Saskatchewan Labour Relations Board: Employer Obligations When Implementing Organizational or Technological Change

Each year MLT Aikins provides a Labour Update on key decisions from Courts, the Labour Relations Board and arbitrators. This year, the Saskatchewan Labour Update is being held as a series of six separate webinars. This blog previews one of the many cases that will be discussed during the Saskatchewan Labour Relations Board Update webinar.

Unionized employers who implement technological or organizational changes which are likely to affect the conditions or tenure of employment of a significant number of their employees have obligations to provide the union with notice of those changes.

Employers may also have to engage in collective bargaining with the union regarding a workplace adjustment plan. However, in Saskatchewan Joint Board, Retail, Wholesale and Department Store Union, Local 568 v Signal Industries (1998) Saskatchewan Ltd., 2019 CanLII 98498 the Labour Relations Board has clearly indicated that collective bargaining does not mean the employer must begin negotiations before deciding to implement a change.

Background

In Signal Industries, an employer decided that it would close its sign manufacturing plant in Regina. The employer intended to service its Regina area customers by producing signs at its plant in Edmonton instead. This business decision was motivated by the fact that the employer’s Edmonton plant was more efficient.

The employer notified the union representing its Regina employees that it had decided to close the Regina plant more than 100 days prior to the closure taking effect. The union claimed that this was a technological or organizational change within the meaning of The Saskatchewan Employment Act (the “SEA”), and provided a notice to bargain a workplace adjustment plan. The employer did not agree that the closure was a technological or organizational change but agreed to participate in bargaining. Bargaining proved unsuccessful and no workplace adjustment plan was negotiated. The employer closed the Regina plant 86 days after receiving the notice to bargain.

The union then filed an unfair labour practice application claiming that the employer had breached the SEA by closing the plant at a time prohibited by the technological and organizational change provisions of the SEA.

When is a Closure a Technological or Organizational Change?

The first issue considered by the Labour Relations Board (the “Board”) was whether the technological and organizational change provisions applied in these circumstances. The Board noted that an employer has a right to close its business entirely and abandon the market. However, the Board drew a distinction between an employer ceasing to serve a market completely, and an employer attempting to serve the market by moving work to another location.

If the employer had simply decided to abandon the Regina area market and focus on its business from regions which the Regina facility had not served, the employer would not have been obligated to provide notice to the union and to bargain with the union prior to closing the Regina facility. However, in this case the employer actively attempted to retain the business formerly carried out at its Regina location. Instead of abandoning the market, the market would be served by work being performed in Edmonton. The Board concluded that when an employer attempts to transfer work, even to a location outside Saskatchewan, it may be a technological and organizational change if (as in this case) it effects the tenure of employment of a significant number of employees.

Providing Notice After Making a Decision to Implement a Change

In Signal Industries, the union argued that the employer had breached the SEA because it only provided notice to the union of the technological or organizational change after the employer had already decided to implement the closure. The union argued that the obligation to bargain a workplace adjustment plan included an obligation to reconsider its decision.

The Board rejected the union’s argument and concluded that the fact the employer had decided to close the Regina facility before informing the union, and the employer’s unwillingness to reconsider the closure decision did not mean it had bargained in bad faith. The Board concluded that the employer was entitled to make the decision to close its Regina facility for business reasons and was not required to concede the possibility of remaining open. While the SEA indicates that a workplace adjustment plan may include consideration of alternatives to the change, this is not a mandatory requirement that must be part of all workplace adjustment plans. The employer was not required to concede the possibility that it would continue to operate its Regina plant as part of negotiations.

Ensuring Compliance with Statutory Notice Requirements

While the employer in Signal Industries was found to have bargained in good faith, the Board did find that the employer violated the SEA in one respect. When an employer intends to implement a technological or organizational change affecting a significant number of employees, it must initially provide notice to the union at least 90 days before the change has been implemented. The union then has 30 days to provide a notice to commence collective bargaining. The employer had complied with these obligations.

However, once a notice to bargain a workplace adjustment plan is provided to the employer by the union, the employer must comply with additional requirement prior to implementing the change. The employer must not implement the technological or organizational change until the earlier of three events have occurred:

1) the employer and union successfully negotiate a workplace adjustment plan;

2) negotiations fail to develop a workplace adjustment plan and the Minister of Labour Relations and Workplace Safety is provided notice of that fact; or

3) 90 days have elapsed from the date the union gave a notice to bargain. The effect of these obligations is that an employer’s implementation of a technological or organizational change may be delayed.

In Signal Industries, the employer failed to comply fully with the second set of obligations. No workplace adjustment plan had been agreed to. Although negotiations had failed and the employer could have informed the minister of that fact, no notice had actually been provided to the Minister. The employer closed the Regina plant on the originally scheduled day. The closure took effect 86 days after notice to bargain had been provided. Therefore, the Board concluded the employer had committed an unfair labour practice.

Implications

Unionized employers who are considering implementing a technological or organizational change affecting the terms and conditions of employment of a significant number of employees should be aware of their detailed obligations pursuant to the SEA. An employer implementing such a change should take care to comply with the notice requirements of the SEA and should also engage in good faith bargaining with the union if the union provides a notice to bargain.

While employers may be required to engage in good faith collective bargaining if they intend to implement a technological or organizational change, this does not mean that the union can prevent the change from occurring. Complying with the SEA may result in the implementation of a change being delayed. However, there is no obligation to consult with the union prior to deciding to make a change. Employers should discuss any position put forward by the union regarding alternatives to a change, but employers do not need to fundamentally reconsider their plans as a result of the concerns raised by the union.

As the SEA imposes detailed obligations on employers relating to technological and organizational changes and there is a significant risk of conflict with the union when implementing such changes, employers should carefully consider their obligations. It is recommended that employers seek specific legal advice prior to taking any definitive steps to announce or implement such changes.

Join us at the 2020 Saskatchewan Labour Update Webinar Series for a more in-depth analysis of this case and other notable Saskatchewan Labour Relations Board decisions.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.Register Now | SK Labour Update 2020