Tilco Plastics Employee's Association v. Tilco Plastics (1976) Limited, 1980 CanLII 869

Ontario Labour Relations Board

[1980] OLRB Rep. July 1096

0110-80-R Tilco Plastics Employee's Association, Applicant, v. Tilco Plastics (1976) Limited, Respondent.

BEFORE: R. 0. MacDowell, Vice-Chairman and Board Members B. L. Armstrong and J. A. Ronson.

APPEARANCES: Peter Millard, Maureen Montgomery, Linda Bullock and Lorraine Pammett for the applicant; Ken Butcher for the respondent.

DECISION OF R. O. MACDOWELL, VICE-CHAIRMAN, AND BOARD MEMBER B. L. ARMSTRONG; July 7, 1980

2. This is an application for certification. The applicant employee organization has never previously appeared in any proceeding before the Board and, accordingly, is required to establish that it is a "trade union" within the meaning of section l(l)(n) of The Labour Relations Act. Ms. Maureen Montgomery, president of the applicant, gave evidence concerning its origins. The facts are not in dispute.

3. In November, 1976 a group of managerial and non-managerial employees decided that, instead of a trade union, they would form an employee association which would include all employees of the respondent, and would meet with the owners of the company to discuss employee problems and terms and conditions of employment. John Armstrong, maintenance foreman, Gail Arnott, secretary to Ken Butcher the president of the company, Eric Bloomfield, a foreman, and Maureen Fowler "assistant-forelady" in the finishing department, were among this founding group. The group approached the owners and senior management (Ken Butcher President, Ted Robinson vice-president, and Pat Baker sales manager) to request permission to hold a meeting on the company premises for the purposes of discussing the formation of the association.

4. On November 19, 1976 the employer agreed to shut down the company's operation so that the employees could conduct their founding meeting. The meeting was held on the premises and was attended by all managerial and non-managerial personnel. John Armstrong was the principal spokesman who explained the benefits to be gained by forming an employee association. It was decided that an association should be formed, and that it should include all hourly rated and salaried employees except the "owners" (i.e. Butcher, Robinson and Baker). Later that day the pro-tem executive of the association approached the "owners" and were recognized by them as the employees' representative. A notice to this effect was posted on November 22, 1976.

5. In December a meeting was held at the home of one of the employees, to discuss the writing of a constitution. The meeting was attended by the original "prime movers" behind the association, as well as some twenty-five other employees. A constitution was drafted and approved; and officers were elected pursuant to its terms. In the years following its formation the association apparently had an amicable relationship with the employer.

6. Ms. Montgomery testified that anyone who becomes an employee of Tilco, automatically becomes a member of the association. There is a form attached to their employment application which is signed by the employee agreeing to membership and an automatic dues deduction. Ms. Montgomery told the Board that this membership/dues requirement is not part of the association's agreement with the employer because it happens automatically. In the early days of the association's existence, not all employees were members and, the association's minutes indicate that it did not purport to represent or take grievances on behalf of non-members. Now however, it would seem that there is only one individual who is not a member of the association.

7. During the last set of negotiations with the company, the members of the employee association decided that it might be appropriate to become certified as the employee's exclusive bargaining agent. They informed the employer of their intention and were advised that it had no objection. On April 18, 1980 the organization applied for certification for "all hourly rated and salaried employees" — a description which, Ms. Montgomery explained, would include all managerial and non-managerial persons other than the owners. The association sought certification for a bargaining unit consistent with its membership, and the group of employees whom it had historically represented. Among this group were John Armstrong, plant superintendent, Linda Bullock, payroll supervisor and secretary to the president, and other managerial employees. At the hearing the parties proposed that Ms. Bullock, as secretary to the general manager and payroll supervisor should be excluded from the bargaining unit; however the proposed unit upon which the parties agreed still extends to foremen and supervisors. All of these managerial personnel were involved in the organizing campaign at least to the extent of signing membership documents. These membership documents were typed by Linda Bullock and copied on the respondent's photocopying machine. The association approached Mr. Butcher, the president and asked for permission to solicit membership in the company cafeteria. Permission was granted, a table was set up, and all of the membership documents were collected in this way.

