I’ve discussed the impending entry of Target into Canada and the employment and labour law implications before:
Will Target Canada Buy the Unionized Zellers Stores? (April 2011)
The Huffington Post ran a story this week discussing how Zellers has announced the termination of thousands of employees employed in the stores that will be transferred to Target. This can’t be considered a surprise, even though the employees quoted in the story exclaim that they were stunned and shocked by the announcement. Zellers employees, with the UFCW, have launched a campaign to shame Target into treating the Zellers employees with respect by allowing them to keep their jobs when the Zellers stores become Targets next summer. Here is the Target Fairness website.
The story notes, as did I last year, that there is good argument that the collective agreements at the unionized Zellers stores being transferred to Target will flow to Target as a successor employer. That would put Target in a different situation than Walmart when it first arrived in Canada, requiring it to deal with the UFCW in those stores. Walmart did not take over any of the unionized Woolco stores. The Supreme Court of Canada in a case called Town of Ajax found that the transfer of employees from company A to company B created the necessary nexus on which to base a finding of a sale of business. While the workers won that case, it did create an incentive for businesses to avoid retaining existing employees when there is a business transfer of some sort. I presume Target received an opinion that the successor provisions would not bind them to the Zellers’ collective agreements, but the labour boards will have to decide that.
Or, maybe Target will take the high road and simply agree to assume the collective agreements and not fire the unionized Zellers workers. HA! “Sometimes, I just think funny things” (Dudley Moore, Arthur).
Here’s a nice advanced Labour Law exam question:
Assume that nonunion Zellers employees have been told they will be terminated next spring, but they remain Zellers employees until then. Now assume that a majority of employees in each of the Zellers stores choose to join a union, and a union gets certified as their representative under the applicable provincial labour laws. Let’s use Ontario as an example. Now that the union is certified, it will serve Zellers with a ‘notice to bargain’ a first collective agreement. Before a collective agreement is reached, however, the store lease transfers to Target and the employees are all fired by Zellers.
Now read Section 69(3) of the Act:
(3) Where an employer on behalf of whose employees a trade union … has been certified … sells .. its business, the trade union continues… until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold…and the trade union… is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement … and such notice has the same effect as a notice under section 16
“Sell” includes “leases, transfers and any other manner of disposition” (section 69(1). Section 16 is the section that allows a newly certified union the right to serve a notice to commence collective bargaining on the employer.
Does the Labour Relations Act require Target to rehire the recently unionized, but dismissed Zellers employees, and continue collective bargaining with the union?
If there has been a “sale of business” from Zellers to Target, then would it be in the interests of nonunion Zellers employees to quickly unionize and serve notice to bargain on Zellers, before the ‘sale” takes place?
Do you think that the Labour Board should have the discretion to refuse to allow the employees to do this?