GSB# 2002-0507

UNION# OLB182/02

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Ontario Liquor Boards Employees’ Union (East)

Grievor

• and -

The Crown in Right of Ontario (Liquor Control Board of Ontario)

Employer

BEFORE

Owen V. Gray

Vice-Chair

FOR THE UNION

Craig Flood Koskie Minsky LLP Barristers and Solicitors

FOR THE EMPLOYER

Alan Freedman Heenan Blaikie LLP Barristers and Solicitors

HEARING

June 28, 2004.

Reasons for Decision

1The issue in this proceeding was whether negotiations in which the parties engaged in May and June of 2003 resulted in a binding agreement that the grievor would resign on certain terms. After considering the agreed-upon facts and the submissions of counsel, I concluded that the parties had not reached agreement. A decision to that effect, with reasons to follow, was issued on July 2, 2004. These are the reasons for that decision.

Facts

2The issue was argued on the basis of a written statement of agreed facts and a bound volume containing certain documents to which that statement referred. In addition to those documents, the parties put before me a set of handwritten file notes created contemporaneously by Ms. Noble, who represented the union in the dealings in issue. Notes of her conversations with the grievor and union officials had been expurgated, so that all that remained were notes of her communications with David Spears, who represented the employer in those dealings. The parties agreed that these notes would serve as Ms. Noble’s evidence of those communications, and should be treated as the equivalent of an examination-in-chief on which there had been no cross-examination.

3The statement of agreed facts is quoted here with its parenthetical cross-references to the book of documents deleted. I have interjected pertinent information from the document book or Ms. Noble’s notes at appropriate points in the parties’ narrative:

1. On May 13, 2002, the Liquor Control Board of Ontario (the “LCBO”) terminated the employment of Leon East (“East”). The Ontario Liquor Board Employees’ Union (the “Union”), which represented East in his employment relations with the LCBO, filed grievance GSB #0507/02 over East’s termination.

2. The parties resolved grievance GSB #0507/02 by entering into minutes of settlement dated April 8, 2003. Under the minutes of settlement, East’s termination dated May 13, 2002 was rescinded and he was reinstated to his former position effective April 22, 2003. The period between East’s termination and his reinstatement was treated as a disciplinary suspension without pay or benefits. The minutes of settlement further provided that, for a period of three years from May 13, 2002, East’s employment would be terminated immediately for just cause should he engage in any further misconduct which would normally result in discipline. The parties also agreed that Vice-Chair Kirkwood would remain seized with respect to the implementation of the settlement

3. Shortly after East’s return to work at the LCBO on April 22, 2003, certain issues arose regarding East’s reintegration into the LCBO workforce. East left work early on April 29, 2003 claiming that he was not feeling well. On the same day, April 29, 2003, Union counsel contacted LCBO counsel to advise that East was not happy at work. She then inquired about whether the LCBO would be prepared to provide East with a severance package in exchange for which East would agree to terminate his employment with the LCBO. Union counsel advised LCBO counsel that East would be prepared to terminate his employment with the LCBO in return for $24,500 and the LCBO’s agreement to waive the approximately $5,700 that it alleged East owed on account of an alleged WSIB overpayment, in addition to the other aspects of the offer which had been previously made by the Employer.

4. On May 1, 2003, LCBO counsel advised Union counsel that the LCBO was not interested in the “buy out”.

5. By letter dated May 1, 2003, Union counsel wrote to the Grievance Settlement Board requesting that a hearing be convened before Vice-Chair Kirkwood to address what the Union alleged were “problems [that] have arisen with respect to the implementation of this settlement”.

6. On May 7, 2003, there were numerous discussions between Union counsel and LCBO counsel as to the implementation of the reinstatement of the Grievor. LCBO counsel advised that the Grievor was “wearing his welcome thin.”

7. On May 7, 2003, Union counsel contacted LCBO counsel. She indicated that East would now be prepared to terminate his employment with the LCBO in return for $15,000, the LCBO’s waiver of the alleged WSIB overpayment and a reference letter.

4Ms. Noble’s notes indicate that between May 7th and May 26th, Mr. Spears responded with an oral counter-offer. Her note of a conversation with Mr. Spears on May 26th says: “I asked him to put offer in writing so I can send it to the grievor. He sd ok ­– will try to do this wk – has to run it by client.” The parties’ agreed statement of fact continues:

8. On May 30, 2003, LCBO counsel sent Union counsel a memorandum of agreement setting out proposed terms upon which East’s employment with the LCBO would be terminated. The terms proposed included a lump sum payment of $7,500 less deductions required by law.

