[1980] OLRB Rep. October 1454
0633-80-U Service Employees Union Local 204, Complainant, v. Kennedy Lodge Nursing Home, Respondent.
BEFORE: E. Norris Davis, Vice-Chairman, and Board Members M. J. Fenwick and J. A. Ronson.
APPEARANCES: Jeffrey Sack, Marcelle Elhadad- Goldenberg and Paul Brennan for the applicant; D. I. Wakely and D. Duncan for the respondent.
DECISION OF VICE-CHAIRMAN E. NORRIS DAVIS, AND BOARD MEMBER J. A. RONSON; October 31, 1980
This is a section 79 complaint alleging that the respondent contravened sections 14, 56 and 58 of The Labour Relations Act by the lay-off of all its housekeeping and janitorial employees and contracting out the work formerly done by such employees.
The parties agreed that the findings of fact in paragraphs 3, 4, 5, 6, 7 and 8 in Board File No. 0632-80-R should be applied to the present proceedings, and that exhibits filed in Board File No 0632-80-R should become exhibits in the instant proceedings. Those paragraphs are reproduced as follows:
"3. Kennedy Lodge Nursing Home, as its name implies, operates a Nursing Home and its organizational structures provides for four departments, each of which reports through a supervisor to the administrator. One department is Building Services department which is comprised of a number of sub-departments. Prior to the alleged sale to Cosmos Building Maintenance Limited, these sub-departments were Repair and Maintenance, Laundry, Housekeeping, and Janitorial. Subsequently, as the result of a written agreement between Kennedy and Cosmos, the services previously performed in the housekeeping and janitorial sub-departments by employees of Kennedy have been totally performed by employees of Cosmos. Kennedy laid off some sixteen employees being all of the full-time and all of the part-time Kennedy employees in the house-keeping and janitorial classifications. At the time of the hearing Kennedy was employing a total of 65 full-time employees and 65 part-time employees who were covered by separate collective agreements to which the applicant is a party as the bargaining agent. Also, three of the laid-off employees have been recalled by Kennedy to other classifications within the bargaining unit.
The agreement between Kennedy and Cosmos was entered into on April 16, 1980 and is to be effective from May 1, 1980 for a period of one year subject to termination on thirty days notice. Cosmos is in the business of supplying janitorial services to some fifty buildings in Toronto including several Nursing Homes. The form of contract entered into with Kennedy is the form of contract generally used by Cosmos. Attached to the agreement is a schedule of services to be performed by Cosmos and embraces the same services formerly performed by Kennedy Housekeeping and Janitorial employees, except that Cosmos additionally performs three items, i.e., window cleaning, steam cleaning of carpets and stripping and waxing of floors, all of which are relatively infrequent and had been previously contracted out.
No assets of any kind passed between Kennedy and Cosmos. Kennedy, at the time of entering into the agreement endeavored unsuccessfully to sell its cleaning equipment and supplies to Cosmos. Those items now remain stored at Kennedy. By the agreement, Cosmos uses its own equipment and supplies, and a locked storage room on Kennedy premises is provided for this purpose.
The Supervisor of the Building Services Department, Wayne Perras, reports to the Administrator and, amongst his other responsibilities, he monitors the performance of Cosmos and reports any contract deficiency to a Cosmos supervisor. Cosmos employs one full-time supervisor in the Kennedy premises, who reports to another supervisor having responsibility for another building in addition to the Kennedy building. Cosmos operation at Kennedy is staffed by some ten employees of Cosmos of whom eight, at the time of entering into the agreement with Kennedy, were employed working for Cosmos in other buildings, and two other persons newly hired by Cosmos for the Kennedy operation. No former Kennedy employees now work for Cosmos.
Cosmos Building Maintenance Limited is a Division of 380688 Ontario Limited which is wholly owned by its President, Mr. Apostopoulos, and has been operating for some three years. Other than the agreement of April 16, 1980, there is no business or financial relationship between Kennedy and Cosmos or Apostopoulos.
