An employer can fragment their business the best way they see fit, but for the purposes of the
ESA and LRA, certain obligations attach regardless of the fact that there may not be a contractual
nexus between the new business owner and the trade union/employees (successor rights follow
business)
 In order for successor rights to apply, the new employing authority must acquire a coherent and
severable part of the previous employer’s economic organization or some “essential elements of
the undertaking” – i.e. there must be a sale
 Collective bargaining rights do not follow the work function, therefore collective bargaining
rights do not attach to work that has been contracted out by an employer
Two Recent Cases Use the Functional Approach
Ivanhoe and City of Sept-Iles
Held: Sale of business when it really was contracting out
SCC: allowed the use of the broader approach – successor rights follow the work not the business
Note: the instrumental approach (which benefits employers not unions) is used by most boards
Most Boards Use Instrumental Approach
UFCW v. Parnell Foods (1992)
 The OLRB stated that the instrumental approach is derived from the statutory language of the Act.
It said that the legislature could have provided for the continuation of bargaining rights whenever
there is a continuity of work performed but it did not. I.e. could have legislated the ‘functional’
approach but didn’t. Thus, bargaining rights only continue when the employer sells its business
 Argument: union isn’t certified for certain employees. Some employees leave or the number of
employees decrease, but the certification remains valid. Thus, certification can’t give proprietary
rights of jobs to the union or the workers. Therefore the employer is the one who controls whether
or not the job exists and the successor rights should follow the business of the employer
Privatization (of Crown Corps) and Successor Rights
 Gov’t contracts out to private companies
 Issue: when gov’t sells to private company, is the company a successor employer (subject to the
CA the gov’t had)?
Canada Post and CUPW Sheldon Manly Drugs (1987) – CA followed private business sale to public
 Canada Post (gov’t) closed an existing outlet and transferred the business to Sheldon/Manly
Shoppers Drug Mart, with an exclusive right to provide wicket services in a defined territory
 The CLRB found Sheldon to be a successor employer
Canada Post and CUPW Rideau Pharmacy (1989) – no successor rights after sale of private business
 Canada Post (gov’t) closed an existing outlet contracted with Rideau Pharmacy to provide wicket
services, but did not contract an exclusive right to provide the services
 The CLRB said no successor rights applied
Note:
As the case law suggests, there is no clear cut jurisprudence with respect to the privatization of
Crown Corps. However, Ontario passed s.23 of the Labour Relations and Employment Law
Statute Law Amendment Act in 1995 abolishing successorship rights in such situations ultimately
ensuring that the gov’t has maximum freedom to sell off gov’t operations to the private sector
Page # 60
Fairness in the Employment Relationship
 The common law contract of employment/ liberal voluntarism allows individuals to contract with
an employer on any basis and although some would argue that market forces would ultimately
cure labour from the ills of discrimination, minimum standards have been introduced in order to
ensure that everyone gets a fair shake
 Can’t just accept the freedom to contract – b/c there would be no protection for people facing
discrimination in the labour market
 In the employment relationship, human rights legislation serves to protect workers, not on the
basis of people as workers, but rather on the basis of the distinct characteristics that these people
possess
Human Rights Code Ontario
s.5(1) Every person is entitled to equal treatment with respect to employment regardless of race,
ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age (1865), record of offences, marital status, family status, or handicap
Note: handicap – broad definition. Includes mental, learning disorders, physical, people injured in
workplace
S. 5(2) Every employee has the right to freedom from harassment in the workplace…but have to show
that the harassment was linked to prohibited ground of discrimination (race, gender, sexual
orientation etc.)
s.6
Every person is entitled to equal treatment with respect to joining a trade union
s.7(2) Sexual Harassment Every person who is an employee has a right to freedom from harassment in
the workplace because of sex by his or her employer, agent of the employer, or another employee
s.7(3) Everyone has a right to be free from
(a) a sexual solicitation from a person in a position to confer a benefit where the person making
the solicitation or advance knows or ought to reasonably know that it is unwelcome
(b) a reprisal or a threat of a reprisal for the rejection of a sexual orientation or advance where the
reprisal is made or threatened by a person in a position to confer a benefit of advancement
s.8
Everyone has a right to enforce their rights under this Act without reprisal
s.10
Definitions
“harassment” means vexatious comment or conduct that is known or ought reasonably be known
to be unwelcome
“spouse” includes both opposite sex and same sex relationships
s.10(2) The definition of sex includes the right to equal treatment without discrimination because a
women is or may become pregnant (i.e. discrimination on the basis of pregnancy is discrimination
on the basis of sex)
Page # 61
s.11(1) Constructive Discrimination A person’s right to freedom from discrimination is violated when a
requirement, qualification, or factor exists that is not discriminatory on its face, but results in
exclusion, restriction or preference of a group of persons who are identified by a prohibited
ground in its application, except
(d) when the qualification is a bona fide occupational requirement
(e) the Act declares it is not discriminatory
s.11(2) Duty to Accommodate The Human Rights Commission shall not find that a requirement is
reasonable and bona fide unless it is satisfied that the needs of the group that are discriminated
against cannot be accommodated without undue hardship on the part of the employer considering
the cost and health and safety considerations
s.17(1) A right of a person under this Act is not infringed for the reason only that the person is incapable
of performing the essential duties or requirements because of a handicap
s.17(2) The OLRB will not find a person incapable unless the needs of the person cannot be
accommodated without undue hardship on the employer, considering cost, outside funding, health
and safety
s.32(1) Where a person believes that their rights have been violated under this Act, the person may file a
complaint with the Commission
s.32(2) The Commission may initiate a complaint by itself or at the request of any person
s.39(1)
(a)
(b)
(c)
The Board of inquiry shall hold a hearing
to determine if a right has been violated
to determine who infringed the right
to decide an appropriate order
s.39(2) Identifies parties to a complaint
(e) deals specifically with sexual harassment – a party is any person who knew or had
knowledge of the facts that would lead to a reasonable assumption that they ought reasonably
have known about the sexual harassment and were in a position to prevent it
s.39(3) The Board may add a party at any stage of the hearing
s.41(1) Affords the Board of inquiry the power to order anything, that in the opinion of the Board, would
remedy the violation of one’s rights
s.41(2) The Board can order remedies specifically to deal with harassment and shall continue to be seized
of the matter in order to deal with any repetition
s.45(1) For the purposes of this Act, any act or thing done or omitted to be done in the course of his or
her employment by an officer, official, employee or agent of a corporation, trade union etc. shall
be deemed to be an act or thing done by the corporation or trade union
Page # 62
Statistics Revolving around the Enforcement Process
 12% of complaints are discarded by way of s.34(1) b/c the complaint is frivolous, better dealt
with under another Act, beyond limitation date (6 months)
 25% of complaints are abandoned before they reach the Board of Inquiry
 only 4% of complaints go before a Board of Inquiry (valid complaint is found it gets referred)
 14% of complaints are withdrawn for some reason
 The main problem seems to be the delay associated with the filing of a complaint under the
Human Rights Tribunal
Blencoe (2000)
 Issues over delay. Accused argues that the time delay b/n when complaint was made to when it
was actually litigated violates their Charter rights by causing harm by having these allegations
hang over them
 SCC: S.11(b) of the Charter which states that an individual charged with an offence must be tried
within a reasonable time only applies to criminal court proceedings and not proceedings held
under the auspices of the Human Rights Tribunal
 The court also stated that one’s right to fundamental justice (s.7 of the Charter) could be
prejudiced by delay but the one claiming the breach would have to show actual harm on the facts
 The court in this case found that the harm associated with the complaint came not from the delay
of the processing of the complaint, but rather from the existence of the claim itself – therefore s. 7
of the Charter was not breached
Direct vs. Adverse (Constructive) Discrimination
What is the difference between direct and indirect discrimination?
Direct discrim is discrimination in a policy on its face (i.e. only hire men) while indirect discrim is
discrimination as a result of an application of a policy that on its face is not discriminatory (i.e. only hire
people who are 6 foot 5 and over 200 pounds. On its face is neutral but has an adverse affect on women)
Note:
s. 48(12)(j) of the OLRA affords an arbitrator the authority to interpret and apply human rights
and other employment related statutes, despite any conflict between those statutes and terms of
the collective agreement
In light of this section and s.34(1)(a) of the OHRC which states that the Human Rights
Commission can refuse a complaint that could be more appropriately dealt with under an Act
other than the OHRC human rights – grievances are handled by arbitrators in collective
bargaining scenarios
BC Gov’t Services Union and BC Human Rights Commission (Meiorin) (1999) SCC
Abolishes distinction b/n direct and adverse effect discrimination. Uses unified approach to
determine whether standard is BFOR (Duty to Accommodate)
Facts: Meiorin, a female fire fighter for 7 years, failed a newly instituted fitness test and was
subsequently fired. The case revolved around an issue of gender discrimination, not physical
disability. The test didn’t take into account the difference in aerobic capacity of men and women
(women’s lung capacity is smaller) and required that mean and women take the same test
Page # 63
Standard was struck down as violation of individual’s human rights
 When an employer’s hiring policies indirectly or directly discriminate against an identifiable
group on the basis of a prohibited ground, the employer must defend such actions by arguing
(1) the standard was for a purpose rationally connected to the performance of the job
Here: Valid purpose – adopted fitness standard for firefighters safety and fitness test was
rationally connected to performing firefighting duties
(2) the standard was made in a good faith belief that it was necessary to fulfill the legitimate work
related purpose
Here: gov’t adopted it in good faith (not to keep women out of firefighting jobs). Good faith was
shown b/c they hired consultants to devise the test while taking Human Rights into consideration
(3) the standard is reasonably necessary to the accomplishment of that legitimate work related
purpose (bona fide work requirement) – to show that the standard is reasonably necessary, it must
be demonstrated that it is impossible to accommodate individual employees sharing
characteristics of the claimant without imposing undue hardship upon the employer (codified
under s.11(2) of the EAS under heading of constructive dismissal)
SCC
Here:
Held:
Note:
the employer didn’t do everything they could to bring equality in the workplace
applicants ability to meet the standard isn’t necessary to their ability to perform the tasks of
firefighter safely and efficiently. The standard is discriminatory and the gov’t failed to establish
that its BFOR
Previously, indirect discrimination never required an analysis of the actual standard at issue
(while direct discrimination always did and still does) – the standard is no longer taken as a given
and focus is solely relegated to the duty to accommodate the employee who fell short of the
standard. Rather, the employer is required to defend both the standard and their duty to
accommodate regardless of whether the standard is a form of direct or indirect discrimination
 With respect to the duty to accommodate, the SCC says the courts should be sensitive to the various
ways in which individual capabilities may be accommodated. Questions pertinent to this analysis
include
o Has the employer investigated alternative approaches that do not have a discriminatory effect?
o Is it necessary to have all employees meet the single standard for the employer to accomplish its
legitimate purpose or could standards be created that can encompass individual differences
o Is there a way to do the job that is less discriminatory while still accomplishing the goals of the
employer?
o Is the standard properly designed so as to ensure undue burden on those to whom the standard
applies?
o Was the employee given an opportunity to try other potential assignments in the workplace? Re
Canada Safeway v. UFCW (2000)
o Have other parties fulfilled their obligation to assist in the search for possible accommodation –
Sopinka states in Renaud that determining how to accommodate individual differences may also
place burden on the employee and a union
When a standard discriminates (indirectly or directly) against an identifiable group on the basis of
prohibited ground, the employer has a defense if they can prove the standard is BFOR
In determining if its BFOR have to look at three things:
1. Is it adopted for purpose rationally connected to the performance of the job?
2. Is it adopted in good faith?
Page # 64
3. Is it impossible to accommodate individual employees sharing characteristic of complainant
without undue hardship on employer?
Drug Testing
Can an employer perform drug and alcohol testing on their employees?
TD Bank (1998) (Federal CA)
Facts: Mandatory drug testing on employees. After + third test employee could be terminated
Court: The Act prohibits discrim in employment on the basis of disability which includes “previous or
existing dependence on alcohol or drugs.”
Robertson J.A.
 The bank’s policy was found to be directly discriminatory because it was not neutral. A policy that is
designed to eliminate illegal drug use in the workplace targets employees who fall within a protected
class (disability – alcoholism) and cannot therefore be said to be neutral. An impugned employment
policy need not be patently exclusionary on its face before qualifying as direct discrimination – it can
also arise when it is evident, on a casual reading
 When direct discrim exists, the employer must meet the BFOR test (bona fide occupational
requirement) – note – Meiorin now states the BFOR test applies in both direct and indirect discrim
 First, is there discrimination on prohibited grounds? Yes, can’t discriminate on basis of disability
which includes ‘dependence on alcohol or drugs”
 After discrimination on prohibited grounds is found, apply BFOR test:
(1) Was the standard for purpose rationally connected to the performance of the job?
Here: Random drug testing – not rationally connected to ensuring employees aren’t impaired
at work. Residue of drug in system doesn’t necessarily mean the person is impaired while on
the job. Alcohol testing is different b/c level of blood alcohol is directly affected by the
amount of alcohol consumed – higher the level the more impaired the person
(2) Was the standard was made in good faith belief that it was necessary to fulfill the legitimate
work related purpose?
(3) is there a more reasonable or less intrusive alternative to the policy
i.e. the standard is reasonably necessary to the accomplishment of that legitimate work
related purpose (bona fide work requirement) – to show that the standard is reasonably
necessary, it must be demonstrated that it is impossible to accommodate individual
employees sharing characteristics of the claimant without imposing undue hardship upon the
employer (codified under s.11(2) of the ESA under heading of constructive dismissal)
 Here: there was no evidence of a drug problem within the workforce – no causal relationship b/t drug
use and crime, the policy was not reasonably necessary to assure job performance. It could only
qualify as reasonable if the Bank could demonstrate a serious threat to the other employees and the
public – which it did not. The Bank also failed to demonstrate that the mandatory drug test was the
least intrusive reasonable method for assessing job performance. Observation would have done a
similar job without being as intrusive
McDonald J.A.
 The policy is adverse discrim b/c it is designed to treat all employees the same but adversely effects
those who are dependent on drugs. It is designed to catch all drug users not merely dependent ones.
Page # 65
The policy cannot be justified b/c it was not sound judgment to implement such an intrusive test that
only applies to a small portion of the workplace. Thus it fails the BFOR test
 The Bank did not comply with the duty to accommodate either. It allows for termination of an
employee without objective evidence of poor performance while on the job – if an employee tests
positive the third time, they are fired (this doesn’t sufficiently accommodate the employee and the
disability (alcoholism)). Since the policy is not tied to job performance, it does not satisfy the duty to
accommodate
Entrop v. Imperial Oil (2000) (Ontario CA) – Drug testing in safety sensitive industries is allowed
and pursued
Facts: Employees in safety sensitive areas were tested for alcohol, and if tested positive, they were
terminated
Court: Alcohol testing was allowed
 The court found that the policy was created in good faith, there was a rational connection to its
implementation and the objectives of the corporation, and the policy was reasonably necessary to
ensure a safe working environment
 Random alcohol testing in safety sensitive industries does not violate the code. Such testing is a bona
fide occupational requirement provided the sanction for an employee testing positive takes into
consideration the employee (who tests positive) circumstances. Therefore there still is a duty to
accommodate up until the point where economic costs of accommodating starts to adversely affect an
employer’s viability
Note:
Drug testing will likely fail parts (1) & (2) of the BFOR test b/c there is no scientific proof that
the drug testing currently used are a conclusive indicator of impairment. Alcohol testing on the
other hand will likely pass parts (1) & (2) but it may not pass part (3) Drug testing may be able to
withstand the rational connection part of the BFOR test if it is part of a larger program of drug
testing – what this exactly entails is unclear
Racial Discrimination
 43% of racially based claims are settled compared to 56% of claims in general
 Higher proportion of race discrimination cases are dismissed after investigation (21% of race cases
dismissed compared with 11% of general)
Bhadauria
Facts: Asian teacher applied for vice-principal 39 times. Claimed that his culture which valued hierarchy
caused him to be quiet the authority conducting the interview. Also claimed that criteria such as
‘warmth and openness’, ‘sense of humour’ and articulateness worked against him
Board: Dismissed complaint. However, recommended that the interview process be changed
Discrimination is hard to prove
Page # 66
Sexual Harassment
 it was only until the 1970’s that sex harassment was given a name and considered unacceptable form
of discrimination in the workplace
 An employer can be held responsible for failing to provide a workplace free from harassment, or for
the sexual harassment caused by a foreman who functions as part of the employer corporations
directing mind Kotyk v. CEIC, Olarte v. Commodore Business Machines, Potapczyk v. McBain.
 Over an average female’s life, 77% of women will experience one form of sexual harassment – 1/3
reported negative effects in the workplace including increased stress and reduced productivity while
15% stated it effected their lives outside the workplace – nearly half of those who experienced sex
harassment dealt with it head on
 Problems associated with the handling of claims is that the process is complaint driven and often
decisions come down to assessments of credibility
S. 7(2) Right to freedom from harassment. Every employee has a right to freedom from harassment in the
workplace b/c of sex by his employer or another employee
Robichaud v. R - employer can be held vicariously liable under Federal Code for harassing
behaviour of the employee
Facts:
Issue:
Court: •
Sexual harassment by the supervisor in a federal sector employment setting. R filed
complaint against her supervisor for sexual harassment. R is claiming against the employer
who hired the harasser not the harasser who did it
Can the employer be held liable for these actions (case came before the enactment of S. 48(5)
& (6) of the Canadian Human Rights Act) which specifically deal with the issue?
Adopted view that the HRC should be read purposively and broadly – thus the spirit of the
Code allowed the court to hold the employer vicariously liable for the employees acts
•
A discriminatory practice by an employee is considered a discriminatory practice by the
employer even if the employer didn’t authorize it
• Court in effect says that there is a burden on the employer to take proactive steps in the
workplace to both try to prevent harassment from occurring and to have a mechanism to
respond to these events if they do occur – however, even if they do take such measures, it will
not relieve the employer’s liability
• However, it will be taken into account when the Board of Inquiry is attempting to
administer a proper order to remedy the situation
Even if discriminatory behaviour of employee not authorized by the employer and the behaviour
not done in course of his duties – employer can still be vicariously liable and should take
responsibility to remedy the victim of harassment
Note:
Under the OHRC S. 45(1) holds an employer liable for the acts of its officers or employees
S.39(2)(e) also allows the Board of Inquiry to include as parties to the complaint
all those who did or ought to have known about the harassment and were in a position to prevent
it (i.e. they are in the position to prevent it)
Page # 67
Bannister v. GM
Facts:
Employer terminated Bannister claiming just cause after an investigation into allegations of
sexual harassment on his part in the workplace. Bannister subsequently sued for wrongful
dismissal
Trial: • Found for Bannister on two grounds:
1. It was wrong to blame the supervisor because the company had not implemented its
policy properly
2. Found that there was no sexual harassment - said that in order to be terminated for sexual
harassment, there had to be evidence of lasting/persistent conduct without improvement
OCA: • overturned - disagreed with what was required to constitute sexual harassment to have just
cause
• look to totality of individual’s conduct and deal with it on that basis
• there was a policy in place and it was the supervisor who was violating it and it was within
the employer’s right to terminate that person on the basis of that policy – the OCA also
specifically rejected the notion that there had to be persistent harassment in order to justify
termination – they did not go so far as to say one incident would suffice but just that there had
to be serious proven allegations
Sexual Harassment in Unionized Workplace
 in unionized workplaces, there are different options available
o File grievance with union - settlement process which then followed, may lead to arbitration
o If it is co-worker - both people are members of the bargaining unit and thus may be put in
contentious issue
o Union may use own internal disciplinary powers, such as for breach of solidarity, to deal with
the issue
 There has also been an attempt to bring sexual harassment under the provisions of the
Occupational Health & Safety Act - ie. poisoned work environment and this has serious
consequences on someone’s health
o The OLRB handles cases dealing with reprisal for bringing complaint under the OHSA
Page # 68
Equal Pay
The Wage Gap
 The wage gap is slowly narrowing
 In 1880’s women were making 50% of what men were. In 1967, women were making 58% of
what men were making, in 1997 that percentage has changed to 75%
 Some people benefit more from the closing of the gendered wage gap:
o The gap is less for single women – it decrease with education – the gap is also smaller among
unionized women (i.e. unions have + effect on decreasing the wage gap) – however the gap
increases with age
 it is argued that the perceived decrease in the wage gap over the years is a result of the male wage
remaining stagnant (men’s wages say the same of fall (from 1975-1996) while women’s wages
have been increasing)
Explanations for the Wage Gap
 Historic social devaluation of what has historically been classified as “women’s work”
 Familial responsibilities that take away from a female’s commitment to the workplace
 Barriers to education (lower human capital of women) because of familial responsibilities
 Less unionization
 Segmented labour markets
o Primary – industries more central to the economy (paid more)
o Secondary – poorer industries, more competitive industries and more marginal (paid less)
o Women usually relegated to secondary due to historic undervaluation of women’s work
 Labour market segregation
o Horizontal segregation – men and women in different occupations (men traditionally in
managerial and professional occupations, while women are in clerical positions)
o The industries in which women are concentrated – lower pay, small employers and part time
work (clerical) while men are in high paid industries (manufacturing, construction)
o Vertical Segregation – even when men and women are in the same occupations and industries
they’re not equally distributed within those industries. Women are crowded into the lower
income quartile
 Prevailing societal attitudes which include the notion of the “family wage” and the main bread
earner
Employment Standards Act
S.42(1)
Equal Pay for Equal Work No employer shall differentiate b/n male and female employees
by paying a female less than a male if
(a) they perform substantially the same kind of work in the same establishment
(b) the performance requires substantially the same skill, effort and responsibility and
(c) their work is done under similar conditions
S. 42(2)
Note:
Exceptions S. 42(1) doesn’t apply when the difference in the rate of pay is made on basis of
(a) a seniority system
(b) a merit system
(c) piece work system
(d) differentiation based on something other than sex
if work substantially similar – then men and women have to be paid the same
There can be differences in wages due to other factors (seniority – a man who’s more
meritorious than a woman can be paid more)
Page # 69
s.32(3)
No employer shall lower the pay of an employee to comply with s.1
Problems with Equal Pay for Equal Work
1. Need a male comparator: It depends on male occupying the same or similar position as female
which doesn’t address positions that are held exclusively by women
2. Complaint-based: It depends on female plaintiff filing complaint against employer for wage
discrimination
Work of Equal Pay for Work of Equal Value
 Can compare different jobs (primarily female) with other jobs (primarily male)
 Work of equal value should be paid the same
 Have to determine the value to the organization of a certain job that is occupied by a female worker
and make sure that other jobs of equal value to the organization occupied by males receive the same
pay
 Advantage: Jobs of different work function can be compared for pay purposes
 Problem:
This system can’t be used if there are no male occupied jobs in the firm that can be
compared with those occupied by females and complaint based
The Pay Equity Act
s.4(1) the purpose of the Act is to redress systemic gender discrimination
s.4(2) systemic discrimination shall be identified by comparisons b/n each female job class in an
establishment and the male job classes in the establishment in terms of compensation and value of
work performed
s.11(1) This Act applies to all employers in the public sector, all employers in the private sector who
have at least 10 employees.
“establishment” means all employees of an employer in a geographical division or in such
divisions as are agreed upon under S. 14 & 15
“female job class” a job where 60% or more of the members are female
“male job class” a job where 70% or more of the members are male
“job class” means those positions in an establishment that have similar duties, qualifications,
filled by similar procedures, same pay
Note:
If there are 2 male job classes with the same value but 2 different rates of pay, the employer
is only obligated to pay the female the lesser of the two rates
Note: Employers are only obligated to use up to 1% of their total payroll costs to address pay equity
issues
Note: Pay equity can’t look at inter-employer or inter-industry inequities, can only look at intraestablishment gendered pay discrimination associated with horizontal segregation
I.e. Men in garbage collection and women in office job – can compare the men and women if
in the same firm
 Under the Ontario approach, employers are/were obligated to create pay equity plans – it was
not a complaint based procedure, it was pro-active
Page # 70
No Direct Male Job Class Comparison – Proportional Method
The NDP passed the proportional method, which only applied to the public sector and large private
sector firms. It stated that exact comparisons were not necessary (don’t need job-to-job comparison) and
that the gov’t would just place the female job class on the male job class function and estimate the wages
 it would establish a wage line representing the pay rates of all male dominated job classes
according to their points given by job evaluation process and plot it against the wage line of all
female job classes
 All female jobs classes and all male job classes would be plotted and a male wage line would be
found – all female jobs under the line were brought up to meet the male wage line
Workplace is All Female
If proportional method is impossible, the public sector was obligated to go outside the establishment and
compare wages of similar male job classes in similar establishments the proxy method (interestablishment comparisons)
I.e. if employer in the provincial public sector couldn’t find male comparator for its female job class
within its own firm by using the job-to-job or proportional method – the employer could get a job
match for its female job class with male comparators in other public company designated a proxy
PCs tried to kill proxy evaluation in 1995 b/c it operated only in public sector and estimated it would cost
government around $400 million dollars. However, challenge was repealed – the court said this was a
violation of S.15 of the Charter. The judge said there was no positive obligation on state to have pay
equity legislation at all - they could have repealed entire scheme if they wanted to. Since they chose not
to, they were excluding from the program a group of disadvantaged women and not treating them equally
in comparison to other women
Steps in Pay Equity Plan
1. Pay equity to be created within the context of what is called “establishment”
• “establishment” - S.1 all the employees of one employer employed within a geographic division this means intra-firm pay equity
•
also builds in geographical divisions - only compare to those operations in your region
•
I.e. if an employer has a store in Toronto and one in Ottawa, then potentially each store is a separate
establishment (b/c they’re in different regions)
The establishment determines who you have to compare yourself to
Within establishment there can be several different groups with which a comparison can be made
(the smaller the establishment, the less opportunity to find a male comparator against whom to
compare has a better wage)
Once outside of the establishment – the job evaluation process can be negatively affected by
different wage administration conditions
•
•
•
2. Establish the job classes (within the establishment)
• “Job Class” those positions in establishment that have same features - that are roughly the same in
skills and qualifications of employees at similar place in the hierarchy of the firm
• Because of their similarities they can be covered by the same wage schedule
Page # 71
3. Establish the gender composition of the job classes (male and female job classes)
• This is important b/c what needs to be compared is female job class with men job class
• Female job class is class where 60% or more of incumbents are women
• Male job class is where 70% or more of incumbents are men
• Why 70% - the wage of a job class that’s 70% males will be higher than a job class that’s 60%
males – might be less job classes but there’s a higher wage rate in the class, which will allow
women’s wages to be increased to higher rate
• If there is mixed job class, then you are outside of the scheme - remedy is Employment Standards equal pay for equal work
4. Calculate what the pay rate is for each job class
• in reality though, there is likely to be a range of pay rates within the class
• statute says that pay rate is to be the highest rate of pay within that class
5. Calculate job value of each job class
• using gender neutral comparison system - s.5 of Act
• composite of skill, effort and responsibility normally required in performance of work and
conditions under which it is normally performed - therefore, 4 factors to consider
6. Make comparisons
• take female job class and look for male comparative (plot out job value for females and job value
for males on the neutral job class and compare)
• if there is equal value classes, then the female class is entitled to the same rate of pay as the male
job class (i.e. male job class value of 10 on gender neutral system and female job class value of 10
on gender neutral system but they are being paid different wages. Have to increase the female job
wage)
• if there are two classes comparable, and they have different valuations, under the statute they are
entitled to the lowest job rate
7. Implementation
• can’t create pay equity by reducing men’s rates - rather, have to increase women’s rates by up to
1% of provincial payroll each year to make pay equity increments - up to the point where difference
is eliminated
• however, not all differences deemed unacceptable - some are ok under s.8 of the Act - if they arise
for specified reasons
Page # 72
Example of Pay Equity
Establishment: Mo Go Grocery Store
Job Class
Gender
Composition
Cashier
62% female
Gender Neutral
Value
10
Job Rate
Stock Clerk
Butcher
Baker
Candlestick Maker
10
16
14
Invaluable
9.50
16.00
i.
ii.
iii.
iv.
v.
vi.
74% male
70% male
65% female
50% male
$8.00
Pay Equity
Adjustment
$1.50
Take an establishment – grocery store
Break it up into its various job classes
Look at the gender composition within each class, what is the female and the male job class
This is difficult with butchers and stock clerks b/c there isn’t an equivalent female job class
Look at the Gender Neutral Value of the job class
Determine the amount by which the females pay is to be adjusted
Note:
Implementation: for all of public sector and large number of private sector employers, there is
proactive element in that employers must submit a formal pay equity plan (S. 13(1))
• outline all of the factors of the steps above - the results at each stage
• if difference, what is the plan for making pay equity increments to close the wage gap
• here again, the employer may have to submit different pay equity plans if they have
operations in different regions
• also, within each establishment, the law requires separate pay equity plan for each
bargaining unit that exists
Employee Input in the Pay Equity Process
 Where no union is present in workplace, there is no requirement to have any worker participation in
the preparation of pay equity plan - employer prepares it, posts it, and then employees have window
of opportunity to make suggestions or indicate concerns to employer - the employer may choose to
modify plan in response to these
o
if employee dissatisfied at that point, can bring it to the Pay Equity Commission - will try to get
negotiated settlement and then can issue order and either party can make complaint and go to Pay
Equity Tribunal for formal adjudication
 if there is union, there is requirement that plan be negotiated - if these fail, then there is obligation to
notify the commission and they will follow similar procedure as non-unionized workplace
o for smaller, private sector employers - no obligation to produce formal pay equity plan but there
was obligation to achieve pay equity
o makes it essentially a complaint based system if employee feels left out
o also, ongoing obligation on employer to ensure that these are ongoing - that pay equity provisions
do not become eroded
o also, special provisions - ie. s.13.1 (1)(2) if as result of sale, the pay equity plan no longer
possible, then obligation to redo the process - also allowed for situations where changed
circumstances - develop new plan to encompass these
Page # 73
Problems With Pay Equity Scheme
1. Pro-active system only applies to certain sectors (Public and Large Private Sector (+ 100)).
Complete exclusion of small employers (1-9 employees)
2. Self-Managed – didn’t require employee consultation in non-union settings. Doesn’t have to be
approved by pay equity commission. Employer creates it then posts it
3. Complex system thus easy to manipulate – one person in or out of job class would have an impact
and would have to be adjusted. However, can manipulate rather than adjust for an inequity
4. Larger employer tended to use job evaluation systems designed by consultants. The problem is
that these “off-the-shelf” systems tend to have embedded in them the traditional valuation of jobs
- ie. men’s jobs valued more highly. These standardized evaluation methods weren’t gender
neutral – they didn’t adequately identify what the skills that women were bringing to the job.
