Supreme Court of Canada

Lafrance et al. v. Commercial Photo Service Inc., [1980] 1 S.C.R. 536

Date: 1980-03-18

Johanne Lafrance, Elizabeth Marsolais, Lorraine Trudel, Richard Racine and Charlotte Savard Appellants;

and

Commercial Photo Service Inc. Respondent;

and

Marc Brière

and

Canadian Union of Public Employees, Local 1819 (QFL) Mis en cause.

1980: January 29; 1980: March 18.

Present: Pigeon, Dickson, Beetz, Estey and Chouinard JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Labour law—Dismissal for participation in an unlawful strike—Another good and sufficient reason—Jurisdiction of the investigation commissioner—Labour Code, R.S.Q. 1964, c. 141 as am., ss. 13, 14, 15, 16.

The five appellants were dismissed by respondent on February 11, 1976 for their participation in an unlawful strike. At the time they were dismissed, they were members of the mis en cause union, certified on June 18, 1975, which had since that time been attempting to negotiate an initial collective agreement. Appellants submitted complaints in accordance with s. 15 of the Labour Code, alleging they had been dismissed by reason of the exercise of a right conferred by the Code. The investigation commissioner found that respondent had not rebutted the presumption of s. 16, since participation in an unlawful strike could not constitute “another good and sufficient reason”, and ordered appellants to be reinstated in their employment. The Labour Court rejected the reasons of the investigation commissioner but upheld the decision because it found that the recourse to massive dismissal was “premature and excessive”. The writ of evocation sought by respondent from this judgment was denied by the Superior Court but allowed by the Court of Appeal. Hence the appeal to this Court.

Held: The appeal should be dismissed.

As the principle that participation in an unlawful strike may constitute good and sufficient reason for dismissal has been recognized in most of the decisions

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(including that of this Court recently), it remains to determine the meaning of the phrase “another good and sufficient reason” in s. 16 and the scope of the jurisdiction of the investigation commissioner and of the Labour Court on appeal. From the outset it has been held that this phrase means that the investigation commissioner must be satisfied that the other reason relied on by the employer is of a substantial nature and not a pretext, and that it constitutes the true reason for the dismissal. Under this interpretation, it is not for the investigation commissioner to rule on the severity of the penalty as compared with the seriousness of the wrongful act in question, in other words, to substitute his judgment for that of the employer, in doing which he would be exceeding his jurisdiction. In the case at bar the Labour Court judge, by holding that the recourse to massive dismissal was premature and excessive, ruled specifically upon the severity of the penalty and in doing so exceeded his jurisdiction.

United Last Company Ltd. v. Tribunal du travail, [1973] R.D.T. 423; United Steelworkers and Aerocide Dispensers Ltd. (1965), 1965 (ON LA), 16 L.A.C. 57, referred to; Douglas Aircraft Company of Canada Ltd. v. McConnell, 1979 (SCC), [1980] 1 S.C.R. 245, applied; Maresq et Brown Bovari (Canada) Ltd., [1963] R.D.T. 242; L’Industrielle, Compagnie d’assurance sur la vie v. Nadeau, [1978] T.T. 175; Aluminum Company of Canada Ltd. v. Le Syndicat national des employés de l’aluminium d’Arvida Inc., [1966] Que. Q.B. 641, referred to; Roger Vandal v. Ambulance “Paul Georges Godin Ltée” Ambulancia/Ouest-Montréal Ltée, [1976] T.T. 141, disapproved.

APPEAL from a decision of the Court of Appeal of Quebec[1], reversing a judgment of the Superior Court which refused to issue a writ of evocation from a judgment of a Labour Court[2] Upholding a decision by an investigation commissioner. Appeal dismissed.

Gaston Gamache, Q.C., for the appellants.

Robert Skelly and Danièle Béliveau, for the respondent.

English version of the judgment of the Court delivered by

CHOUINARD J.—This appeal, in which five appeals are joined by consent, deals with the interpretation of ss. 14 and 16 of the Quebec Labour

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Code, R.S.Q. 1964, c. 141, more specifically, with the meaning of the phrase “another good and sufficient reason” in s. 16, and with the jurisdiction of the investigation commissioner and the Labour Court in this regard.

