United Steelworkers of America v. Fotomat Canada Limited, 1980 CanLII 983

[1980] OLRB Rep. October 1397

1790-79-U United Steelworkers of America, Complainant, V. Fotomat Canada Limited, Respondent.

BEFORE: George W. Adams, Chairman and Board Members F. W. Murray and W. F. Rutherford.

APPEARANCES: James Hayes and Michael Schuster for the complainant and John P. Sanderson, Q. C. and Heather T. Laing for the respondent.

DECISION OF CHAIRMAN GEORGE W. ADAMS; October 24, 1980

1. This matter, filed on December 14, 1979, involves a complaint alleging that the respondent has acted contrary to sections 14, 56, 58 and 61 of The Labour Relations Act. It is brought by the United Steelworkers of America on its own behalf and on behalf of the employees of the respondent it represents. In its initial filing with the Board the complainant requested the following relief:

1. Declaration that the Respondent has violated the Labour Relations Act;

2. Cease and desist order from continued unlawful conduct;

3. Direction to bargain in good faith and more particularly to:

(i) table forthwith a complete proposal, and

(ii) attend at all negotiations with spokespersons with full authority to act for the respondent, and

(iii) cease and desist from its rigid and predetermined position on union security and

(iv) schedule early meetings under the auspices of mediation services and attend for such periods of time without adjournment as the mediator shall direct.

4. Damages to the union and members of bargaining unit flowing from the unlawful conduct payable with interest as appropriate.

5. Such further and additional relief as counsel may advise at the hearing and the Board see fit to grant.

2. The facts will reveal that the matter, on the agreement of the parties, did not come on before the Board as originally scheduled and in its request of June 25, 1980 that the case be rescheduled for hearing, the complainant asked for the following additional relief:

1. Direction that the respondent attend forthwith at a meeting under the auspices of mediation services and table the proposal tendered by it to the union on February 25, 1980;

2. Direction that the respondent re-employ all striking employees who wish to return to work at the conclusion of the strike notwithstanding any limitations contained in section 64 of the Act;

3. Direction that the respondent provide to the union a list containing the names, addresses, and telephone numbers of all persons recruited as replacements for striking employees which the respondent intends to retain in the bargaining unit after the conclusion of the strike; the union undertakes to maintain said list in the custody of responsible union officials.

4. Direction that the respondent post a Board Notice in the usual form in every location of the respondent where the employees work for a period of sixty working days.

FACTS

3. Most of the material facts are not in dispute, but the submissions of the parties and the substantial relief requested require a review of the evidence in considerable detail. The complainant has been certified by the Board to represent various bargaining units of employees of the respondent in various parts of Ontario. The locations which are the subject of these certifications and the dates of issue of the said certificates are set out in the respondent's reply in the following form and are not in dispute.

Location of Certification

(i) Warden Avenue

(ii) Scugog

(iii) Metropolitan Toronto

(iv) Oshawa

(v) Newcastle

(vi) Peterborough

(vii) Markham

(viii) Trenton

(ix) Belleville

(x) Oakville

(xi) Port Hope

(xii) Lindsay

(xiii) Caledon

(xiv) Ajax

(xv) Bradford

(xvi) Barrie

Date of Issue

February 26, 1979

April 17, 1979

April 17, 1979

April 17, 1979

April 17, 1979

May 18, 1979

May 18, 1979

May 18, 1979

May 18, 1979

May 18, 1979

May 18, 1979

May 23, 1979

June 14, 1979

June 14, 1979

July 30, 1979

August 8, 1979

4. With the exception of the certification of the Warden Avenue location, all of these certificates pertain to employees engaged in retail stores. The Warden Avenue certification relates to route drivers and maintenance employees. The Board was advised that the total employment of the respondent in the Province of Ontario is somewhere between 250 to 300 employees and that the certificates cover approximately 130 of these employees. Accordingly, each certificate relates to a relatively small number of employees.

5. It is not disputed that notices to bargain for the various locations were given on the following dates:

(i) Warden Avenue

(ii) Scugog

(iii) Metropolitan Toronto

(iv) Oshawa

(v) Newcastle

(vi) Peterborough

(vii) Markham

(viii) Trenton

(ix) Belleville

(x) Oakville

(xi) Port Hope

(xii) Lindsay

(xiii) Caledon

(xiv) Ajax

(xv) Bradford

(xvi) Barrie

March 1, 1979

April 23, 1979

April 23, 1979

April 23, 1979

April 23, 1979

May 31, 1979

June 4, 1979

May 31, 1979

May 31, 1979

May 31, 1979

May 31, 1979

June 1, 1979

June 19, 1979

June 20, 1979

Set out in complainant's Request for Appointments of Conciliation Officer as August 2, 1979 but apparently not received by the respondent.

July 31, 1979

6. In May 1979 the respondent appears to have retained the law firm of Hicks Morley Hamilton Stewart Stone to conduct negotiations for it and the parties met on May 23, 1979 to set "the ground rules" for the negotiations. A second meeting was arranged for June 8, 1979; however, on or about that same time John C. Murray of the Hicks Morley firm, advised the complainant that his law firm was no longer representing the respondent. Soon after, the complainant trade union applied for conciliation services (i.e. on June 13, 1979). William Mills, assigned to conduct negotiations on the complainant's behalf, explained this action on the basis that he had tried to telephone Dave Gillespie, Group Manager of the respondent, but his telephone calls were not returned. A second request for conciliation services in relation to the additional locations certified after June 13 was made on October 23, 1979. The two requests for conciliation services by location are set out in the respondent's reply at paragraph 5 and are not disputed:

(a) Warden Avenue, Scugog,

Metropolitan Toronto, June 13, 1979

Oshawa, Newcastle, Peterborough,

Markham, Trenton, Belleville,

Oakville, Port Hope and Lindsay;

(c) Caledon, Ajax, Bradford and Barrie October 23, 1979

7. The respondent subsequently retained the law firm of Stikeman, Elliot, Robarts and Bowman and Fred von Veh of that law firm advised Mills on June 20, 1979 that he would be representing the respondent in negotiations. A meeting between the parties was scheduled for June 28, 1979 for the purpose of reviewing all outstanding matters. At that meeting Mills and von Veh discussed certain complaints relating to alleged unlawful terminations for a number of employees during organizing and the proposed format for future bargaining. With respect to the former, von Veh promised to look into the matters raised and with respect to the latter some confusion appears to have resulted. Mills testified that he proposed that the parties focus their attention on the largest bargaining unit (Metropolitan Toronto) and the language for the other units would subsequently "fall into place" in all probability. On the other hand, the respondent later objected to the Minister's issuance of "No-Board Reports" in respect of all locations represented by the complainant on the basis that it believed negotiations had been confined to the Municipality of Metropolitan Toronto. Whatever the actual agreement of the parties, neither party took the precaution of recording this agreement by way of written memorandum or letter. Mills testified that at the June 28, 1979 meeting it was further agreed that he would make a complete set of proposals on the understanding that monetary issues would be left to the end of bargaining. It was also agreed that the parties would meet again on July 13, 1979.

