Archived – Digest of Benefit Entitlement Principles Chapter 8 - Section 11

8.11.0 Termination of the stoppage of work

The termination of a stoppage of work is not an isolated event which, by chance, suddenly occurs. Rather, this event is collectively fixed and in fact brings to an end the stoppage of work that lasted just until then ^{Footnote 1} .

While the Commission has the authority to make regulations prescribing the circumstances that constitute the start or the end of a stoppage of work ^{Footnote 2} , only the regulations that deal with the termination of the stoppage of work were considered necessary. Here is an extract ^{Footnote 3} :

a stoppage of work at a factory, workshop or other premises is terminated when

1. the work-force at the factory, workshop or other premises attains at least 85 per cent of its normal level; and
2. the level of activity in respect of the production of goods or services at the factory, workshop or other premises attains at least 85 percent of its normal level.

The termination of the stoppage of work is a function of the two indicators, that is, the number of the work force and the activities related to the production of goods and services. In this context it is logical that both of these indicators are also used to determine whether there is a stoppage of work ^{Footnote 4} .

This 85 percent minimum is a rigid demarcation line between the continuing of the stoppage of work and the end of the stoppage, which occurs when this minimum is attained. The 85 percent minimum must be obtained in both indicators, without such it cannot be concluded that the stoppage of work terminated. In other words if we take the example of the work force equaling or surpassing the normal level by 85 percent without it being the same in the activities related to the production of goods and services, the stoppage of work has not ceased to exist ^{Footnote 5} .

The activities related to the production of goods and services must also be considered. That is, with respect to its quantity and quality, the activities must obtain a minimum of 85 percent in both of these aspects.

The determination of the end of the stoppage of work is not an exercise initiated for its own sake: it is one of the two factors provided in the legislation that permits the termination of the disentitlement ^{Footnote 6} . Just as for the stoppage of work, the question is whether the stoppage of work has come to an end with regard to the business as a whole, or, if the labour dispute was more limited in its impact, with regard simply to those operations or group of works affected by the dispute ^{Footnote 7} .

Termination of the stoppage of work does not necessarily mean that the dispute has come to an end, any more than the fact that the dispute has been settled means the stoppage of work is immediately terminated. It would in fact be quite unusual for these two events to occur simultaneously ^{Footnote 8} .

Although a sole dispute could paralyze activities at several places of employment, the determination of the termination of the stoppage of work must nevertheless be made distinctly for each of these locations. The termination of the stoppage of work could therefore occur at different dates because of the actual situation existing at each of these places.

Finally, it must be remembered that the 85 percent minimum must be calculated on the basis of what constitutes the normal level of the work force and the activities related to the production of goods and services. In many cases it is not easy to determine the normal level which corresponds to each of these indicators.

8.11.1 Normal situation

The regulation provides that the stoppage of work terminates when the work force and the activities related to the production of goods and services represent at least 85 percent of their normal level ^{Footnote 9} .

What constitutes the normal situation for these two indicators corresponds to the situation which would normally have existed had it not been for the stoppage of work. With some caution, generally, it could be said that the number of employees and the level of activities that prevailed before the stoppage of work would give a good idea of what would have been the normal situation. The level of production that had been obtained due to overtime operations could also qualify as being normal. It is not thus however when the work force and the level of activities has been attained because of exceptional or temporary measures taken by the employer to lessen the effects of the situation. The normal situation would be determined after discounting these measures ^{Footnote 10} .

The normal situation evolves from one moment to another and could be translated from the differing number of employees and level of activities during this time. It is necessary to take into account fluctuations in production if these normally occur during the course of the year, as well as contracts that the business would have normally obtained or achieved if not for the stoppage of work and the dispute.

The situation as it existed before the stoppage of work could also be attributed, or not, to factors which are related to the labour dispute and the imminent stoppage of work. The work force or the level of activities, reduced or increased, which could be explained by factors not relevant to the dispute, whether it is the economic climate, competition curtailed or increased by competitors, active or seasonal shutdown, these represent what would constitute the normal situation.

However, when this factor is related to the dispute and potential stoppage of work and is causing a reduction or increase in the work force or level of activities, it is not the normal situation. The normal situation would correspond to one that would normally have existed in the absence of this factor.

Sometimes these circumstances could occur during the course of the stoppage of work, or at the resumption of activities and they would have a bearing on the normal situation ^{Footnote 11} . Some of these are related to the dispute and the stoppage of work, and others, not at all; some permanently modify the normal situation, and others, only temporarily.

