The Jurisdiction of Labour Arbitrators under Quebec Law

Last Thursday the SCC released a trio of decisions that once and for all settled the issue of the jurisdiction of arbitrators under s. 124 of the Act respecting labour standards, R.S.Q. c. N-1.1 (the Act). The trio dealt with the recurring issue of unionized employees in Quebec seeking to grieve their termination without good and sufficient cause before an arbitrator. Section 124 of the Act gives a recourse to employees dismissed without good and sufficient cause, as long as they have completed two years of uninterrupted service in the same enterprise.

124. An employee credited with two years of uninterrupted service in the same enterprise who believes that he has not been dismissed for a good and sufficient cause may present his complaint in writing to the Commission des normes du travail or mail it to the address of the Commission des normes du travail within 45 days of his dismissal, except where a remedial procedure, other than a recourse in damages, is provided elsewhere in this Act, in another Act or in an agreement.

In all three cases, the unions representing the employees argued that s. 124 was implicitly incorporated into the collective agreements that governed the labour relations between the respondent employers and the appellant unions. They also argued that arbitrators, and not the Commission des relations de travail (CRT), had jurisdiction over the complaints. Accordingly, the two main issues in the trio were: (i) whether s. 124 is implicitly incorporated in all collective agreements; and (ii) whether arbitrators had jurisdiction over the complaints.

In accordance with the Act, all of the employees in question had two years of uninterrupted service with their respective employers. In Syndicat de la function publique du Quebec v. Quebec (Attorney General), 2010 SCC 28, (SFPQ), the appellants were two government employees who alleged that they had been fired from their jobs without good and sufficient cause. The appellant in Syndicat des professeurs du Cegep de Ste-Foy v. Quebec (Attorney General), 2010 SCC 29, (SPCS), was a teacher who argued that his employer’s withdrawal of his employment priority constituted dismissal without good and sufficient cause. Similarly, in Syndicat des professeurs et des professeures de l’Universite du Quebec a Trois-Riveres v. Universite du Quebec a Trois-Rivieres, 2010 SCC 30, (SPPU), the appellant was a university professor who argued that the non-renewal of her contract constituted dismissal without good and sufficient cause, as required by the applicable collective agreement and s. 124.

The SCC Splits Thrice, but makes Nice on Implicit Incorporation

The majority decision written by LeBel J. in SFPQ was referenced in the majority decisions in SPCS and SPPU.  Unsurprisingly, the positions of the SCC justices were consistent between the three decisions. Like LeBel J., Deschamps J. referenced her minority decision in SFPQ in her minority decisions in SPCS and SPPU. The trio of decisions establish the precedent that s. 124 is not implicitly incorporated into all collective agreements, though the public order status of the Act means that any provision inconsistent with s. 124 is of no effect. Given the high position of public order status in the hierarchy of labour law, s. 124 affects the actual content of a contract of employment or collective agreement so that the illegal provision is “unwritten”, thereby altering the content of the remaining contract or agreement. Since the other decisions reference the decision in SFPQ, only the latter decision will be discussed in this post.

Syndicat de la function publique du Quebec v. Quebec (Attorney General)

The Syndicat de la function publique du Quebec argued that s. 124 functions not only as a means for recourse, but also as an employment standard. Since it is an employment standard, parties may not enter into a labour agreement that bypasses or eliminates the right to recourse provided for in s. 124. The union also argued that  “[c]ollective provisions that contravene or are inferior to that standard are of no force or effect and are deemed not to exist, which means that that the arbitrator has jurisdiction to determine whether an employee was dismissed for a good and sufficient cause.” Despite splitting on other issues, the SCC unanimously rejected the union’s argument that s. 124 of the Act is implicitly incorporated in all collective agreements.  Endorsing Deschamps J.’s analysis of the legislative framework in her minority decision, Lebel J., in his majority decision, wrote that the union’s argument “is not consistent with the words of the [Act] and disregards the drafting techniques used by the Quebec legislature when it intends to incorporate a specific standard into collective agreements.” Although the SCC rejected the union’s argument, that did not mean that the union came back empty handed.

The majority held that because the Act is a statute of public order, any provision in a collective agreement or individual agreement that purports to prevent an employee who is credited with two years of uninterrupted service and dismissed without good and sufficient cause from contesting his or her dismissal is of no effect. Instead of framing the Act’s public order status as having the effect of implicit incorporation, which would be contrary to legislative intent, the majority held that the correct way to frame this status was took look at it in terms of how the “hierarchy of relevant sources of labour law affects the content and implementation of agreements.” Since it is at the top of the hierarchy, the Act would deem any provision contrary to s. 124 as “unwritten”. LeBel J. framed this precedent as a limitation on the freedom of contract that “affects the actual content of the contract of employment, and not just its legal framework.” Any provision that is inconsistent with this “mandatory” standard will be “deemed unwritten, which alters the content of the collective agreement.”

In her dissent, Deschamps J. describes Lebel J.’s approach as “reading out”. A provision inconsistent with s. 124 is read out of the collective agreement, thus opening the door for arbitrators to assume jurisdiction. The majority held that jurisdiction over the complaint will depend on whether the collective agreement, as amended by the public order status of the Act, provides for equivalent recourse. Recall that s. 124 contains an exception to the Commission des normes du travail’s jurisdiction: “except where a remedial procedure, other than a recourse in damages, is provided elsewhere in this Act, in another Act or in an agreement.” The arbitrator will look at the amended collective agreement and determine whether he or she has the power to grant recourse equivalent to the one available under s. 124. If the agreement does not provide equivalent recourse, then the employee will have to take his or her complaint to the CRT. In the alternative, an arbitrator will have jurisdiction where equivalent recourse exists.

Deschamps J. criticized the “reading out” approach because it is contrary to legislative intent, which as demonstrated by her in-depth analysis, does not provide for the reading out of any provisions. According to her, any provision that allows an employee with two years of uninterrupted service to be fired without a good and sufficient cause would be null, but “there is no requirement that the parties confer responsibility for the enforcement of this protection on an arbitrator appointed under the collective agreement.”  Furthermore, the standard in the Act is not incorporated into all collective agreements.

I agree with Deschamps J.’s criticism of the majority’s reading out approach. By overemphasizing the public order status of the Act, the majority is able to essentially incorporate s. 124 into every collective agreement, despite rejecting the unions’ implicit incorporation argument. It is conceded that the majority does use a different line of reasoning – the hierarchy agreement – to incorporate s. 124, though the effect is still the same: legislative intent is circumvented. The reputation of the law as being riddled with loopholes and technicalities is reinforced by the manner in which the majority uses the legislature’s decision to award public order status to the Act to overcome the absence of legislative intent to implicitly incorporate s. 124 into all collective agreements. At paragraph 41, Lebel J. stated,

The public order status the legislature has attributed to this provision means that no individual contract or collective agreement an employee credited with two years of uninterrupted service who is dismissed without good and sufficient cause from contenting is or her dismissal…Thus, the public order status of the legislation affects the actual content of the contract of employment or collective agreement, and not just its legal framework.

Where the public order standard alters the collective agreement, the collective agreement could be potentially interpreted so that “an employee may apply the agreement to contest his or her dismissal before a grievance arbitrator.” I echo Deschamps J.’s comment that it should not be open to an arbitrator to re-write a collective agreement that has been negotiated and agreed upon by the parties so that he or she can assume jurisdiction.