Digest of Benefit Entitlement Principles Chapter 8 - Section 8

8.8.0 Direct interest

In order to be exempt from disentitlement (Digest 8.1.4), one of the conditions a claimant must meet is demonstrating that they are not directly interested in the dispute (EI Act 36(4)). The fact that there are other members of the same grade or class of workers as the claimant who are directly interested has no effect on a claimant's entitlement to benefits.

8.8.1 Definition of the expression directly interested

The act does not define what is meant by this expression. There is no clear dividing line between what is direct and what is indirect, and it is not always easy to distinguish between the two.

Generally an individual is directly interested when the issues in dispute relate directly to their own job. However, this does not mean there is no direct interest in a dispute in some situations where the issues under dispute are not related to the worker's own pay or conditions of work. This situation may occur during a labour dispute where the employer opposes one of the trade unions that represent some of the workers on a particular contentious issue. Workers who are not part of this unit, have nothing to do with and are not part of the dispute, are nevertheless directly interested if the outcome will automatically be applied to them, either as part of a collective agreement, or an established industrial custom or practice. The fact that the employer may have no obligation to follow this practice does not matter, unless it is known that the employer will not follow it (Supreme Court decision 28876; FCA A-552-00, CUB 48786 and CUB 48815). It is a pure question of facts based on the particular situation of the case under study to determine if the industrial custom or the relevant practice is well enough established (FCA A-741-87, CUB 14021).

If an individual is not part of the union and is not involved in the labour dispute activities, but may indirectly benefit from the final resolution, they are not considered directly involved. There is no direct interest if the only issue is the possibility of revising pay scales or working conditions once the dispute involving other workers has been settled, or if an individual would have benefited from a new collective agreement, had they been a member of the union. The same applies if a worker takes advantage of a dispute in order to support their own wage demands. Even if the facts show that a worker did benefit from the solution to the dispute involving another group of employees, it does not change this line of reasoning. When employees who are not involved in the dispute seek an end to the strike so that they may be reinstated, they have only an indirect interest (CUB 15967, CUB 14236).

The end results of a dispute should not be the determining factor as to whether a person was directly interested in a dispute. It is possible that an individual may be directly interested in the dispute, whether, in the end, the negotiations, result in an advantage, or if nothing was gained from it. When it has been determined that the worker has a direct interest, the value of the benefits at issue is not relevant (CUB 48786 and CUB 48815).

The question is not whether a person wins or loses, but if the interest in the dispute is direct. The possibility of gain clearly strengthens the likelihood of direct interest in a given case. Direct interest should also be considered where the claimant shows solidarity with other workers involved in the dispute, or if the claimant objects to the hiring, continued employment, or dismissal of other workers.

It is quite common for a union to succeed in negotiating an agreement, including rather sizeable salary increases for a particular industry. The sole possibility that another union in the same industry demands the same increases when negotiating its own agreement later on, is not sufficient grounds to conclude that the second union had a direct interest in the negotiations undertaken by the first union. The fact that a collective agreement negotiated with an employer is used as a model for other collective agreements negotiated elsewhere in the same field of activities, does not mean there is a direct interest from workers who are not directly governed by this model agreement.

It may be difficult for a person to rebut direct interest while being a member of the union that is negotiating a new collective agreement, and belonging to one of the group of workers represented by this union. Direct interest is present when the terms and conditions of the claimant's employment are included in the negotiations.

Once the interest is only incidental to the dispute, it can only be indirect. Serious consideration must be given to the facts and circumstances, taking into account the nature of the dispute.

Finally, a complete and final severance of the employer-employee relationship may demonstrate that some workers, namely term employees, are no longer directly interested in the dispute (FCA A-594-91, CUB 19771; Digest 8.13.1 and Digest 8.13.2). It should be clearly established that such a severance is permanent by nature, as opposed to a temporary lay-off (FCA A-1198-82, CUB 7454). For example, these employees have no recall rights or promise of a pattern of employment that guarantees they will be rehired once the dispute is settled.

8.8.2 Ratification of collective agreement

More often than not, a dispute between a union and the employer relates to the ratification of a collective agreement. To decide whether a person has direct interest, the question to consider is whether that person's employment will be governed by the agreement in dispute.

