Ontario Labour Relations Board
[1980] OLRB Rep. February 223
0658-79-U; 0659-79-U; 1076-79-U; 1077-79-U Ontario Nurses' Association, Applicant, v. Grey-Owen Sound Health Unit, Respondent.
BEFORE: R O. MacDowell, Vice-Chairman and Board Members D. B. Archer and R. Redford.
APPEARANCES Donald F. Hersey and Anita Deane for the applicant; John H. E. Middlebro and W. C. MacPherson for the respondent.
DECISION OF R. O. MacDOWELL, VICE-CHAIRMAN AND BOARD MEMBER D. B. ARCHER;
This is an application by the Grey-Owen Sound Health Unit (hereinafter referred to as "the employer") for reconsideration of a decision of the Board issued August 10th, 1979, [1979] OLRB Rep. August 751. The employer's application was heard together with two union applications: a request for damages under section 79 of the Act; and an application for consent to prosecute the employer pursuant to sections 85 and 90 of the Act. All of these matters arise from the same general fact situation, and the Board considered it appropriate to consolidate the proceedings and dispose of all of the outstanding issues at a single hearing and by a single decision.
The facts are not substantially in dispute and were extensively reviewed in the Board's August 10th decision. It may be useful, however, to refer to them again, briefly, in order to establish the context in which the two new applications arise.
The last jointly negotiated collective agreement between the parties expired on December31, 1975. For some months thereafter the parties sought to negotiate the terms of a new collective agreement. One of the outstanding issues between them was the inclusion in that collect ye agreement of a provision which would require that the next collective agreement be settled by binding arbitration if the parties were unable to achieve a collectively bargained solution to this future dispute. The employer was not prepared to agree, in advance, to go to arbitration for the next agreement nor was it prepared to foreclose its right to resort to economic sanctions. As a result the negotiations reached a stalemate.
The parties decided that the way to resolve their deadlock was to refer all outstanding matters in dispute to an arbitrator, appointed pursuant to section 34c of the Act. One of these outstanding matters, of course, was the inclusion, in the collective agreement, of a clause which would provide for arbitration as the means to resolve the subsequent collective agreement. It is not disputed that the employer clothed the "section 34c arbitrator" with jurisdiction to prescribe the terms of a new agreement and to consider the inclusion in that agreement of an arbitration clause which would require resort to "a second round" of arbitration. (For ease of reference we shall refer to the arbitration pursuant to section 34c as the "first round" of arbitration; and the subsequent arbitration flowing from the section 34c arbitrator's award as the "second round" of arbitration.) Before the "first round" arbitrator the employer opposed the continuation of the arbitration process - in effect taking the same position as it had previously taken at the bargaining table - however, the arbitrator rejected the employer's arguments and decided that the disputed arbitration clause should be included in the collective agreement.
The employer remained adamantly opposed to a "second round" of arbitration, and sought judicial review of the arbitrator's jurisdiction to include this clause in the collective agreement. The employer's arguments were rejected by both the Divisional Court and the Court of Appeal. The Court of Appeal decision was issued February 5, 1979, and is now reported at (1979), 1979 CanLII 1899 (ON CA), 24 OR. (2d) 510. For somewhat different reasons each of the learned judges decided that the first round arbitrator had jurisdiction to include the disputed clause in the collective agreement, and that, accordingly, resort to a second round of arbitration was "compulsory." The matter was referred back to the arbitrator for reconsideration of the form of clause which he had prescribed, but there is no doubt that the Court of Appeal was unanimously of the view that the arbitrator could impose a "mandatory" provision which would bind the parties to resort to arbitration if they could not resolve their next collective agreement by negotiation. Unfortunately the Court decisions threw little light on a number of questions which, as a practical matter, were bound to arise: what was the status of the arbitration clause when the collective agreement, of which it was part, expired? How could non-compliance with the second round of arbitration be prevented? How was the second round arbitrator's award to be transformed into a collective agreement? And, most important, how did the second round of arbitration affect the right to strike or lock-out - a statutory right which would accrue following expiry of the collective agreement and the completion of the statutory conciliation process?