8.11.2 Settlement of dispute, resumption of activities

There is no absolute rule that says the settlement of the dispute is conditional on the resumption of activities. The parties could agree to resume activities even if there is no immediate apparent solution to the dispute or could even be constrained from resuming without there being a settlement. This in no way signifies that instantly the number of employees at work and the activities related to the production of goods and services will attain the levels equivalent to the normal situation ^{Footnote 12} .

In the vast majority of cases, the resumption of work is a gradual process, governed by a back-to-work agreement and the business' requirements. It is quite likely that only those workers who are needed to perform the preliminary tasks in preparation for the resumption of normal business activities, either to start up the machinery or to repair equipment, will be initially recalled. This situation may also be experienced by a small group of employees who are often recalled one, two or more weeks before the recall of the majority of the workers affected by the labour dispute. However that may be, this context does not by itself warrant the termination of the disentitlement unless when resuming employment, the claimant effectively holds the same job that was held before the stoppage of work occurred ^{Footnote 13} .

The settlement of the dispute per se has little bearing on the disentitlement. It is the termination of the stoppage of work which is the deciding factor and which permits the termination of the disentitlement ^{Footnote 14} . The question is not whether the claimant is still involved in the dispute, but whether the claimant continues to be involved in a stoppage of work attributable to the dispute.

Even when a labour dispute has been settled, it inevitably leaves tangible traces which continue to affect the normal course of the activities of a business for some time, regardless of the impact of other elements unrelated to the dispute which can also delay the resumption of activities. The causal relationship between the dispute that has been settled and the stoppage of work that continues should not be based merely on speculation. The interval between the settlement of the dispute and the termination of the stoppage of work must appear as a natural consequence of the dispute. If it does not, facts must be obtained before concluding that there is a causal relationship between the past dispute and the continuing stoppage of work.

It may also happen, once the dispute is settled, that another unrelated cause arises and becomes solely responsible for prolonging the duration of the stoppage of work. It then becomes necessary to determine the point at which the stoppage ceases to be attributable directly to the dispute and another stage begins in which another cause predominates.

Obviously, in this context, it is in the interest of claimants and unions to minimize the impact of the conflict in explaining the delay in resuming the course of normal activities, or to invoke other causes that are minimally or entirely unrelated to the dispute ^{Footnote 15} . Regardless of this, each of the parties must be given the opportunity to state its case and their claims and assessed fairly and objectively, in order to determine whether the resumption was delayed or prevented in some way as a result of the dispute.

Once the dispute is settled, it is often difficult, depending on the sector involved, to resume normal activities as if nothing had happened, to secure new orders or to recover lost clients. Such considerations may be sufficient to show relative continuity in the relationship between the dispute and the stoppage of work, or alternatively they may be too speculative.

The continuing stoppage is obviously due to the dispute if it results from damages caused by the dispute or closure of the premises, unless because it suits the employer's own purposes, the latter does not take immediate steps to put the machinery in working order. A delay due to the employer's intentions to restructure the staff or to proceed with renovations is not attributable to the dispute.

Other circumstances could also prevent the attainment of the 85 percent minimum. A regulatory provision specifies at what time the stoppage of work terminates in those circumstances ^{Footnote 16} .

8.11.3 Circumstances preventing the attainment of a minimum of 85%

A business which had suffered a stoppage of work due to a labour dispute is more at the mercy of many circumstances which would occur at that moment, and which, for the most part are related to the dispute and the stoppage of work. Other circumstances, distinct to the business or a sector of the economy, could also appear, which, without being related to the dispute and the stoppage of work, will nonetheless have an impact on its work force, its activities or even its actual existence.

The repercussions of these circumstances on the number of workers and the level of activities could just as well be minimal as significant, temporary as long term, and in the latter case, may be felt beyond the resolution of the dispute and the subsequent resumption of activities ^{Footnote 17} .

Whatever the situation, generally, it could be said that the fact these circumstances, which have a bearing on the normal situation of a business, appear during the course of a stoppage of work, does not modify the relationship between the cause and effect that binds the initial stoppage of work to the dispute ^{Footnote 18} .

Amongst these circumstances there are six which will always be considered in the light of the regulation which specifically deals with when the stoppage of work terminates. Here is an extract ^{Footnote 19} :

Where, in respect of a stoppage of work, an occurrence prevents the attainment of at least 85 per cent of the normal level of the work-force or activity in respect of the production of goods or services at a factory, workshop or other premises, the stoppage of work terminates

1. if the occurrence is a discontinuance of business, a permanent restructuring of activity or an act of God, when the level of the work-force or of the activity attains at least 85 per cent of that normal level, with the normal level adjusted by taking that occurrence into account; and
2. if the occurrence is a change in economic or market conditions or in technology, when
   1. there is a resumption of activity at the factory, workshop or other premises, and
   2. the level of the work-force and of the activity attains at least 85 percent of that normal level as adjusted by taking that occurrence into account.

