The Supreme Court of Canada has been relatively active over the last quarter in the labour and employment field, issuing two decisions that will continue to change the labour and employment landscape.

In Saskatchewan Federation of Labour v Saskatchewan, 2015 SCC 4, the Supreme Court of Canada held that the right to strike is protected under the right to freedom of association, guaranteed by section 2(d) of the Canadian Charter of Rights and Freedoms (Charter).

The decision followed the Saskatchewan government’s introduction of two statutes, being The Public Service Essential Services Act (PSESA) and The Trade Union Amendment Act, 2008,

Under the PSESA, designated “essential services employees” were prohibited from participating in any work stoppage against their public employer. In the event of a strike, essential services employees were required to continue the duties of their employment with the public employer in accordance with the terms and conditions of the last collective bargaining agreement, and were prohibited from refusing to continue those duties without lawful excuse.

The Trade Union Amendment Act, 2008, introduced stricter requirements for a union to be certified by increasing the required level of written support from 25% to 45% of employees; by reducing the period for receiving written support from the employees from six months to three; and by eliminating the automatic certification previously available when over 50% of the employees had given written support prior to the application.

Of note and of particular import to the Alberta landscape was the majority’s holding with respect to the PSESA; specifically, that where strike action is limited in a way that substantially interferes with a meaningful process of collective bargaining, it must be replaced by one of the meaningful dispute resolution mechanisms commonly used in labour relations. Thus, the Court held that where essential services legislation provides such an alternative mechanism, it would more likely be justified under section 1 of the Charter. It was the Court’s view that the failure of any such mechanism in the PSESA is what ultimately rendered its limitations constitutionally impermissible.

This case raises the question as to whether the Alberta government will amend the Alberta Public Service Employee Relations Act, which prohibits strikes for certain employees, and what alternative mechanisms will act as a saving mechanism to legislation restricting the right to strike.

In Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10, the issue on appeal was whether and in what circumstances a non-unionized employee who is suspended with pay may claim to have been constructively dismissed. The case involved the indefinite suspension of an employee with pay in the context of negotiations for a buyout of his contract of employment.

The case adds to the principles espoused in Novakowski v Canadian Linen & Uniform Service Co, by further providing that there are two branches of constructive dismissal. Under the first branch, a court must first identify an express or implied contract term that has been breached, and then determine whether that breach was sufficiently serious to constitute constructive dismissal (fundamental unilateral change). Under the second branch, an employer’s conduct will constitute constructive dismissal if it more generally shows that the employer intended not to be bound by the contract of employment through, for instance, ongoing and reprehensible conduct (cumulative acts).

Thus, constructive dismissal can take two forms: that of a single unilateral act that breaches an essential term of the contract, or that of a series of acts that, taken together, show that the employer no longer intended to be bound by the contract.

The Court addressed the fundamental unilateral change branch in the context of administrative suspensions (non-disciplinary). In addressing administrative suspensions, the Court noted that an administrative suspension is not wrongful where the employer has express or implied authority to suspend. Whether there is an express term permitting suspension will easily be found on the face of the employment contract (or legislation); however, an administrative suspension will only be considered an implied term of an employment contract if it is reasonable and justified.

The Court presented the following factors to consider when determining if a suspension under implied authority is reasonable and justified:

  • The duration of the suspension;
  • Whether the suspension is with pay; and
  • Whether the employer demonstrated good faith, including the demonstration of legitimate business reasons for the suspension.

Of note, and building on last quarter’s decision of Bhasin v Hrynew, 2014 SCC 71, the Court also held that at minimum, acting in good faith in relation to contractual dealings means being honest, reasonable, candid and forthright.

This post is intended to provide general information concerning developments in the law and is not intended to provide legal advice in respect of any particular situation.