This past summer, Cadillac Fairview, which owns the TD Centre in Toronto, locked out its unionized workers and contracted out their work to a third party contractor. A month or so after that, it decided to terminate the locked out workers and use the contractor instead. The background facts are described in this OLRB decision that involved a variety of preliminary issues surrounding the union’s complaint that the employer has violated the Labour Relations Act. Here is the letter that Cadillac Fairview sent to the terminated workers.
The Labour Relations Act protects workers from discrimination and termination of their employment because they have exercised rights under the Act, such as joining a union and engaging in collective bargaining. The key provisions in this regard are Section 70, 72, and 76. You might think it is pretty straightforward that contracting out the work of unionized workers and firing them all would be discrimination on the basis of union activity. But this is one of those grey areas in the law.
Labour law students in Canada read an OLRB case called Kennedy Lodge, in which the OLRB ruled an employer had not breached the Act by contracting out bargaining unit jobs and dismissing the workers. The Board ruled that an employer can do this as long as its motivation is to avoid the costs associated with a union, and not to punish workers for joining a union and bargaining a collective agreement. The Board found:
The facts of this case do not disclose any desire on the part of the employer to rid itself of union representation of its employees. Rather a legitimate business decision was made which resulted in an annual saving of around $50,000. The fact that the union and the employees were adversely affected does not of itself taint the legitimacy of that decision.
You can imagine that the labour movement thinks that distinction is ridiculous–a decision to fire all of the unionized workers to save costs is a decision to avoid the union.
In this case, Cadillac Fairview is arguing that it sought revisions to the bargaining structure, and other changes, but the union would not budge. It then contracted out the work and found that the new contractor was working out very well, and therefore a decision was made to make the contacting out permanent.
Do you think that Cadillac Fairview should be able to permanently replace the lockout out union members? We will keep an eye out for the decision…