8. The statutory provisions relevant to this application are as follows:

1 .-(1 )(n) "trade union" means an organization of employees formed for purposes that include the regulation of relations between employees and employers and includes a provincial national, or international trade union, a certified council of trade unions and a designated or certified employee bargaining agency.

1. (3) Subject to section 80, for the purposes of the 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.

12. The Board shall not certify a trade union if any employer or any employers' organization has participated in its formation or administration or has contributed financial or other support to it or if it discriminates against any person because of his race, creed, colour, nationality, ancestry, age, sex or place of origin.

13. An agreement between an employer or an employers' organization and a trade union shall be deemed not to be a collective agreement for the purposes of this Act,

(a) if an employer or an employers' organization participated in the formation or administration of the trade union or if an employer or an employers' organization contributed financial or other support to the trade union; or

(b) if it discriminates against any person because of his race, creed, colour, nationality, ancestry, age, sex or place of

origin.

56. No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence.

57. It is fundamental to the scheme of the collective bargaining regulated by The Labour Relations A ct that there be a clear separation between managerial and non-managerial employees, and that the employees' bargaining agent be entirely free of managerial influence. This basic principle is expressed in a number of statutory provisions beginning with section l(3)(b) which excludes managerial personnel from the statutory definition of "employee". Thus, managerial persons cannot form a "trade union", be covered by a "collective agreement" or seek the protection of The Labour Relations Act(see Barbara Jarvis ". Assoc. Medical Services Inc. et al (1964), 1964 CanLII 12 (SCC), 44 D.L.R. (2d) 407 (S.C.C.)). The rationale for the exclusion of managerial personnel was succinctly stated by the British Columbia Labour Relations Board in Corporation of the District of Burnaby et al, [1974] Can LRBR I at page 3:

"The explanation for this management exemption is not hard to find. The point of the statute is to foster collective bargaining between employers and unions. True bargaining requires an arm's length relationship between the two sides, each of which is organized in a manner which will best achieve its interests. For the more efficient operation of the enterprise, the employer establishes a hierarchy in which some people at the top have the authority to direct the efforts of those nearer the bottom. To achieve countervailing power to that of the employer, employees organize themselves into unions in which the bargaining power of all is shared and exercised in the way the majority directs. Somewhere in between these competing groups are those in management — on the one hand an employee equally dependent on the enterprise for his livelihood, but on the other hand wielding substantial power over the working life of those employees under him. The British Columbia Legislature, following the path of all other labour legislation in North America, has decided that in the tug of these two competing forces, management must be assigned to the side of the employer.

The rationale for that decision is obvious as far as the employer is concerned. It wants to have the undivided loyalty of its senior people who are responsible for seeing that the work gets done and the terms of the collective agreement are adhered to. Their decisions can have important effects on the economic lives of employees, e.g., individuals who may be disciplined for "cause" or passed over for promotion on the grounds of their "ability". The employer does not want management's identification with its interests diluted by participation in the activities of the employees' union.

More subtly, but equally as important, the exclusion of management from bargaining units is designed for the protection of employees organizations as well. An historic and still current problem in securing effective representation for employees in the face of employer power is the effort of some employers to sponsor and dominate weak and dependent unions. The logical agent for the effort is management personnel. One way this happens is if members of management use their authority in the work place to interfere with the choice of a representative by their employees. However, the same result could happen quite innocently. A great many members of management are promoted from the ranks of employees. Those with the talents and seniority for that promotion are also the very people who will likely rise in union ranks as well. In the absence of legal controls, the leadership of a union could all be drawn from the senior management with whom they are supposed to be bargaining. If an arm's length relationship between employer and union is to be preserved for the benefit of the employees, the law directed that a person must leave the bargaining unit when he is promoted to a position where he exercises management functions over it."

