On June 23, 2023, major amendments to section 45 of the Competition Act1 (the “Act”) are set to come into force. Adopted in 2022 by the Parliament of Canada, these amendments are primarily designed to harmonize Canadian non-competition law with legislation in various other countries, particularly the U.S., which restricts certain business practices regarded as harmful to workers. The amendments to the Act will have an impact on employers across Canada, whether or not they operate in an area of federal or provincial jurisdiction. Beginning on June 23, 2023, the Act will prohibit “unaffiliated” employers from entering into agreements aimed at: i) fixing wages or employment conditions; or ii) restricting the job mobility of employees by means of reciprocal non-solicitation and no-poaching agreements. In this regard, it should be noted that agreements between affiliated companies (e.g., controlled by the same parent company) do not violate the Act. This bulletin seeks to provide a summary of various amendments of interest to employers in light of the official version of the related enforcement guidelines (the “Guidelines”), which were published by the Competition Bureau (the “Bureau”) on May 30, 2023.2 Although the Guidelines do not have the force of law, they set out the Bureau’s approach when interpreting applicable prohibitions and defences. AGREEMENTS FIXING WAGES AND EMPLOYMENT CONDITIONS Paragraph 45 (1.1) (a) of the Act prohibits agreements between unaffiliated employers aimed at fixing, maintaining, decreasing or controlling wages and other employment conditions. In this regard, the Bureau’s Guidelines state that “terms and conditions of employment” typically refer to any condition that could affect a person’s decision to enter into, or remain in, an employment contract. This may include “job descriptions, allowances such as per diem and mileage reimbursements, non-monetary compensation, working hours, location and non-compete clauses, or other directives that may restrict an individual’s job opportunities”. Citing an example of a problematic case in light of the Act’s new provisions, the Bureau describes a situation in which two unaffiliated employers hold a lunch meeting during which they agree to limit the annual bonuses of their employees to 5% of their gross salary. This type of agreement would, in all likelihood, be prohibited under the Act. NON-POACHING AND NON-SOLICITATION AGREEMENTS Paragraph (1.1) (b) of the Act also prohibits agreements between unaffiliated employers that could limit the prospects of their employees being hired by the other employer. This new provision concerns reciprocal non-solicitation and non-poaching agreements between employers. These agreements are found fairly frequently in commercial contracts covering mergers/acquisitions, joint ventures, partnerships, sales, procurement/supplies of goods and services, franchises, recruitment and personnel placement, etc. However, as discussed below, it should be noted that these types of agreement would only violate the Act if the parties had reciprocal non-poaching obligations in place. In other words, if the obligation is only “one-way”, i.e., only one of the parties is subject to the obligation not to solicit or poach the employees of the other employer, there is no infraction. POTENTIAL EXEMPTIONS AND DEFENCES The main defence against proceedings initiated under subsection 45 (1.1) is based on the ancillary restraints defence (“ARD”). To use it, employers must demonstrate that: The restraint is ancillary to a broader or separate agreement between the parties; The restraint is directly related to and reasonably necessary for achieving the objective of the broader or separate agreement; and The broader or separate agreement does not otherwise violate subsection 45 (1.1) of the Act (when considered without the restraint). For example, it is reasonable to expect that an agency specializing in temporarily placing personnel with its clients would want to prevent its clients from hiring said personnel for the duration of their agreement. In that case, the ARD defence could be used. The agreement, however, must be carefully drafted so the employer can demonstrate that it was reasonably necessary for achieving the desired objective. In this regard, the Bureau notes that the  duration, objective and geographical scope of the restraint, among other factors, will be examined when determining whether the agreement is in fact “reasonably necessary”. The Guidelines states that the Bureau “will generally not assess wage-fixing or no-poaching clauses that are ancillary to merger transactions, joint ventures or strategic alliances under the criminal provisions”. However, the Bureau “may start an investigation under subsection 45(1.1), where those clauses are clearly broader than necessary in terms of duration or affected employees, or where the business agreement or arrangement is a sham.” Other exemptions and defences may also apply, such as the defence