Therefore, a lot of the problems stemmed from “what is gender neutrality in job evaluation”
5. Provision allows for departure from pay equity. S. 8(2) – the act doesn’t apply to prevent
differences in compensation b/n male and female job class if difference is due to difference in
bargaining strength
6. Only addresses intra-establishment under-valuation of women’s work. Doesn’t address workfamily conflict and vertical segregation (between establishments)
Other Legislative Attempts to Deal With Sex Discrimination
Employment Standards Act 2000
Pregnancy Leave
s.46(1) Pregnancy leave – a pregnant employee who started employment at least 13 weeks before the
expected birth date is entitled to a leave of absence without pay
s.46(2) When Leave Can Start. Employee cannot leave earlier than 17 weeks before due date
s.46(4) Notice. Employee must give 2 weeks notice unless emergency s.46(6)
s.47(1) End of pregnancy leave. Pregnancy leave ends 17 weeks after the leave begins
Parental Leave
s.48(1) Employee, who has been working for 13 weeks, is a parent of the child (adopted or otherwise) is
allowed to take parental leave
s.48(2) Parental leave can begin no later than 52 weeks after the child is born or comes into the household
s.48(3) Parental leave cannot begin until such time that the pregnancy leave ends
s.48(4) Employee must give 2 weeks written notice before beginning leave
Page # 74
s.49(1) Parental leave ends 35 weeks after it begins if the employee took pregnancy leave and 37 weeks
if otherwise
I.e. parent can take 35-37 weeks of unpaid leave from employment related to caring for children
during first year of birth or adoption of child coming into the home
Emergency Leave
s.50(1) An employee that works for an employer with 50 or more employees is entitled to leave of
absence without pay for any of the following:
1. personal illness
2. death, illness, injury of family members
3. urgent matter concerning family members
s.50(5) An employee is entitled to take 10 days leave under this section each year
s.53(1) Upon the conclusion of an employees leave under part XIV, the employer shall reinstate the
employee to the position he/she most recently held
s.53(3) The employer shall pay a reinstated employee at a rate that is equal to the greater of
(a) the rate the employee most recently earned or
(b) rate the employee would have been earning had they worked through the leave
Rights during leave: (1) continuity in benefit plans, (2) vacation leave protection (3) Accumulation of
seniority (4) Right to reinstatement to old position if the position is gone, right to comparable one
Note: if right to reinstatement is violated, there’s a provision in the ESA can statutorily reinstate the
person outside the bargaining scheme
Reprisal
s.74(1) No employer shall intimidate, dismiss, penalize or threaten to do so
(a) because an employee
i.
asks employer to comply with the Act
ii.
makes inquiries as to rights under Act
iii.
files a complaint with the ministry
iv.
exercises a right under the Act
v.
gives info to ESO
vi.
testifies or participates in proceedings
vii.
is or will become eligible to take a leave
s.74(2) The burden of proof that an employer did not contravene a provision set out in this section lies
upon the employer
Action Travail des Femmes v. CNR Company - The use of Human Rights Claim to Further
Employment Equity
Facts: • Very few women employed in the non-traditional blue-collar jobs in the St. Lawrence
Region. This situation was significantly worse than the national standard - less than 1%
versus 13%. I.e. more women in blue-collar jobs outside CN then inside CN – thus women
available not being hired for these positions
• claimed discrimination b/c hiring and promotion policies prevented women from moving into
these positions
Page # 75
HRC: •
SCC:
•
found for the complainants and ordered that they get jobs and imposed hiring quotas scheme
(to curb systemic problems) - 1 in 4 people hired had to be a woman until they reached the
national average level
upheld this remedial authority of the human rights tribunal
It’s possible to use the Human Rights Commission to Push Equity Along
Federal Employment Equity Legislation (464-466 text)
 the legislation applies to the public service and separate employers in the public sector as well as
federally regulated private sector employers and crown corps.
 Goal: Designated groups (women, aboriginals, members of visible minorities and persons with
disabilities) representation in workforce should be proportional to their representation in the relevant
population
 S. 5: The employer must take a survey of their workforce and determine if their workforce is
representative of the community (i.e. determine under-representation of designated groups)
 S. 5: The employers must assess their procedures (i.e. review employment systems, policies and
practices to identify barriers affecting designated groups) and devise accommodating plans
with actual numerical goals (long and short term) to remove barriers. I.e. adopt policies to
correct under-representation of designated groups
Page # 76
Fairness in the Collective Bargaining Relationship
 Application of anti-discrimination law to realm of CB
 HRC governs both unions and employers b/c unions can bargain terms and conditions of
employment for their members and can potentially control employment opportunities through
union security provision in the CA
Ontario Labour Relations Act:
S. 45 Once certified a trade union is the exclusive bargaining representative for the bargaining unit
S. 56 The employer and the trade union are the parties to the collective agreement – i.e. the collective
agreement is binding on both the trade union and the employer
Note: Exclusive bargaining agency – Unions are the agents over their employees and thus have to
protect their employee
Union Security
 Once a trade union is certified, they enjoy a great deal of security
S. 47(1)
Deduction and Remittance Where a union requests, an employer is required to deduct and
remit union dues from employees (Rand formula)
S. 51(1)
Unions are permitted to request and bargain for greater institutional security such as
union shop – must become a member of the union once hired
closed shop – must be a member of the union to be hired
Rand Formula (Dues Shop) – Membership not required but have to pay dues
An employee has to pay union dues in a unionized workplace regardless of whether they
choose to be a member of the union or not
(s.52(1)) – if employee chooses not to be a member b/c of religious beliefs, their dues are to
go to a mutually agreed upon charity
Note:
Note:
S. 54
Discrimination Prohibited. Collective agreements are not allowed to discriminate against any
person contrary to the Human Rights Code or the Charter while s.15 states a trade union that
discriminates cannot be certified
Note: Prohibits CA from discriminating on prohibited grounds
Protection of individual rights in union context
s.48(12)(j) an arbitrator or arbitration board has the authority to interpret and apply human rights and
other employment related statutes, despite any conflict between the statutes and the terms of
the collective agreement
Application of HRC to CB
T. Barbisen & Sons v. Operative Plasterers and Cement (OLRB) – Union demand that discriminatory
practice be included in CA violate HRC (Thus HRC applies to CB)
Facts: •
Union proposed agreement not to employ more than 50% of employees of Italian origin. In
essence, wanting employer to enter agreement that was discriminatory and thus “deemed not
to be a CA for purposes of the Act” b/c this would violate the HRC
Page # 77
Court: •
found this to be bargaining in bad faith - cannot be said to fulfill duty to bargain in good faith
by imposing as condition to entering agreement that other party enter agreement which by its
terms must be deemed not to be CA for purposes of the Act
Ontario Hydro [1978] – Grievance arbitration under CA
Facts: • Employer unilaterally adopted mandatory retirement policy of age 70. Older employee was
therefore forced to retire at age 70. Remedial path was to go to arbitration - to say that
employer had no authority under the CA to impose mandatory retirement. It is important to
note that management retains all prerogatives it had prior to a CA except those which are
limited either directly or indirectly by the CA (implied limitation read into the CA by
arbitrators) or that is prohibited by statute - this is the notion of management rights
surviving the CA except where they are directly limited in one of these ways
Issue:
Was the retirement policy allowed to be unilaterally adopted or was it discriminatory?
Arb: • was there anything that limited the ability to implement this policy in CA?
• An employer can unilaterally adopt a mandatory retirement policy w/out having to bargain
through the CA b/c management retains every right that it had before CA (it’s rights are only
limited if expressly limited by the agreement) – the starting point of any CA – is that
management retains every it had before the CA except to the extent that its expressly or
impliedly limited by the collective agreement
• Therefore have to look to see if management rights are limited
• 1. Express Limitations (on mandatory retirement policy): union point to clause in CA which
prohibited discipline or discharge except in cases of just cause, where the employee has done
something wrong
• Union argued that terminating employment at age 70 is NOT just cause if the individual is
still capable of performing the work (they’re being terminated based only on their age - not
just cause)
• Arbitrator rejects this argument: this is too broad of reading of the clause - has been
interpreted more narrowly in the past, this has never been taken to mean this before, look at
industry standards, etc.
• 2. Implied limitations (on management rights)
• Duty to Act Fairly – implied term that management rights will not be used in arbitrary,
discriminatory or unfair manner - there is general duty of fairness imposed in respect to
the exercise of management prerogative
• Here: Does this mandatory retirement requirement amount to breach to act fairly?
• Unreasonable conduct? To determine reasonableness the court looks at whether
mandatory retirement policy is reasonable in light of the general standards of the industry
•
•
No not unreasonable exercise of power. This policy is set at 70 years old majority are at 65 and so this is more generous and not unreasonable
• Discriminatory? No Discrimination b/n employees in its application – it is
applied evenly across the board to all employees
• Arbitrary Conduct? No b/c there was adequate notice. It was properly
communicated (some problems but overall it’s alright)
3. Statutory Limitations: is there some kind of statutory restriction on the authority of the
employer to impose policy of mandatory retirement
•
•
•
OHRC - is this applicable - no b/c the definition of age is between 18 and 65
OLRA - at the time, this is prohibited discrimination on basis of age, but nothing in that
legislation defined age
Charter – Charter doesn’t apply b/c only applies to public not private action
Page # 78
Note:
Charter prohibits discrimination on basis of age, with no express limitations, while HRC prohibits
discrimination on age as long as b/n 18 and 65. Thus, the dual prohibition against age
discrimination favours the prohibition of discrimination on basis of age
How does the arbitrator reconcile the potential difference between the OLRA & OHRC?
 arbitrator tries to avoid this - would not be reasonable to have different standards between the
OLRA and the OHRC in age definition
 if one were to apply this provision literally and held that CA or exercise of management
prerogative was applied in discriminatory way this would mean that there is no CA
o if this is so, then we are back to individual employment situation and the OHRC applies-back
to age limit at 65 so why not just read that into the OLRA
Note:
The OLRA specifically lists the grounds contained in the OHRC so this debate no longer occurs however, the Charter also makes reference to prohibited grounds and its age provision is not
specifically defined either
This has since been closed with cases to SCC, such as McKinney where court said that mandatory
retirement policies did discriminate on basis of age, but was reasonable under s.1 given the public
policy goals and interests in mandatory retirement – encourages labour market turnover, prevents
employees from ceaseless work, promotes inter-generational social equity, getting rid of mandatory
retirement would have negative effects on the function of pension plans etc.
Therefore even though there is discrimination at age 65 – it’s demonstrably justified under S. 1
Note: there is room to challenge the upholding of mandatory retirement provisions – BC CA trying to
read down the decision of mandatory retirement at age 65 by saying the McKinney case didn’t mean that
mandatory retirement at age 65 in all employment is allowed
Efforts to Address Dangers of Collective Bargaining
OHRC
S. 6
Vocational Associations. Every person has a right to equal treatment with respect t membership
in any trade union, trade or occupational association or self-governing profession without
discrimination b/c of race, ancestry, place of origin, citizenship, creed, sex sexual orientation,
age, marital status, same-sex partnership status, family status or handicap
OLRA
S. 74 Every person is free to join an employer’s organization of the person’s own choice and to
participate in its lawful activities
 Duty of fair representation, a union has a duty to represent all members of the bargaining unit
whether or not they’re members of the union
S. 15
The Board shall not certify a union if any employer has participated in its formation or
administration or has contributed financial support to it or if it discriminates against any person
b/c of any ground of discrimination prohibited by HRC or the Charter
Page # 79
Steinberg’s Limited [1971] – creed means religious beliefs not political beliefs
Facts:
Dispute b/n two unions as to who gets to represent the workers. One argues that the other has
provision that violates HRC on basis of creed (b/cn ot letting communists or fascists in unit)
Board • Creed should be given its narrower interpretation - religious beliefs, not political beliefs
• Thus, the exclusion isn’t a violation of S. 15 and the union is able to be certified
Note: Political disagreement can as a mater of public policy allow unions to discriminate on prohibited
grounds (i.e. kick people out of union b/c of political beliefs)
It therefore undermines the policy of the union – if prevented from joining due to political belief,
can never gain favour of their views b/c not allowed to express them or they will lose their jobs
Problems Associated with CB:
1. Exclusion of Individual Workers Against there Will (i.e. not allowed in unless member of union)
 This effects democracy as they can’t participate in CB and job security b/c if excluded form the
union can’t be hired under the Rand form of security (S. 51(1)(a) OLRA – as a condition of
employment (Rand), membership in the union)
 I.e. If kicked out of union and its closed shop (can’t be employed unless member of union) – can’t
keep your job
2. Forced Association Against their Will (i.e. Closed Shop) must join union to be an employee
 Different levels of forced association:
1.
Union Representation – have to abide by CA even if rather have an individual contract of
employment, Orenda
2.
Pay Dues to Union or
3.
Membership (have to become a members to be able to work or remain employed (union
shop)) R. v. Advance Cutting
1. Forced Association against their will
Can an employee be forced to become a member of a union or face dismissal (due to closed shop term in
CA)?
s. 52(1) Religious Objection Where the OLRB is satisfied that an employee, because of his or her
religious conviction or belief
(a) objects to joining a trade union, or
(b) objects to paying of dues or other fees to a trade union
The OLRB may order that the provisions of the collective agreement do not apply to the employee and
that the employee is not required to join the trade union or to pay any dues provided that equal amounts
that would have gone to dues go to a charitable organization
Eg. “I am against being in a union b/c it violates my religious beliefs and its those beliefs that are the
basis of the objection to being a union member” – they can keep their job even where union
membership is required to keep the job. Can’t argue political reason “I don’t believe in unions,
they’re not good”
Note:
Note:
Tough questions occur like when an employee’s opposition to the pro-choice stance of its union
is not religious but rather political in nature
this allows the person to not be associated with the union as a member or financial supporter b/c
even though they pay the union dues, the money doesn’t go to the union
Page # 80
Orenda Case – Union can’t compel employer to terminate employee b/c union membership taken
away due to union activity
Facts: • union revoked persons membership but employer failed to discharge the person. Union
wanted employer to fire the employee for not being member of the union
Issue: • what is union required to provide to make the employer discharge the employee?
Arb: • must provide particulars to show expulsion from union has occurred in proper way – the
employer cannot be compelled to terminate unless proper procedures were followed.
The union has to
i. Give notice to the company that the person was kicked out of union,
ii. Give particulars that would allow the company to prove that its duty to dismiss was for a
proper cause under the union’s constitution and by-laws - but by and large, courts have
tried not to get involved in these cases, and generally only in cases of procedural fairness
If membership is being terminated b/c of trade union activity, can’t make them lose their job. The
employee can be made to suffer the results of union membership but not loss of employment
s.51(2) No trade union shall require an employer to discharge an employee because
(a) the employee has been expelled or suspended from membership in the union
(b) membership has been denied or withheld from the employee for a reason that
the employee
(c) was or is another member of another trade union
(d) has engaged in activity against or for another trade union
(e) has engaged in reasonable dissent within the trade union
(f) has been discriminated against by the union in the application of its membership rules
(g) has refused to pay initiation fees, dues or other fees to trade union which are reasonable
If the membership is terminated for any of the above reasons – the union can’t compel the employer to
terminate the employee’s job
s.51(3) S. 51(2) doesn’t apply to an employee who has engaged in unlawful activities against the union
Page # 81
Constitutional Ways to Deal with Forced Union Membership
What are some challenges to union security?
Lavigne Case v. OPSEU, [1991] – Payment of union dues doesn’t breach freedom not to associate
Facts: • Lavigne was worried that part of his dues are being used for political objectives that the union
supported but he personally did not (i.e. used to support a political party etc.). Lavigne wasn’t
challenging the use of the union dues for the narrow purposes (collective bargaining) just the
broader purposes. He claimed it violated his freedom. Found these objectionable (actually
hated the union itself)
Issue:
Does Rand (have to pay union dues but don’t have to join union) violate the negative freedom
of association – freedom not to associate?)
Court: Paying union dues (Rand) doesn’t breach freedom not to associate, b/c not forced to adopt the
views of the union
1. Does Charter apply here?
• Problem is that there isn’t state involvement - Dolphin Delivery Case
• in many ways, this was just about what the union did with money it received
• however, majority said there was enough state involvement b/c public employer and
statutory provisions included
2. What is scope of freedom of association (does it include freedom not to associate?)
• split court 4/3
• Majority held that freedom of association includes the right not to associate
• b/c it was about individuals, should protect them from being compelled to join with others
(i.e. right of individuals not right of association – individual not forced to associate)
• Minority said not a right to negative freedom of association. It’s about protecting people
who wish to join into groups
3. Does compelled payment of dues violate negative freedom of association (to not associate)?
• Majority – no it doesn’t violate the negative freedom of association - fact that you pay dues
does not compel you to associate with them or adopt the views of the organization - does
not make you associate with them, doesn’t violate liberty interest
• Minority – said it did, especially if money going to ideas that you did not support
4. If it does violate freedom not to associate, is this justifiable under S. 1?
• Was demonstrably justified, the Rand formula, b/c allows the trade unions to participate in
broader social debates, this is to be encouraged, etc.
•
there is still some scope left to challenge after this - but as in most other cases where CB laws
challenged, in most instances courts have come to conclusion that the existing laws are acceptable
The payment of union dues does not result in a breach of the freedom of association. The payment
of dues does not compel them to associate with the union. Further, even if there is infringement on
association rights, the infringement is justified in order to allow unions to participate in broader
social issues and promote workplace equality
Page # 82
Note:
Tucker says that compulsory membership would be a violation of s.2(d) but a case has not yet
gone to the SCC because there has not been any state actor involved in such instances where
compulsory membership issues have existed
If a case does go through, Tucker thinks that it would still be saved under s.1.
R. v. Advance Cutting and Coring (SCC – Quebec Case) – Compulsory membership violates
freedom of association but is saved by S. 1
Facts: Turmoil in construction industry. Plan to rationalizes CB. Unions were recognized as having a
place in construction – workers get to vote for who they want to represent them. However in
order to vote had to be a qualified construction worker and in order to be qualified had to join one
of the five recognized unions and become a member (compulsory association at membership
level – Lavigne distinguished b/c it dealt with dues)
Issue: What’s the scope of the negative freedom of association and does compulsory membership
violate it?
Held: Scheme upheld 5/4. It did violate freedom not to associate but it was saved under S. 1
Court:
1. Freedom of association includes freedom not to associate (Lavigne)
2. Scheme violated the negative freedom of association – b/c compulsory membership of union lead
to ideological conformity
3. The violation is justified by S. 1
Note: the question in determining whether it violates freedom not to associate is – does the compulsory
act (membership dues) impose ideological conformity (i.e. money being used for other purposes besides
CB etc.)
If Yes – violation of freedom not to associate
If no – there’s no violation of freedom not to associate
Page # 83
Rights and Duties of Parties to the Employment Relationship
Duties of Employer
1. Duty of the Employer to Pay
• Obligation of employee to serve employer for remuneration - duty of employer to pay money for the
employee’s time spent working
• Once an employment relationship has been established, the duty to pay remuneration basically falls
from that finding - in many cases then the analysis starts at whether there is a contract of employment
or is there another type of arrangement (i.e. contractual duty to pay contingent on establishing
employment relationship)
• Many problems in historical cases were in case of family employment relationships - was there any
expectation that remuneration would be paid
Reeve v. Reeve – just b/c services rendered doesn’t mean obligation to pay
Facts: • uncle managing nephews farm and received room, board and clothing allowance. Was he
entitled to wages - nephew dispute on grounds that either no employment relationship or on
understanding that form of remuneration to be paid was to be services provided in kind (room
and clothing)
Issue:
was there an employment relationship such that the work was to be done for payment?
Court: • court will not imply obligation to pay remuneration simply just b/c there’s proof that
services were rendered - recognizes the reality that services could be rendered on many
different levels and not always for remuneration (have to show that there was a bargain and
that services were done for money)
• Here: court found here that there was a mutual understanding that there would be
remuneration (i.e. the nephew had to pay the uncle)
There is no inferred obligation to pay remuneration simply on the basis of proof that services were
rendered
Sprague and Wife v. Nickerson
Facts: • daughter lived with father on farm taking care of him for years, likely in expectation of
getting farm. He died, left it to son. She claim implied term of remuneration for services
Court: • looked on this badly - how could she suggest entitled to wages, that is a daughter’s role to
care for an elderly father (unnatural to think of daughter providing service to father on
understanding that she was to be paid for it)
When nothing expressly set out by the parties, court will draw on the customs prevalent around
them to decide what was intended
Page # 84
Problems: Re amount of wages – enforceability of promise to pay more
Stylk v. Myrick (1809) – no obligation to enforce promise to pay
Facts: • Voyage in which at outset the sailors hired and agree to a fixed sum to be paid upon
completion of voyage. When reach the first port, some sailors desert the ship. In order to
induce the other sailors to stay on and do the extra work of those that left the voyage, the
master promises payment of the left over wages (i.e. would divide up the money that was to
be paid to the other crew members for their extra work). When they return captain refused to
pay and sailors sue
Court: • Refuses to uphold the claim. No obligation to pay the additional wages
Reason: There was no new consideration for the promise to pay more
Working harder is not fresh consideration - sailors were already under obligation to perform
the work and in effect the promise by the captain was a gratuitous promise and therefore there
was no obligation to pay. The sailors were already under contract to provide whatever
services necessary to sail the ship as the master sees fit
Note:
they sold the captain their time and it’s thus up to the captain to determine how that
time will be put to use (work hard or not – employer entitled to increase work load)
Now:
A promise for a raise can be enforced. The promise itself is the consideration – the fact that
the person worked at all is the consideration to support the enforceability of the promise
Quantum Meruit and Unjust Enrichment:
•
•
•
Quantum meruit is given when court not able to find contract of employment or express term of
remuneration, court may still find that employee entitled to pay
I.e. Money still awarded absent duty to pay
In situations where it would be unjust for the recipient of the services to benefit from those services
without having to pay for them, the court can make an implied term of remuneration Way v. Latilla
Page # 85
A. Minimum Wage
How little can an employee be paid for their labour?
(1) Common Law
 There is no lower or upper limit; Common law never regulated the quantity of Remuneration
 Whatever the parties agreed would be enforceable
 Now: there’s minimum wage
What led to minimum wage?
 Growing market (labour) inequality. There has been a tendency to wage polarization … rise in the
number of high income earners and a rise in the number of low income earners … study in 1990
“Good Jobs, Bad Jobs” looked at a twenty year span from 1967 to 1986 which indicated this tendency
 Rising Labour Market Poverty (wage polarization has increased) through the 90s … more high and
low income earners which becomes a public policy concern with respect to the low earners. We have
minimum wage laws across the province…3.6% of the workforce working at minimum wage in four
provinces across Canada. There is thus a large group of working poor – 2/3 of minimum wage
earners are women
 Teenagers represent the largest segment of minimum wage workers
Statutory Responses to Minimum Wage
(1) Minimum Wage Laws
- earliest minimum wage laws only provided minimum wages for women
- push for a universal minimum wage occurred at the end of WWII
- During the depression it became a public policy issue … economic depressed conditions
(2) Promotion of Collective Bargaining Legislation
- way to raise bargaining power and overall wage levels
(2) Employment Standards Act
Minimum Standards – Part IX
S. 23(1)
Minimum Wage. Where an employer has permitted an employee to do work for which a
minimum wage has been set, the employee must be at least paid that amount
Establishment of Minimum Wage (Reg. 285.01, S. 5(1))
Reg 285.01
S. 5(1) Minimum Wage. An employer shall pay not less than the following minimum wage:
1. student under 18 working less than 28 hrs - $6.50/hr
2. liquor servers - $5.95
3. hunting & fishing guides - $34.25 for less than 5 hrs
- $68.50 for 5 hrs (consecutive or not) or more in a day
4. An employee who’s a homeworker, 110% of the amount set out in para 5
5. To any other employee, $6.85/hour
Note: minimum wage is not a universal minimum wage. Aside from those who are entirely excluded
from the ESA, there are provisions in the regulations regarding exemptions from Part IX
Page # 86
Exclusions From Minimum Wage (Reg. 285.01, S. 7)
Reg. 285.01
S. 7
Exemptions from Minimum Wage Minimum wage (Part IX of Act) doesn’t apply to
(a) person employed as a student in a recreational program operated by a charitable organization
registered under the Income Tax Act and whose work is directly connected with the program
(b) employed to instruct or supervise children
(c) employed at a camp for children
(d) employed as superintendent, janitor or caretaker of residential building and lives in building
 They can be paid below the minimum wage level
 No legal intervention, work for whatever amount is agreed to
Exemptions from Certain Parts of the Act (Reg. 285.01, S. 2(1))
Reg 285
S. 2(1) Exemptions from Parts VII to XI (hours of work, eating periods, minimum wage) These
parts of the Act don’t apply to practitioner’s of;
(i) architecture, (ii) law, (iii) professional engineering, (iv) public accounting etc.
 Excludes a variety of professionals from the minimum wage and other provisions
Exemptions from Over Time Pay (Reg. 285.01, S. 8(1))
Reg. 285.01
S. 8(1) Overtime Pay doesn’t apply to
(a) person employed as a firefighter
(b) person whose work is supervisory or managerial
(c) fishing or hunting guide
(d) person who is a (i) landscape gardener, or (ii) installs pools
(e) person whose employment is related to (i) growing mushrooms (ii) growing flowers
(f) employed to instruct or supervise children
(g) employed at a camp for children
(h) …
Different Rates
 The rate depends on the job. However, general minimum wage in Ontario is 6.85/hour
Enforcement
 There are certain segments of the population at risk of getting significantly low wages (noncompliance with minimum wages) people working illegally or people unaware of their rights
 To effectively enforce these provisions need a pro-active scheme of enforcement. It’s too difficult to
find out the rate of non-compliance with minimum wages b/c the people who are subject to it can’t
come forward to complain and when they do complain they can’t under the ESA b/c by then they are
usually fired from the job or are working illegally
 Pro-Active Inspection Strategy – focus on certain sectors to increase compliance levels
o If they find that people have been paid below the minimum wage (i.e. violation of ESA in that
money is owing) the ministry used to undertake to do the collections in-house. In 1996 they
privatized that function and there are collection agencies which contract with the ministry of
labour
o Means of Setting and Consequences: people have to opt to get compensated under minimum
standards act or civil legislation
Page # 87
Adequacy of Minimum Wage
 Minimum wages are not indexed to account for cost of living increases – their level is set by way of
political decision making by the provincial gov’t (i.e. by regulation)
 Minimum wages do not allow for individuals to escape poverty as full time employment at minimum
wage does not generate an income above the poverty Line
o Poverty line = total amount of income needed to live at a minimum standard (decent standard of
living)
o Single person working at minimum wage would be making just a little over 70% of the income
needed to be at the poverty line
o A single parent with child will be making 60% of what they would need to be at the poverty line
Adequate Response to Low Wages
Increase Minimum Wage:
 Argument against increase in minimum wages  it will result in loss of jobs
 Increase cost of labour doesn’t justify gains to the employer thus the employer will hire less people at
the higher rate, which leaves more people without a job
Tax Policy:
 Income Transfer Mechanisms – People who earn higher incomes will be taxed and those taxes will be
used to support transfer programs (i.e. people at the lower end)
Broader Policies Supporting the Growth of High Wage Industries:
 this is outside labour law but Canada has not been active in taking such policy initiatives
Promote Collective Bargaining:
 A public policy in which those can work together and ask for higher wages and this will help those in
the lower end of the economy
Living Wage Legislation:
 Various levels of gov’t pass legislation that says if you’re going to do business with the gov’t then
you have to pay ‘living wages’ which are significantly above the minimum wage
Page # 88
B. Sick Pay/Leave
Is an employee entitled to be paid when they are off sick?
(1) Common Law
 If a person is off work b/c of illness, are they entitled to be paid?
 Express Agreement: In instances of an individual contract of employment, the parties can
basically agree to whatever terms they want to regarding sickness and pay with exception of some
statutory requirements (thus it depends on the express terms of the contract)
 therefore, generally some explicit provisions will apply to these situations
o ie. In large organizations there is a policy for paid sick leave. Can accumulate 1 or 2 sick
days per month which can accumulate for certain period of time
o ie. may be some provisions for disability benefits (an employee benefit package) - when sick
days run out (i.e. go over the amount of sick days allowed), the employee can claim benefits
under the disability benefits insurance policy which is part of their benefits
 Implied: Dartmouth Ferry
What is the court to imply as the intention of the parties?
Dartmouth Ferry Commissioners v. Marks – Court implies the intention of the parties
Facts: • Ship captain was hired on monthly basis by the employer, with provision that either party
could terminate the contract with 1 month notice. Employee gets ill in Dec. and takes a few
months off and dies in July without return to work. Widow sues company claiming
entitlement to wages owing during that period of time of sickness
Court: • Classified the illness as temporary - on this basis held that he was entitled to recover wages
Note: • Looks like they wanted the widow to recover so drew the distinction between temporary and
permanent illness
• Implication is that permanent illness means a frustration of the employment contract
and the employer is able to treat the contract as at an end - one of parties unable to
fulfill duties under contract which subsequently relieves the employer of corresponding
duty to pay
Davies J.A. states
 Distinguishes between permanent and temporary illness
o the law permits temporary illness on the ground of common humanity to be offered as an
excuse for not discharging duty temporarily and allows the disabled party to recover wages
for time while temporarily away from work (i.e. can recover wages while sick)
 Court must examine the situation in terms of contract law
o the term of the contract was such that the employee was employed on monthly basis
o Thus, according to CL if employee unable to perform during any part of the month then
wouldn’t get wages for whole month if contract frustrated…
o However, an employee only agrees to give their best effort to provide service for the
entire time, they do not guarantee that they will be able to work for the whole time.
