November 27, 2009 / 2:59 PM / in 8 years

Canada court backs Wal-Mart in union dispute

OTTAWA (Reuters) - Canada’s top court on Friday backed the right of Wal-Mart Stores Inc. to close a store where workers sought to unionize, but said closures like this might require the retail giant to compensate workers.

The Supreme Court ruled 6-3 in favor of Wal-Mart, which opened a store in Jonquiere, Quebec, in 2001 and closed it four years later after a union was certified to negotiate a collective agreement and Quebec’s labor ministry said negotiations should go to arbitration.

Justice Ian Binnie wrote for the majority that the court had “endorsed the view that no legislation obliges an employer to remain in business.”

He said this did not mean that shutting down a store automatically immunizes the employer from financial consequences, although the court did not order Wal-Mart to make any compensation in this case.

Wal-Mart insisted that it did not close its store because it was unionized, pointing to the fact that it reached a collective agreement early this year with the same union in St-Hyacinthe, Quebec.

“We took great efforts to reach a collective agreement in Jonquiere, and those efforts are well-documented,” spokesman Andrew Pelletier said. He said the store was closed because the store was losing money and then the union demanded Wal-Mart hire 30 new staff on top of the 200 it had.

The union disagreed.

“The workers at the Jonquiere store know in their hearts why Wal-Mart shut their store. So do most Canadians. So does Wal-Mart,” said UFCW Canada President Wayne Hanley.

“We still believe the Jonquiere Walmart was closed because workers exercised their constitutional rights.”

Justice Rosalie Abella, writing for the minority, delivered a blistering rebuke of the closure.

“The closing is not only punitive for those employees who attempt to unionize, but also sends a general message that unionization is an endeavor that carries the risk of the loss of jobs for all employees in that workplace,” she opined.

The decision has no automatic application across Canada since the court said provincial labor codes differ, but it was certain to be eyed carefully by unions and management throughout North America.

The case is Gaetan Plourde v. Wal-Mart Canada Corporation et al, Supreme Court of Canada, No. 32342. A companion case is Johanne Desbiens, Ingrid Ratte and Claudine Beaumont v. Wal-Mart Canada Corporation et al, Supreme Court of Canada, No. 32527.

Editing by Janet Guttsman

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