based on regulated conduct3 or the exemption with respect to collective bargaining.4 APPLICABLE SANCTIONS Violations of the new subsection 45 (1.1) could lead to criminal charges. A person found guilty of an offence could be subjected to a fine at the discretion of the court or may be imprisoned for up to 14 years, or both. In addition, under section 36 of the Act,individuals (in all likelihood workers) who suffer losses or damages due to violations of provisions of the Act, including section 45 (thus including the new subsection 45 (1.1)), can claim from the person engaging in such misconduct (in this case, the employer) a sum corresponding to the amount of the losses or damages suffered. Therefore, violations of these provisions could lead to civil suits and possibly, in certain cases, to a class action suit. SPECIFICATIONS REGARDING EXISTING AGREEMENTS AND NEXT STEPS The Guidelines specify that the prohibitions set in out subsection 45(1.1) apply not only to agreements entered into on or after June 23, 2023, but also to conduct that reaffirms or implements agreements that were entered into before that date. In this respect, at least two of the parties to these prior agreements must reaffirm or implement the restraint. This may include, for example, the renewal by two or more parties of an agreement containing a prohibited undertaking. The Bureau also notes that it will be focusing on the intent of the parties on or after June 23, 2023. In that context, companies are advised to review their contract templates and to update their pre-existing agreements in the normal course of business. We therefore recommend that all companies, whether operating in an area of provincial or federal jurisdiction, examine the contracts currently in effect to which they are party and identify any clauses that might constitute violations under the new provisions of the Act. Various strategies or corrective measures aimed at limiting business risks could then be evaluated and implemented depending on the necessity and reasonableness of the undertakings in question are (e.g., renegotiating an undertaking or adopting a directive confirming that the employer will not apply an undertaking on or after June 23, 2023, etc.). Please feel free to contact the members of our teams for further details or for ad R.S.C. 1985 c. C-34, as amended by Bill C-19, Budget Implementation Act 2022, No. 1, S.C. 2022, c. 10. Competition Bureau. Enforcement guidelines on wage-fixing and no-poaching agreements on line, May 30, 2023. Subsection 45(7) of the Act. Section 4 of the Act.

The Canada Emergency Wage Subsidy (the “CEWS”) is a key component of the Government of Canada’s COVID-19 economic response plan. The purpose of the CEWS, adopted on April 11, 2020, is to help Canadians keep their jobs during the crisis and help companies maintain an employment relationship with their employees in order to recover more quickly when the economy returns to normal. On July 13, 2020, when the Canada Revenue Agency had already approved 667,400 applications, the Prime Minister of Canada confirmed that the CEWS will be extended until December 2020. A few days later, on July 17, the Minister of Finance of Canada announced that the CEWS will be extended until December 19, 2020. He also announced major changes to the structure of the CEWS, which, for the time being, should apply until November 21, 2020. Details are expected to follow for the eligibility period from November 22 to December 19, 2020. Summary of changes As the draft legislative proposal has not yet been adopted, the proposed changes may be modified. Duration of the CEWS Pursuant to the legislative proposal, the CEWS would now be available until November 21, 2020, and CEWS applications may be accepted until February 2021. Eligibility The concept of eligible entity remains the same, except that trusts would now be eligible for the CEWS. The changes to the CEWS are intended to make the eligibility criteria more flexible to enable more employers to benefit from the subsidy. Businesses that do not meet the 30% drop in revenue test would now be eligible to the CEWS. The base rate of the CEWS would now vary depending on the revenue decline’s level, and its application would be extended to employers with a revenue decline of less than 30%. However, despite being more flexible, the criteria would be more complex than those applicable to initial eligibility periods. CEWS’s “base” and “top-up” subsidy The amount of the CEWS for each employee would now vary according to the employer’s drop in revenue, expressed as a percentage. The CEWS would consist of two parts: a “base” subsidy and a “top-up” subsidy. During an eligibility period, the CEWS amount would be calculated by adding the base and top-up percentages, as defined in Appendix A below. Base subsidy: The maximum base CEWS rate would be gradually reduced from 60% in eligibility periods 51 and 6 to 20% for the last period (Period 9). The maximum base CEWS rate would be