Disability due to illness excuses him. And since his promise is so qualified, strict
and full performance of service isn’t a CP to the right of wages. The wages are
payable for such service as he can reasonably be called upon to give and for such
only – refashions the covenant made by employee – thus wages are due for the period that
employee couldn’t work
Page # 89
When dealing with a definite term contract of employment, temporary illness leaves the contract in
force, not frustrated, and therefore there is an obligation to pay wages for the entire term because
the employee has not breached the contract
SCC – As long as there is a working relationship, the duty to pay exists. A permanent illness goes to
the actual promise on the part of the employer to pay wages (as long as only temporarily ill, have a
right to be paid)
Note: Protective, paternalistic interest of labour law that it wouldn’t be right to not pay a person who
can’t show up to work b/c they’re sick. The protective impulse comes from master and servant
contracts
How much of this traditional common law idea in Dartmouth survives into modern day contract of
employment?
 in large number of cases today, people might be surprised to find court coming to same
conclusion - not considering collective bargaining regime and legislation - just CL
 Might be Good Law – people who are sick are still entitled to pay
 Might not be Good Law – customary practice has changed. There’s no common understanding
that employee is entitled to pay when sick except if there’s an express contractual entitlement (no
longer able to imply that term into the contact)
 Also, for people who work on hourly wage, it is not likely that the court would hold that there is
an implied obligation on employer to pay wages - look at how things operate in the workplace
 unique thing about Dartmouth – the employee was salaried employee employed by the month
(2) Statutory Entitlement to Sick Leave
 There are limited statutory rights for unpaid sick leave for an employee (ESA, CLC)
 There is statutory provisions for teachers for sick pay – 20 sick days a year
 (1) Canadian Labour Code
S. 239(1) Prevents termination b/c of illness as long as the employee has worked for 3
months, they are not sick for more than 12 weeks and the employee furnishes doctor’s note
 (2) Employment Insurance Act scheme:
o provided you meet the requirements (i.e. illness or injury not caused at work) – entitled to
max. of 15 weeks pay
o problem is that there is no job protection if you take time off under this Act
o The employer must have worked at least 52 weeks. The benefits cover 55% of wages
 (3) Worker Safety Act
o An employee is entitled to benefits under this Act if disabled because of their work
o Provisions also include job protection s.41(4) & (6)
o S. 41(4) – Obligations of employer. When workers is able to perform essential duties of
his prior injury employment, the employer shall (a) offer to reemploy worker in position
they had on day of injury or (b) offer worker alternative employment comparable to the
worker’s employment before the injury
o S. 41(6) Duty to accommodate. Employer shall accommodate the workplace for the
worker to the extent it doesn’t cause the employer undue hardship
o s.41(2) employer must have more than 20 workers for it to apply
Page # 90
 (4) Ontario Human Rights Code
o Another possible source of entitlement – sickness as a disability and employer
discriminated against employee b/c of illness by not paying – claim under HRC
o Short term or minor illnesses are not captured under the definition of disability, so code
provides no protection
o If sickness is classified as a disability – refusal to pay wages while off sick could
plausibly be heard at the OHRC
 (5) Collective Bargaining
o No presumption that workers that are sick are entitled to pay. Unions had to negotiate this
o Have to have a provision in the CA that paid or unpaid sick leave will be accommodated
(i.e. employees allowed certain number of sick days per year – could or could not be
cumulative)
 (6) Employment Standards Act 2000
Employment Standards Act
Emergency Leave
s.50(1) An employee that works for an employer with 50 or more employees is entitled to leave of
absence without pay for any of the following:
1. personal illness
2. death, illness, injury of family members
3. urgent matter concerning family members
S. 50(2) Para’s 2 and 3 of S. 50(1) apply to:
1. Employee’s spouse or same sex partner
2. Parent of employees or the employee’s spouse
3. Grandparent of employee or employee’s spouse
4. Spouse or same sex partner of child of employee
s.50(5) An employee is entitled to take 10 days leave under this section each year
s.53(1) Upon the conclusion of an employees leave under part XIV, the employer shall reinstate the
employee to the position he/she most recently held.
s.53(3) The employer shall pay a reinstated employee at a rate that is equal to the greater of
(a) the rate the employee most recently earned or
(b) rate the employee would have been earning had they worked through the leave
Page # 91
C. Hours of Work
Maximum Hours and Overtime
 The time/money trade-off is a key area of concern in labour – especially since it is so intrinsically
linked to macroeconomic issues like mal-distribution of work and unemployment
 Competing Interests:
o Employers – don’t want to hire more workers but want existing workers to work overtime
o Employees – want flexibility. They want to adjust work to meet their needs
Trends in Hours of Work
 Decline in standard work week
 1870 – 64 hours/week
 1982 – 40 hours/week
Overtime
 In 1995, 8.6% of workers were working more than 41 hrs/week, 4.6% of workers were working over
50 hrs/week.
o 18% of the workforce works overtime, but only 8% of those workers are obtaining overtime pay
o 11% of men & 11.5% of women were working unpaid overtime
o 24% of the public sector workers work overtime, 18% receiving overtime
o surveys also show workers choose to perform overtime voluntarily, but Tucker suggests that this
stat must be put into context – are they working overtime b/c of the stress of having work
hanging over their heads?
o Most of the overtime wages come from blue collar sectors of the labour market
 In 1994, an advisory group report on Working Time and the Distribution of Work found that in 1991,
6.5% of the labour force worked an average of 8 hrs overtime per week for pay. If those hours were
converted to new full-time jobs, it could mean up to 80,000 full time positions
(1) Common Law Regulation of hours
 In the absence of a specific term in the contract or an established custom, liberal voluntarism suggests
that there is no legal barrier to the number of hours on any one day, or days per week that an
employer can require an employee to work – but custom and convention as well as statutes now exist
 I.e. CB and statute deals with long working hours
(2) Employment Standards Act and Regulation of Hours
a. Part VII – Hours of Work and Eating Periods
Limit on hours of work
Prior to ESA 2000:
 8 hour day, 48 hour week (subject to some exceptions)
 Exceptions:
o allow for hours in excess of the above if (1) get license or permit from director of employment
standards branch and (2) consent from the worker. Longer hours of work couldn’t be imposed
on the workers
Page # 92
o
o
Overtime wage at premium rate of time and a half – after 44 hours
Provision for averaging over 2 weeks (i.e. if person works long hours one wekk and shorter hours
the next – if the hours of the two weeks add up to less than 44 hours – no overtime pay)
 ESA 2000:
o No longer have 8 hour day or the permit system (i.e. employer used to have to get permission for
employee to work longer)
S. 17 (1) Limits on Hours of Work. Subject to subsection (2), no employer shall require or permit an
employee to work more than,:
(a) 8 hrs/day or, if the employer establishes a regular work day of more than eight hours for the
employee, the number of hours in his or her regular work day; or
(b) 48 hours in a work week.
Note: 12 hr days previously required director approval
S. 17(2)
Note:
Exception where agreement. An employer may permit an employee to work up to a
specified number of hours in excess of an amount set out in subsection (1) if,
(a) the employee agrees to work those hours; and
(b) the employee will not work more than 60 hours or such other number of hours as are
prescribed in a work week
Employer previously required director approval to get employee to work more than 48 hrs in one
week period on a regular basis – this means that an employee can work up to 60 hrs in one week
without any director permission required
S. 17(3)
Agreements revocable on notice from employee An employee may revoke a agreement
under S. 17(2) two weeks after giving written notice to the employer
S. 17(4)
Agreements revocable on notice from employer An employer may revoke an
agreement under S. 17(2) after giving reasonable notice to the employee
S. 18(1)
Note:
Hours free from work An employer shall give an employee a period of at least 11 hours free
from performing work in each day
This seems to suggest the potential for 13 hr days being acceptable (without employee consent)
S. 18(2)
Exception (to 11 hrs off) Subsection (1) does not apply to an employee who is on call and
called in during a period in which the employee would not otherwise be expected to perform
work for his or her employer
S. 18(3)
Free from work b/n shifts An employer shall give an employee at least eight hours free
from work between shifts unless the total time worked on successive shifts does not exceed
13 hours or unless the employer and the employee agree otherwise
S. 18(4)
Weekly or biweekly free time requirements An employer shall give an employee a period
free from the performance of work equal to
(a) at least 24 consecutive hours in every work week; or
(b) at least 48 consecutive hours in every period of two consecutive work weeks
Page # 93
S. 19
Exceptional Circumstances An employer may require an employee to work more than the
maximum number of hours permitted under section 17 or to work during a period that is required
to be free from performing work under section 18 only as follows, but only so far as is necessary
to avoid serious interference with the ordinary working of the employer’s establishment or
operations:
1. To deal with an emergency
2. If something unforeseen occurs, to ensure the continued delivery of essential public
services, regardless of who delivers those services.
3. If something unforeseen occurs, to ensure that continuous processes or seasonal
operations are not interrupted.
4. To carry out urgent repair work to the employer’s plant or equipment.
S. 20(1) Eating Periods An employer shall give an employee an eating period of at least 30 minutes at
intervals that will result in the employee working no more than five consecutive hours without an
eating period
Note: S. 20(2) Can substitute 2 eating periods equally 30 minutes (i.e. two 15 minute breaks)
Note: This is a new exception that did not exist in the previous version of the statute
Part VIII – Overtime Pay
S. 22(1) Overtime Threshold An employer shall pay an employee overtime pay of at least one and onehalf times his or her regular rate for each hour of work in excess of 44 hours in each week or, if
another threshold is prescribed, that prescribed threshold
S. 22(2) Averaging Agreements if the employee and the employer agree, the employee’s hours of work
may be averaged over a period of not more than four weeks for the purpose of determining the
employee’s entitlement to overtime pay
S. 22(3) Term of Agreement An averaging agreement is not valid unless it provides for an expiry date
and, if it involves an employee not represented by a trade union, the expiry date shall not be
more than two years after the day the agreement takes effect
Note:
Previously, S. 24 of the ESA stated that overtime pay kicked in after 44 hrs in one week – there
was no provision that allowed for an averaging of hours over 4 weeks. Need consent for
averaging over 4 weeks
Eg. 16 hrs – 1 week, 16 hrs – 2 week, 28 hrs – 3 week, 28 hrs – 4 week = 176 hrs/4 weeks. The
worker isn’t entitled to overtime pay unless employee consent
Page # 94
(3) Collective Bargaining Regime and Overtime Hours (ESA Applies)
 ESA does apply to union
 Nothing special about hours of work in CA
 Unions can bargain for hours of work and overtime pay and whatever the union agrees is binding on
all employees
 Therefore, collective agreements often contain restrictions or definitions of what working day is
(usually provides for shorter working day than ESA) - ie. 8 hr/days and 40 hour weeks (increasingly 7
and 35)
 CA also often speak to premium rates of pay which may include double time
 CA also often contain provisions about how overtime hours are to be distributed amongst workers in
the bargaining unit (often based on seniority – get to work overtime if they want) and the right of
workers to refuse to work beyond the hours stipulated in the agreement
 Some argue that unions should stop negotiating better overtime provisions and try to force the
employer to hire more employees - these are political judgments unions have to make in balancing
different BU interests (i.e. no overtime hire more employee)
Work on Sundays
 This issue has been settled since the Lord’s Day Act was debated in light of Charter rights – S.15
o However, s.50(2) of the ESA gives retail workers the right to refuse Sunday work and working on
holidays
o now the only group that has a statutory right not to work on these days
o also provision that if employee terminated for exercising this right, there is power for ESO to
reinstate the worker to position - one of only two times they have right to reinstate (other is in
pregnancy issues)
Vacation Pay
S. 33(1)
Right to Vacation. An employer shall give an employee a vacation of at least 2 weeks after
every 12 months of employment
S. 34
S. 35
Timing of Vacation. An employer determines when employee takes his/her vacation subject
to: (1) the vacation must be completed no later than 10 months after the end of the 12 month
period for which it’s given and (2) the vacation must be a 2 week period or 2 periods of 1
week each
Vacation Pay. After 12 months, employee is entitled to 2 weeks paid vacations (S. 33(1)) –
the rate of pay being not less than 4 % (s.35) of the wages the employee earned during the 12
month period for which the vacation is given
Page # 95
2. The Duty to Provide Work
Can an employer unilaterally suspend the employment relationship for a period of time? (is the employer
under an obligation to supply work?)
(1) Common Law and the Duty to Provide Work
Collier v. Sunday Referee Publishing Co. (1940) – no duty to provide work however duty to pay
Court: • provided the employer is paying the employee, there is no duty to provide any work
• there are certain circumstances where there may be a duty to provide work - generally in
scenarios where person works on piece-rate basis or commission basis - need to provide them
with the opportunity to earn their income
• other exceptions may include contracts where an employer does not allow a theatrical person
to do their role – costing them both money and publicity
• thus, if employer chooses to temporarily suspend the contract of employment, the contract
was still in effect and they have a duty to continue to pay
Termination of Employment Contract
 Most people are hired under an indefinite contract of employment (not sure how long)
 Therefore, in order to terminate the contract have to (1) Give Reasonable Notice and (2) There has to
be a cause for terminating or (3) Frustration – contract can’t be performed (permanent illness) no fault
 Note: if person terminated is entitled to be given notice – then the employee is entitled to
remuneration for the period of time they were to have notice (eg. If person is entitled to four week
notice but is given no notice – they are entitled to remuneration for those four weeks)
Devonald v. Rosser (1906) – employer has duty to find an employee work – can’t unilaterally lay off
employee and not pay the employee
Facts: • worker wages were paid on basis of piece-work. Written contract of employment had some
unusual features - the contract can only be terminated by either party by giving 28 days
notice, which must be given on the first day of new month. Employer decides on July 20
that b/c business was down he would suspend the employee’s contract of employment – he
told employee that he was laid-off as of July 20 and then on Aug. 1 he gave the 28 days
notice of termination (the time that the notice should be given)
• Two time periods to consider: 1. July 20-31
2. August 1-28
• Second period is relatively easy - if you terminate employment relationship by giving notice,
then either have to pay employee for work during the period and give them work, or you give
them pay in lieu of notice
• First period of time - could employer unilaterally suspend contract of employment in form of
temporary lay-off prior to the notice period
• Employer argues: they never expressly or impliedly agreed to provide P work and if there is
such an agreement, it’s custom for them to temporarily shut down their work and suspend
employment when they didn’t have orders
Issue: • Does an employer have a right to unilaterally suspend a contract of employment and not
provide work or pay?
Trial: • P entitled to be paid for 2 week lay-off. Employer can’t temporarily lay off employee and
not pay them
Reasons: relies on contract mutuality - employee has implied right by contract to be provided while the
contract lasts with reasonable amount of work (unless custom to the contrary)
Page # 96
The understanding b/n two business men is that the employer would provide work and the
employee would be paid for performing the work
• It would be strange if such a right weren’t implied – bargain would be very one-sided for
the employer - employee has to be at beck and call of master and even though he’s ready
and willing to work and make money – can’t make money unless employer decides to
give him work
• worker can’t unilaterally decide to suspend contract so why should employer be entitled
• The employer has a duty to find the employee work
Employer has to find employee work to allow employee to do his part of the bargain
CA:
Reason:
•
There are circumstances where contract could be suspended without the obligation to pay Court asking itself what the understanding of the parties was in terms of how certain risks
were to be shared
• Implied Understanding b/n Two Businessmen:
• If cause of suspension due to unforeseen act – employee entitled to pay for being laid off
• If cause of suspension due to something that the employer and worker have some
common control over – shared risk, contract suspended and no obligation to pay
• However…if cause for suspension under sole control of employer then they bear the
risk and have obligation to pay
• Here: suspension was result of shortage of work - employee has no control over this,
while employer is in a better position to control this through prudent planning and
therefore they bear the risk
• however, intuitively there seems to be a lot of the risk on the market which may be
beyond the employer’s grasp also - however, the Court says that employer is in a better
position to know, they bear the risk by going into business, customary understandings
• Exception: If there’s an obligation to pay that is implied into the contract of employment the
only way to get out of it, is if there’s a custom
• The employer can only be relieved of obligation to pay by pointing to custom which allows
them out - must be notorious (everyone in the community has to be aware of the custom),
certain (it has to be clear to everyone) and reasonable (it has to be a fair custom)
Conclusion: Obligation on employer to pay and no custom that would let him not pay
• Here: they say the custom of shutting down plant and laying off employees when there’s no
work, is not notorious and definitely not certain
• In terms of reasonable - to impose all risks and perils on one side and leave the other free is
not reasonable, therefore, not reasonable for employer to be able to suspend
• Reason: Two businessmen (employer and employee) have to make a living. It would be
unreasonable to let the worker starve b/c he’s under a contract to work and, thus employer has
to find employee work
Notion that employers cannot unilaterally lay-off workers without the obligation to pay them wages
Page # 97
Law of Canada Today – Duty to Provide Work
Does this common law perception still exist today in Canada?
Depends on nature of the employment relationship
Stolze v. Addario (CA) – unless custom that employer has right to temporarily lay off employee, an
attempt by employer to do so is breach of contract and employee can consider it as termination
Facts: • Senior employee (S) received letter that purported to be temporary lay-off notice. Employee
claimed he was terminated and was therefore entitled to termination and severance pay (i.e.
treated as being fired). They took the letter to employment standards where the adjudicator
found temporary lay-off and therefore not entitled to severance and termination pay divisional court upheld the decision but it was ultimately reversed by the OCA
OCA: • objectively, this was permanent termination and not a temporary lay-off and therefore
employee was entitled to severance and termination
 Also held – temporary lay off can lead to constructive dismissal (not directly fired but employee
position is altered by employer such that employee is forced to quit)
 Separate issue was whether employer had right to put worker on temporary lay-off or suspension of
contract
 Court held: if there is no custom or established practice that employer has right under the contract to
temporarily lay-off employees, the attempt by employer to do so constitutes fundamental repudiation
of employment contract itself
• unless implied right established through practice, no right to temporarily lay-off and it’s a breach
of contract
• option (for certain salaried employees such as senior employees) - either accept the temporary
lay-off (wait until employer rehires them) or treat it as termination and go after termination and
severance pay
• therefore, allows employee to treat this as termination, breach of contract and entitled to damages
under that
If there’s no custom or established practice that employer has right to temporarily lay off
employee, the attempt by employer to do that is fundamental repudiation of contract and the
employee can treat it as termination and get severance pay
Is the OCA decision in Stolze applicable to the lay-off of an hourly wage employee?
 First, its important to note that the court viewed the inability of the employer to lay-off the
employee as an implied term of the employment contract – as such, you need to look to see if the
employer or even more broadly that the industry has established principles with respect to lay-off
o In Ontario, for hourly workers there is an established principle that there is a right to
temporarily lay-off of workers - the Stolze case was an employee in more managerial role
o therefore, generally no right to treat contract at end and sue for termination and severance
o in reality, for most hourly workers the better option is to accept the lay-off anyway (whereas
if senior employee – want to get the job back b/c they have seniority)
 in Canada, however, this seems to have deteriorated a bit - especially for hourly workers employers can temporarily lay workers off without having to pay them during the lay-off
 therefore, it would be very hard to win an action claiming that lay-off amounted to termination or
that there is a duty to pay during the lay-off
Note:
Stolze case seems to separate types of workers - more senior employees may still have the
protection of the former views of the court as opposed to the more modern approach
Page # 98
(2) Duty to Provide Work & the Collective Bargaining Regime
James Howden & Parsons (1974) – there’s no implied obligation on employers to provide work,
must be an express clause in CA to restrict management rights
Facts: •
Employer decided not to open for half-days around the holidays. Told employees not to come
in and they weren’t going to pay them (i.e. lay-off before holidays without being paid). Union
grieved claiming breach of CA
Union argues: Breach of CA by management’s unilateral decision to lay people off for half
day b/c of ‘hours of work clause’ – which says employees are entitled to 8 hr day/40 hr week
Arb: • There is no implied term in CA that there is obligation on employer to provide work
throughout contract or to pay them regardless (i.e. nothing in the ‘hours of work’ clause that
restricts management rights to shorten the work day or week)
• therefore, the union has to show that there’s a provision in CA that limits management’s right to
not provide work – express clause
• there is no express provisions restricting lay-offs - however, there is a provision for normal
workdays and workweeks - does this articulation of what constitutes normal working periods
create any restriction on management’s rights to dictate the amount of work in the week
• arbitrators take position that hours of work clause does not in any way restrict management’s
rights to specify the hours of work – management can still decide on any particular day or week
that the hours may be shorter
Re James Howden does not suggest that unionized workers are better off than non-unionized
workers. Arbitrators take position that the hours of work clause does not restrict management’s
rights to specify hours of work. Whereas under CL (non-unionized employees) are under the duty
of the employer to pay
Page # 99
Lay-Offs
What have unions done in an attempt to deal with the problem of lay-offs?
 Can negotiate provisions to protect certain employee benefits so that the workers continue to
enjoy the benefits during the lay-off
 union may also negotiate for the payment of supplementary income to augment EI payments
 seniority provisions - may restrict the employer from laying off whoever they want to, there is a
procedure that must be followed based on seniority
 The problem – have to determine what a lay-off is for these provision to be allowed
Definition of Lay-Off
Re United Automobile Workers and Northern Electric Co. Ltd (1971) – Any reduction in work (even
15 minutes) is considered lay-off
Facts: • the UAW negotiated for employees two kinds of protection. One was procedural (if employer
laying off workers they must do so according to procedure spelled out in agreement) and
secondly there is provision for lay-off allowance (certain economic benefits have to be
provided to workers during lay-off). Northern Electric had two bargaining units - production
and office employees (both covered by same union). Production employees strike. As a result
there is not enough work for office and the employer therefore interrupts some people’s work
- told not to come in. Union grieves that this is a lay-off and must be done according to the
layoff provision in the CA and paying the lay-off allowance
Issue: • What is a lay-off for purposes of CA (i.e. is it a lay-off when employee is sent home due to
lack of work), when and in what circumstances do the protections in the CA kick in?
Arb: • in the past - lay-off involves temporary severance of employment relationship for purpose of
reducing employment force in order to meet manning requirements of the employer
•
doesn’t matter why there is need for reduction (ie. strike, economics, etc.) - anything
that causes employer to decide to reduce workforce to meet requirements constitutes
lay-off and the provisions in the CA kick in
It does not matter why there is a need for a reduction in the workforce but if there is a reduction,
even of 15 minutes, this constitutes a lay-off and the employer must comply with lay-off provisions
of the collective agreement
 Arthurs in the case - “lay-off must be regarded as any period during which employees are
required to cease working and includes being sent home from work as little as 15 minutes before
the end of a regular working period” – indicating even the slightest reduction could plausibly be
viewed as a lay-off
Job Sharing = Lay Off b/c it reduces hours of work
 Job Sharing (eg. Instead of laying some people off and keeping others, decrease everyone’s day
from 8 hrs to 6 hrs) constitutes lay-off – according to Arthurs’ argument it seemingly would be
lay-ff because the shared work results in reduced work and a subsequent loss of income, etc.
 The question for arbitrators is - which strand of case law do you follow?
o one which protects managements rights – thus allowing them to unilaterally change hours of
work across all employees
o or do you read the lay-off provisions negotiated in a CA so that in order to be effective
arbitrators must limit the rights that employers would otherwise have
Page # 100
What Constitutes a Lay-Off – Three SCC cases that deal with the question of lay-off
Air-Care Ltd. v. United Steelworkers of America (1974) - General Reduction of Hours – not a lay-off
Arb: • initially held: shortening of hours across the board constituted lay-off – fettered
management’s rights and stated that management was obligated to comply with the lay-off
provisions of the CA – even minor interruptions of work are a lay-off for the purposes of
collective bargaining
SCC: • on judicial review, the SCC ultimately stated that a reduction in hours of work does not
constitute a lay-off and therefore the provisions of a CA with respect to lay-offs are not
triggered – this decision seems to indicate that SCC favours an approach that gives deference
to managerial prerogative when it comes to the structure and organization of the workforce
Note:
The SCC defined lay-off as a reduction in an employer’s overall workforce, not a
reduction in the hours of work
SCC says that any reduction in the hours of work does not constitute a lay-off and therefore
management need not consider the provisions of the CA with respect to lay-off protocol. This is the
preferred approach
Note:
Which approach is better, to allow for lay-offs of particular people or to share the losses across
the board through reduced work hours?
Should the employer make this type of decision unilaterally or should it be an issue subject to
negotiation in the collective agreement? Should an arbitrator read management right provisions
more narrowly and give more effect to the provisions actually negotiated and agreed upon in the
CA?
Re Canada Safeway (1998) SCC – lay-off requires a cessation of work
Facts:
Individual employee was grieving on the basis that his hours were changed – there were two
kinds of hours, call-in hours and regularly scheduled hours. The employee was placed on
call-in hours. Employee grieves: unequal reduction of hours, therefore, a constructive lay-off
Arb:
An alteration of hours is a lay-off which triggers the lay-off provisions of collective
agreement
SCC:
rejects arbitrator’s decision. A lay-off requires a cessation of work not just a change in the
work. It’s a quantitative analysis, not qualitative
The employer’s refusal to provide scheduled hours to the employee may potentially serve as a
valid argument for a constructive dismissal in an independent employment scenario, however,
it cannot be construed as a constructive lay-off for the purposes of collective bargaining
 Change from schedule to call-in hours doesn’t matter. Not something worthy of protection b/c the
workers didn’t lose anything, they still got paid
 Concerned with the notion of constructive lay-off getting too broad. Therefore, the court confines layoff - only when there’s a cessation of employment (therefore, it doesn’t capture all those other
scheduling changes as lay-offs)
Unless the hours were reduced to the point that there has been a cessation of the employer’s
employment, there has been no lay-off
Page # 101
Re Battleford (1998) SCC - Uneven reduction of hours, not general reduction for all employees is a
lay-off
Facts:
Individual employee was grieving on the basis that his hours were reduced. Not everyone’s
hours were shortened, only some were
Issue:
Does the decrease in hours constitute a lay-off and the provisions of lay-off should be used?
Arb:
A reduction in hours is a lay-off which triggers the lay-off provisions of the CA
SCC:
Unequal reduction in hours is equal to constructive lay-off which causes the lay-off
protection provisions of the CA to be used
Where one employee is singled out and has their hours reduced, such conduct may amount to a
constructive lay-off – this is a reasonable conclusion to draw. As such, the lay-off provisions of a
collective agreement are then triggered by such conduct. A reduction in the amount of hours has to be
significant to be considered a cessation – exactly what “significant reduction” means is unclear
Note:
Note:
Note:
In this case the court has more respect for the arbitral decision (SCC upholds the decision of
the arbitrator)
Broader view of what constitutes a lay-off, court expands the definitions so that the protection
provisions apply (distinguished from Air Care – general reduction of hours not lay-off)
Not clear the kind or how much of disruption has to be before they will qualify it as a lay-off
(move back to the approach in Air Care)
The SCC will step in and exercise supervisory jurisdiction and impose their view of what
a layoff is – not up the arbitrator to decide
1. General Reduction in working day (Air Care) – not lay-off
2. Shorten hours for some but not others – uneven reduction of work is lay-off
3. Play around with schedule in another way – not lay-off unless no work
Page # 102
(3) Employment Standards Act Provision and Lay-offs
s.57(1)
Employer Notice Period. Notice periods with respect to termination – increasing with time
worked (I.e. less than 1 year work – one week notice, 1-3 years work – 2 weeks notice, 3-4
years work – 3 weeks notice)
S. 58(1)
Notice, 50 or more employees. Despite S. 57, the employer shall give notice of termination
in the prescribed manner and for the prescribed period if the employer terminates the
employment of 50 or more employees at the employer’s establishment in the same four-week
period (described in Reg. 288.01 S. 3(1))
Note:
The notice doesn’t change with the length of time of employment but with the number of
employees that are dismissed at the time
Reg 288.01
S. 3(1) Notice, 50 or more employees
1. 50-200 employees - 8 weeks notice
2. 200-500 employees – 12 weeks notice
3. 500 + - 16 weeks notice
S. 56(1)(c)
Temporary lay-off does not constitute termination and therefore no notice has to be given
S. 56(2)
Temporary lay-off
(a) a lay off not more than 13 weeks in any period of 20 consecutive weeks
(b) lay-off not more than 13 weeks in a period of 20 consecutive weeks, if the lay-off is
less than 35 weeks in a period of 52 consecutive weeks and
i.
the employee continues to receive payment from the employer
ii.
employer continues to make payments to employee’s pension and insurance plan
iii.
employee receives supplementary unemployment benefit
iv.
employee is employed at another place during the lay-off and would be entitled
to receive supplementary unemployment benefits if not employed during lay-off
v.
employer recalls employee within time approved by Director, or
vi.
if an employee not represented by a union is recalled by the employer within the
time set out in an agreement b/n employer and employee
(c) if employee is represented by union, a lay-off longer than the lay-off described in
clause (b) where employer recalls the employee within time set out in agreement b/n
employer and union
S. 56(3)
What constitutes a week lay-off. week in which employee receives lees than ½ their regular
wages
Note:
Bottom Line:
if there are lots of these weeks – permanent lay-off
Employer has the right to lay-off without pay. Only when temporary lay-off becomes
permanent – they have to pay employee
Page # 103
Duty of Employees
 To what extent have the duties of the employee changed since the master and servant days
o Duty to obey
o Duty to exercise skill and care
o Duty to provide fidelity and good faith
Note:
The first two duties exist during the time of employment and not after the contract is over,
however, the last duty could plausibly extend beyond the length of the employment contract
Duty to Obey
(1) Common Law
Laws v. London Chronicle (1959) – Implied duty to obey. Only disobedience if willful
Facts: • Supervisor gets mad at meeting and storms out and tells employees to follow. General
manager says to stay put. Employee (Laws) is confused and therefore leaves (follows her
supervisor). When Laws comes back to work the next day she is terminated for disobeying
orders
Issue: • what limitations, if any, are there on the duty to obey?
Court: • Laws was unlawfully dismissed and awarded damages
Reason:
Her conduct didn’t amount to willful disobedience (deliberate disregard) of an order it is
clear that there is a duty to obey - this is not contested:
• “generally true that willful disobedience of an order will justify summary dismissal,
since willful disobedience of lawful and reasonable orders shows complete disregard - of
a condition essential to the contract of service, namely, the condition that the servant
must obey the proper orders of the master and that, unless he does so, the relationship is
struck at fundamentally
• Source of the duty to obey?
• Implied term: would be bizarre if employer didn’t have the right to control the capacity of the
worker since they purchased the right to direct their labour power
• What constitutes disobedience? Was there a breach of obedience?
• what was it about her situation that allowed her to get away with disobeying the orders of
general manager?
• in order to be disobedience, it has to be willful disobedience or defiance - she was
trying to obey but simply obeyed the wrong master b/c she got the hierarchy wrong
• Here: Lack of intention to disobey – therefore, it wasn’t disobedience
Note: Even an act that is willful disobedience might not justify dismissal. Have to look at the employee
history (have they done this before), was the act minor etc.