Sections 13 to 16 read as follows:

13. No employer, or person acting for an employer or an employers’ association, shall refuse to employ any person because such a person is a member or officer of an association, or endeavour by intimidation, threat of dismissal or other threat, or by the imposition of a penalty or by any other means, to compel an employee to abstain from becoming or to cease being a member or an officer of an association of employees.

This section shall not have the effect of preventing an employer from suspending, dismissing or transferring an employee for a good and sufficient reason, proof whereof shall devolve upon the said employer.

14. When an employee is dismissed, suspended or transferred by the employer or his agent, because of the exercise by such employee of a right granted to him by this code, the investigation commissioner may order the employer to reinstate such employee in his employ, within eight days of the service of the decision, with all his rights and privileges, and to pay him, as an indemnity, the equivalent of the salary and other advantages of which he was deprived by the dismissal, suspension or transfer.

If the employee has worked elsewhere during the above mentioned period, the salary which he so earned shall be deducted from such indemnity.

15. An employee who believes that he has been illegally dismissed, suspended or transferred by reason of the exercise of a right which devolves on him under this code must, if he wishes to take advantage of section 14, present or mail his complaint in writing to the chief investigation commissioner within fifteen days of the dismissal, suspension or transfer. The chief investigation commissioner shall appoint an investigation commissioner to make an investigation and decide as to the complaint.

16. If it is shown to the satisfaction of the investigation commissioner seized of the matter that the employee exercises a right accorded to him by this code, there shall be a presumption in his favour that he was dismissed, suspended or transferred because he exercised such right, and the burden of proof that the employee was dismissed, suspended or transferred for another good and sufficient reason shall be upon the employer.

[Page 539]

Appellants were employed by respondent which on February 11, 1976 dismissed them because of their having taken part in an unlawful strike, and sent them the following telegram:

[TRANSLATION] TELEGRAM

YOUR PARTICIPATION IN THE PRESENT WORK STOPPAGE IS IN BREACH OF THE LABOUR CODE. FOR THIS REASON, YOUR EMPLOYMENT WITH THE COMPANY IS TERMINATED AT THE TIME AND ON THE DATE YOU CEASED TO PROVIDE YOUR SERVICES TO THE COMPANY.

SIGNED:

M. Ship,

Director General,

Commercial Photo Service,

90 Beaubien W.,

Montreal, Quebec

Appellants were members of the mis en cause union, certified on June 18, 1975, which in the words of the Labour Court judge had since that time been [TRANSLATION] “negotiating or attempting to negotiate an initial collective agreement”.

The negotiations were marked by several difficulties, including the dismissal of the president and a member of the union executive.

Additionally, the unlawful strike mentioned in the telegram was the sixth since the negotiations commenced.

The first of these work stoppages was settled by the signature of a “return to work agreement”, stating inter alia that:

[TRANSLATION] In view of the foregoing there shall not be any unlawful strike, stoppage, slowing down or reduction of production, interference of any kind with production or picketing until the right to strike is legally acquired in accordance with the provisions of the Labour Code.

Respondent alleged that, after the fifth unlawful strike on January 29, it warned the union representative and the employees involved [TRANSLATION] “that it would not tolerate another unlawful strike, and warned the respondents that it would terminate their contracts of employment if this occurred”.

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Following their dismissal, appellants submitted complaints in accordance with s. 15 of the Labour Code.

The investigation commissioner found in favour of appellants and ordered that they be reinstated in their employment. On appeal the Labour Court upheld this decision, although for different reasons.

The Superior Court refused to issue a writ of evocation, but this was authorized by the Court of Appeal: hence the appeal.

Provisions comparable to ss. 14, 15 and 16 were first introduced in the Labour Relations Act in 1959 (8-9 Eliz. II, c. 8, s. 1), and were then re-enacted in the Labour Code when it was adopted on July 31, 1964.

In United Last Company Ltd. v. Tribunal du travail[3], Gagnon J., speaking for the Court of Appeal, made the following observations at pp. 433 to 436 on the purpose and scope of these sections:

[TRANSLATION] It should be borne in mind that ss. 14, 15 and 16 of the Labour Code apply to all employees who are “dismissed” because of their exercising a right conferred on them by the Code. It is clear that they are not limited to those who are protected by a collective agreement and who may accordingly benefit under that agreement and the law from a certain measure of security of employment, like special procedures for presenting their grievances. The remedy created by these sections is complete in itself.