5The document faxed to Ms. Noble on May 30th is reproduced here in full:

Memorandum of Agreement

BETWEEN:

THE CROWN IN RIGHT OF ONTARIO LIQUOR CONTROL BOARD OF ONTARIO

(the “LCBO”)

• and -

ONTARIO LIQUOR BOARD EMPLOYEES’ UNION

(the “Union”)

• and -

LEON EAST

IN THE MATTER OF AN AGREEMENT TO SEVER THE EMPLOYMENT RELATIONSHIP BETWEEN LEON EAST AND THE LCBO

WHEREAS Leon East returned from a disciplinary suspension pursuant to a Memorandum of Settlement, dated April 8, 2003;

AND WHEREAS after Leon East returned to work, the LCBO, the Union and Leon East made a bona fide effort to make the employment relationship work;

AND WHEREAS in spite of the parties’ efforts, the LCBO, the Union and Leon East agree that Leon East’s employment relationship with the LCBO is no longer a viable relationship;

AND WHEREAS Leon East injured his ankle while at work and he confirms that he has recovered fully from his ankle injury and has suffered no impairment because of and in any way related to his ankle injury;

AND WHEREAS the LCBO, the Union and Leon East wish to forever sever Leon East’s employment relationship with the LCBO;

THE PARTIES AGREE AS FOLLOWS:

1. Leon East agrees to resign from his employment with the LBCO effective May 26, 2003, and his employment with the LCBO will be considered terminated for all purposes as of that date.

2. The LCBO’s records will indicate that Leon East resigned from his employment with the LCBO for personal reasons.

3. The LCBO will pay Leon East a lump sum of $7,500, which shall be considered a retiring allowance for purposes of the Income Tax Act, less deductions required by law. The LCBO shall make best efforts to provide the payment to Leon East within four weeks of the date that this Memorandum of Agreement is executed.

4. The Union and Leon East hereby withdraw all outstanding grievances that have been filed by him or on his behalf. The Union and Leon East agree not to refile any grievance in whole or in part except to enforce the terms of this Memorandum of Agreement.

5. The LCBO will provide Leon East a letter in the form attached as Attachment “A” to be provided by Mr. Neil Lenihan, Human Resources Manager for Durham Logistics Facility. Leon East should direct any potential employer to contact Mr. Lenihan, or the person in position of Human Resources Manager for Durham Logistics Facility, who will provide only information consistent with that contained in the letter.

6. Leon East agrees not to reapply to the LCBO for any position of employment, and should he reapply for a position of employment, this Memorandum of Agreement shall be considered by the LCBO, the Union and Leon East as just and sufficient reason to refuse to hire him or otherwise continue to employ him.

7. IN CONSIDERATION of the terms set out herein and for good and valuable consideration, and by Leon East’s signature hereunder, he releases and forever discharges the LCBO (which includes its directors, officers, employees, and any related, affiliated or successor corporations) from any and all causes of action, claims, grievances, complaints, damages and demands of every nature and kind which Leon East had, has, or could have by reason of his employment with the LCBO, or termination of his employment from the LCBO and, in particular, but without limiting the foregoing, from any and all claims in any way arising from, incidental to, or in connection with all matters raised, or which could have been raised, in the Grievance;

FURTHER, Leon East and his successor(s) agrees not to commence or maintain any action, claim, grievance and/or complaints of any kind which could be claimed against the LCBO, including, without limitation, any claims or complaints under or pursuant to Ontario’s Human Rights Code, Employment Standards Act, Crown Employees Collective Bargaining Act, Labour Relations Act, 1995, or any such legislation, and the collective agreement between the LCBO and the Union;

AND FOR SAID CONSIDERATION, Leon East agrees to release, indemnify, and save harmless the LCBO from any action or claim made against it from either Canada Customs and Revenue Agency or Human Resources Development Canada pertaining to Leon East;

IT IS AGREED that this Release will be raised and will act as a complete bar to any claims, actions, grievances, or complaints that Leon East had, may have, or may have at any point in the future except to enforce this Memorandum of Agreement;

8. This settlement is without admission of liability by the LCBO, the Union or Leon East and such liability is specifically denied.

9. By his signature below, Leon East confirms that he has been fully and fairly represented by the Union and its representatives in this matter. Leon East confirms that he has read and understands the terms of this Memorandum of Agreement and enters it freely, voluntarily and without duress.

LCBO

Date

ONTARIO LIQUOR BOARD EMPLOYEES’ UNION

Date

LEON EAST

Date

I note that although paragraph 5) of the memorandum refers to “a letter in the form attached as Attachment ‘A’,” the fax to Ms. Noble did not include any such attachment.

6The parties’ narrative continues:

9. On or about June 2, 2003, Union counsel advised LCBO counsel that East’s “bottom line” was $13,000 less applicable deductions. LCBO counsel advised Union counsel that the LCBO would agree to a settlement upon those terms, provided that the other terms were acceptable. Union counsel stated that East wanted to look over the proposed settlement document and that she would courier it to him. Union counsel asked if the Grievor should go to work or not. LCBO counsel subsequently advised that the LCBO did not want someone back in the workplace with an offer of severance on the table and that if he does not want the offer then the parties could discuss the Grievor coming back.