In order for there to be a breach of the implied duty to obey - which is a breach that strikes at the
very heart of the employment relationship - there must be willful disobedience of a reasonable and
lawful order within the scope of employment
Page # 104
Limits on the Duty to Obey
 An employee can willfully refuse the employer’s orders when: unsafe work, unlawful orders (i.e.
if business short on cash employee can refuse employer’s order to steal) unreasonable orders (i.e.
if the person is ordered to do things outside the scope of the profession)
 Ottoman Bank v. Charkarian (1930) and Re Woodbridge Foam (1995) states that where there’s
a real threat to an employee’s safety, employee may violate the duty to obey (i.e. right to refuse)
 In Ontario, the s. 43 of the Occupational Health and Safety Act gives a worker the right to refuse
unsafe work, while s.50 prevents any reprisal for such a refusal.
 More recently, it seems the duty to obey has been collapsed into the duty to act competently –
Kozak v. Krispy (1988) and Casey v. General Inc. (1988) stated that where an employee has a
reasonable excuse for disobedience, such as a personal reason, this may eliminate the employer’s
right to dismiss for just cause without notice
(2) The Duty to Obey Under Collective Bargaining
If employee thinks the order shouldn’t be given, still have to obey – “Obey now and grieve later”
Ford Motor Company 3 L.A. 779 (Shulman) – obey now and grieve later
Issue: • is there a duty to obey when union feels that orders are in violation of the CA?
Court: • “Obey Now, Grieve Later” While grievance is being pursued production must go on
neither party can be the final judge as to whether the contract has been violated
• while this production must go on, someone must have authority to direct the manner in which
it is to go on until the controversy is settled - authority is vested in management
• must be vested there because they retain the responsibility for production and b/c the
grievance procedure is capable of adequately compensating employees for abuse of authority
by supervision
Note: orders that are given are presumptively valid and employees must obey. They can challenge them
later through an arbitrator
Note: the union can grieve discipline for disobedience
“Obey now, grieve later” - production must continue while a dispute is waiting to be settled – in the
interim, management shall retain responsibility for the production and decision making process –
the assumption underpinning this rule is that the grievance procedure is capable of adequately
compensating employees in the event that their grievance is valid
•
•
Common now that CA have management’s rights clause - they have the general power to direct the
workforce, etc. except to the extent that their rights are explicitly fettered by the provisions of the CA
Also, should be no work stoppage during the duration of the CA - disputes to be resolved through the
grievance procedure - obey now b/c not entitled to stop work must grieve later
Page # 105
Exception to the Obey Now Grieve Later
Kimberley-Clark of Canada (1973) – don’t have to obey an unlawful order
Facts: • Two separate plants. Employer told union they wanted to extend working day b/c other plant
was on strike and they wanted to make up for lost production at the other plant. Union
objected and told members not to scab (don’t want to go against the other employees).
Employer implemented extended hours. In protest, employees leave. Employer suspends says disobeyed lawful order.
Issue: • can employer order employees to work overtime (breach of ESA)?
Arb: • management’s rights allow them the right to order overtime on employees in the
absence of any restriction to the contrary in the collective agreement – this is so, even if a
collective agreement does not have a management’s rights clause
• thus there is clearly a duty to obey this order
• however, the arbitrator found this was an unlawful order b/c it was in breach of the
minimum standards in ESA, as such, there was no duty to work now, grieve later because
the order was an unlawful order
• I.e. if the order is unlawful (not legal) the failure to follow it isn’t proper cause for discipline
Note: to determine whether order is lawful – objective test (was the order actually unlawful, not
whether the employee thought it was unlawful)
An employee’s refusal to obey an unlawful order - including a breach of the ESA – is not a violation
of the implied duty to obey OR the work now grieve later maxim. Management rights allow the
employer the ability to demand over-time from its employees as long as it complies with the ESA
Note:
There are exceptions to the obey now, grieve later rule
(1) Health and Safety – the employee must
(i) possess an honest belief that their health or well being is endangered
(ii) communicate this belief to their supervisor
(iii) the belief is “reasonable” in the circumstances
(iv) the danger is sufficient to justify the particular action taken
Thibodeau-Finch Express Inc. (1987)
National Search & Chemical Co.(1976)
International Nickel Co. (1974)
(2)Union Officials – if union official, acting reasonably, determine that it’s necessary to refuse to
comply with an order of their supervisor in order to attend to union matters and avoid irreparable
harm to the employees they represent, they may refuse work on the spot.
Drug Trading Co. (1991)
Gulf Canada Clarkson Refinery. (1982)
Firestone Steel Products of Canada. (1975)
(3) Might be able to refuse to comply without negative repercussions in the collective bargaining
setting if demands are made in relation to: personal appearance requests City of Toronto (1989)
unless the situation is easily remedied by the employee by, for example, purchasing an article of
clothing UBC Health Sciences Centre Hospital Society (1985) or tying one’s hair back Pavco
Plastics Inc. (1991)
Page # 106
(4) The right to privacy in employment may include the right to refuse personal searches Comco
Metal Products (1972).
(5) Reasonable personal excuses that involve, for example, the provocation of an employee by an
employer Douglas Aircraft Co. (1972).
Enforcement of Duty to Obey
 Collective Bargaining: the employer is able/forced to fashion a variety of different types of
disciplinary responses to employee disobedience by virtue of the process
o CA contain just cause provisions which often require evidence of progressive discipline
o The employer has to establish on a balance of probabilities the cause for discipline and
the reasonableness of the discipline in grievance arbitration
 Common Law: the employer can normally only resort to summary discharge (no notice)
o however they possibly could refuse to hand out bonuses or give promotions
o as for suspensions, the traditional common law position is that in absence of some
express provision to the contrary in the contract of employment or well established
industry or employer custom, there was no right to suspend workers for disciplinary
reasons Haldane v. Shelbar (2000)
Page # 107
The Duty to Exercise Skill and Care
(1) Common Law
 It was once thought that the failure by an employee to exercise adequate skill and care entitled the
employer to discipline an employee without more – instant dismissal without notice
 Rationale: the employee by accepting employment, implied that they had competence to do job
 Now, however, with the onslaught of radically changing technologies and work environments,
lack of skill by an employee who is doing their best no longer permits summary termination.
Willful and gross incompetence, often evidenced by disobedience, is necessary
 Bottom Line: no implied duty to possess requisite skills, however duty to apply themselves to
work
 Problem: can an employee be summarily terminated for unsatisfactory but non-willful work
performance (i.e. employee isn’t intentionally trying not to work but just isn’t able to work)
 Can’t terminate summarily, however…
 Employer ALWAYS has the right to terminate workers by giving notice (the reason is irrelevant)
o ESA 2000 s. 54 states no person shall terminate without notice
o ESA 2000 s. 55 states that prescribed persons do not require notice
o Reg 288.01, S. 2(1)3 – An employee who has been guilty of willful misconduct,
disobedience or willful neglect of duty is not entitled to notice
(3) Collective Bargaining and Duty to Exercise Skill and Care




Workers can only be discharged or disciplined for Just Cause (not by giving notice)
Thus, employer has to show the arbitrator reason for the discharge
Willful neglect of duty – justifies discipline (i.e. it constitutes just cause)
Unsatisfactory performance (person is making reasonable effort to do job but can’t do it well)
 Management has the right to establish job qualification and performance standards but they’re limited
by: (1) Express language in CA, (2) Implied Limitations – Duty of Fairness, (3) Statutory – OHSA,
OHRC
Management Rights: Job Qualifications and Standards
 Employee valuation must be reasonable – only expected to perform job at level of reasonably able,
skillful and efficient worker of same classification
 Management also determines how many people will be needed to get the job done (i.e. more people –
less work or less people – more work)
Aro Canada Ltd. (1975) – Implied limitation on managements rights in that they have to be
exercised reasonably. Employee only expected to perform job at level of reasonably able, skillful
worker of same classification
Facts:
Mrs. Emburgh worked in warehouse as stock person. Every once in a while the job requires
her to carry an 85 pound box down a ladder. She requires help to do this. Employer says not
prepared to have someone assist her all the time. B/c she can’t do it without assistance, and its
not a two person job – fires her
Issue:
Is termination justified (is there any limitations on management from re-defining the job
qualifications or performance expectations (i.e. is re-classification an option)?
Page # 108
Arb:
Reason:
Analysis:
Termination was not appropriate. The finding that she wasn’t able to perform the job was
unreasonable. No just cause therefore she was reinstated
Just b/ an employee isn’t able to perform all or part of the tasks of a particular job, doesn’t
mean employee is unsuitable for any employment with the employer – i.e. no termination
Appropriate Solution: Temporary lay-off (not completely sever agreement) until such time
that her seniority rights allowed her to bump into another position that she would have been
“competent”. Being laid off completely eliminated her “recall rights” under the CA (i.e. she
should have been able to invoke her seniority rights against less senior employee who had a
job that she could do)
Arbitrator looks at whether there is any limitation on managements right to set standards
o No Express Limitation (nothing in CA)
o Implied Limitation: Management must act reasonably (not arbitrarily, discriminatorily or
in bad faith) when changing job qualifications or setting standards
o Statutory Limitations: HRC – when employee can’t meet employer qualifications – look
at whether the qualification is BFOR and the duty to accommodate
o OHSA – can’t have standards against health and safety of employees
Determining Just Cause for Termination
 In order to determine if an employer had just cause to remove an employee from a particular job for
poor performance, an arbitrator looks at
(1) the job qualifications
• employers often establish job qualifications as part of collective agreements – they can also
do so through exercising their managerial prerogative during the life of a collective
agreement absent any provisions to the contrary
(2) limitations on managerial prerogative in establishing qualifications
• implied by arbitrators, management must not create or alter job qualifications arbitrarily,
discriminatorily or in bad faith
• arbitrators are seemingly cognizant of the potential that management may arbitrarily change
job requirements to sub-route the seniority provisions or get rid of an employee
• can’t be set at some unreasonable level that is beyond reasonable expectations and interests in
production, etc.
(3) the standard of performance demanded by the employer
• In the absence of provisions to the contrary, management reserve the right to set performance
standards – however - if management wants to remove someone due to poor performance, the
standard of performance that they can require is (assuming no express provisions) that
which an ordinary and reasonable employee would perform - not entitled to insist on
perfection
• must accept the relative strengths and weaknesses of each employee so long as they are
able to meet some general standard of ability
• test is that of reasonable ability or the ability of a reasonable, able, skillful and
efficient workman of the same classification
(4) the consequences of employees inability
• the employee does not have to establish that the standard is unreasonable – rather, the
employer has to establish that the employee’s inability to do the assigned task is unduly
disruptive to getting their tasks completed (just cause onus on employer in collective
bargaining regime)
Page # 109
In a claim that an employee failed to exercise reasonable skill and ability, the employer must show
that the employee failed to exhibit the ability of a reasonable, able, skillful and efficient workman of
the same classification
If an employer successfully argues that the employee is unable to fulfill the duties, the employer
must show that duties were essential to the workplace and not feasible to modify (subject to
OHRC’s BFOR test and duty to accommodate)
Re Aro – Part 2 – the amount of time the employee was suspended for wasn’t reasonable
Facts: Mrs. E was suffering from ‘work-related’ disabilities and subjected to harassment from
supervisors. The supervisor made a comment about her still needing help carrying the boxes and
she told him to “Fuck Off”. She was suspended for three days
Issue: Was the three-day suspension given without reasonable cause?
Arb: Can’t condone her behaviour and thus must show it’s unacceptability. However, held three-day
suspension too severe and decreased it to one day
Bottom Line: CL and CB – similar. Unsatisfactory job performance can lead to termination
Limits on duties of a certain job
• When an employee is unable to meet employer qualifications, might be useful to scrutinize the
qualifications in light of limitations imposed by OHRC (i.e. BFOR test and the duty to accommodate)
• Also look at OHSA – whether the qualification is so severe that it’s creating disabilities with workers
then it might be able to challenge the requirements
The duty to exercise skill and care and it’s impact on vicarious liability litigation
 If an employee is negligent by way of breaching the duty to exercise skill and care, McKee v.
Dumas (1976) suggests that an employer may be able to obtain indemnification from an
employee for damages paid out in a vicarious liability claim
Deductions for Poor work
ESA
S. 13
Deductions. An employer shall not withhold wages payable to an employee, make a
deduction from an employee’s wages or cause employee to return wages to the employer
unless authorized under this section (see S. 13(2), S. 13(3))
S. 13(2)
Statute or Court order. An employer may withhold or deduct from an employee wages or
cause employee to return wages if a statute of Ontario or Canada or court authorizes it
S. 13(3)
Employee authorization. An employer may withhold or deduct from employee’s wages or
cause them to return the wages with employee’s written authorization
S. 13(4)
S. 13(2) and S. 13(3) don’t apply if the statute, order or written authorization from employee
requires employer to remit withheld or deducted wages to a third person and the employer
fails to do so
Page # 110
The Duty of Good Faith and Fidelity
 this is a duty implied by law into the contract of employment not to injure one’s employer by
conduct that amounts to the abuse of trust
 Obligation on employee to serve employer honestly and in good faith
 Scope of Duty:
o Dishonest – grounds for summary dismissal and can sue employee for damages
o Fidelity – working for self on employer’s time
o Protect trade secrets and confidential information
o Harming employer’s business
(1) Common Law
Hivac Limited v. Park Royal Scientific Instruments Ltd. – can’t do anything to employer’s detriment
Facts: • P made midget values for hearing aids and had monopoly on product. Rival firm starts up.
One of production engineers goes to work for competitor secretly (while still working for PO)
and discloses information about P’s processes. The rival company also hires 5 skilled
production employees from P’s company to work for competitor while still working for
plaintiff. P learns of it and terminates engineer and seeks injunction to prevent rival from
hiring its workers. Claimed that they are breaching contract by working for competitor on
spare time
Issue:
What is the scope of the duty of fidelity to stop an employee from working for competitor in
spare time?
Court: • Injunction granted
Hivac sues for an injunction to stop competitor from procuring employees - they also sue
competitor in tort for inducing a breach of contract – inducing employees to breach their
implied duty of good faith and fidelity to their original employer
• struggles with issues or whether there are general or specific skills at issue
• well known distinction between a man’s skill, which is his own property, part of his
own equipment, and confidential information which he acquired during his service
• therefore, just b/c they have gained the skills under the employer, not a breach of faith
and fidelity to take those skills elsewhere – however, can’t take confidential information
or trade secrets
• trying to create balance between employer’s interests in protection of confidential
information and employee’s ability to use skills after employment
• what is the problem with employee working for another after hours then if they are not using
confidential information?
• doing something off-hours that is detrimental to employer’s legitimate business interests
is a clear breach of the implied duty of faith and fidelity and discipline can be imposed duty not to do something against employer’s interests
• Here:
• Court can’t find disclosure of confidential information of employer’s business
However…
• Concern with the closeness of the relationship (new employer and employee knowledge)
• Highly specialized techniques are learned and its hard to separate them from one
company to the other
• Conclusion: Breach of fidelity, injunction granted
The duty of good faith and fidelity includes the duty not to do something against the employer’s
interests (i.e. must be a detriment to employer’s business) and can be extended to off-duty hours
Page # 111
Extent of Duty of Good Faith and Fidelity
1. Regular Employees
The duty will depend on one’s familiarity with the industry to which they work, the extent of their
knowledge of secrets, whether or not the employer actually has a protectable confidential interest at stake
2. Fiduciary Employees
Fiduciaries, by virtue of their important role and position, cannot disclose info on their own time or after
the contract ends, nor can they personally take advantage of business opportunities that they became
aware of during the course of their employment
Restrictive Covenants
 All these implied duties can be changed or altered by express agreements know as restrictive
covenants
 Employer can ensure confidential information is protected…employees have to enter into restrictive
covenants (limit their ability to work for competitors w/in industries, time and geographic boundaries)
 This causes concern about anti-competitive behaviour (employer’s unduly tie up the labour market)
 Nordenfelt v. Maxim (1894) stated restrictive covenants will always be read down by the courts if
they are unreasonable in that they severely restrict one’s ability to re-enter the job market. They must
(1) protect a legitimate proprietary interest
(2) be reasonable in terms of temporal length, geographic area, activities prohibited and
overall fairness (it’s too restrictive and prevents person from getting other employment)
(3) the terms being clear, certain and not vague
(4) be reasonable in terms of public interest (i.e. must allow for competition)
Elsley v. J.G. Collins(1978) SCC the court stated that a more rigorous standard must be applied when
assessing restrictive covenants in the employer/employee context because of the potential imbalance of
bargaining power which could lead to oppression and denial of the right of an employee to exploit
knowledge and skills obtained during employment
Employer Interests (protection from unfair competition)
The following employers interests should be balanced
1. Employer’s interest in not being harmed by confidential information the employer has
Faccenda Chicken – Factors to determine if employee is being unfairly harmed
1. Nature of relationship b/n employee and employer (higher vs. lower level employees. Higher
level employees are fiduciaries – they have special duties beyond those of normal employee)
2. Nature of information – Three types of information (i) trade secrets (ii) highly confidential (iii)
confidential (not all information in trade secrets)
Note: employee has duty not to disclose any of the three kinds of information, however only trade
secrets can be protected when employment relationship is over
3. Whether employer told employee the nature of the information (that it was confidential)
4. Whether relevant information can be isolated from disclosable information
2. Employers right to get new job
3. Public interest in competition
Page # 112
Remedies (for breach of good faith and fidelity)
 Employer can summarily terminate the employee
 Employer can enjoin a competitor employer to try and prevent them from employing former
employees
 Employer can sue a competitor employer for damages (loss of profit) arising out of the tort of
inducing breach of contract
 Employer can sue former employee for breach of duty
 Employer can sue a fiduciary for breach of duty and potentially unjust enrichment
Trade Secrets
 In order for an employer to show that their employee has breached the duty of good faith and
fidelity by divulging a trade secret, the employer must
(1) Show that the information was either expressly or impliedly meant to be kept secret
(2) The info could only be acquired through the course of employment
(3) The employer has a protectable interest - like special software, a secret sauce, or exclusive
client list
R.L. Crane v. Ashton (1949) defined trade secret as a plan or process only known to its owner and its
employees which allows the owner to gain a competitive advantage over its competitors who do not know
or use it
(2) The Duty of Good Faith and Fidelity in Collective Bargaining
 Even if contract doesn’t specify employee owes duty of good faith or fidelity – arbitrator will find it
intrinsic to the relationship
 Unionized employee who steals from employer – breach of good faith and fidelity – grounds for
dismissal
 Duty of good faith and fidelity can arise b/n union and employer in context of negotiations or union
officials while trying to carry out union duties
Re United Brewers Worker and Pepsi
Arb: the duty of good faith and fidelity is so important that it does not have to be reduced to writing
Beaver Foods (1996)
Case: Re Gray’s Department Stores Ltd
Facts: • Greiver worked for employer and set up competing business. Employer found out when
customer told him. No evidence that he’s soliciting business from employer’s clients. No
evidence there’s any overlap of business - none of employer’s clients have come there
Held:
Grounds for discipline but not dismissal
Reason:
Griever has no right to enter into competing business b/c it conflicts with his obligation to his
employer
An employee is not allowed to do any off duty conduct that is even potentially injurious to
employer’s interests. The fact that no harm has materialized is irrelevant – discipline is reasonable
in such instances
Page # 113
Nipissing Hotel Ltd. v. Hotel and Restaurant Employees and Bartenders International Union
Facts: • Unionized employees of hotel trying to negotiate new CA. Employees unhappy how
negotiations going so union official encouraged employees not to strike to put pressure on
employer but to picket during off-duty hours. The employer sought an injunction to put a
stop to the picketing
Court: • Granted injunction b/c union official breached good faith and fidelity owed by employee to
employer
during bargaining, a union official cannot induce a breach of duty of good faith and
fidelity by encouraging employees to conduct an unlawful strike – the implied duty still
exists. Union steward committed the tort of inducement
Note:
Court did this to take away one of the union weapons to put economic pressure on employee
De Havilland Aircraft of Canada Ltd.
Facts: • Union official was given leaked documents which indicated that employer was going to lay
off people. He published the document and was disciplined for using confidential, leaked
information to detriment of employer in union news bulletin. Employer claimed it was a
breach of good faith duty owed to employer. Employee grieved
Arb: • Upheld the discipline. Employer had just cause to discipline the employee
Ratio:
not allowed to use the information that is against interests of employer notwithstanding
the fact that this is important information for the people that they represent – discipline
is indeed reasonable and the conduct is worthy of discipline
Note:
competing duties. Union official owes duty of good faith and fidelity to employer AND to
bargaining unit that they represent. Here: arbitrator chose to favour duty to employer (i.e.
didn’t let employee use information against interest of employer even though it’s important
information to the people they represent)
Prof:
Doesn’t seem right to give higher priority to relationship b/n union and employer then union
and union members
Case: Nelsons Laundries Ltd. v. Manning (1965)
Facts: Collective agreement b/t the employer and the union contained a restrictive covenant. The
employer sought an interlocutory injunction to enforce the restrictive covenant and was
successful, the collective situation making no difference to the law relating to consumer lists –
which is ironic given that courts normally do not recognize collective agreements as valid
contracts
Page # 114
TERMINATION OF EMPLOYMENT CONTRACT
 The contract of employment may be terminated according to the terms of the contract, by mutual
agreement, by performance, by frustration, death, sale of the business, bankruptcy, and retirement
 The CL principles with regard to employment contracts have been modified by minimum
standards legislation which dictate when and the amount of notice required
 The CL and ESA state that notice must be given in the event of termination in normal
circumstances
 Four different circumstances for termination contract of notice
1. Termination by Notice
2. Faultless Termination Without Notice (employer doesn’t have to provide notice)
3. Termination by Action of Employee
4. Termination for Cause
1. TERMINATION BY NOTICE
(1) Common Law
 Termination by notice allows the employer to dismiss employee, no specific reason to
 General Principles:
o Employment can be terminated by either party by giving reasonable notice, where there’s an
indefinite (not fixed) employment
o Either party can specify notice period or amount employer will have to pay if employer
unilaterally terminates the contract –will only be enforced if notice contractually determined is as
good as ESA (can’t have notice period less than ESA)
o Cornell Engineering- Employer doesn’t have to have regard for other party’s interest (employee)
when arranging the termination of the employee. Each party can look out for their own interest
unless contractually written – not duty to look out for the other person
Reasonable Notice
 Reasonable Notice – if no contractual stipulation of what is reasonable notice – court determines what
is reasonable using CL Bardal factors for calculating appropriate notice – see CL
Bardal v. The Globe and Mail (1960) (Ont. H.C.)
Facts: • Bardal hired for indefinite term for newspaper. After 16 years fired without notice. Employer
conceded he was entitled to notice
Issue: • How is reasonable notice calculated? What factors should be considered in determining
length of reasonable notice?
Court: • no catalogue laid down as to what is reasonable notice in particular classes of cases
• reasonableness must be decided with reference to each particular case
• Factors to consider (1) Character of employment, (2) length of service, (3) age of employee,
(4) availability of similar employment
• onus on employer to establish just cause and to adduce evidence that the employee could
have mitigated their losses
• plaintiff has onus of establishing a rational for the quantum of damages they are requesting
• Given uncertainty of test, judges adopted Rule of Thumb – For every year of employment
a person would be entitled to one month’s notice
Page # 115
•
The Bardall Factors would be used to vary that basic starting point
A case by case approach is appropriate to determine the length of reasonable notice. The four main
factors to consider are: (1) character of employment, (2) the length of service of the servant, (3) the
age of the servant, (4) the availability of similar employment having regard to the experience,
training and qualifications of the servant
Note:
The factor approach was endorsed by the SCC in Machtinger v. HOJ Industries (1992) and
more recently in Wallace
Bardal Factors:
1. Employee Status (in determining length of notice period)
 for a long time after Bardal courts seemed to take position that senior, higher status employees
are entitled to more notice than lower status employees (Rationale: they would have more
difficult finding employment)
o so pervasive was this assumption that rarely were claims even brought by lower status
workers - rare that CL would give more than minimum entitlements of ESA
 Cronk was one of the first cases that served to challenge assumptions normally associated with
employment status. Held: no logic to giving senior employees more notice than junior employees
and thus awarded low status employee who worked for 35 years, 20 months notice
Cronk v. Canadian General Insurance Co. (1994) – character or status is only one factor in
determining reasonable notice (Upper limit for lower status employee)
Facts: • Cronk was clerk who had worked there for roughly 25 years and was 55 years old when
dismissed from junior position. The employer gave her 9 months notice. Cronk challenged
this notice, requesting 20 months
Court: • At trial, the court gave this lower status employee 20 months notice - this was extremely high
for lower status employee
• However, on appeal, the OCA reduce the notice period to 12 months on the basis of stare
decisis – it said the trial decision went too far and created too much uncertainty for employers
when determining the cost of downsizing – the potential to disrupt prudent economic activity
was too great
Reason:
the character of employment (low level) was a factor (i.e. didn’t entitle her to long notice
period). However, the other Bardel factors allowed her the maximum notice in her category –
which the judge fixed at 12 months
Note:
This case had huge potential ramifications for employers because it potentially served to
dramatically increase the cost of running a business
Page # 116
Minnot - No Upper Limit for Low Status Employees (court rejects its prior decision in Cronk that
for lower status employees – 12 months was the upper limit) – have to take all Bardal factors into
account and determine what’s appropriate in the case
Facts:
Minnot was 43 when first hired. Had little formal education and limited skills
Held:
13 months was appropriate. Even though 13 months was a lot given his low status, the other
Bardal factors (age when fired, lack of formal education and skills and the availability of jobs
in his industry when he was dismissed) were all taken into consideration to determine that it
was reasonable
Reason: no upper limit for lower status employees. Status of the employment is an appropriate factor
that will be taken into account, however all Bardal factors have to be looked at
2. Economic Conditions in determining reasonable notice
 Economic conditions at the time of termination impact notice determinations
 How is the length of notice effected when times are bad (everyone is downsizing?)
 1980’s: Longer notice for employees laid off for economic reasons – b/c it would take them longer to
find another job when economy isn’t good. Courts were more sensitive to employee
 1990’s: Shorter notice for employees laid off for economic reasons – b/c the bad economy was the
reason for having to decrease the labour force. Courts were being more sensitive to employers, b/c the
longer the notice, the more, the higher the cost to the employer
Boheimer v. Storal Int’l (1983)
The economic outlook for both the employer and the employee must be considered and the employer
must be able to reduce its workforce at a reasonable cost
 Tucker: when the economy is in turmoil, the issue always becomes one that is potentially
litigable – who should be favoured? Employee (longer notice) or employer (shorter notice)
Contractual Provisions and Reasonable Notice
 Express contractual provisions can effect the determination of reasonable notice
 Contracts that set out notice provisions shall be enforceable provided that they do not breach the
statutory minimums, the provisions are clear, and they do not show a clear inequality of
bargaining power (in that they are too harsh or unconscionable) HOJ Industries v. Machtinger
3. Ballpark Justice
 Theory: if employer made an offer the court found reasonable (or within the ‘ballpark) then it
wouldn’t substitute it’s own view of what appropriate notice should be AND it might also
penalize the employee who chooses to reject the ballpark offer, in costs
 Holland J. introduced the doctrine of “ball park justice” with respect to notice. In Perry v. Gulf
Minerals (1985) he stated that notice periods will be assessed on the basis of the reasonableness
of the employer’s offer. Only if the offer was deemed unreasonable should the court substitute its
own judgment. As of late, this doctrine has been unequivocally rejected b/c it pushes the limit to
its lowest
4. Near Just Cause
 Near Just Cause – employee did something wrong, however, not quite enough to justify summary
dismissal without notice
 Recently the courts have decided employee misconduct which is bad yet nonetheless
Page # 117
insufficiently serious to constitute just cause (i.e. near just cause) cannot serve to reduce the
appropriate notice period entitlement of a terminated employee Donaldson v. Phillipine Airlines
 It can be taken into account in determining the notice period, still have to give notice (i.e. won’t
look at how employee behaves unless it’s just cause – otherwise employee conduct is irrelevant)
 However, the Ontario Court of Appeal in Queensbury v. JR Corporate Planning (1989) mere
negligent conduct will not invoke the doctrine of near just cause
Reasonable Notice and Resignation
Are employees required to give their employer reasonable notice before resignation?
 Employees who wish to terminate their employment relationship are required to give reasonable
notice to their employer. Where reasonable notice has not be given, the employer may sue for
any damages it suffers as a result of this failure – however, these types of suits are uncommon for
a variety of reasons (inability to realize on damages)
 In these situations, the employer has the onus of both establishing damages and proving that they
were unable to mitigate their losses
5. Availability of Aggravated and Punitive Damages (very limited)
Is it possible for a terminated employee to get exemplary damages?
Vorvis v. Insurance Corporaton of British Columbia (1989) (SCC) – employee could claim aggravated
or punitive damages where act of employer are independently actionable
Court: • in limited circumstances, wrongfully dismissed employees could claim aggravated damages
or punitive damages
• aggravated damages for intangible injuries like mental distress or humiliation are only
available upon termination in situations where the acts of the employer were
independently actionable and arose out of the termination itself and not due to conduct prior
to dismissal (eg. slander upon firing)
• i.e. not payable b/c of breach of contract but only if independent cause of damage (thus has to
find a tort, such as infliction of mental suffering, beside the breach of contract)
• To find a separate tort required the conduct of the employer to be fairly outrageous (humiliate
employee) and that it intended to humiliate the employee or cause mental distress – have to
show that it caused the intended effect
Effect: punitive damages available for “vindictive or reprehensible” damage in the dismissal, but this
conduct must be independently actionable as well. I.e. can’t just show employer behaved badly – have to
show behaviour was independently actionable
Note:
Although this decision seems to open the door, the conditions under which these awards are
available are severely restricted - hard to claim
Wallace v. United Grain Growers [1997] – employer has duty of good faith in terminating employee
Courts began to add another dimension – which allowed for calculation of notice period
Facts: • Wallace was the top salesperson for many years. Terminated without notice or explanation.