8. In the particulars filed with the Board by the respondent it is stated that Mills agreed to provide von Veh with a copy of his proposals before July 13 and that the July 13 date was cancelled by von Veh when Mills failed to honour this undertaking. We have already observed that the parties did not record their understandings of June 28 in writing; Mills denied the undertaking to provide von Veh with a copy of his proposals before the next meeting in his testimony before the Board; and von Veh did not testify. Having regard to the evidence before us, we accept Mills' version of the meeting's cancellation wherein he stated that von Veh telephoned him on July 12 and advised that he had an emergency meeting in Windsor on July 13th. This was the first unilateral cancellation of a meeting by the respondent. The next meeting was arranged for July 30, 1979. It was a date that had already been set by Fraser Kean, the Conciliation Officer appointed by the Minister of Labour. This meeting was to be held at the offices of the Conciliation Service at 400 University Avenue in Toronto. The complainant delivered its proposals to von Veh on July 27, 1980 at Kean's request, but von Veh apparently advised Kean that he could not attend at the July 30th meeting in any event. No one for the respondent testified to explain von Veh's failure to attend the July 30th meeting. The next meeting was arranged for August 10, 1980 at 400 University Avenue. At this meeting von Veh presented the complainant with the respondent's counter proposals. The parties also reviewed the complainant's earlier allegation that the respondent had improperly terminated several employees during the complainant's organizing drive. Mills testified that von Veh said "Steelworkers are all the same, you're the only union who insists on union security in a first agreement and I'm not prepared to discuss it." Von Veh did not testify before the Board and, on the evidence, we are satisfied that the statement was made. Mills also testified that von Veh was carrying on a conciliation meeting for another client at the same time and had to leave both meetings by the noon hour. Mills, however, advised von Veh at this meeting that the complainant wished its own language to be adopted on union security and this language made both union membership and the check-off of union dues compulsory. Article 6 of the union's proposal reads:

CHECK-OFF - UNION SECURITY PROVISIONS

6.01 Effective within thirty days of the date of signing of this Collective Agreement, each employee shall be and remain a member of the Union in good standing, as a condition of employment.

6.02 The Company shall deduct, as a condition of employment, from the wages of each employee in the bargaining unit, union dues, and assessments in the amount certified by the Union to the Company to be currently in effect according to the Union constitution. Such deductions shall be made from the first pay period of each calendar month, and shall be remitted within fifteen days and made payable to the International Secretary-Treasurer of the United Steelworkers of America and forwarded directly to him. The monthly dues remittances shall be accompanied by a complete check-off list and the amount of dues and sums equivalent to Union dues, for the pay period in which the deduction was made.

6.03 No deduction shall be made from the pay of any employee in any month where the employee has worked only five days or less. (Paid days on vacation and paid statutory holidays will be considered as days worked.)

6.04 The Union will save the Company harmless from any and all claims which may be made by employees against the Company for amounts deducted from wages in accordance with the terms of this Article.

Article 6 of the respondent's proposal provided:

CHECK-OFF - UNION SECURITY PROVISIONS

6.01 The Company agrees, during the lifetime of this agreement, to the extent authorized in writing by each employee, but not otherwise, to deduct whatever sum may be authorized for union dues from the first pay due each calendar month, and to remit same not later than the fifteenth day of the same month to the Secretary-treasurer of the Union. Any such authorization (which shall be agreed to as to form and substance between the Company and Union) shall be in duplicate and shall be signed by the employee concerned and witnessed. It shall be on a form approved by the Union and the Company and shall take effect after fifteen days from the date of signing.

6.02 The Union agrees to save the Company harmless from any and all claims which may be made by employees against the Company for amounts deducted from wages in accordance with the terms of this Article.

9. August 22, September 6 and 7 were set for following meetings. However, von Veh failed to attend the August 22 meeting and, instead, directed Andra Pollak, a law student, to attend the meeting of August 22, 1979 on the respondent's behalf. Mills testified that she advised him that she had no authority to amend, change or agree to proposals and that she was there only to listen to the complainant. Neither von Veh nor Pollak gave evidence to explain why she had been inserted into the negotiations and the Board, therefore, accepts Mills' testimony in this respect. Conciliator Kean prevailed on Mills to remain at the meeting and make the best of the situation. Mills then raised with her a number of the grievances referred to above and a few days later Pollak called to advise that the respondent would reinstate two persons and that it was still investigating the details surrounding the status of two others. At that same meeting Pollak and Mills agreed that the wording of some eleven provisions were similar, but Pollak lacked authority to give the respondent's agreement. Accordingly, over the summer von Veh cancelled or failed to attend three of four meetings scheduled and had to leave early the one meeting he did attend.

10. The parties met again on September 6, 1979 and this time the respondent was represented by Steve McCormack, an associate of von Veh. McCormack assured Mills he possessed the authority to conduct negotiations. Mills was encouraged by the progress achieved in this meeting and did not take issue with paragraph 26 of the respondent's particulars recording the breadth of the negotiations on that day. Paragraph 26 reads:

At this meeting Mr. McCormack redrafted various provisions of the Respondent's counterproposals in order to facilitate the acceptance by the Complainant of these Articles in accordance with the comments and objections which had been received by Miss Pollak. The following is a list of those Articles which were agreed to between the parties at the meeting of September 6, 1979:

(i) Article 4 – Management Rights

This Article was agreed to in its entirety following the Respondent's amendment in paragraph 4.01(c) to the effect that the Complainant would be consulted prior to the making, enforcing or alteration of Rules and Regulations to be observed by the employees.