The agreement of April 16, 1980 resulted from an initial solicitation by a Cosmos salesman, Dan O'Hare, in December, 1979 which resulted in a written quotation dated December 6, 1979 directed to Wayne Perras, Supervisor of Kennedy's Building Services Department. Mr. Perras, showed the letter to David Duncan, the Kennedy Administrator, who reviewed it and returned it to Perras as being "worthless". Duncan states that the quote was obviously for an office building and that the schedule of work was totally inappropriate to a Nursing Home. In the latter part of December Duncan informed his superior, a Mr. Angelo Tuzi, of the item as a matter of information. Mr. Tuzi felt the matter should be pursued and Duncan agreed to get further information."
In addition, the parties agreed that it was in November, 1979 that Wayne Perras, the respondent's supervisor of the Building Services Department, was first approached by a salesman of the company to which the work was ultimately contracted; that the grievors received notice of termination during the afternoon of April 30, 1980 to be effective immediately and were paid in lieu of notice; that those employees affected retained their seniority rights for six months and were subject to recall, and one employee subsequently returned to a full-time position and three emp1oyees returned to part-time positions; and that the respondent through its contracting out achieved savings of approximately $50,000 per year. The Board also received oral evidence from which it makes the following findings of fact.
The complainant in mid-January, 1979 delivered contract proposals in respect to the renewal of an expiring collective agreement covering the full-time workers, and proposals in respect to a first-time agreement covering part-time workers. Amongst those proposals were one headed "Job Security" and reading, "The number of persons on payroll as of January 17, 1979 shall be the minimum level of staff'; and one headed "Contracting Out Clause" reading, "There will be no contracting out of any work performed' by the bargaining unit before new rules are implemented. They must be first agreed to by the Union."
Negotiation meetings were held between the parties on February 20, 1979, March 20th, April 30th and a meeting in April under the auspices of a Conciliation Officer. The proposal in regard to contracting out was not an issue at the conciliation stage as the union felt that contracting out was not a problem and that the proposal relating to job security would be more beneficial. The issue of contracting out had been discussed at one of the meetings between the parties. Mrs. Goldenberg, the union spokesperson at those meetings, testified that the company representatives in respect to the issue enquired as to why the proposal was made and that there had been no problem. Mrs. Goldenberg testified that "I didn't infer at all that they were not going to contract out. I thought that was a normal request for justification". In cross-examination, the question was put, "Did you ask the employer if he intended to contract out?" and the response was, "No". Mr. Duncan, Administrator for the respondent, confirms that those proposals were discussed only once and that he had asked the union for their rationale, and that indicated the company's rejection of those proposals as being an infringement of Management Rights as contained in the existing agreement.
A "no-Board" report was issued June 6, 1979 and on August 14, 1979 a memorandum of settlement was reached which was ratified by the union membership on August 21. Formal collective agreements were executed on December 16th. Retroactive wage payments were made two pay periods following the ratification meeting and all other terms then implemented.
The evidence is clear that during the period from mid-January, 1979 through the August 21st ratification, the respondent was not then investigating or entertaining the possibility of contracting out any work then being done by employees. The possibility of contracting out of housekeeping and janitorial services was first introduced in November, 1979 when Perras secured an unsolicited contact from O'Hare, a representative of Cosmos Building Maintenance. This contact was followed up by a quote made by O'Hare and passed to Duncan through Perras. Duncan testified that the quote was obviously not applicable to a Nursing Home and that he was not interested. Duncan testified that he had not up to this time entertained any thought of contracting out and that he was not then even aware that there were firms engaged in the Nursing Home cleaning business. O'Hare submitted an amended quotation dated January 22, 1980. Duncan considered this a "low balling" quote and left it in abeyance.
It appears that some representatives of Cosmos Building Maintenance contacted Duncan's superior, a Mr. Tuzi, who queried Duncan about housekeeping costs and the Cosmos bid. The upshot was that Duncan undertook to look further into the matter. Duncan then investigated the competence and reliability of Cosmos in respect to Nursing Home cleaning and, ultimately, met with O'Hare on March 25, 1980, at which meeting O'Hare amended his January 22nd quote of $8,000 per month to $11,800 per month. Duncan testified that at this figure there would be little savings over the costs being experienced in the current operation and he, therefore, told O'Hare that the price was too high and that if a reasonable price was put forward he "might look at it". On April 2, 1980, O'Hare returned with a price of $9,000 per month which Duncan states would represent savings to the respondent of some $4,300 - $4,500 per month over its then current costs.
