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The Walmart store in Jonquière, Quebec, was the first of the retail chain’s establishments to count unionized employees among its ranks in North America. A few months after the union’s arrival, Walmart announced the definitive closure of its establishment, resulting in the dismissal of almost 200 employees. The workers laid off by Walmart and their union then launched a series of legal actions and appeals, culminating in two Supreme Court of Canada rulings rendered five years apart. These were the reprisal complaints and the maintenance of conditions of employment, both of which are provided for in the Labour Code. On the eve of the tenth anniversary of the Walmart case, a dialogue between labour law and economics sheds new light on business closures in the context of unionization. If the purpose of the Labour Code is to promote freedom of association for workers, the protections and remedies it provides should encourage employer behaviour that ensures compliance and discourage those that do not. However, the teachings of the Supreme Court of Canada conflate different types of business closures based on different economic rationales. To determine whether it is rational for an employer to close in part or completely its business to avoid dealing with a union, we must first go back to the reasons that originally motivated this economic agent to choose this legal form. Ronald Coase’s theory of the firm explains that the creation of a firm depends on the extent to which transaction costs are reduced compared to the scenario in which the same goods or services would be produced through the market process. The characteristics of the North American union model do not deviate substantially from the founding principles of the theory of the firm, to the extent that it would be rational to abandon this model altogether in the marketplace. The elimination of any possibility of profit represents a greater financial loss than the cost of compromising with the union and accepting better working conditions, within the limits of its ability to pay. This is not to say that such an irrational decision by the responsible economic agent – the employer – should be sanctioned by labour law. Rather, it is the economy itself that sanctions the irrational conduct of an employer who closes his business completely to avoid an agreement with a union. In the case of a partial business closure, it may appear rational for a company to outsource part of its production for related activities, when recourse to the market proves more beneficial. Where the business decision is based on legitimate economic grounds and does not involve anti-union considerations, labour law may be tolerant of it. By recognizing that a company can go out of business, even for socially reprehensible considerations, the principle endorsed by the first Walmart judgment seem, however, to grant immunity to employers whose business decisions are based on anti-union animus. The closure of the Walmart store in Jonquière represents a borderline case that does not fit into any of the categories of closure previously considered by labour law. It can be explained by a very particular economic rationality. The closure of a store where workers had recently joined a union can be seen as part of a broader strategy to intimidate all workers in the chain’s other stores in Canada. The loss of profits resulting from the disappearance of the Jonquière store was largely offset by the reduction in operating costs and maximization of profits resulting from Walmart’s unilateral imposition of working conditions on all of its other Canadian stores. The second Walmart decision sets out the test for a reasonable employer in the same circumstances. In the absence of serious economic justification or genuine business considerations, the Supreme Court cracked down on this type of employer tactic, which upsets the balance in labour relations that the Labour Code seeks to maintain. Through the payment of compensation, the Labour Code imposes financial consequences on Walmart to discourage this anti-union behaviour that it may wish to replicate in its other establishments or that may inspire other companies in Quebec. The control of the legality of the employer’s business decisions and the dissuasive effects sought by labour law should therefore consider these different scenarios of cessation of activities.
Le Walmart de Jonquière, au Québec, fut le premier établissement de la chaîne de commerce de détail à compter des salariés syndiqués dans ses rangs en Amérique du Nord. Quelques mois après l’arrivée du syndicat, Walmart annonçait la fermeture définitive de son établissement, entraînant le licenciement de près de 200 salariés. À la veille du dixième anniversaire du dénouement de l’affaire Walmart, un dialogue entre droit du travail et économie permet de jeter un éclairage nouveau sur les fermetures d’entreprises en contexte de syndicalisation. À la lumière des enseignements de la Cour suprême du Canada, l’article distingue les cas de fermeture totale ou partielle d’entreprise et la fermeture d’un établissement d’une multinationale afin de voir si de telles décisions d’affaires procèdent d’une décision économique rationnelle de l’employeur. Cette analyse permet de se prononcer sur l’efficacité de la législation du travail québécoise quant à la protection du droit d’association des salariés lors d’une fermeture d’entreprise qui reposerait sur une intention antisyndicale.
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