Follow Me on Twitter

A Wrongful Dismissal Case and the Absence of a Right of Employees to Act Collectively

August 28 2018

I want to start the 2018-19 academic year with an interesting issue that I have written about periodically over the years.  It has to do with the legal right in the American National Labor Relations Act (the equivalent of Canadian labour relations statutes) that does not have a parallel in Canadian private sector labour law.  It is the right found in Section 7 of the NRLA, which reads thus:

Sec. 7. [§ 157.] Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection


Sec. 8. [§ 158.] (a) [Unfair labor practices by employer] It shall be an unfair labor practice for an employer–
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7

The key here is that this is a general “right to engage in concerted activities… for the purpose of … mutual aid or protection”.  Although Canadian labour law protects a right to engage in “trade union activities”, it does not protect a general right of all employees to engage in concerted activities to advance their employment issues.

[Sidebar:  There is a case to be made that Section 2(d) of the Charter of Rights [freedom of association] protects a version of a right to concerted activities for public sector employees, but not private sector employees.]

I have discussed the lack of a right of employees in Canada to engage in concerted activities before.   Who can forget the Florida law firm that fired its staff for showing up to work wearing orange t-shirts?  The employer believed the employees were engaged in some form of collective protest about working conditions, but if they were, their protest was protected by Section 7 of the NLRA.  I noted in that earlier post that a group of nonunion Canadian employees wearing orange to protest working conditions would not be protected from retaliation by our labour laws.  Check out also my recent post on the US Supreme Court decision in Epic Systems, where I consider the importance of the right to concerted activities in US law.

Check out also this interesting paper by Professor Cindy Estlund (NYU) and Alan Bogg (Bristol) called “Freedom of Association and the Right to Contest: Getting Back to Basics”, where the authors argue for a “right to contest” employers.

A recent wrongful dismissal case from Ontario reminded me again of the absence of a right to engage in concerted activities in Canada.   The case is called Burton v. Aronovitch McCauley Rollo [Hattip to Sean Bawden over at Labour Pains blog for making me aware of the case on Twitter].  The case has nothing to do with the right to “collective activities” per se, but the facts provide a classic example of the gap in employee protections produced by the omission of such a right.

Burton v. Aronovith McCauley Rollo:  The Facts

Follow along with me.  The plaintiff employee, a law clerk, was terminated in April 2015 after 12 years of employment.  In about 2009, the employer introduced a “base salary cap” of $70,000 for law clerks, although employees could earn more through performance bonuses. From 2012 to the date of her termination, the plaintiff received the cap, plus bonuses of various amounts.  In March 2015, the plaintiff met with a manager and complained about the salary cap and asked if the employer intended on increasing it.  The manager responded, “do your homework and see what others are paid”.

Now here’s the interesting part for our purposes.  The plaintiff then began discussions with her coworkers about the wage cap.   Some of them contacted law clerks at other firms to ask about their compensation.  The group of employees met on March 20 and discussed what they had learned.  Then, according to the judge, “the law clerks met as a group with [the manager] and a partner of the firm to discuss their findings and concerns” about the wage cap.

A month later, the plaintiff met with the managing partner for her annual review.  At the outset of the meeting, the partner confronted her with concerns over “rumours” that the law clerks were discussing salaries and pay concerns with one another, which the partner said was a violation of the employment contract’s “confidentiality clause”.   The two witnesses gave differing accounts of what happened at the meeting, but it is clear that there was tension and that the employer strongly believed it was improper for employees to be meeting as a group to discuss their wages, even if a manager had told the plaintiff to do “homework” on law clerk pay practices.  Soon afterwards, the plaintiff was terminated “without cause”.

The Decision

The employer relied on a termination clause in the contract that granted the employer a right to terminate without cause by providing “notice, severance pay, and any other payment required by relevant legislation”.   The key issue for the court was whether this clause ousted the common law implied obligation to provide “reasonable notice”.  Justice Monahan found that it did and so the termination was lawful under the contract.  He ruled:  “this incorporation by reference of the minimum notice required under applicable law is sufficiently clear to displace the Plaintiff’s common law notice entitlement.”

What About “Collective Activities for Mutual Aid”?

