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It is reported that the Quebec Labour Relations Board released a decision on February 24, 2005 ordering Wal-Mart to cease and desist from certain conduct at its Ste-Foy, Quebec store that was contrary to the Quebec Code du travail (Syndicalisation: Wal-Mart reçoit un blâme, Wal-Mart Tried to Block Quebec Store Union Drive, Ruling Says and Wal-Mart ordered to stop harassing help). The decision can be found at Travailleurs et travailleuses unis de l’alimentation et du commerce v. Compagnie Wal-Mart du Canada.
It seems that only the applicant (union) presented evidence and that Wal-Mart simply cross-examined the witnesses tendered by the union. The Board found that the evidence presented was "uncontradicted".
An employee, Annie Fleurent, was called into a closed door meeting with a manager who informed her that some employees had complained that she had been soliciting their support for the union at work. Ms. Fleurent was informed that she must stop this conduct or disciplinary measures would be taken against her. Following this, she was asked questions about her activities, who else was involved and what stage of the organizing drive was at. The manager pulled out a reprimand from 2003 and said that he had been "tolerant" (patient?) on this occasion and that this could change in the future. The day after this, it seems that the manager was abnormally in Ms. Fleurent's vicinity during work. Ms. Fleurent's evidence was that she only solicited members at work during breaks or the lunch hour.
Another employee, Julie Paquet, testified that she was called into a closed door meeting with two managers accusing her of soliciting union support during working hours. She was read an employer policy ("directive") to the effect that prohibited this type of activity in the workplace. She was then asked who else was involved in the the union organizing efforts, and she was told that her conduct is like a "knife in the heart" ("coup de couteau au coeur"). She was warned that there was no discipline on her file, but if this continued she would get a verbal warning.
Another employee, Melanie Gelinas was in the store shopping when she met a manager (Ms. Langois) and a number of employees. On this occasion, the manager stated, in the presence of Ms. Gelinas and the other employees that Ms. Gelinas had signed a union membership card. At the same time, the manager handed her a document that described how to withdraw a union membership card and who to send this withdrawal to. When Ms. Gelinas reported this to another manager, he indicated that he would discuss this with Ms. Langois, which he did.
Finally, there's another employee, Lyne Couturier, who met with two managers who conducted her performance evaluation. She was told that her employer could not rely upon her. The manager said that they would let this slide, this time, but if this continues she would receive an unfavourable review.
A union organizer testified that the employer's actions were having an adverse effect on the campaign.
The Board held that the case law supported the proposition that it was acceptable to solicit union membership support during breaks and, as such, the employees conduct, in the circumstances, was perfectly legal.
Furthermore, the Board concluded that there was no doubt that representatives of the employer engaged in conduct that was prohibited by the Code du travail. The Board ordered that the employer cease and desist behaviour that was prohibited by the Code.
The union, as a remedy, asked the Board to order Wal-Mart to provide it with the names of employees as well as a bulletin board in the workplace. The Board refused to make this order "at this stage". The Board did, however, order Wal-Mart to post its decision in a conspicuous place and to keep the decision posted for 30 days.
Are the orders that the Board made in this case "effective"? The union's concern, among other, I'm sure, is the "chilling" effect that the conduct complained of, and proven, will have on its organizing drive at the Ste-Foy store. The union must also be wondering what effect the announced closure of the Jonquiere, Quebec store will have on it's on-going organizing efforts in Quebec, and Canada, for that matter.
The UFCW has vowed to fight the closure in Jonquiere and will certainly be vigilant of employer behaviour in the future.
The Nova Scotia Court of Appeal in Children's Aid Society of Cape Breton-Victoria v. Nova Scotia (Workers' Compensation Appeals Tribunal) (February 23, 2005, N.S.C.A.) considered whether a worker, who had a history of anxiety attacks, who went on "stress leave" after an "intense meeting" with his supervisor was entitled to benefits under the Nova Scotia Workers Compensation Act.
Summary of the Appeal Tribunal's Decision
The Court summarized the matter as follows:
Stress is considered an accident under the Workers' Compensation Act, S.N.S. 1994-95, c. 10 ("WCA") if it results from an acute reaction to a traumatic event: WCA, s. 2(a). In this case, the Workers' Compensation Appeals Tribunal ("WCAT") found that the worker's stress fell within the definition of accident and therefore recognized his claim for workers' compensation. The question on this appeal is whether the Tribunal erred.