10. Union counsel requested confirmation of the rate of taxation on a lump sum settlement of $13,000. LCBO counsel indicated his understanding that the lump sum amount of $13,000 would be taxed at a rate of 20%.

11. On or about June 2, 2003, after some further discussions about withholding tax, Union counsel advised LCBO counsel that the Grievor wanted to review the document and would call Union counsel if he wanted to accept the proposed settlement.

7Ms. Noble’s notes record that later on June 2nd she had this telephone conversation with Mr. Spears:

I told him that he is now making an offer of $15K – says its because he didn’t know how much the tax would be. I explained this not good nego practice & he’d be mad if the Er did it. He will talk to his client.

From the context it is apparent that “him” and the last “he” refer to Mr. Spears; otherwise, “he” refers to the grievor. Ms. Noble’s notes also record a telephone call from Mr. Spears later that day:

The offer for $13K is open for 10 minutes. Otherwise, he shd come back to work Wednesday and live up to the back to work.

While this note is dated “June 3/03”, it appears (and counsel arguing this matter confirmed) that the call occurred on June 2nd, as did two further telephone conversations or messages in which Ms. Noble told Mr. Spears that the grievor had told her “send me doc & I’ll look at it tomorrow & call you to say if I accept it,” and Mr. Spears responded that $13,000 was (still) the bottom line and “let us know tomorrow.”

8The statement of agreed facts continues:

12. On June 3, 2003, Union counsel advised LCBO counsel that East had decided that he wanted to return to work at the LCBO. She asked that if LCBO counsel wanted to provide information regarding the Grievor’s return to work, then he could advise Union counsel.

13. On June 5, 2003 at approximately 1:00 p.m., East contacted Neil Lenihan (“Lenihan”), Human Resources Manager, Durham Logistics Facility. East left a voicemail message for Lenihan stating that he had just received the proposed memorandum of agreement from the Union in the mail and, after looking at it, had decided that he would sign it. He stated in the message that he would like to accept the package. Later that same day, Lenihan spoke with East and advised him to contact the Union. Also on the same day, LCBO counsel left a message for Union counsel advising her of the message that East had left for Lenihan. LCBO counsel also advised that the LCBO did not want to be seen as negotiating with the employee directly. LCBO counsel also advised that he would have Lenihan call the Union representative. Lenihan subsequently called Ms. Chaykowsky of the Union who advised that communication on this matter should be directed to Union counsel.

14. On the morning of Friday, June 6, 2003, Union counsel left the following voicemail message for LCBO counsel:

Hi David, its Julia Noble calling about Leon East. I got your message from yesterday. I understand that you are saying that the LCBO didn’t negotiate with him and that’s fine. I am sure that is the case. And anyway I spoke to Leon and he’s apparently going to send me something that is signed by fax today so we will see if I actually get that and if I do I guess what I can do is leave you a message to the effect of whether Leon and the Union both signed the agreement and then you will know. Okay? Any questions give me a call 905-712-2912.

15. That same morning, Union counsel contacted LCBO counsel again. She indicated that the proposed settlement document did not include a term waiving the approximately $5,700 that the LCBO had alleged East owed on account of the alleged WSIB overpayment. Union counsel did not express any other concerns about the proposed settlement document to LCBO counsel. Later that same day, at approximately 1:38 p.m., LCBO counsel advised Union counsel by telephone message that the LCBO agreed to waive this approximately $5,700 alleged overpayment. He stated that he would change the proposed minutes of settlement and that it was the LCBO’s view that there was a deal.

9According to Ms. Noble’s notes and one of the employer’s documents, the message quoted in paragraph 14 of the agreed statement of fact was left at around 9:40 a.m. According to her notes, Ms. Noble first called about the waiver provision at 9:55 a.m., and after identifying that the memorandum did not contain a waiver provision said “I think he wants that.” There was no indication in that message that she had spoken to the grievor in the intervening 15 minutes. Ms. Noble called again at 11:30 a.m. to ask whether the alleged overpayment would be waived. Her note of that conversation includes the words “Yes he wants it in Minutes.” From the context it is clear that “he” meant the grievor in each of these notes.

16. On Monday, June 9, 2003, LCBO counsel sent Union counsel correspondence enclosing a document referred to as a draft of the memorandum of agreement with respect to the severance of East’s employment with the LCBO. The enclosed document included a term under which the LCBO agreed to waive the alleged overpayment (as agreed on June 6, 2003) as well as a document referred to as “the draft reference letter ... being Attachment “A” to the Memorandum of Agreement.”