A formal contract for a twelve-month period was entered into by the respondent and Cosmos on April 16, 1980, whereby Cosmos was to provide all services then done by the respondent's housekeeping and janitorial employees. Cosmos provides all supplies used and the equipment required. Additionally, services respecting window cleaning and steam cleaning of carpets which had been previously done by outside contractors were included in the Cosmos price, as was stripping of floors which had been done on overtime by the respondent's employees.
Duncan testified that the major moving force behind the decision to contract out was to save money and that it would also result in some simplifying of administration. He specifically testified that the fact that employees were unionized was not in any way a factor in the decision. Duncan gave evidence that in fiscal 1979 (ending August 31st) the respondent suffered a small operating loss, and in fiscal 1978 had had a small operating profit. The fiscal 1980 statements were not yet available, but Duncan expects a small operating profit. He pointed out that the physical facilities were built to accommodate 289 beds and that mortgage financing was predicted on that. The respondent has only been licensed for 245 beds by the Ministry of Health. He also pointed out that in late 1979, the Ontario Nursing Home Association, of which the respondent is a member, sought an increase of $4.95 per day in the per diem rates. On April 1, 1980, the Ministry of Health approved an increase of $2.38 per day with the matter to be reviewed again before October 1, 1980. Duncan states that the respondent is not in a financial crisis but that the return on investment represents less than "bank interest".
On April 30, 1980, Duncan met with the employees of housekeeping and janitorial services and a union representative was present at Duncan's request. The meeting was near the end of the shift and Duncan announced that the cleaning services were being contracted for "mainly because of economic considerations" and that, as a result, all "the housekeeping aides and janitors at Kennedy Lodge are being laid off effective April30, 1980". Duncan drew attention to the security provisions of the collective agreement and the right of recall during a period of six months. He also announced that two vacancies in other departments would be posted next day for which the affected employees were entitled to apply. The following day Duncan met with the Chief Steward and the Business Agent of the union who introduced the possibility of those employees bumping into other departments. Duncan pointed out that the collective agreement did not permit cross-department bumping but that if the union would talk to laid-off employees and ascertain those interested in other department jobs that, perhaps, a way could be found to make such transfers without contracting grievances. There was no follow-up discussion on this topic.
In cross-examination, Duncan stated that he had seen no reason to discuss the housekeeping and janitorial situation with the union in the period leading up to the April 16, 1980 contract. In his words, "We had frank, open discussions if there was a problem there was no problem then but we were simply investigating a service." When questioned as to whether he considered he had acted in good faith by not mentioning the matter to the union until April 30th, he stated, "It was not bad faith. I consider it a management right. It's in the collective agreement. I didn't think I had to check with the union."
Duncan testified that he had never discussed with the union any dissatisfaction with the level of cleanliness, or the cost of services, or the need to save money. He admitted that, in effect, by the subcontracting of services he relieved the respondent of financial burdens negotiated with the union six months previously.
The initial issue before the Board is the respondent's preliminary objection that a Board of Arbitration has been set up to hear the union's grievance and that the matter is essentially a dispute over the interpretation of the collective agreement, and the respondent requests the Board to defer to the Board of Arbitration. The respondent refers us to a line of Board decisions dealing with this issue and in particular the case of The Corporation of the County of Middlesex, [1976] OLRB Rep. Aug 427 where the Board states:
"4. Where an alleged unfair labour practice also constitutes at the same time an alleged breach of a collective agreement, the Board has generally chosen to exercise its discretion under section 79 of the Act and defer the matter to grievance arbitration. (See Collingwood Shipyards [1967] OLRB Rep. July 376; Sunnybrook Food Market (Keele) Ltd. [1972] OLRB Rep. March 210.) However, in exceptional circumstances where the arbitration process is "clearly unavailable or unsuitable to resolving the issue", the Board will depart from its general practice and will itself hear the matter. Examples of such exceptional circumstances include situations where it is alleged that the union has procured the discharge of an employee (Bowin v. United Ass'n of Journeymen et al 67 CLLC ¶16,C04), where it is alleged that there has been collusion between the union and the employer to the detriment of an employee (Pitt Street Howl Ltd. 63 CLLC ¶16,275), where it is obvious that a grievance arbitrator cannot provide effective relief (Imperial Tobacco Products (Ontario) Limited, [1974] OLRB Rep. July 418), and where it is obvious that the interests of an employee will not be effectively represented at arbitration because of a direct conflict between the interests of the trade union and those of the employee (Imperial Tobacco Products (Ontario) Limited, supra.)