Similar views were expressed in Ontario Hydro [1971] OLRB Rep. Aug. 501 — a case in which the Board declined to grant status to an organization in which managerial personnel had been involved. At page 504 the Board remarked:

"This Board over the years has refused to give status to purported trade unions on the basis that members of management are or have been involved in its organization. There are many cases on that point. The whole spirit of The Labour Relations Act is to provide trade unions with a separate and distinct identity from management in order to maintain their integrity in dealing with management. See e.g. section 10, section 13(b) and section 48. Indeed, section 48 makes it an unfair labour practice for management to involve itself in certain trade union affairs. The spirit of the legislation and the cases before this Board which have invoked that spirit resulted because of the potential for a conflict of interest with respect to certain issues in collective bargaining. That is not to say that cooperative and harmonious relations do not exist between employers and trade unions. But it does consider that on occasion there will be issues where relationships must be maintained at arms length. To this end the Legislature has required that trade unions be free from any type of management involvement. The "potential for conflict of interest" which Mr. Scott admits exists in his organization is precisely the problem that the legislation has attempted to resolve by requiring that trade unions be separated from management. We pause to note that even the original certificate obtained in 1947 was restricted to professional engineers who were "employees". On the basis of the evidence before us we have no alternative but to find that the applicant is not an organization of employees but is an organization of both employees and persons exercising managerial functions and accordingly it does not come within the definition of a trade union contained in the Act.

Our decision does not mean that bona fide bargaining has not taken place between the parties with respect to wages and working conditions or that bona fide bargaining could not take place in the future. Our concern is with the "potential for conflict". We also recognize that the parties may voluntarily agree to bargain collectively for managerial persons and while certain other legislation has recognized that managerial persons are appropriate for collective bargaining there is no such legislation in this Province and this Board does not have the jurisdiction to go beyond the terms of the legislation as it presently exists."

The Board reached the same result in Armour Associates Ltd. [1976] OLRB Rep. Mar. 117, where it emphasized that (as here) it was not faced with a mere possibility that non-employees could be admitted to membership, or with a mistaken belief by certain managerial persons that they were employees for the purposes of the Act (see: Chrysler Canada Ltd., [1975] OLRB Rep. Nov. 852; Children's Aid Society of Metropolitan Toronto. [1976] OLRB Rep. Dec. 861).

10. The import of sections 12, 40 and 56 is abundantly clear. Organizations which have received the active or tacit support of the employer cannot be certified nor can they conclude a "collective agreement" within the meaning of The Labour Relations Act. Strictly speaking, it is impossible for such organizations to carry out their responsibility under section 14 of the Act - to make every reasonable effort to make a "collective agreement" — because any agreement reached would not be a "collective agreement" within the meaning of the Act. Such organizations can continue to exist outside the framework of the Act (see: Ontario Hydro. supra) and may even represent their members in a manner satisfactory to them; however if such organization seeks the rights, obligations and protections of The Labour Relations Act, it must first purge itself of managerial influence and demonstrate that it is entirely independent of employer support.

11. In the present case the evidence conclusively demonstrates that managerial personnel have been actively involved in the organization from its inception, are presently members and that as recently as March of 1980, the respondent has lent its support to the preparation and solicitation of the applicant's documentary evidence of membership. In the circumstances we are not satisfied that the organization is a "trade union" within the meaning of section l(l)(n) of The Labour Relations Act; and in any event, section 12 would prevent the Board from issuing any certificate to it.

12. In the result the application is dismissed.

CONCURRING DECISION OF BOARD MEMBER J. A. RONSON:

1. While I concur in dismissing the application, it is only on the basis that the Applicant must purge itself of those members who are managerial personnel, (York University, [1975] OLRB Rep. Feb. 127).

2. The evidence of Ms. Maureen Montgomery does not lead me to conclude that at the time of the application the Respondent had participated in the formation or administration of the Applicant or was contributing financial or other support to the Applicant so as to contravene s. 12 of the Act. In fact, Ms. Montgomery stated that the reason for bringing this application was to expedite negotiations with the Respondent Company.