17. Later on June 9, 2003, Union counsel contacted LCBO counsel. She asked the LCBO to amend the resignation date noted in the draft reference letter to make it consistent with the resignation date noted in the draft of the memorandum of agreement. The LCBO agreed to the amendment and LCBO counsel forwarded the revised reference letter to Union counsel by e-mail on June 9, 2003.

18. Union counsel did not advise that these were the full extent of any changes the Union was seeking. Nor did Union counsel advise that the Union was seeking any further changes to any extent. LCBO counsel did not ask whether these were the full extent of any Union changes to the draft of the memorandum of agreement. In their conversation on June 9, 2003, LCBO counsel asserted the parties had a deal and Union counsel did not agree with that position.

10Concerning the exchange referred to in the last sentence of paragraph 18 of the agreed statement of fact, Ms. Noble’s note of the conversation of June 9th records this:

David says there is offer & acceptance – based in part on Leon’s call saying I accept, to Lebo. I sd I didn’t think they cd really base it on that, but I also hope we have closure. If he can send me amended letter today, I will get it out to Leon.

The agreed facts continue:

19. The LCBO never received an executed memorandum of agreement from the Union or the Grievor. The LCBO has never paid any monies to the Grievor pursuant to the proposed memorandum of agreement or the draft of the memorandum of agreement, either in trust or otherwise, or provided a signed reference letter to the Grievor or the Union.

20. On June 12, 2003, East contacted Bev Jordan, Human Resources Consultant at the LCBO. He advised her that he had changed his mind because of new circumstances that forced him to resume work and that he could not accept the severance package.

21. By letter dated June 16, 2003, Union counsel advised LCBO counsel “...that Mr. East has instructed me to communicate to the Employer that he does not wish to accept the Employer’s offer as contained in the draft Memorandum of Agreement”.

22. Neither LCBO nor Union Counsel specifically discussed the distinction, if any, between the description of documents as “proposed” memorandum of agreement as opposed to “draft memorandum of agreement.”

23. The issue that requires determination is whether the parties have reached a settlement concerning the termination of East’s employment with the LCBO and, if so, the terms thereof.

Argument

11The issue was argued by Mr. Freedman for the employer, and Mr. Flood for the union.

12Mr. Freedman submitted that an agreement is made when the parties agree on all essential terms, and that in this case that had occurred on June 6th when the employer’s advised union counsel that it agreed to include the provision that union counsel had identified as absent from the draft memorandum sent to her on May 30th.

13Mr. Freedman identified a number of general principles concerning the settlement of grievances: that it is not necessary for a settlement to be in writing, as oral settlements are valid and enforceable; that the fact that an oral agreement may contemplate formalization later in writing, or that the grievor will execute a formal release, does not diminish the force of the oral agreement when it is apparent that execution of the document is a matter of the performance of the agreement rather than its creation; that it is not necessary for the grievor to sign a memorandum of settlement in order to settle matters on which the trade union is bargaining agent, as the union’s agreement is legally sufficient to bind the grievor; that in assessing whether an oral exchange resulted in an agreement one must consider the objective effect, in context, of the words actually used, not the unexpressed intention of the speakers of those words. Each of the following awards was cited in support of one or more of these propositions: Re Oakville Assn. for the Mentally Retarded and O.P.S.E.U., [1993] 29 C.L.A.S. 600 (Samuels), Re Bilt-Rite Upholstering Co. Ltd. and Upholsterers’ International Union of North America, Local 30 (1979), 1979 CanLII 4007 (ON LA), 24 L.A.C. (2d) 428 (Rayner), Re Network North and O.P.S.E.U., Loc. 666 (1996), 1996 CanLII 20274 (ON LA), 53 L.A.C. (4th) 102 (Thorne), and Manitoba and M.G.E.U. (Martens) (1997), 1997 CanLII 24982 (MB LA), 68 L.A.C. (4th) 321 (Freedman), Re Sudbury District Roman Catholic Separate School Board and O.E.C.T.A. (1997), 1997 CanLII 25036 (ON LA), 61 L.A.C. (4th) 223 (Kaplan); Re British Columbia and B.C.G.E.U., [1988] 9 C.L.A.S. 97 (Larson).

14Mr. Freedman relied particularly on Re Concord Confections Inc. and Bakery, Confectionery and Tobacco Workers’ International Union, Local 264 (Bobotan Grievance), [1999] O.L.A.A. No. 633 (Bendel). There the employer proposed a settlement on terms set out in a particular document. The union proposed two changes to the document. The employer told the union it agreed to those changes. The arbitrator found that an oral agreement was made at that point, because by proposing those changes the union had impliedly stated that with those changes the terms in the employer’s document were acceptable.