Counsel for the respondent contended that the facts of this case were such that the Board should not defer to arbitration. In particular he noted his concern that a number of months might pass before the arbitration procedure was completed. The dangers of such a delay, he contended, would be further heightened by the fact, as established in evidence, that the employees have voted to give authority to the complainant trade union to call an illegal strike over this issue.
Although the complaint is framed in terms of an alleged breach of The Labour Relations Act, the complainant is in fact seeking relief from an alleged breach of the collective agreement. The issue is one which clearly falls within the jurisdiction of a board of arbitration established pursuant to the terms of the collective agreement itself, and there appears to be no impediment to having such a board of arbitration properly hear and dispose of the matter. This being the case, the Board declines to depart from its established practice of deferring to arbitration. It should be noted in this regard that the length of time it takes to constitute a board of arbitration and to schedule a hearing are, to a large extent, within the control of the parties and their nominees. We would hope that the parties will seek to have this matter go on to arbitration with all due dispatch. In any event, we decline to depart from the Board's general policy in this regard solely on the basis of a possibility of delay in the arbitration process, particularly in that any such delay is unlikely to cause the complainant to suffer irreparable harm.
The application is hereby dismissed."
The complainant takes the position that its allegations, if proven, go beyond a breach of the collective agreement and raise issues of bad faith bargaining, destruction of the bargaining unit and undermining the union which issues cannot be effectively dealt with by a Board of Arbitration. The complainant argues that the Board's decision in the case of Westinghouse of Canada Limited, [1980] OLRB Rep. Apr. 577 establishes that "collective bargaining as established under the Act has an economic or productivity component to it", the deliberate avoidance of which through contracting out is a contravention of the Act.
- We are of the opinion that in the instant case, that if the complainant's allegations of bad faith bargaining are proven, that the dispute is one going beyond interpretation of the collective agreement and is properly characterized as relating to the general structure of collective bargaining in the province. As was stated by the Board in the Kodak Canada Ltd. case, [1977] OLRB Rep. Feb. 49, at paragraph 9,
"…Although grievance arbitration is the proper forum for the resolution of matters relating to individual collective agreements, it is the Labour Relations Board that has been entrusted with the responsibility for resolving matters that go to the general structure of collective bargaining in this Province. Where such matters arise, therefore, it is this Board that provides the proper forum for their resolution, and deferral to grievance arbitration can no longer be the appropriate response."
The matters raised in the instant case have implications extending beyond the parties collective bargaining relationship. The parties raise the issue of the effect of a section 14 violation on actions subsequently taken within the ambit of the collective agreement. The parties raise the further issue as to the statutory obligation on an employer, during the life of a collective agreement, to seek a curative response from the bargaining agency before taking action to correct a productivity or adverse cost condition. These issues, in our view, go directly to the administration of The Labour Relations Act and make it inappropriate for us to defer to grievance arbitration.
We shall now deal with the alleged violation of section 14 of the Act which 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 every reasonable effort to make a collective agreement."
There is no real dispute but that the memorandum of settlement, signed on August 14, 1979, became on ratification by the membership on August 21st a binding collective agreement. The complainant concludes that there was no evidence of any intention by the respondent to contract out before some time in November or early December. This was prior to the signing of the formal collective agreement incorporating the memorandum of settlement on December 16, 1979. The complainant argues that in accordance with the principles enunciated in the case of Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577, there is a duty on an employer to disclose, during bargaining, a firm intention to make a change such as was involved in this case and that such duty of disclosure in this case should be effective until the formal collective agreement was signed on December 16, 1980.