There is a useful discussion of the developing case law on the enforceability of termination clauses in Ontario.  I’m working on a law review article on these developments in fact.  However, in this post I am more interested in what the case does not consider which is that, in the end, this employee was fired in whole or in part because she had engaged in collective discussions with her coworkers and then raised collective concerns about the pay practices of the employer with the hope of improving their working conditions.

In the United States, the termination of the plaintiff in circumstances such as this would almost certainly be a violation of Section 7 of the NLRA.  A complaint to the NLRB could result in a reinstatement order.   In Canada, labour relations legislation has no application to this case at all.  The workers are nonunion, they were not in discussions with a union about organizing, they were not even attempting to create an employee association.   The workers had simply engaged in collective discussions and then they raised a collective concern with their employer about the employer’s pay practices.  For this, the employee lost her job.   And because the employer had included a termination clause in the contract, all she is entitled to is the absolute minimum required by the ESA, despite her 12 years of strong performance and service to the employer.

I have argued for many years that if we are reforming Canadian labour law, then one obvious addition I would make is to include a NLRA Section 7 equivalent.  See for example my 2013 paper “Graduated Freedom of Association: Worker Voice Beyond the Wagner Model” in the Queens Law Journal.  More recently, Brishen Rogers and Simon Archer made essentially the same argument in this paper.  The idea of introducing a right to concerted activities was considered during the recent Changing Workplaces Review process in Ontario, but was never taken very seriously by either the two commissioners or the Liberal government.

As I have tried to argue for years, the absence of a general right to engage in concerted activities beyond pure “trade union activities” will become more important in Canada as union density in the private sector (currently sitting at around 16% with variation across provinces) continues its decline.  Harvard’s Ben Sachs and Sharon Block make essentially the same point in regards to American law when they noted on their On Labor blog that, “for the vast majority of workers who are not currently in a traditional union, and who may never have the opportunity to join one, the scope of § 7 activity outside the union and collective bargaining context is all that matters.”

I’ll conclude with one other small point.  Surely the law should protect the right of employees to discuss their wages with one another.   Confidentiality clauses that purport to restrict this right should be legislatively banned, or the courts should refuse to enforce them as being contrary to public policy as they do with many restrictive covenant clauses.  Such clauses serve no valid business purpose beyond seeking to repress wages and employee liberty, neither of which are purposes that the law should respect.  Even neoliberal labour market economic theory demands wage transparency for labour markets to function efficiently. What other comparable workers are paid is information that is relevant to the labour market and it should not be repressed.

Questions for Discussion

Should Canadian governments introduce a form of the American “right of workers to engage in concerted activities”?   What arguments exist against taking such a step?

Should employment law prohibit contract clauses that ban employees from disclosing their salary level?   Make an argument why such clauses should be lawful.

 

 

 

 

 

 

Socialize

2 Responses to A Wrongful Dismissal Case and the Absence of a Right of Employees to Act Collectively

  1. Elizabeth Reply

    August 29, 2018 at 4:32 pm

    In my last workplace, my employer told me I was not permitted to talk to other staff about possible overtime violations. We also had a policy prohibiting us from discussing our salaries. But Fraser, Health Services etc are replete with references to the right of employees to make “collective representations”. It would be absurd if employees were prohibited from discussing the bases for those representations, and/or if they only had that right in the context of a formal unionizing process. How does one even start talking about the benefits of unionizing if one is prohibited from discussing one’s terms and conditions of employment? As you say, keeping salaries a secret only helps the employer. It also hides discrimination.

  2. Dan McGarry Reply

    September 4, 2018 at 6:02 pm

    In relation to the 2nd question, the Government of Ontario addressed it in the Pay Transparency Act, scheduled to come into force on January 1st 2019. In regards to an employees discussing their salaries the following applies:

    Pay Transparency Act, 2018, S.O. 2018, c. 5
    Anti-reprisal

    8 (1) No employer or person acting on behalf of an employer shall intimidate, dismiss or otherwise penalize an employee or threaten to do so because the employee has,

    (a) made inquiries to the employer about the employee’s compensation;

    (b) disclosed the employee’s compensation to another employee;

    …….

    (e) asked the employer to comply with this Act or the regulations.

Leave a Reply to Dan McGarry Cancel reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>