available for eligible entities that have experienced a revenue drop of more than 50%. It would then be gradually reduced by the percentage of the eligible entity’s revenue decline from the maximum base rate for the relevant eligibility period to zero. For example, for a revenue drop of 50% or more, the maximum CEWS amount would now be 60% for Periods 5 and 6, to be reduced to 50% for Period 7. Top-up subsidy: A maximum top-up subsidy of 25% would be offered in certain cases to provide additional support to companies particularly affected by the crisis. The top-up subsidy would be available to eligible entities that have experienced a revenue drop of more than 50% for a given eligibility period. To be eligible for the maximum top-up subsidy, a revenue drop of 70% or more must be registered for the three months preceding the relevant period. A transitional rule is provided for Periods 5 and 6 to allow eligible employers to elect the most advantageous subsidy, that is, the CEWS rate of 75% under the initial structure with a threshold of 30% or one of 60% (+ potentially 25%) under the new structure. In addition, the special rule providing for automatic eligibility forthe subsequent period would also be modified. Thus, an entity that qualified for Period 3 would automatically qualify for Period 4. However, for subsequent periods, the revenue reduction percentage from the previous qualifying period could be applied if the revenue reduction percentage for the current qualifying period is lower. For example, if an eligible entity had a 45% revenue reduction for Period 6 but its revenue reduction for Period 7 fell to 25%, the entity could benefit from the Period 6 percentage, that is, 45%. The base and top-up CEWS would apply to the remuneration of active employees. A separate CEWS rate structure would apply to furloughed employees. For furloughed employees, for Periods 5 and 6, the CEWS calculation would remain the same as it is now, but would be adjusted for Periods 7 to 9 to harmonize with income support through the Canada Emergency Response Benefit (“CERB”) and/or Employment Insurance. Calculating the CEWS In order to calculate the CEWS, the proposed legislation introduces three new definitions that are further described in Appendix A below. These definitions are used to calculate the base and top-up subsidies. Base percentage (if revenue decline < 50 %) Base percentage (if revenue decline = 50 %) Top-up percentage (if revenue decline > 50 %) CEWS Period 5: July 5 to August 1st, 2020 CEWS Period 6: Period 6 : August 2 to August 29, 2020 1.2 x % decline 60 % 1.25 x (% of revenue decline on preceding three-month average – 50 %) Max 25 % CEWS Period 7: August 30 to September 26, 2020 1 x % decline 50 % 1.25 x (% of revenue decline on preceding three-month average – 50 %) Max 25 % CEWS Period 8: 27 septembre au 24 octobre 2020 0.8 x % decline 40 % 1.25 x (% of revenue decline on preceding three-month average – 50 %)Max 25 % CEWS Period 9: October 25 to November 21, 2020 0.4 x % decline 20 % 1.25 x (% of revenue decline on preceding three-month average – 50 %)Max 25 % CEWS amount The maximum weekly amount per employee would be increased from $847 to a maximum percentage of 85% (maximum base and top-up subsidies) of the lesser of the weekly remuneration paid and $1,129, for a maximum of $960 per week, per employee. This percentage would be reduced according to an eligible employer’s revenue decline. The concept of eligible remuneration would remain the same, but the concept of basic remuneration would no longer apply as of Period 5, except in the case of employees that do not deal at arm’s length with the employer. Other significant changes to the CEWS A variety of other changes were announced, including: An appeal process based on the existing Notice of Determination procedure to make it possible to appeal to the Tax Court of Canada. For example, an employer denied the CEWS in whole or in part could avail itself of the objection and appeal process under the Income Tax Act to challenge the CRA decision in this regard. On June 17, 2020, as part of the economic response plan, the CRA announced that it would begin post-payment audits of CEWS claims as early as September 2020. Employers whose employees are paid through a payroll service provider would now be able to claim CEWS for the salaries of their eligible employees; For reference periods beginning July 5, employees who have not received remuneration for 14 consecutive days would still be granted eligible status; New optional reference periods have been added to each qualifying period to account for the particularities of seasonal businesses; Corporations formed on an amalgamation would be deemed to be the same corporation and a continuation of each of the corporations existing immediately before the amalgamation; Trusts would now be eligible entities; Continuity rules would be introduced to make it possible for employers who have purchased all or substantially all the assets of