Apart from the fact that this interpretation is the only one made possible by the wording of the provisions, we know from experience, and the legislator knew, that disputes of this kind often arise during union organizing campaigns, and thus before a collective agreement has been negotiated and signed. It is only being realistic to recognize, without any partiality, that this is a particularly crucial stage in the life of a union, one in which even an enlightened and socially motivated employer cannot easily remain aloof. The legislator was concerned, especially at this stage, to protect exercise of the right of association, to guarantee that legitimate union activities can be carried on, and at the same time to avoid disrupting a nascent bargaining unit which at a later stage may be the subject of certification. To do

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this, he enacted provisions which are a clear departure from the ordinary law.

In general, apart from certain special statutes, a non-unionized employee must look to the Civil Code for a guarantee of his security of employment. Of course, he may be dismissed for cause, without notice and without compensation. In any other case, however, and if his contract of employment does not provide otherwise, his employer may terminate a contract of service by prior notice, the time of which may be quite short. If the prescribed notice is given the contract ceases, and the worker has no contractual remedy in connection with his dismissal.

This is where ss. 14, 15 and 16 L.C. come in. If it is established to the satisfaction of the investigation commissioner that an employee is exercising a right which devolves on him under the Labour Code, the presumption of s. 16 applies. From then on, the Act imposes a heavy burden on the employer. Thus, he may not take refuge behind the Civil Code and justify his employee’s dismissal by saying, for example, that the latter was hired for an undetermined period, that he was paid by the week, and that he received a week’s notice. He will have to establish a good and sufficient reason for the dismissal. It can thus be seen that these provisions go beyond the boundaries of the individual contract of employment and give an employee dismissed for union activities security of employment which does not derive from the Civil Code, and which even makes certain provisions of that Code inapplicable.

The terms “dismissed” and “dismissal” must therefore be given a wide enough interpretation so that the intention of the legislator is not frustrated, and, in my opinion, one which covers all forms of termination of employment prompted by union activities.

As I have tried to show, the fact that the legislator intended to subject these situations to a special scheme emerges from the burden of proof which he has placed on the employer. This becomes even more apparent when one considers the penalty which he has attached to the acts which ss. 14, 15 and 16 are designed to prevent.

The investigation commissioner may order the employer to reinstate the employee in his position. He may apply these provisions, I repeat, in all cases, even where the employee may not, under his contract of employment, have any right to claim that he be rehired. The Labour Code thus confers on an employee to whom these sections apply a special right to his position.

Further, the investigation commissioner may order payment to the employee of the salary and other benefits which he lost through his “dismissal”.

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The provision states that the payment is made as an indemnity. It is to some extent a penalty imposed on account of the unlawful act committed, which goes much further, in spite of what might appear at first sight, than simply putting the parties back into the legal situation they were in before the dismissal. In this regard, I would say that ss. 14, 15 and 16 create a new legal situation between the employer and the employee, that they modify the individual contract of employment and that they give the employee new rights, independently of the Civil Code and even of any collective agreement.

Once it has been established that an employee is exercising a right conferred on him by the Labour Code, s. 16 creates a presumption in his favour that he was dismissed because he exercised this right.

In view of appellants’ membership in the union, the certification of the latter and the negotiations undertaken the investigation commissioner held that the presumption had arisen in appellants’ favour. That is not in dispute.

In order to rebut this presumption, the employer has the burden of establishing that the employee was dismissed for “another good and sufficient reason”.

The investigation commissioner wrote that [TRANSLATION] “respondent dismissed applicant for having participated in an unlawful work stoppage along with several other employees”.

At a later point he stated:

[TRANSLATION] In his testimony Mr. Moe Ship, director general, stated that the unlawful work stoppage mentioned in the telegram was the reason for the dismissal.

No other reason was given for dismissing applicant.

In concluding that in these circumstances respondent had not rebutted the presumption of s. 16, the investigation commissioner adopted the opinion expressed by Geoffroy C.J. of the Labour Court in Roger Vandal v. Ambulance “Paul Georges Godin Ltée” Ambulancia/Ouest‑Montréal Ltée[4], to the effect that s. 98 of the Labour

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Code divests an employer of the right to dismiss an employee on the ground that he participated in a strike, even though an unlawful one. Accordingly, participation in an unlawful strike would not constitute “another good and sufficient reason”.

The first paragraph of s. 98 reads as follows:

98. No person shall cease to be an employee for the sole reason that he has ceased to work in consequence of a strike or lock-out.

