Is a foreign employer subject to the Act Respecting Labour Standards (the “ARLS”) merely because one of its employees performs work from home in Quebec? In a much-anticipated decision released on November 5, 2026, in Marchetta c. Petros 724 inc.1, the Quebec Court of Appeal answered that question in the negative and dismissed the appeal of an employee who sought to have the ARLS applied to her employment relationship with her U.S. employer. Lavery wishes at the outset to underscore the significant contribution made to the debate by the Canadian Association of Counsel to Employers / Association canadienne des avocats d’employeurs (“CACE”). In a context where the employer did not participate in the appeal, CACE obtained leave to intervene as amicus curiae (“friend of the court”) in order to assist the Court on the interpretation of section 2 of the ARLS and on the issues relating to its territorial scope. This decision is of particular importance to foreign employers that employ individuals working remotely from Quebec or domiciled there, a situation that has become increasingly common with the rise of remote work and the dematerialization of tasks made possible by technological tools. It also highlights the private international law issues raised by determining the laws applicable in such contexts. The practical impact of these issues is all the more significant given that the ARLS provides employees with recourses and remedies that differ from those generally available in most North American jurisdictions. In particular, the ARLS allows employees with at least two years of uninterrupted service to seek a reinstatement order from the Administrative Labour Tribunal (the “ALT”) in the context of contesting a dismissal without good and sufficient cause. Background: The Territorial Scope Provided for in the ARLS To properly frame the issue, it is important to recall that section 2 of the ARLS establishes a specific territorial connecting-factor regime that differs from those found in other provincial statutes governing labour and employment standards in Canada. Section 2 of the ARLS establishes both connecting factors relating to the employee and a distinct connecting factor relating to the employer. As regards the employee, the provision applies more specifically to an employee who performs work both in Quebec and outside Quebec, as well as to an employee who, while domiciled or resident in Quebec, performs work outside Quebec. In both situations, however, the ARLS further requires that the work be performed for “an employer whose residence, domicile, undertaking, head office or office is in Québec.” That specific wording was central to the analysis in Marchetta. Marchetta in Brief In this case, the employee, who held the position of financial consultant, performed most of her work remotely from her home in Quebec, using her own computer and personal telephone. She worked for a U.S. employer that had no head office, residence, domicile, office or other official presence in Quebec, and in respect of which no activity in Quebec had been established. The employee’s services were provided exclusively for the benefit of U.S. clients, and she only occasionally travelled to the United States to meet with some of them. The evidence also did not support a finding that the employee’s home served as a place of business for the employer. The employee was advised in December 2018 that her employment was being terminated following the company’s sale of a substantial portion of its Canadian assets. She then filed a complaint with the Commission des normes, de l’équité, de la santé et de la sécurité du travail (the “CNESST”) alleging dismissal without good and sufficient cause and contesting the termination of her employment. The complaint was subsequently referred to the ALT. In an initial decision, the ALT upheld the complaint and ordered the employee’s reinstatement, despite the jurisdictional arguments raised by the employer. Following an application for administrative review, however, the ALT revised that first decision and dismissed the complaint, among other grounds because the ARLS did not apply territorially and the termination of employment resulted from a genuine layoff. The Superior Court subsequently upheld that second decision in judicial review proceedings. Seized of the matter, the Court of Appeal in turn confirmed that the Superior Court had committed no reviewable error in concluding that the mere fact that the employee performed her work from her home was not sufficient, in and of itself, to establish that the employer maintained an office or carried on an enterprise in Quebec within the meaning of the ARLS. The Court of Appeal confirmed that, to reach such a conclusion, there must be at least some evidence showing that the employer intended to use the employee’s residence or home to conduct its business. More specifically, such evidence must reveal a certain degree of organization of the place where the employee works, making it possible to conclude that it constituted a foothold for the employer in Quebec for some of its activities, whether concrete or in development. The Court nevertheless acknowledged that a different finding could be warranted in other circumstances, even in the absence of an establishment in Quebec, including in cases where the evidence shows that the employer carries on activities in Quebec or uses the employee’s home to conduct its business. For example, the case law reviewed referred to situations where: the employee acted as a salesperson or representative in Quebec from a home office used as the employer’s business address, with certain related costs borne by the employer;2 the employer paid for the installation of business telephone lines, Internet or fax services at the employee’s home, provided the equipment necessary to perform the work, and stored documentation or promotional materials there for its clients, some of whom were located in Quebec;3 although working largely from home, the