Law Times

Law Times • February 27, 2012 FOCUS PAGE 13 York Region raises eyebrows with contract cancellation But anti-strike provision may work against employers, lawyers suggest BY UYEN VU For Law Times W hen York Region Transit cancelled a contract with the company pro- viding privatized bus service, labour lawyers called it a bully tactic meant to punish its work- ers for going on strike. But other lawyers note York Region Transit was doing noth- ing more than exercising a termination right contained in a common provision. Some would say that such a provision, rather than having a weakening effect on the bargaining power of unions, might even lessen the employer's position instead. The decision by York Region Transit to cancel its contract with First Canada came about 12 weeks into a strike by 560 workers represented by two unions and employed at three bus companies: First Canada, Miller Transit Ltd., and Veolia Transportation Inc. The strike brought 60 per cent of the re- gion's transit service to a halt. Rick Leary, general manager of York Region Transit, told the media at the time that the re- gion was relying on a contract clause that permits it to termin- ate the agreement if a labour dispute has been unresolved for 30 days. It had been about a month since First Canada and the union last met, he added. Neither York Region nor First Canada granted an interview for this story. Ray Doyle, president of the Amalgamated Transit Union Local 1587 that represents workers at First Canada and Miller Transit, says the cancel- lation was an intimidation tac- tic. That's because it came just a day before workers at Veolia were about to vote on the latest contract offers. He says York Region wanted to send a warning to the strik- ing workers, particularly the Veolia staff, because they were the largest bargaining unit of the two. Doyle suspects York Region sacrificed First Can- ada's contract because it was the smallest of the three and was up for renewal in six months. There were also rumours that York Region wasn't going to re- new the contract anyway. "We were not aware [of the provision] because they don't disclose their contracts with the union," says Doyle, adding that the union has filed an un- fair labour practice complaint over the cancellation. It's typical for unions not to be aware of what's in a service contract between the employer and a client, says Mark Wright, a labour and employment law- yer at Sack Goldblatt Mitch- ell LLP. But as someone who has represented unions in the health-care sector and has seen many types of service contracts, he has never heard of a provi- sion allowing clients to cancel an agreement due to a strike. "Have I ever seen a provision in a commercial agreement that allows a contract to be termin- ated in 30 days of a labour dis- ruption? I've never seen that. That's obviously a provision designed to break a strike. At a minimum, it's just unconscion- able for an employer to have an agreement like that with a con- tractor." A client cancelling a con- tract in the middle of a labour disruption is also uncommon in the auto sector, says Lewis Gottheil, counsel with the Can- adian Auto Workers. "We deal with parts manu- facturers all the time vis-a-vis major automobile assemblers. And I can't recall a parts manu- facturer losing a contract be- cause of a strike," says Gottheil. He adds that part of the reason Ball Professional Corporation Excellence in Employment & Labour Law • Counsel in Leading Cases • • Author of Leading Treatise • Wrongful Dismissal Employment Law Human Rights Post Employment Competition Civil Litigation Appellate Advocacy Disability Referrals on behalf of employees and employers respected 82 Scollard Street, Toronto, Canada, M5R 1G2 (416) 921-7997 ext. 225 or srball@82scollard.com Contact Stacey Ball at web: www.staceyball.com www.lawtimesnews.com all_LT_Nov7_11.indd 1 11-11-08 11:44 AM ORDER # 983564 $132 Softcover October 2011 approx. 1180 pages 978-0-7798-3564-5 Annual volumes supplied on standing order subscription ORDER # 983858 $98 Softcover October 2011 approx. 600 pages 978-0-7798-3858-5 Annual volumes supplied on standing order subscription could be the ability of em- ployers in the manufactur- ing sector to deliver the ser- vice despite a labour disrup- tion. "In a lot of commercial contracts, what the em- ployer does is build up an inventory, whether it be iron ore, forest products or paper products. They make ar- rangements. That's why you might not see a lot of this in other sectors in the econ- omy." What York Region is rely- ing on might be a force ma- jeure or a standard 30-day early termination provision, both of which are quite com- mon, says Darryl Hiscocks, a partner at McMillan LLP. "We would generally recommend them for this sort of contract if we were to act for the region, for ex- ample," he says, adding that the force majeure provision would have to specifically con- template the event of a labour disruption in order to boost the chances that the courts would enforce it. However, a force ma- jeure provision that specifically It's typical for unions not to be aware of what's in a service contract between the employer and a client, says Mark Wright. makes reference to a labour dis- pute might be contentious. Companies, Hiscocks notes, "would be wise in that scenario to rely on the plain Jane 30-day provision, not to reference the labour unrest." provision might influence labour relations, The existence of such a says His- cocks, who notes it's the em- ployer rather than the union that would feel the pres- sure to make concessions it otherwise wouldn't have considered. That's because most unions, unlike the con- tracted employer, wouldn't be aware of such a provi- sion. "So it'll have to factor the consequence into nego- tiations with the union and decide whether it wishes to increase wage rates or other terms in dispute in order that it doesn't go to strike and risk losing the contract," says Hiscocks. Doyle, in fact, noticed a difference when he next sat down to negotiate with Mil- ler Transit, one of the two companies that still had a contract with York Region. "I will say that when the employ- ers came back to the table, they actually came back as if they were finally willing to negotiate and finish the strike. So it did make a difference," he says. LT CRITICAL INSIGHT INTO EMPLOYMENT LAW NEW EDITION THE 2011 ANNOTATED ONTARIO EMPLOYMENT STANDARDS ACT T. STEPHEN LAVENDER The 2011 Annotated Ontario Employment Standards Act provides annotations of noteworthy court decisions, interpreting the various provisions of Ontario's Employment Standards Act, 2000. NEW AND REVISED FOR THE 2011 EDITION • Employment Standards Claim Form • Employment Standards Claim Guide • The complete text of the Wage Earner Protection Program Act, S.C. 2005, c. 47, s. 1 and Regulation SOR/2008-222 • All significant Ontario Labour Relations Board and court cases interpreting the Act • Commentary on amendments to the Act introduced by the Open for Business Act, 2010, which came into force on November 19, 2010 NEW EDITION THE 2011 ANNOTATED EMPLOYMENT INSURANCE ACT T. 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