Digest of Benefit Entitlement Principles Chapter 8 - Section 2

8.2.0 Labour dispute

Only once it has been determined that a labour dispute does in fact exist, can the labour dispute provisions be applied. The specific characteristics of a labour dispute will now be discussed.

8.2.1 Labour dispute defined

The act gives the expression “Labour Dispute” a broad definition. It includes any dispute between employers and employees, or between employees themselves, that is related to employment or to the terms of employment of certain individuals, or to the fact that they are not employees (EI Act 2(1)).

This definition is based on three distinct elements:

  1. the existence of a dispute
  2. between parties to the dispute
  3. with respect to specific issues.

8.2.2 Distinctive features of a dispute

The word "dispute" is not specifically defined in the legislation (CUB 21211). Case law has relied on dictionary definitions to the effect that a dispute means a difference of opinion, a controversy based on argumentation or the expression of contrary opinions or assertions (FCA A-186-03, CUB 56057, CUB 37885).

Invariably, these definitions contain two elements that are essential features of a dispute: evidence of insistence by one party and resistance by the other, with respect to specific demands. These two essential features are present when there is a refusal to negotiate, a disruption of negotiations, appointment of a conciliator or conciliation board, when the conciliation process fails, taking a strike vote, or issuance of a lockout notice. The existence of a strike or lockout is even more decisive.

A variety of situations may indicate that a dispute exists: ongoing negotiations, a slowdown, the calling of special meetings, concerted formulation of grievances, refusal to handle prohibited materials or to serve customers, refusal to work, demonstrations, withdrawal of services, mass absenteeism or resignation, picketing, stoppage of work, strategic shutdown of premises, lay-off, suspension or dismissal.

A labour dispute is a question of fact; it is not necessary that there exist a strike or lockout. The essential element is a clear indication that there is insistence by one party and resistance by another. A labour dispute exists, and continues to exist, so long as there is insistence by one party and resistance by the other with respect to employment, non-employment or working conditions (CUB 39840, and CUB 21211). Strikes and lock-outs are pressure tactics available to employees and employers respectively. Alone, they do not constitute a dispute; rather, they are the result of a dispute.

The existence of grievances is not enough to conclude that there is a dispute; clearly, where a collective agreement is in force, numerous grievances may be filed and submitted to arbitration without there being a labour dispute. However, if a difference between the employer and the union leads to either a legal or illegal stoppage of work resulting from a strike, lock-out or even a major lay-off, it would be difficult to conclude that there is no labour dispute.

It cannot be argued that no dispute exists between parties negotiating a collective agreement, simply because such negotiations are proceeding smoothly, there is no request for conciliation, and no withdrawal of labour or picketing. A dispute is a disagreement. The parties negotiating a collective agreement are in disagreement. The purpose of negotiation is precisely to put an end to the disagreement (FCA A-787-81, CUB 6801).

Nor is it realistic to claim there is no dispute where a lockout occurs before employees have had an opportunity to study the employer's proposals. The same conclusion has been reached with respect to the argument that ongoing negotiations did not indicate a dispute (CUB 21211).

Finally, it should be noted that even if the definition of labour dispute is broad, it does not include the refusal of one or more employees to continue working without pay for an employer in serious financial difficulty.

In a situation of economic slowdown, an employer may ask the union to reopen the collective agreement in order to lower some monetary provisions of the current labour contract. Otherwise there may be no other choice than to lay off some of the labour force, or even close the operations (CUB 46110 and CUB 24335). The Union’s refusal of such a request cannot by itself, be considered an element of resistance which is part of a dispute. This could, however, be the starting point of a real dispute between the parties about, for example, the conditions of the labour force reduction, or a wage reduction.

8.2.3 Parties to the dispute

Among other considerations, in order to meet the statutory definition of a labour dispute, one of the parties must be the employee, and the other, either the employer or other employees (EI Act 2(1)).

A dispute may sometimes appear to be between employees and a third party who is not the employer, for example the owner of a place of employment or the government. If the employer has say in the matter or is bound to adopt the position taken by the third party, then the employer is deemed a party (CUB 21211).

A conflict resulting only from relations between employers, such as a general contractor and a subcontractor on a construction site, does not meet the definition of labour dispute. When the employer-employee relationship has been definitively broken and there is no longer any possibility of continuing negotiations, a dispute between an employer and employees who have recently been temporarily laid off constitutes a labour dispute (FCA A-0595.00; CUB45670A; Digest 8.5.4).

The very idea of a labour dispute implies that the actions of employees are coordinated, even if only a very limited number of employees, such as those of a single grade or class of workers, are actually involved. This would not be the case for a disagreement between an employer and a single employee, unless this disagreement draws in other employees who support the position taken by the employee.