15Mr. Freedman submitted that the same analysis applied here. The employer made a comprehensive proposal. The union’s response only questioned the omission of a particular term. An agreement was formed, he submitted, when the employer agreed to include that term. He acknowledged that the union had earlier indicated that the grievor would have to agree to the terms of any deal. He noted that the grievor had indicated acceptance of the terms of the deal in his message to Mr. Lenihan on June 5th, and the union must be taken to have been acting on his behalf thereafter in identifying objections and, impliedly, confirming agreement to the matters to which it did not express an objection. He invited me to find that the “change of mind” mentioned by the grievor in his telephone conversation with Bev Jordan on June 12th was a change from accepting the deal to not accepting it, and that this was something he could not then do.

16For the union, Mr. Flood noted that the onus is on the employer to demonstrate that the parties came to an agreement. He submitted that this onus is very substantial, particularly when the claim is based on oral representations made on various dates with the purported result that the grievor’s right to employment was relinquished. Re Doman Forest Products Ltd., Nanaimo Sawmill Division and International Woodworkers of America, Local 1-80 (1983), 1983 CanLII 4818 (BC LA), 13 L.A.C. (3d) 274 (Munroe), Re Pacific Forest Products Ltd., Nanaimo Division Pulp Paper and Woodworkers of Canada, Local 7 (1983), 1983 CanLII 4897 (BC LA), 14 L.A.C. (3d) 151 (Munroe), and Re FPC Flexible Inc. and G.C.I.U., Loc. N-1 (1997), 1997 CanLII 25146 (ON LA), 76 L.A.C. (4th) 322 (H.D. Brown) were cited with respect to this onus and the desirability of using signed documents as a means of signifying whether and on what terms agreement had been reached. Mr. Flood submitted that silence in bargaining does not signify acceptance: Toronto (City) v. Toronto Civic Employees Union, Local 416 (Lewis Grievance) [2002] O.L.A.A. No. 531 (Luborsky), Cold Springs Farm Ltd. v. Canadian National Federation of Independent Unions (Bull Grievance) [2002] O.L.A.A. No. 474 (Snow). If the award in Re Concord Confections Inc., supra, suggests otherwise, he argued, it should not be followed.

17Mr. Flood noted that the union and employer are the necessary parties to any settlement, that the union is the exclusive bargaining agent and that the statements by the grievor on which the employer relies here cannot be treated as having been made on the union’s behalf. Reference was made to Noël v. Société d’énergie de la Baie James 2001 SCC 39, [2001] 2 S.C.R. 207 and McGavin Toastmaster Ltd. v. Ainscough et al. (1975), 1975 CanLII 9 (SCC), 54 D.L.R. (3d) 1 (S.C.C.) with respect to the union’s status as exclusive bargaining agent and its relationship to a bargaining unit employee.

18Mr. Flood argued that in this case there was an ongoing process of negotiation that never reached a final agreement. The union had never represented that there would be agreement if the employer made the suggested change to its offer, and the employer never asked whether there would be agreement if it did. While there can be cases in which there is a complete, binding oral agreement of which reduction to writing is procedural, this was not such a case. It was apparent from the proposed memorandum of agreement that signatures, and particularly the grievor’s signature, were considered essential to the creation of an agreement. Paragraph 9 contemplates that the grievor will confirm with his signature that he has read and understands the Memorandum of Agreement and that he “enters it freely, voluntarily and without duress.” It also requires that he confirm by his signature that “he has been fully and fairly represented by the Union and its representative in this matter.” Mr. Flood notes that this latter portion of the paragraph is for the benefit of the union, a benefit it could not have unless the grievor signed.

19Mr. Flood argued that Ms. Noble’s communications on behalf of the union, particularly her first message on the morning of June 6th, had made it apparent that the grievor’s signature on a written memorandum of agreement was a precondition to agreement by the union. She identified that the proposed deal in its final form would have to be sent to the grievor for his approval, which he was to signify by his signature, before the union would agree to it.

20With respect to the need for signatures and writing, reference was also made to Re Hall Lamp of Canada Ltd. and United Automobile Workers, Local 1620 (1972) 1972 CanLII 2064 (ON LA), 3 L.A.C. (2d) 303 (Ord) and Bawiko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 1991 CanLII 2734 (ON CA), 79 D.L.R. (4th) 97 (Ont. C.A.).

21In reply, Mr. Freedman argued that the employer was not relying on silence but on the union’s overt act in suggesting inclusion of a particular provision as implying union agreement to the balance of the proposal it had made. With respect to the union’s submission that Ms. Noble’s first message of June 6th made it a condition that the settlement be signed by the grievor, Mr. Freedman invited me to look at the course of conduct before and after that message and note that there was no discussion of such a requirement at any other point. He added that there was never any agreement that the grievor’s signature would be a condition of the agreement. In any event, he submitted, the language of the message did not clearly add such a condition. He noted particularly that when Ms. Noble later proposed the addition of a provision with respect to the WSIB overpayment issue, she did not add that a deal was conditional on the grievor’s signature. He acknowledged that it would not have been necessary for Ms. Noble to repeat the condition if it had been expressed clearly in the first message of the day, but said that because that was not clear enough in that message the failure to include it again in the next communication in effect dropped it.