- The question raised is whether the section 14 obligations were extended during the period of August 21st to December 16th. The evidence in the instant case clearly establishes that as of August 21, 1979 a collective agreement had been brought into existence by the parties. The obligations of section 14, which are directed to the conduct of the parties in their efforts to reach a collective agreement, are no longer applicable since an agreement is concluded. A similar issue was raised, in a somewhat different manner, in the case of Inglis Limited, [1977] OLRB Rep. Mar. 128. The Board there stated at paragraph 15,
"Counsel for the complainant argued that the duty set out in Section 14 of the Act is a continuing duty requiring the employer to negotiate the terms of a mid-contract relocation with the union. The Board rejects this argument. The duty stipulated in Section 14 is in respect of the duty to bargain for a collective agreement. The scheme of the Act is such that having concluded a collective agreement subsequent disagreements are ultimately resolved by third party adjudication. The Ontario Act does not require mid-term bargaining over job security issues as is required under certain other Statutes. [see Sections 150-153 Canada Labour Code]. This is not to say that the effects of these kinds of decisions should not be discussed with the bargaining agent as a party having a vital interest and in this case an ongoing relationship with the company."
In the instant case, at the time of conclusion of a collective agreement there then existed no plans or intention by the respondent to contract out work and, therefore, there existed nothing to which an obligation to disclose could attach.
The complaint insofar as it alleges a violation of section 14 arising from a failure to disclose must be dismissed.
We turn now to the alleged violations of section 56 and 58 of the Act. The complainant argues that the instant case falls within the rationale of the Westinghouse Canada Limited case, supra. It is argued that the respondent's failure to raise with the union the economic disadvantage of performing work through its own employees is an avoidance of its collective bargaining obligations. It is argued that the action in the instant case was solely to avoid the economic impact of paying wage rates agreed to in the collective agreement, and that by the respondent's decision to put himself out of reach of the economic impact of this aspect of the collective bargaining relationship, it can be inferred that the respondent was motivated by anti-union considerations. The complainant relies on the Westinghouse decision and in particular on paragraphs 63, 64, 65 and 66 which read as follows:
"63. The purpose of The Labour Relations Act is to provide a statutory framework within which employees are encouraged to join together and bargain collectively with their employer. The underlying assumption is that employees who bargain collectively are on a more equal footing with their employer than unorganized employees and have a greater say in determining their terms and conditions of employment. It is axiomatic, therefore, that collective bargaining as established under the Act has an economic impact in terms of both the price of labour and the scope of the employer's unilateral authority. Under our Act the employee's share of the economic pie and the scope of management's authority vis-a-vis employee relations must be determined at the bargaining table and against the backdrop of possible economic sanctions by either side. An employer whose employees have decided to bargain collectively cannot escape his obligations under The Labour Relations Act and any decision taken to avoid these obligations or to defeat the legitimate collective bargaining aspirations of his employees is in violation of the Act. Under our statute accommodation is sought at the bargaining table. An employer who contracts out his work, relocates or closes his plant or takes any other major business decision to avoid having to deal with his employees collectively through a trade union or to avoid the possibility, in the abstract, of being subject to economic sanctions is guilty of an unfair practice and the Board has so found in a number of cases including Academy of Medicine, supra, Humber College, supra, and Consolidated Sand and Gravel, supra.
In many cases the employer will argue economic justification for a business decision which has an adverse impact on the bargaining unit. If an employer acts because his premises are antiquated or because his market is expanding or shrinking or because of transportation factors or for a range of other economic or business reasons which are unrelated to collective bargaining he is clearly not motivated by an anti-union animus and is not restricted, therefore, by The Labour Relations Act. Indeed, section 68 of the Act expressly provides that so long as what he is doing is not a strike or lockout he can discontinue operations for cause regardless of the impact on the bargaining unit and the collective bargaining rights of employees.
Can an employer faced with economic difficulties caused by collective bargaining-related factors (wages, benefits, seniority, work practices etc.) act to remove himself from his collective bargaining relationship? It may well be that it is more profitable to operate without a union than with one but if an employer can react to this reality simply by moving his business the right of employees to engage in collective bargaining would be seriously undermined. What of the employer who is faced with an economic crisis caused by collective bargaining related factors, seeks relief from the union and is met with an unsympathetic or unsatisfactory response? Assuming that these factors could be established, the answer is by no means clear. The question, however is not raised by the facts of this case. This company was not faced with an economic crisis and notwithstanding the constraints to productivity perceived by it, there is no evidence that the company ever raised its concerns with the trade union prior to making its decision to relocate.
