In United Food and Commercial Workers Canada, Local 175, Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671 (“Quality Meat Packers”), the Ontario Court of Appeal considered (1) the Ontario Labour Relations Board’s (“OLRB”) jurisdiction to decide claims related to the wrongful dismissal of unionized employees; and (2) whether, in proposed representative proceedings under Rules 12.08 and 10.01, representation orders must be obtained during the limitation periods for the individuals’ claims.
Background
The dispute in Quality Meat Packers concerned the termination, without notice or severance, of a bankrupt meat processing company’s 800 employees. Sam Caetano brought an action under Rule 12.08 as a proposed representative of the 700 unionized employees (“Caetano action”), while Debbie Abreu and Alex Abreu brought a second action under Rule 10.01 as proposed representatives of the roughly 100 non-unionized employees (“Abreu action”). Rule 12.08 permits a plaintiff to bring a representative proceeding on behalf of members of an unincorporated association or trade union as an alternative to a class action under the Class Proceedings Act, 1992 (“CPA”), whereas Rule 10.01 permits the court, in certain cases, to appoint one or more persons to represent an unascertained class of persons.
Jurisdiction & Limitations Motions
The defendants in the Caetano action moved under Rule 21.01(3)(a) to request that the action be stayed on the basis that the OLRB had exclusive jurisdiction to determine the unionized employees’ claims for wrongful dismissal and unpaid severance. The Court of Appeal upheld the motion judge’s order staying the action for lack of jurisdiction. Relying on Weber v. Ontario Hydro, [1995] 2 SCR 929, The Court held that the dispute falls within the exclusive jurisdiction of the labour arbitrator if “the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement”. The Court found that Caetano’s claims for wrongful dismissal and unpaid severance owed to unionized employees were directly tied to the employees’ employment and that the collective agreement comprehensively governed the terms and conditions of that employment.
The defendants in the Caetano and Abreu actions also brought motions under Rules 21.01(a) and (b) on the basis that the plaintiffs were time-barred from acting as representatives since the necessary representation orders were not obtained before the limitation periods expired.
The Court of Appeal agreed with the motion judge that the representative aspect of the Caetano action was time-barred. The Court found that Rule 12.08 requires a person to receive authorization before bringing a proceeding on behalf of or for the benefit of all members of a trade union or unincorporated association. Reading Rule 12.08 harmoniously with s. 4 of the Limitations Act, the Court reasoned that the limitation period does not stop running for the claims of the proposed class until a proceeding has been “commenced”, which does not happen unless and until the court authorizes a representation order under Rule 12.08.
Regarding the limitations motion for the Abreu action, the Court of Appeal disagreed with the motion judge and found that the claims of the proposed class would be defeated by the two-year limitation period. The Court reaffirmed that “parties cannot circumvent the Limitations Act by amending their pleadings to add additional claims”. The Court reasoned that since the non-union employees referred to in the Abreu statement of claim are not parties to the action until a representation order is obtained, the limitation period in respect of such claims continued to run.
Of note, the Court of Appeal applied the Supreme Court of Canada’s academic consideration of the nexus between s. 28 of the CPA and ss. 138.8(1) and 138.14 of the Securities Act in Canadian Imperial Bank of Commerce v. Green, [2015] 3 SCR 801 (“Green”) to find that representation orders must be obtained before the limitation period stops running for the claims of proposed class members under Rules 12.08 and 10.01. In Green, the majority of the Supreme Court found that s. 28 of the CPA suspends the limitation period for statutory secondary market liability claims only after leave to proceed with those causes of action is granted under s. 138.8(1) of the Securities Act. Applying Karakatsanis J.’s reasoning in Green at para 175, in the absence of a tolling provision for representative actions under Rules 12.08 and 10.01, the limitation periods for proposed class members continues to run until the court authorizes the proposed representative proceeding.
The Quality Meat Packers decision provides helpful guidance to employers about the proper jurisdiction to defend wrongful dismissal disputes from unionized employees. The decision also provides a word of caution to individuals that might wish to commence a representative proceeding through Rules 12.08 or 10.01. Despite their potential use as an alternative to a class proceeding, proposed representative proceedings under Rules 12.08 and 10.01 are subject to more stringent limitation period requirements than proposed class proceedings under the CPA.
Some of the lawyers at Gilbertson Davis LLP have experience with employment disputes, representation before tribunals, and representative proceedings, including class action defence. Please contact us for an initial consultation.
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