Majority
The judgment of La Forest, L'Heureux-Dubé, Gonthier, Cory and McLachlin JJ. was delivered by
L'Heureux-Dubé J.
L'Heureux-Dubé J. -- This appeal concerns the entitlement of certain workers to unemployment insurance benefits. The legislation applicable to this case is the Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48 ("the Act"), now the Unemployment Insurance Act, R.S.C., 1985, c. U-1. The respondents were all workers who were "locked out" by their employer during a labour dispute. Their claim for unemployment insurance benefits depends on the interpretation of s. 44(1) of the Act (now s. 31(1), recently amended by S.C. 1990, c. 40, s. 23), which reads:
44. (1) A claimant who has lost his employment by reason of a stoppage of work attributable to a labour dispute at the factory, workshop or other premises at which he was employed is not entitled to receive benefit until
(a) the termination of the stoppage of work,
(b) he becomes bona fide employed elsewhere in the occupation that he usually follows, or
(c) he has become regularly engaged in some other occupation,
whichever event first occurs.
This appeal concerns specifically the meaning of the phrase, "termination of the stoppage of work" in s. 44(1)(a). When the stoppage of work was terminated, then the respondents became eligible for benefits. When did the stoppage of work terminate?
The facts are not in dispute. The respondents were employed in an aluminum plant by the Reynolds Canadian Metal Company Limited ("the Company") in Baie Comeau, P.Q. Beginning in December 1985, the Company and the National Union of Aluminum Workers at Baie Comeau ("the Union"), representing the workers, were negotiating a new collective agreement. On March 3, 1986, the Company ordered a lockout of the workers. The Company and the Union recommenced intense negotiations to resolve the dispute. During the lockout, only three of the eight production areas in which aluminum vats are situated remained operational, and these were staffed by management personnel. As a result, production levels were significantly diminished.
In the early hours of March 29, the negotiations resulted in a settlement and the parties signed a collective agreement and a memorandum governing the return to work. The workers were recalled and at 8 o'clock that morning, 970 of the approximately 1430 workers reported to the plant.
It is evident that some 460 workers were unable to start working immediately after the end of negotiations. Put simply, production in an aluminum plant cannot quickly return to normal levels after a period of idleness. Time must be taken to prepare the machinery for full operational use. So some workers must wait several days or weeks before reporting for work. The case before this Court poses the question of when these workers become eligible for unemployment insurance benefits.
The Commission itself originally decided that the workers would be extended benefits as of May 17, 1986. The workers appealed this result to a Board of Referees, which altered the date to April 26. The three-member Board decided that [TRANSLATION] "[t]he stoppage of work was not necessarily connected with the signing of the collective agreement and the memorandum governing the return to work. After examining the documents . . ., the Board was of the view that there was substantial production (71%) and a 90% recall of the employees. The Board thus concluded that the stoppage of work occurred on April 26." (The reference to the "stoppage of work" in the Board's decision was evidently intended to mean "the termination of the stoppage of work".)
An appeal against this decision was launched as of right to the Umpire. Dubé J. heard the appeal and took the same approach as the Board. Dubé J. recognized that the figures of production and employees which were used to determine the end of a work stoppage were useful guides, although they were not (in his word) [TRANSLATION] "magic". Taking into account all the facts before the Board, he did not interfere with the Board's date of April 26: CUB-14267.
An application was then made to the Federal Court of Appeal, under s. 28 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10 (now R.S.C., 1985, c. F-7). The Federal Court of Appeal by a majority (Hugessen and Desjardins JJ.) found the workers entitled to benefits beginning on the day when (in this case) the collective agreement and the memorandum governing the return to work were signed, and a number of the workers returned to work. That day was March 29. Marceau J., in dissent, would have affirmed the view of the Umpire Dubé J. The Federal Court of Appeal's reasons, delivered July 12, 1988, are now published at [1989] 1 F.C. 628.
The majority gave an interpretation to s. 44 which, in their view, better accorded with the text of the legislation, and posed this question (at p. 638):
How can it be said that there is still an "arrêt de travail" (the English word "stoppage" seems even stronger) when on the one hand, the employer has agreed to call its employees back to work, and on the other hand the latter have agreed to return and have in fact returned to work, at least in part? The facts of the case at bar are a striking illustration of this: if there was still a work stoppage at the Reynolds company's operations on March 29, 1986, then what were the 970 people who returned on that date doing?
The majority noted that s. 44(1) creates a chain of causation: a labour dispute may cause a stoppage of work to a group of employees, and the stoppage of work in turn may cause a loss of employment to an individual. The difficulty arises when the stoppage of work is over, and the second effect (the individual's loss of employment) persists.