The dispute need not be one between the employer of the claimant and a group of employees; it can be any employer, doing business at the same place of employment where the claimant works, and where the stoppage of work attributable to a labour dispute has occurred. Although not involved in the particular dispute, a claimant is still affected by the labour dispute provisions simply because of working in the same place as others who have provoked the work stoppage and the resulting general loss of employment (CUB 20493).

Because of the nature of their work, those engaged in certain administrative functions or professions may be unable to form an accredited association under the relevant labour legislation. However, they may still join professional associations to defend their interests and make demands. They remain employees under the statute, and conflicts between them and their employers are considered labour disputes (CUB 48786). The same is true for employees who own part of the business, so long as the employment is considered insurable and they are not self-employed (CUB 28095).

Employees may be involved in a dispute either directly, or via a representative or trade union. Similarly, an employer may negotiate in person, or by delegating powers to a negotiator or an association. In some cases, there are no discussions at the local level; employers' associations or a union federation may conduct negotiations.

There is no point in questioning the legality of a representative's mandate or of the union's accreditation. It is, however, appropriate to verify whether the representative or the union is actually acting on behalf of the employees, with their expressed or implied consent, and that they have not dissociated themselves from the stand taken on their behalf (S.C.C.19094CUB 8764). The same reasoning applies to the employer's representative or association.

When employees are directly involved in the dispute, it is immaterial whether they are unionized or whether the union plays an active role in the dispute. Nor is it crucial that the employees have the right to strike or that the employer is entitled to declare a lockout. The key consideration is whether a dispute does, in fact, exist between the parties.

Labour legislation provides, among other things, for a "raiding" period, and this may result in disputes between unions about the representation of employees; some may choose to be represented by one union while others take a different position. Disagreements resulting from this situation are labour disputes similar to those among employees about which union should be their bargaining agent (CUB 15967 and CUB 14236).

8.2.4 Matters in dispute

The issue between parties cannot be a simple generality. The act specifies that at least one of the following elements must be involved:

  • the employment or non-employment of one or several individuals, or
  • their terms or conditions of work.

In most cases, disputes arise from negotiations related to the resolution of a collective agreement (CUB 21211). Normally, such disputes concern terms or conditions of employment such as wages, hours of work, job classification, productivity, job security, union security, seniority rights or fringe benefits (CUB 15967 and CUB 14236).

Sometimes labour disputes arise prior to the expiry of a collective agreement or as a reaction to working conditions dictated by legislation. Such disputes are often tied to differences about the application or interpretation of a clause in a collective agreement. Thus, a labour dispute was held to exist where there was a disagreement over the bonus plan, the method of payment, a wage cut, hours of work, the applicable hourly rate, indexing, transportation, identity cards, union security and the grievance procedure, departmental transfers and the handling of prohibited materials (CUB 21211, CUB 20493 and CUB 20494).

The creation of a union local or the subsequent choice of a union as bargaining agent can also be a source of confrontation that may provoke disputes. Here there is little question of the existence of labour disputes, because recognition of a bargaining agent may not only considerably alter existing working conditions, but may itself constitute a new employment condition (CUB 21211).

Dismissal or non-dismissal of fellow workers may lead to opposition that falls within the definition of a labour dispute. Although the word "persons" is in the plural in the act a dispute may still exist when it has been brought about by even a disagreement over the employment or non-employment of a single individual (Digest 8.2.1).

However, a disagreement arising from the refusal of employees to commit an illegal act cannot be considered a labour dispute. Moreover, the refusal of one or many employees to work without pay should not be included in the definition of a labour dispute.

8.2.5 Dispute at place of employment

Application of the labour dispute provisions should not be considered if the dispute does not take place at the claimant's place of employment. It may be very helpful on this point to compare the claimant's place of employment with that of the employees identified as parties to the dispute.

It is quite common for the same dispute to exist at several places at the same time. For example: where employees of different plants have joined together in a common cause, or where employees of the same employer, but in different places of employment, are covered by the same collective agreement. Similarly, there are situations in which negotiations are conducted by an association of employers and a union federation; any dispute at this level also involves the local level (EI Act 36(1); FCA A-800-87, CUB 11295A; and FCA A-209-89, CUB 16202).

It is not necessary that the claimant's employer be a party to the dispute. All that is required is a dispute between certain employees and any employer at the claimant's place of employment (CUB 21211).

Once the dispute involves a claimant's working conditions, it may be said to exist at the claimant's place of employment (FCA A-1198-82, CUB 7454). An outside dispute may also be extended, by sympathetic action (Digest 8.2.9), to the claimant's own place of employment (Digest 8.3.0 to 8.3.7).

8.2.6 Merits of dispute

The Commission has no authority to rule on the merits of the actions of the parties involved in a labour dispute, or even to issue opinions or comments on the legitimacy of demands and offers made by such parties. Any such behaviour would unquestionably violate the vital principle of neutrality imposed on administrators of public funds comprised of premiums paid by the parties to the dispute.