a business to calculate their drop in revenues for the purposes of CEWS. Labour and employment law considerations As in the previous version of CEWS, an employer would not be required to pay employees the pre-crisis remuneration they were receiving in order to be eligible to the CEWS2. However, it is important to remember that a substantial change in an employee’s working conditions, especially one lasting for an extended period of time, may give rise to allegations of constructive dismissal. An analysis of the employment contract of employees affected by a change in their working hours, remuneration, position or duties is recommended, as well as obtaining legal advice. Considering the elimination of the requirement that an employee should not be “without remuneration from the eligible employer in respect of a period of 14 or more consecutive days in the claim period,” employers will now have more flexibility in terms of call-back dates and employee schedules. Caution is still advised when calling employees back to work. While employer eligibility for CEWS is no longer dependent on the “14-day rule,” employees may still be required to reimburse the CERB benefits received, depending on their income level during the applicable eligibility period. Currently, an employee must reimburse the CERB in the following cases: 1st1 CERB eligibility period Other CERB eligibility periods An employee will be required to reimburse the sum of $2,000 if they have earned or will earn, for at least 14 consecutive days during that period, , more than $1,000 (before deductions) in employment or self-employment income. An employee will be required to reimburse the sum of $2,000 if they have earned or will earn more than $1,000 (before deductions) in employment or self-employment income during this period. Finally, despite CEWS’s rules being more flexible, some employers will have to consider permanently laying off part of their workforce. Legal advice should be obtained in order to assess an employer’s obligations under the employment contracts’ terms and applicable law. Particular considerations also apply to notice and severance pay for an employer benefiting from the CEWS, as the amounts paid generally cannot be subsidized through the CEWS. Lavery’s tax and labour law teams are available to answer all your questions regarding the application of the CEWS and to support in the case of audits by tax authorities. APPENDIX A “Revenue reduction percentage” means the percentage of revenue reduction for the qualifying period relative to revenue for the reference period used to determine eligibility. For qualifying periods beginning July 5, 2020, employers would now have the option of calculating their revenue reduction percentage by electing the greater of: The revenue reduction obtained by comparing the current month with the same month in 2019; and The revenue reduction obtained by comparing the previous month with the same month in 2019. Otherwise, an eligible employer would have the possibility of electing to calculate the revenue reduction percentage by comparing either: The current month and the average of January and February 2020; or The previous month and the average of January and February 2020. Employers would be able to decide which calculation method they wish to use for the qualifying period beginning July 5, regardless of the election they made for qualifying periods prior to that date. The method chosen for the eligibility period beginning July 5 would become mandatory for all subsequent qualifying periods. The reference periods for the purposes of calculating the revenue reduction percentage of an eligible employer would thus be as follows: Reference period (revenue reduction percentage) Optional reference period (revenue reduction percentage) Qualifying period 5: July 5 to August 1, 2020 July 2020 compared to July 2019 or June 2020 compared to June 2019 July or June 2020 compared to the average of January and February 2020 Qualifying period 6: August 2 to August 29, 2020 August 2020 compared to August 2019 or July 2020 compared to July 2019 August or June 2020 compared to the average of January and February 2020 Qualifying period 7 : August 30 to September 26, 2020 September 2020 compared to September 2019 or août 2020 comparé à août 2019 September or August 2020 compared to the average of January and February 2020 Qualifying period 8: September 27 to October 24, 2020 October 2020 compared to October 2019 or September 2020 compared to September 2019 October or September 2020 compared to the average of January and February 2020 Qualifying period 9: October 25 to November 21, 2020 November 2020 compared to November 2019 or October 2020 compared to October 2019 November or October 2020 compared to the average of January and February 2020 “Top-up percentage” is the percentage equal to the lesser of: 25%; 1.25 multiplied by the result of the following subtraction: The average monthly revenue for the last three calendar months divided