Local 1979 Retail Clerks International Union v. Wilson Automotive (Belleville) Ltd., 1980 CanLII 898

[1980] OLRB Rep. July 1136

0217-80-U Local 1979 Retail Clerks International Union Affiliated with the Canadian Labour Congress, AFL-CIO, Applicant, v. Wilson Automotive (Belleville) Ltd., Respondent.

BEFORE: Kevin M. Burkett, Alternate Chairman and Board Members H. J. F. Ade and M. J. Fenwick.

APPEARANCES: Ian E. Reilly and Ronald Mastin for the applicant; R. D. Perkins and J. Wilson for the respondent.

DECISION OF THE BOARD; July 8, 1980

1. This matter was filed as an application for consent to institute a prosecution for an alleged violation of section 14 of The Labour Relations Act, the section which requires the parties to bargain in good faith and make every effort to conclude a collective agreement. It was agreed by the parties at the hearing, however, that the application should be amended to become an application under section 79 of the Act for an alleged breach of section 14 on condition that the relief sought by the trade union be the issuance of a cease and desist order.

2. The parties agreed on the following statement of facts:

(1) The Respondent handed out to its employees on Wednesday, October 17th, 1979 copies of the following letter:

"Dear Employee:

The union has told us that it is going to try to persuade you to go on strike tomorrow (Thursday October 18th) in spite of the fact that our last offer of settlement will not be put to a vote until Friday, October 19th. This is most disappointing to me.

Last week we made an offer to the union which met nearly all of the union s demands. Only two serious issues remain:

1. the union's demand for large wage increases

2. the union's demand that the company deduct monthly union dues from employees' pay cheques without the employees' consent.

We offered a substantial wage increase as well as $150.00 for back pay. We did not agree to the demand for a compulsory payroll deduction of union dues because we feel that every employee should have the right to decide for himself whether he wishes to pay dues to the union.

(Our offer is summarized at the end of this letter).

Some time ago the union conducted a strike vote among a small number of our employees. At the time of that vote a further bargaining meeting was scheduled to complete the negotiating sessions which were then in progress. In other words the employees who went to that meeting were being asked by the union to turn down a company proposal which the union knew was incomplete.

An employee's decision whether to engage in a strike or not is an ex­tremely serious one. Strikes are always costly both to the employee and to the company. Business lost to a company during a strike is often never recovered, sometimes with the result that employees have to be laid off. I hope, therefore, that you will discuss this whole matter carefully with your family before making any decision. I believe the union should have reported to you fully and fairly on the company's offers before asking you to go on strike.

As a result of the union's failure to put our last offer to a vote before calling a strike and because we know that you have been many months without a wage increase, we have decided as a mark of good faith to put our last offer of settlement into effect on Thursday, October 18th, 1979. Every employee who continues working will receive the full benefits set out in the offer including retroactive pay.

May I suggest to you that a strike is not in your best interest nor in the company's best interest. May I suggest further that you reject the union s demand for a strike now and that you instruct the union either to accept the company's offer or to return to the bargaining table and continue to negotiate in good faith with a view to making an acceptable collective agreement.

Yours truly,

J. Wilson, President

Company's last offer

The company's last offer is set out in detail.

The following is a summary of the company's last offer to the union made on Thursday, October 11th, 1970.

(i) WAGES: WAGE SCALE AND CLASSIFICATIONS (EFFECTIVE UPON ACCEPTANCE)

30 6 12 18 24 36 Class Start Day Months Months Months Months Months Receiver 3.75 4.00 4.15 4.30

Truck Driver 3.20 3.45 3.60 3.75 4.00

Janitor 3.95 4.10 4.25

Lift truck

Mechanic 3.45 3.70 3.85 4.00

Counter

Clerk 4.15 4.30 4.45 4.60 4.75 5.00

General

Clerk 3.45 3.70 3.85 4.00

Machinist 4.70 4.85 5.00

Start 500 hrs 1000 hrs 1500 hrs 2000 hrs 2500 hrs 3000 hrs.

Machinist

Apprentice 3.00 3.25 3.50 3.75 4.00 4.25 4.50

Bonus

Counter Clerks 6% of House accounts prorated by salary for em­ployees with one (1) year's service.

Machinists — after two and one-half (2¼) times rate in production a bonus of 20% of excess.

