Labour Relations

Labour law lawyers advise employers, organized labour, and individual employees in grievance and arbitration proceedings under federal and provincial law. They appear before courts and labour relations boards, negotiate collective agreements, assist with workforce planning including downsizing, and appear in interest arbitrations and on judicial reviews of arbitration and board decisions.

Right to Strike

For almost 30 years, the Supreme Court of Canada has been equivocating about the extent to which the constitutional rights to freedom of association and speech impact labour relations. Given the far-reaching effects of this jurisprudence on Canadian workplaces, uncertainty had become the norm. Most recently, the Court dealt with the issue in a trilogy of cases, Mounted Police Association of Ontario v. Canada, Meredith v. Canada, and Saskatchewan Federation of Labour v. Saskatchewan.

Both Mounted Police and Meredith involved the RCMP. In these cases, the government held that the unique bargaining scheme that the federal government had imposed on the RCMP violated section 2(d) (freedom of association) of the Charter. In Saskatchewan Federation of Labour, the Court went further: faced with essential services legislation, the court ruled that section 2(d) protection included the right to strike as an “indispensable component” of the right to bargain collectively.

The decisions were a complete reversal of form for the high court, so much so that management-side counsel complained that is would be difficult to predict where future jurisprudence is headed. Union counsel, however, say the reversal is merely a recognition that collective bargaining is not as robust as it used to be and that workers need more protection today.

What seems clear is that the trilogy will resound for years. From a legislative perspective, statutory limits on collective bargaining will be subject to greater scrutiny and essential services legislation limiting the right to strike will need to go no further than necessary. From a dispute resolution perspective, courts, labour relations boards, and arbitrators will have to take the trilogy into account, which could result in narrowing interpretations of employer rights as the focus of the law shifts from economic to constitutional considerations.

What Is an Employer’s “Payroll”?

Justice Paul Kane of the Ontario Superior Court of Justice has challenged existing jurisprudential wisdom by holding that the “payroll” used for determining an employer’s liability for statutory severance should be calculated with reference to all of a company’s Canadian operations.

Paquette v. Quadraspec involved an employee who started working for one of Quadraspec’s predecessors in 1983 and continued to work for other predecessor companies. In 1988, he signed a new employment contract as General Director of Placage Inc.’s operations in Oakville, Ontario. Eleven years later, Quadraspec merged with Placage and terminated Paquette. The new company operated in Ontario and Québec. The Ontario payroll was less than $1.5 million, but its Québec payroll was double that.

The employment contract limited Paquette’s severance, but he brought a motion for a determination that the contract was void. In the alternative, Paquette argued that he was entitled to severance pay pursuant to section 64 of the Employment Standards Act, 2000. Section 64 requires employers with a payroll of $2.5 million or more to pay severance to employees who have at least five years’ service. The practice has been to take into account only payroll arising out of Ontario operations. Both the Ontario Ministry of Labour and the Ontario Labour Relations Board have consistently approved this approach.

Kane held that the legislature did not intend to so limit the payroll calculation. He noted that the Hansard Debates of 1987 that led to the $2.5 million threshold demonstrated that the purpose of the provision was to protect workers who were employed by a company “that is part of a larger enterprise.” Kane also noted that section 64 does not specifically limit the calculation to a company’s Ontario payroll.

In Kane’s view, previous decisions limiting the ESA’s application to workers in Ontario were not relevant to the instant case. He concluded that section 64 was not meant to and did not “govern” payrolls in other provinces. Rather, the Ontario legislature, which was clearly empowered to legislate about employers who operated in Ontario, could also legislate about the impact of their overall payrolls on Ontario employers and employees.

Many labour lawyers argue that Paquette is wrongly decided. They say that from a constitutional perspective, provincial statutes attach only to labour relations within the province. They argue that if employees can reach outside the jurisdiction to determine severance pay, logic dictates that a union certification issued by the Ontario Labour Relations Board could also apply to the operations of the same company outside Ontario’s borders.

The critics also point out that ESA regulations and interpretation guidelines have gone so far as to limit section 64 payroll calculations to individual establishments of a company operating at more than one location in the province. If the payroll calculation can be so limited, the critics conclude, it doesn’t make sense that it could be expanded beyond the Ontario border.


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