Analysis

22In Manitoba and M.G.E.U. (Martens) (1997), 1997 CanLII 24982 (MB LA), 68 L.A.C. (4th) 321, arbitrator Freedman observed (at pp. 328-9) that:

As a matter of principle unions and employers often settle griev­ances verbally, and often settle grievances in writing, and often confirm in writing settlements reached verbally. So long as the facts clearly demonstrate that the Province and the Union have uncondi­tionally agreed to settle a matter, and so long as no question is then left open expressly or implicitly between them as to whether the grievor is to be bound, verbal or written settlements between the Union and the Province will bind a grievor. In my view a settlement was reached when the Province accepted the proposal in the February 6 letter and the subsequent Memorandum of Settlement need never have been signed by either party. The required degree of certainty had already been achieved

Naturally, to avoid confusion and misunderstanding it is general­ly preferable that settlements be effected or confirmed in writing. That certainly is the normal practice of these two parties and it is, as indicated, best that such occur. As was said in Re Sudbury District Roman Catholic Separate School Board and O.E.C.T.A. (1997), 1997 CanLII 25036 (ON LA), 61 L.A.C. (4th) 223 (Kaplan) at 229:

... giving effect to settlements reached between the parties is of paramount importance in labour relations. In the normal course of events, settlements should be written. That is the usual practice of these parties, and it is unfortu­nate, albeit understandable given the circumstances, that usual practices were not followed. That being said, a settlement need not be written; where the facts indicate that a matter was resolved, it is open to a board of arbitration to so find absent any written agreement, as we do in this case. What is important is to determine whether a settlement has been reached and then, given the tremendous importance of settlements in labour relations, to give any such set­tlement appropriate effect.

23There is no substantial dispute in this case about the correctness of the statements of principle in this passage, nor about the correctness of the statements of principle summarized in paragraph [13] above. It is not suggested here that terms of settlement on which an employer and a union come to clear and unconditional oral agreement can have no legal effect unless reduced to writing in a document signed by the employer and trade union, nor that such an agreement could not be binding on a grievor as a matter of law unless he signed it or otherwise expressly agreed to its terms.

24The employer relies heavily on the award in Re Concord Confections Inc., supra. There, a member of employer’s management, Mr. Nussbaum, spoke directly to a grievor, offering to pay him money and discontinue a civil action against him in return for his signing a release and withdrawing his grievance. The grievor took the release to his union. The union’s representative, Mr. Piercey contacted Mr. Nussbaum. On Mr. Nussbaum’s evidence, Mr. Piercey had then said that the proposed settlement was acceptable subject to two changes to the release that he explained. According to Mr. Piercey, he told Mr. Nussbaum that the grievor was leaning toward accepting the offer, and then observed that there was nothing in the release about the discontinuation of the action and asked if the employer intended to discontinue it. In any event, it was common ground that Mr. Nussbaum had said that if Mr. Piercey had any changes to make to the draft Release, he should fax them to him.

25Thereafter, Mr. Nussbaum received a fax from Mr, Piercey captioned “For your consideration” setting out two paragraphs, one below the heading “New Paragraph” and the other below the heading “Change the 3rd paragraph to read.” After consulting his lawyers about the proposed changes, Mr. Nussbaum telephoned Mr. Piercey and told him that they were acceptable. Mr. Nussbaum testified that he had then said they had a deal and that this had elicited no denial from Mr. Piercey, who had stated that the grievor would be coming to the union office the following day to sign the papers. In his examination-in-chief Mr. Piercey denied ever saying that they had a deal. He testified that he did not remember saying that the grievor was coming to his office the next day, and certainly had not said that he would be doing so for the purpose of signing the release. In cross-examination, however, Mr. Piercey acknowledged that he might have led the employer to believe that the grievor would sign the revised release, and had never specifically told the employer that settlement of the grievance was contingent upon the grievor signing the revised release. The grievor did not sign, the grievance proceeded to arbitration and the employer objected that the grievance had been settled.

26The employer there argued that a firm agreement had been made by Mr. Nussbaum and Mr. Piercey on behalf of the employer and union, respectively, and that the grievor was expected to attend the union office to sign the release, not to study it further. As recorded in the award, the union’s argument was that even if the arbitrator made those findings, the objection that the grievance had been settled should be dismissed for one of three reasons: first, that the employer had negotiated directly with the grievor so the grievor was a necessary party whose signature was required; second, that the amount to be paid to the grievor was not expressly stated in the release so there was no complete agreement; and third, that there was no agreement by the union, which had carriage of the grievance, that the grievance would be withdrawn.