The employer took the position that it was still entitled to lock out its employees in pursuit of its bargaining objectives. By letter dated July 4, 1979 the employer advised all of its employees that as at 4.30 p.m. Friday, July 13th, they would be "locked out." It was the propriety of this lock-out which was the subject of the first union application to this Board and which resulted in our decision of August 10, 1979. The union contended that a strike or lock-out was the very thing which arbitration was designed to avoid and would be both "unlawful" and in defiance of the clear intention of the Court of Appeal. It is inconceivable, argued the union, that the Court could have intended that the parties could engage in a protracted strike or lock-out at the same time that they were obliged to resort to a "compulsory" arbitration process which would itself result in a new collective agreement. Such position, it was said, would undermine the arbitration process and vitiate the very purpose for which it was created. The employer contended, on the other hand, that it had complied with the statutory prerequisites of a lawful lock-out and that the "second round" arbitration mechanism had either disappeared with the collective agreement, of which it formed a part or, alternatively, could not abridge statutory rights which the employer was entitled to exercise. The employer maintained that it was entitled to engage in a lock-out despite the first round arbitrator's award and the Court of Appeal decision.
The hearing before the Board occurred on July 13th, 1979 - that is, the day on which the lock-out was scheduled to begin. The legal issues raised were complex, and at the end of the day the Board indicated that it would reserve its decision. On its own motion the Board asked the employer for its position concerning the scheduled lock-out — noting that we had no jurisdiction to grant interim relief, that the propriety of the lock-out was the very issue before us, and that if the employer's threat matured into a lock-out, we might then have to deal with the matter of damages. The employer was not prepared to await the Board's decision. The lock-out was implemented, as scheduled, shortly after the completion of the Board's hearing, and continued until Friday, August 10th, 1979, when the employer received the Board's decision. The employer now seeks reconsideration of that decision. The union now seeks compensation, inter alia, for the wages lost by the locked out employees. The union also seeks consent to institute a prosecution for what the Board found to be the employer's breach of section l4.
The procedural vehicle by which the matter was initially brought before the Board was an application under section 83 of the Act alleging "an illegal" lock-out. The statutory basis for "illegality" was not specifically pleaded. Much of the argument before the Board concerned the employer's purported compliance with the statutory pre-conditions for a lawful lock-out (i.e., timeliness and conciliation) and the union's contention that, notwithstanding this compliance, the employer's conduct was illegal because of the "compulsory" arbitration process; to which we have already referred. Neither party addressed the effect of section 14 of the Act; however, on the basis of the agreed facts, the majority of the Board found that a lock-out in the circumstances, constituted a breach of section 14.
The Board found that the parties had voluntarily, and specifically, clothed the arbitrator with the authority to prescribe a second round of arbitration, that a second round had been lawfully prescribed and that, therefore, neither party could now repudiate, or frustrate, the process by engaging in economic conflict. The parties had set in train an arbitration process, founded on section 34c, which limited their right to apply economic sanctions in order to secure their collective bargaining objectives. Of course, they remained free to engage in collective bargaining in an effort to compose their differences; but, once having undertaken to proceed to arbitration (in this case by specifically giving the "first round" arbitrator jurisdiction to require a second round) they could not now repudiate their previous commitment. They had created a new framework within which their bargaining had to be conducted and had given up certain bargaining tactics which might otherwise have been available to them. The Board found that the employer could not resile from that process and return to the previous collective bargaining status quo. Its attempt to do so constituted a breach of section 14 which, in the circumstances of this case, operated as a statutory fetter on the employer's right to lock out its employees — a right which it would otherwise be entitled to exercise having properly terminated the collective agreement and completed the compulsory reconciliation process.
The Board was satisfied that its interpretation of section 14, although novel, was neither inconsistent with the reasoning of the Court of Appeal, nor resulted in the creation of a perpetual process of arbitration. Indeed, the Board was doubtful whether section 14 could ever operate as a permanent bar to the right to strike/lock-out — unless, perhaps, the parties had, ab initio, explicitly and unequivocally, agreed to forever forego resort to economic conflict to resolve a bargaining impasse. Such agreement would be so unusual, and so inconsistent with the scheme of collective bargaining prescribed by the Act, that it would require the clearest possible language before the Board would be driven to consider this interpretation. In this respect the Board adopted the approach of Estey, J. in Bradburn v. Wentworth Arms Hotel Ltd., [1978] S.C.R. 846 at 861.