As we know, legislation dealing with labour disputes is not concerned with concepts of equity, fault, merit, justice or sympathy towards either party (FCA A-521-86, CUB 12543, FCA A-226-88, CUB 14715). Nowhere does the act suggest that fault be assigned or that decisions be based on an assessment of merit or demerit points. This responsibility, should it exist, lies with other bodies and is governed by other legislation. (S.C.C.1909488, CUB 8764).

To sum up, the Commission's role is to reach conclusions based on genuine facts in order to rule on a claimant's entitlement to benefits. The Commission will not make value judgments or rule on the legality or merit of existing factors such as the reasonableness of employee demands or of employer resistance, the justification of grievances or dismissals, etc.

8.2.7 Start of dispute

It would be inaccurate to regard the terms "labour dispute", "strike" and "lock-out" as synonyms. Chronologically, a labour dispute usually precedes a strike or lockout, although on rare occasions they may coincide (CUB 21211).

Strikes or lockouts are really only outcomes or indications of a dispute, measures of last resort that parties use to support their positions as the dispute unfolds. Signs of dissatisfaction, differences of opinion, the existence of grievances, and vague feelings of unrest or discontent are not sufficient in themselves to indicate the presence of a labour dispute.

A labour dispute is usually preceded by negotiations of varying length or intensity. The dispute itself is characterized by insistence by one party and resistance by the other (CUB 21211). The fact that there have been no prior negotiations in a specific case does not necessarily mean there is no dispute; one of the parties may very well have refused to negotiate.

A dispute does not necessarily arise as soon as bargaining begins. It usually acquires focus during negotiations, as of the moment the parties adopt differing positions. Although it is a question of fact, in some circumstances the existence of a dispute as defined in the act, as well as the moment at which it starts, are sometimes the subject of disagreement. A labour dispute begins at the moment where insistence and resistance among the parties can be precisely shown (Digest 8.2.2).

8.2.8 Settlement of dispute

A labour dispute exists and continues to exist so long as there is insistence by one party and resistance by the other, with respect to the acceptance or repeal of various provisions dealing with employment, non-employment and working conditions of any individual. This is true, even if this insistence or resistance relates to one or several issues other than those that led to the strike or lock-out (CUB 21211).

The dispute cannot be considered resolved until all parties agree on the terms of settlement (FCA A-38-96, CUB 31276). A tentative agreement between the parties to a dispute does not necessarily bring the labour dispute to an end; such an agreement, by definition, has no effect until it is ratified and then made definitive (FCA A-512-88, CUB 12992A and FCA A-814-91, CUB 20138).

Thus, agreement by only one of the parties is insufficient. It is not relevant whether the terms of a final agreement signed by the parties are the same as those that were previously accepted by one of the parties. Even after agreement in principle is reached, new issues may arise which prolong the dispute or lead to another one. Examples include the refusal of employees to return to work immediately following the settlement of a dispute, a disagreement about a return-to-work protocol, or the controversial application of various clauses that have already been the subject of an agreement in principle.

Presentation of an offer by one of the parties or the clear willingness of employees to return to their jobs, even under the former conditions, does not necessarily bring an end to the dispute. Issuance of an ultimatum by one of the parties clearly indicates that the dispute is not settled, even if the parties are prepared to work in the meantime.

8.2.9 Sympathetic dispute

Sometimes employees or employers who are not parties to a dispute may still take sides with one or other of the parties involved. For a sympathetic dispute to exist mere expressions of solidarity are not enough; there must be real acts of solidarity (CUB 21211).

Employee tactics have included sympathy strikes, or wildcat walkouts; employers may sometimes show their solidarity by lockouts or plant shutdowns. It is also common to refuse to handle "hot" materials, i.e., those affected by an outside dispute. All of these tactics constitute labour disputes in and of themselves (CUB 20493).

At times, strikers find it advantageous to form picket lines at a place of employment where there is no labour dispute (Digest 8.2.2Digest 8.2.5). In other cases, workers employed at a distinct place of employment may be faced with a picket line set up at a common entrance. Thus, employee sympathy may also be expressed by respecting a picket line instead of going to work.

Failure to cross a picket line amounts to a form of participation in the dispute; a dispute that has begun elsewhere is deemed to have spread to the claimant's place of employment. Evidence of non-participation may serve to disprove this extension of the dispute (Digest 8.6.6 and Digest 8.6.7). Taking legal means to cross the picket line cannot by itself, of course, constitute a labour dispute.

In cases where an outside dispute has spread from one location to another, the claimant's own terms or conditions of employment need not be issues in dispute. The definition of a labour dispute embraces terms or conditions of employment of "any persons" (EI Act 2(1)), and this includes persons employed elsewhere than at the claimant's place of employment.

[April 2019]

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