Wal-Mart has done their employees wrong

Wal-Mart has over 11,000 stores in 27 countries. They employ around 2.2 million associates (employees) worldwide. That huge multi-store company’s stores are great for customers but it is a terrible company to work for unless you are in upper management.

The wages for the associates is just a bit above minimum wage.  They earn approximately $8.80 US an hour. This means that if they work 40 hours a week, they earn approximately $22,880 a year gross. A department manager earns approximately #$11.16 an hour which comes to 23,128 a year gross. Wal-Mart CEO Mike Duke has defended paying poverty wages to company employees, claiming that associate compensation is "competitive." Who is it competitive to? As President and CEO at Wal-mart stores Inc, Michael T. Duke earned as much as $4,703,476 in total compensation in one year. Of this total,  $1,366,593  was received as a salary, $2,846,793 was received as a bonus, and $490,090 came from other types of compensation. He was paid 1,034 times more than the average Wal-Mart worker. This means that the average worker would have to work 0ver 700 years to earn the money that their supreme boss makes. 

                             

A lot has been heard of and read about the dissatisfaction of Walmart employees when it comes to poor salaries, lack of employee benefits, poor working conditions, and inadequate health care provisions. Apparently, all the health insurance packages provided are very expensive for the employees to choose from. The company has also been accused of racial and gender discrimination.

This article is going to be about a Wal-Mart store in the province of Quebec in Canada in which the owners (Wall-Mart Canada Corp) decided to close down the store, leaving the employees without a job because the owners didn’t want the store to be unionized.

The employees through the United Food and Commercial Workers, Local 503 decided to spank the owners and spank them they did and harder that the owners anticipated. The union took Wal-Mart to court. The case ended up in the Supreme Court of Canada. The court’s decision came down in June, 2014.  And now I will give you the background of this event.

Wal‑Mart opened its Jonquière, Quebec establishment in 2001.  In August 2004, the Commission des relations du travail certified United Food and Commercial Workers, Local 503 (“the Union”) as the bargaining agent for the employees working at the establishment.  In the months that followed, Wal‑Mart and the Union met several times to negotiate the terms of a first collective agreement.  These meetings proved to be unsuccessful, and on February 2, 2005, the Union applied to the Minister of Labour to appoint an arbitrator to settle the dispute that remained between the parties.  One week later, Wal‑Mart informed the Minister of Employment and Social Solidarity that it intended to cancel the contracts of employment of all the approximately 200 employees who worked in its Jonquière establishment “for business reasons” on May 6 of that year.  After breaking the news to its employees, the business actually closed its doors earlier than planned, on April 29, 2005.  Believing that the decision was based on anti‑union considerations, the employees and their union brought a series of proceedings against their former employer.  In most of these proceedings, the result favoured Wal‑Mart.

On March 23, 2005, the Union submitted the grievance at issue in their appeal.  It alleged that the dismissal of the employees constituted a change in their conditions of employment that violated section  59 of the Labour Code in Quebec which provides that, from the filing of a petition for certification, an employer may not change its employees’ conditions of employment while the collective agreement is being negotiated without the written consent of the certified association.  Since Wal‑Mart had not proved that its decision to dismiss was made in the ordinary course of its business, the arbitrator concluded that the cancellation of the contracts of employment of all the employees constituted a unilateral change that was prohibited by section 59.  The award was affirmed by the Superior Court, but overturned by the Court of Appeal.  The judges of the Court of Appeal, although divided on how broadly the section should be construed, agreed that the section did not apply in the circumstances of the case before them. Hence, it ended up before the Supreme Court of Canada.

  

The true purpose of s. 59 of the code is to foster the exercise of the right of association.  Its purpose in circumscribing the employer’s powers is not merely to strike a balance or maintain the status quo during the negotiation of a collective agreement, but is more precisely to facilitate certification and ensure that the parties bargain in good faith.  The “freeze” on conditions of employment codified by s. 59 limits any influence the employer might have on the association‑forming process, eases the concerns of employees who actively exercise their rights, and facilitates the development of what will eventually become the labour relations framework for the business.

Since s. 59 is not directly concerned with the punishment of anti‑union conduct, the prohibition for which it provides will apply regardless of whether it is proven that the employer’s decision was motivated by anti‑union animus.  It is the union representing the employees that must prove that a unilateral change in working conditions has been made for the purposes of s. 59.  To discharge this burden, the union must show:  (1) that a condition of employment existed on the day the petition for certification was filed or a previous collective agreement expired; (2) that the condition was changed without its consent; and (3) that the change was made during the prohibition period.  The “condition of employment” concept is a flexible one that encompasses anything having to do with the employment relationship on either an individual or a collective level.  The right to maintenance of the employment relationship is the basis for a condition of employment for employees, although that condition is nevertheless subject to the employer’s exercise of its management power. 

Unlike s. 17 of the Code, s. 59 does not create a presumption of change or automatically reverse the burden of proof.  The union must adduce sufficient evidence to prove that the alleged change is inconsistent with the employer’s normal management practices.  However, nothing prevents the arbitrator hearing the complaint from drawing presumptions of fact from the whole of the evidence presented before him or her in accordance with the general rules of the law of civil evidence as normally applied.  As a result, if the union submits evidence from which the arbitrator can infer that a specific change does not seem to be consistent with the employer’s normal management practices, a failure by the employer to adduce evidence to the contrary is likely to have an adverse effect on its case.  A change can be found to be consistent with the employer’s “normal management policy” if (1) it is consistent with the employer’s past management practices or, failing that, (2) it is consistent with the decision that a reasonable employer would have made in the same circumstances.  The arbitrator must be satisfied that those circumstances exist and that they are genuine.

