Ivanhoe+Inc.+v.+UFCW

  __ Facts: __ · Ivanhoe is a property management company · In 1974, UFCW was certified to represent janitorial staff at Ivanhoe’s shopping centres across Qc  ·  Ivanhoe eventually decided to contract out the janitorial services to ‘Moderne Services’, so all its janirtorial employees were transferred to Moderne · UFCW applied to the Commission des relations de travail for recognition of the transfer of the certification and collective agreement to Moderne (pursuant to s.45 of QC labour code); & the Commissioner granted this · UFCW then negotiated a collective agreement with Moderne · Shortly before its contract with Moderne was to expire, ivanhoe invited bids for a new contract. Moderne did not bid; but Ivanhoe ended up establishing contracts with 4 new companies (“the contractors”) · 2 days before the its K with Ivanhoe expired, Moderne signed a new collective agreement with UFCW, (to extend it from 1991-1994) · On the day that its K with Ivanhoe expired, Moderne fired the entire janitorial staff responsible for Ivanhoe’s buildings · Although no legal rel. existed bw Moderne and the ne contractors since the contactors employeed their own staff and used own equipment; UFCW applied (under s.45 QLC) to have the certification and collective agreement signed with Moderne transferred to the contractors; while Ivanhoe applied (under s.41 of QLC) to have the union’s certification cancelled with regard to itself · The Commission granted transfer of certification, but not of the collective agreement; and denied ivanhoe’s petition for cancellation of the certification __ Issues: __ i) Did the QC Labour Court err in holding that s.45 applied; and in its interpretation of s.45 QLC? (allowing the motion under s. 45 in part and finding that the certification that originally covered Ivanhoe, but not the collective agreement signed by Moderne and the union, had to be transferred to the new contractors) a) Can the cetification be transferred to the contractors? b) Can the collective agreement be transferred to the contractors? __ Held: __ i) NO; a) YES ; b) NO __ Analysis __ · Ivanhoe and 3 of the 4 contractors argue that the Labour Court’s decision was invalid because it conflicts with the Bibeault precedent (//U.E.S., Local 298 v. Bibeault)// in that i) they adopted a functional definition of an undertaking so that s.45 can apply to subcontracts for janitorial services; and ii) they reject the requirement for a legal relationship between the former and new employer. · functional v. organic definition of “undertaking”: i) functional à ‘undertaking’ defined in terms of work being done ii) organic à ‘undertaking’ viewed as a set of various kinds of components-physcial, human, intellectual and legal- which were used to carry on an activity; “instead of being reduced to a list of duties and functions, the undertaking covers the means available to an employer to attain his objective” (Beetz J in Bibeault) · In Bibeault, court found that in order for s.45 to apply, there must be a consensual legal transfer of the undertaking from one employer to another; and advocated an organic definition of ‘undertaking · Here, court distinguishes this case from Bibeault, that the situation in the Labour Court has changed since then and they now have sound interpretive policies and a new standard of judicial review (patent unreasonableness rather than correctness) __ Standard of review and discretion of administrative tribunals: __ · standard of review to be applied to decisions relating to s. 45 of the //Labour Code// must be patent unreasonableness. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> high degree of judicial deference should be shown in a situation like this where specialized administrative tribunal is acting within its jurisdiction; decision should only be disturbed by the superior courts where there are clearly absurd or irrational results. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> admin tribunals have wide discretion in defining ‘undertaking’ à Application of s.45 requires that an organic rather than a functional definition of an “undertaking” be adopted;but the tests to be applied in defining this concept may vary with the with the specific circumstances of each case and the administrative tribunals charged with applying s. 45 enjoy wide discretion in determining and weighing the factors they apply in defining an undertaking and are at liberty to develop specific tests to respond to the situation in a given industry ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> By enacting s. 46 of the //Labour Code//, the legislature gave the responsibility for settling difficulties arising out of the application of s. 45 to labour commissioners and the Labour Court. __ Interpretive rules regarding application of s.45 __ : ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Bibeault established that it’s not necessary that the portion of the activities transferred be essential to the purpose of the undertaking as a whole. The only requirement is that the elements that characterize the essence of the part of the undertaking be transferred. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Re: __Degree of autonomy__ required in order for it to be concluded that an undertaking has been transferred? à where the main characteristic of the part of the undertaking to be transferred is the right to operate on the premises of the main undertaking (which is the case here), the part transferred cannot enjoy wholly autonomous existence; so it is sufficient that the transferee be legally independent and be responsible for the work performed by its employees, even if the transferor continues to exercise administrative or legal control under a contract à this was the approach adopted by labour court and this is reasonable interpretation of s.45 ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Re: __Why certification not cancelled__ à In context of temporary subcontracting, theory of __retrocession__ applied: o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> a certification originally granted in respect of the transferor remains with it, but is temporarily inactive during the period of operation by another and is then transferred to the successive subcontractors (temporary transfer of operation of the undertaking does not permanently terminate the certification  o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  According to retrocession, when its contract with Moderne expired, Ivanhoe took back responsibility