27The arbitrator found that Mr. Piercey had been acting on behalf of the union in negotiating a settlement of a grievance, from which it followed that the grievor’s signature was not required to effect a settlement, that the omission of the amount of the consideration from the release was of no significance since Messrs. Nussbaum and Piercey both knew what amount had been agreed, and that if there was agreement between the employer and the union it was obvious that it was an implied term that the union would withdraw the grievance. On the question whether the conduct of Messrs. Nussbaum and Piercey had resulted in agreement between the employer and union, the arbitrator made this finding:

¶37. I am further satisfied, even on the version of the facts most favourable to the union, that an agreement was reached in the discussions between Mr. Piercey and Mr. Nussbaum on June 21. When Mr. Piercey raised two specific objections to the draft Release that day, he was implicitly stating that everything else was acceptable. Once the two specific matters he raised were resolved in the manner he had proposed, an agreement was reached. There was nothing else left to discuss. Mr. Piercey, even according to his own testimony, did not indicate to the employer, explicitly or implicitly, that he lacked the authority to conclude a settlement or that it was in any way contingent on the grievor’s acceptance.

28It seems to me that arbitrator Bendel was making a finding of fact in the second sentence of the passage just quoted, not pronouncing a rule of law of general application.

29A proposal of changes in response to an offer may amount to a counter-offer that impliedly includes every term of the initial offer that is not expressly rejected or amended, particularly if the offer to which it responds was coupled with an express request for a response identifying any desired changes to the offer. A counter-offer may be impliedly subject to conditions previously identified by its proponent, such as ratification by the proponent’s principal or the grievor’s acceptance of the terms of settlement, either orally or in writing. A proposal of changes in response to an offer may not be a counter-offer at all: it may be a suggestion that the initial offer be improved, unaccompanied by any firm undertaking that an improved offer would be accepted — an “invitation to treat” in the language of contract law. These examples do not exhaust the possibilities. The nature and implications of a response to an offer depend on the words used and the context in which they are used.

30In this case, several things about the negotiators’ communications and their context suggest that a binding agreement could not reasonably have been expected to result, and did not result, from the employer’s indicating on June 6th that it would amend its proposal to include a waiver of the alleged WSIB overpayment.

31First, the memorandum of agreement faxed to Ms. Noble on May 30th was incomplete. It said in paragraph 5) that the employer would give the grievor a letter “in the form attached as Attachment ‘A’,” but there was no such attachment. Without an attachment, this was essentially an offer to provide a letter in a form to be agreed upon later. The language of the provision and the prior discussions reflected in Ms Noble’s notes do suggest generally what sort of letter was intended, but there is no evidence of oral agreement on its contents or on the substance of its contents. Both of the negotiators might reasonably have thought at that point that there would be no great difficulty coming to agreement on the form of the letter after agreement was reached on the other, more contentious terms. Still, it was something left to discuss. Provision for some variant of a letter of reference is not an “essential term” of an agreement about the resignation of an employee, of course, in the sense that such an agreement could not be given legal or practical effect if such a provision were absent. An “Attachment ‘A’” is, however, an essential term of an agreement that includes an obligation to deliver a “letter in the form attached as Attachment ‘A’”, since without the attachment there is no way of knowing whether any particular letter satisfies the obligation as framed.

32Second, the language of paragraph 9 of the proposed memorandum implied that the grievor’s signature on it was a prerequisite to the creation of a binding agreement, not a mere procedural formality that he could become obliged to perform as a result of an oral agreement between the union and the employer. Paragraph 9 said:

9. By his signature below, Leon East confirms that he has been fully and fairly represented by the Union and its representatives in this matter. Leon East confirms that he has read and understands the terms of this Memorandum of Agreement and enters it freely, voluntarily and without duress.

33The first sentence required that the grievor confirm, by signing the document, that he was satisfied with the union’s representation in the matter. This was not something that the union could commit the grievor to provide in the exercise of its authority as exclusive bargaining agent. The second sentence had the grievor confirming as well that he “enters” the Memorandum of Agreement “freely and voluntary and without duress.” The language chosen was quite inappropriate if it was expected that when the time came for the grievor to sign he would be under legal compulsion to do so by reason of an earlier oral agreement between the employer and the union to which he had not assented, since in that event it could not be said that he was acting freely and voluntarily in signing. The language was at very least grammatically awkward if his signing was expected to be the required result of an oral agreement between the employer and union to which he would have orally assented, since in that event he would have “entered” the agreement before he signed, not at the time of signing as the use of the present tense “enters” implies.

