[1980] OLRB Rep. August 1244
0753-80-U Fuel, Bus, Limousine, Petroleum Drivers and Allied Employees, Local Union No. 352, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Applicant, v. Superior Oil Company, and Liquiflame Oils, A Division of Ultramar Canada Inc., Respondent.
BEFORE: R.A. Furness, Vice-Chairman.
APPEARANCES: Ken Petryshen, Susan Stewart and Jack Hurd for the applicant; S. C. Bernardo, F. N. Scott and Bob Campbell for the respondent.
DECISION OF THE BOARD; July 28, 1980
The applicant has applied for relief under section 83 of The Labour Relations Act and has requested the Board to direct the respondents to return all employees of Superior Oil Company ("Superior") to their former positions and to fully compensate these employees for their loss. The applicant has also requested the Board to direct the respondents to cease and desist from further violations of this nature.
The applicant alleged that the unlawful lock-out commenced on July 7, 1980, and was continuing at the time of the hearing on July 15, 1980. The respondents denied that they had unlawfully locked out any employees.
The applicant, on the one hand, and Toronto Fuels Company, Liquiflame Oils, Halliday Fuels, Shully-Dibble Fuels and Superior, on the other hand, are bound by a collective agreement which continues in effect until September 30, 1980. Toronto Fuels Company, Liquiflame Oils and Halliday Fuels are operating trade styles of the Toronto Retail Group of Ultramar Canada Inc. ("Ultramar"). These three operating trade styles were divisions and are now merged into one operating group. Superior is an operating division but had a separate seniority list from the seniority list of Toronto Fuels Company, Liquiflame Oils and Halliday Fuels. However, these three operating styles and Superior now have a common seniority list and, operationally speaking, are now merged. After the merger Superior became a division of Ultramar. Officially, all the employees are employees of Ultramar. In essence, the one operating division has four marketing names. The employees in all four marketing names receive their cheques from Liquiflame Oils. With respect to pension benefits all are employees of Ultramar.
Comfort Guard Services ("Comfort") is an entity which consists of brokers who provide oil burner servicing. The Toronto Retail Group, which was formerly comprised of Toronto Fuels Company, Liquiflame Oils and Halliday Fuels, had their oil burner service work performed by Comfort, which is a division of Ultramar, and is not in the business of delivering fuel oil. The Board issued a certificate to the Fuel Oil & Natural Gas Service Technicians Associations with respect to certain employees of Comfort and a collective agreement was signed on February 28. 1979. The employees of Comfort are paid by Comfort cheques. Comfort and Liquiflame Oils are located in the same building.
Formerly Superior delivered fuel oil and provide oil burner servicing. Prior to the merger on July 2, 1980, Superior had a very small division with a seasonal maximum of five fuel oil drivers, four servicemen and one mechanic. Liquiflame Oils has indicated that it intended to move Superior into the operational unit which existed in Toronto. This involved moving Superior in with Toronto Fuels Company, Liquiflame Oils and Halliday Fuels. The employees doing the oil burner servicing work for Superior were notified that they were being laid off in June and their effective layoff began on July 7, 1980. In the period February — March two fuel oil drivers were laid off. In May there were two more drivers about to be laid off but they had greater seniority than two servicemen and the ultimate effect was that there are two drivers who are doing service work and two servicemen who were laid off by virtue of bumping. The four remaining employees who were doing service work were laid off on July 7, 1980. Up until July 7, 1980, there were five people doing the service work. The two servicemen who were laid off in May would normally have been recalled to replace any one of the five who were taking vacations. Once the weather becomes cold the two drivers would in all probability revert to delivering fuel oil and the two servicemen who had been laid off in May would be called back to do the servicing work. Since July 7, 1980. the servicing work is being done by employees of Comfort.
The applicant's position is that the layoff of the five employees of Superior who were doing the cleaning of burners until July 7, 1980, constitutes an unlawful lock-out. The applicant has represented the eight employees affected by this application since certification some ten years ago. Jack Hurd, the secretary-treasurer and business agent of the applicant, testified that he was first made aware of changes taking place by a letter dated March 28, 1980 from Frederick Scott, the president of Liquiflame Oils. This letter states:
"Dear Mr. Hurd:
In our contract with you we are serving about 24,000 customers in Superior Oil and the other unionized companies. Because of an adverse market this could shrink by 2 to 3 thousand customers per year significantly effecting the jobs of our employees.
In order to preserve a viable presence in the market place, we believe that, it is desirable to combine our interests in Toronto into one unit. There are two points in doing this that require some accommodation between the company and the union.
