Agreement in principle in Saguenay-Lac-St-Jean, Quebec: the end of a long saga?

The lockout that has plagued the Saguenay-Lac-Saint-Jean automotive sector for almost three years and has resulted in 49 Superior Court rulings, including 44 judgments for contempt, seven rulings by Quebec’s labour board (Commission des relations du travail), one decision by the Quebec Arbitration Tribunal and the enactment of special legislation, is finally over, bringing a close to one of the longest labour disputes in Quebec history. On January 14, 2016, the union representing approximately 400 garage employees, the Syndicat démocratique des employés de garage du Saguenay Lac Saint Jean (CSD) (Union), and an association of employers that includes 25 car dealerships, the Corporation des concessionnaires automobiles du Saguenay-Lac-Saint-Jean-Chibougamau (Corporation), reached an agreement in principle.

On January 23, 2016, the agreement in principle was presented to the union members at a general meeting, where it was approved by 94% of the membership. About 150 garage employees returned to work on January 25. The rest are receiving monetary compensation for six weeks and may be called back to work as and when needs and the market dictate.

Background

Faced with an impasse in the dispute, Sam Hamad, the minister of labour, employment and social solidarity,
tabled special legislation to encourage the car dealers and the garage employees to settle their differences. On
December 3, 2015, the Quebec National Assembly voted unanimously to pass the Act respecting the settlement of certain disputes in the automotive sector in the Saguenay-Lac-Saint-Jean region (the Act), which provides for a final period of mediation and, failing an agreement between the parties, two arbitrations culminating in a determination of the terms of the employees’ return to work and the conditions for renewal of the collective agreements. When the Act was passed, it sparked a strong reaction among the car dealerships involved in the dispute.

Feeling the Act infringed the dealers’ right to lockout and right to bargain collectively and therefore violated the Canadian Charter of Rights and Freedoms (Canadian Charter) and the Quebec Charter of Human Rights and Freedoms (Quebec Charter), the Corporation filed a motion for a declaratory judgment with the Superior Court on December 11, 2015, in order to have the Act declared null, void and inoperative.

The Corporation also applied to have the Superior Court order the suspension of enforcement of the Act until it ruled on the merits of the matter and thus maintain the status quo, i.e. continuation of “free bargaining” between the parties and preservation of the right to lockout until the court issued a final ruling on the Act’s constitutional validity.

On December 30, 2015, the court dismissed the Corporation’s application, confirming that the 25 car dealerships involved in the conflict had to comply with the Act until the court reached a final ruling on its validity.

The decision of the Superior Court

To get the Act suspended until the Superior Court reached a final decision in the matter, the Corporation had to prove the following three criteria were met:

• there was a serious question to be tried;
• the Corporation could suffer irreparable harm if the Act were annulled at a later stage; and
• the balance of inconvenience weighed in the Corporation’s favour.

On the first criterion, the court found that determining whether the employers’ right to lockout, like the workers’ right to strike, was protected by the Canadian and Quebec charters was a serious question to be tried.

As for the second criterion, the court had to consider the consequences that would be suffered by the car dealerships during the time between the coming into force of the Act and its possible annulment, when the court will rule on the merits.  The car dealerships alleged that they would suffer financial losses that could not be remedied by the court’s final judgment. For the court, such alleged harm was theoretical and hypothetical at that stage. There was no certainty that the problems they anticipated would materialize between then and the final ruling. The court stressed that the Act did not in and of itself impose the terms for the workers’ return to work and the conditions for renewal of the collective agreements. Those would have to be determined by an arbitrator after the two parties had an opportunity to be heard. The Corporation also argued that the alleged infringement of a constitutional right was in itself an irreparable harm. The court rejected this argument and reiterated that it was necessary to demonstrate the nature of such harm. In the end, the court found that if the Act were found to be invalid, the right to negotiate collectively and the right to lockout would be revived and the car dealerships would therefore not suffer irreparable harm.

As for the last criterion, the Corporation alleged the balance of inconvenience weighed in its favour. It argued the Act had a purely private character because it applied to just a handful of car dealerships and about 400 employees. The court pointed out that the Act in this instance was not an act of private interest; on the contrary, it was for the common good. It was an Act of public interest and therefore presumed to be valid. Its enforcement would not be suspended unless doing so was justified by that same public interest. In this instance, the court found that suspending enforcement of the Act, thereby continuing the lockout, would cause greater harm to the garage employees than the harm caused to the car dealerships by enforcement of the Act.

Based on this analysis, as two of the three criteria were not met, The Honorable Daniel Dumais of the Superior Court dismissed the Corporation’s application to have enforcement of the Act suspended until there was a final ruling on the question of the Act’s constitutional validity.

Conclusion

As a result of the agreement in principle finalized on January 14 under the mediation process, the parties were not forced to endure the arbitration proceedings that were provided for in the Act in the event nothing came of final mediation.

The prospect of “forcing” a settlement through enforcement of the Act seems to have been enough of a bargaining chip to resolve the impasse and yield an agreement in principle between the parties.

Given the agreement between the parties, it remains to be seen whether the Corporation will discontinue its Superior Court action to obtain a ruling on the question of the Act’s constitutional validity. Whether, like the right to strike of unionized workers, the right to lockout is protected by the Canadian and Quebec charters is an important question for all unionized employers in Quebec.  

The author wishes to thank Kasandra-Rose Villeneuve, articling student, for her help in preparing this legal update.