Employee claimed emotional distress had been caused in the way that the termination was
conducted and was under psychiatric care as a result
Trial: • said entitled to 24 months - this is pretty much the top of the limit
• also said that entitled to aggravated damages due to terrible behaviour
Page # 118
CA:
•
Note:
Wallace seems to undermine the basis for notice periods - no longer appear to be relying on
rationale of notice periods being the period to allow for alternative employment - new rationale
seems to be the focus on protection of vulnerable workers at most vulnerable times (dismissal)
reduced notice to 15 months and said not case for aggravated b/c actions of employer not
independently actionable (i.e. independent tort hadn’t been committed)
SCC: • Employer has a duty of good faith in the way they terminate employee, the breach of which
will be compensated by extending length of notice period
 I.e. bad faith behaviour on part of employer in dismissal can in and of itself serve to increase the
notice period upon termination – did the employer act high handedly, cruelly, unusually callous etc. –
the decision also affirms Vorvis in stating that independent actionable wrongs will also have the
potential to increase notice
 Where there has been bad faith in termination on part of employer – the notice period may be
lengthened for two reasons:
1. the action by the employer might have a material effect on the employee being able to get
another job (might be less able to go back into job market with confidence in themselves and
thus make it more difficult) and
2. The employment relationship is b/n parties in unequal positions (power imbalance) and thus
employees are in need of protection especially when vulnerable at termination
 SCC discusses the unequal bargaining power of employees and the need to protect employees at their
most vulnerable position (termination)
 Thus, lengthening of notice period encourages employers to act in good faith at termination of
contract of employment
 Employees treated badly when terminated can get damages without having to establish that
employer’s actions are independent actionable (an independent tort) but rather claim increase in
notice b/c it could take them longer to get reemployed
 end result is that they have constructed a duty of good faith in dismissal of employees and if this
is breached, court can consider these incidents in determining the proper period of notice
There is now an implied duty of good faith and fair dealing on employers when terminating
employees, the breach of which can be another factor to be considered in determining the length of
reasonable notice. There is no need for an independently actionable wrong to establish this factor
Page # 119
Employment Standards Act: Statutory Notice Period
TERMINATION OF EMPLOYMENT S. 54
Three kinds: (1) Individual Termination – S. 54 (2) Mass Termination – S. 58 (3) Severance Pay in
Addition to Notice – S. 63(1)
S. 54
No termination without notice. No employer shall terminate the employment of an employee
who has been continuously employed for three months or more unless the employer,
(a) has given to the employee written notice of termination in accordance with section
57 or 58 and the notice has expired; or
(b) has complied with section 61
S. 57
Employer notice period. The notice of termination under section 54 shall be given,
(a) if employee’s employment is less than one year – one week notice
(b) if employee’s employment is more than one year and less than three years – two weeks notice
…..
(h) if employee’s employment is eight years or more - at least eight weeks notice
O. Reg 288.01
S.2(1) Exemptions from notice. Employees not entitled to notice of termination
1. An employee who’s hired on basis that his employment is to terminate on the expiry of a definite
term or the completion of a certain task
2. An employee who’s on a temporary lay-off
3. An employee guilty of willful misconduct, disobedience or willful neglect of duty
4. An employee whose contract is impossible to perform or frustrated by an unforeseeable situation etc.
S. 58(1) Notice 50 or more employees. Despite S. 57, the employer shall give notice of termination in
the prescribed manner and for the prescribed period if the employer terminates the employment of 50 or
more employees at the employer’s establishment in the same four-week period
 Regulation 288.01, S. 3 sets out the notice requirements for S. 58(1) of the Act
o 50-199 employees requires 8 weeks
o 200-499 requires 12 weeks
o and 500 or more requires 16 weeks
S. 58(2) Information. An employer who is required to give notice under this section,
(a) has to give the Director the prescribed information in a form approved by the Director; and
(b) shall, on the first day of the notice period, post in the employer’s establishment the prescribed
information in a form approved by the Director.
Note:
More notice with mass terminations b/c more people are trying to find jobs, therefore more
difficult to find work then when there is only one person that is looking for work
It’s a cushion for employees to find work
Page # 120
SEVERANCE OF EMPLOYMENT – S. 63
63 (1) What Constitutes Severance. An employer severs the employment of an employee if,
(a) the employer dismisses the employee or refuses to continue employing the employee;
(b) the employer constructively dismisses the employee and the employee resigns from the
employment in response within a reasonable period;
(c) the employer lays the employee off for 35 weeks or more in any period of 52 consecutive weeks;
(d) the employer lays the employee off because of a permanent discontinuance of all of the
employer’s business at an establishment; or
(e) the employer gives the employee notice of termination in accordance with section
57 or 58, the employee gives the employer written notice at least two weeks before resigning and
the employee’s notice of resignation is to take effect during the statutory notice period
S. 63(2)
What constitutes a week lay-off. For the purpose of subsection (1), an employee is laid off
for a week if in a week, the employee receives less than one-quarter the amount he or she
would earn at his or her regular rate in a regular work week…
S. 63(3)
Resignation. An employee’s employment that is severed under clause (1) (e) shall be deemed
to have been severed on the day the employer’s notice of termination would have taken effect
if the employee had not resigned
S. 64(1)
Entitlement to Severance Pay. An employer who severs an employment relationship with
an employee shall pay severance to the employee if the employee was employed by the
employer for five years or more and,
(a) the severance occurred b/c of a permanent discontinuance of all or part of the employer’s
business at an establishment and the employee is one of 50 or more employees who have
their employment relationship severed within a six-month period as a result; or
(b) the employer has a payroll of $2.5 million or more
S. 64(2)
Payroll For the purposes of subsection (1), an employer shall be considered to have a payroll
of $2.5 million or more if,
(a) the total wages earned by all of the employer’s employees, including officers, in the four
weeks that ended with the last day of the last pay period completed prior to the severance
of an employee’s employment, when multiplied by 13, was $2. million or more; or
(b) the total wages earned by all of the employer’s employees, including officers, in the last
or second-last fiscal year of the employer prior to the severance of an employee’s
employment was $2.5 million or more
S. 64(3)
Exceptions Prescribed employees are not entitled to severance pay under this section.
S. 65(1)
Note:
Note:
Calculating Severance Pay Severance pay under this section shall be calculated by
multiplying the employee’s regular wages for a regular work week by the sum of,
(a) the number of years of employment the employee has completed; and
(b) the number of months of employment not included in clause (a) that the employee has
completed, divided by 12
Employee gets 1 week pay for each year up to 26 weeks (severance pay maxes out at 26 weeks)
To calculate the week pay – have to look at what employer gets for the whole year
ESA notice pay is significantly less than what person is entitled to at CL, thus severance pay can
bring up this money for certain employees, not all employees that are terminated (why not just
Page # 121
Note:
take the 8 week maximum and increase it to 26 weeks so everyone gets more pay) – i.e. 8 weeks
notice for employees who have been there for a long time – under notice period
When employee is terminated, they have to choose ESA or CL (ESA limit is $10 000, thus where
higher status employees are terminated, more likely to propose CL remedies than ESA)
S. 65(5)
Limit An employee’s severance pay entitlement under this section shall not exceed an
amount equal to the employee’s regular wages for a regular work week for 26 weeks
S. 97 (1)
When Civil Proceeding Not Permitted An employee who files a complaint under this Act
with respect to an alleged failure to pay wages or comply with Part XIII (Benefit Plans) may
not commence civil proceeding with respect to the same matter
S. 97(2)
Same, Wrongful Dismissal. An employee who files a complaint under this Act alleging an
entitlement to termination pay or severance pay may not commence a civil proceeding for
wrongful dismissal if the complaint and the proceeding would relate to the same
termination or severance of employment
S. 97(4)
Withdrawal of Complaint Despite subsections (1) and (2), an employee who has filed a
complaint may commence a civil proceeding with respect to a matter described in those
subsections if he or she withdraws the complaint within two weeks after it is filed
S. 98(1)
When Complaint Not Permitted An employee who commences a civil proceeding with
respect to an alleged failure to pay wages or to comply with Part XIII (Benefit Plans) may
not file a complaint with respect to the same matter or have such a complaint investigated.
Page # 122
2. TERMINATION BY ACTION OF EMPLOYEE
 Under ESA and CL – employee who voluntarily quits – not entitled to notice (employee has duty to
give reasonable notice if they’re going to quit)
 Test to determine whether employee has quit – subjective and objective
Termination or Resignation (quit)
Dowling Red & White - ESA Case 1997 – test whether employee quit or was fired
Facts: • dispute at work and in heat of moment employees walks out and says they’re done
Issue: • Did employee quit or was employee fired?
Adjud: • She quit
Reason:
generally look for two elements to protect employees from forfeiting what could be important
rights during a heat of the moment argument
1. subjective expression of intent to quit (saying “I quit)
2. objective behaviour to confirm that that was the truly, on reflective, real intent of the
employee (not showing up for work)
 Not sufficient to just say they quit – have to have objective behaviour which shows intention to quit
 In this case, the employee did not come back to work - rather tried to claim for lack of notice under
ESA - they said this failure to return to work met the objective part of test - considered it to be a
resignation (quit)
In order for an employee’s resignation to be valid, two requirements must be met:
1. A subjective expression of intent – saying they quit
2. Objective behaviour to confirm that the employee really intended to quit – not going to work
Constructive Dismissal or Quitting for Cause
 when employer makes unilateral change to substantial component of contract, this can be treated
as CD by employee (i.e. treat the contract as terminated) and they will be entitled to damages
 Basic Principle: where one party to contract demonstrates an intention not to be bound by it, that
party commits a fundamental breach that results in its termination (Farber v. Royal Trust)
Farber v. Royal Trust [1997] – significant unilateral change such that employee can claim CD and
claim severance
Facts: • As result of restructuring, employer offers to move employee from regional branch manner
(managing 21 branches) to position of branch manager (managing one branch) this was
substantial reduction in prestige of position from regional manager to branch manager. There
were some protections for wage decreases. Employee claim CD
Issue:
did these changes amount to CD entitling the employee to terminate the employment for just
cause?
Court: • Employee entitled to treat it as CD due to significant change in the position. The employee
had the right to treat contract as terminated and claim for damages
• said this notwithstanding evidence that showed that branch became very successful and he
would not have suffered any monetary loss - court said that this was not reasonable
foreseeable at the time of the contractual problem
Significant changes in the composition of an employee’s compensation, movement of duties and a
reduction in prestige will constitute a CD. When the court is deciding this, the appropriate point in
time to determine the reasonableness is what is reasonably foreseeable at the time of the contractual
problem
Page # 123
Relocation
 If employer offers employee same job but in another city, the employee can refuse to take the job (in
another city) and claim CD, however…
 Some cases – relocation does not constitute significant unilateral change such that employee can treat
the contract as terminated and claim for damages
Smith v. Viking Helicopter Ltd (1989)
Facts: • employee faced with situation of being relocated into same position basically covered and
employer will cover some of expenses. Employee doesn’t want to move - rooted in the
community. Claim this is CD
Courts said that there is no implied term that the work is to be performed in any given area and
that the employee should be flexible enough to move provided the position is similar to that
currently held and the employer is willing to help with any moving expenses
Demotion
 If an employee is given lower status job for lower wages, and later claim not happy, can they at the
later time claim CD and get damages
Ontario v. Tenecco (OJ 4494) – Employment Standards Case
Fact: Person was lab tech for 20 years – made $14/hr. There was a downsizing and the employer
offered a different job to lab tech. The employee tried the job and after a few days couldn’t
continue and claimed CD
Issue: Did the employee truly accept the changed conditions and thus waived the right to sue, or did the
person just try out the job and then decided not acceptable, thus still able to sue?
Held: Only accepted job as trial and b/c they didn’t work there very long, they didn’t accept the
changed conditions
Test: to what extent does the employee truly accept the changed conditions of the employment
Trial of new job – not considered to accept the changed condition. If employee decides a few days later
they don’t like the conditions, they still have the right to sue
Misfud v. MacMillan Bathurst Inc. (1989) – have to look at new position to mitigate damages
Court: • fact that there may be CD does not eliminate obligation of employee to look at the new
position offered and evaluate it as means to mitigate damages
• many situations where it would be patently unreasonable to consider that position - however,
this is not one of them
Principle: Where the salary offered is the same, where the working conditions are not substantially
different or the work demeaning, and where the personal relationships involved are not
acrimonious it is reasonable to expect the employee to accept the position offered in mitigation of
damages during a reasonable notice period, or until he finds acceptable employment elsewhere
Page # 124
3. FAULTLESS TERMINATION WITHOUT NOTICE
 Notice isn’t always required
i. Fixed Term Contracts (Completion of the Contract):
 employment ends when particular job is done or the contract ends and there is no obligation of
employer to provide notice of this
 An employee whose contract isn’t renewed at the conclusion of a fixed term isn’t terminated –
employment stops according to the terms of the contract
 true in both CL and S.55 of ESA 2000 – outlines employees that are exempted from notice
termination or termination pay (Reg. 288.01, S. 2(1))
 Thus have to determine whether the contract is for fixed term or indefinite term
Ceccol v. Ontario Gymnastic Federation – fixed term contract – no notice
Facts: Looks like a fixed-term contract on its face. Employee hired for 16 years on a series of one-year
contracts when she was told that her contract wouldn’t be renewed (i.e. at the end of each year the
employee would sign a new contract for the next year). When contract wasn’t renewed by
employer, the employee claims entitled to notice for termination of a contract of indefinite term
Issue: Is it a fixed term contract or a contract of indefinite hire?
Held: Employment contract was for indefinite term, thus notice was required
 Fixed term contracts are legal if their terms are clear (they will be enforced)
 When an employee works for many years under a series of supposedly ‘fixed term’ contracts – the
employer shouldn’t be allowed to avoid the protection of the ESA and the CL by relying on the label
‘fixed term’ when its really an indefinite term
 Here: Indefinite term contract even if called ‘fixed term’. There was continuous service by employee
with representations and conduct of employer which showed it to be indefinite term relationship
 Employee argue: contract of indefinite hire - not a question of if it’s going to continue but on what
terms its going to continue
 Employer argue: Flexibility – funding is contingent and they don’t know from year to year whether or
not they’re going to be able to hire more people, thus only able to make year commitment. Each year
have to determine whether or not they can hire the person
Note: The court wants to protect employees. It’s harsh to not give notice to an employee who has
worked there for 16 yrs
Note: ESA – there’s a provision that protects these arrangements (Reg. 288.01, S. 8(2) – two
consecutive periods of employment are added together. As long as they’re not too far apart, then
there’s a strong argument that seniority continues. Where there’s a continuous arrangement
difficult to get out of ESA and CL arrangements
ii. Frustration
 Occurrence of unforeseen event which renders contract incapable or impossible of performance
 Eg. Unforseeable destruction of business premise, permanent illness etc.
 Contract is brought to an end with need for notice (CL and statutory)
 Common Law – Poly Window Manufacturing (1994) states that a fire taking place at the
workplace is an example of frustration – but in some instances, the courts have viewed the
employer as an insurer of unforeseen events and therefore not relieved of their notice
requirements Poole v. Shanks (1992)
 temporary illness is generally not regarded as sufficient enough to amount to frustration - more
Page # 125
serious illness which would prevent employee from performing contract may amount to
frustration at a certain point – cross reference with emergency leave provisions under ESA s. 50
iii. Just Cause, Willful Disobedience, Gross Incompetence
 The employer does not have an obligation to provide notice when terminating for cause, because
of willful disobedience or gross incompetence
When employer isn’t relieved from notice obligations for termination
i. Shutdown Under Environmental Protection Act
 if employer is ordered to shut down operations under the Environmental Protection Act, this does
not meet requirements of frustration - employees able to collect notice under the ESA
ii. Bankruptcy
 bankruptcy - does not in and of itself terminate the employment contract. It might give rise to
breach of contract which entitles employee to damages (I.e. it doesn’t deny employees the right to
statutory benefits of termination pay)
 Reason: shouldn’t be in employer’s power to terminate its obligations by closing down business
Rizzo
 Court of Appeal Held: dismissals due to bankruptcy weren’t terminations for purpose of ESA (i.e.
where there’s bankruptcy, there’s no entitlement to termination pay under ESA). The Act was
therefore amended by gov’t – dismissals b/c of bankruptcy entitled to termination pay
 After amendment, Ritzo case was appealed
 SCC Held: there was entitlement to termination pay on bankruptcy
o the ESA s. 57(2.1) & 58(1.1) - say specifically that employer shall be deemed to have
terminated employee if employee terminated by law operating in regards to bankruptcy –
no mention of similar provisions in ESA 2000
o Presumably decision of SCC in Rizzo is law. In the event of bankruptcy – employee
entitled to notice pay under ESA
o In reality – nothing for them to collect
iii. Sale of the Business:
 The common law views this as end to the contract of employment but ESA deems employment
relationship not to be terminated and the duties and obligations will be borne by the purchaser
(S. 9 and 10 of ESA 2000)
Page # 126
4. TERMINATION FOR CAUSE
(1) Termination for Cause – Common Law
 Under CL – No need for notice if there’s cause
 cause includes: dishonesty, revelation of character, insolence and insubordination, disobedience,
lateness and absenteeism, incompetence, improper conduct outside the workplace, permanent
illness or disability, disruption of corporate culture, alcohol and drug abuse, conflict of interest or
sexual harassing behaviour Jewitt v. Prism Resources (1980)
Procedural and Remedial Matters - CL
1. Onus
 Onus on employer to show just cause to terminate without notice
 Employer has to show breach of contract entitling them to put contract to end immediately
2. Post Termination Reasons to Justify Cause
 Employer is permitted to use reasons to justify dismissal which weren’t operative at time of
dismissal (Hardie)
 I.e. Employer isn’t limited to the grounds initially claimed for firing employee. I.e. can look at
CV and find inconsistencies with person an job and find just cause on that basis
3. Condonation
 If the employer condones the inappropriate behavior, the employer loses right to treat conduct as
repudiation entitling to termination without notice (i.e. if accepts the breach)
 Must be aware of the breach in order to condone it - also entitled to reasonable amount of time to
react Empey v. Coastal Towing (1977)
4. Fairness
 Obligation of good faith and fair dealing (procedural fairness) in termination process (Wallace)
 Historically, at common law office holders were entitled to a hearing before they could be
removed – more recently, the common law has extended rights to procedural fairness in relation
to termination of employment to other public officials (no duty to provide hearing)
 Some judges have attempted to import these public law duties into the private sector – in Reilly v.
Steelcase Canada (1979) the court suggested that the duty to act in a procedurally fair manner
applied to private employment
 Wallace is another example of the SCC extending the doctrine of procedural fairness to the
private sector – established a duty of good faith and dealing in context of termination (i.e.
employer has to be reasonable honest and forthright when termination employee and shouldn’t
engage in conduct that is unfair or in bad faith)
 An employer who doesn’t raise the problem with the employee in appropriate time will be found
to condone conduct
 failure of employer to give some kind of notice to employee and some type of opportunity to
respond or adjust behaviour, might become a factor used by the court to prevent employer from
succeeding at establishing justification for dismissal
o misconduct - Xerox Case - failure of employer to follow its own procedures (bring the
problem to employee to give them chance to address it before firing them) in regards to
termination may lead adjudicator to find that there was not willful misconduct sufficient
to deprive individual of rights under ESA to notice
5. Remedy – If found to be a wrongful dismissal (i.e. not fair termination) the courts can only award
damages, increase notice (no power to reinstate). Arbitrators however, have more power
Page # 127
As a general matter, there is no right to a hearing prior to a dismissal, but fairness has crept in and
may impact on the notice period or determinations of whether there was cause to terminate
Substantive Matters and Just Cause – CL
6. Probationary Employees
 employees hired into probationary status to see if they’ll be good at the job and hired permanently
 Probationary employees are entitled to just cause protection against summary dismissal (but at lower
standard). I.e. probationary employees can’t be fired during the probationary period without any
reason being given (has to be just cause)
 Employer can only terminate probationary employee summarily if they fail their probation (i.e. don’t
meet the employer’s reasonable standard of performance)
 Remedy? B/c the CL doesn’t say the amount of notice that has to be given – have to use the Bardal
factors, thus entitlement will be small unless the probationary employee was induced to leave a high
paying job to work as probationary employee
7. Disciplinary Suspensions
 Employer might be able to discipline employee (send home for two weeks with no pay) if employee
breaches contract (i.e. disobedience) in absence of express term in contract if there’s custom to do so
Haldane v. Shelbar - Employer right to impose disciplinary suspension without pay may be implied
in the contract where that’s the custom in the industry or that it was the parties intention
Issue: Is there an implied term in the contract that employer has right to discipline disobedient
employee?
Held: They don’t imply into CL contract of employment that employer has the right to impose
disciplinary action, however it could be implied into the contract if that is the custom or the
parties intended that it to be in the contract
 Have to first look what’s in the contract to see if there’s a right to discipline employees
 Express Term:
o If the parties have an express term in the contract to impose disciplinary measures, then the
employer has the right to discipline employee
 Implied Term:
o Terms implied by custom: is there custom in that particular industry? Has to be widespread,
understood practice by everyone in the industry
o Terms implied by presumed intentions of parties: the parties intend for their to be disciplinary
term
o Terms implied by law (Business Efficacy): if the term is necessary to the fair functioning of the
agreement, it will be implied by law
Note: The risk of implying that employers have a right to discipline employees if they do something
wrong b/c if something happens that doesn’t amount to just cause (i.e. can’t summarily dismiss
the employee) the employer will suspend them – this would be similar to CB where employer has
a range of disciplinary actions, besides termination for cause
The individual employer (not part of union thus can’t grieve the discipline act) has to risk
their employment in order to challenge the suspension – thus concern if employers had
right to impose discipline act
Page # 128
Examples of Cause in CL: dishonesty, sexual harassment, off-duty conduct
1. Dishonesty
McKinley - Sets out general principles for summary termination for misconduct (i.e. dishonesty)
Facts: M was employed by BC Tel for 17 years. At age 48, had health problems and took leave of
absence. Later indicated he wanted to return to work but in less stressful position. BC Tel said
they would accommodate him and instead terminated employment. M rejected severance offer
and sued for wrongful dismissal. BC Tel claimed just cause for termination – M was dishonest
about his medication condition and the treatment available. Note: there was evidence of
dishonest, however was dismissal justified for it
Issue: Did M’s dishonesty justify summary dismissal?
Held: Employer may have disciplinary power over employee for things that aren’t just cause for
dismissal (note: hasn’t been adopted by courts, but it might be)
 Contextual analysis: have to look at the circumstances of dishonesty (severity) and determine whether
serious such that it’s grounds for summary termination
 Dishonesty doesn’t always justify summary dismissal. Thus, lesser sanctions for lesser misconduct
(i.e. depends on nature and seriousness of the dishonesty and whether it gives rise to breakdown in
employment relationship)
 To apply the test (whether misconduct gave rise to breakdown in employment relationship:
1. Whether evidence established employee’s deceitful conduct on balance of probabilities
2. If yes, whether nature and degree of honesty called for dismissal
o If severe – dismissal without notice is justified
o If not severe – lesser sanction allowed (i.e. employee can have pay taken for minor misuse of
employer property)
 Court takes protective view of management authority b/c of power imbalance b/n parties. An
effective balance must be struck b/n severity of employee’s misconduct and the sanction
 Factors to consider in determining whether employee’s dishonesty is just cause for dismissal
o Look at the circumstances surrounding the misconduct
o The level of seriousness
o The impact it had on the employment relationship
Here: the dishonesty wasn’t so serious that it would be impossible to maintain the employment
relationship. Thus, the imposition of summary dismissal wasn’t called for
Management overreacted – the dishonesty didn’t strike fundamentally at employment relationship
(i.e. the relationship could continue)
Courts take a contextual approach to examination of misconduct (i.e. dishonesty) and
determine whether it constitutes grounds for summary termination. Only if the dishonesty
is serious enough that it would be impossible to maintain the employment relationship,
would the imposition of summary dismissal be allowed
Problem:
Note:
Note:
Employees lack mechanism for challenging authority in CL context (no grievance process)
Only remedy for employee is to treat discipline as Constructive Dismissal and claim
employee is entitled to pay in lieu of notice
This might be good for long-term employees who could be entitled to significant notice
period (i.e. work more than 8 years, entitled to 8 years notice) and who can find another job.
Not good for those only entitled to minimum notice and don’t have good job potentials
There are greater range of remedies available to unionized workers
Page # 129
2. Sexual Harassment
 Courts have become less tolerant of sexual harassment and thus quicker to uphold summary dismissal
 Courts not protecting employer interest but the employee interest
 Thus, different standard then McKinley
3. Off-Duty Conduct
Can an employer terminate an employee b/c of something done on their own time
Pliniussen v. UWO
Facts: Terminated university prof. for false insurance claims. He sued for breach of contract
Issue: Should business school be allowed to terminate for stealing money (on his own time)?
Held: Termination upheld
 Test: Is there a connection b/n conduct and work?
 The potential damage to the school’s reputation justified dismissal
 Person teaching bus ethics can’t engage in unethical conduct outside of work
Heynen v. Frito Lay
Facts: Truck driver convicted of offence while on medical leave (not working) and therefore can’t work
for 30 days in order to serve his sentence. He was dismissed and claimed wrongful dismissal
Issue: Is that grounds for summary dismissal?
Held: Misconduct unrelated to employment and therefore not basis for summary termination
Also 30 day absence isn’t to level to be just case for dismissal even thought it was b/c of
misconduct of employee
Note: if sentenced to prison time while supposed to be at work, there could be ground for termination –
not b/c of the conviction but b/c the person is unable to work which is frustration of the contract
b/c he can’t go to work
If there’s no connection b/n employment and off-duty misconduct, then there’s no justification for
summary termination – as long as employment contract can still be performed
Bottom Line:
Iacobucci:
Courts have to take into account employer and employee interest and the fact that there’s
unequal power inherent in the employment relationship
Thus courts have to take protective position (makes it harder for employer to summarily
dismiss b/c standard of conduct that must be demonstrated will be high)
Therefore, employer will have to tolerate some degree of misconduct
if employee is allowed some misconduct then employer should be allowed some
disciplinary action against employee
Page # 130
(2) Termination for Cause – Collective Bargaining
 The notion of just cause in CB is much broader than just cause in individual contract of
employment
 Not only includes misconduct as just cause for summary dismissal without notice also includes:
o Faultless termination that would meet level of just cause (notice required)
 i.e. fire that causes plant to shut down – just cause for termination
 Economic downturn such that employer needs to decrease staff – just cause
o Workforce reductions (notice required)
o Summary termination for cause (no notice required)
 Only looking at summary termination for cause
 most, if not all, collective agreements contain provisions that termination shall not be handed
down as a form of discipline unless there is just cause
 similarly, collective agreements also afford an arbitrator the authority to vary and or alter any
form of discipline handed down by the employer in the event that a grievance is pursued by the
union
 in the arbitral setting, the employer has the obligation of showing that (1) there was cause for the
discipline and that (2) the choice of discipline was indeed reasonable given the circumstances –
this usually requires some proof of progressive discipline
Note:
CL: employers are generally allowed to raise matters that came to their attention after the
discharge occurred
CB: (under grievance procedure), employers only allowed to rely on the facts that they had
knowledge of at the time they imposed discipline or discharge
Procedural and Remedial Matters – CB
1. Onus on employer to show just cause

When employee grieves to arbitration (wrongful dismissal) – onus on employer to show just
cause
2. Generally, employer must rely on matters known at time of action to justify dismissal
 Diff b/n CB and CL: ability to raise grounds to justify dismissal not raised at time of termination
 At CL: employer can raise grounds (to show just cause) not raised at time of termination
 At CB: whatever claimed at time of termination is the only reason to justify termination
 Rule: can’t change grounds and claim different justification for termination employee that
weren’t here when terminated
 Exception: Employer might be allowed to argue on the same facts that an employee quit, even
thought they argued at first he was discharged
3. Fairness
 Management has duty to exercise rights fairly and reasonably (negotiate grievance procedures
apply)
 Wallace – general duty on employers to exercise powers fairly – there are procedural rights for
employees to challenge management
 More substantial than duty imposed by CL – failure to comply with grievance procedure could
result in action being overturned
4. Disciplinary Action Short of Termination (i.e. suspensions) are allowed
 Employers have range of disciplinary actions, not available in CL (i.e. suspension without pay)
 More scope for action under CA then under CL
Page # 131
Substantive Matters – CB
5. Probationary Employees
 Probationary employee can’t be denied access to grievance process but lower standard of just
cause applies – easier to meet just cause and therefore justify termination
 Note: arbitrators held – can’t create status that denies access to grievance procedure
 Employer can make it difficult for probationary employee to grieve by negotiating certain things
such as; probationary employee can only grieve for certain reasons
 Can terminate probationary employee if not properly doing job – onus on employer to show that
they fairly determined that the person wasn’t properly doing the job
 Difference b/n CL and CB in treating probationary employees:
o CL: action for dismissal of probationary employees was upheld if employee didn’t meet the
standard of employer. Probationary employee who won successful probationary action – only
entitled to pay for notice period they should have had
o CB: Probationary employee if found to be unfairly terminated can be reinstated
Key difference: can be reinstated under CB, not CL
How do arbitrators deal with probationary employees?
 Under the common law and statute, probationary employees really have no protection – statute
does not provide for any minimum notice for employees of less than 3 months, and common law
reasonable notice assessments normally factor in length of service – the only potential limiting
factor may be the duty to act fairly in the termination as stated in Wallace
 Arbitrators tend to view the probationary period of a new employee as a period in which an
employer must give them a bona fide opportunity to be considered for full employment – and
although probationary employees are usually not entitled to the substantive rights expressly
appearing in a collective agreement – the grievance procedure is available to them in the event of
a dispute
6. Misconduct (insubordination, dishonest, sexual harassment, off-duty misconduct)
Examples of Cause in CB
1. Insubordination
Gardiner-Denver Co. – not every kind of misconduct will justify termination. Arb. can discipline
Facts: • union employee ordered by supervisor to load compressor in situation where clear to
employee that it should not be loaded. Employee refuses to load and becomes verbally
abusive to supervisor. Subsequently discharged
Note:
It appeared to the supervisor that employee was refusing to obey orders, however, the grievor
had already done what he was supposed to do – thus not refusing to carry out order
Issue:
Was employee in refusing to obey, insolent and abusive such that termination was justified?
