A Quebec redundancy that came back as reinstatement

The situation

A packaging group bought the shares of a Montreal specialty printer. The integration plan moved production planning to the buyer’s own scheduling team in Ontario and abolished the Montreal planning role, held by an employee with six years’ uninterrupted service at $92,000 a year.

The buyer did what its Ontario playbook says to do on a genuine redundancy: gave written notice, paid the statutory entitlement in full, took a release, and moved on. Four weeks’ indemnity under s.83 at the six-year band in s.82 came to $7,080.

The problem

Forty-one days later the employee filed a complaint. Section 124 provides: “An employee credited with two years of uninterrupted service in the same enterprise who believes they have not been dismissed for a good and sufficient cause may present a complaint in writing to the Commission des normes, de l’équité, de la santé et de la sécurité du travail or mail it to the address of the Commission des normes, de l’équité, de la santé et de la sécurité du travail within 45 days of the dismissal, except where a remedial procedure, other than a recourse in damages, is provided elsewhere in this Act, in another Act or in an agreement.”

Two years, not ten. Forty-five days, not a limitation period measured in years. And the closing carve-out matters as much as the rule: an employee covered by a grievance procedure under a collective agreement has a remedial procedure elsewhere and is outside s.124 — this one was not unionised, so the route was open.

The service also arrived fully vested. Section 97 provides that an alienation, concession or modification of juridical structure “does not affect the continuity of the application of the labour standards”, and CCQ art. 2097 that “A contract of employment is not terminated by alienation of the enterprise or any change in its legal structure by way of amalgamation or otherwise. The contract is binding on the successor of the employer.” The buyer inherited a six-year clock, not a fresh one.

The numbers

Paid at termination: $7,080. Annual cost removed by the abolition: $92,000.

Settled eleven months later at $124,000, roughly sixteen months of remuneration, plus $38,000 of the buyer’s own legal and expert costs and an agreement that the employee would not seek reinstatement. Net cost of eliminating a $92,000 role: $162,000 in year one, against $92,000 of saving.

The settlement number was driven by the remedy rather than by the merits. Section 128 provides that “Where the Administrative Labour Tribunal considers that the employee has been dismissed without good and sufficient cause, the Tribunal may (1) order the employer to reinstate the employee; (2) order the employer to pay to the employee an indemnity up to a maximum equivalent to the wage the employee would normally have earned had the employee not been dismissed; (3) render any other decision the Tribunal believes fair and reasonable, taking into account all the circumstances of the matter.” Once reinstatement into a post the buyer had spent four months dismantling was a live possibility, the buyer was negotiating against an outcome it could not operationally accept.

The rule that decided it

The Act does not define good and sufficient cause and does not allocate the burden of showing it. What it does is convert a funding question into an evidentiary one. An Ontario redundancy is closed by paying the right amount; a Quebec dismissal of an employee with two years’ service is closed by being able to show the reason, and abolition of a post is a reason that has to survive being tested against what the employer actually did afterwards.

That is where this file was lost. The buyer’s integration deck, produced in the CNESST process, showed the planning function being re-established four months later under a different title at the Ontario site, and then a Montreal-based scheduling coordinator posting three weeks after that. The abolition was real on the org chart and not real in the operation.

Section 130 adds the last piece of pressure: “The decision of the Administrative Labour Tribunal under this division is without appeal. It shall bind both the employer and the employee.” A buyer facing an unappealable reinstatement order settles.

The outcome

The buyer settled and changed the sequencing rather than the plan. Post-closing role eliminations in Quebec are now decided before completion, documented against a written organisational design that predates the dismissal, and paired with a rule that a function abolished in Quebec is not re-created anywhere in the group for twelve months without sign-off.

The saving survived on the second attempt, a year later, on a record that supported it. See what happens to the staff when the business is sold for the general position on inherited employment.

What it would have cost otherwise

Had the function genuinely stayed abolished, the same dismissal on the same facts would have cost $7,080 and produced the $92,000 saving. Nothing about the payment was wrong; what failed was the fact the payment was meant to rest on.

The larger unpriced item is the one the buyer never reached. Where a Quebec integration removes several roles at once, each employee with two years’ service carries an independent forty-five-day complaint right and an independent reinstatement risk, and those risks are not diversified by paying more per head. A ten-role Quebec consolidation is ten evidentiary files, not one bigger cheque.

The tell

The dismissal letter said the position was eliminated. The workforce plan sitting beside it, dated three weeks earlier, showed the same tasks assigned to a role in Ontario with a start date already fixed. A redundancy whose duties reappear on a chart before the incumbent has left is not a redundancy, and in Quebec that gap is discoverable in a forum that can order the person back.

The second tell is a calendar one. Forty-five days is short enough that a buyer often does not know a complaint is coming until the integration is already committed. On any Quebec target, the two-year service line should be drawn during diligence, because everyone above it changes the sequencing of the integration rather than its cost.

Takeaways

• • LSA s.124 gives an employee with two years’ uninterrupted service 45 days to complain that a dismissal was not for good and sufficient cause — unless a remedial procedure is provided elsewhere, which is why unionised employees are outside it.
• • Section 128 puts reinstatement on the table, and s.130 makes the Tribunal’s decision final and binding without appeal. That is what prices the settlement, not the merits.
• • The two-year clock survives the transaction through LSA s.97 and CCQ art. 2097. A buyer inherits it fully vested on day one.
• • The section converts a funding question into an evidentiary one. Paying the s.83 indemnity in full does not close a Quebec dismissal; being able to show the reason does.
• • Draw the two-year line during diligence. Above it, a role elimination is a sequencing and documentation problem, and re-creating the function elsewhere in the group destroys the record you are relying on.

Sources

• • Act respecting labour standards, CQLR c. N-1.1 (Quebec) — s.82 notice scale; s.83 compensatory indemnity; s.97 continuity of the application of labour standards; s.124 recourse against dismissal not made for good and sufficient cause; s.125 and s.126 the CNESST stage; s.128 the Tribunal’s orders; s.130 decision without appeal.
• • Civil Code of Québec, CQLR c. CCQ-1991, art. 2097 — the contract of employment is not terminated by alienation of the enterprise and binds the successor.
• • Treadstone Law — termination for just cause and the Ontario employer’s burden — the closest available treatment of an employer having to prove its reason. It is Ontario law about just cause for misconduct, not Quebec’s good-and-sufficient-cause standard for a redundancy, and the two should not be read across.
• • Treadstone Law — am I liable if the seller times a termination to dodge my cost? — adjacent, on pre-closing terminations. Here the dismissal was the buyer’s own and four months after completion.
• • The Act does not define “good and sufficient cause” and does not allocate the burden of proof. Section 128 states only what the Tribunal may order, so the outcome turns on the record the employer can produce rather than on any statutory test.