The Court went on to say that:
WCAT made two critical findings. First, it concluded that the February meeting was a traumatic event. Second, it found that Mr. MacNeil [the employee] had an acute reaction to this event which gave rise to post-traumatic stress syndrome and exacerbated his pre-existing anxiety disorder.
WCAT concluded that the meeting "caused the worker to develop post-traumatic stress syndrome" and that "there was no evidence that the worker suffered from this before the meeting and no evidence that he would have developed it had the events of the meeting not occurred." While the worker had a pre-existing condition (i.e. suffering from anxiety attacks) it wound that the February 2002 meeting "exacerbated" that pre-existing condition.
WCAT determined that "injury" arose out of the workers' employment and awarded benefits.
What the Court of Appeal Said
The Court of Appeal overturned the decision of the WCAT.
In discussing what "an acute reaction to a traumatic event" means, the Court stated as follows:
Given the agreement of the parties on the correct test, I will assume, for the purposes of this appeal, that whether or not the worker had "an acute reaction to a traumatic event" is to be assessed using both a subjective and an objective point of view. For the purposes of this appeal, therefore, the only issue is whether WCAT employed the test which the parties agree to be the correct one. I will assess that on the correctness standard. It is not necessary for the purposes of this appeal to offer a final opinion on whether the test on which the parties agree is the correct test or on the question of whether WCAT's selection of the test should be reviewed on a more deferential standard.
So, the Court does not weigh in with a "final and conclusive" decision on the appropriate test but, rather, assumes the test agreed to by the parties as being the correct one. The employer, on the appeal, argued that, while the subjective/objective test was appropriate, the WCAT failed to apply it. The Court disagreed and stated that:
WCAT found the meeting to be highly charged with the potential for physical violence. The word "traumatic" was taken to mean something other than the common workplace experiences of the particular worker, suggesting an objective element. And WCAT addressed itself to the question of what employees working for the employer in general, not just this worker, would find normal or unacceptable. Therefore, assuming without deciding that this more objective approach was the proper one, WCAT did not fail to take it.
At the end of the appeal,the Court held that the finding that there had been "an acute reaction to a traumatic event" was not patently unreasonable and concluded that:
In short, the worker's uncontradicted testimony, his psychiatric diagnosis, and his medical history all support WCAT's conclusion that the events of February 2002 caused the worker to develop post-traumatic stress syndrome and, as well, that those events exacerbated Mr. MacNeil's pre-existing anxiety condition. Supported as they are by the record, these conclusions cannot be said to be bordering on the absurd, clearly irrational or evidently not in accordance with reason.
The Appeal was dismissed.
There's an article discussing the case entitled N.S. court upholds worker's claim of post traumatic stress syndrome
For what it's worth, Ontario employer's governed by the Workplace Safety and Insurance Act might want to read the Workplace Safety and Insurance Board's Policy with respect to "traumatic mental stress that is an acute reaction to a sudden and unexpected traumatic event arising out of and in the course of employment."
I've been reading a blog called Management Craft for some time and find it very insightful and informative on a broad range of topics. The blog's author, Lisa Haneberg has written a book (H.I.M.M.: High Impact Middle Management ) which looks like a great read. Today, Lisa discusses the difficult subject of When should you let someone go? This ties in nicely with my post on Progressive Discipline in the Non-Union Workplace.
Terminations are not easy for anyone, most of all the employee. It is important to be sensitive to that reality, fair and honest.
I like Lisa's parting comment that "the best way to avoid having to fire someone is to hire the right people and be a great manager." The hiring process is your opportunity (as imperfect as it is) to staff your company with the "best" applicants. Sometimes, it just doesn't work out, that's simply a reality. But, its amazing how many times, with the benefit of hindsight, you look at the hiring decision and say "you know, we should have picked up on that".
Every employee who is terminated was, at some point, hired. The hiring process should be the beginning of the employment relationship, not the "beginning of the end" of it and, so, it's important to be as thorough as possible in reaching the hiring decision (recognizing that while perfection is a lofty goal, it is sometimes not achieved).
