[1980] OLRB Rep. January 110
1730-78-M Office and Professional Employees International Union, Local 166, Trade Union, v. Spruce Falls Power & Paper Co. Ltd., Kimberly-Clark of Canada Ltd., Employer.
BEFORE: Pamela C. Picher, Vice-Chairman and Board Members W. G. Donnelly and D. B. Archer.
APPEARANCES: Jeffrey Sack, Jeffrey Egner, Gilles Beauregard and Roland Clouthier for the trade union; Wallace M. Kenny for the employer.
DECISION OF VICE-CHAIRMAN PAMELA C. PICHER AND BOARD MEMBER W. G. DONNELLY; January 2, 1980.
- This is an application under section 95(2) of The Labour Relations Act. The trade union has requested the Labour Relations Board to determine whether or not certain persons heretofore excluded from the bargaining unit are employees for the purposes of The Labour Relations Act. The classifications in question are the Woodland's Cost Analysts, the Mill Cost Analysts the Senior Mill Cost Analyst and the Financial Analysts. The respondent contends that none of the persons occupying the classifications in question are employees for the purposes of the Act because they all either are employed in a confidential capacity in matters relating to labour relations or exercise managerial functions and would, therefore, be excluded from collective bargaining pursuant to the provisions of section 1 (3)(b) of the Act which are as follows:
"1. (3)Subject to section 80, for the purposes of this Act, no person shall be deemed to be an employee,
(b) who, in the opinion of the Board, exercises managerial functions or is employed in a confidential capacity in matters relating to labour relations."
Persons employed in a confidential capacity in matters relating to labour relations are excluded from collective bargaining because their involvement with confidential information relating to the employer's labour relations would, if they were permitted to engage in collective bargaining, place them in a conflict of interest between their responsibilities to the company in performing their job functions and their interests as members of the bargaining unit. Optimal collective bargaining flows from an arms-length relationship between the union and members of the bargaining unit on the one hand and management on the other. The placement of persons who are employed in a confidential capacity in matters relating to labour relations outside the bargaining unit recognizes the divergence between the interests, objectives and priorities of the two groups and is aimed at maintaining the vital arms-length relationship between unions and management which forms the foundation of effective labour relations.
In defining the parameters of the confidential exclusion the Board has consistently held that for a person to be excluded from collective bargaining on the basis of being employed in a confidential capacity there must be "a regular material involvement in matters relating to labour relations which are confidential because their disclosure would adversely affect the interest of the employer ..." (see Falconbridge Nickel Mines Limited, [1966] OLRB Rep. Sept. 379 at page 388). As further indicated in Falconbridge, "an accidental or isolated involvement in some aspect of labour relations is not sufficient ... to exclude a person from collective bargaining." To cause a conflict of interest sufficient to exclude a person from collective bargaining the exposure to confidential information must flow from an individual's regular duties and constitute an integral part of the employee's service to the employer's undertaking (see York University, [1974] OLRB Rep. Dec. 945 at page 951 and the cases cited therein). The kind of information deemed confidential within the meaning of section 1(3)(b) of the Act is not simply information that the employer would rather the employees did not know about. Instead it is information relating to labour relations which is confidential because its disclosure would prejudice the employer in the sphere of labour relations such as in negotiating or settling grievances (see Comtech Group Limited, [1974] OLRB Rep. May 291; Frito-Lay Canada Limited, [1978] OLRB Rep. Sept. 831 and Falconbridge, supra).
Mr. Ron Briggs is the respondent's Woodland's Cost Analyst. Briggs estimates that he spends about forty per cent of his time supervising eight to ten camp clerks. Included among his other duties is the task of preparing the costing necessary for compiling five-year forecast plans relating to what the company proposes to do over the course of the ensuing five years. The evidence indicates that Briggs also takes part in putting together the yearly Woodland's operating budget. Of particular significance is Briggs' participation at the behest of management in labour negotiations with the union. During negotiations he is asked by top-level management to provide cost estimates relating to how much a proposed increase might cost the company over a period of time. He testified that he is given the union's proposal, asked to determine how much it would cost the company and determine if there would be a more advantageous way to make the payment. This kind of evaluation would require him, for example, to cost a bonus payment versus a cost of living allowance versus a total cost per cord of productivity which is paid to the employees. Briggs testified that he has taken part in negotiations in this manner every year since he assumed his position as Woodland's Cost Analyst in 1975.
