Hotels, Clubs, Restaurants & Tavern Employees' Union Local 261 v. Boretos & Tsotsos, 1980 CanLII 815

[1980] OLRB Rep. March 343

1846-79-U Hotels, Clubs, Restaurants & Tavern Employees' Union Local 261, Complainant, v. Boretos & Tsotsos, Carrying on Business as Nicholson's Restaurants, Steak House & Tavern, Respondent.

BEFORE: Pamela C. Picher, Vice-Chairman and Board Members J. D. Bell and O. Hodg­es.

APPEARANCES: Alick Ryder, Q. C. and Frank Grella for the complainant; H. W. Shaw for the respondent.

DECISION OF THE BOARD; March 19, 1980

1. The Hotels, Clubs, Restaurants & Tavern Employees' Union, Local 261 has com­plained to the Board that the respondent, Nicholson's Restaurants, Steak House & Tavern, has violated the provisions of section 14 of The Labour Relations Act. That section defines the duty to bargain and provides:

"The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make very reasonable effort to make a collec­tive agreement."

2. The obligation imposed by section 14 to "bargain in good faith and make every reasonable effort to make a collective agreement" requires that the parties meet for the pur­poses of collective bargaining and participate in full discussion of the matters in issue. As has been pointed out by the Board in a number of cases, the necessity to participate in full and reasoned discussion of bargaining differences lies at the centre of the obligation to bargain in good faith (see The Journal Publishing Company of Ottawa Limited and L. A. Lalonde, [1977] OLRB Rep. June 309; Canadian Industries Ltd., [1976] OLRB Rep. May 199; St. Jo­seph's Hospital, [1976] OLRB Rep. June 255). In elaborating on the obligation to engage in rational communication, the Board has stated that the union is entitled to know an employ­er's rationale for its position on the compensation offer (see, for example, St. Joseph's Hospital, supra and Pineridge District Health Unit, [1977] OLRB Rep. Feb. 65.)

3. While an employer may be required to apprise the union of its rationale for its po­sition, there is no requirement imposed by section 14 that the employer make particular con­cessions. The right for a union to engage in collective bargaining is not a guarantee that a union will obtain a collective agreement. Except to the extent that bargaining demands are themselves illegal, the Board is primarily concerned with the manner in which negotiations are carried out rather than the content of the demands themselves. As pointed out most re­cently by the Board in Radio Shack, (File No. 1004-79-U decision dated December 5, 1979, as yet unreported), bargaining demands aimed at undermining the union by fostering dis­sension can constitute a violation of section 14 as well as sections 56, 58 and 61 of the Act. In Radio Shack, supra, for example, the Board concluded that the respondent's rigid position on union security, as well as other central issues, were designed to avoid a collective agree­ment and aimed at undermining the trade union.

4. In The Daily Times, [1978] OLRB Rep. July 604, the Board discussed the ear­marks of "surface bargaining" which describes the type of bargaining where a party goes through the required motions but does not intend in fact to conclude a collective agreement. In distinguishing hard bargaining from surface bargaining, the Board stated at paragraph 15,

"The parties to collective bargaining are expected to act in their individ­ual self-interest and in so doing are entitled to take firm positions which may be unacceptable to the other side. The Act allows for the use of economic sanctions to resolve these bargaining impasses. Consequent­ly, the mere tendering of a proposal which is unacceptable or even 'pre­dictably unacceptable' is not sufficient, standing alone, to allow the Board to draw an inference of 'surface bargaining'. This inference can only be drawn from the totality of the evidence including, but not re­stricted to, the adoption of an inflexible position on issues central to the negotiations. It is only when the conduct of the parties on the whole demonstrates that one side has no intention of concluding a collective agreement, notwithstanding its preservation of the outward manifesta­tions of bargaining, that a finding of 'surface' bargaining can be made."

5. In this case, the union contends that the employer has engaged in surface bargain­ing. Its counsel submits that the evidence, viewed in its entirety, demonstrates that the em­ployer has sought to undermine the union and has no intention of ever reaching a collective agreement.

6. The union's application for certification was filed November 3, 1978. A few days later one of the employees who initiated the union organizing effort was discharged. As well another employee, also involved in the initial contact with the union, was told not to return from lay-off. Complaints under section 79 of the Act were filed by the union and were ulti­mately settled. The Board cannot, therefore, look to those discharges as establishing any­thing for the purposes of these proceedings. In the certification application in December 1978, the Board found that a petition filed in opposition to the application for certification was not a voluntary expression of desire on the part of the employees. At the instant hear­ing, Nick Boretos, the president of the respondent, admitted that his partner, Ted Tsotsos, had questioned employees about whether or not they had signed membership cards in the union. He admitted that both he and his partner had been interested in finding out who had signed membership cards, but stated that they didn't know that it was an improper inquiry until they were so cautioned by a friend. The petition being rejected, a certificate issued to the union.