At the reconsideration hearing the parties were permitted to call evidence on any and all matters which they considered relevant either to the Board's earlier determination or to the new applications. In the unusual circumstances of this case the Board did not follow its usual practice on reconsideration applications of restricting new evidence to facts which could not have been obtained by reasonable diligence prior to the earlier hearing. It was apparent that the issues in all three applications were inextricably intertwined and of sufficient importance that both parties should have full opportunity to lead evidence and make their submissions with respect to all three. Accordingly, we heard such evidence as the parties wished to lead concerning the bargaining process and the parties' conduct, both before and after, the original Board hearing; since, it will be recalled, the lock-out, and consequent economic loss, did not occur until after the earlier hearing. Furthermore, the union argued that our discretion to grant consent to prosecute might be influenced by what it characterized as the employer'; "flagrant disregard of the law" in proceeding to lock out its employees while the legality of that lock-out was before the Board.
The Board was impressed by the open and forthright manner in which all of the witnesses gave their evidence; however, there is nothing in that evidence which substantially alters the factual basis upon which our earlier decision was based. Indeed, the evidence largely confirmed, or amplified, the agreed facts. The employer admitted that the lock-out was not provoked by, or a reaction to, any conduct of the trade union; rather, it was simply designed to force the employees to agree to the employer's terms. As both employer witnesses candidly admitted, many of the outstanding items had already been settled and the employer expected that its lock-out would achieve a collective agreement. We cannot accept the submission of counsel that the employer remained willing to proceed to arbitration despite its lock-out threat. The evidence is clear and uncontradicted that the employer was only prepared to proceed to the second round of arbitration if the union would forego any attempt to seek reimposition of the arbitration clause (i.e., a "third round" of arbitration.) The employer was concerned that the second round arbitration might issue an award requiring a third round and it was not prepared to risk this possibility. The evidence also indicates that the employer was well aware that its threatened lock-out was the subject of a proceeding before this Board, that the union had challenged the legality of its intended action, and that the Board would ultimately release a decision resolving the issue. In view of the statements made at the hearing the employer was, or ought to have been, aware of its potential financial liability. Nevertheless, on the advice of counsel, the employer decided to impose the lock-out as planned.
It might be noted that throughout the entire course of events the employer has been acting on the advice of its solicitors, who have apparently been intimately involved in both the tactical and legal considerations associated with the negotiations. The employer contends that in locking out its employees it was merely taking a "legal position" on the advice of counsel. It is argued that it was reasonable, in the circumstances, to rely on the advice of counsel and that, in taking this "legal position", based on the advice, it could not be said to have breached section 14 of the Act.
The employer is haunted by the spectre of perpetual arbitration — a series of successive rounds of arbitration, each "feeding" the next, and all arising from what the employer now considers to be its mistake in going to arbitration in the first instance. The employer views this possibility as the very antithesis of free collective bargaining and its concern is one that is legitimate and compelling — particularly having regard to the obiter statements of this Board in Haldimand-Norfolk Regional Health Unit, [1978] OLRB Rep. Feb. 197 which were favourably considered by Brooke, J.A. in the Court of Appeal. It is a position with which all members of this panel of the Board are sympathetic. However, the sincerity of the employer's concern does not, ipso facto justify its resort to a lock-out; nor does it turn the use of economic power, as a bargaining tactic, into an assertion of a "legal position." On the contrary, the lock-out of its employees was a form of affirmative action based upon certain legal premises and, as the employer was aware, the validity of those premises was being considered by this Board at the very time that the lock-out was being instituted.
Our holding that the employer is not entitled to lock out its employees does not mean that the employer is powerless to resist the reimposition of arbitration. It remains open to the employer to argue before the second round arbitrator that: he should not, as a matter of sound industrial relations judgment, attempt to provide for a "third round" of arbitration; or, alternatively, that a third round is inconsistent with the Court of Appeal's decision. The majority of the court (and in particular Arnup, J.A.) appears to base its decision, as we have done, on the fact that the respondent agreed to two, and only two, rounds of arbitration. Only Brooke, J.A. posited an alternative legal theory which might support a continuation of arbitration. If the employer is unsuccessful in persuading the arbitrator not to continue the process into a third round, it is open to the employer to seek to quash the award to the extent that the arbitrator has exceeded his jurisdiction. All of these actions would involve the employer asserting, or protecting, its legal position, and there is nothing improper in any of them. What the employer was not entitled to do, however, was to lock-out its employees in an effort to avoid the second round of arbitration and force the employees to conclude a collective agreement. In our view this is entirely inconsistent with compliance with a procedure which the Court of Appeal found to be compulsory, and to which we are satisfied it had previously agreed.