(ii) Article 5.02 and 5.03 were withdrawn from the table by the Respondent.

(iii) Article 6.02 was agreed to.

(iv) Article 7.01 – union representation

The Respondent moved from an age requirement of 21 years for Union stewards to 18 years of age for Union stewards.

(v) Article 7.05

The entire Article was agreed to following the Respondent's withdrawing paragraph 7.05(e) and the Complainant undertaking to provide a letter of intent in regard to paragraph 7.05(e).

(vi) Article 8 – Adjustment of Grievances

Article 8.01 –agreed, and

Articles 8.03, 8.04, 8.05, and 8.06 were agreed following the Respondent's amending its position concerning the time frame within the grievances would be adjusted.

(vii) Article 9 – Arbitration Procedure

The Respondent agreed that its present Articles 8.07 through to 8.16 be amended and numbered Articles 9.01 through to 9.10.

(viii) Article 10 – Discharge Cases

Article 10.01 was agreed to following the Respondent amending its position concerning the time frame within which a grievance would be lodged.

(ix) Article 11 – Seniority

Article 11.01 was agreed.

Article 11.03 – the Complainant was advised that the Respondent would redraft its language and present the redrafted language at the next meeting.

Article 11.06(a), (b), and (d) was agreed.

(x) Article 12 – Job Posting

The Complainant was advised that the Respondent would redraft its proposed language and provide same at the next meeting of the parties.

(xi) Article 13 – Bulletin Boards

Articles 13.01 and 13.02 were agreed.

Article 13.04 was withdrawn by the Respondent and the Respondent advised that it would be redrafting its proposal with respect to this provision.

(xii) Article 14 – Hours of Work and Overtime

The Complainant was advised that the Respondent would be tabling its proposals for this Article at the next meeting between the parties.

(xiii) Article 15 – Vacations with Pay and Article 16 – Statutory Holidays

The Complainant was advised that these provisions would be drafted and proposals tabled at the next meeting of the parties.

(xiv) Article 17 – Leave of Absence

This Article was agreed following the Respondent's amending its language concerning notice to the Respondent.

(xv) Article 21 – Safety – was agreed to.

At this juncture negotiations concluded for the day and the Complainant was advised that those provisions which the Respondent had agreed to redraft would be tabled at the meeting which was scheduled for the next day, that is, September 7, 1979.

11. Negotiations continued on September 7, 1979. Mills did not take issue with paragraph 29 of the respondent's particulars recording discussions on that day. Paragraph 29 reads:

On September 7, 1979, the parties again met (Mr. Mills and his negotiating committee, Mr. McCormack and Mrs. Hallett and Fraser Kean) and a decision was made that the Complainant and the Respondent would meet on a one-to-one basis and that Mr. Kean would only become reinvolved if the parties felt his assistance necessary. Mr. McCormack, on behalf of the Respondent, then tabled the Respondent's proposed language concerning those Articles, which the Complainant had been advised on the previous day would be tabled by the Respondent, and in particular, the following:

(i) Article 11.03

Amended language was proposed and the Complainant agreed to this provision.

(ii) Article 13.04

An entire new provision was drafted by the Respondent and agreed to by the Complainant.

(iii) Article 14 – Hours of Work and Overtime

The Respondent's language for this particular Article was given to the Complainant.

(iv) Article 16.01 – statutory holidays – was given to the Complainant.

(v) New Article – Jury Duty – was given to the Complainant.

(vi) Article 9 – Arbitration Procedure – was agreed to by the Complainant.

(vii) Article 11.08

Was agreed to after the Complainant was advised that the Respondent's language proposed therein reflected language set out in the Complainant's proposals for a collective agreement.

(viii) Article 12.01

The Respondent amended its language concerning the filling of vacancies on a temporary basis.

In addition to these items, various other items were discussed and at approximately 2:00 o'clock in the afternoon the Complainant replied to the Respondent's counterproposals and discussions ensued for the remainder of the day. At the conclusion of negotiations for the day, it was agreed that negotiations would continue on September 27, 1979. McCormack further advised Mr. Mills of the Respondent's position in the very near future. On or about September 11, 1979, Mr. McCormack advised Mr. Mills by telephone that the Respondent was confirming the position that had previously been given to Mr. Mills by Mr. von Veh concerning the alleged employee grievances, and that if the Complainant felt the allegations were warranted, that Section 79 Complaints should be filed.

12. As these particulars reveal, another meeting was arranged for September 27. A few days before this date the complainant was advised that one of the respondent's principals would not be available and that the meeting would therefore have to be cancelled. At about the same time Mills was pressing Kean to cause the release of a "No Board Report" presumably to create some greater urgency on the part of the respondent and the respondent advised Kean that it had no objections to the release of such report. It was also agreed that the parties would meet again on October 12, 1979. A "No Board Report" dated October 1, 1979 was issued on or about October 11, 1979 with respect to the June 13, 1979 conciliation request which provoked an objection from the respondent by letter dated October 12, 1979 on the basis that the parties had been bargaining only with respect to the Municipality of Metropolitan Toronto bargaining unit. The parties, however, met as agreed on October 12, 1979, where McCormack advised Mills of the respondent's objection to the issuance of the Minister's "No Board Report". Mills was also advised of an "emergency" back in McCormack's office requiring his absence between 11:00 a.m. and 1:00 p.m. But before his departure, McCormack tabled proposals on some six provisions which Mills considered during the noon hour break. On McCormack's return the parties discussed or agreed to the following items outlined in paragraph 34 of the respondent's particulars:

(i) Article 2.01 – agreed

(ii) Article 2.03 – agreed

(iii) Article 3.02 – agreed

(iv) Article 10.01 – agreed

(v) Article 14.01 – agreed

(vi) Article 14.03 – agreed

(vii) Article 14.02 – There was discussion concerning the fact that various members of the bargaining unit presently enjoyed hours in excess of those hours set out in Article 14.02. The Complainant was advised by Mr. McCormack that the Respondent would draft language to protect the hours of certain individuals and that this would be reflected in a letter of intent to be provided by the Respondent. In addition, there was discussion concerning the payment of travel time and travel allowance for those employees who moved from location to location for the Respondent. It was tentatively agreed at this time that these individuals would be paid travel time and would be paid public transit travel allowance and that the Respondent would draft language to that effect.