All of the above wage rates will be increased by 20~ per hour six months after signing.

Each employee employed on March 23rd, 1979 who is now employed shall receive an allowance of $150.00 (pro-rated for ab­sence during this period).

(ii) Paid Holiday's

Paid holidays shall be seven statutory plus six religious.

(iii) Vacations

Vacations shall be:

(a) Fewer than 10 years service — 2 weeks

(b) Ten to fifteen years service — 3 weeks

(c) More than 15 years service—4 weeks

(iv) Jury Duty and Crown Witness Pay

Employer to pay difference between jury pay and regular wages.

(v) Reporting Allowance

Reporting allowance 4 hours guaranteed

(vi) Call Back Guarantee

Employee guaranteed four (4) hours if called back.

(vii) Bereavement Pay

Three days with pay for immediate family, one day with pay for others.

(viii) Employee Purchases

Discount to be continued (but not in agreement).

(ix) Welfare Plan

(a) Employer to pay O.H.I.P. premiums as follows:

(i) Start to ten years — 50% (ii) Ten years to fifteen years — 75%

(iii) Over fifteen years - 100%

(b) Life insurance and Accidental death and dismemberment — (I X earnings)—Company to pay same as (a)

(c) Dental Plan — 100% of X-rays, fillings etc. — Company to pay same as (a)

(d) Short term weekly indemnity—first day accident—8th day sickness— 17 weeks—66% of salary to maximum of $300.00

— Company to pay same as (a)

(e) Long term disability — 66% of salary to $1,500.00 maximum to age 65 or recovery — Company to pay same as (a)

(f) Health Guard Plan-90% of prescription drugs paid—semi private hospital room, Employer to pay same as (a)

(g) Pension Plan—present plan to be continued

(h) Present sick leave plan — ¼ (one-half) day per month — annual pay out to be continued"

(2) On Thursday, October 18th, 1979 eleven employees elected to go out on strike and nine commenced picketing at the employer's pre­mises at 29 Harriett Street in Belleville. The rest of the respondent's employees, (sixteen employees plus eighteen management staff) elected to continue working and have continued working up to the present time.

(3) The picketing employees picketed the employer's premises daily from October 18th, up until April 8th, 1980 the date when six returned to work at their election.

(4) The picketers carried on secondary picketing at the premises of various customers of the respondent and distributed letters to cus­tomers of the respondent urging them to discontinue doing busi­ness with the respondent. On of these letters reads:

'On October 17, 1979 we will be going on strike against WIL­SON AUTOMOTIVE. This will include their Lift Truck Division.

We are writing you so that you can make plans for obtaining your requirements and service from an alternative source.

Any inconvenience that our picketing of WILSON or his cus­tomers causes will be unavoidable, but, with this notice we sin­cerely hope you can arrange not to be inconvenienced.'

The union as of this date has not retracted the above letter.

(5) As a result of the various activities of the picketers and other un­known persons the respondent company suffered a severe reduc­tion in business. Some business lost during the picketing has re­turned. Much business lost during the picketing has not been re­covered.

(6) At a mediation meeting held on February 14th, 1980 the union

amended its proposal on union security as follows:

The union proposed that all employees who now belonged to the union would remain members and pay dues and all new employees hired by the company would be required to join the union and pay dues.

The employer rejected the proposal and the conciliation officer terminated the meeting. There was no discussion of monetary or other issues.

(7) On March 26th, 1980 the company through its counsel informed I. Riley, business representative of the Applicant that the company's losses during the strike were substantial, that the company's proposal made on October 18th, 1979 could no longer be accepted as the basis for a collective agreement unless the union was pre­pared to restore the company to its position as of October 18th, 1979.

(8) The parties met on April 14th, 1980 with Mr. Skinner for the pur­pose of resolving their differences. At that meeting the union in­dicated that it was prepared to withdraw its proposals for Union security and demanded that the company sign an agreement based on the October 18th proposal. The company indicated that it was prepared to have the question of the amount of its losses during the strike and its continuing losses assessed by an arbitrator. The com­pany indicated that it was prepared to negotiate on the amount of its losses. The company said that the union would have to accept the principle that the company's losses during the strike were legiti­mately is issue. The company said that it was prepared to deal with the question either through a reduction in its proposal to its em­ployees or by some form of lump sum payment from the union. The union refused to accept the principle that the company's losses during the strike were legitimately in issue and took the position that each side in a strike should be prohibited from bargaining on their losses.