by the average decrease in revenue compared to their respective reference period; minus 50% The qualifying periods and their corresponding reference periods for the purpose of calculating the top-up percentage are set out in the table below: Qualifying period Reference period (top-up percentage) July 5 to August 1, 2020(Period 5) Average of April to June 2020 compared to the average of April to June 2019 or January and February 2020 August 2 to August 29, 2020(Period 6) Average of May to July 2020 compared to the average of May to July 2019 or January and February 2020 August 30 to September 26, 2020 (Period 7) Average of June to August 2020 compared to the average of June to August 2019 or January and February 2020 September 27 to October 24, 2020(Period 8) Average of July to September 2020 compared to the average of July to September 2019 or January and February 2020 October 25 to November 21, 2020(Period 9) Average of August to October 2020 compared to the average of August to October 2019 or January and February 2020 “Base percentage” means the percentage calculated based on the base percentage defined above and the qualifying period, as set out in the table below: Reference period (base percentage) Base percentage if the revenue reduction percentage exceeds 50% Base percentage if the revenue reduction percentage does not exceed 50% Qualifying period 4: June 7 to July 4, 2020 June 2020 compared to June 2019 or the average of January and February 2020 N/A N/A Qualifying period 5: July 5 to August 1, 2020 July 2020 compared to July 2019 or the average of January and February 2020 60 % 1.2 x revenue reduction percentage Qualifying period 6: August 2 to August 29, 2020 August 2020 compared to August 2019 or the average of January and February 2020 60 % 1.2 x revenue reduction percentage Qualifying period 7: August 30 to September 26, 2020 September 2020 compared to September 2019 or the average of January and February 2020 50 % 1 x revenue reduction percentage Qualifying period 8: September 27 to October 24, 2020 October 2020 compared to October 2019 or the average of January and February 2020 40 % 0.8 x revenue reduction percentage Qualifying period 9: October 25 to November 21, 2020 November 2020 compared to November 2019 or the average of January and February 2020 20 % 0.4 x revenue reduction percentage As set out in the table above, the base percentage rate, and therefore the total amount of CEWS paid relative to an employee’s salary, would gradually decrease over the qualifying periods. The maximum CEWS for an employee’s salary for a given week in the last qualifying period beginning October 25, 2020, would be $508. New CEWS calculation For qualifying periods beginning August 30, the amount of the CEWS that may be claimed for each employee would be calculated as follows: If the employee deals at arm’s length with the employer and is not on paid leave in a particular week: The percentage obtained by adding the base percentage and the top-up percentage for the qualifying period multiplied by the lesser of: The remuneration paid in respect of that week; and $1,129.00. If the employee does not deal at arm’s length with the employer and is not on paid leave for a particular week: The lesser of: The eligible amount of remuneration paid in respect of that week; An amount prescribed by regulation; and $0 if both the revenue reduction percentage and the top-up percentage are 0%. Eligibility periods: March 15, 2020, to April 11, 2020 (Period 1), April 12, 2020, to May 9, 2020 (Period 2), May 10, 2020, to June 6, 2020 (Period 3), June 7, 2020, to July 4, 2020 (Period 4), July 5, 2020, to August1, 2020 (Period 5), August 2, 2020, to August 29, 2020 (Period 6), August 30, 2020, to September 26, 2020 (Period 7), September 27, 2020, to October 24, 2020 (Period 8), and October 25, 2020, to November 21, 2020 (Period 9). It should be noted that the government strongly encouraged businesses to supplement employee remuneration to bring it back to pre-crisis levels wherever possible.

In order to best support our clients and business partners, our team is following developments related to COVID-19 very closely. We invite you to visit on our website the page that centralizes all of the tools and information produced by our professionals. There is a concern that simply laying off employees could lead to companies experiencing a major loss of expertise and skill. This expertise will be essential to rebuilding after the end of the crisis, a time that for many will be the greatest challenge in the history of their organization. Organizations recognize that employees have value over and above their skills. They have acquired an in-depth understanding of the company’s goals and operations. They have established a relationship of trust with the company, a network of contacts, and a certain degree of autonomy, to name only a few examples. These make all the difference. We are working with many employers to identify solutions designed to