On the basis of the evidence adduced before us, and for the reasons set out herein and, more particularly, set out in our earlier decision, we are satisfied that the employer breached section 14 of the Act when it engaged in a lock-out. In so finding we have carefully considered the employer's submissions that it was acting on the advice of counsel; but we do not consider that this can provide an effective defence in the circumstances. We wish to make it clear, however, that we express no opinion on the wisdom, legal validity or possible legal foundations for a clause prescribing a third round of arbitration should the second round arbitrator choose to prescribe one. We hold only: where an employer has voluntarily agreed to a two-round arbitration process, the Court of Appeal upholds the arbitrator's jurisdiction to prescribe a "compulsory" second round, and a second round is prescribed, the employer cannot resort to the economic pressure of a lock-out in order to avoid the second round. To do so would be to renege on its earlier commitment to resolve a collective bargaining dispute by arbitration and would be a breach of section 14. To the extent that it was necessary to comment on the scheme of the Act we have already done so in our earlier decision and it would serve no purpose to repeat that an analysis here.
We rum now to the question of remedy. The union seeks, by its section 79 application, to obtain compensation for the employees in respect of the wages which they lost when they were locked out. The union also seeks, on its own behalf, to obtain damages in respect of certain sums which, it argues, it was required to expend by reason of the lock-out. The statutory provision most relevant to this aspect of the case is section 79(4). The relevant portion of that section reads as follows:
“..... where the Board is satisfied that an employer, employer's organization, trade union, council of trade unions, person or employee has acted contrary to this Act it shall determine what, if anything, the employer, employers' organization, trade union, council of trade unions, person or employees shall do or refrain from doing with respect thereto and such determination, without limiting the generality of the foregoing may include, notwithstanding the provisions of any collective agreement, any one or more of,
(a) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to cease doing the act or acts complained of;
(b) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to rectify the act or acts complained of; or
(c) an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate in lieu of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers' organization, trade union, council of trade unions, employee or other person jointly or severally."
- Prior to 1975 the Labour Relations Board had no jurisdiction to remedy alleged breaches of the duty to bargain in good faith; but this is not the first time that damages have been sought. In The Journal Publishing Company of Ottawa, [1977] OLRB Rep. June 309 the Board considered the appropriateness of a damage award where an employer, while engaged in a course of collective bargaining (which ultimately resulted in a timely lock-out), had contravened section 14 by prematurely breaking off negotiations, refusing to discuss certain issues in dispute and refusing to meet with certain designated representatives of the union. The Board found that during the protracted bargaining process there were a number of incidents which could be characterized as bad faith bargaining; however, the Board rejected the union's contention that there was any intention to eliminate the union altogether. A long and arduous bargaining process had merely been marked by certain incidents of bad faith bargaining by both parties. With respect to the union's request for damages, the Board commented:
"60. The ancillary request for damages also poses serious problems. The employer argued that the Board's general remedial power, found in section 79 of the Act, does not permit the awarding of damages, except in the limited circumstances where the Board is reinstating an employee under section 79(4)(c). The essence of the argument was that the power to award damages must be conferred upon the Board by a specific provision of the Act. We do not consider that the general remedial power is limited in such a way. The language of section 79 clearly provides the Board with the broadest power to provide relief where there has been a breach of the Act. The language of section 79(4)(c) is intended to clear up any doubts about the Board's power to reinstate employees, a remedy not available at common law, and not to restrict the awarding of damages to this one situation. The power of an arbitrator to award damages in the absence of express statutory authority has had long-standing approval from the Supreme Court of Canada. See: Polymer Corp. (1962), 1962 CanLII 3 (SCC), 33 D.L.R. (2d) 124. It would be strange indeed if the Labour Board did not have at least equal remedial authority, where the language of the legislation so clearly provides for it.
