Province's steps to "modernize" the public sector met with protests by labour groups
Quebec labour groups staged massive demonstrations last month to protest changes to the labour code which would make it easier to contract out.
The Jean Charest government, since taking office last spring, has been making bold moves to “modernize” the public sector. Among the changes proposed in recent months has been a bill to restructure the health and social services sector, as well as a bill that would make it easier for unionized employers to contract out work.
But the provisions at the heart of the debate were never meant to apply to contractors and subcontractors, employer groups say.
At issue is article 45 of the Quebec Labour Code, introduced in 1961. As with most successorship laws, the intent was to protect workers’ collective bargaining rights in the event that the business changes hands or undergoes changes to its legal structure.
The question is whether a partial transfer occurs whenever a function once covered by a collective agreement is performed by a contractor.
In 1988, the Supreme Court of Canada ruled a partial transfer takes place only when tangible and identifiable elements of a business — location, equipment, inventory, and so on — change hands. However, subsequent interpretations by labour tribunals have applied this rule inconsistently.
Thus, collective agreements and accreditation have often been understood to be transferred to the contractor. The collective agreement would remain in effect for one year at the most, unless the agreement expires within that first year. At that point, the union and the contractor would have to sign a new collective agreement.
Thus, the law, meant to protect workers in case a business is sold or restructured, has prevented employers from contracting out parts of the business covered by a collective agreement they didn’t like.
In a 2001 case involving the property management company Ivanhoe, the contracting out of janitorial services resulted in the transfer of certification and collective agreement to the contractor, Moderne. That’s because Ivanhoe janitorial staff were transferred to Moderne along with the service.
Two years later, Ivanhoe invited bids for a new contract. Moderne didn’t bid, so when Ivanhoe hired four other contractors to do the job, Moderne dismissed the janitors, who were still under a collective agreement.
The union took the case to the Supreme Court, which decided the certification and collective agreement had been passed back to Ivanhoe. This means that they applied to the four new contractors when they signed the deal with Ivanhoe.
“An essentially temporary transfer of the operation of an undertaking therefore does not operate to permanently terminate the certification,” wrote the judges. “When its contract with Moderne expired, Ivanhoe took back responsibility for its undertaking and was once again bound by the certification, which was then transferred to the new contractors.”
The overall result of such jurisprudence, said economist Diane Bellemare of the Conseil du Patronat, Quebec’s largest employers’ group, was to hamstring employers, especially public-sector employers that are more likely to be unionized.
She cited what she calls “aberrations” of application of the article 45. In one recent case, the City of Montreal contracted out some work to an engineering firm. “That contract was temporary, and when the union filed a grievance, the tribunals said the technicians at the engineering firm had to pay union dues and had to be paid according to the bureaucrats’ collective agreement for the rest of the contract. So the engineering firm turned around and said, ‘We don’t want the contract with the city anymore,’” said Bellemare.
“From an employer’s perspective, the problem is workers at the contractor may not even want to be unionized. And often, when a union enters through the back door like that, it tends to stay,” said Bellemare.
The changes proposed by Bill 31 would apply only to situations that involve the transfer of employees, said Bellemare.
“Charest doesn’t have any choice. If he doesn’t pass the law, then he won’t be able to modernize the state. It’s a key to re-engineering public service,” said Bellemare.
The Jean Charest government, since taking office last spring, has been making bold moves to “modernize” the public sector. Among the changes proposed in recent months has been a bill to restructure the health and social services sector, as well as a bill that would make it easier for unionized employers to contract out work.
But the provisions at the heart of the debate were never meant to apply to contractors and subcontractors, employer groups say.
At issue is article 45 of the Quebec Labour Code, introduced in 1961. As with most successorship laws, the intent was to protect workers’ collective bargaining rights in the event that the business changes hands or undergoes changes to its legal structure.
The question is whether a partial transfer occurs whenever a function once covered by a collective agreement is performed by a contractor.
In 1988, the Supreme Court of Canada ruled a partial transfer takes place only when tangible and identifiable elements of a business — location, equipment, inventory, and so on — change hands. However, subsequent interpretations by labour tribunals have applied this rule inconsistently.
Thus, collective agreements and accreditation have often been understood to be transferred to the contractor. The collective agreement would remain in effect for one year at the most, unless the agreement expires within that first year. At that point, the union and the contractor would have to sign a new collective agreement.
Thus, the law, meant to protect workers in case a business is sold or restructured, has prevented employers from contracting out parts of the business covered by a collective agreement they didn’t like.
In a 2001 case involving the property management company Ivanhoe, the contracting out of janitorial services resulted in the transfer of certification and collective agreement to the contractor, Moderne. That’s because Ivanhoe janitorial staff were transferred to Moderne along with the service.
Two years later, Ivanhoe invited bids for a new contract. Moderne didn’t bid, so when Ivanhoe hired four other contractors to do the job, Moderne dismissed the janitors, who were still under a collective agreement.
The union took the case to the Supreme Court, which decided the certification and collective agreement had been passed back to Ivanhoe. This means that they applied to the four new contractors when they signed the deal with Ivanhoe.
“An essentially temporary transfer of the operation of an undertaking therefore does not operate to permanently terminate the certification,” wrote the judges. “When its contract with Moderne expired, Ivanhoe took back responsibility for its undertaking and was once again bound by the certification, which was then transferred to the new contractors.”
The overall result of such jurisprudence, said economist Diane Bellemare of the Conseil du Patronat, Quebec’s largest employers’ group, was to hamstring employers, especially public-sector employers that are more likely to be unionized.
She cited what she calls “aberrations” of application of the article 45. In one recent case, the City of Montreal contracted out some work to an engineering firm. “That contract was temporary, and when the union filed a grievance, the tribunals said the technicians at the engineering firm had to pay union dues and had to be paid according to the bureaucrats’ collective agreement for the rest of the contract. So the engineering firm turned around and said, ‘We don’t want the contract with the city anymore,’” said Bellemare.
“From an employer’s perspective, the problem is workers at the contractor may not even want to be unionized. And often, when a union enters through the back door like that, it tends to stay,” said Bellemare.
The changes proposed by Bill 31 would apply only to situations that involve the transfer of employees, said Bellemare.
“Charest doesn’t have any choice. If he doesn’t pass the law, then he won’t be able to modernize the state. It’s a key to re-engineering public service,” said Bellemare.
