The court ordered that the workers be compensated.
The country's highest court ruled in a five-to-two decision that the retail giant modified working conditions for the employees without a valid reason when it shut down the store in February 2005.
The ruling ends nearly a decade of legal battles between the corporate giant and the 190 employees who lost their jobs at the Jonquiere location in the province's Saguenay region.
The store never re-opened so it is impossible for the workers to be re-hired. Instead, the court said an arbitrator will determine appropriate reparations, possibly with damages and interest.
Friday's judgment stems from a complaint filed by the union against Wal-Mart that alleged the enterprise had modified working conditions by eliminating their jobs.
The complaint said that contravened Section 59 of the Quebec Labour Code, which states working conditions must not be altered in any way, shape, or form during a unionization process.
An arbitrator had ruled in favour of the union, but that decision was overturned by the Quebec Court of Appeal, leading to a showdown at the high court in December 2013. The Supreme Court agreed with the original arbitrator's ruling.
"It was in fact reasonable to find that a reasonable employer would not close an establishment that 'was performing very well' and whose 'objectives were being met' to such an extent that bonuses were being promised," the ruling reads.
A spokesman for Wal-Mart Canada said Friday the company will consider its options.
"We are disappointed by the decision," the company wrote in an email. "This was an appeal of a unanimous decision by the Quebec Court of Appeal to reject the UFCW's claim, which in our view was a legally correct decision. We will review the decision carefully in order to determine what our next steps will be."
The closing of the store has been the subject of a lengthy judicial saga that has played out before the courts, with the retail giant winning the majority of those battles.
Friday's judgment puts an end to the various legal battles initiated by the former employees against Wal-Mart, but the company could decide to contest the amounts owed to its former workers.
The store shut down a few months after the workers became the first Wal-Mart employees in North America to be unionized in 2004. They were negotiating a collective agreement when the store suddenly shut on the same day an arbitrator was appointed to resolve an impasse in negotiations.
The workers, who belonged to the United Food and Commercial Workers union, said it was their union activities that led to the store closure. The union has said the closure was part of a worldwide strategy by the retail giant to stop other workers from unionizing elsewhere.
In the case before the Supreme Court, an arbitrator had agreed with the union, which had argued work conditions were illegally modified because Wal-Mart had not demonstrated, in its opinion, the decision to terminate employees was taken during "ordinary course of the company’s business." For example, if the store was losing money.
The Supreme Court overturned the appeal court decision which had disagreed with the arbitrator.
"The true function of (Section) 59 is to foster the exercise of the right of association," the ruling reads. "Its purpose to circumscribing the employer's powers is not merely to strike a balance or maintain the status quo during the negotiation of a collective agreement, but it is more precisely to facilitate certification and ensure that the parties bargain in good faith."
The United Food and Commercial Workers union applauded the victory.
"The Supreme Court ruling sends a message that no one is above the law," says Paul Meinema, national president of the UFCW. "By clarifying that employers must respect the law and the rights of their employees when making business decisions, this ruling serves as a major positive landmark."
It's not the first time the Supreme Court has had to deal with this particular Wal-Mart closure.
In 2009, the high court ruled that Wal-Mart was within its rights to shut down the store.
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