(9) Of the nine employees who picketed the employer's premises six returned to work on April 8th. The company undertakes to treat all employees who returned just short of the six-month limit the same as its other employees.

(10) The union continued its efforts to persuade customers of the com­pany to continue to withhold their business up to April 14, 1980.

(11) The employer is operating at much less than its normal capacity but is required to retain most of its staff to attempt to recover lost business.

3. The union called Mr. William Kritsch, a 14 year employee of the respondent company who served as chairman of the union's bargaining committee. He was present at the meeting between the company and the union which took place on April 14, 1980. It is his evidence that the company informed the union that the only way Mr. Wilson (the owner of the company) could negotiate was if the union would reimburse him for $100,000, or better, lost during the strike or accept a 50¢ per hour reduction in the rates of pay. Mr. Wilson testified that it was suggested that the union might have to accept 50~ per hour less than had been offered at the commencement of the strike or make a lump sum settlement in the area of $100,000 but that the figures were subject to arbitration and negotiation.

4. Section 14 of the Act stipulates:

"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 every reasonable effort to make a collective agreement."

5. The purpose and extent of the duty to bargain in good faith are described in the Goldcraft Printers Ltd. case, Board File No. 1360-79-U, decision dated April 16, 1980 in the following terms:

"The Board has found that the duty operates on two levels. It operates to buttress the employer's recognition of the trade union as the exclusive bargaining agent of all bargaining employees. They duty also operates to preserve and maintain the decision-making framework which is essential to meaningful collective bargaining. The Board has found that this second aspect of the duty requires an employer to provide the union with data necessary to its bargaining capability, to engage in full and open discussion on all matters in dispute and to refrain from tactics which upset or destroy the decision-making framework.

At the recognition level the duty ensures that at the very least the parties share the common objective of concluding a collective agree­ment. The Board, however, has been careful in its jurisprudence to emphasize the principle of voluntarism which underpins the collective bar­gaining process. The parties must intend to enter into a collective agree­ment but the content of that agreement is to be determined by the parties themselves through the process of negotiation and if necessary, nego­tiation assisted by economic sanction. The Board aptly summarized the extent of the duty in the Ottawa Journal case, [1977] OLRB Rep. Nov. 748 wherein at paragraph 12 the Board stated:

'The duty to bargain in good faith is administered by this Board in such a way as to improve and facilitate the practice and procedure of collective bargaining. This approach recognizes, however, that the results of collective bargaining are necessarily dictated by the rela­tive economic strength of the bargaining parties. Although the Board should make every effort to restore a bargaining relation­ship and re-establish the dialogue between the parties to that rela­tionship, it should not go so far as to redress any imbalance of bar­gaining power that might exist in a particular bargaining situation.'

(See also The Daily Times of Brampton case, supra, and Fashion Craft Kitchens, [1979] OLRB Rep. Oct. 967. The Board does not regulate the content of collective agreements. In appropriate circumstances, however, the Board will draw an adverse inference with respect to the intent of a party to enter into a collective agreement if it persists in tabling patently unreasonable proposals.

In the recent Radio Shack decision ([1979] OLRB Rep. Dec. 1220), the Board dealt specifically with the need for circumspection in first agree­ment situations; especially those in which the employer has committed unfair labour practices in an effort to stem the union's organizing. The Board put its mind to the difficulties presented in assessing bargaining behavior in first agreement situations at para. 74 of that decision and stated:

'In discussing the nature of the bargaining duty, we noted the diffi­culty of distinguishing hard bargaining from conduct which is more in the nature of 'going through the motions', and lacking any real intention of signing an agreement — 'surface bargaining' if you will. Experience has taught this Board that it must be particularly sensitive to this distinction in first contract situations. Few em­ployers willingly embrace collective bargaining, but most accept the right of the employees to participate in that process and negotiate first agreements with duly certified bargaining agents without rancor or controversy. This, of course, does not mean that all first agreement controversy is a product of anti-union animus or that good faith bargaining in first agreement situations must always end in a contract. Neither proposition would be true... The Board should not conclude lightly that an employer is merely engaging in hard bargaining in such situations or that it is exercising its free­dom of speech in communicating directly with bargaining unit employees. The nuances of each case must be considered and earlier employer unlawful conduct may trigger a detailed assessment of bargaining activity. The legitimate concern for 'freedom of contract' of 'freedom of speech' ought not to blind the Board to abuses committed under either banner, and that strike at other equally fun­damental tenants of the legislation.'