(viii) Article 14.04 – agreed

(ix) Article 14.05 – agreed

(x) Article 14.06 – agreed

(xi) Article 14.09 – agreed

(xii) Article 15.01 – agreed

(xii) Article 15.02 – agreed

(xiii) Article 15.03 – agreed

(xv) Article 22 of the Complainant's demands – Credit Union – was withdrawn by the Complainant.

13. They then, as recorded in paragraph 35 of the respondent's particulars, agreed on the items which remained outstanding and the complainant made its first monetary demand. Paragraph 35 reads:

At this point in time Mr. McCormack and Mr. Mills agreed that the following were those items which remained outstanding:

Articles 3.01, 5.01, 6.01, 7.01, 11.02, 11.06(e), 11.09, 12.01, 14.02, 14.08, Article 16 of the Complainant's demands for travel time and travel allowance, super seniority, jury duty, and pay on day of inquiry. Having agreed that these were the only open items, the Complainant then proposed its monetary demands for a collective agreement. Those demands were as follows:

Classification Rate

Fotomates $4.00 per hour

Senior Fotomates $4.25 per hour

Area Trainers $4.50 per hour

No proposals or demands were made for route drivers and maintenance employees.

In addition, the Complainant advised that they were holding to their proposed benefits as set out in their original proposals for a collective agreement.

This flurry of activity was due, it appears, to the fact that before the October 12, 1979 meeting the complainant had set a strike deadline of October 22, 1979. This strike deadline was therefore, set before the complainant had made any monetary proposal and on the basis of Mills' testimony it appears that he was really not prepared to make the proposal that he did. He admitted he quickly drafted a monetary proposal after McCormack had asked for his position and the proposal amounted to a wage increase of approximately 45 percent.

14. Mills testified that he had "hoped" McCormack would reply to his monetary proposal on the Monday or Tuesday of the following week, but that he never heard back from McCormack prior to the commencement of the strike on October 22. He admitted that McCormack had advised him on October 12 of the respondent's objection to the issuance of the "No Board Report" for most of the locations and that he had not tried to contact McCormack prior to the strike to determine why he had not yet replied. The Ministry of Labour, over the signature of Paul Hess, Director of Legal Services, dismissed the respondent's objection to the issuance of the "No Board Report" by letter dated October 19, 1979. The evidence reveals that there were no more meetings between the parties before this complaint was filed on December 14, 1979. Mills explained this delay in filing and the intervening absence of negotiations on the basis that the complainant was waiting for the issuance of a decision of this Board in Radio Shack, [1979] OLRB Rep. Dec. 1220 issued on December 5, 1979. He further testified that he was preoccupied with the establishment of picket lines at the many locations affected by the bargaining. We would also record that prior to this complaint, the complainant had filed three other unfair labour practice complaints against the respondent. Two of the complaints were withdrawn (Board File Nos. 2033-78-U and 1351‑79-U) and the third was dismissed by a unanimous decision of the Board dated January 15, 1980.

15. The hearing of this matter was originally scheduled for January 24, 1980. However, the respondent sent the following letter to the Board dated January 21, 1980 and, on the agreement of the parties, the case was adjourned pending further negotiations.

As the Board is no doubt aware, a complete collective agreement has been negotiated between Fotomat Canada Limited and the United Steelworkers of America with the exception of certain language and monetary issues which are known to the parties.

In an attempt to set the record straight and to avoid any misunderstanding about our Company's position on collective bargaining with the United Steelworkers of America, the following undertaking is given – namely – our Company undertakes to meet with the United Steelworkers of America and by a process of collective bargaining to bargain in good faith and make every reasonable effort to conclude a collective agreement. Furthermore, our Company hereby agrees to have a mediator assist the parties in achieving a collective agreement.

16. The parties then met on January 31, February 21 and February 25, 1980 with the assistance of two mediators. Progress was made on January 31 and Mills testified that by February 25, 1980 the parties were left with only two items, the respondent's proposed Article 3.01 and the Complainant's proposed Article 6.01 reproduced above. Mills later testified that Article 3.01 was not really in issue. Article 3.01 provided:

3.01 There will be no discrimination, intimidation, restraint or coercion exercised or practiced by the Company or the Union or any of its representatives with respect to any employee because of the employee's membership or non-membership in the Union.

According to Mills, when the parties' positions became this close von Veh told him he had to seek instructions from a representative of the parent company who was at that time skiing in Sun Valley and could not be reached. Mills conveyed his concern about von Veh's inability to convey his clients final position by letter dated February 29, 1980.

We were advised at the conclusion of our lengthy meeting on Monday, February 25, 1980, that your American principal, Mr. John Lackland, was in Sun Valley and could not be reached for the purpose of providing you with instructions on the outstanding matters in dispute.

Your therefore withdrew from the meeting at that point. We regard this as entirely inconsistent with the position taken by Mr. von Veh that he had complete authority to conclude a collective agreement on that day.

We now understand that Mr. von Veh departed for two weeks vacation in Hawaii on Tuesday, February 26th.

In view of the long delays in this matter, we require that you provide us with a response or our last offer to you no later than noon on Monday, March 3rd, 1980. I would of course be prepared to discuss this matter with you.

The positions of the parties at this time were subsequently set out in a reply to Mills dated March 3, 1980 over the signature of von Veh together with an attachment recording the respondent's position as of that date. The letter rejecting the union's position of February 25 and the attachment read:

We are in receipt of your correspondence dated February 29, 1980 and wish to clarify a number of points that are raised therein.

Initially, it is pointed out that I did not have "complete authority to conclude a collective agreement on that day". Such a position was never advanced by either myself or Mr. McCormack and in fact the events of Monday, February 25, 1980 clearly indicated the contrary, namely, that instructions were sought on a continuing basis from a senior officer of the client.