Collective bargaining as established under the Act has an economic or productivity component to it. Indeed, the strike record at the Hamilton plant would have had a telling impact on productivity. Having regard to the nature of collective bargaining and the rights conferred on employees under the Act, projected productivity improvements or a projected increased return on investment resulting from the relocation of a unionized plant, do not establish the absence of an anti-union motive. This is particularly so where an imminent financial crisis does not exist a rid where there is no evidence that the company ever raised its concerns with respect to productivity at the bargaining table. When reference is had to the 1977 return on investment, the failure of the company to attempt to deal through the trade union in respect of productivity and the evidence which is analyzed in the following paragraphs, we are of the view that the company's decision to relocate was motivated in large part by anti-union considerations."
If the complainant's argument was accepted, any action taken by an employer, which has an economic impact upon the bargaining unit would lead to an inference that the employer was motivated by anti-union considerations. For example, employer initiated decisions which resulted in the replacement of bargaining unit employees through process change, methods change, equipment change done solely to effect savings in labour costs would, on the basis of the complainant's argument, in and of themselves justify an inference of anti-union motivation. To accept such a conclusion would appear to be directly contrary to section 68 of the Act which provides in part:
"Nothing in this Act prohibits any suspension or discontinuance for cause of an employer's operations ... if the suspension, [or] discontinuance ... does not constitute a lockout..."
The Board, in the past, has made clear that "cause" in section 68, supra, relates only to "lawful cause". If the cost of doing business is too high in relation to the business revenues generated, the employer, who is motivated solely by correcting that imbalance, is not precluded by the Act from taking that action. Absent restrictions in the relevant collective agreement, business operations are not "frozen" by the collective relationship so long as the action taken is not in any way motivated by the accomplishment of an unlawful objective.
Business decisions must be made on the basis of the overall viability of an operation one aspect of which might be the cost of labour. In the Westinghouse case it was found that the company's decision to relocate its operation was "motivated in large part by anti-union considerations". There was evidence in that case that the company had explicitly set non-union operation as a goal to be achieved. However, in the case before the Board there was no evidence that the fact that the employees had engaged in collective bargaining and were represented by a trade union played any part in the employer's decision to contract out some bargaining unit work. We accept Mr. Duncan's testimony on this point. Westinghouse makes it clear that an employer may discontinue operations for cause so long as the decision is not motivated by anti-union animus. A desire to save money and thereby increase profits is not equivalent to anti-union animus simply because the money saved would otherwise have been paid as wages to employees in the bargaining unit.
The Board is satisfied on the evidence that the sole reason for the respondent's decision was improving its profitability. The evidence concerning the decision to contract out indicates that the employer was not overly-anxious to change his operations in that fashion. The initial contact with Cosmos was in fact unsolicited. At no point does it appear that the advantages of non-union labour over union labour was ever considered. It was not until a substantial saving was offered that the respondent took the idea of contracting out seriously. The facts of this case do not disclose any desire on the part of the employer to rid itself of union representation of its employees. Rather a legitimate business decision was made which resulted in an annual saving of around $50,000. The fact that the union and the employees were adversely affected does not of itself taint the legitimacy of that decision.
The complainant in argument placed considerable emphasis on the inclusion in the collective agreement's wage schedules of classifications and rates of pay for the positions of Housekeeping Aides and Janitors. It would have the Board draw the inference that by such inclusion the respondent had entered into an undertaking with productivity and economic implications, the avoidance of which by contracting out undermines the rights of the employees to engage in collective bargaining. The complainant also takes the position that the failure of the respondent to discuss and seek a solution to the productivity and economic concerns justifies an inference that the respondent acted for anti-union reasons.
The complainant's arguments go to the general thrust of the legislation. The general scheme of the Act is to initially set the scope of recognition of the bargaining agency while leaving the parties maximum freedom to deal with the matter mutually as they see fit. As was expressed in the Inglis Limited case, supra, at p. 136,
"…It is parties themselves who are best equipped to make the necessary trade-offs between management rights, union rights and employee rights. It is they who are best equipped to make their own bargain and to thereby set the parameters of their own relationship."