employee nevertheless carried out concrete market development, representation or public relations activities in Quebec for the employer’s benefit.4 Key Considerations for Foreign Employers The decision confirms that, while the physical location where the work is performed remains relevant to the analysis, the specific connecting factors set out in the ARLS must still be met before a foreign employer is subject to it. In that regard, there is no automatic rule: remote work from Quebec alone is not sufficient. The analysis will depend closely on the evidence and on the concrete organization of the employment relationship. In our view, it is also worth emphasizing that the analysis may evolve over the course of the employment relationship. The absence of activities in Quebec at the time of hiring does not preclude a sufficient territorial connection from arising later if the employer’s activities or how the work is organized change. Foreign employers should, therefore, pay close attention to the evolution of their activities and how work is organized throughout the employment relationship. It should also be noted that this decision is specific to the ARLS’s scope and to the circumstances in which it may be found inapplicable. This does not, however, mean that other Quebec laws that may govern the employment relationship, including the Civil Code of Québec, are therefore inapplicable. Accordingly, each situation requires a case-by-case analysis based both on the applicable legislative framework and on the characteristics of the employment relationship, including the duties and responsibilities performed, the clients served, and the arrangements for expense reimbursement and the provision of equipment. Particular attention should also be paid to the drafting of employment agreements and policies applicable to employees hired in Quebec to work remotely. Finally, the Marchetta decision forms part of a trilogy of judgments released the same day by the Quebec Court of Appeal concerning remote work and the notion of establishment. These decisions raise important issues for employers in Quebec. Our Labour and Employment Law team is currently reviewing this trilogy, and a more detailed bulletin on its key takeaways and practical implications will follow in the coming days. 2026 QCCA 1461. Ladouceur et Almico Plastics Canada inc., D.T.E. 90T-490 (T.A.). Commission des normes du travail c. Micros System Inc., 2009 QCCS 6083. Boisvert et Marnier-Lapostolle Chile Spa, 2018 QCTAT 4718.

This bulletin addresses the same subject as a first bulletin we published on March 10, 2025, regarding Bill 89 tabled by the government. The bill was assented to on May 30, 2025, with a number of amendments and clarifications. The bill provides for major amendments to the Labour Code (L.C.) to improve the way in which the needs of the population are taken into account during labour disputes by introducing two new mechanisms, in particular. Firstly, it grants the Minister of Labour the power to refer parties to binding arbitration when the Minister considers that a strike or lockout is causing or threatening to cause serious harm to the public after unsuccessful mediation or conciliation. Secondly, it creates a framework for a new category of services to be maintained, those “ensuring the well-being of the population,” under which critical services will be maintained during strikes or lockouts. Having followed the parliamentary proceedings closely, we noted that a number of significant amendments were made to the bill since it was introduced. The time limit to negotiate services ensuring the well-being of the population was changed from fifteen to seven clear working days and the date of entry into force of the new provisions postponed to November 30, 2025. During the parliamentary debates, the Minister gave a few examples of what could fall under the concept of “social, economic or environmental security” for the population. Social security could be at stake in situations affecting the development of a vulnerable person, or in cases linked to poverty, isolation or food insecurity, among others. Economic security could also be compromised in similar circumstances, particularly when they affect the ability to get to work or earn wages. The concept of environmental security may include natural disasters or a significant deterioration in environmental quality, in particular. Although it will ultimately be up to the courts to rule on the scope of these new provisions, we believe that the points raised in parliamentary committee will affect how they are interpreted. The following table illustrates the main differences between the general essential services framework that apply to the public services covered by the Act and the new measures that can be put in place to protect the population:   Essential services among public services  Services ensuring the well-being of the population Special powers granted to the Minister Scope of application (subject to exclusions)  Public or comparable services (ss. 111.0.16 and 111.0.17 L.C.) Parties designated by the government by order (s. 111.22.4 L.C.) Any dispute, but does not apply to certain sectors or organizations listed in s. 111.32.1 L.C. Process by which dispute is rendered subject to mechanism ALT decision (s. 111.0.17 L.C.) ALT decision (s. 111.22.5 L.C.) Notice from the Minister to the parties (s. 111.32.2 L.C.) Application criteria Possibility of endangering public health or safety (s. 111.0.17 L.C.) Disproportionate impact on the social, economic or environmental security of the population, particularly that of persons in vulnerable situations (s. 111.22.3 L.C.) Labour conflict that causes or threatens to cause serious or irreparable harm to the public and unsuccessful intervention of a conciliator or mediator (s. 111.32.2 L.C.) Effect once subject to mechanism Right to strike temporarily suspended until legal requirements are met (s 111.0.17 L.C.)   Right to lockout prohibited in public services (s. 111.0.26 L.C.)   