Many employer will apply their foreign (e.g. U.S.) stock option plans to their Canadian operations, without regard to the fact that Canadian and, for example, U.S. employment law are quite different. One of the more significant differences is that Canada does recognize employment "at-will". Simply put, in the absence of just cause, and employer may only terminate the employment of an employee upon reasonable notice or pay in lieu of notice at common law. The employer and employee are entitled to agree, in a contract, to a lesser period of notice or payment on termination, provided that this meets certain standards (including that it complies with the minimum standards contained in the applicable employment standards legislation - see Lloyd v. Oracle Corporation of Canada Inc. ), but that is a discussion for another day.
But how have Canadian courts interpreted stock option plans?
There are typically two (2) issues:
These are difficult questions that are, ultimately, decided on the specific wording of the plan under which the options were granted and having regard to Canadian legal requirements. In brief, the Ontario Court of Appeal has held that, where the language with respect to either the Trigger or the Sunset Period does not specificly contemplate the non-incorporation of the period of reasonable notice, courts ought to imply an employee’s notice period into the terminology used to define the Trigger or Sunset Period. However, where the relevant language is sufficiently specific, courts are to hold the parties to the bargain made.
[A]ny termination of a participant’s employment for any reason shall occur on the date Participant ceases to perform services for Micro or any Affiliate without regard to whether Participant continues thereafter to receive any compensatory payments therefrom or is paid salary thereby in lieu of notice of termination...
On this language, the Court found that Mr. Kieran was not entitled to any damages on account of stock options and that he was not entitled to any extension of the period during which he could exercise the vested options by reason of the notice period.
On the other hand, the Court of Appeal came to a different conclusion in Gryba v. Moneta Porcupine Mines Ltd. (December 20, 2000, C.A.) on the following language:
If an optionee ceases to be employed... by the Corporation otherwise than by reason of death or termination for cause... any option... held by such optionee at the effective date thereof may be exercised in whole or in part for a period of 30 days thereafter.
The majority of the Court of Appeal focussed on the words “the effective date thereof” and held that the effective date of termination was at the conclusion of the employee’s notice period. Accordingly, the employee had up until the expiry of the notice period plus 30 days within which to exercise any vested options.
There are now many cases on this issue. Simply because the plan would be interpreted in a certain way in, for example, the U.S., does not necessarily mean that it would have the same interpretation in Canada. What is important, I think, is for employers to recognize the different legal requirements, review their plans and assess whether the language is sufficiently clear to support their interpretation of the plan and their intentions, having regard to the cases released to date (and the fact that this issue is a "moving target", at this point). If the language is ambiguous, get advice, and re-draft the plan.
Radio-Canada reports that the Quebec Minister of Labour has, on agreement of the union and company, appointed Jean-Pierre Tremblay as the arbitrator in the Jonquiere, Quebec Wal-Mart store negotiation. After hearing the submissions of the parties, the arbitrator will determine the terms of the first collective agreement.
The Ontario Court of Appeal dismissed an employees' appeal in Vanelli v. Sobeys Capital Inc. (February 23, 2005, C.A.). The employee argued that the following actions amounted to a constructive dismissal:
- the employer’s requirement that the employee work hours and duties include closing the store one night per week and one weekend per month, without additional pay, was a fundamental breach of his employment contract; and
- the employer’s delayed payment of its share of the employee's disability benefits.
The Court of Appeal referred to its earlier case of Hilton v. Norampac Inc. (August 22, 2003, C.A.) where it held that the unilateral imposition of an on-call requirement amounted to a fundamental change in the terms of employment and a constructive dismissal. In the Court's words:
It seems to me that a trier of fact could reasonably find that the unilateral imposition of additional hours of weekend work without pay materially changed the terms of Hilton's employment. See Randall Scott Echlin & Jennifer M. Fantini, Quitting for Good Reason (Aurora: Canada Law Book, 2001) at 406ff. As this finding was available to the trial judge on the evidentiary record before him, I see no basis to interfere with it. Accordingly, I would not give effect to this ground of appeal.
Unlike in the Norampac Inc. case, Sobeys was "not asking the appellant to work extra hours or closing hours without pay" but, rather, that "working hours were to be adjusted to take into account the closing hours and he was to be compensated for this work in the normal course."