The first point concerns the servicemen at Superior Oil whom we would propose to transfer to Comfort Guard Services and give them employment with the dependent contractors association that looks after the bulk of our service. We believe that this proposal would well serve the interests of Superior Oil's service personnel and in fact give them year round employment which they all do not have with the present arrangement.
The second point relates to 4 brokers that are presently with Automatic Fuels.
We believe that we have an obligation to continue to provide employment for these "brokers". We are attaching a map of Metro indicating the areas we would suggest for this operation. We would also be prepared to make a commitment to the effect that no new "brokers" would be hired. When the existing "brokers" dissociate themselves the territories outlined in the attached map would be served by union employees.
The consequences of implementing this proposal would be to increase the number of accounts serviced by our employees from 24,000 to about 30,000 and reduce the geographic area that they cover thus enabling them to become more productive and presumably increase incentive earnings.
Since varying amounts of lead time would be required to accomplish this program an early indication of your opinion on this proposal would be appreciated.
Yours truly,
'F.N. Scott'
President"
Meetings were held subsequent to this letter among Mr. Hurd, Mr. Scott, other representatives of the respondents and employees who were effected by the changes which Superior proposed to introduce. The effect of the change would mean that these employees would cease to be covered by the collective agreement with the applicant and would instead be covered by the collective agreement with the Fuel Oil & Natural Gas Service Technicians Association. These employees had studied the last mentioned collective agreement and informed Mr. Hurd that they did not want to become dependent contractors. These employees are of Italian descent and fluently speak Italian. Mr. Hurd had no doubt that the respondents wanted these employees to service the large Italian business that Superior served. These meetings did not resolve the impasse in the positions of the parties. The applicant wanted to preserve the status quo while the respondents wanted to implement changes in their system of operating their businesses.
On June 23, 1980, Mr. Hurd received the following letter from Mr. R.H. Campbell, the general manager of Liquiflame Oils:
"Dear Mr. Hurd:
Effective July 2, 1980 Superior Oil Company is to be merged with the combined Toronto Fuels, Liquiflame Oils and Halliday Fuels operations. In compliance with clause 11.11 of the collective agreement between Toronto Fuels, Liquiflame Oil and Halliday Fuels and Fuel, bus, Limousine, Petroleum Drivers and Allied Employees, Local Union No. 352 we propose to combine the union seniority lists of Superior Oil and Toronto Fuels, Liquiflame Oils and Halliday Fuels. Employees of the merged operations will be credited with their same seniority dates as previously held with their respective employers.
Since Liquiflame Oils, Toronto Fuels and Halliday Fuels have historically had their burner repair services done by Comfort Guard Services we propose to merge the Superior Oil serviceman's seniority list with the Liquiflame Oils, Halliday Fuels and Toronto Fuels Drivers Group Seniority List. We will then endeavour to train the Superior Oil servicemen as drivers so that they may continue as salaried employees. Pursuant to clause 9.10 the servicemen would be paid at the servicemen's rates for a period of two months after which the rates of pay would change to driver rates as specified in the collective bargaining agreement.
In the event that the Superior Oil servicemen do not accept the job classification transfers we are prepared to offer them positions as dependent contractors in our Comfort Guard Services burner service department. In this case it is to be understood that they would have to abide by the collective bargaining agreement between Comfort Guard Services and Fuel Oil and Natural Gas Service Technicians Association.
We will be happy to arrange interviews for the servicemen who so desire to exercise this option.
Yours very truly,
'R.H. Campbell'
General Manager
It was the opinion of Mr. Hurd that the respondents were applying pressure to the employees who are affected by this application to force them by means of a layoff to become dependent contractors.
In cross-examination Mr. Hurd agreed that article 11.11 of the collective agreement with the applicant had one seniority list and that bumping could occur if an employee had the requisite qualifications and licences. Mr. Hurd agreed that the applicant has agreed to the respondents' proposal to retain four drivers who are "brokers" and who will be working outside Metropolitan Toronto.
Frederick Scott, a vice-president of the Ontario Division of Ultramar, testified that there were several divisions of Ultramar and that some of them operate together and some of them operate quite separately. Some of these companies have separate seniority lists. The witness referred to one such company by the name of Automatic Fuels and stated that it is a non-union company which was operating with its own office in Downsview. Deliveries of fuel oil for Automatic Fuels were performed by a combination of two salaried drivers and eight owner-operators who own their delivery trucks. Mr. Scott also informed the Board that there was also a division called Higrade Fuels which is also non-union and has its own office in Toronto with approximately six drivers in its employ. He gave evidence that in September of last year the Ultramar group reviewed the economies of their business and discovered that they were losing ten per cent of their business each year to natural gas. It was decided that in order to survive the companies would have to merge into one unit and offices would have to be consolidated under one roof. Similar consolidations in operations have also involved an operation entity called Quality Fuels. In general terms, Ultramar has been attempting to reduce its overhead expenses by consolidating its various offices and operations.
