Confirmed: Managers can't unionize, says SCC

The Supreme Court of Canada has confirmed that Quebec’s exclusion of first-line managers from statutory collective bargaining regime is constitutional.

In a recent decision, the court looked at whether the exclusion of casino managers from Quebec’s labour relations regime infringed their guarantee of freedom of association under the Canadian Charter of Rights and Freedoms and Quebec’s Charter of human rights and freedoms.

But Thomas Roper, founding partner at Roper Greyell in Vancouver, wonders if the court thought through its decision completely, and has concerns about some of the broader implications.

“It's dangerous for courts to just not deal with the facts before them and make broad statements of law without understanding all the unintended consequences.”

SCC ruling on freedom of association

The Association des cadres de la Société des casinos du Québec represents first-level managers at four casinos run by the Société des casinos du Québec, and it had applied to Quebec’s Administrative Labour Tribunal to be recognized as a certified association to benefit from the protections of the Quebec Labour Code.

The Labour Code defines “employee” broadly, but it expressly excludes managers from its regime, including from the ability to obtain association certification, according to the Supreme Court of Canada.

The labour tribunal concluded that the exclusion of managers unjustifiably infringed their freedom of association — so the Société asked the Superior Court to review the decision. The Superior Court disagreed, and when the association appealed that decision, the Quebec Court of Appeal overturned it.

Finally, the Société and the Attorney General of Quebec appealed to the Supreme Court of Canada, which concluded that the Labour Code does not infringe the casino managers’ freedom of association.

Writing for the majority, Justice Mahmud Jamal said the purpose of the legislative exclusion was not to interfere with managers’ rights to associate.

“Rather, the legislature’s purposes in excluding managers from the definition of ‘employee’ under the Labour Code were to distinguish between management and operations in organizational hierarchies; to avoid placing managers in a situation of conflict of interest; and to give employers confidence that managers would represent their interests, while protecting the distinctive common interests of employees.”

Managers not ‘employees’

Managers generally have to make decisions that have material impact on their direct reports, such as hiring or layoffs, says Rebecca Liu, an associate at Hicks Morley in Toronto.

“These are all decisions that can be grieved under the collective agreement. And so if [managers] were in the same bargaining unit as employees, you have this conflict of interest where the decisions under which a collective agreement govern is now being grieved.”

Plus, the employer has the right to know that the managers will be representing its interests, she says, “so they're in a conflict of interest if they are also in a bargaining unit where the union position can sometimes be adversarial to what the employer wants, and where the union's main interest is to protect those in a bargaining unit.”

You don't want management in a position “where they're forced to both have interest as a bargaining unit member for their brothers and sisters, but also charged with this good faith and trust on behalf of the employer,” says Liu.

To justify the exclusion, it’s about the loyalty that managers must have to their employers, says Roper.

“In effect, labour boards see managers as the employer. And these are managers who meet the definition of manager under the Code so it might not include supervisors or people that don't perform managerial functions.”

Right to collectively bargain, strike

However, managers are permitted to enter into associations, says Liu, and, if agreed to by the employer, there can be voluntary recognition agreements where an employer says, “Notwithstanding the fact that I'm not legally obligated to collectively bargain with you, or notwithstanding the fact that the labour relations act or the applicable labour legislation doesn't recognize you as an employee, I'm voluntarily agreeing to collectively bargain with whatever association you formed.”

A voluntary recognition relationship will of course involve bargaining, she says, “whether or not you're recognized through the application of a labour statute or because you've been voluntarily recognized by the employer. At the end of the term of the collective agreement, [that] would be permitted… to the extent that managers are part of an association that has been voluntarily recognized.”

“Nothing in this [recent Quebec] decision says that those managers couldn't collectively bargain or strike,” says Liu.

But Roper doesn’t necessarily agree that freedom of association should allow managers to collectively bargain with their employer and to have the right to strike.

“That’s true of employees but we've just determined that these people aren't employees, they are managers.”

International Labour Organisation (ILO) conventions don't support the idea that anyone who's not an employee has these rights, he says.

“Employers have a freedom to associate but not with employees; they have a freedom to associate amongst themselves — that's what the ILO Convention says.”

Roper also says case law in Canada doesn't “take that jump” either, citing three cases, the “labour trilogy,” that date back to 1987 and all deal with employees: Saskatchewan Federation of Labour v. Saskatchewan, Mounted Police Association of Ontario v. Canada, and Meredith v. Canada.

“So, the court for the first time, in my view, is saying... it's actually broader than that, managers also have that freedom, including the right to strike.”

Broader implications with manager rights

If that’s true, then where does it end, asks Roper, adding the Supreme Court “leaves us dangling.”

“If it's saying that these managers have Charter associational rights, and then went on to say, ‘Well, these managers are low-level people who have really nothing to do with the employer,' I mean, that might have been different.

“But remember, these same managers were excluded from the labour code because they perform the functions of the employer. So, you can't have it both ways — they're out because they're the employer.”

Roper admits there may be no impetus for managers to form associations, claim associational rights, collectively bargain with their employer and ultimately strike.

“But if it did become a problem or an issue, then you've got a Charter-driven right to strike with no framework around it. You have no legislation that deals with ‘OK, how much strike notice do you give? Do you go to mediation before you strike?’ — all the safeguards that the Code puts around it wouldn't exist, because these people have been excluded from the Code, and the court has upheld that.”

And if it did become an issue, we would need new legislation, he says, so then “you've got another round of challenges about ‘Is it a justified restriction?’”

“A lot of people will say, ‘Well, who cares? My managers are never going to do that… or my executive, the C-suite is never going to organize.’ And they’re probably right, but there's broad statements in this decision that don't draw those lines.”

To the extent that this decision confirms that managerial exclusion in the labour relations statute is constitutional, that's good to know, says Liu.

“It’s confirming... that the labour landscape isn't massively shifting under this decision; it's confirming the status quo, at least in this regard.”