The Court also rejected the second ground of appeal. According to the Court:
The applicable benefits insurer denied the appellant’s benefits claim for some time and subsequently accepted it. The appellant’s counsel was informed by the employer’s president that the employer would recommence payment of its share of the appellant’s disability benefits as soon as the insurer approved the claim. Shortly thereafter, upon learning of the insurer’s approval of the claim, the president of the employer, as promised, instructed his staff to promptly resume payment of the employer’s share of the benefits. The evidence at trial indicated that the employer’s subsequent delay in paying its share of the benefits was attributable to an administrative error on the part of one of its benefits staff, who subsequently left the employ of the employer.
Furthermore, the employee never informed the employer "after the approval of his claim by the insurer and the commencement of receipt of benefits payments from the insurer" that he was not receiving the employer's share of the benefits.
The appeal was dismissed.
When considering whether employer action does or does not amount to a constructive dismissal, the test adopted by the Supreme Court of Canada decision in Farber v. Royal Trust Co. is to be considered. The test, from the headnote to the case, is summarized as follows:
Where an employer decides unilaterally to make substantial changes to the essential terms of an employee's contract of employment and the employee does not agree to the changes and leaves his or her job, the employee has not resigned, but has been constructively dismissed. By unilaterally seeking to make substantial changes to the essential terms of the employment contract, the employer is ceasing to meet its obligations and the employee can treat the contract as resiliated for breach and can leave. In such circumstances, the employee is entitled to compensation in lieu of notice and, where appropriate, damages. To reach the conclusion that an employee has been constructively dismissed, the court must therefore determine whether the unilateral changes imposed by the employer substantially altered the essential terms of the employee's contract of employment. For this purpose, the judge must ask whether, at the time the offer was made, a reasonable person in the same situation as the employee would have felt that the essential terms of the employment contract were being substantially changed.
The analysis and determination is very much a fact specific exercise based on what a reasonable person, in the employees' circumstances, would have thought.
I recently spoke at the HRPAO Annual Conference on Progressive Discipline in the Non-Union Workplace. The overheads (in PDF format) from the presentation can be accessed Here. The HRPAO is a great organization and the conference was, without doubt, a huge success and a pleasure to participate in. I hope to be able to participate in 2006.
The Court of Appeal had occasion to again discuss the Supreme Court of Canada decision of Weber v. Ontario Hydro and, specifically, whether a court had jurisdiction to hear and decide upon a claim by a unionized employee against (a) his employer and (b) his union. The case is General Motors of Canada Limited, Basil Hargrove et al (February 15, 2005, Ont. C.A.).
In this case, the employee commenced a class action against GM and executives of his union (the CAW), including Buzz Hargrove, alleging that GM and the CAW misrepresented the terms of an early retirement agreement, causing him and other employees to retire early and suffer monetary loss.
The issue was whether the court had jurisdiction to hear the claim. A motions judge said "no", the employee appealed to the Court of Appeal who, ultimately, upheld the motions judges decision and concluded that a court did not have jurisdiction over the complaint.
The early retirement arrangement was contained in ancillary documents and the employee argued, these did not form part of the collective agreement and, therefore, an arbitrator had no jurisdiction to interpret them (under the collective agreement and the Labour Relations Act, 1995). The Court stated the test as follows:
Ancillary documents, such as company statements, memoranda of understanding, supplementary agreements, and miscellaneous agreements are considered part of a collective agreement if they were so intended by the parties and incorporated in some way into the collective agreement. See D.J.M. Brown and D.M. Beatty, Canadian Labour Arbitration, 3d ed. looseleaf (Aurora: Canada Law Book Inc., 2003) at 4:1210.
The Court concluded that the document in question was part of the collective agreement and that the arbitrator, not the court, had the exclusive jurisdiction over the matter.
Further, the fact that a "separate" dispute resolution procedure was negotiated between GM and the CAW with respect to the early retirement program, and that the employee would not have access to usual arbitration, did not change the court's views. Specifically, they held that "parties to a collective agreement may negotiate different dispute resolution procedures for different kinds of disputes." It would be wrong to assume that the collective agreement may only contain one arbitration procedure (i.e. the "standard process"). The Court notes that:
Here, these two sophisticated parties have negotiated a simplified and expeditious procedure to resolve disputes over pension and retirement benefits. I have no reason to think that this procedure runs afoul of s. 48(1). Natural justice does not always require an oral hearing. For these disputes over benefits, GM and CAW have agreed that a written hearing will satisfy the requirements of procedural fairness. See D.J. Mullan, Administrative Law (Toronto: Irwin Law, 2001) at pp. 244-250. In my opinion, the decision of the seven-person board amounts to a “final and binding settlement by arbitration”, as the Act requires.