The existence of the power to award damages does not necessarily mean that such relief is appropriate. Although we do not agree with the employer's argument that damages are never an appropriate method of remedying a failure to bargain in good faith, we recognize that this type of remedy must be imposed with care. There are two concerns of particular importance. First, the awarding of damages should not result in the indirect imposition of a collective agreement. In this case, therefore, it would be inappropriate to award damages for loss of wages suffered as the result of the lock-out, since this approach would require the Board to determine terms and conditions of employment for those employees during that period. Second, the Board should not compensate for damage that results from the use of legal economic sanctions. The problem, in this case, is that the lost wages and employment benefits flow from the lock-out - an action that was timely, and not prohibited by the Labour Relations Act. The mere existence of an element of bad faith bargaining cannot convert an otherwise legal strike or lock-out into an illegal act, that would give rise to extensive liability in damages. The wrong lies with the manner in which the negotiations are conducted, not with the use of this economic sanction. To hold otherwise would introduce into the strike and lock-out an element of uncertainty that would disrupt the process of labour relations as it now exists in Ontario. In this case, although it is clear that the lock-out was not connected initially with any failure to bargain in good faith on the part of the employer, it could be argued that the employer's later failures to bargain in good faith subsequently tainted the lock-out. We do not accept this argument. The lock-out continued to be legal and damages, if any, must relate to extra negotiating costs that might have been caused by the employer's conduct, and not to the economic losses resulting from the lock-out itself.
In the circumstances of this case, however, we do not consider it appropriate to award damages for the extra negotiating costs that might have been incurred by the unions. This is a case where neither side can be given a clean bill of health, both sides on different occasions having failed to meet the standard of good faith bargaining. The responsibility for the breakdown of negotiations must be borne by both sides. Moreover, if these complaints had been brought to the Board more quickly, it is quite possible that the situation would have been corrected, and the damage would have been minimal. In this case, therefore, the Board does not consider it appropriate to award damages"
The Ottawa Journal case arose in the context of an unfettered bargaining situation in which neither of the parties had circumscribed its right to resort to economic sanctions as a means to resolve their collective bargaining dispute. Indeed, the employer's lock-out was imposed in response to a series of slow-downs called by the union. It was not the lock-out itself which constituted the bad faith bargaining — it was the incidents to which we have already referred. Likewise, it was not the sporadic strike activity which prompted the Board to find that the trade union had also failed to bargain in good faith. It was the union's refusal to discuss certain issues which the employer wished to raise. In neither case was the use of economic sanctions, in itself, an item of misconduct or a per se violation of section 14; and the Board was not prepared to find that the parties' other trangressions tainted an otherwise legal strike or lock-out.
The circumstances of this case are quite different. This is not a situation in which the lock-out is "tainted" by extraneous incidents of bad faith bargaining. Here, it is the lockout itself which constitutes the breach of section 14. By agreeing to a second round of arbitration (or, more precisely, clothing the "first round" arbitrator with jurisdiction to prescribe a "second round") the employer had agreed not to resort to economic conflict — yet by locking out its employees it did just that. We simply do not think the concerns expressed in the Ottawa Journal are applicable on the facts presently before us. It cannot be said that in the circumstances here present the potential liability in damages would "introduce into the strike and lock-out an element of uncertainty that would disrupt the process of labour relations as it now exists in Ontario." Not only is the situation in this case unique, but it can hardly come as a surprise to the employer that it was risking financial liability if it failed to comply with a process which the Court of Appeal had described as "compulsory." The propriety of the lock-out was being considered by this Board at the time that the employer locked out its employees and the Board had specifically drawn the employer's attention to the possibility of damages in the event that the Board found that it was not entitled to do so. Lost wages arising from a lock-out are not only "reasonably foreseeable" in a legal sense; they were specifically adverted to by the Board prior to the lock-out's commencement. Our decision does not introduce a note of uncertainty; it merely confirms that a party will be required to adhere to its commitments.
There is no problem in this case in quantifying the employee's losses. Had there been no lock-out, the employees would have continued to earn wages at their then prevailing wage rates, and the new agreement would have been settled by the arbitration process. Prima facie, the measure of damages suffered by the employees is the value of the wages lost by reason of the lock-out.
We further note that the lock-out was not a response to any provocative union conduct nor is there any evidence before us, as there was before the panel in the Ottawa Journal case, which indicates that the union has bargained in bad faith. This is not a case in which a party seeking relief has itself been guilty of misconduct. Finally, in contrast to the situation in the Ottawa Journal, the union did not delay in seeking relief from this Board but moved to clarify its rights at a time when no financial losses had been incurred. In the circumstances we are satisfied that the employees are entitled to be compensated for all the wages and benefits lost while they were locked out.