We also wish to confirm the events of the 25^th, in particular the events surrounding the most recent offer of the Company made to the Union late that afternoon. The most recent position of the Company (photocopy attached hereto) was submitted to the Union, and I was advised by you that the offer would be acceptable on condition that the Company's proposed Article 3.01 be withdrawn and the Union's proposed Article 6.01 be agreed upon. This advice given to the Company's negotiators was subsequently confirmed by Mr. Speranzini. I thereupon advised you and Mr. Speranzini that in view of the conditional acceptance of the Company offer by the Union, instructions would have to be sought from senior Company officers, more particularly Mr. John Lackland. In view of Mr. Lackland's unavailability on that day an adjournment was sought in order to receive instructions on the conditions imposed by you. Both the Union and Mr. Speranzini were advised to this effect.

I wish to now advise you that we have had an opportunity to confer with Mr. Lackland. It is our client's position that the conditions which were imposed by the Union upon the acceptance of the most recent Company offer are not acceptable to our client.

We have further been instructed by our client to seek a further meeting with you in order to continue collective bargaining negotiations in an effort to attempt to resolve the dispute between the parties.

Fotomat Canada Limited Feb 25.80

Company Position on Open Items

1.) Compensation

(i) Fotomates – Base Rate $3.00

1st year – .27

2nd year – .29

3rd year – .32

(ii) Senior Fotomates

(In Store Trainees) – Base Rate $3.20

1st year – .29

2nd year – .31

3rd year – .34

(iii) Area Trainees – Base Rate $3.40

1st year – .30

2nd year – .33

3rd year – .36

Note (1) – The above rates reflect a 9% increase in each year of the proposed term of the agreement.

Note (2) – Any employees in these classifications earning more than these rates are to be red circled at the higher rates and will stay at such higher rates until the negotiated rates "catch up".

2.) No retroactivity

3.) No change in Article 3.01, 6.01(U), and 7.07

4.) The 9% proposed compensation could be otherwise allocated by the Union, in whole or in part.

Mills testified that after March 5, 1970 he did not ask for another meeting because he thought "everything had been exhausted." He said that at that point the complainant "gave up" on the negotiations and decided to pursue "the political route." He testified that many of the employees on strike participated in lobbying for a legislative change which would make the checkoff of union dues mandatory in a first collective agreement. He also admitted on cross-examination that there was political advantage to the complainant in having the strike continue during its efforts for legislative reform. Bill 89 was introduced to the Legislative Assembly on .June 3, 1980. With surprising speed, it received third reading and royal assent on June 12 and 17, 1980, respectively. The principal provision of the Bill affecting this dispute provides:

36a(1) ... where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision requiring the employer to deduct from the wages of each employee in the unit affected by the collective agreement, whether or not the employee is a member of the union, the amount of the regular union dues and to remit the amount to the trade union, forthwith.

17. Mills testified that on June 17, 1980 he telephoned mediator, Jack Speranzini, to arrange a meeting with the respondent and shortly thereafter on the same day he received the following hand delivered letter over the signature of Steven J. McCormack.

We have been instructed by our client to advise you that in view of your failing to have responded to our letter of March 5, 1980, and the significant period of time since our last meeting, our client hereby withdraws all monetary provisions of the Collective Agreement which previously were proposed to the Union.

These provisions are more specifically outlined in the Company Proposals for a Collective Agreement and include:

Article 14 – Hours of Work and Overtime

Article 15 – Vacations with Pay

Article 16 – Statutory Holidays

Article 18 – Bereavement Pay

Article 19 – Reporting Allowance

Article 20 – Call Back Pay – Early Reporting Pay

Article 22 – Classifications and Rates of Pay (as more specifically outlined on the Company's most recent position dated February 25, 1980)

– Jury Duty

– Floaters

Our client further instructed us to advise you that it will continue to be available for collective bargaining negotiations in an effort to attempt to resolve the dispute between the parties.

Mills testified that since the passage of Bill 89 and following the respondent's letter of June 17, 1980 the complainant has not attempted to have collective bargaining discussions with the respondent. The following correspondence between the respondent and striking employees was also introduced into evidence.

October 24th, 1979

TO ALL OUR EMPLOYEES:

As you may know, during the past month, your Company has been meeting with the Steelworker's Union, to try to arrive at a collective labour agreement which will govern your terms and conditions of employment. Unfortunately, all of the terms could not be worked out and the Union decided you should go on strike.

We recognize your right to strike, but want you to know that your Company wants you to come to work and that you have every right to return to work. We know that a lot of you want to come to work but are afraid of what might happen if you do. Let me personally assure you on behalf of your Company that if you would like to come to work, your Company will take every step possible to ensure that you enjoy the same working conditions as you enjoyed before and that any problems which may arise as a result of your returning to work will be dealt with very quickly in order to ensure a peaceful and safe work-place.

Keeping in mind that in a strike, nobody wins, and the longer the strike continues, the less likelihood that we will keep all of our customers – loss of customers means loss of work and consequently, fewer jobs, we would suggest that you ask yourself:

– do I really want this strike?

– for what reason am I on strike?

– is this strike best for me and my family?

If you would like to come to work, please call your supervisor at the Area Office, telephone 298-2209, call collect if necessary, and we will make the necessary arrangements.

December 6th, 1979.

TO ALL OUR EMPLOYEES:

As you are aware, certain benefits to which you contributed were available during your employment with Fotomat Canada Limited. During your absence, you Company has been making certain payments on your behalf to cover the expense of your dental plan and in addition, the coverage provided by the Ontario Health Insurance Plan (OHIP). Unfortunately, your Company can no longer carry these benefits during your absence from employment. Accordingly, we must advise you that effective December 13th, 1979, these payments will no longer be made and the coverage under these plans will be your own responsibility.

Should you wish to make your own payments through your Company, we would be more than pleased to hear from you. As we indicated to you in our last letter, if you would like to return to work, you have every right to do so and your Company would appreciate very much your support during these times.

The following correspondence, apparently sent only to strike replacement employees, was also introduced into evidence.

February 21, 1980

As you are no doubt aware, the United Steelworkers of America started a legal strike against our Company on October 22 and December 10, 1979. This strike is continuing as of the present time.

