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Labor & Employment Law

: Thoughts from a Management Lawyer

"Hot Cargo" Arrangements in British Columbia

By Michael Fitzgibbon

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The British Columbia Court of Appeal recently considered the validity of "hot declaration" clauses in a collective agreement in Victoria Times Colonist, a Division of Canwest Mediaworks Publications Inc. This was an appeal of this lower court decision.

A ?hot declaration? clause permits the union and its members to refuse to perform work that comes from a third party employer involved in a lawful strike or lockout. In 2005, the BC Federation of Labour made a declaration against Telus and the unions informed the Victoria Times Columnist that they were refusing to execute any Telus related work, relying on hot declaration clauses in their respective collective agreements. The following is illustrative of the clause:

The Guild reserves for its members and itself the right to refuse to execute any work coming from or destined for delivery to any department of the Times Colonist, or any other newspaper, publication or wire services, or to any employer who furnishes supplies or material required for the normal operation of the Times Colonist, in any of its departments and which is involved in a lawful strike or lockout.

The employer argued that the clause in the collective agreement conflicted with the British Columbia Labour Code which provided as follows:

?strike? includes a cessation of work, a refusal to work or to continue to work by employees in combination or in concert or in accordance with a common understanding, or a slowdown or other concerted activity on the part of employees that is designed to or does restrict or limit production or services, but does not include

(a) a cessation of work permitted under section 63(3), or

(b) a cessation, refusal, omission or act of an employee that occurs as the direct result of and for no other reason than picketing that is permitted under this Code,

and ?to strike? has a similar meaning;

The refusal to work under a "hot declaration" clause, it was argued, was an unlawful strike as it took place during the term of the collective agreement.

The BC Court of Appeal considered the history of the "hot declaration" or "hot cargo" clause in British Columbia:

Hot declaration clauses have always been controversial in British Columbia but the clauses have not been generally prohibited in this province as they have been in other Canadian jurisdictions. The Board has declined to find that clauses in collective agreements that allow unions and their members to refuse to handle products and services declared hot as a result of third party labour disputes conflict with the definition of strike in the Code. In the absence of such a clause the refusal to handle products or services declared hot does contravene the Code. The Board?s approach to the clauses has been consistent over many years. It has viewed them as terms defining the scope of work contractually bargained by the parties that excluded the subject matter from strike activity as otherwise defined.

Section 70(1) of the BC Code permits the BC Labour Relations Board to override hot declaration clauses and void or limit hot declarations where their effects are substantial. It states:

70 (1) If, on the complaint by an interested person, the board is satisfied that a declaration by or on behalf of a trade union or employer, or an agreement or combination between one or more employers and one or more trade unions, or 2 or more trade unions, is substantially affecting trade and commerce in a commodity or service or is substantially affecting the business, operations or purposes of the complainant, the board may, in its discretion, issue a declaratory opinion that

(a) the declaration, agreement or combination is void for all purposes,

(b) the declaration, agreement or combination is unenforceable in specified circumstances or for a specified period of time, or

The definition of "strike" was amended in the BC Code in 1984. The Board rejected the submission of the employer in this case that the revised definition of strike voided the hot declaration clauses.

The issue before the Court was whether the Board?s interpretation is irrational. If the board?s interpretation is a rational one, then it is within the jurisdiction of the board to continue to apply that interpretation and the Court will not intervene.

The Court of Appeal refused to overturn the Board's decision. In BC, the approach to these clauses has been to allow the employer and union scope within which "to define work through collective bargaining" and the Board will only step in under section 70 where the "effects are substantial".

This approach and result is not necessarily the one that would follow in other provinces. Nonetheless, it does highlight differences approach as among Canadian jurisdictions and the need to be well aware of the different standards wherever the employer carries on business. The case also shows how significant the decision regarding the standard of review is on the outcome.

Full post as published by Thoughts from a Management Lawyer on June 07, 2009 (boomark / email).