Who is the real employer of healthcare employees hired through employment agencies? The Court of Appeal rules on applicable criteria

In a decision handed down on July 6, 2021, the Quebec Court of Appeal is referring back to the Administrative Labour Tribunal (ALT) cases in which it had concluded that nursing professionals assigned by a placement agency to work in an integrated university health and social services centre were employees of the institution and, as a result, they should be included in the bargaining unit of the certified union. In doing so, the highest court in Quebec reversed the interpretation maintained by the ALT in first instance. The ALT will therefore be called upon to rule again in order to consider the issue in light of the test set out by the Supreme Court of Canada in the Ville de Pointe-Claire decision.

Context

For many years now, employers in the health care and social services sector have been facing a shortage of personnel. Often unable to meet their needs, they use third party labour through placement agencies, selected through tenders subject to the Act respecting contracting by public bodies. This is not an anti-union sentiment, but rather a labour market reality.

It was therefore through a call for tenders that the CIUSSS de l’Est-de-l’Île-de-Montréal (CIUSSS) used third party labour to meet its nursing care needs. These professionals were performing tasks covered by the CIUSSS union’s certificate of accreditation, which has long challenged these hiring practices. On two occasions, the union asked the ALT to declare that certain professionals assigned to the CIUSSS be included in its bargaining unit, under section 39 of the Labour Code (L.C.). The issue in dispute was therefore to determine the real employer between the CIUSSS and the placement agencies.

Ruling on the two petitions made by the union, the ALT focused its attention on the institutional framework governing health care and social services, namely, the one that has been outlined by several specific laws¹. For the ALT, the institutional framework would establish that the institution is the sole provider of care. Consequently, the latter could only direct all the professionals involved as the sole real employer. In other words, all applicable legislation would prohibit the CIUSSS from using the services of health care professionals provided by placement agencies without becoming the employer and without these professionals being recognized as part of the bargaining unit represented by the union.

However, faced with an application for judicial review, the Superior Court overturned the decisions of the ALT on the grounds that the administrative judge’s reasoning was circular and wrongly attributed a non-existent legislative objective to the health network’s institutional framework. The interpretation according to which the institutional framework excludes the use of placement agencies was therefore unreasonable.

Court of Appeal Decision

Based on the premise that the applicable standard of review is that of the reasonable decision, the Court of Appeal begins with an overview of the relevant legal principles. First, it points out that the working relationship considered by section 39 L.C. is that of a bipartite relationship between an employer and an employee. However, this classic view is not always sensitive to the reality of the employment relationship. In fact, over the past few decades, the so-called personnel loan contract has evolved considerably, particularly due to the increased role of placement agencies. In order to take this new reality into consideration, the Ville de Pointe-Claire decision established the analytical framework for identifying the real employer. In particular, a more comprehensive and flexible approach is used to determine whether the placement agency or the client company "has the most control over all aspects of the work on the specific facts of each case"².

Despite these well-established legal principles, the ALT concluded that, in all cases and under all circumstances, an individual providing nursing care in a health care or social services institution is an employee of the institution. In fact, the legislator would have implicitly prohibited the use of personnel placement agencies within the network.

In the opinion of the Court of Appeal, this interpretation would be unreasonable and would have the effect of making it dubious to use placement agencies. To reach that conclusion, it conducted an analysis of the laws invoked by the ALT, clarifying the actual scope of the institutional framework. Overall, none of these laws modifies the definition of "employee" or "employer" set out in the L.C. and none of them supports the interpretation according to which employees of placement agencies would be subject to specific rules that change their employment relationship.

With respect to the Act respecting health services and social services (HSSSA), keystone of the institutional framework, the Court of Appeal points out that the use of the private sector or community to meet workforce needs, to  ensure accessibility and continuity of health services, is expressly provided therein. The HSSSA also provides for the possibility for institutions to enter into agreements for the provision or exchange of professional services. The Court of Appeal specifies that this provision or exchange does not require placement agencies to provide the services themselves. As the purpose of the HSSSA is to ensure the accessibility and continuity of health services, it would be unreasonable to conclude that it is prohibited to use placement agencies, particularly when certain institutions have staffing needs that could not otherwise be met. The specific legislation reforming the administrative structures of the health and social services network³ does not in any way change the provisions of the HSSSA, which allow for the usage of contracts for the loan of services or personnel.

In short, nothing in the institutional framework justifies deviating from the teachings of the Supreme Court in the Ville de Pointe-Claire decision.

Takeaways

In this decision, the Court of Appeal sets aside a minority trend in case law challenging the relevance of the analytical framework developed in the Ville de Pointe-Claire decision, in favour of an analysis based on the institutional framework of the health care network⁴.

The applicable legislative provisions in the health and social services sector do not justify deviating from the comprehensive and flexible approach developed by the Supreme Court. Identifying the real employer must be done on a case-by-case basis, rooted in the concrete facts of the case and factors of selection, hiring, discipline, training, personnel assessment, compensation, assignment of tasks and length of service at the client company.

The author would like to thank articling student Giacomo Marchisio and law student Gabrielle Rollin for their help in preparing this legal update.