There have been numerous acts of vandalism directed towards the Company and many of our employees have been subjected to abusive language and acts of intimidation and harassment while the strike has continued.

We sincerely regret that such activities have occurred. We have also asked officials of the Steelworkers to refrain from such activities but up to now there has not been any co-operation in this regard.

Under the laws of our province the Company and the union must bargain in good faith, – it is the Company's belief that it has done so and it is our intention to continue doing so. Striking employees and representatives of the union have advised some of you that you will lose your jobs with the Company and that they will be back at work in the near future. We wish to assure you that it is the Company's position that your jobs are secure and that no one is authorized to advise you differently. In other words, please be assured that you will not be replaced by a striking employee. You should also be aware that under the laws of Ontario, a company is entitled to continue operating during a legal strike, just like a striking employee is entitled to seek employment elsewhere while a strike is in progress. Don't be misled by irresponsible statements by strikers which may tend to cause some doubt in your mind as to what the law actually states.

Your continuing assistance is appreciated. If you have any problems with you job or if you are intimidated or harassed in any way, please contact your supervisor immediately. Your supervisor and I will assist you in whatever way possible.

March 26, 1980

A number of our employees have told us that over the past two weeks, they have been approached by striking employees and representatives of the Steelworkers Union and have been told various things concerning the status of our present labour dispute. The purpose of this letter is to advise you that a number of the matters raised by these individuals are misleading and irresponsible.

Firstly, the letter dated February 21, 1980 which you received was not illegal, although some of these people would lead you to believe that such was the case. Secondly, we wish to assure you that it is you Company's position that your jobs are secure and that no one is authorized to advise you differently. It is not your Company's intention to replace you or move you to a different store.

As you are already aware, under the laws of our Province, your Company and the union must bargain in good faith and it is our belief that your Company has done so and intends to continue doing so. In addition, under our laws, your Company is entitled to continue operating during a legal strike, just like a striking employee is entitled to seek employment elsewhere while a strike is in progress.

Don't be misled by irresponsible statements made by strikers or union representatives which may tend to cause some doubt in your mind as to what the law actually states. We have stood behind you all the way in the past and will continue to do so in the event you are harassed or pressured in any way.

June 27, 1980

Over the past few weeks a number of our employees have told us that they have been approached by striking employees and representatives of the United Steelworkers of America, and have been told a variety of misleading things including that a number of our employees will be out of work in the near future if striking employees return to work. It may be of interest to all of our employees that not one striking employee has requested to continue employment with Fotomat as required by Section 64 of The Labour Relations Act (see page 35 of enclosed Guide).

Initially, we wish to assure you that it is your Company's position that your job is secure and that no one is authorized to advise you differently. It is not your Company's intention to replace you.

A number of our employees have also asked us about their rights in connection with the labour laws of Ontario. In order to assist you in understanding what the laws of Ontario are, we are enclosing with this letter a copy of "A Guide to the Ontario Labour Relations Act". This publication has been prepared by the Government of Ontario and sets out in an informal fashion the effect of the labour laws of our Province, subject to certain recent amendments which are not reflected in the Guide.

We wish to reiterate that you should not be misled by irresponsible statements made by strikers or Union representatives which may tend to cast some doubt in your mind as to what the law actually is or where you stand as a Fotomat employee. If you have any problems with your job or if you are harassed or pressured in any way, please contact your supervisor immediately. Your supervisor and I will assist you in whatever way possible.

18. John Lackland, Vice President, General Counsel and Secretary of Fotomat Corporation of Wilton, Connecticut testified that Fotomat Corporation is the parent of Fotomat Canada Limited and Lackland sits on the subsidiary's Board of Directors. He is also responsible for the labour relations and litigation for the parent and all of its subsidiaries. He testified that he has given instructions to von Veh and McCormack throughout the negotiations and was kept apprised of the progress of the negotiations both by them and his Canadian operating people. He said that on February 25, 1980 he could not have been reached by von Veh but that, subsequently, he was advised on the content of negotiations for that day and he instructed von Veh to write the letter that he did, dated March 3, 1980. He testified that the respondent could not agree to the complainant's Article 6.01. In examination in chief he testified that the respondent was not an old company; that it employed many part-time employees; and it experienced a very high monthly turnover (10%). It was the respondent's view, he said, that this type of employee is not interested in having something deducted from his pay cheque, particularly when the employee might not be with the respondent for very long. He further testified that the Canadian operations had lost money for several years and that in 1979 the parent company had experienced its first overall loss in some years. He said that prior to sending the respondent's letter of June 17, 1980, the parent had obtained its final figures on the 1979 financial year. Not knowing what would be the "aftermath" of this poor financial year, it was decided that it should consider withdrawing its financial proposal in the Canadian negotiations to maintain flexibility. According to Lackland, there was a meeting between von Veh, McCormack, representatives of the parent, and the persons in charge of the Canadian operations after which the offer was withdrawn. Lackland did not attend this meeting and no one who did attend testified before the Board either to confirm its occurrence or to describe its content.

19. Lackland testified that as early as June of 1979 von Veh had advised him of the possibility of legislation like Bill 89. He further admitted to being told in June 1980 that Bill 89 had been introduced but he denied that McCormack's letter of June 17, 1980 had anything to do with the legislation. On cross-examination, Lackland testified that neither the parent nor any of its subsidiaries is party to a collective agreement. Also filed with the Board was a decision of the National Labor Relations Board dated October 19, 1977 finding that Fotomat Corporation had violated section 8(a)(5) of the National Labor Relations Act in connection with a certificate pertaining to employees in Cleveland and vicinity. He testified that before making its initial proposals no financial calculations had been made to cost out provisions such as bereavement leave, reporting allowance, call-in pay, statutory holiday pay, vacation pay, jury duty, etc. He said, on cross-examination, that he was not dissatisfied that a collective agreement had not been reached by October 1979; that he felt comfortable about where the parties were in negotiations at that time; and that he would prefer to operate without a trade union. In his view, the "hang-up" issue was union security. He testified that von Veh did not have authority to agree to wages on February 25, 1980 and that the respondent had decided against moving on the union security issue. He further said that the Rand Formula, even if proposed by the complainant, would not have been acceptable. He said that this position was based on the respondent's perception of its employees' concern over the size of their pay cheques. He further testified that he did not think many of the employees actually went on strike or, at least, remained on strike. He agreed that, with the extent of employee turnover, the complainant trade union could not survive without the kind of union security provision reproduced above or at least without the Rand Formula and that the issue was therefore critical to the union. However, he expressed the belief that with employees moving "in and out", they did not care about a trade union and had absolutely no interest in union affiliation in this kind of situation. Lackland also testified that, personally, he did not think the complainant was going to assist the type of employees who work for the respondent, but that the respondent has always been prepared to bargain with the complainant "within the law" and "if that ends up in a contract it ends up in a contract."