The claim against GM was dismissed as the Court had no jurisdiction to deal with it.
With respect to the claim against the CAW, the court held that "Vernon’s [the appellant] dispute with his union centres on whether the CAW fairly represented him on a matter arising from the collective agreement and is rooted in his employment relationship with GM." and that the Ontario Labour Board has the exclusive jurisdiction to decide "duty of fair representation" complaints. According to the Court:
A union’s duty of fair representation arises from its exclusive power to act as a spokesperson for all employees in a bargaining unit. See Société d’énergie de la Baie James v. Noël,  2 S.C.R. 207. This duty extends beyond the negotiation of a collective agreement and arbitration under the agreement. It encompasses all aspects of the employer-employee relationship. See Great Lakes Forest Limited (1979), O.L.R.B. Rep. 651 at 661; Jeffrey Sack, C. Michael Mitchell & Sandy Price, Ontario Labour Relations Board Law and Practice, 3d ed. looseleaf (Toronto: Butterworths Canada Ltd., 1997) at 8:348. Vernon’s allegation that the CAW misrepresented the terms of his retirement allowance falls squarely within the union’s duty. Thus, the Board had exclusive jurisdiction to hear Vernon’s complaint against his union. And, had the Board found merit in the complaint, it would have had remedial power to grant Vernon the monetary relief he sought. See Leonard Murphy (1977), O.L.R.B. Rep. 146.
The Court dismissed this aspect of the employee's appeal.
Wal-Mart and the announcement to close its store in Jonquiere, Quebec is still very much in the news. Reading the news reports, it seems that one of the difficulties that Wal-Mart has is with the labour laws in place in Quebec themselves.
As I understand it, the union was certified (or accredited) based solely upon the signed membership evidence submitted by the Union in support of their application. In other words, as I understand it, there was never a secret ballot vote among the employees in the proposed bargaining unit. In effect, a vote was not required under the legislation having regard to the level of membership support submitted by the Union in support of its application for certification.
The Return of Card Based Certification in Ontario?
The Ontario Liberal Government, under Premier Dalton McGuinty, introduced Bill 144 which would amend, in some significant respects, the Ontario Labour Relations Act, 1995. For a discussion of the Bill 144 changes see my article Liberal Government proposes Labour Law Reforms. One of the proposed amendments is permitting the Unions to elect, in the Construction Industry only, to proceed with their application for certification under either the "card-based" system or the "vote-based" system.
What is card-based certification? Simply put, the Unions' purpose through the organizing drive is to garner support among those that it seeks to represent. They demonstrate this support, most typically, through signed membership cards. In a card based certification system, the cards are submitted to the appropriate labour relations board, along with the application for certification and, if the number of cards exceed a specified threshold, the union is certified as the exclusive bargaining agent for the employees in the bargaining unit. Of course, the employer can contest various issues (such as the appropriateness of the bargaining unit, who is included in the unit, and whether the union has met the membership threshold). But, in a card-based system, the cards are a demonstration of the signatories desire to have the union represent him or her as his or her bargaining agent.
As mentioned, the Liberal's proposed Bill 144, would re-introduce the card-based certification stream into the Construction Industry. Wayne Samuelson, the President of the Ontario Federation of Labour ("OFL") has recently sent a letter to its members calling for a return of the "card-based" certification system in Ontario, generally, and irrespective of the industry or sector. You can access a printable version of Mr. Samuelson's letter here (the attachment to the letter is here).
As Mr. Samuelson notes, card-based certification was something that was in place in Ontario since the 1950's.
Card-based certification was repealed (along with the Labour Relations Act, in its entirety) by the Conservatives when they came to power and enacted Bill 7 (now the Labour Relations Act, 1995). Instead, the Conservative government opted for mandatory representation votes in every case where the union could demonstrate, through signed membership evidence, that 40% or more of those in its proposed bargaining unit wished to become members of the Union.
