Saint John considers legal options to break no-layoff clauses

City management in Saint John are looking into a rarely used area of law to see if it can break no–layoff clauses in employee collective agreements in event the municipality is hit with a COVID–19 related financial crisis.

The labour contract with the city's 278 outside workers includes a no–layoff clause. Members of the police union hired before 2012 likewise cannot be laid off.

Contracts with two other city unions, representing firefighters and inside workers, do not have such clauses.

When asked about the no–layoff clauses during a council meeting Monday, city manager John Collin said that in emergency or unavoidable cases common law "would suggest that in certain circumstances an employer could be entitled to disregard or not follow certain terms within a collective agreement."

But legal experts consulted by CBC suggest the city would have a tough time making that argument. 

Senior Saint John trial lawyer John Barry says the argument is known as "frustration of contract." 

'A very rare thing'

He said to succeed the employer would have to be faced with no way to do business.

He used the example of a manufacturing plant that is destroyed by fire and left with no customers and no way to make its product. 

"It's a very rare thing," said Barry. "It's got to be a real disaster, with no money and no ability to carry on."

Ottawa–based labour and human rights lawyer, Paul Champ said the city would face a lot of legal hurdles in attempting to lay off workers in violation of collective agreements. 

Those hurdles, he said, would likely include a constitutional challenge.


"There are no modern precedents for these doctrines to be applied in employment contracts or collective agreements," said Champ. "The charter imposes an obligation on the city as a public employer to discuss and negotiate these kind of issues with the unions. In my opinion, any unilateral action by city council would not only be suspect in common law or contract principles but it would certainly violate the charter."

In his own preliminary opinion on the question, city solicitor John Nugent told councillors Monday frustration of contract is an option that could be argued in court, but downplayed the likelihood the attempt would be successful

"It's a challenging, challenging principle," said Nugent. "It's not an easy principle to apply, to relieve parties of their obligations under contract, but that it is theoretically available in the appropriate cases."

Union response

Police union president Duane Squires says if the city tried to break the contract it would be challenged in court

"As a representative of an employee group, I think the employees are people you should be talking with, not at," said Squires.

Contract talks between the police union and the city broke off early in the new year. The matter is on hold because of the COVID-19 crisis.

City negotiators reached a tentative contract agreement with outside workers on March 13. 

That contract has yet to be ratified by union members and city council.

It has not been revealed whether it includes a no–layoff clause.