It is, therefore, necessary in determining whether a particular action of the employer strikes at union recognition to direct themselves in this respect. In so doing, the agreement as a whole must be considered and not mere concentration in classifications in the wage schedule.
- The bargain between the parties is incorporated in the collective agreement entered into by them. Article 6 of that agreement is headed "Management Rights" and provides as follows:
"6.01 The Union acknowledges that all Management rights and prerogatives are vested exclusively with the Employer and without limiting the generality of the foregoing it is the exclusive function of the Employer:
(a) to determine and establish standards and procedures for the care, welfare, safety, and comfort of the residents in the Nursing Centre;
(b) to maintain order, discipline, efficiency and in connection therewith to establish and enforce reasonable rules and regulations;
(c) to hire, transfer, lay off, re-call, promote, demote, classify, assign duties, discharge, suspend or otherwise discipline employees for just cause, provided that a claim of discriminatory transfer, promotion, demotion of classification or a claim that an employee has been discharged or disciplined without just cause, may be the subject of grievance and dealt with as hereinafter provided;
(d) to have the right to plan, direct and control the work of the employees and the operations of the Nursing Centre. This includes the right to introduce new and improved methods, facilities, equipment and to control the amount of supervision necessary, combining or splitting up of departments, work schedules, and the increase or reduction of personnel in any particular area or on the whole."
This Article, together with Article 2, headed "Scope and Recognition" are the major clauses embodying the trade-offs arrived at between management rights, union rights and employee rights. Article 2 reads as follows:
"2.01 The Employer recognizes the Union as the sole collective bargaining agent of all employees of Kennedy Lodge Nursing Home at 1400 Kennedy Road in Metropolitan Toronto, save and except Registered Nurses, physiotherapists, occupational therapists, supervisors, persons above the rank of supervisor, office staff, persons regularly employed for not more than 24 hours per week, and students employed during school vacation period.
2.02 The Employer undertakes that he will not enter into any other agreement or contract with those employees for whom the Union has bargaining rights either individually or collectively which will conflict with any of the provisions of this agreement.
2.03 Where the masculine pronoun is used in this agreement, it shall mean and include the feminine pronoun where the context so applies.
In our view, Article 6 is sufficiently broad to give the respondent the right to contract out work and there is no express language placing any limits on such right. That being so, the complainant cannot now heard to say that such contracting out strikes at or delimits the rights of the union s recognition.
The complainant argues that such contracting out as we have here is in contravention of the Act itself and that the bargain between the parties cannot over-ride the legislation. The complainant relies on the previously quoted paragraphs of the Board's decision in Westinghouse Canada Limited in support of its proposition. Our reading of that decision does not support the complainants arguments and, indeed, paragraph 64 (previously quoted) of that decision makes clear that a decision such as the respondent here made is within a permitted area of action without any contravention of the legislation.
The complainant also argues that the respondent's failure to bring the matter of economics forward for discussion with the union interfered with the complainant's rights to represent the employees. The Act makes it explicit that once the parties strike a bargain that the terms will be in operation for a minimum period of one year. The Act permits but does not obligate the parties to engage in mid-term negotiations and it, therefore, follows that the failure of the respondent to initiate discussions in the instant case clearly is not a contravention of the Act.
For all of the foregoing reasons, the complaint is dismissed.
DECISION OF BOARD MEMBER M. J. FEN WICK:
I dissent.
The employer's actions in this case disclose a total disregard for the interests of the union and the employees. Rather than discuss the possibility of contracting out with the union, the employer simply took unilateral action which affected the bargaining rights of the union and the jobs of the employees. This complete failure to consult with the union over such a serious matter indicates that the employer did not take the union seriously as the representative of his employees. This fact is in my view, substantial evidence of anti-union animus.
To allow an employer to contract out bargaining work in this high handed fashion is incompatible with the promotion of "harmonious relations between employers and employees" to which the preamble of The Labour Relations Act speaks. I would have found that the employer, in attempting to divest itself of its collectively bargained obligations, was in violation of the Act.