Briggs' regular participation in labour negotiations supplying management with cost data necessary to evaluate the union's proposal and prepare their response thereto clearly constitutes confidential labour relations work. Costing proposals and alternative responses generates information the untimely revelation of which could severely prejudice the employer's position in negotiations. The employer must know that the individual it calls on to supply cost information relating to the various proposals is completely devoid of a conflict of interest. The Board, therefore, finds that Briggs is employed in a confidential capacity in matters relating to labour relations and is not, therefore, an employee for the purposes of the Act.
The employer further contends that the Mill Cost Analysts are employed in a confidential capacity in matters relating to labour relations. The aspect of the Mill Cost Analysts' job that the employer contends is confidential relates to their participation in making up the cost-of-manufacturing section of the budget. The Mill Cost Analysts' work in preparing the operating budget begins sometime in May each year and is finished sometime in September. Because none of the three persons who occupied the position of Mill Cost Analyst at the time of the application had completely performed the duties relating to the budget, the respondent called evidence from other persons who have since been promoted. Mr. Cassidy, for example, was a Mill Cost Analyst for one and one-half years before he was promoted to Mill Cost Accountant; Mr. Peter Pecaric was a Mill Cost Analyst before he became the Senior Mill Cost Analyst and Mr. Reno Clouthier was a Mill Cost Analyst before becoming the Woodland's Assistant Cost Accountant. There is general agreement that the duties relating to the preparation of the budget have not changed since the above-named individuals occupied the position of Mill Cost Analyst and the Board therefore relies on their testimony as well as that of Claude Devost, a Mill Cost Analyst at the time of the instant application, in evaluating the duties and responsibilities of the Mill Cost Analysts.
Mr. M. R. Hicks, the comptroller for Spruce Falls in charge of the Mill Cost Accounting Department, testified that once a year the company budgets for a projected five years. In developing the budget the Mill Cost Analysts create cost standards or projections of what the cost of production in the various departments will be for the following year. In developing the standards or projections the Mill Cost Analysts use historical data which is then updated by their formation of projections for the following year. Being responsible for predicting the cost of manufacturing for the various departments for the following year, they must be informed of changes that either will or may take place in these departments over the ensuing year. To this end they hold meetings with the superintendents of the various departments to find out whether changes are anticipated for that department for the following year. The evidence indicates, for example, that they are regularly informed of anticipated or proposed manpower alterations because of the impact of such changes on their cost projections. We note in this regard the testimony of Mr. Cassidy, the Mill Cost Accountant in charge of the Mill Cost Department, that labour costs constitute the major part of the budget. Among numerous other examples of the kind of information to which they become privy, Mr. Reno Clouthier testified that in performing his duties as Mill Cost Analyst he was informed in his meeting with the head maintenance engineer that the department intended a manpower increase of one maintenance engineer and that other employees would be switched around. No one in the bargaining unit knew of the proposed increase at the time he was informed.
In addition to learning about proposed changes in departments and proposed alterations to manpower levels before those proposals are finalized or publicized, the Mill Cost Analysts are also provided with the proposed labour rate increase for the following year in order to set their projections for the budget. Mr. Hicks testified that the forecasted labour rate provided to the Mill Cost Analysts is the best projection of what the company thinks the wage settlement will be for the upcoming year. Having regard to all of the evidence, the Board is satisfied that the projected labour rate used by the Mill Cost Analysts in preparing their budget is not just an across-the-board percentage increase reflecting a notional increase in the cost of living, but is, in fact, top management's best estimate of the labour rates they will have to pay in the ensuing year. The projected labour rate increases are kept in Mr. Cassidy's desk under lock and key. They are made available to the Mill Cost Analysts, but not to anyone in the bargaining unit. The testimony reveals that when the operating budget is completed and distributed to other people, some of whom are in the bargaining unit, all the labour rate increases are lumped together and put under one account called a standards adjustment. In this form members of the bargaining unit such as Mr. Roland Clouthier do not become privy to the projected labour rate increases in performing their cost work.