Arb: • Employee was reinstated – the employer wasn’t justified in discharging the grievor, however
employee should be disciplined – given 5 day suspension for misconduct
 takes view that in order to obey the work now, grieve later idea the order must be reasonable –
employee who disobeys a patently unreasonable order cannot be disciplined
Page # 132
 however, the employee can be discharged or disciplined for insolence (i.e. insolence is a serious
offence in the industrial setting – under no circumstance is an employer justified in abusing
supervisor)
 When supervisor comes down on employee – responding in kind isn’t appropriate
 under s.48(17) of OLRA, arbitrator has the power to alter the discipline
 between this and the common law, can see in rough way the notion that not every kind or act of
misconduct will justify discharge - similar to the fact that not every act will justify summary
dismissal in CL
• courts and arbitrators use numbers of factors to determine if threshold is met – the principle
difference lies in the remedial powers of judges and arbitrators – damages vs. reinstatement/
moderate discipline
2. Dishonesty
Fraser Valley Library – not every act of dishonesty attracts summary termination – have to look at
circumstances
Facts: Employee was upset about not getting promotion therefore broke into manager’s e-mail and go
caught. She was embarrassed and apologized but was dismissed. The discharge was grieved to an
arbitrator. There clearly was misconduct but was termination appropriate
Issue: Was employer’s decision to terminate employee extreme?
Arb: Upheld discharge. The employment relationship was breached
 McKinley Approach: not every act of dishonesty attracts summary termination. Adjudicator has to
look at all circumstances
o Motivation of employer
o Likelihood of behaviour being repeated
 Has to balance interest of employer in maintaining certain policy (honesty of its employees) and
interests of employees who make mistakes that they won’t do again
 Test: is employment relationship irreparable damaged? (can employment relationship be restored?)
Note: CL court might have come to different conclusion using McKinley
CL wouldn’t necessarily have upheld dismissal (based on McKinley factors) in the case where the
employee hasn’t acted in this way before and when caught showed remorse and not chance of
dishonesty being done again
Would expect grievance arbitrators to be more favourable to employee than CL judges – not here
Page # 133
3. Sexual Harassment
 CL: sexual harassment could be grounds for dismissal
 CB: problem – both the harasser and the harassed are in the bargaining unit (represent by same union)
 The union has an obligation to protect the harasser – don’t have to take the harasser’s case to
arbitration however, some union’s feel obligated to do so
 Unions also have to be concerned that the allegations of the sexual harassment might not be true
 How do arbitrators deal with sexual harassment compared with the courts
City of Nanticoke and Canadian Union of Public Employees (1980), 29 LAC (2d) 64
Facts: • Fairly crude and gross sexual harassment at ice arena. Ultimately leads to harassers
termination. Union grieves
Arb.: • reinstate the employee - grounds are that there was more than one employee involved but
only one was discipline - unfair treatment of similar employees
• the employer seemed to condone the behaviour - it had gone on over time without action
• lack of progressive discipline - unless the behaviour in the first instance is extremely harmful,
in most case there is a series of steps which should be take prior to termination
•
creates weird situation - the failure of management to adequately protect employee in the past
becomes a ground for reinstatement of employee after discharge which in turn further fails to protect
the employee due to management’s misactions
CUPE and Office and Professional Employees’ International Union (1982)
Facts: Activity of supervisor directed to employee. After employee complained that the difficult
working conditions were retaliation for not conforming which supervisors requests to engage in
sexual behaviour. Employee who was discharged grieves (even though she was the harassed not
the harasser)
Note: This is an unusual case – an employee discharged by employer is now complaining of being
treated badly (sexually harassed). Harassed employee not the harasser is grieving wrongful
termination
Held: Not sexual harassment but difficult working conditions that caused tension b/n supervisor and
employee
• find that there might have been harassment, but not sexual, or that it was just reflective of the
sexual structure of our society - thus grievor failed to satisfy that they have been victimized by
these actions
 Can bring it under ESA or HRA – can claim notice under ESA, however, that is not the remedy that’s
being sought
 Arbitrator looks at it through industrial discipline context and the power relations of the workplace
that the arbitrator doesn’t want to disturb
 Had the arbitrator looked at the case through Human Rights perspective – might have come to
different conclusion (Not found that it was simply the result of a woman working for a male
employer)
 Note: once you have CA, don’t have right to go to CL, even to the extent that you want to claim
slander against employer. There’s no longer contract of employment under CL
Page # 134
Community Living South Muskoka – no reinstatement if employment relationship is breached
Facts: Employees worked in home for people with mental disabilities. Inappropriate sexual misconduct
b/n harasser and people he works with (other employees). The harassed employees remained
silent about harassment and finally tell employers. Employer meets with harasser and he denies it.
At a later meeting, he admits his behaviour might have been sexual harassment. They find it was
Issue: Was termination appropriate, justified?
Held: Damages instead of reinstatement. Not reinstated b/c employment relationship was breached such
that couldn’t be reinstated
 Arbitrator can’t uphold summary termination b/c employer didn’t know about harassment and
therefore wasn’t able to give employee progressive discipline (i.e. chance to correct behaviour).
Needs to be progressive discipline that leads up to just cause except where case is so severe that it
undermines emoployment relationship
 However, arbitrator finds can’t be reinstated (employment relationship breached such that he can’t
work there)
Note:
 CL: more forgiving of dishonesty then sexual harassment (will uphold summary dismissal for sexual
harassment)
 CB: Dishonesty is less forgiving then sexual harassment (won’t uphold summary dismissal for sexual
harassment but will for dishonest – Fraser Valley Library)
4. Off-Duty Conduct
 In some cases employees can be disciplined or discharged for off-duty if found to affect legitimate
interests of employer
 Re Phillips Cable Ltd. (1974) – Where employee charged with criminal offence – the employer can
be justified in discharging employee (however, employer can’t suspend employee unless employer
can establish the employee’s guilt. The employer has duty to investigate the charge and determine
whether or not employee is guilty)
Page # 135
CL and CB Compared – Termination
Has the Collective Bargaining Regime really differed from the Common Law?
 Important Differences:
 Job Security: unionized employers have job security that non-unionized employees don’t
o CL: employers always have option of terminating employees by giving notice
o CB: Have to have just cause for termination (i.e. misconduct or some other ground that’s
accepted as just cause in CB – economic downturn)
 Enforcement
o CB: has a way to enforce the employees right without fear of being terminated –
grievance arbitration
o CL/Statute: Even though the statute might prohibit termination for things such as, unsafe
work, employer’s still have the right to terminate employee – just have to give notice
 Note: there are more work refusals in unionized than non-unionized work place
o Not b/c there are more problems or danger in unionized work place but rather employees
aren’t afraid to come forward b/c they’re protected by CA
o Non-unionized workers are protected by statute, however, can still be terminated (notice)
 Remedial Powers
o Courts (CL): damages only, no power or have refused to order employee reinstatement
o Arbitrator (CA): have the power of reinstatement, or different forms of discipline
 Similarities (Substantive Grounds for Termination):
 Duty of Fairness
o The basic duty structures are similar in CL and CB – both have duty of good faith and
fair dealing in termination, however, CB also has grievance procedure
 Decision Making
o Adjudicators in both systems (courts – CL and arbitrator – CB) take contextual (look at
the circumstances of the misconduct) and proportional (make sure the severe
consequence is in proportion to the misconduct) approach
o CL: not every breach of employment agreement will justify summary termination
o CA: not every breach of employment agreement will be cause for discharge – Have to
look at severity of the conduct and the record of the employee
 Perhaps the inability of the collective bargaining regime to differ from the common law
conception of the independent employment scheme is that there is an overlap of personnel, they
are using old tools to navigate a new ship
 It is argued that there is no real recognition of employee interest – fairness requirements only
seem to be imposed in the relationship when there are protections that exist in the collective
agreement or within a statute that governs the relationship (OHRC)
 Others argue that the ability of arbitrators to alter discipline, the use of the KVP rules etc.
distinguish arbitration from the common law and place limits on management prerogative
 One thing is for sure, the collective bargaining regime’s grievance procedure has increased an
employee’s access to justice
Prof:
 Is it surprising that the duty structure didn’t change much from CL to CB?
 Note: once you enter into CA, the CL rules don’t apply – thus, why didn’t the duty structure change
in the CB
 Workplace Structure: There are structures that are entrenched in workplace that arbitration can’t
Page # 136




change (the parties have to)
The vision was that by entering into CB, the workers would be entering into an industrial citizenship
(a constitution) – a new framework for their relationship, which would be more legitimate b/c of CB
However, b/c of the power imbalance, CB wasn’t very different from the previous contractual
arrangement made under individual contracts of employment
Peterborough Lock (1953)- Locke
o “The change from individual to CB is a change in kind and not merely a difference in degree. The
introduction of CB system involves acceptance by the parties of assumptions…alien to the area of
individual bargaining. Hence, any attempt to measure rights and duties in employer-employee
relations by reference to pre-CB standards is an attempt to re-enter a world that has ceased to
exist”
o I.e. Held that CB was different than CL
o Most arbitrators did NOT share Laskin’s view: they saw the arbitrator and the world of the CB no
different from CL – owners (employers) are still organizers of production, economic system
rewards those who are efficient. Role of arbitrators not supposed to facilitate restrictions
o Desire for efficiency – puts production before anything else (i.e. Obey now, grieve later)
Woods Task Force – major commission in order to recommend reform to the CB
o “A principle objective of CB system is to provide workers with the means of
participating…in the determination of their terms and conditions of employment. The CB
process becomes a means of legitimizing and making more acceptable the
superior/subordinate nexus. Accordingly, the actual impact of CB on the well-being of
workers may not be as important as the potential impact”
o Therefore, want a way to legitimize inequality by allowing participation of some kind. If
this is more democratic workplace – it’s one with workers still accepting their
subordinate position
Page # 137
Benefits of Industrial Citizenship (CB) According to Industrial Pluralists
Industrial pluralists have identified key advantages of arbitration
1. Review and moderation of disciplinary action
o Under CB management has more authority to impose discipline on employees. I.e. more power
to punish within CB then at CL (Denver-Gardener Case – can suspend employees without pay)
o Allows for regime of Corrective or Progressive Discipline
o Adams writes about this: Made an analogy b/n individual discipline and criminal
discipline that when talking about imposition of discipline in industrial relations the goal
are the same as criminal law: (1) specific deterrence – teach individual so they don’t do it
again, (2) general deterrence – punish individual as an example to deter others (3)
denunciation – want the community to reject the behaviour (4) removal – if employee
can’t remain in the workplace, then arbitrator will uphold termination
o Bottom Line: not a regime that empowers industrial citizens – rather it transforms
workers so that they accept their subordinate position and the system’s values and modify
their behaviours accordingly
o Only some protection provided to workers by the regime and some job security but it also
makes available to the employer correction that doesn’t exist in the CL world
2. Participatory Rights
o Opportunity to bargain and strike (employees can strike to get what they want, individuals can’t)
o However, there’s not much participation with respect to the grievance arbitration system (i.e.
rarely is there a right to participate in ongoing decision making after CA is signed)
o When an employee grieves
o Individual files grievance, the union decides whether they will pursue the grievance, the
grievance procedure takes the problem off the shop floor, so that production can keep
going, into bureaucratized, formal dispute resolution process
o This promotes lack of individual participation in favour of bureaucratic tendencies
o Could lead to constant grievance arbitrations in workplace (not beneficial in enhancing
worker participation)
3. Arbitral Fetters on Management Rights (Duty of Fairness)
o When arbitrator hears grievance – they interpret and apply the CA (no employment standards
legislation involved just the CA)
o If there’s no explicit limitation on management rights in CA – is there an implicit limitation that
arbitrator’s can impose?
o Approach to management rights
o Reserve Rights Theory: management rights are absolute expect to extent limited by CA
o Joint Sovereignty Theory:
 Laskin: CA is a democratic agreement, where employees and employer working together
to make a fair agreement. Thus can’t imply anything into agreement that’s not there. It’s
a joint authorship in which agreement would substitute old world of CL
 Woods Task Force: Substitute rule of law for rule of man in workplace
 Not enough to say that CB is the old world of contract employment combined with
whatever union could bargain for. It’s a democratic regime and the employer who
exercise authority have to meet certain standard. Arbitrato has to review management
behaviour according to the standard
Page # 138



Beatty Argues: role of arbitrator not to just find or give effect to what parites intended or
negotiated. Arbitration becomes substitution for negotiation in bargaining
It’s a way to call into existence the different world that Laskin saw when the parties
themselves weren’t able to do it through negotiation
Bottom Line: there’s a substantive outcome that arbitrators should be allowed to achieve
(i.e. arbitrators should impose substantive values on the parties even if the absence of
explicit terms in CA)
Arbitrators Imposing Substantial Outcomes
 To achieve fairness, management can’t impose do whatever it wants so as to undermine the implied
term of the CA – thus arbitrators should be allowed to impose substantive outcomes where
management hasn’t
Metro-Ambulance – Substantive decision imposed by arbitrator – overruled management rights
Facts: Employer introduced unilateral changes on use of sirens for ambulance drivers. Drivers didn’t
like this – they wanted more discretion and grieved. Claimed no problem with old and no safety
concerns with old problem
Issue: Was the arbitrator’s decision to overrule management rights, patently unreasonable?
Arb:
Trial:
Struck down the new policy. Employer couldn’t show evidence to justify the change in policy
Overturned the decision. Held board’s interpretation of CA was unreasonable
CA:
Upheld board’s decision. Can overrule management rights



All management rules with discipline must be reasonable (unreasonable if employer acts in arbitrary
manner, i.e. can’t provide business justification for the modification of the policy)
Therefore, can only override management rights if its patent unreasonableness
Here: Nothing in board’s decision was patently unreasonable. “By imposig duty on emo;oyer to
expercise its discretion to make rules which if not obeyed result in discipline, in a reasonable fashion
– the Board interpreted CA in way that was reasonable and logical
Note: Unreasonable that arbitrator can override managements rights – employer acted in
arbitrary manner or if there was business justification for the modification it can be found
unreasonable if it conflicted with interest of the employees (i.e. just cause provision)
Arbitrator can overrule management if management uses its power under management rights clause to
issue…order which undermines the reasonable clause provision. Can’t issue unreasonable rules and then
discipline the employee for not following them
Stelco Case
Facts: Employer adopted vacation policy – they were silent on an issue and union grieved. Arbitrator
upheld grievance and employer challenged it.
Court: upheld the employer’s challenge. Held for employer
 Arbitrator can oblige management to exercise discretion reasonably, where to do so unreasonably
would create a conflict with rights conferred by another provision in the CA
 However, employer only has to act in bona fide way. Management decision made in good faith can’t
be challenged as being unreasonable just b/c it had the effect of conflicting or undermining another
right
If employer found to act in bona fide manner, it doesn’t matter that their exercise in power undermined an
employee right
Page # 139
Re Sisters of St. Josephs - OCA endorsed Stelco view – employer only has to act in bona fide manner
Facts: Job-posting. Came within management rights such that the union couldn’t point to anyint in CA
with regards to the job postin or job classification. Union grieved
Arb: upheld grievance. Employer was acting in good faith howver, didn’t have good enough
justification for what it had done
CA:
Held for mangement. Arbitrator acted outside jurisdiction by imposing requirement that
tmangement had to give reason for what it did. Arbitrator is rewriting the CA
Managementn function shouldn’t be usurped by imposing high standard of justification (i.e. have
to have congent and convincing evdince to prove tha they were acting in reaonble way)
Board shouldn’t’ make its won decisiona dn impose it on the employer
Re Lenworth Metal Products
Facts: Privacy in workplace – employer installed surveillance equipment. Employees grieve claiming
right to privacy in workplace
Arb: Installing cameras is an unreasonable exercise of management rights without clear and
convincing evidence as to why internal security problems couldn’t be adequately handled by
existing supervising arrangement
CA:
Court split
Maj: No general duty on management to exercise all rights in reasonable manner. Management rights
could be subjected to standard of reasonableness where exercise of management rights can be
limited to extent that it conflicts with other rights (i.e. just cause)
Dissent: putting in cameras doesn’t conflict with just cause provision in the agreement
This debate shows…
 Different views about nature of CB and nature of grievance arbitration as mechanism of industrial
arbitration where unions haven’t been able to have more control over management rights
On one hand:
o Those who take view that management continues to have the right to manage as owner of the
means of production except to extent those rights are limited by CA
o Labour law shouldn’t intervene to undermine management judgment
o Will discipline arbitrators who will substitute their decisions for management
On other hand:
o Those who have the view that something different was supposed to happen in CB system and
even though union didn’t have the power to make that happen, arbitrators can still do something
to contain exercise of management rights that violate the vision they have the workplace
o The arbitrator will find some way to strike down management provision (i.e. conflict b/n
management rights and protection clause)
o Bottom Line: try to limit management rights so employee interest can be protected b/c they’re not
protected under CA
Page # 140
Collective Action
The Duty to Bargain in Good Faith
 It’s a statutory duty – one consequence of recognition is that the employer is under a duty of good
faith to enter into the CA with the union (De Vilbiss)
Labour Relations Act
s.17
Obligation to Bargain in Good Faith. The parties shall meet within 15 days from giving notice
of desire to bargain (under s. 16) and shall bargain in good faith and make every reasonable effort
to make a collective agreement
s.86(1) Working Conditions May Not Be Altered. Where notice has been given under s. 16 to bargain,
no employer shall alter the terms of the employment contract without consent of the trade union
(a) until the minister has appointed a conciliation officer or a mediator under this Act
(i) and 7 days have elapsed after the minister has released to the parties the
report of the conciliation board
(ii) 14 days have elapsed after the minister has released to the parties a notice
that they do not consider it advisable to appoint a conciliation board.
(b) or until the right of the trade union to represent the employees is terminatedwhich ever occurs first.
 Purpose of Duty to Bargain in Good Faith
1. Gives effect to recognition of union as exclusive bargaining agent
o A component of recognizing union is that you will negotiate in good faith with it
2. Promotes Dispute Resolution
o Want to avoid unncecessary conflict – which is conflict that could have been avoided if the
parties sat down together and negotiated
 General Content of Duty
o Only have to promote process of negotiation, parties not required to actually come to agreement
(after discussing – still might not be able to agree)
o It’s a process-oriented duty – each party has their own self interest. Therfore parties are allowed
to enage in hard bargaining (they can take a position and stick with it)
o This is not evidence of bad faith bargaining – don’t have to accept terms that you don’t agree
with and can’t be at fault for that
o Problem: only have to agree with what is beneficial – then how do you distinguish b/n hard
bargaining and bad faith bargaining
o Solution: If parties define their interest in a way that violates accepted norms in the CB
relationship, the labour board will impose the terms (i.e. Substantive determination, not just
procedure) – therefore there’s restraint on the notion of voluntarism
Duty to Bargain in Good Faith and Freedom to Contract
 The OLRB does not enforce a duty to reach an agreement – just to bargain in good faith
 It simply requires the parties to engage in the process with an honest effort
 Devilbiss – “we compel negotiation and compel bargaining in good faith, but no compelled
decision making – this would interfere with the normal business market”
Page # 141
Duty to Bargain in Good Faith – Bad Faith vs. Hard Bargaining
How does the OLRB distinguish between bad faith and hard bargaining?
 Have to look at the context to determine whether employer was really refusing to come to
agreement
United Electrical Workers et al. v. De Vilbiss (Canada) [1976]
Facts: • newly certified union was negotiating first contract with employer. In this context there is
concern that there is refusal by employer to bargain in good faith or attempt to avoid
unionization by refusing to negotiate first contract. Union filed a complaint against employer
for not bargaining in good faith
Issue: • what is difference between bad faith and hard bargaining?
Board: • The surrounding circumstances lead the board to be suspicious of the employer
 Factors that gave rise to suspicion of bad faith conduct
1. Union recently certified w/ strenuous employer opposition
2. Board looks to conduct of negotiation sessions
i. first bargaining session where union puts forth list of demands and wants disclosure of
existing wage structure to determine wage offer, was cut off a few minutes into the meeting.
The employer looks at it and says we are going to conciliation - saying that they have reached
impasse before negotiations really got under way (is this genuine effort to engage with union)
ii. Subsequently refuse to resume negotiations when asked to by union
iii. When conciliator arranges meeting they fail to show up
• this appears to be bad faith bargaining - not wanting to negotiate at all
3. Employer refuses to disclose information vital to the negotiation process (the wage structure)
• this failure to disclose represents evidence of bad faith
4. Employer unilateral changes terms and conditions of employment
• in Ontario, s.86(1) prevents employer from making any unilateral changes during
negotiations or conciliations until the parties have bargained and gotten themselves into legal
strike or lockout position - statutory prohibition against unilateral change - not evidence of
bad faith bargaining, but it is a statutory breach
• Note: at this point in the case, the management tells the workers that there will be massive
changes to conditions, etc. now, however the employee were in strike or lock out position
(i.e. already bargained for CA) thus can employer still unilaterally change terms and
conditions – not always might be unfair labour practice
• beyond the statutory freeze period, it is not a rule that this is bad faith
bargaining, however, it does alert the OLRB that something wrong is happening
(note: even though the employer changed the terms after CB had taken place,
employers intended to do so even before collective bargaining – thus bad faith)
• Employers also tried to by-pass the union and try to negotiate directly with employees. Not
allowed – can’t go behind union and deal directly with employees (if the employer wants to
make changes have to do it with union not employees)
5. Employer offered bonus to employee to work the entire week, which was the week that the union
negotiating committee was getting together. Unfair labour practice – b/c it was enforced
specificially to undermine employee participation on th eday the union was holding the emeeting.
• I.e. employer knew that some employees wouldn’t be able to work the entire week for the
money, or they would miss the meetings to work the week – interferes with union negotiation
• all of these factors combined lead board to the conclusion that the employer had no intention
Page # 142
Rem:
Note:
Note:
to try and reach collective agreement, negotiating in bad faith, not making any effort to try
and reach an agreement
• idealistically the union wants the Board to impose first agreement or have it done by
compulsory arbitration (third party imposes terms and conditions of employment)
• Boards refuses to impose CA because of their belief in voluntarism – the scheme is voluntary
(the parties are in the best position to determine the terms and conditions of CA)
• will say that the order is to tell the parties to go back and negotiate - individual damages
compensated as well
focus on the process of good bargaining (good faith) and not the outcome of bargaining (the CA)
Therefore board will only order the parties to go back and engage in serious effort to reach
agreement with the union, with the threat that if they don’t, then the bard can impose CA
this doesn’t prevent the employer form taking hard position – but they at least have to appear to
be participating in negotiating in a fair way
The Board will look at the entire situation to determine whether, on the whole, it appears that one
party is bargaining in bad faith. Hard bargaining is not bad faith, but when this goes so far as to
refuse to meet, refusing to provide information requested, unilaterally making changes in this tense
time (not in breach of the Act though so only evidence that something is wrong) and discriminatory
treatment of bargaining unit team then the Board will impose a remedy of ordering the parties to
negotiate
This case establishes many things:
o LRB view of the purpose of duty to bargain in good faith
o Focus on the importance of the principle of voluntarism and therefore that the duty was more about
process, not outcome (i.e. there was no substantive determinations of CA, only wanted to make sure
the employer was engaging in process of CB)
o Allowed to engage in hard bargaining as long as person is bargaining in good faith (K-Mart of CB)
o Here: it was obvious that the employer wasn’t engaging in fair labour practice – didn’t want CA
o Thus after De Vilbis – don’t shut down so easily, make a counter offer to union’s offer, don’t refuse
to negotiate, if conciliator asks you to come to meeting then go to the meeting (thus able to abovid the
problems faced in De Vilbis while still being able to do hard bargaining)
Two Problems After this Case
o How do distinusish b/n hard abargaining and unfair bargaining
o Will the board step in to compel people to negotiate (i.e. if CB process doesn’t produce outcomes
with some minimal content that complies with what the ideals of the industrial pluralists have
(democracy) will they violate those to achieve a result)
Duty to Disclose
Duty to disclose information during the negotiation process
 De Vilbiss deals with one instance of this - management’s failure to provide reasonable
information to other side to allow them to prepare offer – eg the wage structure
 This is a process issue – economic efficiency through negotiation process assumes both sides
have equal access to knowledge
 this issue has also come up in other contexts - disclosure about the economic plans of the
employer, work reorganization, possible relocation, technological changes in the pipeline, etc.
 Thus employers have to disclose the following information to unions:
Page # 143
o
o
Matters under consideration that would have potential affect on bargaining unit
This is important in situations when after CA has been entered into employer announces
that its shutting down or that its going to undertake a technological change with impact
on bargaining unit. Problem is that after CA is signed, there’s nothing the union can do –
can’t reopen CA and renegotiate, can’t strike or lock-out in order to threaten employer
b/c once CA’s signed, there’s no strike or lock-outs during life of CA
Why is it important that these be disclosed during the negotiation process rather than after?
 bargaining is the one window that union can negotiate protections against these types of actions,
etc. - is the one time that unions can negotiate over issues and have some bargaining power - ie.
could strike unless able to extract some protections
o all of these types of decisions are management’s rights and union is powerless
Westinghouse Canada Limited, [1980] – duty to disclose decisions that have already been made
Facts: • Agreement reached (i.e. CA signed) and 3 months later employer notifies that relocating
some of work to other sites which are not unionized. Union had not negotiated anything in
regards to this idea. Union files unfair practice complaint because employer failed to disclose
this information of plans to move and denied the union the right to bargain about them
Board: • No breach of duty to bargain in good faith b/c union never asked employer about matters
under consideration. However, found employer to be motivated by anti-union animus and
thus unfair labour practice
 Two employer duties:
1. Duty to disclose decisions that have been already made
if at the time that the negotiations are occurring decision has already been made – employer must
disclose to union. I.e. if employer had during course of bargaining decided it was closing the plant it
would have been under obligation to disclose these plans to the union even if not asked by union
2. Duty to Respond honestly
Employer has to respond honestly when asked about plans under consideration. I.e. if union had
asked employer if they were contemplating relocatin as part of plan, employer has to answer honestly
even it hand’t yet take final position on it
• but there is no obligation on employer on its own initiative to disclose initiatives that are under
consideration but about which no firm decision has been made
• Don’t have to voluntarily disclose matters under consideration and not required to disclose plans
that haven’t crystallized
• union loses here - Westinghouse had not actually decided to close or not at time of
negotiations and union failed to inquire
• however, in the end, the Board sides with union as said that employer’s decision was
triggered by anti-unionism goals
A company has a duty to disclose any decisions that have already been made at the time of
negotiation. A company does not have a duty to disclose, on its own initiative, other plans that are
under consideration but about which no firm decision has been made – unless the union inquires
Page # 144
International Woodworkers of America v. Consolidated Bathurst Packaging Ltd.
Failure to disclose to union decision to close plant is bad faith bargaining
Facts: • CA is reached and shortly after the employer decides to close operations. Union had not made
any inquiries as to plans but makes allegation of bad faith bargaining
Board: • no duty on employer to disclose at own initiative matters that are being considered but about
which no firm decision made yet
 Board found however, a de facto decision had been made b/c of circumstances and thus reubttable
presumption was raised and employer failed to rebut it. Thus bad faith bargaining
 where decision is announced shortly after bargaining has concluded that will raise a rebuttable
presumption that a de facto decision had been made at time of bargaining, thus burden shifts to
employer to establish that in fact no de factor decision had been made (i.e. at the time the
employer was bargaining with the union they didn’t know that they were going to shut down)
 If employer doesn’t rebut this presumption the board will find that the employer is therefore under a
duty to disclose even if not asked – however the fact that the union did not disclose the info without
being questioned by the union was of issue
While there is no duty on employer to disclose initiatives for which no firm decision has been made,
the Board may draw an inference that where a decision is announced shortly after bargaining has
concluded that a de facto decision had been made at the time of negotiations. This is sufficient to
meet the requirements for disclose without inquiry from the union
Canadian Pacific Forest Products Ltd [1989]
Facts: • case of technological change
OLRB • Employer failed to bargain in good faith b/c it didn’t disclose the intention to shut down the
turbine when bargaining with union
Reason:
says primarily focused on the process of bargaining, the content is relevant only so far as it
may be used as evidence for the Board to draw inferences in regards to parties bargaining in
bad faith
New : • extends the issue of disclosure into the area of technological change - not limited only to
plant closures, etc.
• extends to any decision that is bound to impact on the bargaining unit which they may
wish to negotiate about
Rem: • Board would not find it appropriate to order the company to put the turbine back into work will not require employer to move plant back, to continue to operate when decision was to
shut down, etc. - not prepared to interfere with management prerogative to this degree
• find remedy to compensate the union for what they suffered as result of inability to bargain
due to failure to disclose
• here they ordered them to go back and negotiate again in regards to some of the issues around
this area, including the bumping rights of seniority - had to sort these issues out because this
had occurred
• these remedies don’t fully rectify the union to the position they would have been had
disclosure been made originally - they don’t have much power not (cannot strike)
The obligation of disclosure extends to decisions regarding technological change within the
workplace. The Board also says that the primary focus should be on the process of the bargaining,
the content is relevant only so far as it may be used as evidence for the Board to draw inferences in
regards to parties bargaining in bad faith
Page # 145
Summary of Disclosure Requirements:
(1) The employer must answer questions honestly, and although there is no onus to
disclose information that the employer is in the process of considering, if the union makes such
inquiries, the employer is obligated to answer the question honestly – Westinghouse & Bathurst
(2) The employer has a duty to disclose information that is required by the union to make proposals, reach
informed decisions, and perform its statutory duties - De Vilbiss Case
(3) The employer has a duty to disclose information with respect to decisions made prior
to or during the bargaining process - Westinghouse Case
(4) The employer has to disclose information in regards to decisions that may be made shortly after the
conclusion of bargaining or else the Board may infer a defacto decision having been made prior to or
during the negotiation process - Bathurst Case
(5) The employer has a duty to disclose information that will have the effect of dramatically changing the
working environment – not just plant closures – includes technological changes – Canadian Pacific
Forests
Legislative Response
How has the LRA helped parties reach a first Collective Agreement?