While the principle of voluntarism is fundamental to the collective bar­gaining process the Board must not be blinded by it in critically assessing what is portrayed as hard bargaining. This is especially so in first agree­ment situations where an employer who maintains he is engaging in hard bargaining has previously attempted to upset the union's organizing efforts by unlawful means.

6. The issue before the Board in this case is whether the bargaining stance adopted by the company on April 14, 1980 is in violation of the section 14 duty. The union takes the position that the company breached the duty when it introduced a new ingredient into the negotiations at the point in time when the union was prepared to settle on the company's terms. In addition, the union maintains that the new ingredient itself, a demand to make the company whole for the losses suffered during the strike, is contrary to the section 14 duty. The union argues that the company is attempting to penalize it for exercising its right to strike. Finally, the union characterizes the company's position as one which has been formulated to ensure that it does not have to enter into a collective agreement with the trade union. The company relies on the concept of voluntarism as the underpinning of free collective bargain­ing and argues that, having suffered extensive losses over a protracted period of time, it is entitled to alter its bargaining position to reflect the altered situation. The company main­tains that its willingness to arbitrate the amount and negotiate on the result should dispel any doubt that it might not be bargaining in good faith.

7. We start with the long held view of this Board that "the parties are best able to fashion the law which is to govern the workplace and that the terms of an agreement are most acceptable when the parties who live under them have played the primary role in their enact­ment," (See the De Vilbiss (Canada) Ltd. case, [1976] OLRB Rep. March 49 at para. 13.) This Board recognizes the concept of voluntarism as relied upon by the respondent company. As a general proposition a party is free to take whatever position best satisfies its self interest providing it maintains the intention of concluding a collective agreement. The difficult cases arise where a party tables a position which it maintains is legitimately in its self interest but which the other side maintains is destructive of the process or designed to avoid a collective agreement and to undermine the trade union. In the Pine Ridge District Health Unit case, [1977] OLRB Rep. Feb. 65 the Board noted:

"Collective bargaining does not take place in a vacuum or in a period where time and events are frozen. Generally, as in this case, it occurs over an extended period of time against a fluid backdrop of events. A party may thus come to reshape its view of its own best interests from one point in time to another and so wish to change its position at the bargaining table. The party opposite cannot be taken to be unaware of the increasing likelihood of that happening with the passing of each successive day and week. The old caution, "Take it before I change my mind" reflects a widely accepted bargaining precept that has its proper application in collective bargaining..."

(See also Toronto Jewellery Manufacturers' Association [1979] OLRB Rep. July 719).

However, the Board s views as expressed in the Pine Ridge District Health Unit case, supra, cannot be taken as a carte blanche to alter one's bargaining position at any time and for any reason. Clearly, an alteration of position designed to wreck the critical decision-making framework necessary for collective bargaining would be contrary to section 14 of the Act. (See the Graphc Centre (Ontario) Inc. case, [1976] OLRB Rep. May 221.) Similarly, the move to a position tailor-made for rejection would betray an intention not to conclude a collective agreement contrary to the duty imposed by section 14 of the Act. It follows, therefore, that while the parties may govern themselves by self-interest and may alter bargaining positions in response to changes in relevant conditions, a party which alters its bargaining position may leave itself open to the allegation that it is bargaining in bad faith. It falls to the Board in these cases to examine the evidence in light of the labour relations dynamics and draw the appro­priate inferences.

8. It is clear on the evidence before us in this matter that the company has suffered substantial losses as a result of a protracted strike. We have no hesitation in expressing the view that if the financial condition of a company deteriorates after it has made a monetary offer in collective bargaining, but before the union has accepted that offer, the caution referred to in the Pine Ridge District Health Unit case, supra, would apply. At the very least, this company had cause to reconsider the position it tabled with the union on October 17, 1979 as its financial condition deteriorated during the course of the strike. Indeed, if the company had made known its intention to reconsider its position at the earliest possible date and if it had simply tabled a revised package based on diminished ability to pay and had commenced to pay those at work on the basis of its revised offer, this Board would have been hard pressed to find a violation of the Act.