One of the employees, Patricia Totton, had taken one week holiday prior to the lock-out and was scheduled to be on holiday for the first two weeks of the lock-out. When the lock-out was implemented she reported to work, verified that a lock-out was in progress, and thereafter spent the two weeks, when she would otherwise have been on holiday, working in the union office and engaging in picketing and other related activities. While the Board can understand why an employee might choose to forego her planned cottage holiday so that she could participate in union activities, we do not think that she thereby becomes entitled to two further weeks off. She was paid her holiday pay and could well have taken her vacation despite the lock-out. It was her own choice not to do so. The loss of vacation time did not result from the lock-out and, accordingly, the employer is not required to grant further time off.
In addition to the damage claim made on behalf of the lock-out employees, the trade union seeks compensation on its own behalf in respect of certain expenses which it claims were necessarily incurred as a result of the employer's lock-out. The union maintains that it was required to engage counsel to make two applications to this Board and, further, that as a result of the lock-out, it was required to expend certain funds in order to focus attention on the employer's conduct, mobilize public support for the trade union and make it clear that the trade union was not responsible for the work stoppage. The union tendered bills in respect of rental payments for a "lock-out headquarters", radio and newspaper advertising, long distance telephone calls and certain printed material. All of these expenses were associated with the union's public campaign. The amounts claimed are not unreasonable. The union argued that the Board should fashion a "make whole order" which included compensation to the union for all expenses incurred.
The power to fashion broad compensatory relief, in the nature of a "make whole" order, is expressly authorized by section 79(4) of the Act, and is now firmly established in the Board's jurisprudence. Such make whole orders, in appropriate circumstances, have included a trade union's organization costs or extraordinary organizing costs, wasted negotiation costs and necessarily incurred legal costs caused by the commission of the unfair labour practice. In The Academy of Medicine, [1977] OLRB Rep. Dec. 783, for example, an employer threatened to close, and eventually did close, the part of its business operation in which a group of employees was seeking to organize. This shut-down, putting a number of employees out of their jobs, was designed to thwart the trade union's organizing campaign and frustrate the possibility of union organization in other aspects of its business. In awarding the union "all reasonable organizational, bargaining and legal and other expenditures" the Board noted:
"48. The Board, having regard to the seriousness of the respondent's unfair practices, to the impracticality of making orders for rectification, and to the fact that the employer is continuing in operation other aspects of its enterprise, has concluded that this case is an appropriate one for the granting of a "make whole" order. The Board orders the respondent to reimburse the union for all reasonable organizational, bargaining, legal and other expenses associated with its efforts to acquire and pursue its statutory rights. Such expenses are to include the costs of proceedings before the Board, proceedings which would not have been necessary but for the unfair labour practices of the respondent. While this part of our order is equivalent to an award of costs, it should not be taken as signalling a retreat from the Board's general practice of not awarding costs as against an unsuccessful party. This is a case, however, where the employer's contraventions of the Act are so serious that the resulting legal costs to the union cannot be ignored. Moreover, the rationale underlying the Board's practice of not awarding costs - that of not identifying a "winner" and a "loser" - is of no application where, as here, the conduct of the employer has made it impossible for the parties to live together in the future. (See Repac Construction and Material Limited, [1976] OLRB Rep. Oct. 610.) It should be stated, however, that the board has not attempted in this decision to exercise any general procedural power to award costs. What the Board has done is exercise its remedial authority under section 79 (4)(c) of the Act so as to, as nearly as possible, restore the union to the position it was in prior to the respondent's unfair practices. Given the impracticality of an order for rectification, full compensation, including all reasonable legal expenses, ought to be awarded to the union.
Similarly, in Radio Shack, [1979] OLRB Rep. Dec.1 126 the Board found that an employer's egregious unfair labour practices, and flagrantly illegal attempts to undermine a trade union, justified an exceptionally broad remedial order, which included compensation in respect of the trade union's negotiating costs and extraordinary organizing costs. In that case, however, the Board did not award the complaint's legal costs. The Board commented:
"The Board is hesitant to pursue this line of compensation because of the possibility that the denial of legal costs to those parties who successfully defend against complaints, may be misunderstood and perceived as unfair. This policy may be reviewed by the Board from time to time."
