Supreme Court rejects implicit incorporation of Section 124 LSA into collective agreements
September 2, 2010

Introduction

Three recent Supreme Court of Canada decisions have split the bench five to four over the public order nature of s. 124 of the Act respecting labour standards ("LSA") and its effect on collective agreements, and ultimately on the jurisdiction of grievance arbitrators.1 However, both the majority and the dissent agree that s. 124 LSA, which prohibits the dismissal without good and sufficient cause of an employee who has two years of uninterrupted service, is not implicitly incorporated in collective agreements.

The following discussion will focus on Syndicat de la fonction publique , as the judges refer back to their analysis in this first case in both syndicat des professeurs du Cégep de Ste-Foy and Syndicat des professeur(e)s de l'Université du Québec à Trois-Rivières.

Footnotes

1. See Syndicat de la fonction publique du Québec v. Quebec (Attorney General), 2010 SCC 28 Syndicat de la fonction publique »); Syndicat des professeurs du Cégep de Ste-Foyv. Quebec (Attorney General), 2010 SCC 29 syndicat des professeurs du Cégep de Ste-Foy »); Syndicat des professeurs et des professeures de l'Université du Québec à Trois-Rivières v. Université du Québec à Trois-Rivières, 2010 SCC 30 Syndicat des professeur(e)s de l'Université du Québec à Trois-Rivières »).

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The facts

In Syndicat de la fonction publique, the Supreme Court was asked to consider two appeals in cases where dismissed employees were unable to contest their termination because the applicable collective agreement restricted their access to the grievance procedure. One case involved a casual employee and the other a probationary employee. The union argued that the employees had completed the two years of uninterrupted service required by s. 124 LSA and contested their dismissal.

The arbitration tribunal in the first case incorporated s. 124 LSA into the collective agreement and concluded that the arbitrator had jurisdiction to hear the grievance. In the second case, the arbitration tribunal came to the opposite conclusion: s. 124 LSA is not to be incorporated into the collective agreement and as such, the arbitrator had no jurisdiction to hear the grievance.

The Quebec Superior Court held on judicial review that arbitrators had exclusive jurisdiction over the disciplinary grievances, while the Quebec Court of Appeal rejected the implicit incorporation argument and ruled that only the Commission des relations du travail ("CRT") had jurisdiction to decide a s. 124 LSA wrongful dismissal complaint.

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The majority

Justice LeBel, writing for the majority, concludes that the union's argument of implicit incorporation of s. 124 LSA into collective agreements disregards legislative intent and is inconsistent with the wording of the LSA. However, as a statute of public order providing minimum standards of protection, the LSA does not allow individual contracts of employment or collective agreements to prevent an employee credited with two years of uninterrupted service who is dismissed without good and sufficient cause from contesting his or her dismissal. Any such provision will be null and deemed unwritten, thus altering the content of the collective agreement. With this modified collective agreement in hand, an arbitrator asked to review an employer's decision to dismiss will have to determine whether or not the agreement provides for rights and recourses equivalent to those set out under s. 124 LSA. If the recourse in the agreement allows an arbitrator to review the decision and order appropriate remedies in a comparably effective procedural framework, the employee, like any other employee, can use these recourses to contest the dismissal. As such, the arbitrator will have jurisdiction to hear the complaint.

Applying these principles to the facts of the case, Justice LeBel finds that the altered collective agreement granted the grievance arbitrator powers of intervention similar to those of the CRT. As such, the arbitrator had jurisdiction to hear the grievances and the decision of the Quebec Court of Appeal should be overturned.

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The dissent

Justice Deschamps, writing for the dissent, also concludes that it was not the legislator's intention to implicitly incorporate s. 124 LSA into collective agreements. Nonetheless, she considers that the majority is resorting to a practice of “reading out,” which she considers inappropriate and prefers an interpretation that gives meaning to both the provisions of the legislation and the collective agreement. While a provision contrary to s. 124 LSA would be null, finding a right to the grievance procedure would be equivalent to rewriting certain clauses of the collective agreement.

Justice Deschamps would have dismissed the appeal. She notes that the clauses of the collective agreement were not contrary to public order as they did not deprive the employees of their recourses under s. 124 LSA. The LSA and the Quebec Labour Code do not prohibit restricting access to the grievance procedure in collective agreements. Where employees are not afforded adequate remedial protection in their collective agreements, they can turn to the CRT. In this case, considering the absence of recourses for casual and probationary employees in the collective agreement, the CRT was the appropriate forum to settle their complaints.

We note that the two sides of the bench dismissed the appeals in syndicat des professeurs du Cégep de Ste-Foy and Syndicat des professeur(e)s de l'Université du Québec à Trois-Rivières based on their analysis of the respective collective agreements.

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Conclusion

It is clear from this new case law that any clause denying the right of an employee with at least two years of uninterrupted service to contest his or her dismissal will be null and deemed unwritten. However, these three decisions open the door to some confusion as to the effect of s. 124 LSA; indeed, with the possibility of contesting the validity of certain collective agreement clauses, uncertainty reigns as to the jurisdiction of the grievance arbitrator and the CRT. It will now be much more difficult to determine whether the grievance arbitrator or the CRT has jurisdiction to hear a complaint for wrongful dismissal of an employee with a particular status (casual, probationary, seasonal, etc.) who does not have the same rights as a regular employee under the collective agreement. Parties will have to carefully draft their collective agreements in order to avoid complex litigation as to the jurisdiction of the grievance arbitrator or the CRT in cases in which the employee has at least two years of uninterrupted service.

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