Continuation of strike or lockout after a decision making the dispute subject to the mechanism is rendered, unless exceptional circumstances warrant otherwise pending a decision by the ALT on whether the minimum services to be maintained are sufficient (s. 111.22.11 L.C.) Right to strike and lockout ceasing at the time indicated on the Minister’s notice (s. 111.32.2 L.C.) Procedure 1. Mandatory negotiation between the parties (s. 111.0.18 L.C.) 1. Mandatory negotiation between the parties within seven clear working days of an ALT decision (s. 111.22.7 L.C.) Parties consulted for 10 days on choice of arbitrator. If this fails, appointment by the Minister (s. 111.32.3 L.C.)   At any time, the parties may agree upon one of the matters of the dispute. The agreement shall be recorded in the arbitration award, which shall not amend it (s. 111.32.4 L.C.). Procedure 2. Forwarding of the agreement to the ALT for sufficiency assessment. If no agreement is reached, the union must forward a list of which services must be maintained (s. 111.0.18 L.C.). 2. Forwarding of the agreement to the ALT for sufficiency assessment (s. 111.22.8 L.C.) Dispute referred to arbitration, with necessary adaptations (ss. 111.32.2 and 111.32.5 L.C.) Procedure 3. ALT can help the parties to reach an agreement (s. 111.0.18 L.C.) 3. ALT can help the parties to reach an agreement (s. 111.22.7 L.C.) n/a ALT’s main role Sufficiency assessment, recommendations to parties in the event of insufficiency (s. 111.0.19 L.C.) Sufficiency assessment, determination of services to be maintained in case of insufficiency or if no agreement is reached (ss. 111.22.8 and 111.22.9 L.C.) Rule on the conditions of employment in dispute. Term and amendment of decisions The ALT’s decision to require a certified association and an employer to maintain services applies to each negotiation stage.   The ALT may also amend or revoke its decision at any time (s. 111.0.17.1 L.C.). The ALT’s decision to require a certified association and an employer to maintain services applies to the negotiation stage in progress.   The ALT may also amend or revoke its decision at any time, after the parties have submitted their views (s. 111.22.10 L.C.). Save for some exceptions, the award binds the parties for no less than one year or more than three years. The parties may, however, agree to amend the content, wholly or in part (s. 92 L.C.).   The arbitrator may at any time correct an award containing a mistake in writing or calculation or any other clerical error (s. 91.1 L.C.). Entry into force October 30, 2019 November 30, 2025 November 30, 2025 Note that we summarized the information above to make it concise. Given the complexity of the provisions in question and the many nuances and clarifications that may apply, you should read the specific provisions of the Labour Code or contact your legal advisors before making any decisions. We are available to answer any questions you may have about the impact of these new provisions on your business or to help you address such matters.

 On April 24, 2025, Labour Minister Jean Boulet tabled Bill 101, An Act to improve certain labour laws, in the National Assembly of Québec. This new omnibus bill proposes some 20 measures to amend legislative provisions, including those regarding the grievance arbitration process set out in the Labour Code. The proposed measures that concern grievance arbitration include the following: Establishment of a maximum time limit of six months to appoint an arbitrator and of one year to hold a first hearing:  An arbitrator will have to be appointed within six months of the grievance being filed. If this does not occur, the party that filed the grievance will have to ask the Minister to appoint one within 10 days after the time limit has elapsed, failing which the party will be deemed to have withdrawn its grievance. However, it will be possible for the party to apply to the Administrative Labour Tribunal to have the time limit extended by 10 days if it can show that it was impossible to act. The first day of a grievance hearing must take place no later than one year after the grievance is filed. It will be possible to extend this time limit once only and for a specific number of days if the parties so request and the arbitrator agrees. Grievances filed before these new provisions come into force will not be subject to the new process. The provisions would also not apply to the public and parapublic sectors. Requirement that parties consider mediation before resorting to arbitration and introduction of measures specific to the process. Mandatory disclosure of evidence between the parties within the time limits set at the pre-hearing conference, or, failing that, at least 30 days before the hearing. Two exceptions are provided for: when an urgent situation arises or unless otherwise decided to ensure the proper administration of justice. Proof that a copy of the evidence was provided will have to be sent to the arbitrator. Requirement for the arbitrator to hold a pre-hearing conference when one of the parties requests one. These are just a few of the changes proposed by Bill 101, which also includes several other measures, such as: Measures aimed at maintaining the employment relationship for an employee who is absent because of a public health rule, or because of a disaster, as defined in the Act respecting civil protection to promote disaster resilience (chapter S-2.4). Heftier fines for criminal offences under the Act respecting labour standards and the Labour Code. A requirement for associations to present their audited financial statements at annual general meetings and to make them available to members on request. Measures concerning the health and safety of workers as well as the occupational health and safety compensation system. Bill 101 must go through a number of stages, including special consultations and public hearings, before its provisions come into force. More articles to come on this subject!

