COURT FILE NO.: 410/03

DATE: 20040624

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

O’DRISCOLL, JENNINGS and SWINTON JJ.

B E T W E E N:

THYSSEN ELEVATOR LIMITED carrying on business as THYSSENKRUPP ELEVATOR

Applicant

• and -

NATIONAL ELEVATOR AND ESCALATOR ASSOCIATION, INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS and ONTARIO LABOUR RELATIONS BOARD

Respondents

L. Leslie Dizgun, for the Applicant, Thyssen Elevator Limited

Douglas K. Gray, for the Respondent, National Elevator and Escalator Association

David A. Wright, for the Respondent, International Union of Elevator Constructors

Voy T. Stelmaszynski, for the Respondent, Ontario Labour Relations Board

HEARD: June 24, 2004

O’DRISCOLL J.: (Orally)

I. NATURE OF THE PROCEEDINGS, THE PARTIES AND THE BACKGROUND

1Thyssen Elevator Limited (hereinafter “Thyssen”) brings an application for judicial review and seeks an order setting aside the “remedy portion” of a decision of the Ontario Labour Relations Board (hereinafter “OLRB”), dated March 21, 2003, given by Vice Chair D.A. McKee.

2The impugned remedy follows a finding of the OLRB that the union had engaged in bad faith bargaining, contrary to s.17 of the Labour Relations Act 1995, S.O. 1995, c.1, Sch. A., (hereinafter the “Act”).

3The applicant submits that the remedy: (a) exceeds the jurisdiction of the OLRB, and (b) is patently unreasonable.

4Thyssen was present at the OLRB hearing and participated as an intervenor. The National Elevator and Escalator Association (NEEA) opposes this application to set aside the remedy employed by the OLRB. The International Union of Elevator Constructors (hereinafter the “Union”) takes the position that although it does not agree with the finding that it engaged in bad faith bargaining, it does not challenge the finding and asks that the judicial review be dismissed.

5NEEA is an employer Association representing employers in the elevator industry. The material states that there are only two members of the NEEA: Otis Canada Inc. and Kone Elevator Co. Limited. The other employers in the industry are “Independents”. The applicant is an “Independent”.

6Since 1978, the NEEA has been the employer organization designated by the Minister of Labour to represent employers in the “industrial, commercial and institutional” sector of the construction industry (ICI) in negotiating a province-wide collective agreement. The Union is the designated employee bargaining agency for purposes of bargaining a provincial-wide agreement, sometimes referred to as the OPA.

7NEEA is also an employers’ organization as defined by s.1 of the Act for the purposes of negotiating a collective agreement with the Union for the non-ICI work. Non-ICI work, generally, includes some repair work and most or all maintenance work. There is no accredited employer organization representing employers in the industry which is authorized to bargain a collective agreement for the non-ICI work in Ontario.

8The Union has refused to enter into one collective agreement for the ICI sector work and a different collective agreement for the non-ICI sector work. Historically, the Union has entered into one collective agreement between it and NEEA for both ICI and non-ICI work under a province-wide bargaining scheme, the OPA. Although the OPA between NEEA and the Union addresses both ICI and non-ICI work, the OLRB has held that the Independents, including the applicant, are not bound by the OPA for non-ICI work because NEEA is not authorized to bargain on their behalf for non-ICI work.

9To bridge the gap, the applicant, the same as other Independents, signed a final binding collective agreement with the Union that provided that its terms would be identical to the OPA between the Union and NEEA. It is called a “Me Too” collective agreement.

II. THE 2001 NEGOTIATIONS

10In 2001, in negotiations for a new collective agreement, NEEA proposed that each employer remit ten cents for each hour worked by every employee. In 1998, the same “industry fund” proposal had been made but not accepted.

11On August 24, 2001, the Union obtained “Me Too” agreements from all the Independents. These written agreements, as did the previous “Me Too” agreements, stated that the Independent would be bound by any amendments to the OPA subsequently reached between the Union and NEEA. There are various references in the material as this being tantamount to giving the Union a “blank cheque” or “carte blanche”.

12Paragraph 2 of the “Me Too” agreement states:

“2. If and when any of the terms and conditions of the Ontario Provincial Agreement are in any way amended by the parties thereto, then the parties to this Memorandum of Agreement shall be bound by such amendments as if the amendments were made by the Union and the Employer and the Employer agrees to execute such documents as may be presented to the Employer by the Union in order to confirm and acknowledge such amendments.”

13The only issue remaining on the bargaining table was NEEA’s request for an industry fund. NEEA and the Union could not agree on the terms of the new collective agreement and a strike commenced on August 25, 2001. On August 28, 2001, the Union sent a letter to each Independent stating that, following failed negotiations, a legal strike had commenced at midnight on August 24, 2001 with the industry fund as “the single outstanding issue”.

14On August 30, 2001, the parties met and signed a Memorandum of Agreement and agreed to resolve the “industry fund issue” by referring it to an interest arbitration board, chaired by Ms. Diane Gee, “for final determination”. The matter was to be heard within 45 days. The president of the applicant, Kevin Lavallee, was at that meeting.

