The Supreme Court of Canada has today released its much anticipated decision in the case of Bisaillon v. Concordia University, in which it re-establishes the purely procedural character of class actions, and refuses to permit their use by unions as a tactical mechanism to pressure an employer to provide employment benefits that could not be obtained through the collective bargaining process, and thereby avoid the exclusive jurisdiction of a labour arbitrator.

A defined benefit pension plan was established for the employees of Concordia University dating back to 1977, in which all employees of the University were entitled to participate by making contributions.  Since that time, Concordia's labour relations with the vast majority of its employees came to be governed by at least nine (9) collective agreements with as many different unions.  At various times the petitioner, Richard Bisaillon, was a member of at least two of these unions and president of one of them.  Over the years, several of the unions negotiated improvements to their members' pension benefits, and these improvements were reflected in amendments to the pension plan and the respective collective agreements of individual unions concerned.  Several other unions, including the one of which Bisaillon was a member, failed to obtain similar improvements to their members' pension benefits through the collective bargaining process, and in 1997, with the explicit and active support of several of the Concordia unions, Bisaillon launched a class action on behalf of all employees of the University, unionized and non-unionized, alleging that the amendments to the pension plan obtained by some of the unions were unauthorized and illegal and claiming repayment to the pension plan of amounts paid pursuant to these amendments.  Bisaillon also alleged that the University had taken illegal contribution holidays and claimed that these amounts as well be reimbursed to the pension plan.  In total, the amounts allegedly owed by the University to the pension plan amounted to well over one hundred million dollars. 

A motion to dismiss the class action was brought in Quebec Superior Court, which dismissed the action on the basis that the Court did not have jurisdiction over the claim, since it was in its essence a labour matter subject to the exclusive jurisdiction of a labour arbitrator.  The Superior Court also found that the class action had been launched as part of a concerted strategy on the part of eight of Concordia's unions to obtain through the class action lawsuit what they had failed to obtain through the collective bargaining process.  The Quebec Court of Appeal overturned this judgment, holding that the pension plan had "nothing to do with the collective agreement", and even assuming the pension plan were part of the collective agreement(s), a single arbitrator under one collective agreement would not have jurisdiction over all Concordia employees.  Therefore, the Court of Appeal held that the Superior Court had residual jurisdiction over the claim.
 
In a 4-3 decision released today, the Supreme Court of Canada overturned the judgment of the Quebec Court of Appeal and restored the judgment of the Superior Court.  The majority of the Supreme Court, comprised of LeBel J. (Deschamps, Abella and Charron JJ. concurring) characterized the question before them, in its simplest terms as: "can the class action be used to bypass the representation and grievance resolution mechanisms established under Quebec labour law?"  The majority held that the pension plan was incorporated into the various collective agreements, had been the subject of collective bargaining, and was therefore subject to the exclusive jurisdiction of the labour arbitrator.  Significantly, LeBel J. took pains to emphasize that class actions were a mere procedural vehicle that could not be used to trump the jurisdiction of the labour arbitrator, and held that the unions' "tactical decision to yield their power of representation to Mr. Bisaillon disregarded the legal mandates the Labour Code attributes to them as certified unions and the obligations it imposes on them in respect of the employees and the employer."  

Davies, with a team made up of Guy Du Pont, Nick Rodrigo, and Jean-Philippe Groleau, successfully represented Concordia University in these proceedings before the Supreme Court of Canada.  Davies is involved in some of the largest and most complex class action litigation matters in the country and this victory cements Davies' pre-eminent reputation in this field.
 

Please do not hesitate to call Guy Du Pont (514-841-6406), Nick Rodrigo (514-841-6548) or Jean-Philippe Groleau (514-841-6430) in Montréal or Ed Babin (416-863-5503) in Toronto if you would like further information on this case or to obtain a complete copy of the decision.

Davies Ward Phillips & Vineberg LLP, with over 235 lawyers, practises nationally and internationally from offices in Toronto, Montréal, New York and an affiliate in Paris and is consistently at the heart of the largest and most complex commercial and financial matters on behalf of its North American and overseas clients.

The information and comments herein are for the general information of the reader and are not intended as advice or opinions to be relied upon in relation to any particular circumstance. For particular applications of the law to specific situations, the reader should seek professional advice.