On February 19, 2025, the government introduced Bill 89, a piece of legislation that is essentially designed to regulate strikes and lockouts to limit their impact on the population. The Bill proposes major changes to the QuebecLabour Code,1 including granting special powers to the Minister of Labour to force binding arbitration on the parties in order to break a bargaining deadlock. It also introduces a new category of “services ensuring the well-being of the population,” i.e., services that may be maintained in the event of a labour dispute. Special powers granted to the Minister The Bill would allow the Minister to force the partiesinto binding interest arbitration provided that conciliation or mediation has failed and the Minister considers that the labour dispute is causing or threatens to cause serious or irreparable harm to the population. Such powers would not apply to labour disputes in the public and parapublic sectors.2 The strike or lockout would end at the time indicated in the notice sent to the parties. If the parties cannot agree on the choice of arbitrator, the Minister will appoint an arbitrator ex officio.3 The parties would still have the option to settle the dispute outside of arbitration, and the arbitrator would have no power to amend the resulting settlement agreement.4 Failing agreement, the arbitrator would break the deadlock by ruling on the employees’ working conditions. The new powers are similar to those of the Federal Minister of Labour, who can refer disputes to the Canada Industrial Relations Board under the Canada Labour Code.5 The Board then investigates the matter and decides on the necessary steps to resolve the issue. This mechanism has been used to order employees back to work in major disputes, such as the Canada Post mail strike in December 2024.Services to be maintained to ensure the well-being of the population The Labour Code currently provides that essential services must remain available during labour disputes to safeguard the health and safety of the public.6 However, it does not cover certain cases where a strike could cause major social or economic disruption. From 1982 to 2019, it was solely up to the government, on recommendation of the Minister, to pass orders in council directing the parties to maintain essential services. This gave the executive branch discretionary power to assess whether an anticipated strike posed a significant danger.7 The main goal was to protect the public against social and economic turmoil.8 In 2019, that power was taken away from the government and given to the Administrative Labour Tribunal (“ALT”). The ALT now decides whether certain services must remain available during a strike and, if so, assesses whether the essential service levels are adequate. However, in some cases, the ALT has applied a strict interpretation of the criteria for determining which essential services must be maintained. This is what happened, for example, with public transit in the Capitale-Nationale region, where bus service was not deemed essential during a drivers’ strike.9 Bill 89 parallels that jurisprudential trend by introducing a new category of protected services - those “ensuring the well-being of the population ”. These are defined as the services “minimally required to prevent the population’s social, economic or environmental security from being disproportionately affected, in particular that of persons in vulnerable situations”.10 This provision would apply to all strikes or lockouts, except those occurring in a government department or agency where employees are appointed under the Public Service Act11 or in an institution within the meaning of the Act respecting the process of negotiation of the collective agreements in the public and parapublic sectors.12 This notion is similar to the concept of “minimum services” recognized in international labour law, particularly by the International Labour Organization’s Committee on Freedom of Association. The Committee considers that minimum levels may be set for certain services that are not essential “in the strict sense of the term” when a strike has the potential to paralyze a critical sector or trigger a severe national crisis that would jeopardize the well-being of the population, or when such measures are necessary to ensure that the basic needs of the population are met.13 > It is certainly still too early to determine which sectors would fall under the new category in Quebec and be subject to the new interpretation criteria. However, while each case is different, sectors where international law provides for minimum service levels could qualify, as they have a direct impact on daily life. Such services include education during extended strikes, public