protect this invaluable asset during this unprecedented crisis. The latest government announcements, which include provisions for increased wage subsidies for some companies, are certainly a positive response to current concerns and realities. Other programs with solutions that might be of interest include: New Flexibility in the Federal Work-Sharing Program The federal government has recently established measures to increase the flexibility of the Work-Sharing program (“WS”), which has been the subject of many questions from both employers and employees. Considering the frequent changes made to various government programs, it is possible that by the time you read this, some information may no longer be up to date. We therefore invite you to visit the Employment and Social Development Canada1 (“ESDC”) website or consult our labour and employment law professionals for more information. What is the Work-Sharing program (“WS”)? The goal of the program is to allow employers to keep all of their workers by reducing hours rather than laying off part of their workforce. This program may be a good option for employers who are facing a decrease in their normal level of operations due to COVID-19, but who still have some work for their employees in a reduced capacity.  During the program’s implementation period, available work is redistributed equally among employees in one or more work units.  The employer submits an application and fills out the form outlining the agreement between the employer, the affected employees and their representative, through which the employees voluntarily accept a reduction in their work hours and the sharing of available work. In order to compensate for this reduction in income, the program allows workers who are part of the agreement to receive employment insurance benefits. Under the Employment Insurance Regulations2, remuneration received for a given week of work-sharing is not deducted from the benefits payable under the Employment Insurance Act3. For companies that are directly or indirectly affected by the decline in business due to the current situation, the program’s duration is a minimum of six weeks and a maximum of 76 weeks. The reduction in employees’ regular work schedules must be between a minimum of 10% and a maximum of 60% on average during the period of the agreement. We invite you to visit the ESDC website or consult with our professionals to obtain more information about the eligibility criteria and the general requirements of the program. What Are the New Measures Related to COVID-19? On March 25, due to the downturn caused by COVID-19, the federal government updated its temporary special measures regarding the WS program, including the following, which: Reduce the requirements associated with preparing the application and the attachments. Starting now and until further notice, employers are no longer required to submit: The recovery plan, Attachment B, which used to be required, has been removed and replaced with a single line in the text of the application; Sales and/or production data from the last two years; Broaden program eligibility to include companies that have only been operating for a year, instead of the usual two years; Remove the required waiting period in between WS applications. How to Submit an Application and the Expected Processing Times Following the recent changes made to the program, there is now a simplified way to submit the application. Employers must fill out the following forms, which have been revised by the federal government: Revised form: Application for a Work-Sharing Agreement (EMP5100) Form - Attachment A (revised): Work-Sharing Unit (EMP5101) For businesses located in Quebec, the application must be sent to the following email address: QC-DPMTDS-LMSDPB-TP-WS-GD@servicecanada.gc.ca. As of the date this bulletin was written, the ESDC website that provides information on the special measures implemented due to COVID-19 does not specify the amount of time it will take to process applications. However, it does indicate that employers are now asked to submit their applications 10 calendar days before the requested program start date, and that Service Canada will endeavour to reduce processing time to 10 calendar days. Before COVID-19, employers had to send their Work-Sharing application (and the supporting documents) 30 calendar days before the requested start date. Due to the major increase in applications, the federal government now has nine (9) processing centres in Canada for the purpose of processing WS applications and has the additional capacity to further support employers who have questions. A new email address has been created for the purpose of handling requests for information about the WS program: EDSC.DGOP.TP.REP-RES.WS.POB.ESDC@servicecanada.gc.ca. Conclusion Considering the constant changes, we invite you to consult our labour and employment law professionals to ensure that your decisions are in conformity with the various government