 Limited voluntarism by mandating terms
 The legislature takes certain things off the table and statutorily requires that certain terms must be
included in collective agreements that are not subject to negotiation
S. 45(1) Recognition Provision. Mandatory recognition – when union is certified, employer is required
to recognize it. This becomes part of CA and can be taken to arbitration if there’s a dispute over
that matters
s.46
Every collective agreement says no strike or lockout during life of collective agreement
s.47
Deduction and Remittance. Provision that states employer must deduct amount of regular union
dues and remit the amount to the trade union – RAND formula
s. 48
Arbitration Provision. Every collective agreement shall provide for final binding arbitration
without the stoppage of work for all differences b/t employer and union
Page # 146
First Contract Arbitration
 In order to avoid the first term agreement problem the Board is allowed to impose first term contracts
if parties can’t agree
 Note: this is unique b/c union didn’t have to establish that there was bad faith bargaining to get this
remedy. I.e. Statutory Entitlement
s.43(1) First Agreement Arbitration. Where parties are unable to reach a first collective agreement,
either party may apply for a settlement of first collective agreement by way of arbitration –
regardless of whether s. 17 (duty to bargain in good faith) has been violated
s.43(2) In deciding whether or not the application will be accepted, the OLRB will consider
(a) the refusal of the employer to recognize the bargaining authority of the trade union
(b) the uncompromising nature of the bargaining position by one of the parties
(c) the failure to make reasonable efforts to conclude the collective agreement
(d) any other reason that the board considers relevant
Note: This violates principle of voluntarism
Rationale: Bargaining units were having significant difficulties in reaching their first agreement
Case: Royal Oak Mines v. Canada (Labour Relations Board) [1996] 1 SCR 369
Adjudicative Minimum Standards
Facts: • extremely bitter strike in the mines. Employer used replacement workers. Here, there was a
bombing inside the mine and 9 replacement workers were killed. In the aftermath of violence,
extraordinary efforts made by the governments to try and reach settlement. However, the
employer appeared bent on breaking the union. Union eventually filed unfair labour practice failure to bargain in good faith (this continues on during strike) – employees were ordered
back to work (back to work protocol deals with the process of going back to work after such a
long and bitter strike)
• Three ways in which employer breached the duty to bargain in good faith:
• 1. problems in negotiating the back to work protocol
• union wanted arbitration provision to ensure that any dismissals that occurred when
workers were called back to work were for just cause (wanted the right to be referred
to arbitration if disciplinary action was taken against striking employees)
• Employer refused to bargain with union until after certification process. No CA
enforced thus no access to arbitration
• 2. employer insisted that all striking workers would be given probationary status for some
period of time after strike settled
• this would lead to lower level of protection against discharge of discipline during
probationary period
• The workers had the right to strike and therefore the employer can’t penalize those
who participate in lawful activity (goes against principles of labour relations statute)
• 3. During the time where there are replacement workers, also employees – there was an
attempt to have the replacement workers decertify the official union and certify their own
union - while this occurred, the employer refused to negotiate with certified union - this
was dismissed due to employer involvement in union formation
Board:
• found in totality there was an unfair labour practice
Remedy:
ordered that employer put on the table an offer that had previously been rejected by the
striking miners and also that they agree to impose arbitration to hear dismissals of those
fired during strike
Employer challenged the Board’s finding of bad faith and the remedy that was ordered
Page # 147
SCC:
•
before the court, the focus was on the willingness of the employer to accept the arbitration
condition to settle the back to work protocol
• duty to bargain in good faith had 2 elements:
1. subjective element - both parties had to have a subjective intent to participate in negotiating
process in good faith - lacking subjective intent was unfair labour practice - this was hard to
prove. Look at circumstantial evidence and try to establish whether they have met appropriate
standards and if acting in good faith
2. duty to make reasonable efforts to enter into CA to be measured on objective standard. To
determine whether reasonable effort has been made, look at comparable standards of practive
within the industry
• If employer’s proposals are far from accepted norms – not reasonable
• I.e. refusal or demand to depart from the customary norms that have become accepted
standards in the industry is bad faith bargaining (it’s an unreasonable demand)
• “failure to negotiate and include the clause cannot be viewed as reasonable” - shows
departure from voluntarism doctrine
• employer argued that this was a total violation of voluntarism in contracting - the Board was
imposing terms in the contract of employment the employer was no longer willing to offer
• Court responded by saying that it is true that free collective bargaining is (para.98) a
cornerstone of the CLC - but it is not an absolute principle
• some kinds of hard bargaining might be characterized as per se bad faith bargaining,
and in these circumstances, the labour boards can become themselves as type of
arbitrator and impose terms on the parties
Remedy: The board will be justified in exercising its experience and skill in order to make remedy –
where it has been found that the dispute was due to one of the parties not bargaining in good
faith and that this cause the failure of CA to be made
Note:
It’s appropriate to limit voluntarism to achieve higher goal (i.e. resolve conflict) and to
establish that certain norms that are accepted in the community are adhered to
There are two parts to the duty to bargain in good faith: (1) Both parties must have subjective
intent to participate in the process in good faith and (2) based on an objective standard, the parties
must make reasonable efforts to reach a collective agreement. Further, the Board can infer from
the actions that bad faith bargaining is occurring or can determine that this is per say unreasonable
and bad faith. Not sure which way the courts will go
Page # 148
Individuals in Collective Bargaining System
What is the place of the individual in the collective bargaining scheme?
Duty of Fair Representation
 how do we protect individual rights within a system established to represent the majority view?
 Duty of fair representation – have to balance collective goals with individual rights
OLRA
s.74
Duty of Fair Representation. A trade union shall not act in a manner that is arbitrary,
discriminatory or in bad faith in representing any employees in the bargaining unit, regardless of
whether they are members of the union or not
Note: When union’s negotiating CA, has to represent all union members in the process. However,
doesn’t mean that it can’t make choices in determining the terms of the agreement. Can’t satisfy
every single person in the bargaining unit
 there are however a number of other provisions that provide individuals with certain types of
redress to ensure their views are adhered to:
o OHRC applies to trade unions - if union makes decision that discriminates on enumerated
grounds, they can be challenged before the OHRC
o s.15 of the OLRA prohibits the certification of unions who discriminate under OHRC and
CCRF from being certified
o s.51(2) prevents the discharge a employee in union shop workplace b/c they have lost
their union membership for various reasons
o s.54 of the OLRA - prohibits CA from discriminating against persons whom are protected
 In an allegation of the breach of the duty of fair representation, the Board can order the union to
take the case to arbitration
I.e.
labour board doesn’t want to find that unions have come to unfair result when found to have
sacrificed some members of the bargaining units interests for other member’s interests. They,
however, have to do this in a fair way. The board will therefore look at the process, NOT the
outcome by which the union decided to choose some interests over other interests
Difficult case to win in absence of agregious conduct on the part of the union
Page # 149
Ford Motor Company of Canada [1973] OLRB Rep. 519
Boards have been cautious in their approach to complaints of fair representation
Issue: • how to balance majority interests with need to fairly represent the interests of all members of
the union
Board • S. 60 of OLRA says that the union has to consider the interests of all the groups and balance
the competing interests of minorities, individuals etc. with the majority interest coming to its
decision = duty of fair representation
• begins to identify a number of factors that board should consider to flush out the duty of fair
representation
1. look at context in which duty is to operate? who is burdened by the duty? Laypersons
• the people who makes the decisions (union officials) are laypersons – have to look at their level of
expertise and knowledge, they can only be held to the standard of people with their background,
can’t hold them to same standards as those who are highly professional
2. look at the unions interests
it is legitimate for the union to consider things that affect their viability as a unit - ie. costs of grievances
to the union, therefore the union can’t take on every grievance. Have to consider the interests of others
when pursuing grievance – an indvidual’s claim might not be met while other individual’s are
3. look at the union’s long term relationship with management
4. the desire to resolve disputes
undesirable to place unions in a place where they feel that they have to take everything to arbitration.
Dispute resolution might have to take place at lower levels – not at the board. Employers have to be
confident that what the union decides won’t be overturned
Four factors to consider in determining whether union has given fair representation:
1. Context in which the duty operated
2. Look at aspects of the trade unions interests
3. Look at union’s long term relationship with management
4. The desire to resolve disputes
All this means that the union should be given fairly broad discretion to deal with these issues
The statute protects an individual’s interest in his grievance from being abuse by requiring the
union to deal fairly with the grievance – S. 60
Walter Princesdomu [1975] – What does ‘bad faith and discrimination’ mean
Held: Specific adjudicatory procedure set out:
(1) Duty not to discriminate – Union can’t single out certain individuals and treat them unfairly. Can’t
treat people differently on prohibited grounds, have to treat people differently on a legitimate basis.
Note: prohibited ground includes non-membership in union – can’t act unfairly toward person b/c
they aren’t member of union
(2) Duty not to act arbitrarily – a mere error in judgment, mere negligence or laxness are not arbitrary
behaviour (not enough to constitute breach of duty of fairness)…requires flagrant errors, consistent
with ‘not caring’ attitude in processing of grievances. Union has to put its mind to the matter
(3) Duty not to act in bad faith – subjective dimension ie: ill-will, animosity on part of union toward an
employee
Bottom Line: LRB don’t hold union to high standard of conduct b/c many union representatives are
volunteers (no background) and don’t want union to be risk adverse to settle agreements
(employer should have confidence that if union signs an agreement, that’s the end of it)
Page # 150
The Individual Contract of Employment in the Collective Bargaining System
 Is there a place for an individual contract of employment in CB scheme?
 I.e. Can union members bring civil actions in relation to something that arose out of their employment
relationship (when there’s a CB agreement)
 Before CB Scheme:
o CA’s weren’t legally enforceable – employer could sign CA but if breached, they couldn’t be
sued
 Post Statutory CA:
o Individuals were entitled to sue – if employer breach CA i.e. didn’t pay employee wages
o Held: there was an individual contract of employment even if there was a CA
o Neslon Laundries, Hamilton Street Railway – courts would allow the individual to bring an action
(sue) as long as the courts didn’t have to interpret the CA. I.e. the terms of the CA are
incorporated into individual contract…however grievance process was the exclusive method for
deciding dispute under CA
o Alternative Method (Laskin, Peterborough Lock) – the world of CB was different than the old
world of the individual contract of employment). When in new world, left the old world behind –
there was disjunction b/n the worlds and thus no room for individual contract in CB
Under what circumstances can unionized employee seek the remedies of the court?
Nelsons Laundries, Hamilton Street Railway, Grottoli,
 Parties to a collective agreement could bring a civil action in the courts so long as it did not require an
interpretation of the collective agreement. Thus it seems to suggest that a civil action could be
brought on the individual contract of employment – the terms of the collective agreement are
incorporated into the individual contract – but does this include an incorporation of the grievance
procedure??
McGavin Toastmaster Ltd v. Ainscough (1975)
No room left for private negotiation b/n employee and employer where the matter is in the CA (only
room if matter not covered by CA)
Facts: •
Issue: •
Court: •
•
employer announced plan to reduce operations and unionized workers went on strike to
protest this. They were still on strike when the plant, which was shut down b/c of the strike,
decided not to reopen. The employer also refused to pay striking employees (illegal b/c it
occurred during life of CA) severance that is due under the CA b/c there was repudiation of
the contract by the employees. Employers claim that employees have fundamentally breached
individual contracts of employment by going on illegal strike and thus ceased to be
employees thereby relieving employer of having to comply with CA (i.e. employees therefore
had no right to claim benefits under the contract). Note CL principle of fundamental breach
brought into CB
Were there individual contracts of employment which could have been breached and
alternatively, does it make sense to talk about these common law notions such as repudiation
and breach of contract in light of the new world - should these be brought in?
Employers had to pay severance. The strike didn’t terminate the employee/employer
relationship
Laskin takes view that there are no individual contracts of employment to speak of here so
employer cannot rely on breaches of individual contracts of employment as grounds to
say that they have effectively quit and therefore not entitled to contract benefits
Lakin: says these are different worlds - there should be no reason to assume that doctrines
Page # 151
•
•
adopted and developed in context of individual employment should be imported into this new
regime (the individual relationship b/n employer and employee is only at the hiring stage, not
in the CB)
there are other ways to deal with these issues under the CB regime - common law doctrines
should not play any role in this situation
Note: When there’s CA, there is nothing outside it-there’s no individual contract of
employment. Might be one when entering into employee/employer relationship but that ends
one in CA world
The common law doctrines surrounding the individual employment contract are not adopted by or
contained in the collective agreement. As there are no individual contracts of employment, the
parties cannot rely on breaches of individual contracts of employment
Question: Is there any way the individual employee can sue? Can they bring claim under ESA, Tort,
Charter (i.e. actions that arise outside of employment relationship for which there are other remedies)?
Weber v. Ontario Hydro – there’s no concurrent jurisdiction of court for matters covered by the CA
Fact: • Weber worked for Ontario Hydro. Took sick leave and received benefits under CA. Employer
hired PI to go into employer’s home because they suspected he was faking and therefore
abusing benefits. Used the information that they got from his home to suspend Webber for
abusing benefits. Union files grievance on behalf of Webber, claiming use of PI breached
CA. At the same time Weber brought action in court against Ontario Hydro alleging PI
committed torts and Ontario Hydro responsible for those acts and breach of Charter under s.7
and s.8 for illegal searches. Ontario Hydro had motion to have this action struck as no basis
for it – (i.e. employee has to go through grievance arbitration under CB)
Note:
S. 45(1) of OLRA – every CA ‘shall provide for the final and binding settlement by
arbitration…of all differences b/n parties arising from the interpretation, application,
administration or violation of the agreement”
Court: • SCC adopts the “exclusive jurisdiction approach” - there is no concurrent jurisdiction
of court over matters that are covered by the CA - have remedy in one or the other, but
not entitled to pursue remedies from both
• therefore need a test to see who has jurisdiction – Whether the dispute in its essential
character arises from the interpretation, application or administration of CA, there needs to be
an analysis of the essential character of the dispute by assessing
1. nature of dispute - the facts surrounding it, not the legal character of the dispute
2. What the CA covers - if the facts come within what the CA covers, then it’s within
the exclusive jurisdiction of the arbitrator and you can only get remedy through
grievance arbitration
• here, the majority of the court said that the essential character of the dispute is one that arises
in relation to the Interpretation, Application or Administration of the CA, including the
• Charter dimension of the claim
• Couldn’t bring civil claim b/c it was covered by the CA
• don’t look at the legal form - look at the facts - the facts that gave rise to the claim –
unlawful entry into home to investigate the allegation that employee abusing sick
benefits)
• case is really about the IAAV of the CA so we have to bring this before arbitrator
• I.e. as long as in essence the matter is one that’s covered by the CA – then have to use
grievance arbitration process
Page # 152
•
here, the arbitrator had the legal authority to deal with this dispute (the provisions of the CA
are broad in this case and therefore the arbitrator decides the remedy)
• The benefits of the sick leave plan are part of CA, it covers the conduct alleged against
employee
• Minority decision - they agreed on the test and how to apply it, but disagreed on the Charter
issue - said if asserting that Charter right being violated, could go to court
In order to determine the proper jurisdiction for a dispute, we need to look at two things:
1. The nature of the dispute - the facts surrounding it, not the form they take
2. The ambit of the CA - if facts fall under this ambit then go to arbitration
The general question is whether the dispute arises as a result of the interpretation, application,
administration or verification of CA – if it does, it goes to arbitration – if it doesn’t, it goes to court
The Place of Individual Contract of Employment in Strikes and Lockout
S. 86(1)
Working Conditions May Not Be Altered. Where notice has been given under S. 16 to
bargain, no employer shall alter terms of employment contract without consent of union
(a) until minister has appointed conciliation officer or mediator
(i) and 7 days have elapsed after minister has released to parties the report of the
conciliation board, or
(ii) 14 days have elapsed after minister released to parties notice that conciliator isn’t
needed, or
(b) until the right of the union to represent the employees is terminated whichever happens
first
I.e. S. 86:
Statutory freeze kicks in b/n time that CA expires and time that parties are in strike or
lockout position
Note:
Things stay the same until the employee get into strike or lockout position
Note:
There’s also mechanism for resolution of dispute during that time
Note:
After employee has passed the strike or lockout freeze period, i.e. in strike position, the
employer’s not prohibited from unilaterally altering terms and conditions of employment.
However, there are limitations on what an employer can do:
1. De Vilbis – if employers negotiate with employees, they violate the right not to negotiate while
bargaining unit is in effect
2. S. 1(2) provides that employee maintains employment status even if on strike or locked out
3. Employee engaging in lawful strike can apply to employer to return to work within 6 months from
beginning of strike and the employer will reinstate the employee and can’t discriminate against the
employee for being part of lawful strike (S. 80(1))
Note: Have to apply for the 6 month statutory reinstatement and if no CA has been signed, the
employee is applying to be reinstated under individual contract of employment
4. Any dispute made during strike – will be dealt with by the grievance procedure when the strike is
settled (Royal Oaks)
5. Refusal of employer to not allow these disputes to be dealt with proactively is breach by the employer
of the CA
6. If CA is signed in long strike – CA will have provisions about how to deal with what happened while
there was no CA
7. Where strike is long and not CA agreed on – then Labour Relations Board will try and deal with the
issue (was there discrimination, i.e. employer refused to hire people b/c of union support during
strike)
Page # 153
Legal Regulations of Collective Action
1. Statutory Controls
2. Common Law Controls
3. Charter Rights
(1) Statutory Controls and Strikes and Lock-outs (Collective Action)
“strike” collective stoppage or slowdown in work, done with a common understanding – designed to limit
output
Note: purpose (the activity) of the stoppage is irrelevant to definition of strike (only has to be work slow
down or stoppage designed to limit output) – thus taking away a union’s ability to use their
collective economic power to influence public policy and pursue their political goals.
If there’s a work stoppage – it’s a strike
“lock-out” closing of the workplace, suspension of work, or refusal to employer or to continue to employ
workers with a view to induce employees to refrain from exercising the rights and privileges
under the act, or to agree to provision or changes of conditions of employment
Note: purpose of the lock-out is relevant (the closing or suspension of work in order to compel
employees to refrain from exercising their rights under the Act) – it’s not a lockout unless it’s
for a purpose articulated under the act (economic strikes by the employer are permitted)
Note:
Difference b/n Strike and Lockout:
1. lockout has to have a purpose. Has to be closing or suspension of work to compel employees
to refrain from exercising rights
2. Lockouts don’t involve collective action, it’s the employer acting as individual. Employers
are combined to form one individual – this is publicly accepted b/c not change of conspiracy
3. It’s not a lockout unless its for purpose under the Act (i.e. economic strikes by employer are
allowed – not lockout). If employer wants to shutdown for reasons other than to put pressure
on employees – its allowed
Timelines of Strikes and Lockouts
Note: CL workers could strike any time they wanted (except if it was a breach of contract, such as, if an
employee was required to give notice before termination)
Now:
Limitations on timing of withdrawal. The current scheme is very effective in discouraging strikes
and lockouts
OLRA
S. 46 Every CA shall be deemed to provide that there will be no strikes or lockouts during life of CA
s.79(1) where a collective agreement is in force, no employee shall strike and no employer shall lock out
s.79(2) no strike or lockout can occur until the minister has appointed a conciliation officer and
(a) 7 days have passed after the minister has released the report of the conciliation
officer
(b) 14 days have passed after the minister has released a notice that he or she does
not consider it advisable to appoint a conciliation board.
(i.e. have to have gone through conciliation and a period of 7 days before can strike)
Page # 154
s79(3) if a collective agreement is or was in effect, no employee shall strike unless a strike vote is taken
30 days or less before the collective agreement expires and 50% vote in favour of a strike
I.e. union has to conduct mandatory strike vote within 30 days at end of CA or anytime after
s.80(1) When an employee engaging in a lawful strike applies to the employer to return to work within six
months from the beginning of the strike, the employer shall reinstate the employee and shall not
discriminate against the employee for being part of the lawful strike.
s.80(2) (a) except where the job no longer exists
(b) except where the employee has been suspended/dismissed for cause
Note:
s. 80 protections disappear after 6 months
S. 81
no union shall call or threaten to call or authorize an unlawful strike and no union shall support an
unlawful strike
S. 82
no employer shall call or threaten to call or authorize an unlawful lock-out an no employer shall
support an unlawful lockout
S. 83(1) no person shall do any act that they know or ought to know might cause an unlawful strike or
lockout
Note: Most of the time strikes are prohibited. Only after CA has exprired and a certain number of days
have passed, can hold strike
S. 84
Nothing in this Act prohibits any suspension or discontinuance…or quitting of employment for
cause…if it doesn’t constitute a lockout or strike (if employer wants to shutdown for reasons
other than putting pressure on employees – it’s allowed to)
s.85
union cannot penalize an employee for refusal to participate in an unlawful strike
s.86(1) Where notice has been given under s. 16 to bargain, no employer shall alter the terms of the
employment contract without consent of the trade union
(a) until the minister has appointed a conciliation officer or a mediator under this
Act
(i) and 7 days have elapsed after the minister has released to the parties the
report of the conciliation board
(ii) 14 days have elapsed after the minister has released to the parties a notice
that they do not consider it advisable to appoint a conciliation board.
(b) or until the right of the trade union to represent the employees is terminatedwhich ever occurs first.
s.86(3) where differences with respect to the statutory freeze may be arbitrated
Page # 155
Process for strike or lockout to occur
(1) if collective agreement was in effect previously, must have mandatory strike vote no earlier than 30
days before end of the collective agreement under s. 79(3) – if no previous collective agreement must
have a strike vote on the day conciliation officer appointed or after under s.79(4)
(2) union gives notice to bargain under s.16
(3) union and employer bargains
(4) no headway is obtained
(5) apply for conciliation under s.18(1)
(6) wait until 7 days after the conciliator renders their decision that the scenario is irreconcilable under
s.79(2) – then strike
(7) if the conciliator refers the matter to a board of conciliation, must wait until 14 days
after the board renders its decision – but this level is rarely used
Remedies for Untimely Industrial Action
 Unlawful strikes are grievable and arbitrators hold unions to high standards to prevent strikes
Hamilton Terminal Operators Ltd. (1966) – union officials must take steps to prevent illegal strike
Facts: • at meeting of union, there was a resolution to call a strike. The union leaders all spoke against
it, voted against it but the members voted to go on illegal strike
Arb: • union was held responsible for the unlawful strike. Union has to take active steps to prevent
it and not in any way be seen to condone it. Can’t participate in vote of unlawful strike.
Here:
should have done more to prevent this merely speaking out against it and voting against it
was not sufficient - should not have held meetings, etc.
(Standard of conduct of union officials is very high – can’t just stand up and say go back to
work – have to actively bring strike to an end)
Note:
Individuals who participate in strike can be subject to discipline – can be discharged
OLRA also has provisions
S. 96(4) if the Board finds employer or union acts in contrary to the Act it (a) can issue cease and desist
order. Breach of cease and desist amounts to contempt of court, thus union leaders can be jailed
for disobeying orders
s.100
on complaint, the board may declare an unlawful strike and may direct what action should be
done to remedy the situation
s.101
on complaint, the board may declare an unlawful lockout and may direct what action should be
done to remedy the situation
S. 103(1)
Where board declares that union has called or authorized unlawful strike or employer has
Page # 156
called or authorized unlawful lockout and there’s no CA b/n the union and the employer, can
apply for damages for unlawful strike or lockout through labour relations board
s.103(5)
where board declares an unlawful strike or lockout, the board shall hear and determine claim
for damages
s.104
every person who contravenes this Act or ruling under this Act is guilty of an offence and is liable
upon conviction
(a) if an individual, $2,000 a day
(b) if a corporation, union, a fine of not more than $25,000
s.108
proceedings to enforce determinations made under this Act or a prosecution for violation under
this Act may be instituted in the Ontario Court – thus a violation of court order results in
contempt of court and falls under the criminal code
s.109(1)
no prosecution shall be instituted without consent of the Board. Nothing in Act says strikes
are illegal, only says when they’re untimely
Note: nothing in OLRA says when strikes are illegal, only says when they’re untimely
Page # 157
(2) Common Law Controls in Collective Action
What about the Common Law controls on the right to strike?
Tort Liability
 CL courts have been hostile to strikers – thus willing to invent CL Torts
 most referred to as the “economic torts” - designed to provide redress against losses resulting from
hostile use of the collective strength of economic adversaries (unions and employees)
 best established and most frequently used are breach of contract and conspiracy
 Note there’s also
o CL Tort of nuisance – can’t block traffic or stop people from going to work
o CL Tort of intimidation – can’t deter someone from doing something that they’re legally
allowed to do (what constitutes intimidation –dirty look at someone crossing the picket line)
o Criminal Law – Assault, Watching and Besetting
Page # 158
(1) Tort of Inducing Breach of Contract: Two Types (Direct and Indirect):
(a) Direct Inducement of Breach of Contract:
 Employer P
Supplier
K of supply
Induce supplier to breach their contracts
Union
i.
ii.
iv.
iv.
Unionized employer with contract with supplier
Employees want to put pressure on unionized employer
Instead employees put pressure on supplier to get supplier to breach its contract with employer
If supplier does breach Employer turns around as Plaintiff and sues the union
 In order for employer to be successful under this tort has to demonstrate the following five things:
1. The intent to cause injury – union has to have intent of injuring employer (plaintiff)
2. Union (defendant) has to know about contract b/n employer (P) and 3rd party (supplier)
3. Has to show use of lawful means to induce (or persuade) breach by third party (don’t have to
show unlawful means)
4. Breach of contract results – Supplier breaches contract with employer
5. Economic injury to plaintiff as a result
 requirements of knowledge and persuasion have been whittled away significantly
o requisite knowledge – if defendant ought reasonably to believe that contractual rel’p exists,
even if not aware of terms, or if acts “recklessly” without caring whether contract there
o persuasion – enough if D (union) conveys information to third party whom defendant would
like to see act in certain way and the third party does in fact act in that way
 classic form of direct inducement - the union pickets the third party with whom employer has
economic relationship - the plaintiff is the employer and the third party is the party being induced
 The dispute should be kept between the two parties and not affect any other parties
Analysis of Direct Inducement Claim in Hersees:
 First problem – in Hersees, the union is picketing the third party, Hersees (who has contract with
the employer). It’s not the employer that the union is picketing – thus indirect inducement. This
was first time the action was presented in this form - Hersees is plaintiff claiming that the union
induced them to breach contract
o says union should be prohibited from putting pressure to breach relationship with Deacon
 Second problem – there is no contract between Deacon (employer) and Hersees (supplier) - trial
court found no contract and thus union not pressuring them to breach a current contract
How is this direct inducement?
 the union is trying to convince customers not to purchase goods from Hersees that are
manufactured by Deacon Bros.
 this does not fit well with the direct inducement model - appears to be more indirect
 what’s the significance of the distinction between indirect and direct inducement - where there’s
indirect inducement, there is an additional requirement that unlawful means are being used
Page # 159
(b) Indirectly Procuring Breach of Contract by Unlawful Means:
Employer (plaintiff)
Supplier
Supplier’s employees (4th party)
Union
Requirements:
1. Intention by defendant (union) to cause economic injury to the plaintiff (employer)
2. Knowledge by defendant of the contract between the plaintiff (employer) and third party
3. Threat or actual use by defendant of unlawful means against the third party to induce a fourth
party to breach its contract with the third party to pressure it to breach contract with P
4. Breach of contract between plaintiff and third party
5. Economic injury to the plaintiff as necessary consequence of the breach
 Note: have to show that there’s unlawful means used by union to induce fourth party to breach its
contract with third party - any technically illegal act can suffice, whether it be crime, another tort
or breach of contract
Hersees of Woodstock Ltd. v. Goldstein (1963) – secondary picketing is illegal
Deacon (Unionized Empoyer)
Facts: •
Trial:
•
Hersees (3rd Party)
Union
Amalgamated clothing workers (union) represented the employees of Deacon brothers. Union
trying to put pressure on employer (Deacon), not by striking (even though in lawful position
to strike) but instead of striking, by boycott – encouraging people not to buy clothing at
Hersees (3rd party) that is manufactured by the Deacon brothers but only with union label.
Employees therefore put pressure on Hersees (3rd party) to not stock union bros. Union got
someone to wear a sign in front the Hersees store where Deacon bros. clothing was sold. The
sign said not to buy Deacon bros. clothes b/c the clothes weren’t made by union workers, thus
Hersees selling non-union goods. Hersees seeks injunction, claiming three causes of action
against picketer: 1. inducing breach of contract, 2. conspiracy to injure and 3. nuisance
Court found no contract between Hersees and Deacon so no breach of contract that union
(defendant) was trying to induce - Hersees was selling Deacon Bros. clothes, but no
appearance of ongoing business relationship other than buying and selling
1. No direct inducement – wrong plaintiff in this case. The P isn’t the employer but is Hersees.
Union didn’t coerce the employer to breach the contract, thus they can’t sue the union
2. Conspiracy to injure not found – the union’s purpose for the action was not to injure Hersees
but rather to benefit the union, so as long as not unlawful means being used, the picketing is
allowed. Thus not guilty of civil conspiracy
3. Tort of Nuisance – Is this a nuisance tort which requires one person using their property in
way so as to prevent others from enjoying it – Court rejected the view that picketing of this
kind (someone standing there with sign) amounted to a nuisance. In order to prove nuisance,
Hersee’s would have to show obstruction by the picketers of access to the property
Judgment was appealed by Hersees
Court of
Tort of inducing breach of contract. In order for the inducing breach of contract appeal to be
Appeal:
successful, the court of appeal had to overturn the trial judges finding of fact (i.e. that there
Page # 160
was no contract). Here: Court of appeal found there was a contract b/n Hersees and Deacon
Held:
Ratio
Appellant (Hersee) had a contract with Deacon. Respondent (union) knew of the contract and
tried to induce the appellant to breach it by picketing. This picketing was found to be
“unlawful” as it was besetting of appellants business likely to cause damage to the appellant
•
•
•
•
•
•
•
•
•
The court did not want to allow this secondary picketing action to be considered legal so they
searched hard to try and ground the prohibition in law
Even if the picketing was lawful (i.e. peaceful picketing for purpose of communication
information) it shouldn’t be allowed. The appellant has the right to lawfully engage in
business of selling to the public
Thus, have to balance rights b/n respondent (right to picket) and appellant (right to sell)
Court says there are better ways then picketing to put pressure on Deacons - if there are
better ways and you haven’t chosen the best way, it appears that you may be liable for the
tort - even if this is not a case of inducing breach of contract, one must look to balance
the rights of individuals involved
(1) there is the right of individual to engage in business, which benefits
the community at large, and
(2) there is the right to picket such as it is
if there is a conflict between the two, then picketing will lose
Why, because the right to trade is universal right (benefits everyone) whereas the right
to picket is designed to benefit a particular class (the narrow interests of the union)
Thus, the harm is much greater than any possible benefit the union members could get from
the action (benefit to employees of Deacon bros. wasn’t greater than harm caused to Hersees)
Court states that citizens in Woodstock (customers) choose not to cross pickets lines – not as
a rational response, but simply out of solidarity – but what if the refusal of crossing the picket
line is characterized as a recognition of “injury to one is injury to all” – if that is the case,
then a strike could be seen as benefiting everyone in Woodstock as opposed to just one
particular class – Tucker says the courts are not willing to accept this type of characterization
Conclusion: All secondary picketing is tortious. Anytime the union puts up a picket
somewhere other than their employers – it’s secondary picketing and thus tortious
Analysis of Indirect Inducement Claim in Hersees
What is the unlawful means?