transit, basic banking, energy infrastructure management, passenger and freight services, and solid waste collection.14 The Bill would allow the government to issue an order in council designating parties for whom the ALT can determine whether services must be maintained in the event of a dispute. It would then be up to the ALT to order the parties to maintain those services, but the parties themselves would first need to attempt negotiations around the services they deem necessary. If no agreement is reached, the ALT will make the final decision. In all cases, an assessment will be conducted to determine whether the level of service is adequate. Moreover, the ALT would be granted various investigative15 and remedial powers16 in the matter. The Bill also introduces various other provisions17 and prohibits changes to the working conditions of employees providing such services, unless the parties have reached an agreement.18 Furthermore, the Bill includes penal provisions and states that employers declaring a lockout in a public service organization are required to inform the other party and the Minister of Labour in writing at least seven clear working days19 in advance. Conclusion Bill 89 is still at the introduction stage, and its approval will depend on the upcoming parliamentary process. The Bill may still be amended before it becomes law. That said, the Bill has sparked strong reactions from trade unions, with some representatives saying they plan to challenge the new measures in court if they are adopted and enforced.20 We will be closely monitoring the Bill’s progress and potential impact on the legal framework governing labour relations in Quebec.   CQLR, c. C-27.   Bill 89, s. 5 amending the Labour Code by adding section 111.32.2. However, this would not apply to labour relations in the public and parapublic sectors. Bill 89, s. 5 amending the Labour Code by adding s. 111.32.3.   Bill 89, s. 5 amending the Labour Code by adding s. 111.32.4.   R.S.C. 1985, c. L-2. The existing provisions mainly apply to public services and comparable services, as well as to the public and parapublic sectors. Fernand Morin, Rapports collectifs de travail, 2nd ed., Montréal, Éditions Thémis, 1991, p. 697: [TRANSLATION] “This provision applies only to businesses designated by an order in council and only while collective bargaining is underway (s. 111.0.17 of the Labour Code).According to this section: (i) It is the Minister’s responsibility to assess whether an anticipated work stoppage poses a danger and to take initiative in bringing the matter before the government.”   National Assembly of Québec, Commission permanente du Travail, de la Main-d’œuvre et de la Sécurité du revenu (standing committee on labour, workforce and income security), 3rd Session, 32nd Legislature, June 10, 1982, “Étude du projet de loi no 72 - Loi modifiant le Code du travail, le Code de procédure civile et d’autres dispositions législatives” (consideration of Bill 72 – An Act to amend the Labour Code, the Code of Civil Procedure and other legislation), p. B-6440: [TRANSLATION] “For example, I was listening to the MNA for Sainte-Anne—I know other people share those same concerns—who was saying that we should introduce the concept of—this isn’t exactly how he put it, but I was going to say—economic or social turmoil.The idea is embedded in the legal framework governing public health and safety, but falls under the jurisdiction of the executive branch.It’s a key element.”    Réseau de transport de la Capitale et Syndicat des employés du transport public du Québec Métropolitain inc., 2023 QCTAT 2525. Bill 89, s. 4 amending the Labour Code by adding s. 111.23.3. CQLR, c. F-3.1.1. CQLR, c. R-8.2. International Labour Office, Freedom of association – Compilation of decisions of the Committee on Freedom of Association, 6th ed., Geneva, 2018, at paras. 830 to 866.  The Supreme Court has recognized the relevance of the comparison: Saskatchewan Federation of Labour c. Saskatchewan, [2015] 1 SCR 245, at para. 69. Jean Berner, Les services essentiels au Québec et la Charte canadienne des droits et libertés, Québec, Presse de l’Université Laval, 2018, p. 35. Bill 89, s. 4 amending the Labour Code by adding s. 111.22.13. Bill 89, s. 4 amending the Labour Code by adding s. 111.22.15. The powers in question are those provided for in sections 111.17 to 111.22.1 of the Labour Code. Bill 89, s. 4. Bill 89, s. 4 amending the Labour Code by adding s. 111.22.12. Bill 89, s. 1 amending s. 111.0.23 of the Labour Code. Radio-Canada, Québec solidaire soupçonne la CAQ de vouloir se venger du secteur public, February 19, 2025, https://ici.radio-canada.ca/nouvelle/2142088/greves-limites-projet-loi-quebec, accessed February 21, 2025