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Many plant closures came out of the economic crisis.  In a unionized environment, the union and company will typically negotiate a closure agreement that will set out the manner in which the windup will be effected including, in some cases, severance.  Sometimes the employees want "more" and are not happy with the deal their union negotiated on their behalf.  They will try to get more - somehow, somewhere.

A number of employees sued their employer and union in Sidhu v. Affinia Canada Corporation claiming additional severance.  The employer brought a motion to dismiss the claim on the basis that the Court did not have jurisdiction over the subject matter of the dispute and that the proper forum for the resolution of the plaintiffs? complaints was at arbitrator under the Collective Agreement or before the Ontario Labour Relations Board.

The company then met with Union representatives and negotiated a Plant Closure Agreement ("PCA") that included a provision dealing with severance pay that would be calculated in accordance with the Employment Standards Act, 2000.  Certain employees wanted more, and sued the union and employer.

The plaintiffs claimed that:

1. Affinia and the Union entered into the PCA secretly and without the knowledge and consent of Union members;
2. The defendants breached a duty of care to the plaintiffs;
3. The Union lacked the proper authority to enter into the PCA with Affinia;
4. The Union breached its ?professional and fiduciary obligations? to the plaintiffs;
5. The negligence and breach of duty by the defendants caused losses to the plaintiffs; and,
6. The plaintiffs sought punitive damages against both defendants.

Counsel wrote asking that the plaintiffs discontinue their action on the basis that the Court had no jurisdiction.  The action was not discontinued and they brought this motion.

The leading case is Weber v. Ontario Hydro, written about numerous times on this blog.  The test according to the Supreme Court of Canada, is ?where the dispute, regardless of how it may be characterized legally, arises under the collective agreement, then the jurisdiction to resolve it lies exclusively with the labour tribunal and the courts cannot try it.?

According to the Court, after analyzing the statement of claim:

"From these surrounding circumstances I conclude that, giving the Statement of Claim a broad and generous reading, the essential character of the plaintiffs? complaint against Affinia is that they did not receive adequate compensation upon the termination of their employment."  

The Court went on to consider what was the effect of the PCA and stated:

"Although the PCA did not state that it formed part of the Collective Agreement, it is not possible to give meaning or operative effect to portions of the PCA unless it did."

In passing, I argued a case before the Ontario Labour Relations Board which concluded that the closure agreement, in the circumstances of that case, was a "collective agreement" within the meaning of the Labour Relations Act, 1995 because:

"The Closure Agreement, being a signed and dated written agreement governing the terms and conditions of work, which was ratified by a secret ballot vote of bargaining unit members, meets the basic statutory requirements of a collective agreement."

The Court in the Sidhu case concluded that it "has no jurisdiction over the plaintiffs? claim against Affinia, and I therefore dismiss their claim against Affinia."

The plaintiffs also claimed that the union "had not represented them properly in respect of matters relating to the closure of the Plant".  The Court held that this claim fell within the exclusive jurisdiction of the Ontario Labour Relations Board.  For some reason, though, the union did not bring a motion to dismiss this claim and, in those circumstances, all the Court could do was "declare that this court lacks jurisdiction to hear the plaintiffs? action against the Union."

When you're represented by a union, your recourse to the courts is very limited.  For example, as the Court noted in this case, "If a cause of action falls outside the collective agreement, such as a claim under a contract predating a collective agreement, the courts have jurisdiction over the claim."

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