In Vandal, Geoffroy C.J. wrote, at p. 142:

[TRANSLATION] It should be noted that the wording of s. 98 of the Labour Code makes no distinction between a strike which may be described as “legal” and any other strike. The definition of the term “strike” in s. 1(h) of the Code also does not contain any reference to the lawful or unlawful nature of the strike.

Subsequently, at pp. 144 and 145, he writes:

[TRANSLATION] The Court cannot make a provision of the law inoperative or act as though it did not exist. Section 98 of the Code, by maintaining the legal validity of the employer-employee relationship when, as the result of a strike, the employee ceases to work, divests an employer of the right to dismiss an employee solely for that reason. If, despite the Act, he does so, he commits an illegal act. The grounds for this dismissal cannot be a good and sufficient reason. They are ab initio void and inadmissible. An employee’s failure to provide the benefit of his services as a result of this strike, since it cannot be alleged against him under the Act, cannot constitute a reason for dismissal. Otherwise it would amount to saying that s. 98 of the Labour Code did not exist.

Brière J. of the Labour Court made a thoroughly documented analysis of this point in reversing the reasons given by the investigation commissioner. The Court of Appeal unanimously held that it concurred with the Labour Court judge on the point.

It does not appear necessary to me to review the analysis made by the Labour Court judge in disposing of this argument, which was reiterated to this Court by counsel for the appellants. However, it may be worth reproducing this passage cited by the Labour Court judge from a unanimous arbitral award made in 1965 under the aegis of Professor Bora Laskin, now Chief Justice of Canada, in

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United Steelworkers and Aerocide Dispensers Ltd.[5]:

As an abstract proposition, if participation in an unlawful strike and picketing is not cause for discharge there can hardly be any dereliction of duty to an employer in respect of service that would be.

The principle that participation in an unlawful strike may constitute good and sufficient reason for dismissal has also been recognized by this Court in Douglas Aircraft Company of Canada Ltd. v. McConnell[6].

It remains for the Court to resolve the principal question raised by this appeal, namely the meaning of the phrase “another good and sufficient reason” in s. 16 arid the scope of the jurisdiction of the investigation commissioner and of the Labour Court on appeal.

From the outset it has been held that this phrase means that the investigation commissioner must be satisfied that the other reason relied on by the employer is of a substantial nature and not a pretext, and that it constitutes the true reason for the dismissal.

Under this interpretation, it is not for the investigation commissioner to rule on the severity of the penalty as compared with the seriousness of the wrongful act in question, in other words, to substitute his judgment for that of the employer, in doing which he would be exceeding his jurisdiction.

Alan B. Gold C.J. of the Provincial Court, then vice-chairman of the Labour Relations Board, wrote in Maresq et Brown Bovari (Canada) Ltd.[7], at p. 246:

…Thus, in order to decide whether or not the Act has been violated, we must, of necessity, consider the reason indicated by the employer for discharging his employee but our consideration must be solely directed to determine if this reason is the real and determining reason—the causa causans of the dismissal—or only a simulated reason given to mask the real reason, which is the employee’s trade union activity and which has brought about the employer’s displeasure. It is not for us to sit as

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a board of review upon the employer’s decision other than to decide the sincerity of his action.

Since then several decisions have been handed down by the Labour Court, all along the same lines except for that now before the Court.

In L’Industrielle, Compagnie d’assurance sur la vie v. Nadeau[8], Louis Morin J. wrote, at p. 179 of his reasons:

[TRANSLATION] From the time of this decision, all subsequent judgments are similar, not in deciding that the words “good and sufficient” are superfluous, but in the fact that once the employer establishes that the reason for the dismissal which he has alleged is good and sufficient to satisfy the judge that it is the true reason, the causa causans and not a pretext, he shifts the presumption of s. 16.

This is the interpretation that the Court of Appeal has adopted in the case at bar. It is also the one adopted in Hilton Quebec Limited v. Labour Court et al.[9], a decision which this Court affirmed concurrently with this case.

Just recently as well, on January 14, 1980, in Société des Hôtels Méridien Canada Limitée v. Le Tribunal du Travail et al.[10], an unpublished decision, Mayrand J. wrote:

[TRANSLATION] The judge accordingly did not simply find that the dismissal occurred for a reason other than the employee’s union activities. He felt that it was his duty to order the employee reinstated when the latter’s fault was not serious enough to warrant a penalty as severe as dismissal.