7. In January, 1979, the union held a meeting of employees in the Pembroke Legion Hall to discuss contract proposals. It is common ground between the parties that Boretos stationed himself in his car across the street from the Hall for approximately fifteen minutes with the intention of watching who went into the Hall. Boretos maintains that he did not re­alize that what he was doing was wrong. He testified that he had not read the Board's certifi­cation decision in which it dismissed the petition because he cannot read English. He stated that while his lawyer explained the certification decision to him, he understood some parts of it but didn't understand everything.

8. Three negotiation meetings were held between the union and the employer dur­ing the months of February and March, 1979. During the meetings Eleanor S. Dunn, busi­ness representative of Local 261, represented the union along with another individual and Nick Boretos and his lawyer, Mr. L. P. LaFrance, represented the employer. The evidence indicates that the actual negotiation took place largely between Dunn and LaFrance. The union admitted that it had no difficulty arranging the meetings with the employer and that discussions were at all times carried out in a courteous fashion.

9. At the first meeting on February 7, 1979, the union presented its proposals clause by clause; the employer agreed with some and disagreed with others. It quickly became ap­parent that the significant bargaining differences were over seniority, union security and wages. With respect to union security, the employer refused to go beyond the requirements of section 36a of the Act requiring the employer to deduct union dues from wages for those employees who have indicated in writing to the employer their desire to have such a deduc­tion made. Regarding seniority, the employer agreed to its application for vacations but not for such matters as hours of work or lay-off. The Board is satisfied that through the meetings progress was made in reaching agreement on the seniority issue through the use of a letter of intent proposed by the union. The Board is satisfied on the evidence that by the last meeting the content of the letter of intent was agreed to though not the precise wording or the timing.

10. In response to the union's wage demands, the employer from the outset indicated that it was not prepared to give any wage increase. During the February 7th meeting the union requested the employer to provide a list of employees by classification and current wage rates. The employer complied with this request orally and further indicated, at the union's request, which employees had received wage increases on January 28, 1979 and what those increases were.

11. At the second negotiation meeting on February 21, 1979, the employer supported its position on wages by providing for the union percentage figures showing the decline in sales it had experienced from September, 1978 through February, 1979. The employer stated that in September its level of sales declined thirteen per cent, in October seventeen per cent, in November twenty-eight per cent, and in January and February fifty per cent. The union complained that it had no means of verifying these figures and that it was never given either the figures in writing or an audited financial statement or the restaurant’s finan­cial books. The evidence clearly demonstrates, however, that the union never requested anything in the way of documents or books from the employer to substantiate the assertion that the employer's business had declined drastically. The employer's evidence that its busi­ness was in decline during the period of negotiations is supported by the uncontradicted evi­dence of Boretos that the union imposed a boycott against the restaurant in the second week of November, 1978 and that the boycott has persisted throughout the negotiations. Dunn acknowledged that the union had sought the support of other union members in the Pem­broke area in a effort to boycott the employer's restaurant. Boretos testified that he was not prepared to give any wage increase whatsoever unless his business improved.

12. Wage increases were given by the employer to some employees on January 28, 1979. In November Dunn reported the employer to the Ministry of Labour indicating the union's belief that the employer was not paying wage rates consistent with minimum wage standards. The Board accepts the evidence of the employer that someone from the Ministry of Labour came to see him on or about January 25th and told him that he would have to in­crease the wages of some employees to meet the minimum wage standards. They went through the restaurant's books together and the Ministry's officer pointed out who should be given a wage increase. Dunn gave evidence that certain employees were given wage in­creases over and above the amount necessary to reach the minimum wage standard. That was partly denied by the employer. It is common ground between the parties, however, that at least one individual, Boretos' daughter, was given a fifty cent increase on January 28th, which was not required by the Ministry of Labour.. The union advised the Board that it seeks no redress of the possible breach of section 70 of the Act in this complaint, having indicated its relunctant acceptance of the increase in the course of negotiations in an effort to attain harmonious relations with the respondent.

13. The parties broke off their negotiations after the meeting of March 22, 1979. The break occurred because the employer was not prepared to change its position on either union security or wages. In June, 1979, the union applied for the assistance of a conciliation officer. A short meeting was held, following which the Ministry issued a no Board report in late June or early July. In early September the union applied for the assistance of a media­tor. Although Mr. Boretos testified that he was never contacted by a mediator and never re­ceived any communication by letter or phone, the Board is satisfied on the evidence that the mediator was in fact appointed. It would appear that the primary contact might have been made with the employer's lawyer, who at the time of the hearing was out of the country and could not clarify that point.

14. Dunn testified that she was at all times prepared to meet with the mediator. When the mediator phoned her on December 12th or 13th with the message that no meeting would take place, she filed the instant complaint.