 Picket line not aimed at employees but at customers. The unions don’t go into Hersees in order to
put pressure on Hersees to not carry Deacon Bros. so that Deacon will be injured – but stand
outside of the store – thus no unlawful means b/c no contract to breach b/n customers and Hersees
 1. Intent to injure – yes
 2. Union (respondents) had knowledge of contract (assuming there was contract) between
employer (appellant) and Hersees (third party) and attempted to induce breach by picketing
its premises
 3. Unlawful means
o in the direct inducement, the unlawful means is the picketing b/c the employees won’t go
to work for the suppliers, which induces a breach of contract b/n the employees and the
supplier and is thus unlawful
o in the indirect inducement – customers (4th part) don’t have contract to work for Hersees,
thus no unlawful means b/c not breaching contract b/n customers and Heresess, however
Page # 161
Unlawful Conduct was found: Such picketing is a “besetting” of appellants place of
business causing or likely to cause damage to the appellant - the picketing is unlawful b/c
it’s not for the purpose only of obtaining or communicating information and ought to be
restrained - Criminal Code
o Held: The picketing (single picket outside of Hersees) is breach of Criminal Code – it’s
not for purpose of obtaining or communicating information-watching and besetting
o If this were the case than all picketing would be criminal – ‘watching and besetting’
o However, the customers don’t have a contract to work for Hersees, thus NO
UNLAWFUL means b/c not breaching a contract b/n customers and Hersees
 4. Breach b/n third party and plaintiff – no b/c it’s the wrong plaintiff (Hersees should be the
plaintiff and not the employer)
 Even if the court had the right plaintiff (Employer) there still wouldn’t be unlawful breach b/c
customers don’t have a contract w/ Hersees that could be breached
 communicating information - just walking with the sign - isn’t this what all picketing is?
Therefore, isn’t all picketing lawful then?
o
(2) Civil Conspiracy to Injure: Two Types
 Involves two things: (a) combination that uses lawful means to achieve unlawful purposes or
(b) combination that uses unlawful means, regardless of the purpose
 Issue: “was the dominant motive to cause harm or to benefit oneself”
 Courts Held: where the motives of the combination are for the benefit of the combination and
not simply for the purpose of injuring the other party, then they are ok provided no unlawful
means used
 Note: can use lawful means for lawful purpose with effect of an injury to the other party
(a) Tort of Conspiracy: Lawful Means for Unlawful Purpose (not legitimate interest recognized)
Requirements:
1. A combination of two or more people
2. Intention to cause economic injury to the plaintiff injury results
3. Predominant purpose or motive that the courts do not recognize as being a legitimate interest
(i.e. if motive is to harm and not to promote yourself – problem with this in Ontario. If the
motive is to promote the union – then it’s not a tort)
 Legitimate Interest: traditional CB activities of unions, including demand for closed shop
 Not Legitimate Interest (i.e. beyond scope of ‘trade dispute’): secondary picketing
 Note: if an individual intends to injure and injuries result and this is done with a lawful purpose – not
a tort of conspiracy to injure
(b) Tort of Conspiracy to Injure by Unlawful Means:
Requirements:
1. Combination of two or more people
2. An intention to cause economic injury to the plaintiff
3. The use of unlawful means to cause the injury (if an individual does something with unlawful
means – civil tort)
Application of Tort of Conspiracy to Hersee (Concurring Judgment)
Held: An unlawful conspiracy to injure the plaintiff in his trade
1. Combination
2. Intent to cause injury and injury results
Page # 162
3. Purpose: to injure the supplier in his trade (dominant motive to cause harm and not to benefit the
union – thus a tort b/c it’s not a legitimate interest)
(3) Tort of Direct Interference With Contractual Relations Short of Breach:
Requirements as drafted by Denning:
1. Intention by D to injure the P economically
2. Action by D that has effect of hindering or preventing performance of contract between the
plaintiff and third party
3. Defendant’s action was direct cause of that result
 in Acrow, Denning added: 4. Action causing interference must be unlawful
(4) Tort of Intimidation
Requirements:
1. Intention by the defendant to injure the plaintiff economically
2. Threat by defendant to use unlawful means against a third party unless the latter takes action
that will injure the plaintiff economically
3. Action by third party against the plaintiff which is lawful in itself but which causes the
plaintiff economic injury (i.e. third party refuses to business with plaintiff (employer) – this is
lawful but causes the P economic injury)
 key element is unlawful means - once again, any crime, tort or breach of contract
(5) Tort of Intentional Injury by Use of Unlawful Means: Therien Tort
Requirements:
1. Intention by defendant (union) to injure plaintiff (defendant) economically
2. Use by the defendant of unlawful means to cause injury - unlawful being any crime, tort, or
breach of contract, or in the case of Therien, breach of LRA
International Brotherhood of Teamsters v. Therien (1960) –tort of injury with use of unlawful means
Therien (Plaintiff)
City (Employer)
Union (trying to influence City)
Facts: •
City has agreement with Teamsters (Union) in regards to their construction workers. City also
has a contract with Therien (ind. contractor) who provided trucks and drivers to City to do
additional work. Teamsters claim that clause in CA says that all drivers regardless of being
direct employees of City have to be members of the union. Therien lets his drivers join the
union but he doesn’t join because he’s an employer. Business agent for Teamsters is not
happy with that - goes to City and says that if City continues to do business with Therien
they’ll picket. Company severs relationship with Therien and he sues the union for:
1. Inducement of breach of contract, 2. Civil conspiracy
Court: • Wrongful interference with economic relationship – tort of injury with unlawful means
1. Inducement of breach of contract – No, it would have been but City did not breach any
contract - there was no ongoing contractual relationship b/n City and Therein, thus no breach
2. Civil conspiracy to injure - problem is where is the conspiracy - business agent went to City
and threatened - there is no proof of conspiracy - only one individual acting on own (nothing
unlawful – only threatened to picket)…However
3. Breach of statute - this would have been an unlawful strike b/c union and City had binding
CA and not allowed to strike during life of CA (S. 79(1)) - however, courts generally take
view that there is not independent tort for breach of statute - unless the courts find that the
Page # 163
legislature intended it that way (i.e. unless the legislation specifies that there’s a right to sure
for breach of statute – which it doesn’t say)
Conclusion:
Nevertheless the court found wrongful interference with economic relationship even
though there’s no contract b/n T and Union. Intention to injure with unlawful means
• how did Therien win - developed the Therien tort - interference with contractual relationship without
proof of combination (conspiracy) - also called the intention to injure with unlawful means
(Wrongful interference with economic relationship even if there’s no contract)
• they intended to injure Therien by threatening to use unlawful means, the unlawful means being an
illegal strike (breach of LRA) thus a tort
• Why is it unlawful? The LRA holds that it’s illegal to strike during the CA and the union threatens to
strike during the CA
• Bottom Line: can’t sue on breach of statute but the statute can provide the element to complete the
tort – wrongful interference with economic relationship. I.e. can rely on breach of statute for the
wrongful element necessary for the tort
Courts are prepared to exercise all their creative powers to fashion a remedy that will serve to
confine a labour dispute between two parties only – in an attempt to prevent a labour dispute from
spilling over and affecting another entity’s interests, the court chooses to
(1) balance the competing interests of trade and labour in Hersees, and
(2) fashion a new tort in Therien
Courts are not willing to characterize the respect paid to picket lines as a rational choice by
individuals – they see it as a conditioned response based on fear, that is not worthy of
recognition/protection – therefore once it moves away from the primary site, it must be curtailed
Page # 164
Interaction b/n CL and LRA
What about recognition strikes?
Gagnon v. Foundation Marine SCC – recognition strikes are unlawful
Facts: • Union attempt to get voluntary recognition by the employer but employer refuses to
recognize. Note: there are provisions in LRA for voluntary recognition (can ask employer to
voluntarily recognize union without having a certification vote). When met with refusal to
grant voluntary recognition, union puts up a picket line and shuts employer down (i.e.
industrial action used to force voluntary recognition)
Issue:
Is putting up a picket line to gain voluntary recognition tortious?
Trial: • The statute sets out a comprehensive scheme that expressly states when a legal strike may
occur. Therefore, it’s implicit in the act that there’s a prohibition on recognition strikes (i.e.
not legal otherwise it would have said that its legal, thus assume that its not). In this case,
using this rational, the court found the recognition strike to be civil conspiracy to injure
through unlawful means – the breach of the statute (by necessary implication) serving as the
wrong/unlawful means to make out the case for the tort. Note: needed to find unlawful means
to find tort of conspiracy to injure b/c there was no unlawful purpose
I.e. recognition strikes violate the statute and provides the unlawful means to complete a CL
tort for which the presence of wrongful act is needed to be able to bring it
Certification strikes will be unlawful - constituting civil conspiracy to pursue a lawful purpose by
unlawful means. If the employer will not recognize you voluntarily, the only way to get recognized
is through the certification process - no right to strike for recognition
Page # 165
Remedies
Labour Injunctions
 important way for employers to remedy the situation in timely fashion
 want immediate action to stop tortious action before more damages are suffered – an injunction
 The injunction says “union shall cease to continue in these activities” is very powerful
 Given hostility of courts toward primary site picketing and to secondary site activity – were inclined
to grant injunctions when employers or 3rd parties asked
 in 1970 as result of Ontario study, the Ontario Courts of Justice Act, s.102 was ammended
Ontario Courts of Justice Act - s.102
 sets out substantive and procedural requirements for obtaining injunction in context of labour dispute
 most important restriction is s.102(3) - in order to get injunction, the applicant must show that
(1) they have made reasonable attempts to get police assistance in order to supervise and ensure
no damage to property, harm to people or breach of the peace; and
(2) the police have been unable to assist in these matters
 this serves to limit the grounds upon which an injunction can be granted - it is no longer a cake walk
to get an injunction like it used to be (have to first show that they have tried to get help to stop the
damage to the property but they have been unsuccessful)
 Procedural requirements S. 102(4):
o Notice must be given to other parties - 2 day notice period (so that union can prepare a response)
o limitations on ex parte applications – they will only be heard in true emergencies where
irrefutable irreparable harm will result (S. 102(6-8)). I.e. Timely notice of motion must be given
in specified form, unless emergency
Note:
S. 102(1) – Definition of Labour Dispute. “injunction procedures only apply to a dispute or
difference...regarding terms and conditions of employment”
Page # 166
Domtar Incorporated v. Boysee – S. 102 only applies to picketing that result from a labour dispute.
The CL injunction applies to other disputes
Domtar
Boysee
Union
lawful strike by union against company BoiseCascade. B also had contract with Domtar.
Union can picket their place of business as long as not violence, obstruction, etc. and B can’t
get injunction to stop it. B has business relationship with Domtar which is separate company.
In normal course of events, B employees go onto Domtar grounds to assist in preparation of
materials. During strike, Domtar hires independent contract to do work formerly done by B
workers who are on strike. Union puts up picket line in front of Domtar (to stop independent
contractors from being used) – says that D involved themselves in dispute, i.e. claims actively
assisting B by hiring people to do struck work. Domtar goes for injunction because Domtar’s
employees refuse to cross and they have to shut down. Domtar applies for injunction but not
under S. 102 (would have had problems b/c the picketing was lawful – no damage or threat to
anyone)
Issue: • Was Domtar bound by S 102, i.e. was this picketing in the context of labour dispute such that
they had to apply for an injunction under S. 102?
I.e. Is this secondary action (applying pressure to someone other than immediate employer to
stop someone (D) in order to put pressure on immediate employer (B)) or has Domtar chosen
to embroil itself as ally for B and therefore fair game for the union – part of labour dispute?
Court: • Domtar does not go through s.102 - claim not to be a party to the labour dispute. They
characterize the issue as a simple inducement of a breach of contract
Note: D not subject to S. 102, if they had been they wouldn’t have been able to get an
injunction
 Union argues: in some cases where third parties involve themselves in a labour dispute, they become
subject to industrial action (if employer (D) comes to assist employer (B) with strike then they should
be subject to industrial action)
 Two theories to support view that 3rd party involved such that they’re a fair target:
1. Struck company is alter ego of the struck employer (D is employer of B)
2. The premises of the 3rd party (D) have become a place of business for the struck employer (B)
 Court finds Domtar not an alter ego (by coming to assistance) - they have just changed contractual
obligations so that they can aid B. D hasn’t become B’s place of business
 Tucker says this characterization of Domtar’s conduct should fall under the allied employer doctrine.
Just another example of courts eagerness to confine a labour dispute to the parties directly involved
(courts took them out of S. 102 (not party to the dispute) so they could get an injunction)
 Note: Court narrowly interpreted definition of labour dispute to allow third party (Domtar) to say that
not that they hadn’t become involved in the dispute but that their involvement not to the extent that
they’re considered to be involved
 Third party (Domtar) not innocent b/c they came to assistance of B, however, not enough to make
them subject to requirements of S. 102. If they were they wouldn’t have been able to get injunction
s. 102 of the Courts of Justice Act does not apply to situations where secondary action/picketing is at
issue – in such circumstances, a normal injunction is available to the harmed party b/c they are not
a party to the labour dispute for the purposes of the Act
However, under the Allied Employer Doctrine, a party may lose their right to seek a normal
injunction and be deemed a party to the labour dispute if:
(1) they become the alter ego of an employer in a labour dispute, or
(2) their premises, in effect, becomes a place of business for the struck employer
Facts: •
Page # 167
Other Dimension of Injunction: The Police Assistance Requirement (S. 102)
How much tolerance of damage to property or person does there have to be in order to bring an
injunction under S. 102?
Industrial Worker – no injunction unless danger or violence in picketing
Facts:
Damage on picket line, police were called. This happened every day. Employer argued that
they have to get police assistance every day b/c of unlawful activity and should therefore be
given an injunction
Issue:
How much tolerance do they have to take before they can be given an injunction?
Held:
Some inconvenience will be acceptable where there’s no damage or injury
Here:
the police were called every day. Every day there was blockage of entry and exit – thus
injunction was allowed

Where picketing involves property damage or personal injury – not much tolerance (any evidence
of police not able to control and the employer will be able to apply for an injunction)

However where picketing only involves obstruction of entry and exit – court says there will be
some toleration of the inconvenience that the picketing cause
Ratio: No danger or violence – won’t be allowed injunction
Page # 168
Restrictions on Employer Actions During Strike or Lockout
 There does not seem to be the same level of judicial activism when it comes to limiting the rights
of employers – perhaps because issues revolve around rights to property and the rights of trade
s.78(1)
No employer shall engage in strike related conduct or employ the services of a professional
strike breaker – that being someone not involved in the dispute whose primary objective is to
interfere with any rights under the Act
strike related misconduct – includes surveillance, intimidation, provocation or any
other conduct that will interfere with any right under this Act
Replacement Workers
What about the use of Replacement Workers?
 in most provinces, employers entitled to hire temporary replacement workers who may become
permanent after employees rights to reinstatement lapses (only Quebec has ban on replacement
workers)
 striking employees have right to return to their jobs within 6 months (Ontario)
o after this period lapses, then no right to return to job
o these are also often referred to as strike breakers - however, they are not included in the
definition of professional strike breaker under s.78 of the statute due to their primary
objective
 should employers be allowed to continue with replacement workers – there are a lot of concerns
o concern about maintaining social peace & order - when replacements hired, often conflict
o question of maintaining balance of bargaining power within the scheme (if employer is
able to carry on production even with withdrawal of labour power, puts them in a much
stronger position than the union. Union’s economic weapon is taken)
 generally speaking these arguments have not been accepted for prohibiting absolutely the use of
replacement workers - exception is Quebec - since mid 1970s they have not been permitted
Page # 169
Charter of Rights and Freedoms
 in general, it has by and large left Canadian Labour Law as it has found it (except that whatever
statutes were in place had to comply with the Charter)
 Union belief that they would be able to use the charter – not the case
 freedom of association recently argued in Quebec case - in the construction industry, must
become a member of the union in order to be permitted to work
 leave has been given to hear appeal dealing with Ontario statute regarding agricultural workers
being exempted and whether or not it complies with the charter freedom to associate
Picketing and the Charter
RWKDSU v. Dolphin Delivery (1986) – Charter doesn’t apply to private actors – only to state actors
Facts: • Involved issues of secondary action. Purolator had locked out unionized employees. Purolator
also had contractual relationship with another company (DD). After lockout, DD makes
deliveries for company called Super Courier. The union says that this is a sham - that Super
Courier is related to Purolator and therefore DD is doing struck work (i.e. involved in the
labour dispute) so they apply to BC LRB for declaration that SC and DD are allies of
Purolator and therefore can be lawfully picketed
Board: • Declines jurisdiction - falls within the federal scheme - however, there is no statutory
provisions regarding picketing so it falls under common law
Court: • grants DD injunction to prevent picketing - classifies it as secondary and tortious b/c either
inducing breaches of contracts (inducing DD to breach with SC or P) or inducement by
unlawful means
• SCC also finds the picketing tortious because it constitutes conspiracy to economically injure
- intent to harm and not to further a lawful purpose
• union claims the injunction violates freedom of expression - therefore, it should not be issued
Issue: • 1. Does the Charter apply? 2. If so, is picketing a constitutionally protected right to freedom
of expression, 3. and if so, is the infringement demonstrably justified under s.1?
Court: • The charter does not apply to private actors but the SCC continued to address the issue in
obiter stating that picketing constitutes a form of expressive activity that is
constitutionally protected but restrictions on this activity are demonstrably justifiable
I.e. even though the Charter doesn’t apply, the CL should be consistent with Charter values,
thus the Charter has influence on CL
 In coming to this conclusion, they state that courts frown upon picketing because it is a form of social
and industrial conflict – it is only permitted as a necessary corollary to the CB process, but it is
harmful and thus there is bare toleration for it
 It is reasonable to restrain picketing to ensure that the conflict does not extend beyond the original
parties – essentially saying restraints on secondary picketing will, in effect, always pass the Oakes test
- because the harm associated with such conduct is too great to society – respect to picket lines is a
conditioned response that has no rational basis
SCC states Charter does not apply to non-state actors - if the Charter were to apply, restraint on
secondary picketing (a form of expression) would be justified b/c picketing itself is seen as a form of
social conflict that is tolerable only to the extent that it is a corollary to collective bargaining
however, secondary picketing falls outside these parameters
Page # 170
British Columbia Government Employee’s Union v. Attorney General (1988)
Primary Site Picketing – Symbolic Picket Line (people who wanted to show support for the union could
and anyone who wanted to go into the court house was allowed to – No Obstruction
Facts: •
Issue:
SCC: •
•
•
people employed in the courts have a lawful strike. They set up picket in front of their place
of employment - primary picketing. The purpose of picketing was not to prohibit people from
entering the courthouse, but just ask us for a pass, we will give it to you, and this will be a
sign of solidarity. No evidence that anyone being disrupted or prevented entry even if didn’t
get the pass. Judge McEachern comes to work, sees picket line, makes order for injunction.
Then goes on to sit as judge and upholds the injunction
Was this an unconstitutional violation of charter freedom?
Injunction granted
1. Charter applies here - because the injunction was issued on the motion of state actor
2. Justified limitation – b/c picketing would restrict or impede getting into the court, thus
picket line ipso facto impedes access to justice
under s.1 analysis - court adopts a particular characterization of picketing which is consistent
with historical view - ie. Hersees Case
• a picket line ipso facto impedes public access – it is per se coercive (to discourage
and dissuade)
• The court says this even though in this specific instance, there was no evidence to
suggest that the picket line was any of these - absolutely no evidence of unlawful
conduct or any disruption to access to courthouse
therefore, the court holds this characterization leads to an inevitable conclusion that picketing
will fail the s.1 analysis (it will always be justified to limit picketing) – restriction on this
marginal activity pails in comparison to the need to protect an employers right to do business
Courts appear to discourage picketing. Secondary picketing will generally be found to be per se
illegal. Further, any right to picketing does not appear to be protected under the rights of the
Charter
Page # 171
Is there evidence to suggest a shift is beginning to emerge? More tolerance for strikes – protected
expression
K-Mart Case – Shift in attitude of SCC – Some activity taken in support of strike
Facts: • unionized workers locked out of certain K-Mart stores. Union decides to conduct leafletting
campaign in front of other stores that are not on strike to try and encourage shoppers to shop
elsewhere. In BC there is statutory scheme regulating strike activity. Under this scheme, there
is an absolute prohibition on secondary action - cannot picket or even leaflet other sites other
than the struck place of business. K-Mart gets order to prevent leafletting. Union challenges
saying infringement of freedom of expression and not demonstrably justifiable
Court: • deny the union all the way up
SCC:
Leafleting should be protected. It’s different then picketing, it’s rational not coercive and
limitations on leafleting aren’t justified
• 1. Charter applies. No problem with state action. this is a statutory scheme - therefore there
is a Charter issue because statute involvement (i.e. leafleting is constitutionally protected)
• 2. clearly infringes right to freedom of expression – but is it demonstrably justifiable
• If court treats leafletting the same as picketing, the answer is readily clear - court does not
condone picketing then it can’t support leafleting
• Court’s strategy is to see if there is a rational distinction between leafleting and picketing.
Finds that there is
• Picketing - talked about in the most unfriendly way - picket lines are not a rational
form of communication, they promote and incite irrational reactions, etc. to a point
where it is almost per se illegal – therefore allowable only in the most limited
circumstances
• Leafleting - it is the very essence of freedom of expression – it does not impede
access, it is rational form of communication and therefore it should not be prohibited
unless designed to promote obstruction, etc.
• Limitations on leafleting – not justified
• Limitations on picketing – is justified (its coercive)
Note: some scope for judiciary to restrict or step in and say Charter requires freedom of expression in
relation to industrial action. Does this by making an artificial distinction b/n picketing and
leafleting
Court draws a distinction between secondary picketing and leafletting as leafletting is the very
essence of freedom of expression and is rational. Therefore, this activity is to be protected unless it
is designed to promote obstruction
Page # 172
In general, it is clear that courts quickly recognize that picketing and other strike support activities
constitute a form of expression protected by the Charter – but in the same breath they are equally fast to
find demonstrably justifiable reasons to prohibit these activities - especially if it spreads beyond the
immediate parties
Why? There are compelling other interests that take precedence and are believed to be more deserving of
protection than a worker’s freedom of expression during strike. Eg. property rights and freedom to trade
 the social interest in protecting these interests are so great so as to constitute restrictions on
freedom of expression
 judicial images of picket lines and what they represent as form of expression - they see this as a
very dangerous form of expression and therefore the regulation of this activity is socially
necessary
• K-Mart Case talk about the dangers of the picket line, refer to it as a barrier, physically
prevents people from going about their business
• say it impedes public access to goods and services and for employees to earn living
• see it as essentially coercive the decision not to cross line might be based more on the
coercive effects rather than the agreement with their message and cause
Question: if actual coercion in picketing and they actively and physically impede or block progress in
substantial way, then there are torts being committed here?
• ie. if blocking access to business, this is tort of nuisance
• if intimidating people, this is the tort of intimidation
• so is picketing independent of these types of activities or are they all wrapped up together
• Courts see it as more than just the independent torts that might be associated with picketing,
talk about the signaling effect of picketing
• Dickson - picketing sends strong and automatic signal - don’t cross the line and this
shows respect to picketers (Pavlovian response to picket lines)
• when this message goes out the courts says this is not rational reasoning based on
getting your message out there - rather, people not crossing not due to developed
solidarity but rather it is irrational behaviour
Key issue: do you accept the general legal system’s imagery of strikes as danagerous forms of expression
and in which regulation is demonstrably justified in s.1 analysis
• is the distinction that court draws in K-Mart between picketing and leaflet a rational
distinction - is this substantively different or not?
• broader question - should either peaceful picketing or leafletting be permitted at secondary
sites - is the courts compromise the proper place to draw the line (allow leafletting at
secondary site but not strikes)
• if the leafletting accompanied by independent torts as well, such as intimidation, the
regulation and restrictions of this is permissible as well
• it is possible that SCC will revisit its common law position on the idea of picketing at secondary sites
in the future
RWDSU v. Pepsi (Saskatchewan Court of Appeal)
 Pepsi became the first case that changed the CL doctrine b/c of Charter values
 Pepsi and the tort of secondary picketing
 Until Pepsi – high degree of intolerance of picketing (especially secondary picketing)
Facts: Workers were locked out. Union responded with non-traditional tactics – occupied office,
warehouse (all illegal and therefore enjoined). Pepsi brought in replacement workers. Thus,
union responded by picketing other places – retail outlets, hotels where replacement workers
were staying and homes of Pepsi managers. Pepsi sought an injunction to restrict secondary
picketing
Trial: Pepsi got injunction against all secondary site picketers (not the law in Saskatchewan thus
Page # 173
CA:
SCC:
Hersees tort shouldn’t be used)
lifted the broad injunction on all secondary site picketing. Whatever the law is in Ontario
(Hersees –which holds that all secondary picketing is tortious I.e. illegal) – not the law in
Saskatchewan
Pepsi appealed to SCC
Got rid of tort of secondary picketing (Hersees). Secondary picketing is generally lawful
unless involves tortious or criminal conduct
 Transformation of rhetoric that court uses to describe picketing (huge difference in tone in this case
than K-Mart)
 Many judges in K-Mart case have accepted the judgment in Pepsi
 Picketing has two purposes: 1. to convey information about dispute 2. to put pressure on employer
and others employer it’s involved with
 Picketing is there to alleviate the imbalance b/n the employer and employee
 Court recognizes that they still are engaged in balancing. The importance of the freedom of
expression of employees has to be balance with the legitimate interest of third parties – and they
shouldn’t suffer b/c of the right to freedom of expression
 Picketing is expressive behaviour and is Charter protected – thus restrictions on it must be justified
 Competing b/n charter protected right (freedom of expression) and non protected right (protection
from economic harm and right to trade)
• Picketing is a form of communication
• Held: balance in favour of freedom of expression and would be inconsistent with Charter
values to have general tort of secondary picketing (get rid of tort of secondary picketing).
However, there are still other torts (inducing breach of contract, conspiracy to injure)
• Saskatchewan Court stated Hersees decision that secondary picketing is per se illegal is
not a position that should be accepted in Saskatchewan
• here, there is a requirement for independent tort to find secondary picketing illegal
• Thus, have to use these torts to go after secondary picketing sites
• given the courts views in K-Mart, it does not appear that the SCC will go that route given
their views on the dangers and badness of picketing
• Can always enjoin picketing if there’s wrongful action which leaves all these other torts
open to use
SCC: Secondary picketing allowed when there’s no independent torts being committed. It’s
generally lawful if there’s no tort involved in it
Note:
Upheld the CA’s decision which upheld the injunction against secondary picketing at residences
of the employees (b/c this was tortious conduct)
However, for hotel and retail outlets allowed to picket b/c there were no independent torts being
committed - no nuisance, no coercion or intimidation, no civil conspiracy to injure (not engaged
in simply for purposes of harming Pepsi, but also forwarding the interests of the union) and there
was no inducement of breach of contract
•
Note: The SCC also talks about the ‘signalling effect’ – every judgement cited this ‘pavlovian
response’, that picketing wasn’t a rational form of communication. The court in Pepsi got rid
of this. SCC says the signillaing effect should be carefully assessed. The court never talked
about it before, just accetpted it as is
Page # 174
Uncertain Areas After Pepsi
 Can other torts be challenged as inconsistent with charter values? Can new torts be developed to
protect third party interests in the absence of tort of secondary picketing?
 Yes, but new torts might have to be consistent with Charter values. Might have to balance other torts
– have to look at interests of employees and determine which takes precedence
Right to Strike Cases Under Charter
 There’s no constitutionally protected right to strike
 at CL, workers privileged to strike at any time subject only to being held liable for common torts,
however, not inherent limits to strike. I.e. workers enjoyed partial privilate to strike (not illegal to
strike) however, the privilege was limited by the various CL torts (which were there to protect
property and trade)
 Under CB…privilege to strike was further limited. In addition to CL limitations - statute
 statutory provisions -significant restrictions on when can strike serving as an effective policing
mechanism. The statute imposed timeliness requirement (it’s only legal to strike when there wasn’t
CA, when gone through conciliation and waited certain amount of time after process had ended)
 There were some rights created for workers who were on strike, such as right to be reinstated
 The statutory CB schemes were then extended to public sector employees, which sometimes gave
employees right to strike and sometimes didn’t (Ontario didn’t allow public employers to strike until
1985)
 Double Movement – while giving right to strike to public employees, the gov’t was putting
limitations on right to strike
 1970’s – period of federal wage and price controls. Prohibit strikes b/c the wages were set by law,
strikes for wages above maximum were prohibited
 1980’s – tried to contain wage increase in public sector (thus, wage restraint on public sector wage
increases)
 Also expension of Essenstial Service Designation in Public Secotr Bargaining. If they had ESD, not
allowed to strike (couldn’t afford to strike b/c the services were essential)
 If strike caused too many problems – back to work legislation
 Against this background of restraints place on CB rights and the rights to strike, unions decided to
challenge the restrictions under the Charter on grounds that restrict freedom of expression
 trilogy of cases before SCC in 1998 - court upheld all of the legislation. I.e. upheld the right for gov’t
to restrict strike activity, whether it was complete prohibition of strikes by public workers
 rational for upholding all of the these was to say that freedom of association did not extend to
protect actions that association took to fulfill its goals (didn’t protect the rights of the
association to engage in the activities they wanted to do unless the right was individually
protected)
 just can’t prevent them from joining associations
 didn’t protect their right to engage in CB or right to strike (only would be allowed to strike if
individual had individually protected right – freedom of expression)
 said that the right to strike and right to bargain are modern rights, not fundamental rights

involves balancing of multiple interests and is not the type of issue which should be
considered to be a fundamental right
Therefore, there is no constitutionally protected right to bargain collectively and no constitutionally
protected right to strike
Recent Developments
• there is possibility that this may be modified in the future - ie. leave to appeal granted for Agricultural
workers challenging decision that they were excluded – Dunmore Case (Ontario)
• maybe the exclusion of workers from benefits that other groups of workers enjoy will be
viewed as infringement of equality rights - can this be justified
• Therefore, whether Dunmore and Pepsi represent substantial shift remains to be seen
Page # 175