The majority reasoned as follows, at p. 639:
. . . what essentially characterizes the section 44 work stoppage and distinguishes it from the claimant's loss of employment is the aspect of "intent": a work stoppage due to a labour dispute always results from the fact that one or other of the parties to a contract of service does not wish to perform it. If it is the employer who feels this way, the stoppage is called a lockout; if it is the employees who refuse to provide their services, it is called a strike. In either case it is the lack of intent which is the essence of the work stoppage. The loss of employment, on the other hand, is a phenomenon completely independent of intent, which is capable of affecting both those directly involved in the work stoppage, the strikers or employees who are locked out, and those who are not in any way concerned but who have lost their employment as a result nonetheless.
In light of this analysis, we feel it cannot be said that a work stoppage attributable to a labour dispute can continue in being after the point at which the parties to the dispute have indicated a desire to resume performance of their contracts of service and have in fact resumed such performance.
Therefore, the change in intention marked the end of the work stoppage, and this coincided in this case with the signing of the collective agreement on March 29. While the majority recognized that this was a novel interpretation of s. 44(1)(a) for the Canadian legislation, as well as for similar provisions under the American and United Kingdom statutes, Hugessen and Desjardins JJ. decided this was appropriate in view of the judgments of this Court in Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2, and Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513. The majority also noted that this was in keeping with the broader purpose of the Act, which is to assist persons who are involuntarily unemployed.
Marceau J. dissented, finding that there was no reason to depart from the precedents solely on the basis of Abrahams or Hills. Marceau J. found various policy arguments in favour of the existing case law. He would have affirmed the view of the Umpire.
I am in substantial agreement with the position of the majority in the Federal Court of Appeal. Nothing in the legislation (as it read at the time) supports the use of criteria such as particular levels of production, and the return to work of a particular number of employees, in the interpretation of the words "termination of the stoppage of work". And although there were suggestions otherwise, I do not read the majority reasons as stating that the end of a labour dispute necessarily implies the termination of a stoppage of work in every case. Although the end of the labour dispute and the termination of the stoppage of work occurred on the same day in this case, this may not be the situation in other cases. In my opinion, the majority of the Federal Court of Appeal properly concluded that in this situation, March 29 was the day of the termination of the stoppage of work.
While this is sufficient to dispose of this appeal, one other matter should be addressed. At the hearing before this Court, the question of the standard of review under s. 28 of the Federal Court Act was raised. As this was not an issue raised in the courts below, and the respondents submitted that a consideration of the issue would completely change the focus of this appeal, this Court decided that it would not hear the parties on this question.
In summary, I would dismiss the appeal with costs and send the matter back to the Canada Employment and Immigration Commission so that it can assess each individual claim as of March 29, 1986.
//Stevenson J.//
The reasons of Sopinka and Stevenson JJ. were delivered by
Stevenson J. (dissenting)
Stevenson J. (dissenting) -- I have read the judgment of my colleague Justice L'Heureux-Dubé and respectfully disagree with her conclusion.
On November 1, 1990, following the decision of the Federal Court of Appeal in the case at bar, the regulations under the legislation in question have been amended to reflect the conclusion of the Board of Referees, the Umpire and Marceau J. dissenting in the Court of Appeal (see s. 49 of the Unemployment Insurance Regulations, C.R.C. 1978, c. 1576, as amended by s. 13 of the Unemployment Insurance Regulations, amendment, SOR/90-756, which states that the stoppage of work is terminated when the work-force and the level of production attains 85 per cent of their normal level). There is therefore nothing to be gained from a detailed analysis of the legislation as it stood before those amendments.
I am in substantial agreement with the analysis of the dissenting judge, Marceau J. The decisions of this court in Abrahams v. Attorney General of Canada, [1983] 1 S.C.R. 2, and Hills v. Canada (Attorney General), [1988] 1 S.C.R. 513, do not mandate any reversal of the previously settled case law under the section in question.
The section reflects the principle of neutrality of the state in labour disputes. Commission funds are not to be used to alleviate the consequences of a labour dispute. Neutrality requires that those funds should not be available to the striking or locked-out workers until the resulting stoppage is at an end. Those consequences, for the employees as well as for the employer, last until the work affected is no longer stopped and the production has come back to normal. Until that point, the employee's loss of employment is attributable to a labour dispute. The proper interpretation of the legislation requires only an answer to the question: was the loss of employment the consequence of a strike or lock-out? The legislation does not, as it might have, end the disqualification with the resolution of the dispute, but, chooses to end it with the ending of the stoppage.
I would, therefore, allow the appeal.
Appeal dismissed with costs, Sopinka and Stevenson JJ. dissenting.
Solicitor for the appellants: John C. Tait, Ottawa.
Solicitors for the respondents: Sauvé, Ménard & Associés, Montréal.
Cases cited
- 1 F.C. 628 1 F.C. 628
- Abrahams v. Attorney General of Canada 16698-1983-01-25
- Hills v. Canada (Attorney General) 19094-1988-03-24
Statutes and regulations cited
-
Unresolved citations
- s. 44(1)
- s. 31(1)
- s. 23
- s. 44(1)(a)
- s. 28 of the Federal Court Act
- s. 44
- section 44
- s. 49
- s. 13