Collective Bargaining for Managers – An Alternate Universe?

July 5, 2024

On April 19, 2024 the Supreme Court of Canada published its decision in Société des casinos du Québec inc. v. Association des cadres de la Société des casinos du Québec 2024 SCC 13, As far as I can tell, it did not get much fanfare in labour relations circles.

Although the case arose in Quebec under the Quebec Labour Code, CQLR, c. C-27 the court’s reasoning will apply to provincial labour legislation across the country and to the Canada Labour Code.

The decision (a majority of four with two judgments concurring in the result) upheld the Charter validity of the managerial exclusion in the definition of employee in the Code, in rejecting an application for certification by an association of casino managers. The majority1 held that the Code did not substantially interfere with the managers’ freedom of association (Charter s.2(d)) as they were not restricted from forming an association and had engaged in collective consultation with their employer pursuant to a Memorandum of Understanding. 

Both the majority and the concurring opinion accepted that the exclusion from the Labour Code was based on the need for the undivided loyalty managers must have to their employer to represent the employer’s interests in collective bargaining:

[51] In my view, the purpose of the legislative exclusion is not to interfere with managers’ associational rights. As my colleague Justice Côté explains, 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 between their role as employees in collective bargaining and their role as representatives of the employer in their employment responsibilities; and to give employers confidence that managers would represent their interests, while protecting the distinctive common interests of employees (paras. 168-69).

And from the concurring opinion of Wagner C.J. and Cote J.:

[168] Like the Wagner Act and the various statutes modelled on it throughout the country, the L.C. is premised on this distinction, in the organization of work, between the employer and the workers. The exclusion of managers from the L.C. regime brings [TRANSLATION] “to the forefront the fundamental idea flowing from the concept of organization, according to which businesses must be structured at two levels of operation: that of management, on the one hand, and that of execution, on the other” (R. Blouin, “La qualification des cadres hiérarchiques par le Code du travail” (1975), 30 I.R. 478, at p. 483 (emphasis in original)). By drawing such distinctions in the definition of “employee” in s. 1(lL.C., the legislature intended to [TRANSLATION] “attach specific legal consequences to the fact that management authority is concentrated in the hands of those in charge of the scientific organization of businesses and allocated among them in a hierarchical manner at various levels or tiers” (p. 483).

[169] The exclusion of managers was also intended to make it possible for the employer to trust its representatives, to prevent employee-employer role conflicts, conflicts of interest and even the domination of unions by the employer, and to ensure a community of interest for employees.

None of the foregoing is controversial. 

What is surprising, and I suggest at odds with the recognition that managers are excluded from collective bargaining because their interests must be aligned with the employer, is the court’s determination that managers nonetheless fall within the section 2(d) protection of associational activities which, by virtue of its previous decisions includes the right to collective bargaining and the right to strike.

The majority held:

[55] The Société, as a government corporation, must respect the Canadian Charter. It must also respect the Quebec Charter. Although the record shows that the Société has neglected to properly respect the memorandum of understanding at times, the Association can seek remedies in court for any substantial interference with its members’ right to meaningful collective bargaining, including their right to strike, which is protected under s. 2(d) even without an enabling legislative framework (Saskatchewan Federation of Labour, at para. 61).

The concurring opinion of Wagner C.J. and Cote J. held:

[184] In the same vein, the Association has not established that it is prevented from striking in the absence of a statutory regime governing it and that this represents substantial interference with its members’ freedom of association. Indeed, no law prevents the Association’s members from striking. On the contrary, if the members decided to take part in a work stoppage for the purposes of negotiating their conditions of employment, s. 2(d) of the Canadian Charter and s. 3 of the Quebec Charter would apply so as to confer certain protections on them. It is also important to bear in mind the broad remedial power granted to the ALT by s. 128 of the Act respecting labour standards, CQLR, c. N-1.1, in cases of dismissal without good and sufficient cause.

I am unaware of any judicial suggestion in Canada, until now, that freedom of association includes the right to collectively bargaining for anyone other than “employees” (defined in all Canadian labour legislation to exclude managers), much less the right to strike. 

The basic framework of the Wagner model of labour legislation is premised on employees having the right to collectively bargain either as a result of statutory, or voluntary, recognition. Collective bargaining takes place between the employee collective and their employer. The “employer” is not a metaphysical entity. It exists in the form of management (at all levels) that represents the interests of the owners. Accordingly, managers are excluded from collective bargaining at least in all common law provinces and federally.