If it is, the direct interest is obvious. The person's own working conditions are under negotiation and may be directly changed by the outcome of the dispute. This is the case when the dispute deals with such matters as wages, a retroactive increase, hours of work, overtime, job classification, vacation, seniority, job security, grievance procedure, travel allowances, union security, elimination of positions, fringe benefits or the duration of the collective agreement (FCA A-1198-82, CUB 7454).

A dispute over whether a person's job should be included in the collective agreement gives that person a direct interest. It is not relevant whether an individual supports or opposes the proposals that have been made, or whether the worker is on leave at the time of the dispute.

A direct interest exists even when only some of the claimant's working conditions are governed by the collective agreement. Similarly, to be directly interested, it is not necessary that the person be concerned with the central issues of the dispute. The issues applicable to the claimant may be of secondary importance or may have even been settled. It is sufficient that any working condition related to the employee's own employment be covered under the collective agreement in dispute.

It may happen, in certain exceptional situations, that the workers whose working conditions are not governed by the collective agreement in dispute are nevertheless directly interested (Digest 8.8.1). In one case, a claimant whose job was covered by the collective agreement even though he was a co-owner of the business was held not to be directly interested, given that he acted more as an employer.

When the wages of an employee are partially based on the rate paid to other employees whose collective agreement is in dispute, the interest is indirect. The same is true when the employer has no obligation to maintain relative equality between the employment conditions of workers covered by the collective agreement and those who are not; however, it may happen, in certain exceptional situations, that these groups of workers could both be directly interested (Digest 8.8.1).

A collective agreement is not strictly limited to a single place of employment. It is possible that employees at different places of employment working for the same employer are subject to the terms and conditions of a single collective agreement. This may lead to a single dispute involving employees at these various places of employment. In such circumstances, an employer may decide to permanently stop all operations at one of these premises. This is normally enough to deny those workers at the closed premises, any possibility of returning to work there, and they consequently have no further interest in the dispute (Digest 8.11.4). The same conclusion cannot be reached when the workers retain their seniority rights and could therefore be recalled at other premises involved in the dispute, and which will undoubtedly reopen once the dispute is settled.

8.8.3 Several labour agreements in dispute

The fact that several collective agreements are being negotiated separately generally indicates the possibility of several labour disputes, unless some common denominator binds them into a single more complex dispute. This single dispute may take place at one or several different places of employment (Digest 8.5.4).

Whether one or several disputes are underway, if the worker's employment is governed by one of the collective agreements in dispute, then the interest is direct (CUB 15967, CUB 14236).

Where the stoppage of work is due to a single isolated dispute, that particular dispute must be identified. The claimant's direct interest will be examined solely in relation to the dispute that has caused the stoppage of work leading to the loss of employment (EI Act 36(4)).

8.8.4 Working conditions governed by legislation

Having input into legislation to determine working conditions in some sectors, is particularly common in Quebec. The Collective Agreement Decrees Act allows associations of workers or employers in a given sector with negotiated collective agreements, to ask the Minister of Labour to extend some conditions included in these agreements, to all employees in the designated sector of a specific region, or throughout the province.

Thousands of workers are subject to such decrees, and joint committees composed of union and management representatives of the designated sectors have the responsibility for applying and enforcing these decrees. There are several throughout Quebec, in five major areas of activity; namely: hairdressing, garages, industries, services and garment.

The Quebec construction industry has its own decree, put in place by the government following each round of negotiations (pursuant to the Labour Relations in the Construction Industry Act), which applies the collective agreement reached between the major employer and employee associations, to the industry as a whole. Upon the Minister of Labour's recommendation, the government may also prolong, change or repeal a decree, without the consent of the parties, if it is in the public interest and appears to be the only way to avoid a dispute. It should be added that unionization is mandatory in this industry.

Obviously all workers in such a sector are directly involved in a dispute when working conditions, once negotiated, are to be subject to a general decree (FCA A-511-97, CUB 37886). But the mere possibility of this is not sufficient (FCA A-825-95, CUB 30448).

