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Can unionized employees bring a class action lawsuit?

Christine Davies

July 14, 2013

If a dispute falls within the Labour Board’s jurisdiction, unionized employees cannot seek remedies through a class action, court holds

Unionized employees have the benefit of collective strength. Through a union, issues affecting many employees are often addressed efficiently through the grievance process, avoiding the need for costly and repetitive individual litigation. Unions can also ensure that relatively small issues, which would be prohibitively expensive or simply impractical to litigate individually, are brought forward, thus enhancing access to justice.

Non-unionized employees do not have easy access to collective mechanisms to challenge employer actions. In addition, low cost administrative procedures designed to allow individual employees to seek redress regarding violations of minimum standards (such as the Employment Standards Act), are not available to deal with issues of contract interpretation, and are rarely used by active employees due to fear of retaliation.  However, in recent years, class actions have played a role in allowing individual non-unionized employees (and retirees) better access to justice in relation to matters affecting their employment, pay, benefits and pensions.

Can unionized employees also bring class actions against their employers (or former employers), rather than pursuing a dispute through grievance arbitration or an application to the relevant labour board? Recently, the Ontario Superior Court of Justice addressed this issue in Baker v. Navistar Canada Inc.

In 2009, Navistar laid off all of its employees when it was unable to reach a new collective agreement with their trade union. Negotiations continued without success after the layoffs, and the employer ultimately decided to permanently close the plant in 2011. The union and employer attempted to negotiate a closure agreement, and to deal with wind-up issues affecting the pension plan.

Two employees, apparently with the support of the union, then launched a class action lawsuit seeking damages for wrongful or constructive dismissal.

Navistar responded by bringing a motion to strike the claim on the basis that it was within the exclusive jurisdiction of the Ontario Labour Relations Board. The employer noted the union had not been decertified, nor had it voluntarily abandoned its rights, as it continued to advocate for the members, particularly with respect to pension issues.

The employees argued that, on expiry of the collective agreement, they lost access to redress through the grievance and arbitration process. They further argued that they were no longer subject to the collective agreement, but rather to implied terms of individual employment contracts, over which the court had jurisdiction.

The court agreed with the employer, finding that a union maintains its role as the exclusive bargaining agent even after the expiry of a collective agreement. The court commented,

There is an ongoing duty on both parties to bargain in good faith, and so long as that obligation remains, the three-part relationship between union, employer and employee created by the [Labour Relations Act] displaces common law concepts… The continuance of the collective bargaining relationship stands as a bar to the plaintiffs’ attempt to create an alternate legal relationship between individual employees and the company.

The court rejected the argument that the expiry of the collective agreement resulted in the emergence of implied individual contracts of employment between each employee and the employer. In this regard, the court relied on authority from the Supreme Court of Canada’s decision in McGavin Toastmaster, which concluded that following the termination of a collective agreement, individual employment agreements do not revive. The judge also noted that, in another case, Bisaillon v. Concordia University, the Supreme Court concluded that unionized employees could not bring a class action in relation to pension issues since those issues arose under their collective agreements.

It is likely that there will be very few circumstances in which unionized employees will be able to bring class actions involving employment-related matters. In determining when it might be possible, a court will analyze the “essential character of the dispute” to assess whether it arises out of the collective agreement (which is the same test a court would apply to a civil action commenced by an individual unionized employee outside of the class action context).

In the circumstances of this case, the court found that the essential character of the dispute was the failure to bargain in good faith for a closure agreement, which was an obligation arising in the collective bargaining context under the Labour Relations Act, 1995 – and therefore within the exclusive jurisdiction of the Ontario Labour Relations Board. The court concluded that the parties were subject to an ongoing duty to bargain in good faith, which extended to the negotiation of a close out agreement, and that the Board could theoretically order the parties to meet to negotiate one. Accordingly, the unionized employees had no recourse to the courts through a class action.

We are only aware of once case, since Bisaillon, in which a class action commenced by unionized employees was allowed to proceed. In Bennett v. British Columbia, the British Columbia Court of Appeal allowed a class action involving a dispute over the post-retirement benefits of unionized retired public servants to proceed as a class action. The court held that, because the benefits had never been mentioned in any collective agreement and because they pre-dated the collective bargaining relationship, the essential character of the dispute did not fall under the authority of a labour arbitrator.

The court also found that, even if an arbitrator had concurrent jurisdiction, a class action would be preferable, given the desirability of dealing with the claims of both unionized and non-unionized former employees in a single proceeding. (Ultimately, the court in Bennett found against the retirees on the merits because the benefits were not provided under the contracts of employment, and were always subject to the unilateral discretion of the employer.)

Although unionized employees and retirees will rarely have access to the courts, class actions remain an important tool for non-unionized employees to try to achieve redress to common problems, including with respect to benefits, pensions, and enforcement of basic employment standards. Going forward, class actions may, to some minimal degree, serve to complement collective procedures for unionized employees to achieve just results in the workplace.

Lawyers

Christine Davies

Practice Areas

Class Action Litigation, Employment Law, Labour Law