for its undertaking and was once again bound by the certification, which was then transferred to the new contractors. o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> legal fiction of the “potential employer”allows s. 45 to be applied without it being necessary for the party that contracted out the work to actually take back the operation of the undertaking that had been transferred. o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> under s. 45, the appellant Ivanhoe is the “potential” “new employer”, because it has control over the activity and may decide to carry it on itself. With regard to the transaction between Ivanhoe and the four new contractors, however, Ivanhoe is “the former employer” and the four contractors are “[t]he new employer” even though it is Moderne who was the last business to carry on the work and to have had actual employees to that end. Hence, the concept of “potential employer” and the possibility of retrocession are used to keep Ivanhoe in the position of “the former employer” under s. 45. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Post //Bibeault// decision, Labour Courts have adopted policies regarding the legal relationship requirement – __the certification can transfer in some cases even in the absence of a **legal relationship** between the transferor and the transferee through the principle of retrocession.__  This would occur when an employer contracts out work to a company, the contract ends, and the employer waits for a period before re-contracting the work to another company (very flexible approach to characterizing necessary legal relationship btw two parties) ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> There has never been a relationship legal or not between the new employer and the previous employer, thus s. 45 cannot apply. o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Here, the original contract between the appellant employer Ivanhoe and its first contractor Moderne ended in 1991. Ivanhoe then entered into a different contractual relationship with the four new contractors. There is no history of a connection or evidence of any kind of relationship between the party who would be “[t]he new employer” under s. 45 of the Quebec //Labour Code//, i.e., the four contractors, and the party who is “the former employer” under that provision, i.e., Moderne. There is no “pre-existing corporate connection” between Moderne and the four contractors, or any “commercial history” (137) ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Further, s. 45, does not mention that it should apply to more employers than two successive. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Allowing that mere functions constitute an undertaking if there is nothing else to transfer constitutes a return to a purely functional definition of an undertaking, contrary to Bibeault. o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> An undertaking may indeed include the work done and hence could apply to a situation of sub-contracting if enough other elements of the business are included; however, it cannot consist, as it does in this case, merely of a transfer of work, functions or tasks. (141) o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;">  This definition is simply too wide: it was possible to transfer something more then “work alone” in this context. o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> One could imagine the transfer of such things as the name of the company, its office, its staff (both cleaning and administrative), its “ways of doing things” (i.e., its internal structure and organization), its inventory and equipment (which might consist of specialized cleaning products or machines), its established relationships with suppliers (i.e., a component of its “good will”), its work contracts in the case where there is more than one client, and so on (142) o<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> This is precisely the situation in which Beetz J. in Bibeault said that “the functional approach” was impermissible, and I cannot agree that this is consistent with a finding of successoral rights in a situation where functions alone pass. To do otherwise, inverts the arguments in Bibeault – the purely functional definition of an undertaking has been removed, but according to the majority mere functions can constitute and undertaking (143) ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> **__ Retrocession as defined by majority is unsound __** : There is no reason to think that “the former employer” is meant to reach back in time in this way and to infer an intention to carry on an undertaking when there is no indication of that intention. This is particularly troubling in light of the fact that no employees are being transferred and “the potential employer” has no employees to receive the benefit of the transferred certification. In other words, the provision itself gives no indication that it is meant to apply to more than the last two actual employers in a line of successive employers. Hence, the creation of this new category, “potential employer”, is nowhere supported by the text of s.45 and the legislature did not intend this or it would have included the words “former employer.” The provision is not ambiguous. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> Moreover, retrocession is an entirely fictional operation. While it is true, as the majority points out, that the law admits of instances of “legal fiction”, I cannot accept that in this context. Labour legislation is specific and technical; it reflects social policy and is not suited to additions by way of judicial constructs. Employment is a real thing, not a fiction, and certification exists for the benefit of actual employees (152) ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> the fact that this is not a true successorship situation explains why no one has said that the collective agreement should pass with the certification under the retrocession argument…the successorship provision in s. 45 should be reserved for true successorship situations. ·<span style="font-family: "Times New Roman"; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: normal;"> If the Legislature wishes to extend the protection offered by s. 45 to situations that are not contemplated under the //Bibeault// interpretation, it is empowered to do so. However, it is not the function of the Labour Court or of this Court to rewrite s. 45.
 * __ Bastarache J. (dissenting in part __**__ ): __