The direct interest need not be immediate. The working conditions may be affected only from a set date in the future (CUB 55320 and CUB 52514), and even this date could be a contentious issue.

8.8.5 Application or interpretation of a clause

The fact that a collective agreement is in force does not mean there cannot be any dispute in the business or firm. The interpretation or application of a specific clause in the collective agreement may be the source of a dispute. Not all members of the bargaining unit are necessarily directly interested in such a dispute, but only those workers whose employment is affected by the clause.

This principle was applied with respect to contract miners who requested that car pushers be provided to them, to weavers in a dispute about a bonus plan, to railway workers alternating between two jobs, and to several dressmakers who were dissatisfied with the piece rate for a particular operation (CUB 15967, CUB 14236).

If the clause in question concerns all employees governed by the collective agreement, then all of them are directly interested (FCA A-511-97, CUB 37886). This would be the case in disputes about a general increase or decrease of wages, calculation of wages, night shift premium, and, grievance procedures and seniority rights.

8.8.6 Dispute over union affiliation

When a dispute arises over union certification or affiliation, all workers whose employment will be governed by a collective agreement are directly interested. It doesn’t matter that an individual is in favour of or against the recognition of the union. With respect to jurisdictional disputes between unions, members of both unions are directly interested.

8.8.7 Employment or dismissal of certain employees

With respect to disputes connected with the employment or dismissal of certain employees, any person who insists upon or resists the dismissal or reinstatement of such employees is directly interested. Employees whose very employment is in dispute are, of course, directly interested.

Similarly, where the union challenges the hiring of non-union workers, not only the union members, but also the non-union workers whose employment is at issue are directly interested.

8.8.8 Policy of union solidarity

Mere agreement with the principle of union solidarity towards strikers, or mere membership in a union, does not in itself constitute direct interest.

However, during a dispute occurring at another place of employment or involving another employer, a union may encourage solidarity with the striking workers and adopt a resolution to that effect. This situation may deteriorate into what is called a solidarity strike (Digest 8.2.9). Some union members may eventually be expected to make concrete acts of solidarity under the policy, for example by refusing to handle hot materials, or by delaying the signing of their own collective agreement until the others win their demands.

Employees who, because of their duties, may be required to decide whether or not they will act in solidarity, are obviously directly interested. Even the other members, who may not have such an opportunity by reason of the nature of their employment, are still directly interested as union members.

8.8.9 Rebuttal of direct interest

A total break in the employer-employee relationship during a stoppage of work generally shows that the claimant no longer has any interest in the dispute.

A person's direct interest does not end when:

The same is true in a large-scale dispute going well beyond the context of negotiation with a single employer and affecting an entire sector or area of activities, such as the Quebec construction industry. Then, even if the worker's resignation was submitted to the employer during a stoppage of work, that worker is not necessarily leaving the sector of activities affected by the dispute. The interest in the dispute thus continues to be direct (Digest 8.13.1).

8.8.10 Non-union workers

Collective agreements generally govern employment conditions of even some non-union workers. Just because an employee does not belong to the striking union does not necessarily mean the worker is not directly interested. Willingly or not, even a non-union member or a member of another union may be directly interested, if the benefits of the new collective agreement will apply to them as well (CUB 18487 and CUB 16434).

Non-union workers are often temporary, casual, substitute or probationary workers, but the employee status is not a determining factor (CUB 15967 and CUB 14236). It is up to the individual employee to provide proof that they do not have a direct interest.

8.8.11 Duration of direct interest

As already noted, the question of direct interest must be examined in terms of the dispute and the stoppage of work which caused the claimant to lose an employment or to be unable to resume a previous employment (Digest 8.8.3). It is not based on a later dispute that happens after this loss of employment. A worker may also be able to show that all interest in the dispute has been lost and no longer exists (Digest 8.8.9). It is thus clear that a person may be directly interested in a dispute for a certain period of time, yet have no further interest during another period of time.

Clearly, the exempting conditions are not met as long as the claimant has a direct interest. A disentitlement will not apply if it is established that the claimant does not have, or no longer has a direct interest in the dispute, assuming of course that all other exempting conditions are met (Digest 8.6.9 and Digest 8.7.5).

[April 2019]

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