   

For example, if the sales of goods in a store is so low; the business is failing and heading towards bankruptcy, then even though a union is negotiating with the business, the owners can still close down the business. However, in this particular case, the business was not undergoing a business failure while the union was negotiating with the Wal-Mart store.

                               

An arbitrator, who is required by law to decide any complaint based on s. 59 of the Code,   has considerable discretion in doing so that the ordinary courts must respect.  Deference is in order, and judicial review will be available only if the award was unreasonable.  In this case, the arbitrator’s award is clearly one of the possible, acceptable outcomes which are defensible in respect of the facts and law.

 

The arbitrator was right to decide that invoking the closure of the Jonquière establishment did not on its own suffice to justify the change for the purposes of s. 59.  He did not place an inappropriate burden of proof on the employer.  His statement that Wal‑Mart had not shown the closure to have been made in the ordinary course of the company’s business was grounded in his view that the Union had already presented sufficient evidence to satisfy him that the change was not consistent with the employer’s past management practices or with those of a reasonable employer in the same circumstances.

 

It was in fact reasonable to find that a reasonable employer would not close an establishment that “was performing very well” and whose “objectives were being met” to such an extent that bonuses  were being promised.  These inferences of fact, which Wal‑Mart did not challenge, led the arbitrator to hold that the cancellation of the contracts of employment and, therefore, the change in the conditions of employment of all the establishment’s employees violated s. 59.  The majority of the court came to the conclusion that the decision of the Arbitrator was reasonable in light of the facts and the law.

                                                                  

However, two of the jurists dissented. Their conclusion was that Section 59 cannot apply to Wal‑Mart’s genuine and definitive closure of its Jonquière store because it would require Wal‑Mart to justify its decision to close the store, which is inconsistent with the employer’s right, under Quebec law, to close its business for any reason.  The sole requirement is that the business closure be genuine and definitive. Once an employer exercises its right to close up shop, then s. 59 of the Code cannot impose an additional ex post facto (after the fact) justification requirement simply because this closure gives rise to a secondary effect—the collective termination of employees.  A store closure, by definition, does not conform to previous business practices.  If s. 59 were to apply to a situation of store closure, the result would be that businesses could never prove a store closure was business as usual.  It would also mean that the employer would be prevented from exercising its right to close its business during the s. 59 freeze period and yet it could, immediately upon the conclusion of a collective agreement, exercise its right of lock out or strike, or the issuance of an arbitration award, close its business for any reason. Legislation cannot be interpreted to give rise to such absurd results.  To apply s. 59 to business closure situations would also undermine the Code’s assignment of the burden of proof and thereby disrupt the Code’s internal coherence.  Under ss. 12 to 14, the claimant must prove that anti‑union animus (hostility) motivated the store closure. Contrarily, under s. 59, the employer would bear the burden of justifying the store closure under the “business as usual” rule. 

       

In my respectful opinion, I don’t think the employees should have to prove that the owners of Wal-Mart were so hostile towards their employees for choosing to be unionized that they decided to close the store. I think any reasonable person would come to the conclusion that was the reason why the store was closed.

Wal‑Mart has already compensated employees of the Jonquière store for the loss of their jobs by paying them severance pay in an amount equal to two weeks of work per year of service. I hardly think that qualifies as a reward for working faithfully for Wal-Mart. It is a pretty hollow statement for Wal-Mart to say that they acted fairly. The reason is obvious. If the city of Jonquière, Quebec was as big as Montreal, Canada’s third largest city, then employment opportunities would be abundant but Jonquière has only 55,000 people living there and for this reason, not all of the 190 former employees could find work similar to that which they had been doing when working for Wal-Mart.

The majority of the five members of the court said that in the case before them, there is no support for a finding that the Arbitrator’s award was unreasonable.  This means that the award to the employees must be increased. It also means that Wal-Mart will be fined. The amounts have yet to be determined.

If an employer wishes to avoid having an arbitrator accept the complaint that is filed against by its employees, it must show that the change in conditions of employment is not one prohibited because of hostility towards its employees because the employees have chosen to be unionized.  It must prove that its decision was consistent with its normal management and business practices or, in other words; that it would have proceeded at closing down the store or company even if there had been no petition for unionized certification.

  

Given that going out of business either in part or completely is not something that occurs frequently in any company therefore the arbitrator often has to ask whether a reasonable employer would, in the same circumstances, have closed its store or company.

The city of Jonquière is large enough for a store like Wal-Mart to be financially viable. I and my wife live in Malton, Ontario which has a population of only 39,000 and yet, we have a large Wal-Mart in our town. They has so much faith in our town, they actually built the large building  that houses their store.

The executives of Wal-Mart who decided to close their store in Jonquière made a terrible blunder. I am not talking about the fine and extra remuneration they have to pay to their former employees. I am thinking about the loss of business and goodwill that will eventually cost that company millions upon millions of dollars because they went into a snit.

 

Closing a viable store to get even with its employees is so dumb; it makes me wonder if the executives that made that decision are losing more brain cells than normally are lost as we grow older. They may have smiled gleefully when they decided to punish their employees but if they have any cells left in their brains, surely they are feeling the pain also. It means that they have to move from their homes in that city and for this reason; they will have also lost friends in that city. And further, where will they get another job as executives after being that stupid?  Further, Wal-Mart can give up any hope of ever re-establishing itself in Jonquière. The people in that city will show Wal-Mart the same contempt as they do to rats in a sewer.