III. THE SECOND SET OF “ME TOO” AGREEMENTS

15Some time after the Memorandum of Agreement of August 30, 2001, was signed, but before the Gee Board commenced to sit, the Union obtained the execution of a second set of “Me Too” agreements from a number of the Independents, including the applicant, Thyssen. The second “Me Too” agreements echoed the first set, except a paragraph 3 was added:

“3. Notwithstanding paragraph 2, above, the Employer does not agree to be bound by any amendment of the Ontario Provincial Agreement that purports to create an obligation on the part of the Employer to contribute to any fund or account that exists or that may exist for the purpose of supporting any entity of which the Employer is not a member, except to the extent that such an obligation may be required by law.”

16The Union did not tell NEEA about the second set of “Me Too” agreements. NEEA discovered the existence of the second set of “Me Toos” shortly before the Gee Board interest arbitration commenced. At paragraph 95 and 96 of its decision, the OLRB found that once the Union realized the full potential implication of its August 30, 2001 agreement, to take the Industry Fund issue to arbitration, the Union did what it could to back out of the deal. The Union did not wish to agree to something that would, if NEEA succeeded on November 7, 2001, before the Gee Board, strengthen NEEA’s hand in bargaining by having money flow into NEEA’s bank account.

IV. THE GEE BOARD’S AWARD

17On November 7, 2001, the Interest Arbitration Board, chaired by Ms. Gee, awarded the provision requested by NEEA.

V. THE OLRB’S CONCLUSION REGARDING THE ALLEGATION OF BAD FAITH BARGAINING BY THE UNION, CONTRARY TO S.17 OF THE ACT.

18At paragraphs 118 and 119 of its March 21, 2003, Decision, the OLRB found that the Union placed NEEA in the position of a de facto bargaining agent for all employers and for all types of work and caused NEEA to enter the OPA Collective Agreement on that basis. And then, the Union altered that bargaining reality once NEEA was “locked in” and unable to change its position.

19In paragraph 129 of its Decision, the OLRB held that the Union’s actions in soliciting the second set of “Me Too” agreements, which did not oblige the Independents to contribute to the fund, constituted reneging by the Union on the original agreement with NEEA and was bad faith bargaining under s.17 of the Act because it subverted the process which concluded in the August 30, 2001 agreement.

VI. THE REMEDY FASHIONED BY THE OLRB

20Commencing at paragraph 140 of its Decision, the OLRB discusses the question of remedy, its remedial authority as set out in s.96(4) of the Act and the Board’s decisions concerning remedy, such as: (i) Radio Shack [1979] OLRB Rep. Dec. 1220; Judicial Review was denied: 80 CLLC 14,017; (ii) The Corporation of the Town of Oakville [1984] OLRB Rep., Apr. 640 and Gebbie v. Longmore [1973] OLRB Rep. Oct. 519, at paragraphs 49 and 50.

21The cases cited above in the OLRB’s decision from paragraph 145 to 151 discuss whether a remedial order could or should in this case affect the rights of third parties, the Independents, who, the OLRB found, were not in a strong position to argue the equities of their position, (see paragraph 142). At paragraph 153 of its decision, the OLRB concluded that:

153. If paragraph 3 of the second “me too” agreement were to cease to have any effect, then the Independents would be in precisely the situation that they were in, willingly and knowingly, the day before the Union committed a violation of section 17 by asking them to execute the second “me too” agreement. The Independents were closely involved in the action which I have found to be a violation of the Act, and they lose nothing that they were entitled to if the provision disappears. What they do lose is the chance to profit from the Union’s unlawful activity.”

22The OLRB then, in paragraph 155, directed the Union to do certain things:

155. I direct the Union:

(1) to refrain from relying on, enforcing, incorporating into any other document or collective agreement, or giving any effect whatsoever to paragraph 3 of the second “me too” agreements;

(2) within 30 days of the date of this decision, to draft a consolidated version of the OPA which incorporates the collective agreement created by the OPA as it existed prior to August 2001, the first “me too” agreement, the arbitration award of Ms. Gee, Messrs. Knight and McMenemy, and the second “me too” agreement absent the third paragraph and to present this document to NEEA for execution; and

(3) to draft and execute an agreement with every Independent that executed a “second me too” agreement to delete paragraph 3 or any reference to it from all collective agreements binding on the Union in Ontario, and to present such document to each such Independent.

This order will be effective from December 22, 2001 (the date by which the last Independent received notice of this application) to April 30, 2004.

156. The Board further directs Thyssen and all other Independent contractors who have notice of this decision:

(1) to refrain from interfering in the Union’s compliance with the Board’s order and to execute any document, which the Union is required to execute in compliance with it.”

VII. SHOULD THE DIVISIONAL COURT REFER TO AND CONSIDER THE AFFIDAVIT OF KEVIN LAVALLEE, SWORN NOVEMBER 3, 2003 AND THE AFFIDAVIT OF CARL W. PETERSON, SWORN NOVEMBER 6, 2003?