34Third, when on June 2nd Ms. Noble had told Mr. Spears that $13,000 was the grievor’s bottom line, he had clearly understood that this did not imply agreement to the other terms he had set out in the memorandum she had received from him by fax. She had no reason to suppose that it would be necessary to expressly negative any such implication when she asked him about the waiver provision in her second and third communications of June 6th. Mr. Spears had told her that the employer had not negotiated with the grievor in response to his intervening call. She had no reason to suppose that Mr. Spears thought the grievor’s call had altered the basis on which counsel were dealing with one another in this or any respect, apart from the alteration that would have been apparent from her first message on June 6th.

35Fourth, Ms. Noble’s first message to Mr. Spears on June 6th had made it clear that the union would not agree to a settlement thereafter unless it had been reduced to writing and signed by the grievor:

I got your message from yesterday. I understand that you are saying that the LCBO didn’t negotiate with him and that’s fine. I am sure that is the case. And anyway I spoke to Leon and he’s apparently going to send me something that is signed by fax today so we will see if I actually get that and if I do I guess what I can do is leave you a message to the effect of whether Leon and the Union both signed the agreement and then you will know.

36The meaning and significance of this message must be appreciated in the context of what Mr. Spears then knew or had heard from Ms. Noble.

37Ms. Noble had earlier indicated that the grievor would have to approve the terms of a deal before the union would agree to it. That is conceded. She had also said he would have to see it in writing before approving it. The memorandum of May 30th was delivered in response to the latter requirement. One of the provisions of that memorandum was an acknowledgement by the grievor he had read it, something he could not do before the very document he was expected to sign was actually in existence. Even before the grievor received the draft memorandum, there had been the further oral discussions about the grievor’s “bottom line” concerning the monetary payment and whether the employer would be willing to improve its offer accordingly. After learning that it would, the grievor had insisted, against Ms. Noble’s advice, that she make an increased monetary demand on his behalf. She had done that, and endured a predictably annoyed response. The grievor had then repeated that he would read the document when it arrived and let her know whether he would agree to it. The next day, however, the grievor had told Ms. Noble he wanted to return to work rather than pursue the negotiations, and she had started acting in accordance with that instruction. If his statement to the employer on June 5th is to be believed, he had given that instruction without waiting to see the written memorandum. On June 5th the grievor had spoken directly with the employer and said that he was willing to sign a memorandum that he said he had only received that day. Ms. Noble had learned of this from the employer’s counsel. By that point no one involved could have been unaware that the grievor had proven unsteady and unreliable in his dealings with the union.

38Against that background, Ms. Noble left Mr. Spears a message saying that she had spoken to the grievor. Clearly he had told her that he was willing to enter into an agreement: she told Mr. Spears “he’s apparently going to send me something that is signed by fax today.” Equally clearly, she was not prepared to effect an agreement based on his oral instructions: she added “so we will see if I actually get that.” She wanted it in writing from the grievor, signed. This was not a surprising position for her to take with the grievor, in light of his conduct during the previous three days. She told Mr. Spears that “what I can do is leave you a message to the effect of whether Leon and the Union both signed the agreement and then you will know.” This is the closest either of the negotiators ever got to identifying whether they understood that the result of their negotiations, if successful, would be a written agreement or an oral agreement to be confirmed in writing.

39Ms. Noble’s first message of June 6th was sufficient to put the employer on notice that thereafter the union would require the grievor’s signed acknowledgement that he was satisfied with any deal before it would agree to it. That condition was not impliedly withdrawn by her two subsequent communications that day. Nothing about the context suggested that there had been any change in the circumstances that had led her to introduce the condition.

40Mr. Freedman argued that the employer did not agree to a precondition that the grievor would have to assent in writing to the terms of any deal before the union would agree to them. No such agreement was necessary. The employer could refuse to negotiate under those conditions, but it could not proceed and then later insist that the union’s words and conduct be interpreted without regard to the qualification the union had placed on them.

41The grievor’s direct communication with the employer on June 5th can have no significance in assessing whether the employer and trade union made an agreement on June 6th. The grievor had no authority to speak for the trade union. It was for the union, not the employer, to be satisfied that the grievor agreed to the terms of any particular deal. Otherwise, the grievor’s state of mind at any particular point was of no legal consequence on this issue, and it does not matter what he meant by the change of mind remark in his call to the employer on June 12th. The employer was evidently and justifiably frustrated by the course the negotiations took as a result of the grievor’s highly changeable state of mind, but sympathy with the employer’s frustration could not affect the result.

42Individually and collectively, the four circumstances identified above created a context in which Ms. Noble’s second and third communications of June 6th could not reasonably be interpreted as implying unconditional agreement to the terms last proposed by the employer if only the employer would add a waiver provision to them.

43For these reasons I determined that the parties had not reached a settlement concerning the termination of the grievor’s employment with the LCBO in June 2003. As indicated in the decision I released on July 2, 2004, I remain seised with any question the parties are unable to resolve concerning the remedies required to put the grievor back in the position he would have been in had the employer not taken the position that he had resigned.