None of the applicable ILO Conventions support the right to collective bargaining, or the right to strike, for management. They recognize freedom of association for workers and employers, each having the right to form organisations to further their respective interests.

Whether the right to strike should be recognized internationally is currently a matter of significant debate. The International Organization of Employers argues that there is no internationally recognized right to strike. Even those who argue that the right to strike is rooted in Convention 87, argue that the right exists for workers, given the bargaining imbalance with employers. In November 2023, the ILO’s governing body referred the dispute over the right to strike to the International Court of Justice. At the time of writing, the Court has not rendered a decision.

In Canada, the Supreme Court has recognized the right to strike as a component of collective bargaining. In all the cases relied on by the court in this case, recognition that freedom of association encompassed the right to collective bargaining and then the right to strike, dealt with “employee” rights, and the exclusion of “employees” from collective bargaining.  Dunmore dealt with the exclusion of agricultural workers (employees) from Ontario’s statutory labour relations regime. The Health Services case struck down legislation interfering with collective bargaining rights of health sector employees.  Saskatchewan Federation of Labour struck down legislation that limited the ability of public sector employees who perform essential services to strike. The Mounted Police Association of Ontario decision struck down legislation that restricted RCMP officers (employees) from choosing their bargaining agent and from meaningful collective bargaining.

In the present case the Supreme Court’s decision to reject the Charter challenge to the exclusion of managers from the statutory labour regime was correct. However, I respectfully submit that its basis for doing so was not. 

The court concluded that the Labour Code did not interfere with the managers’ freedom of association, including the right to engage in collective bargaining and the right to strike, because the managers enjoyed, and were exercising, a form of consultation outside of the Code. The court held that the right to engage in collective bargaining and the right to strike were derived from the Charter, section. 2(d), and not from labour legislation. The Code did not restrict the managers’ rights because they were excluded from it and, so, their Charter right to collective bargaining and their right to strike remained undiminished.

In my view the correct analysis would have been either to determine that, in the case of managers, freedom of association does not encompass the right to collectively bargain or the right to strike or, alternatively if it does, the limitation on the freedom through the exclusion of managers, found in all labour legislation in the country, is justified under section 1 of the Charter.

The difficulty with the court’s reasoning is that it starts from the jumping-off point that freedom of association necessarily includes the right to collective bargaining and the right to strike. This is true for employees. But neither the ILO Conventions nor the court’s previous decisions support the conclusion that it is true for managers. 

If freedom of association with the attendant right to collective bargaining and right to strike extends to managers, does it not logically extend to a group of fiduciaries, or to C-suite executives?

Where does this decision leave us? As a result of this decision, managers can associate, select a bargaining agent, engage in collective bargaining, and exercise the right to strike. But neither the collective bargaining, nor the right to strike would be regulated. There is nothing in the common law that would regulate what is good faith bargaining, that would require mediation, a strike vote or 72 hour strike notice before a strike commenced. The scope of the bargaining group would be entirely a matter of agreement, not subject to a determination of appropriateness. None of the legislative provisions that protect the public interest would apply. 

There is no recognized right to collectively bargain including the concepts of strike/lockout, in the common law concerning employment. Such concepts exist only within Canadian labour legislation all of which applies to employees who are not managers, and not to managers. Managers are free to seek contractual arrangements collectively but have no protection from mass termination should they decide to strike, nor do employers have protection from mass constructive dismissal claims should they decide to “lock-out” a group of non-unionized employees taking a collective position. 

Governments could respond to this void by enacting legislation to establish a different bargaining framework for “managers” as occurred for agricultural workers in Fraser responding to the court’s decision in Dunmore. In that case the court upheld special legislation that provided agricultural workers with the right to make representations about terms and conditions of employment through an employee’s association, but did not provide for traditional collective bargaining with the right to strike. One wonders if the same decision would have been reached had Dunmore been decided after the court’s decisions in Saskatchewan Federation of Labour and Mounted Police Association of Ontario. Whether special legislation regulating or limiting collective bargaining and strikes for managers would survive Charter scrutiny is an open question.

In Société des casinos du Québec inc. the court could have reached the same conclusion it did without extending collective bargaining and the right to strike to managers. Admittedly the court’s statements are made in the context of a unique form of “bargaining” already agreed to by the Casino. Nevertheless, the court made broad assertions of Charter protection for collective bargaining and the right to strike for management, opening what I suggest is an uncharted alternate universe for labour relations in Canada.

See full version of this article here

1 Jamal, Karakatsanis, Kasirer and O”Bonsawin JJ.