Thus, it is apparent that, since Academy of Medicine, the Board has developed a concern about awarding legal costs as a general rule. In the facts at hand, we think the Radio Shack approach to costs should be followed.
Because of the nature of the employer's unfair practice in this case, and the rather unique circumstances in which it arose, the kind of damages claimed by the union are rather different from those sought in either Radio Shack or Academy of Medicine. The union's expenditures are also somewhat different from those usually incurred by a trade union in a strike/lock-out situation where each party seeks to mobilize economic pressure against the other. Here they are more related to the union's desire to maintain a favourable image than an attempt to keep the unit together in face of employer unfair practices. The trade union s expenditures are not, as in Academy of Medicine or Radio Shack, "organization" expenses or costs directly related to the preservation of the trade union's status as the employees' exclusive bargaining agent; nor were they costs incurred needlessly while pursuing fruitless negotiations. No doubt the union felt compelled to engage in an advertising campaign in order to explain to the public that it was not responsible for the work stoppage, but these public relations expenditures were intended primarily to protect, and enhance, the union's reputation in the local community. From the "lock-out headquarters" the union members continued to provide certain limited services to the public and conducted a publicity campaign to explain the importance to the community of the public health nurse. Some of the literature used had nothing directly to do with this particular dispute, and some was designed to mobilize public support for interest arbitration of all disputes. In this respect the advertising campaign, although triggered by the lock-out, represents a continuation of the union's ongoing campaign in support of its position that arbitration is the preferable way to resolve disputes in the public health sector. In our view the expenditures claimed do not arise so necessarily and directly from the employer's breach that in order to effectuate the policies of the Act it is necessary to grant compensation. While we can appreciate the employees' motivation, we do not think the particular expenses claimed were necessarily incurred to mitigate the damages arising from the employer's lock-out. They are simply too remote. As we have already mentioned, the circumstances of this case are significantly different from those in the Academy of Medicine where, it will be recalled, the Board ordered the payment of legal expenses (inter alia) because there were no other effective remedies. Here, our compensation award and section 14 finding should effectively remedy the situation. We might also observe that the employer's legal position was not a frivolous one, nor were its arguments without considerable force. The legal issues raised by this application are both novel and complex. Indeed, despite the conclusion which we ultimately reached, the success with respect to the various legal arguments made by the parties, was divided.
There remains the union application to prosecute the employer for its violation of section 14. We are satisfied that the remedies, by way of declaration and compensation to the employees, can adequately remedy the employer's breach and we do not think that a criminal prosecution is consistent with the promotion of good industrial relations between the parties. While the employer might have been wiser to await the Board's decision before locking out its employees (thereby avoiding the necessity to pay compensation) we do not, in the circumstances of this case, see any public, or private, purpose which would be served by a criminal prosecution of the employer and the possible payment of a fine from a local board of health to the Crown.
For the reasons given, the Board:
(a) declines to reconsider, or amend, its earlier finding that the respondent employer contravened section 14 of The Labour Relations Act;
(b) orders compensation to the employees improperly locked out in respect of all wages and benefits lost;
(c) denies the union's request for damages on its own behalf, and
(d) dismisses the union's application for consent to institute prosecution.
For purpose of clarity the Board notes that the compensation payable to employees shall bear interest calculated in the manner set out in Hallowed House Ltd. (Board File No. 0905-79-R, decision dated January 21, 1980 — as yet unreported).
- The Board will remain seized in order to deal with any problems in calculating the monies owing to the employees.
DECISION OF BOARD MEMBER R. W. REDFORD:
The majority of the Board have found that the Grey-Owen Sound Health Unit are liable for payment of all wages and benefits lost while the employees were locked out. The instruction specifically excludes compensation for lost vacation for Patricia Totton and specifically rejects claims for damages arising from certain expenses claimed to have been incurred as a result of the employees lock-out and legal expenses.
I note that the majority at paragraph 27 indicate that "the employer's legal position was not a frivolous one, nor were its arguments without considerable force". In my view, the force of the employer's arguments was sufficient to be persuasive. I have outlined my views in a dissent from the original hearing issued in August 1979. Since I believe the lock-out to have been permissible and conducted according to the prescription of the Act, I would not have required the payment of damages for wages and benefits lost during the lock-out. No new evidence was brought out during the re-hearing that would have changed this view.