Thus these six prescribed share the common fact that they happen during the course of the labour dispute and they prevent the attainment of a minimum of 85 percent of the normal level. Moreover, it must be noted that these circumstances modify, if not permanently then at least for an indefinite period, the normal situation of the business or the specific operation of the business effected by the stoppage of work. It is logical, therefore, in this context, to adjust what would constitute the normal situation for the two indicators, and that it is against the adjusted level that a determination would be made as to whether the 85 percent minimum has been attained.

These circumstances do not have to have a great significance on the two indicators. It suffices that they prevent the attainment of 85 percent. It matters if, for example, they lower by 10 percent the work force or activities, and it could be just the amount that is lacking to attain a minimum of 85 percent of the normal level.

The regulation ^{Footnote 20} contains six circumstances in two subsections. The first groups three circumstances which are distinct to the business ^{Footnote 21} , and the second groups three others that are more general ^{Footnote 22} . One or the other could have an impact on the normal situation. Except for the discontinuance of the business, it is at the resumption of activities ^{Footnote 23} that these circumstances could truly apply.

Finally it must be recalled that we do not take into consideration any exceptional or temporary measures taken by the employer for the purpose of offsetting the effects of the stoppage of work ^{Footnote 24} .

8.11.4 Discontinuance of business, permanent restructuring, act of God

A stoppage of work which has dragged on may in many cases be the trigger which causes the employer to take or forestall certain decisions in respect of the future of the business or an activity which was particularly paralyzed by the stoppage. Whatever may be the motives, an employer could, during the stoppage of work, declare bankruptcy, proceed to sell the business, transfer the activities elsewhere, reorganize or simply give up.

A business, however, is not sheltered from an act of God as we think of a fire, an explosion or a natural catastrophe like an earthquake, mud slide, tornado or flood, which will irreparably affect what would have been the normal situation had there not been a stoppage of work.

The regulatory text provides for a particular treatment in the case of a discontinuance of business, permanent restructuring of the activities or an act of God where following a stoppage of work, such circumstances impede the attainment of the required minimum 85 percent of the normal activities for the two indicators ^{Footnote 25} . These circumstances will not be considered if they don't affect these two indicators or they only affect those activities not implicated in the stoppage of work due to the dispute. Except for where it concerns the discontinuance of business, it is at the resumption of activities that these circumstances in this context could truly apply. What would be the use of considering the effect of a permanent restructuring or an act of God during the off-season or even at the moment that the stoppage of work interrupted practically all the activities?

On the other hand, it is important that these circumstances become concrete and have permanence that would, in the long term, modify the normal situation ^{Footnote 26} of the business or activity that has suffered the stoppage of work. They must not be in the state of projections or probabilities or form part of a statement of intentions or strategies that are used to force negotiations.

It is important to analyze the pertinent facts beyond the mere intentions or statements or any action on the employer's part to the effect ^{Footnote 27} . For example, the negotiations should be examined as to whether they have broken off, whether there is no further dialogue, operations have been transferred, assets liquidated, notice of closure sent to the Department of Labour, payment of amounts due on final closure, etc. Such actions will serve as an indication as to whether the action is intended merely to intimidate or counter an intractable union.

It may happen that workers receive a letter informing them that their employment will end at such a date if they do not return to work or that the business will close if the offer is rejected. Such notices do not necessarily signify that the employer has closed the business, even when accumulated leave credits or reimbursements of pension contributions have been paid. It may well be a ruse to incite the workers to return to work.

The sale or cessation of parts of the business will not necessarily put an end to the dispute or to the stoppage of work ^{Footnote 28} . These events could proceed even if there is a new buyer. Generally, the new buyer has no other choice but to recognize the present union and to respect the agreements and contracts previously signed. It may be, however, that this leads to a permanent restructuring of activities.

An employer could proceed with a restructuring of activities in order to maintain essential services until a solution is found to the dispute. Evidently this is not what permanent restructuring means. Such exceptional or temporary measures must not be considered for adjusting what would constitute a normal situation ^{Footnote 29} . Neither could they be used in the calculation of the 85 percent minimum ^{Footnote 30} .