Mr. Scott testified that there are eight brokers with Automatic Fuels and that Ultramar decided to give its attention to four of them because it did not think that the applicant would assent to having all eight of them treated in the proposed manner. In these circumstances, Mr. Scott elected to look after the four brokers to whom he thought there was the greatest obligation in terms of minimizing the effect of the economic impact. The arrangement which had been tentatively agreed to by the applicant would have approved the four brokers being retained and as they retired their areas of work would revert to the applicant's jurisdiction. In addition, with respect to the seniority of the drivers of Higrade Fuels, it was agreed with the applicant that they would have to go to the bottom of the overall seniority list and upon recall would have to become members of the applicant. The witness denied that anyone was being forced to become dependent contractors and expressed the view that Ultramar thought it was the best way for all concerned. He testified that he expressed these views to Mr. Hurd and the employees who are effected and explained that it was a good solution to a problem which Ultramar faced, namely, a steadily shrinking market.
When the employees who are effected by this application did not accept the employment offered to them with Comfort, the respondents laid them off. When such employees are placed in dovetail seniority they had enough seniority to take work in the Toronto Retail Group. When they were laid off they did not have enough seniority to bump employees who were driving on July 7, 1980. Mr. Scott testified that the employees who are effected by this application would be recalled and that such recalls, depending upon the weather, will generally commence after Labour Day through to December. It was his testimony that these employees were laid off because Ultramar had no work for them in the newly merged scheme of operations. In this new scheme Comfort would do all the service work.
There are eight employees who are effected by this application. There is no doubt that if the respondents' conduct amounts to a lock-out such a lock-out would be unlawful having regard to the fact that it occurred during the term of a collective agreement. The definition of lock-out in section l(l)(i) of the Act states:
"'lock-out' includes the closing of a place of employment, a suspension of work or a refusal by an employer to continue to employ a number of his employees, with a view to compel or induce his employees, or to aid another employer to compel or induce his employees, to refrain from exercising any rights or privileges under this Act or to agree to provisions or changes in provisions respecting terms or conditions of employment or the rights, privileges or duties of the employer, an employers' organization, the trade union, or the employees;"
This definition of lock-out contains two elements. Firstly, the physical act of the closing of a place of employment or suspension of work or a refusal to continue to employ a number of employees. Secondly, the motive or purpose for such acts. In order for a lock-out to have occurred, it is necessary to show not only the physical act but also that the motive or purpose was to compel or induce the respondents' employees, or to aid another employer to compel or induce his employees, to refrain from exercising any rights or privileges under this Act or to agree to provisions or changes in provisions respecting terms or conditions of employment or the rights, privileges or duties of the employer, the trade union or the employees. See the Humpty Dumpty Foods Limited case, [1977] OLRB Rep. July 401; and the Canada Valve Limited case, [1979] OLRB Rep. August 731.
It is quite clear that Mr. Hurd and Mr. Scott have enjoyed a good relationship over the years and Mr. Hurd testified that Mr. Scott would not hide anything from him. The evidence, which was uncontradicted, established that Ultramar is engaged in an industry which is experiencing relentless competition from natural gas. It is clear that Ultramar was convinced that in order to survive as a viable and profitable undertaking it had to reduce its overhead expenses and streamline its operations. To this end offices were closed and consolidated and various operating entities were merged. The effect of this was in some ways to be beneficial to the applicant with respect to the extent of future representational rights among employees of Ultramar. However, as part of the reorganization, some eight employees were to be required to work under different conditions of employment. Mr. Scott impressed the Board as a compassionate man who was trying to preserve as many jobs as possible while he still had the power to make decisions.
On the evidence before it, the Board is satisfied that the respondents' decisions with respect to the eight employees who are affected by this application was related to considerations of a commercial nature and were not designed to compel or induce them to refrain from exercising rights or privileges under the Act or to agree to an alteration in their terms or conditions of employment.
The Board accordingly finds that the respondents' actions with respect to laying off the eight employees who declined to become dependent contractors did not constitute a lock-out within the meaning of section l(l)(i) of the Act. This application is dismissed.