20. The parent company's financial year end is January 31. Lackland agreed that the respondent had its monthly figures (and all "last year and last month" comparisons) for January when it made its initial wage proposal. The actual report of the parent's auditors is dated April 2, 1980. The annual meeting of the parent was held May 29, 1980 in San Diego, California. Lackland testified that the respondent's financial operations are closely monitored. Monthly and annual reports are prepared by operating group (i.e. camera stores, video, kiosks) and that individual stores or kiosks are also monitored although he would not view this material regularly. However, since the commencement of the strike each kiosk has been monitored. He said that at the commencement of the strike there was a "dip" in sales followed by a rapid climb in sales and business is now getting better not worse. The upturn in sales, he said, occurred within a few days of the commencement of the strike. Thus, while the Canadian operations have lost money over the years, the level of such loss did not change significantly with the advent of the strike.

21. He explained the respondent's change in position in June by reference to the parent's loss – its first such loss in many years – and the annual meeting of shareholders. He said he believed that this situation required the respondent to "remain flexible" and he also made reference to the losses sustained by the respondent as a result of vandalism. However, he admitted that vandalism was a problem with or without a strike and that losses due to vandalism were not a significant problem. The Board was presented with no quantification of the respondents losses due to the strike or to strike related activity. Lackland testified that von Veh called him in San Diego at the end of May or early June. He said they discussed the absence of any response to their March 3rd letter; the financial situation of the respondent; and whether their position should continue to "be out there." They decided, he said, to give serious consideration to withdrawing the offer and that the situation should be reviewed by senior management. He subsequently reviewed the matter with Norman Packard and Dana Hollidy, two vice-presidents of retail stores for the parent, and testified that a meeting of operating people was held in Toronto on June 12th or 13th at which von Veh and McCormack attended. As noted above, Lackland did not attend this meeting and could not remember any discussions with von Veh between this meeting and June 17. He admitted that he was aware of the introduction of Bill 89 before the Ontario Legislative Assembly in early June but that von Veh had merely raised it with him as a mere aside or, in Lackland's words, as an "off-hand comment." He testified that von Veh did not explain how it might affect negotiations. He said he did not know the Bill had received third reading on June 12th and that it received royal assent on June 17. He denied instructing McCormack that the respondent's letter of June 17 be sent before that day or by that day and, indeed, he denied that McCormack had even advised him when the letter was being sent. We observe that McCormack, the author of the letter, did not testify to explain how the letter came to be hand delivered on June 17 nor did he or von Veh testify to corroborate Lackland's testimony on the little attention paid to Bill 89 by the two lawyers. Lackland testified that he did not believe McCormack had been contacted by Speranzini on June 17.

22. The parent company's annual report was introduced into evidence on cross-examination and Lackland was questioned on it. This financial report includes the operation of the respondent on a consolidated basis. Page one reveals an operating loss of $4,650,000 in contrast to a profit of $6,299,000 for 1978. However, total revenues for 1979 were reported as $207,384.000 compared with $192,474,000 for 1978. Total assets and shareholders' equity were also in substantial excess over the previous year. The "Executive Message" on page 2 begins with the following explanation:

1979 was another difficult year for Fotomat. I was very disappointed in our overall performance. Late that summer we made major changes in management, organization and marketing philosophy in an attempt to improve earnings. We are now seeing positive changes and I expect Fotomat to increase industry market share during 1980.

Financial Review

Net loss for Fotomat for the year ended January 31, 1980, was $4,680,000, or $.57 per share, compared to previous year's earnings of $6,299,000, or $.77 per share. Of this loss, $4,200,000 ($8,250,000 pretax) resulted from franchisee litigation accruals and reserves. While no one can predict what a court will decide, we believe that we have now adequately provided for the potential exposure in all remaining franchisee litigation.

Other factors contributing to our 1979 year losses were substantially lower than anticipated sales, particularly during the summer holiday season, and a significant planned increase in promotional expense ($10,200,000 for 1979 versus $4,000,000 for 1978). Also, we continue to absorb substantial development and start-up costs for our new video program and increases in wage costs (in part caused by legislated minimum wage increases) which were only partially offset by product and service price increases.

It continues on page 3 as follows:

New Bank Agreement

Recently we announced new credit arrangements with our existing banks, Citibank, N.A. and Crocker National Bank, providing for short-term loans aggregating $25,000,000, of which $15,000,000 is payable in installments through September 30, 1980, and $10,000,000 is payable in installments through January 31, 1981. The loans are secured by all real and personal property of Fotomat and its subsidiary companies. These security arrangements have been required by the banks primarily due to their concern over our poor 1979 operating results and uncertainties relating to franchisee litigation. Unless these arrangements are modified to provide additional short-term credit, at least for the spring 1981 period, we must seek other sources for our normal short-term seasonal borrowing needs. We are presently pursuing a number of alternatives.

Litigation

As we have reported for several years, we are engaged in extremely costly litigation with some of our franchisees. We originally believed that the initial adverse judgment in Indianapolis was incorrect. This case was subsequently appealed to the U.S. Supreme Court, but our petition for certiorari was denied and we have paid the approximate $3,700,000 in damages and costs related thereto. An additional judgment of $6,500,000 involving franchise stores in Kansas City and St. Louis has been appealed and our counsel believes there is a sound basis for a reversal or substantial reduction in this judgment. A third case involving franchise stores in Kansas City has recently been settled. The fourth case presently pending in a California state court is expected to go to trial in the fall of 1980. As indicated, we established a total reserve in 1979 of $8,250,000 for actual or potential losses from franchisee litigation.