Counsel for the Union argued that because the company has developed a means of concealing the proposed labour rate increases by lumping them into one standards adjustment figure, the Mill Cost Analysts need not have access to the actual proposed labour rate increases. The evidence clearly indicates, however, that the regular duties of the Mill Cost Analysts require them to be privy to the actual anticipated labour rate increases. As they are the persons who in fact set the standards for the budget, the Board is satisfied that they could not perform their work adequately with one lump figure.
The confidentiality of the proposed labour rate increase was brought home by Mr. Hicks' testimony when he stated that on August 25, 1978, the dead line to produce a set of cost standards for the 1979 budget, the company had not yet concluded a collective agreement and senior management had to provide the Mill Cost Department with a projection of what they thought the wage rate settlement would be. Persons who receive this kind of information in the regular course of their duties would be in a conflict of interest position if they were in the bargaining unit. If the union were privy to the information of the company's own evaluation of what the wage rate settlement would be, the company's position at the bargaining table would be severely compromised. The Mill Cost Analysts' access to this confidential information is neither incidental nor accidental. It is an essential ingredient in the performance of their budgeting duties which span approximately four months of the year. The fact that this information is but one of the numerous factors they use in forming their projections does not diminish its importance or render it incidental.
We note that in a recent decision, St. Clair College of Applied Arts and Technology (File No. 1612-78-M, decision dated November 20, 1979, as yet unreported), the Board made a similar finding by excluding a woman who in the regular course of her duties was given, prior to its being generally known, what the Board concluded to be the employer's actual estimate of the salary increases for the upcoming year.
For the reasons set out above, therefore, the Board finds that the Mill Cost Analysts are employed in a confidential capacity in matters relating to labour relations and are not employees for the purposes of the Act.
Mr. Peter Pecaric is the Senior Mill Cost Analyst who supervises the work of the Mill Cost Analysts and Statistical Clerks and reports to Mr. Cassidy, the Mill Cost Accountant. On the basis of the evidence the Board is satisfied that Mr. Pecaric, like the Mill Cost Analysts he supervises, has regular access to the forecasted labour rate in the performance of his duties and is, therefore, not an employee for the purposes of the Act for the same reasons we have so found for the Mill Cost Analysts. We note in addition that, similar to the Mill Cost Analysts, Mr. Pecaric testified about circumstances where he would have advanced knowledge of planned or potential lay-offs before a final decision had been made or publicized. Pecaric testified that the cost analysts are constantly doing special studies for superintendents of departments and as such become privy to projected changes in the labour force. In the Board's view, the regular access to information of this nature prior to its being finalized or publicized constitutes regular material involvement in matters relating to labour relations which are confidential because their untimely disclosure would prejudice the interest of management in its collective bargaining relationship.
Accordingly, for the reasons given above, the Board finds that Mr. Pecaric is employed in a confidential capacity in matters relating to labour relations within the meaning of section 1(3)(b) of the Act and is, therefore, not an employee for the purposes of the Act.
Mr. Dean Davies is one of two Financial Analysts. He reports to Mr. David Linton, the Manager of Business Planning in the Woodland's Operation. Mr. Linton testified that the business planning function in which the Financial Analysts are involved encompasses two areas: firstly, looking at plans for the direction of the company from both a long and short-term perspective, such as whether the company should be expanding its interest in the newsprint business or whether it should be emphasizing the lumber aspect of its operation. The second area of concern is an evaluation of the use of any given resource for the company and would involve looking at such things as whether the company should alter its use of the labour force or its wood resources.