programs. The federal government may further increase the flexibility of the program’s conditions and wait times. If necessary, we will keep you informed of any changes to the program with future updates. It is also important to note that there are other kinds of programs that could be of interest in the current situation, such as the Supplemental Unemployment Benefit Program, which allows employers to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work or quarantine. If the conditions are met and the plan is registered with Service Canada, the amounts paid by the employer are not deducted from employees’ employment insurance benefits4. The Lavery team is available to help you implement measures and determine the best way to endure this crisis, protect your organization and prepare to return to normal.   See also https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html#h4.01. Employment Insurance Regulations, DORS/96-332, subsection 47(1) and section 49. Employment Insurance Act, S.C. 1996, c. 23. Employment Insurance Regulations, supra note 1, subsection 37(1).

By way of two decisions 1 handed down jointly on May 8th of this year, the Québec Court of Appeal held that it is no longer appropriate to mechanically apply the existing analytical framework regarding the criteria for the division of a bargaining unit. Based on principles recently stated by the Supreme Court of Canada, the Court of Appeal held that the limits imposed by such criteria on employees’ freedom of choice, in violation of the fundamental right of freedom of association, may be unjustified and disproportionate in certain circumstances. This was indeed the conclusion of the Court of Appeal with regards to the appeals from two applications for judicial review of decisions rendered by the Commission des relations du travail (the “CRT”, Labour Relations Commission), in light of the decision in Mounted Police Association of Ontario v. Canada (Attorney General).2 The latter decision was rendered by the highest court in the country after judgment was reserved by the Superior Court of Québec on the judicial review cases referenced above. The Renaud-Bray Case In the case of Syndicat des employées et employés professionnels-les et de bureau, section locale 574 (SEPB) CTC-FTQ c. Association syndicale des employés(es) de production et de services (ASEPS),3 the employees of bookseller Renaud-Bray’s Victoriaville store, who at the time were members of a broadly-defined bargaining unit which included nine other establishments, claimed to be inadequately represented by the appellant Union. They wished to be excluded from the broadly-defined unit and to join the respondent Association, in order to return to the separate unit that existed for their store prior to the merger of the certifications held by the Union in 2004. As grounds for their application, the employees cited the significant differences in economic and operational context as compared with the other stores in the existing unit, most of which were located in the metropolitan Montréal region. Deciding in this case on the application for judicial review, the Superior Court found that the CRT had erred by imposing on the Association the heavy burden of satisfying the criteria ordinarily applicable when dividing up a certified bargaining unit. It was not useful in the Court’s view to return the case to the CRT, and as such, it proceeded to certify the Association. In its reasons, the Court of Appeal applies the reasonableness standard and reviews the evolution of the scope of freedom of association as guaranteed by the Charters 4 and labour legislation,5 before taking stock of the more recent shift in the case law which favours a generous and purposive approach to the constitutional guarantee. In adopting the principles set out in the Mounted Police Association of Ontario case referred to above,6 the Court points out that freedom of association protects the right to join with others and form associations, which in turn includes the right of employees to choose what is in their interest and how they should pursue that interest. The Court then identifies the traditional criteria for dividing up a certified unit, which require the presence of serious grounds justifying a reversal of the presumption in favour of maintaining an existing bargaining unit and which, contrary to those criteria applicable to bargaining unit certification or merger applications, clearly set aside any consideration of employee preference. The Court further states that limits on the freedom of choice of employees with regards to bargaining units is inevitable, but that these limits can only restrict freedom of association in a proportionate and justified manner in the circumstances, so as to enable the adequate functioning of labour relations. Judging that in the case at hand, the customary criteria applicable to the division of a bargaining unit were applied disproportionately and unjustifiably, the Court of Appeal holds that