It must be a true and long-term restructuring of the group of workers or of the activities affected by the stoppage of work ^{Footnote 31} and not just any shift of desks or a minute change in duties. Neither does this apply to the timely restructuring between the active season and the off-season ^{Footnote 32} .

In order to consider the effects of a permanent restructuring of activities which would arise because of the changes in the economic conditions or market or resulted from technological change, a resumption of activities would be necessary ^{Footnote 33} .

In conclusion, when one of the three prescribed circumstances prevents the attainment of a minimum of 85 percent of the normal situation, a new calculation will be made. The intent is to see whether the number of employees at work and the production activities attain at least 85 percent, having adjusted the normal situation as a result of these new circumstances. In other words, subtracting the decline in the number of employees and in the activities that are attributable to these circumstances.

8.11.5 Changes due to technology, economic or market conditions

When there is a resumption of activities and there are changes due to technology or in the economic or market conditions, these may prevent the attainment of a minimum of 85 percent of the normal level in the two indicators mentioned in the regulatory text ^{Footnote 34} . In this case a new calculation is provided to determine whether the minimum of 85 percent is attained, but this time, taking into account these changes on the normal level. This element is critical as it determines when the stoppage of work terminates ^{Footnote 35} .

It should be said that generally these changes are not solely occurring at the business which suffered the stoppage of work, however they nonetheless have a bearing on determining the situation that it would have normally known. Most of the time, the impact is on a sector of activities which the business is part of, or even on the whole economy, for example, computerization, automation, free trade, quota reduction, high interest rates, dollar exchange, decline in market demand for products or services, etc.

These changes occur in a cycle of transformation, technological progress, rationalization of activities, international trade, economic growth or recession, market evolution and have a bearing on the activities of a whole group of businesses and transforms it for an undetermined period, if not forever, from its normal situation.

It is only at the resumption of activities ^{Footnote 36} paralyzed by the stoppage that we must determine whether these changes prevent the attainment of a minimum of 85 percent of the normal level for each of the indicators. It would not be useful to do it beforehand if all evidence shows that there are no activities because of the stoppage of work due to the dispute.

Where the off-season in the sector of activities of which the business is a part, originates from the conditions of the economy or market, this does not properly lead to a finding of a change from the normal situation. These are annually recurring conditions and the levels reflect the normal situation which at that time has already taken into account the conditions of the economy or market which are tied to the off-season. Therefore there will not be any adjustment to the levels if the parties should ever come to an agreement during the off-season ^{Footnote 37} .

Changes due to technology or in the conditions of the economy or market could result in a permanent restructuring of the activities of a business. These circumstances are provided for elsewhere in the Regulations ^{Footnote 38} . Whether the case is considered under one or the other is of little importance since it is on the resumption of activities that these circumstances could really have a bearing on the termination of the stoppage of work.

Supposing that at the resumption of activities, the changes in technology or in the conditions of the economy or market lead to a reduction of 10 percent of the work force and the business' activities, such that the 85 percent minimum of the 100 employees normally at work and the 1000 units normally produced each day cannot be attained. The regulatory text ^{Footnote 39} provides that the minimum of 85 percent which determines the termination of the stoppage of work must be recalculated but this time on the basis of 90 employees and 900 units of production which constitute the normal level, adjusted because of the changes at the business.

8.11.6 Exceptional or temporary measures

As we have seen ^{Footnote 40} , what constitutes the normal situation of a business corresponds to the levels of the work force and activities which would normally have existed had it not been for the dispute and the stoppage of work. These levels have nothing to do with what would have been obtained because of exceptional or temporary measures taken by the employer to increase, for example the capacity of production, or the quantity of stored products or, as well, to forestall certain contracts in anticipation of the stoppage of work or to lessen its effects.

An employer may, for a temporary period, give priority to certain tasks and in doing so, drop others that are less useful or use other employees, even strikebreakers, to maintain essential services.

The fact that the employer has taken steps to maintain the firm's production, or that of a more limited group of workers, at a normal level, does not necessarily mean there has been no stoppage of work. As a general rule, there is a stoppage of work when an employer maintains operations with the help of exceptional or temporary measures ^{Footnote 41} , no matter how successful these measures may be.

Not infrequently, such measures have a detrimental impact on the work, which must be performed elsewhere and thus disrupts the operations of the firm as a whole. Temporarily abandoning office and maintenance work for strictly production work constitutes a stoppage of work in sectors other than production ^{Footnote 42} ; whatever the level of production, there is a stoppage of work if the interruption of operations in other sectors is relatively significant.

It is important to know which of the measures used by the employer will become permanent, whether strikers will return to work once the dispute is settled, and whether they have actually returned to work.