This approach is directly at variance with the consistent findings of the Labour Court. According to these authorities, it is not for the Commissioner and the Labour Court to rule on the wisdom and the appropriateness of the penalty imposed, once they have determined that a real and serious reason exists for the dismissal, and that it is not merely a pretext to camouflage a dismissal for union activities.

Similarly, in Aluminum Company of Canada Limited v. Le Syndicat national des employés de

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l’aluminium d’Arvida Inc.[11], Brossard J. wrote on behalf of the Court of Appeal, at pp. 651 and 652:

[TRANSLATION] Any arbitration officer who, contrary to the provisions of a valid collective agreement, assumes the power to substitute his discretion for that which the agreement confers exclusively on the employer exceeds his functions, and acts without jurisdiction and unlawfully; “equity and good conscience” definitely do not confer on him a right to contravene a legislative provision or the terms of a valid agreement which is law so far as he is concerned; a decision which he makes in such circumstances is tainted by absolute nullity; it is ineffectual.

For my part, I am unable to agree that, apart from the case of malice and of proof of an action taken without cause, the power to dismiss for cause reserved exclusively to an employer cannot be limited other than by a formal, precise and certain provision of a statute or an agreement, which does not exist in the case at bar. Once a reason for the dismissal has been duly established, the employer is entitled to dismiss or not to dismiss; in the case at bar, the arbitration officers found that there was a reason for dismissal; their judgment should have stopped at that point; any further finding was beyond their jurisdiction.

For the same reasons, in my view these principles must be applied to ss. 14 and 16 of the Labour Code, and in the absence of any provision giving him such a power, the investigation commissioner may not substitute his judgment for that of the employer. The same is true for the Labour Court sitting in appeal from the decision of an investigation commissioner.

Counsel did not cite any decision of this Court which is directly relevant, and I know of none.

In the case at bar, the Labour Court judge departed from the established precedents.

In particular, he wrote:

[TRANSLATION] …AS only a serious fault attributable to the employee individually can justify the loss of all his rights in the business: there is no greater penalty for a worker than the loss of his position.

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It is the objective circumstances of the participation by an employee in a strike and the circumstances of the strike itself that will determine the seriousness of his fault and any possible conclusion that it constitutes a good and sufficient reason for dismissal.

Appellant had demonstrated a certain amount of patience with regard to earlier labour stoppages [six in eight months]; one can therefore hardly conclude that it used this pretext to dismiss its personnel, with the actual purpose of ensuring that its business would not be subject to a collective agreement. However, the fact remains that after lengthy and difficult negotiations the employer finally broke off all negotiations, contrary to the Act, which required it to negotiate diligently and in good faith (s. 41).

The employees responded to the employer’s unlawful act with an unlawful strike. Both parties were to blame. It would therefore be unfair to hold the employees solely responsible for this situation. The wrongful behaviour of the employees was prompted by the wrongful behaviour of the employer; in such circumstances, it does not constitute a good and sufficient reason for dismissal, and the presumption of s. 16 has not been rebutted.

Finally, the judge found that [TRANSLATION] “in the circumstances, it would appear that the recourse to massive dismissal was itself premature and excessive”.

As his jurisdiction consisted of determining whether the other reason cited by the employer was a substantive reason as opposed to a pretext, and whether it constituted the true reason for the dismissal, by ruling on the severity of the penalty as compared with the seriousness of the wrongful act the judge substituted his judgment for that of the employer. In doing so he exceeded his jurisdiction, and this is the basis for the writ of evocation.

For these reasons, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellants: Gamache & Gagné, Montreal.

Solicitors for the respondent: Guertin, Gagnon, Lafleur, Skelly, Martel & Forget, Montreal.

[1] 1978 (QC CA), [1978] C.A. 416.

[2] [1978] T.T. 8.

[3] [1973] R.D.T. 423.

[4] [1976] T.T. 141.

[5] (1965) 1965 (ON LA), 16 L.A.C. 57.

[6] 1979 (SCC), [1980] 1 S.C.R. 245.

[7] [1963] R.D.T. 242.

[8] [1978] T.T. 175.

[9] C.A.Q. 200-09-000312-782.

[10] C.A.M. 500-09-000292-797.

[11] [1966] Que. Q.B. 641.