What is an employer’s establishment? Even the Quebec Superior Court disagrees

The notion of establishment in employment and labour law is a key concept as it regularly provides the framework for the application of certain standards or obligations. For instance, the notion of establishment will be relevant for determining whether organizations have triggered the application of collective dismissal provisions, whether employees performing the same tasks are required to receive the same salary and benefits and whether employees can benefit from worker’s compensation coverage, to name a few.

The increased ability for employees to work remotely has, however, muddled the waters of what constitutes an employer’s establishment. With employment and labour laws dependent, in many respects, on being able to locate or identify an employer’s establishment, the ability to regularly work from places where the employer has little or no control has given rise to serious and practical difficulties in interpreting employment and labour laws which were conceived through the framework of the traditional establishment.

These practical difficulties were illustrated in a recent series of cases before Quebec’s labour tribunal, the Tribunal Administratif du Travail (“TAT”). In both cases, namely in Unifor, section locale 177 c. Groupe CRH Canada inc. (“Groupe CRH”) and in Syndicat des travailleuses et travailleurs de la Coop Lanaudière CSN c. Coop Novago (“Novago”), the TAT was called upon to determine whether the hiring of a worker to perform work remotely for the employer contravened the provision of the Quebec Labour Code (c-27, section 109.1‎) which essentially prohibits utilizing, in the establishment where the strike or lock-out has been declared, the services of an employee or contractor to perform duties which are normally performed by an employee who is currently on strike or locked out. In these decisions, the TAT found that the notion of establishment needed to be modernized to respond to the widespread teleworking reality, as failing to do so would undermine the spirit of anti-scab provisions and the fundamental right of association. In order to address the notion of “establishment” entrenched in the relevant provision of the Labour Code, the TAT recognized the existence of the “deployed establishment”, concluding that the notion of “establishment” needed to be expanded to include not only the physical establishment of the employer, but also the places from which workers perform work at a distance.

Both of these decisions were subsequently judicially reviewed by the Quebec Superior Court. This past April, it seemed as though the TAT’s proposition for how to deal with the notion of establishment in the new reality of remote work had been shot down. In fact, on judicial review of the Groupe CRH case, the Court found that the adoption of the notion of “deployed establishment” was unreasonable in the circumstances, namely because it did not follow previous teachings from the Quebec Court of Appeal on the interpretation to be given to the notion of establishment and created serious privacy concerns given that the employer’s establishment was now acknowledged as being expanded into the private residences of employees.

In a surprising turn of events, within days of the Groupe CRH decision being rendered, the Quebec Superior Court arrived at a different conclusion on judicial review of the Novago decision and upheld the notion of the deployed establishment. The Court found that the TAT was justified in finding that the new reality of remote working required an evolved interpretation of the notion of establishment so as not to undermine the spirit of the law and the anti-scab provisions it contains.

There are now two recent judgments in Quebec emanating from the Superior Court which stand by differing views of what constitutes an establishment for the purposes of employment and labour legislation. While the Groupe CRH and Novago decisions were both focused on the anti-scab provisions of the Labour Code, there is no doubt that the interpretation of establishment which is ultimately adopted and followed as a result of these decisions will heavily influence the application of the notion of establishment within employment and labour law generally, and perhaps even in broader commercial and regulatory matters where the notion of establishment remains relevant.

The Quebec Court of Appeal is scheduled to hear a leave to appeal application on the Groupe CRH decision this July at which time Quebec’s highest court will have to decide whether it wishes to revisit the notion of establishment and resolve the jurisprudential contradiction which currently exists.

In the meantime, employers would be prudent to interpret the notion of establishment in a way which accounts for the realities of today’s working relationships. While the law has clearly not reached a consensus on the meaning of establishment, it is unlikely that Quebec courts will ultimately opt for a restrictive approach. Given the importance of the establishment for securing certain employee rights and establishing employer obligations, notably with respect to ensuring health and safety and for providing employees with adequate notice upon termination of employment, Quebec courts will likely not want to impede upon the scope of these protections merely because work is no longer performed within the physical walls of an employer’s establishment.