15. Counsel for the union argues that the employer's position on union security and wages, when viewed in the context of its pre-negotiation conduct, demonstrates the employ­er's design to destroy the union. Counsel emphasized that the employer never offered the union a document containing the terms of an agreement which it would be willing to sign. Counsel argued that while the employer's failure to tender an offer in a legal form capable of being accepted by the union, would not in itself point to bad faith bargaining, in the overall context of the case it demonstrates that the employer was not prepared to sign a collective agreement even if the union had been willing to accept all of its terms. Counsel further as­serted that the most evidence of the employer's bad faith bargaining is that the justification for the employer's unwillingness to give a wage increase is undermined by the fact that he gave a wage increase not required by law to one member of the bargaining unit, his daugh­ter, prior to the onset of negotiations. Counsel asked the Board to conclude from this evi­dence that the employer was willing to give wage increases but not willing to give them within the framework of bargaining.

16. The pre-negotiation conduct which the Board can consider in interpreting the em­ployer's conduct during negotiations is comprised of the employer interrogating the employ­ees as to whether they had joined the trade union and the employer stationing his car outside a union meeting to watch who attended. While these acts would prima facie, indicate an in­terference with the administration of the union contrary to section 56 of the Act, they are not of themselves breaches of the section 14 duty to bargain in good faith. The question is to what extent these acts lend colour to the employer's subsequent conduct in bargaining.

17. It is clear that the employer wrongfully questioned the employees to determine whether or not they were union members. Although the employer misconducted himself that way and also acted improperly in stationing his car outside the hall where the union was holding its meeting, the Board, in the context of the entire relationship, concludes that these activities, however reprehensible, do not taint the subsequent negotiations. Apart from the wage increase over and above that required by law given to the employer's daughter, which would appear to be a violation of section 70 of The Labour Relations Act, there is no indica­tion that the employer sought to bargain separately with the employees or engaged in con­duct tantamount to a refusal to recognize the union.

18. Having evaluated the negotiations themselves, the Board is unable to find that the employer has acted contrary to its obligation under section 14 of the Act. Although the em­ployer would not alter its stance taken at the initial negotiation meeting that it would not give any wage increases, the union agrees that the problem was thoroughly discussed. The employer presented figures to the union to justify its position. Although the union argued at the hearing that the figures were not sufficient to enable it to adequately evaluate the merit of the employer's position, the union never asked for any additional financial data to assist in its evaluation. The Board cannot avoid the conclusion that the union was itself responsi­ble for a measure of the employer's intransigence on the wage issue. Boretos' evidence, un-contradicted by the union, was that the union imposed a boycott on the respondent's restau­rant in November, 1978. The boycott, enforced as it was both before and during the negotiations, was hardly conducive to persuading the employer to increase wages. While the evidence demonstrates that the employer gave one employee a wage increase beyond that required by law, the Board cannot conclude from this single incident that the employer was not willing to reach a collective agreement. While the wage increase may have been improp­er, the Board does not view it as being motivated by a desire to undermine the union or to frustrate negotiations, nor did it have that effect.

19. Although the parties have not met since June, 1979 to negotiate, the Board does not view this failure to meet as reflective of an intention on the employer's part not to reach a collective agreement. Although the evidence indicates that the employer is responsible for the fact that there was no meeting with the mediator in December, 1979, the Board has no evidence from which it can draw a conclusion as to whether the employer was unable to meet at that time or unwilling to meet at that time. Even if, however, the employer did re­fuse to meet, this would establish evidence of only a single refusal on the employer's part. Mediation at this state in negotiations is a voluntary process and the Board is unwilling to draw the conclusion that a single refusal on the employer's part to meet with the union and mediator reflects an intention on the employer's part not to reach a collective agreement. The union presented no evidence to suggest that it made any other requests to meet which were refused.

20. On the basis of all the evidence, therefore, and for the reasons set out above, the Board concludes that the employer has engaged in hard bargaining rather than surface bar­gaining. The Board, therefore, does not find that the employer has violated its obligation to bargain in good faith under section 14 of the Act. The complaint is, accordingly, dismissed.

CONCURRING DECISION OF BOARD MEMBER O. HODGES:

1. The law does not require the employer to sign a collective bargaining agreement. When agreement is not reached on issues the trade union requires as part of a settlement, the union members are required to strike to enforce their demands. In this instance it ap­pears that a strike is the only recourse open to the union.

2. The boycott imposed by the union during bargaining appears to have reacted against the union, inasmuch as the ability of the employer to meet wage demands would have been adversely affected by the success of the boycott. However true that may be, tac­tics are decided by the participants, so long as they are not unlawful. It could be that the trade union would have been in a stronger position had it encouraged the patronage of the restaurant and tavern by area union members during bargaining, thereby improving the bar­gaining climate and encouraging a settlement. An influx of area union members as new cus­tomers would probably have been good for the morale of the union members on the prem­ises as well.

3. This unhappy matter is surely a demonstration of the positive value an arbitrated first agreement settlement would have for all concerned, and I would have ordered a first collective agreement be arbitrated in these circumstances were it within my authority to do so. However, considering all of the evidence and in the circumstances of this case, I am obliged to concur in the decision to dismiss the complaint.