The Financial Analysts estimate the cost of the various alternatives being considered in these areas and gather the information necessary to perform their evaluation. They deliver to top management a set of conclusions based on their analysis and make a recommendation concerning which direction they feel the company should take. Mr. Linton testified that in the course of costing these alternatives, the financial analysts would work with projected labour rate increases. Mr. Linton emphasized the importance of the labour dollar as a component of the cost of their product and stated that the labour rate forecast was "extremely close to the best type information." A few years ago the Financial Analysts worked extensively on alternatives relating to the proposed shutdown of the market pulp business. In costing alternatives, Mr. Linton stated that Financial Analysts would spend approximately fifteen per cent of their time using labour rate extension factors. He testified that the alternatives costed by the Financial Analysts would reveal the necessity for transferring people from one aspect of the operation to another or for reducing manpower. In setting out the alternatives related to the shutdown of the market pulp business, for example, the Financial Analysts listed the impact of the alternatives on various things, personnel level being one. He emphasized that any proposed reduction in cords to be cut off the woodlands would have a direct impact on the number of persons employed. With respect to the sulphide operation, for example, Mr. Linton testified that the proposals contained a twelve to thirteen per cent reduction in wood cordage which he indicated would have a very significant impact on the manpower level.
The evidence establishes that in the regular course of their duties, the Financial Analysts are required to use the projected labour rate increase. For the reasons set out above, the Board has found that a person's regular use of this figure establishes in the circumstances of this case that he is employed in a confidential capacity in matters relating to labour relations. Additionally, the Financial Analysts cost alternative directions for the company and alternative use of resources (including the resource of labour) and then make recommendations as to which alternative the company should adopt. The alternative proposals costed by financial analysts could involve the transfer of employees, the reduction of the work force or the closure of a segment of the business. The Financial Analysts are, therefore, aware of sensitive labour relations possibilities before final decisions are made and before such information is publicized. In this manner, the financial analysts become privy to information which if divulged in an untimely fashion could prejudice the employer in its labour relations. For this reason, therefore, as well as for their regular use of the projected labour rate increase, the Board concludes that the Financial Analysts are employed in a confidential capacity in matters relating to labour relations.
In summary, the Board finds that all of the persons occupying the classifications in dispute (The Woodland's Cost Analyst, the Mill Cost Analysts, the Senior Mill Cost Analyst and the Financial Analysts) are employed in a confidential capacity in matters relating to labour relations within the meaning of section 1 (3)(b) of the Act and are, therefore, not employees for the purposes of the Act. In view of the Board's finding with respect to confidential capacity it is unnecessary to determine whether any of the individuals in question exercise managerial functions.
DECISION OF BOARD MEMBER D. B. ARCHER:
I dissent from the majority decision with the exception of Woodlands Cost Analyst who supervises ten camp clerks and can be excluded because he exercises managerial functions.
As regard to the others, "Mill Cost Analysts, Financial Analysts and Senior Cost Analysts" I would have found that they do not exercise sufficient managerial authority to exclude them from union membership, nor do they have authority to make any decision with regard to the confidential information to which they have knowledge. I come to this conclusion because I do not believe the evidence proves that they either exercise independent judgment with regard to the confidential information, they merely relay it on to a management negotiating team to use in their deliberations. Much of the same information must be disclosed to the union in order to carry on meaningful negotiations. These are white collar officer workers, their knowledge is gained as a result of acting in their professional capacity.
I have agreed that Mr. Briggs does supervise employees and should be excluded on that ground. The fact that some of these employees are aware of the cost of labour doesn't seem to me to be particularly important. A financial analyst or a capable accountant could estimate how much a certain union demand would cost. Before such a person was excluded I believe a further step is necessary. The person must exercise judgment as to whether or how the demand should be met. These persons do not exercise this type of authority.
I would have found that the duties they performed did not exclude them from the bargaining unit.