23Mr. C. W. Peterson was counsel for the applicant before the OLRB. His affidavit is a discussion of his assessment of why he did not call Mr. K. Lavallee as a witness before the OLRB and “what might have been”. Mr. Lavallee is the President and CEO of the applicant. His proposed evidence flies in the face of the first “Me Too” agreement. In our view, both of the these affidavits should be disregarded for the reasons set out in Keeprite Workers’ Independent Union v. Keeprite Products Ltd. (1980), 1980 1877 (ON CA), 114 D.L.R. (3d) 162 (Ont. C.A.).

VIII. STANDARD OF REVIEW OF THE OLRB DECISION

24Utilizing the pragmatic and functional approach as set down by the Supreme Court of Canada in: Pushpanathan v. Canada (Minister of Citizenship and Immigration) (1998), 1998 778 (SCC), 160 D.L.R. (4th) 193, Law Society of New Brunswick v. Ryan, [2003] SCC 20, Alberta Union of Provincial Employees v. Lethbridge Community College, 2004 SCC 28, at paragraph [14], there are four (4) factors to be considered in deciding the question of the appropriate standard of review:

(i) The presence or the absence of a privative clause: Here, the Labour Relations Act, 1995 has two strong privative clauses in s.114(1) and s.116.

(ii) Expertise: The expertise of the OLRB to deal with these matters is unquestioned. The OLRB frequently deals with the issues: Has a violation of the Act occurred? If so, what is the appropriate remedy? In fashioning a remedy, the OLRB calls into play its understanding of labour relations policy and provides an appropriate remedy that fits the facts. See: Royal Oak Mines Inc. v. Canada (Labour Relations Board) (1996), 1996 220 (SCC), 133 D.L.R. (4th) 129 (S.C.C.); Canada (Attorney General) v. Public Service Alliance of Canada (1993), 1993 125 (SCC), 101 D.L.R. (4th) 673 (S.C.C.) (PSAC).

(iii) The purpose of the Act as a whole and s.2 and s.17 in particular: In Royal Oak Mines, supra, the Supreme Court of Canada said:

58“In my view remedies are a matter which fall directly within the specialized competence of labour boards. It is this aspect perhaps more than any other function which requires the board to call upon its expert knowledge and wide experience to fashion an appropriate remedy.”

(iv) The nature of the problem: The question or questions facing the OLRB were ones of mixed fact and law, finding the facts on the evidence presented and applying the statute and the relevant labour law decisions to the facts as found. In this, the OLRB is to be accorded considerable deference.

25In our view, in this case, the standard of review is one of patent unreasonableness. In PSAC, supra, at p.691, the Court said:

“This is clearly a very strict test…It is not enough that the decision of the Board is wrong in the eyes of the court; it must, in order to be patently unreasonable, be found by the court to be clearly irrational.”

IX. THE RESULT

26In our view: (i) the OLRB had ample evidence on the record before it, as we cited earlier in these reasons, to make the findings of fact it made, and (ii) the OLRB had ample authority to fashion the remedy it prescribed in this case.

27The factum of counsel for the Union sums up matters this way:

47“In its remedy, the Labour Relations Board simply restored the collective agreement between the applicant and the IUEC to the form it was in prior to [the second “Me Too” agreement] that it determined constituted bargaining in bad faith. The [second “Me Too”] agreement, of course, required the consent of both parties. Had the IUEC not agreed to the amendment that the Board found was improper, the applicant would have been in exactly the same position it is in now. The Board has not imposed anything on the applicant that did not result from its original agreement. It has simply directed that the acts complained of be “rectified” as provided for in s.96(4)(b) of the OLRA by restoring the parties’ unamended agreement.”

Counsel for NEEA sums it up this way in his factum:

47“Had it not been for the Union’s breach of the Act, the Independents would have been in the position to simply pay the Industry Fund as if the second “Me Too” agreements had not been made. In these circumstances, the Board held that it was not unjust to require the Independents to simply pay the amount owing as if the second “Me Too” agreements had not been made.”

28The Board noted that the Independents, including the applicant, had been given notice of the proceedings and an opportunity to participate. Indeed, the applicant intervened and participated fully before the OLRB.

29It cannot be said that any of the OLRB’s findings or the remedy was patently unreasonable, that is, clearly irrational.

30For these reasons, the application is dismissed.

X. COSTS

31After hearing submissions as to costs, with the concurrence of my colleagues, I have endorsed the back of the application record as follows: “This application is dismissed for the oral reasons (recorded) this day. The applicant shall forthwith pay the following fixed costs: (i) to NEEA, the sum of $7,500.00, and (ii) to the respondent, IUEC, the sum of $3,500.00”

O’DRISCOLL J.

JENNINGS J.

SWINTON J.

Date of Reasons for Judgment: June 24, 2004

Date of Release: July 20, 2004

COURT FILE NO.: 410/03

DATE: 20040624

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

O’DRISCOLL, JENNINGS and SWINTON JJ.