In order to determine the permanent or temporary nature of the measures taken by the employer, consideration must be given to:

• the volume of operations affected
• the number of employees on strike,
• the number and type of replacement workers, and whether
• the replacement workers are permanent or temporary ^{Footnote 43} , the hours worked are normal, or the operations are performed at the expense of other operations, such as maintenance or repairs,
• the neglected operations are important, and whether
• the link between employer and employees is finally broken ^{Footnote 44} .

To authorize payment of benefits to strikers simply because the employer has managed to restart and maintain operations through exceptional measures would be to violate the very purpose of the legislative provisions dealing with labour disputes and create a major source of inequity.

This is particularly true when the dispute affects only a small number of workers, and where the employer's measures succeed in preventing the stoppage of work. It is hard to claim that a stoppage of work has taken place when a strike by some employees has no significant impact on ongoing operations.

The employer could also take exceptional and temporary measures at the resumption of activities in order to compensate for the effect of the stoppage of work. These measures are not to be taken into account when calculating the 85 percent minimum ^{Footnote 45} .

8.11.7 New employees permanently hired

It must be remembered ^{Footnote 46} that, the fact that prior to or following a stoppage of work attributable to a labour dispute, an employer succeeded in resuming or substantially maintaining activities by exceptional or temporary measures beyond the normal scope of the operations, is not grounds for concluding that a stoppage did not occur or has terminated ^{Footnote 47} .

A stoppage of work may nevertheless terminate with the return to normal operations using regular, permanent means ^{Footnote 48} , although this does not exclude the possibility that some means considered temporary may after a time become permanent.

The termination of a stoppage of work does not necessarily imply in this context that the regular employees return to their work; the employer may, for example, have hired replacement workers that lead to a resumption of operations ^{Footnote 49} . The issue then becomes focused on the permanent or provisional nature of the action taken by the employer.

Radical positions are taken from time to time, particularly in hotly contested disputes, for example in the case where the employer definitively dismisses the striking employees and hires in their stead replacement workers and describing them as permanent employees. Such action should in more cases than not be viewed in the context of an overall reactive strategy to wear down, discredit and intimidate, in order to force a favourable solution to the dispute and to get rid of radical elements. They generally constitute exceptional or temporary measures that should not be taken into account when calculating the 85 percent minimum ^{Footnote 50} .

8.11.8 Shutdown during the off-season

This is not a question of seasonal termination of employment of a sole individual ^{Footnote 51} , but rather the termination of the whole workforce of a firm or of a particular field of activity due to a shutdown during the off-season; for example, maritime transportation on navigable waterways during winter, agriculture or some kind of leisure activities specific to some seasons.

The off-season is associated with a period of the year where there is a reduced volume of activity in a sector of the economy. It is expected to last a sufficiently long period, a season if not more,. It will recur year after year, at a relatively fixed period of time, which to all practical purposes excludes any shutdown that would be only episodic, occasional or of a short duration.

It is appropriate in such a context, to question whether all workers who, before the beginning of the off-season, have lost their employment due to a work stoppage attributable to a labour dispute, will remain disentitled to benefits for the duration of the off-season, particularly if it lasts, depending on the field of activities, from three to six months.

Although at one time it was held that the disentitlement could be lifted as of the date the claimant could prove that, in the absence of the labour dispute, the claimant would not have been able to work, which is assuredly the case in a seasonal shutdown, this line of thinking appears to be the least compatible with the text of the legislation which limits the termination of the disentitlement described in the labour dispute clause to only one of the circumstances stipulated in paragraphs (a) and (b) of that clause. It is not possible to interpret any of these two paragraphs as signifying that the disentitlement ends when the labour dispute ceases to be the real cause of the unemployment ^{Footnote 52} .

The final resolution rests on the causes of the claimant's loss of employment the moment one becomes unemployed more so than one's subsequent state of unemployment and this, no matter if it is a seasonal shutdown or a vacation period during Christmas or summertime ^{Footnote 53} . The question here is approached differently if, in a given case, there is a complete and definitive severance of the employer-employee relationship ^{Footnote 54} of the sort that the conditions of non-application, as provided in the exempting clause of the labour dispute provisions, are from then on fulfilled.

Finally, we may consider that the stoppage of work has come to an end when the settlement of the dispute occurs during the off-season, even if in fact the resumption of activities only occurs many months later ^{Footnote 55} . Attainment of the 85 per cent minimum may be easily reached when calculated on the basis of a normal situation which represents a reduced, if not virtually nil level of work force and activities.