Canada: Can A Claim Of Bad Faith Bargaining Extend Beyond The Bargaining Table?

The Quebec Commission des relations du travail (CRT) recently dismissed a claim of bad faith bargaining against an employer because the parties did not explicitly address the issue in question and its consequences in their discussions.

The parties

In this case, which pitted the Commission de la construction du Québec (employer or CCQ) against its office employees' union,¹ the CRT had to evaluate a claim for bad faith bargaining based on the application of a back-to-work agreement.

The source of the dispute

The dispute arose in the late stages of the bargaining process between the union and the CCQ. On June 3, 2012, a conciliator prepared a settlement proposal which was submitted to the parties. Upon receiving the proposal, the union agreed to delay calling an unlimited general strike until it received the employer's response. On June 5, 2012, the CCQ announced its partial acceptance of the proposed settlement and the union, being dissatisfied with the CCQ's response, went ahead with its strike.

On July 11, 2012, a special mediator was appointed. The major item of disagreement between the parties was how to deal with the substantial deficit in the pension plan.

On July 24, 2012, agreement in principle was reached on all issues in dispute and a back-to-work agreement was signed the next day. The union was tasked with preparing the final texts and sending them to the employer for review and approval. On July 25, 2012, the union sent the employer a number of documents, including Letter Agreement 39, which gave rise to the allegation of bad faith bargaining. Letter Agreement 39, as drafted by the union, contained the following statement concerning the pension plan: [translation]"All amendments shall have no effect on benefits vested prior to January 1, 2013, and shall apply only in respect of future service."

After numerous discussions which further delayed the employees' return to work, the parties agreed on the final wording of Letter Agreement 39 as follows: [translation]"... the amendments below shall be effective only as of January 1, 2013, and shall not have any retroactive effect..."

Under the new pension plan rules, the bridge benefit for employees taking early retirement between ages 55 and 60 was to be reduced on a linear basis, whereas previously the same reduction applied between ages 50 and 55. The question of how this rule would be applied after January 1, 2013 was not clearly addressed during the negotiations and gave rise to the Union's first allegation of bad faith bargaining.

The union spokesperson claimed that he explicitly asked the CCQ spokesperson whether the new wording "had the same meaning" as the original version of Letter Agreement 39. He alleged that he was told that it did, so he accepted the employer's wording. The CCQ spokesperson, meanwhile, did not recall confirming that both versions "had the same meaning," but remembered mentioning that entitlement to a bridge benefit was not subject to vesting.

The fact that bridge benefits were not vested was again raised by the CCQ's Vice President of Legal Affairs, when the time came to apply Letter Agreement 39.

The CRT was thus asked to decide whether the CCQ had acted in bad faith by deliberately misleading the Union or whether it acted in bad faith when the CCQ's vice-president intervened in the application of the agreement.

The decision

The CRT pointed out that Article 2805 of the Civil Code of Québec provides that good faith is always presumed and that the onus was therefore on the union to prove that the employer was acting in bad faith.

Concerning the first allegation, the CRT concluded that the CCQ did not bargain in bad faith. In fact the parties never addressed head-on the question of the linear reduction of the bridge benefit for employees between ages 55 and 60. To reach a conclusion of bad faith would have required this issue to be addressed. It was not sufficient for the union to have simply asked whether the two wordings "had the same meaning". The union would have had to explain how it interpreted the proposed wording; then the employer could have agreed expressly or tacitly.

As for the second allegation, the CRT pointed out that the vice-president was expressing a legal opinion, not the outcome of the bargaining process, since he was not a member of the small committee whose discussions resulted in the agreement in principle. Therefore, the vice-president's intervention could not be construed as evidence of bad faith bargaining. The proper remedy in such a case is to file a grievance to decide which interpretation is the correct one.

The CRT concluded that "insensitivity and lack of tact are not the same as bad faith bargaining", dismissed the Union's complaint and ordered it to sign the collective agreement, without any further modification.

Conclusion

The union has filed an application for judicial review. Thus, the courts will have to decide whether a claim of bad faith bargaining can be upheld when the potential consequences of an agreement have not been explicitly discussed between the negotiating parties.

Footnote

1 Syndicat des employées et employés professionnels-les et de bureau – section locale 573, SEPB CTC-FTQ c. Commission de la construction du Québec (August 27, 2013), 2013 QCCRT 423.

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