the CRT’s decision is unreasonable on three grounds: (i) the CRT did not consider the question of the employees’ opposition to joining the broadly-defined unit in the first place, despite the fact that no assessment of the representative character of the applicant association at the time of the merger of the nine bargaining units was conducted, (ii) the CRT did not consider the history of the certifications with this employer, which revealed that with respect to this employer, each individual store generally represents the appropriate bargaining unit, and (iii) the CRT did not determine in what respect ensuring the stability of the existing bargaining unit or preserving industrial peace were considerations justifying its application of the traditional criteria, thus ignoring the employees’ clear preference. The Court of Appeal concludes by finding that the trial judge exceeded his jurisdiction, specifically in that he should have referred the case back to the Tribunal administratif du travail (the “TAT”, Administrative Labour Tribunal) rather than certify the Association directly. The Ville de Québec Case In the second case, Syndicat des juristes du secteur municipal (CSQ) c. Alliance des professionnels et professionnelles de la Ville de Québec, 7 the CRT had refused to divide the bargaining unit for professionals employed by the City of Québec, which would have enabled 30 jurists working for the City to be certified in a separate unit, as requested by same. The jurists claimed that their duties of professional conduct made it untenable for them to be grouped into a common unit with the other professionals working for the City, because they were consistently having to signal the omissions and faults of their colleagues to their employer, which placed them in a constant situation of conflict of interest. At the time, the CRT had applied the traditional criteria for dividing up a bargaining unit, without justifying this approach and without commenting on the dilemma in terms of professional conduct that resulted from the jurists’ duty of loyalty, limiting rather its short discussion to the issue of potential conflicts of interest. Moreover, the CRT did not deal with recent developments relating to the scope of the constitutional right to freedom of association or with the effects of same on the application of the traditional criteria for unit division. The Superior Court, sitting in judicial review, subsequently decided that the CRT’s decision was among the reasonable outcomes. The Court of Appeal, once again in a judgment written by the Honourable Justice Robert M. Mainville, takes note of these serious shortcomings in the CRT’s discussion. On the basis of the Supreme Court’s guidance, and repeating the grounds it cited in the Renaud-Bray case, the Court of Appeal holds that the initial decision was unreasonable and returns the case to the TAT so that it may evaluate the case while taking into consideration the evolution of the constitutional right to freedom of association. Lessons to be Drawn Over the coming months, it will be important to closely monitor the TAT’s position, while the Tribunal reassesses whether the presumption in favour of maintaining an existing bargaining unit and the exceptional nature of its division remain constitutionally acceptable in light of the broader reading of the right to freedom of association now adopted by the courts. More specifically, the TAT will have to decide whether recourse to the traditional analytical framework with respect to the division of bargaining units results in a disproportionate and unjustified restriction on employees’ freedom of choice, to such an extent that this limit is no longer necessary to ensure the adequate functioning of labour relations./p> It will be interesting to observe how the TAT answers this question, considering that the Court of Appeal specified that the Renaud-Bray decision was not to be interpreted as holding that the customary criteria will henceforth always be inapplicable, but rather that the lesson to draw from the decision is that such criteria may be inappropriate in certain circumstances and that [TRANSLATION] the mechanical application of the criteria [...] is not per se a justification for restricting employees’ freedom of association. We will keep you informed of developments in this respect. Syndicat des employées et employés professionnels-les et de bureau, section locale 574 (SEPB) CTC-FTQ c. Association syndicale des employés(es) de production et de services (ASEPS), 2017 QCCA 737 et Syndicat des juristes du secteur municipal (CSQ) c. Alliance des professionnels et professionnelles de la Ville de Québec, 2017 QCCA 736. [2015] 1 R.C.S. 3. See above, note 1. Canadian Charter of Rights and Freedoms, Part I of The Constitution Act, 1982, Schedule B to the Canada Act 1982 (UK), 1982, c. 11, s. 2; Charter of Human Rights and Freedoms, C.Q.L.R. c. C-12, s. 3. Labour Code, C.Q.L.R. c. C-27, s. 3. See above, note 2. See above, note 1.