Arguments on Both Sides
I recall when we had card-based certifications in Ontario, employers balked at it and questioned the "democracy" of such a system where the "true wishes" of the employees were not really tested through a Ministry supervised secret ballot vote. In fact, employers were openly concerned that, once signed, the card was difficult to revoke. There was, in the eyes of some, a tremendous incentive on the part of the Unions to get the card signed and, of the more suspicious types, a concern that they might take some liberties in their zeal to have the employee sign the card.
In a "vote-based" system, the cards are simply used to get the union into a secret ballot vote position, where employees will express their true wishes in the sanctity of the voting booth. Union's do not like the "vote-based" system (and, by implication, like the "card-based" system). In the attachment to Mr. Samuelson's letter, the OFL puts it this way:
Having a card-based system for obtaining a union effectively reduces the temptation of employers to intimidate and coerce employees. To impose a vote, after a person signifies their desire for a union by signing a union membership card, known as a card check, leaves workers open and vulnerable to employer influence and pressure.
Between the signing of a card and a vote, anti-union employers all too often illegally intervene in an organizing campaign to persuade employees not to join a union, at best, and intimidate, coerce, threaten to close down their operation and terminate employees at worst. Far from adding democracy to the process of getting a union, forcing a vote on top of signing a union card functions to inhibit the democratic will of workers to join a union of their choice.
The certification process, in Ontario, currently is as follows:
Mr. Samuelson's point, I believe, is that while the vote takes place quickly, after the application is filed, this does not, in any way, address unlawful employer practices between the signing of the membership card or from the time that the employer becomes aware of the certification efforts, and the vote.
He's quite right. The legislation, currently, attempts to address this concern through the unfair labour practice provisions and the remedies that are available to the Board. Specifically, where the employer commits an unfair labour practice, and the results of the representation are likely not to have reflected the true wishes of the employees, the Board has the power to order a second vote along with expansive remedies (such as, for example, requiring the employer to provide the Union with an office on its premises, to meet with employees during working hours, to pay the organizing costs of the union, and to determine the date of the second vote). In other words, the Board, through its remedies, will try (so far as is possible) to "right the wrong".
Furthermore, if the Liberal Government has its way, the Labour Relations Act, 1995 will be amended by reintroducing the "automatic certification" provisions that had been repealed by the Conservative Government in 1998 (largely as a result of a Wal-Mart case, hence the "second-vote" provision is widely known as the "Wal-Mart Amendment").
The Liberal amendment would provide that where an employer, an employers' organization or a person acting on behalf of an employer or an employers' organization contravenes the Act and, as a result:
(a) the true wishes of the employees in the bargaining unit were not likely reflected in a representation vote; or
(b) a trade union was not able to demonstrate that 40 per cent or more of the individuals in the bargaining unit proposed in the application for certification appeared to be members of the union at the time the application was filed and, thus, get themselves into a mandatory representation vote position under the Act.
Where either of these circumstances exists, the Ontario Labour Relations Board has three (3) options:
While, it is correct to say that labour Board's across Canada have used automatic certification quite sparingly to remedy unfair labour practices committed in the certification process, it is certainly not unheard of.
The argument for the return of "card-based" certification is premised, as the OFL notes, on the assumption that the employer will engage in unlawful conduct and commit unfair labour practices. To use the words of the OFL:
To force such workers to go through a vote, with its likely companion employer interference, is to deny many workers access to collective bargaining.
I find such a broad assumption difficult to accept. A review of the Ontario Labour Relations Board cases suggests that most applications for certification are relatively straightforward affairs, which are not marred by unlawful employer conduct. I am confident that there are statistics on this, though I have not found them.
If, my assumption is correct, as I believe it is, then what is the merit of returning to a card-based certification system, when any unfair or illegal employer conduct can be remedied appropriately through the creative use of existing remedies or, if Bill 144 becomes law, through the automatic certification procedures?
The flip side, is that there are very few cases of union impropriety in the organizing phase (ie. in soliciting membership cards), and so, why not bring back the card-based certification system?
A compromise is the free vote. I emphasize free, because for the vote to be truly free, both employer and union must respect the wishes of the employees, and not influence them through "intimidation, coercion or undue influence" (to quote from the unfair labour practice provisions). Where the vote is not free, the Board has, at its disposal, remedies to rectify the unlawful conduct.