by Emilie Paquin-Holmested

Generally when employees decide to leave their jobs, they are considered to have quit. But in Canada, if they leave their jobs because the employer substantially changed essential terms of their employment, they are considered to have been constructively dismissed.

The line separating these two notions is often unclear. It’s especially so when terms of employment are changed after a corporate merger or integration. In a recent decision (St-Hilaire c. Nexxlink inc.), the Court of Appeal of Quebec reviewed the principles of constructive dismissal in this very context. read more…

By Brian P. Smeenk

Canadian labor arbitrators are not legally bound to court-made legal rules. Rules of evidence, for example, are more relaxed. Rules of contract interpretation may also vary. But just how far arbitrators can deviate from general rules of law has been an open question.

A recent decision by the Supreme Court of Canada took a fresh look at this issue. It confirmed that labor arbitrators will be given lots of leeway by the courts.

read more…

By Ida Martin

This December, the Supreme Court of Canada is set to hear a case involving the issue of whether the Canadian Human Rights Tribunal has the authority to grant legal costs to a successful complainant. In an area of law where legal costs often dwarf the actual amount of any award, the Supreme Court of Canada decision could have major ramifications for human rights litigation across Canada.

Audio Conference: Operating in Canada: New Dos and Don’ts for Employers

read more…

by Emilie Paquin-Holmested and Dominique Monet

The Supreme Court of Canada, in Québec (Procureur général) c. Syndicat de la fonction publique, recently struck down a clause in a collective agreement. The clause in question prevented certain employees from challenging discipline through grievance arbitration. The Court declared the clause void because it contravened a statutory minimum standard.

read more…

By Marc Ouellet and Louise Béchamp

On November 27, 2009, in two cases involving Wal-Mart (Plourde v. Wal-Mart Canada Corp. and Desbiens v. Wal-Mart Canada Corp.), the Supreme Court of Canada rendered its much-awaited decision on an employer’s right to close operations for alleged antiunion reasons.

The Supreme Court decisions rule that Wal-Mart could close one of its stores following the unionization of its employees. Essentially, the court confirmed the principle by which an employer can overturn the presumption against it, established by section 17 of the Quebec Labour Code, by simply showing that the decision to close is “real and definitive.” This is possible even though the reasons behind the closing could be viewed as “socially reprehensible.”

read more…

By Katie Clayton and Farrah Sunderani

In our October 12, 2009, entry we looked at the extent to which Canadian courts are following the principles established by the Supreme Court of Canada in Honda v. Keays to awarding bad faith and punitive damages. Last month, an Alberta court was once again put to the test.

On October 13, 2009, the Alberta Court of Queen’s Bench released its reasons in Soost v. Merrill Lynch Canada Inc. where it followed the Supreme Court’s principles, although this time against the employer.

read more…

It has been just over a year since the Supreme Court of Canada (SCC) issued its decision in Keays v. Honda Canada Inc. (Read our analysis of the court’s decision in that case). That decision mandated a change in Canadian courts’ approach to awarding damages in employment cases. Damages for bad faith conduct by the employer (Wallace damages) and punitive damages were to be awarded only in exceptional circumstances.

So just what have Canadian courts been doing since? Has their approach to such damages really changed? A review of the decisions in the past year suggests they have.

read more…

The Court of Appeal of Quebec recently overturned a decision of the Superior Court ordering former directors and officers to pay their ex-employer $3,185,148. The damages had been awarded for appropriating a business opportunity of the former employer and for having breached their obligations of loyalty and good faith under the Civil Code of Quebec. It was a business opportunity on which the employees had actively worked in the course of their employment with Enerchem Transport inc. (ETI).

The appeal court in Gravino v. Enerchem Transport Inc. confirms that, absent specific noncompete and nonsolicitation agreements, ex-directors or officers may, in certain circumstances, fulfill the duty of loyalty owed to their former company while still pursuing for themselves certain business projects that were started while engaged with the prior company.

read more…

by Bill Duvall

At the best of times, employer-sponsored pension plans bring with them thorny administrative and legal problems.

These issues multiply in an economic environment in which many such pension plans face funding problems while employers seek to reduce their costs. Many employers have attempted pension plan amendments to reduce funding pressures. One such example is the creation of a defined contribution (DC) component out of an existing defined benefit (DB) plan. Similarly, employers have sought to reduce their pension plan administrative expenses wherever possible. Such employer actions are almost universally met by suspicion from plan members and are followed on occasion by litigation.

read more…

For the last five years, two Wal-Mart big-box stores in Quebec have been the subject of certification applications filed by the United Food and Commercial Workers Union (UFCW). The first store to be unionized was located in the town of Jonquière. Wal-Mart decided to close down that operation in 2005 immediately after the union applied for binding arbitration to settle the terms of the collective agreement.

The Quebec Labor Code provides that an arbitrator designated by the Minister of Labor can impose the content of a first collective agreement. This may be done when the parties are unable to reach an agreement, after negotiation and government-assisted mediation/conciliation. In imposing an agreement, the arbitrator must decide the terms “according to equity and good conscience.” The arbitrator may also take into account the conditions of employment that prevail in similar businesses.

read more…