9. This company, however, waited until some twelve days before the expiry of the 6-month period during which employees engaging in a lawful strike are entitled to claim their jobs under section 64 of the Act, before announcing that its last offer could no longer be considered as the basis of a settlement. Although its financial position deteriorated during the course of the strike, the company did not advise the union of its revised approach until March 26, 1980; 5¼ months after the commencement of the strike and 5¼ months after it put the rates contained in the last offer into effect. When the parties returned to the bargaining table on April 14, 1980 the company, as a condition of settlement, required the union to agree to a calculation of the losses incurred by it during the strike. The company did not simply table a revised offer based on diminished ability to pay but tied the settlement to restitution for the losses incurred by it during the period of the strike. The difference in emphasis is critical to the determination in this matter where the company paid those who worked during the strike and those who returned to end the strike on the basis of its last pre-strike offer. Although entitled to unilaterally determine terms and conditions of employment during the period of the strike, the company paid the higher rates throughout the strike, continued to pay these rates when the strikers returned to work, but made it clear to the union on April 14th that it was not prepared to enter into a collective agreement on the basis of these rates. While the company's offer contained the option of paying a lump sum in restitution rather than accepting a reduction in direct wages, the net effect upon the members of the trade union would be identical regardless of the option chosen.

10. A natural suspicion attaches to the motives of an employer who alters his bargaining position at a critical stage in negotiations; this is especially so where the negotiations are for a first agreement. When, as in this case, the employer does not simply table a revised position based on his projected ability to pay, but requires the trade union to agree to a calculation of the company's losses during the strike and the subtraction of these losses from the company's last offer, the concern increases. When the employer who is revising his position in this manner has paid those working during and after a strike on the basis of his last pre­strike offer and has not unilaterally cut these rates in response to changing economic conditions as he is entitled to do, the Board must draw the inference that the employer no longer has the intention of entering into a collective agreement. The decision of the company to continue to pay at the level of its past pre-strike offer throughout the period, coupled with the tabling of a position which requires the union to agree to a calculation of its losses during the strike, and makes the signing of a collective agreement conditional on a reduction in wages equal to the company's losses, creates a Hobson's choice for the trade union. The union is put in the position of having to agree to the company's proposal, thereby identifying itself as the cause of a reduction in the employees' wages based on the cost to the company associated with a legitimate exercise of the right to strike (in effect the imposition of a penalty on employees for having exercised the right to strike), or of abandoning the employees who have chosen the union to represent them collectively. In the circumstances, the proposal must be characterized as having been designed for rejection. Even if the trade union was prepared to accept such a proposal, which is doubtful to say the least, the employees whose wages would be reduced to make the company whole for the losses incurred by it during the strike, would most certainly reject it. On the facts we can come to no other conclusion but that the company's bargaining strategy was designed with this result in mind.

11. Having regard to all of the foregoing, we are satisfied on the evidence before us that as of April 14, 1980 the respondent company did not negotiate with an intention to conclude a collective agreement and hence we must find the respondent company to be in violation of section 14 of the Act. Having regard to the foregoing and to the nature of the relief requested we hereby direct the respondent company to cease and desist from bargaining in bad faith.

ADDENDUM OF BOARD MEMBER M. J. FEN WICK:

1. I agree that the OLRB does not regulate the content of collective agreements and that voluntarism in bargaining must prevail. I also agree and concur in the finding that this company is not bargaining in good faith and has therefore violated section 14 of the Act.

2. In this case the respondent company has implemented what in effect is a collective bargaining agreement, terms of which were offered to union negotiators on October II, 1979, communicated by the company to the employees on October 17, 1979 and implemented on October 18, 1979.

3. The only issue dividing the applicant union and respondent company and which is the subject of the union's complaint, is the employer's unusual demand that the union reim­burse the firm $100,000 or better for business it lost during the strike. The payment is to take the form of a wage cut or a lump sum payment to this company. The Board has found that this demand in the circumstances of this case constitutes bargaining in bad faith.

4. If the relief sought has not been circumscribed by the agreement of the parties, I would have directed the parties to sign an agreement containing the terms of the company's last offer. Precedent for such a directive is the Municipality of Casimir, Jennings and Appleby case, [1978] OLRB Rep. June 507, paragraph 40. If this company does not now sign an agreement on these terms it would be my view that the union can return to the Board and seek such relief.