Current Outlook

If times were normal I would be enthusiastic and confident or our ability to regain previous years' sales and earnings growth momentum. We have been working very hard to overcome our problems and we have seen a number of positive changes occur. Things are not normal, however. It is possible, even probable, in our view that we are at the beginning of a major recession. Additionally, our leadership in Washington, both at the Executive Branch and Congress, is spending our country toward bankruptcy.

Irrespective of overall economic conditions, we are doing everything possible to regain our profitability during 1980 and we believe we will be successful.

The Canadian operation (the respondent) is mentioned at page 5 and pages 23. The reference at page 5 reads:

Taxes on Income

The operating loss in 1979 resulted in an income tax benefit for the year. The benefit is basically due to applying the operating loss and the current year's investment tax credits against prior years' income and income taxes. The effective rate for taxes on income was 51% in 1978 and 48% in 1977. The difference in those two years resulted from the impact of a higher Canadian operating loss and lower investment tax credits in 1978 than in 1977.

Net Income (Loss)

The net loss for the 1979 year is well below the net income for the 1978 year. The primary cause of this decline is the effect of the provision for franchisee litigation. Additionally, costs associated with increased promotional expenses, the increased minimum wage, the introduction of video products, higher financing costs and the upgrading of our photofinishing quality, combined with lower than anticipated sales levels, contributed to the decline.

The Canadian net loss for 1979 was $1,786,000 compared to a $1,295,000 loss in 1978. Canadian sales were adversely affected by industry conditions as well as a labor stoppage in the fall of 1979.

ARGUMENT

23. On behalf of the complainant it was submitted that the respondent's actions in June amounted to a patently unlawful attempt to avoid a collective agreement and demonstrated that this employer has never intended to enter into a collective agreement with the complainant trade union. Counsel submitted that, assuming lawful conduct, a collective agreement would have been consummated by February 25, 1980 at the latest. Counsel further submitted that but for the respondent's unlawful motive a collective agreement would have been entered into within six months of the commencement of the strike and he argued that it is fair to assume the striking employees would have returned to their jobs on the settlement of the dispute. He further contended that the actions of the respondent and particularly its letters to strike replacement employees demonstrated an unlawful intention not to re-employ striking employees and that this intention is clearly continuing. Accordingly, the complainant emphasized that this Board must reinstate all striking employees regardless of whether such reinstatements displaced employees hired after the commencement of the strike in addition to all the other relief set out at the beginning of this decision.

24. Counsel for the respondent submitted that while the negotiations may reflect "bargaining sloppiness" on both sides, it did not demonstrate any bad faith on the part of the respondent. He emphasized that there was a complete absence of the unlawful conduct surrounding the Radio Shack case, supra; indeed, there had not been one previous violation of the statute established against the respondent. He emphasized that this was a first agreement situation requiring the negotiation of an entire collective bargaining relationship. He further stressed that the complainant exhibited the same resistence to the union security issue as the respondent. Moreover, in February, he contended, Mills never revealed the complainant's final position on this issue (i.e. Rand Formula). He emphasized that the respondent had presented the person behind the corporate decision-making in June to avoid the drawing of inferences against it that had been made in Radio Shack, supra, and to demonstrate that Bill 89 played no role in the respondent's actions taken in June 1980. It was also submitted that the complainant should be restricted to the remedies requested in its initial complaint and letter of June 25, 1980 and that at no time has the respondent refused to reemploy striking employees. It was submitted that to direct their return would be contrary to the evidence and would be imposing a term of a collective agreement on the respondent contrary to section 64 of The Labour Relations Act and contrary to the Board's remedial powers. On the issue of monetary relief, it was submitted that the complainant bears much of the responsibility for the delay experienced in the negotiations and, thus, for any resulting loss. Finally, it was argued that the respondent was entitled to re-evaluate its economic position and adjust its negotiating posture as it did in June 1980.

DECISION

25. In De Vilbiss (Canada) Limited, [1976] OLRB Rep. Mar. 49 the Board observed that the bargaining duty found in section 14 of The Labour Relations Act has two broad purposes when applied to an employer. The first being the employer's duty to recognize the duly designated bargaining agent of his employees; the second being the obligation to engage in all reasonable efforts to arrive at a collective bargaining agreement. Bargaining designed to undermine the trade union and to avoid a continuing collective bargaining relationship is the subject matter of the first purpose. See for example Kidd Brothers Produce Ltd., [1976] Can LRBR 304 (BCLRB) at 313. Bargaining conduct which frustrates meaningful collective bargaining, but not to the point of evidencing an intention to escape that process, is the focus of the second aspect of section 14. See Canadian Industries Ltd., [1976] OLRB Rep. May 199. However, examples of both types of misconduct frequently arise in the same case and when this is so, the totality of conduct may reveal a basic overall desire to avoid collective bargaining. See for example Radio Shack, supra, and De Vilbiss (Canada) Limited, supra. Over time, the cases have provided substantial flesh to these "bare bones" purposes. Indeed this case brings into play many of the ancillary principles that have evolved since 1975. For instance: Has the respondent engaged in "hard bargaining" or "surface bargaining?" Did it evidence bad faith by "reneging" on its earlier financial proposal or was it simply reacting to its financial position on the context of a longstanding strike that it was weathering? Has it engaged in reasonable efforts throughout? But before these issues are examined a few of the more fundamental premises of the legislation merit review.

26. In Radio Shack, supra, the Board began its opinion with a review of a certified trade union's exclusive authority to represent bargaining unit employees and an employer's correlative duty to recognize the trade union's status in this respect. In this matter, the Board wrote:

27. ... Thus, while it may be tempting for some employers to conduct bargaining with a view to fostering dissension in a bargaining unit by attempting to protect those employees who initially opposed the trade union, it is improper and in violation of the Act to do so. Such conduct interferes with the rightful choice made by the majority of the employees in the bargaining unit, and simply feeds the anxiety of those employees who, for whatever reason, had earlier doubts about the need for or vialibility of collective bargaining in their workplace.

28. Bargaining with the obvious view of creating and fostering dissension with a bargaining unit, is also a failure to abide by the requirements of section 14 which obligates trade unions and employers alike to "bargain in good faith and make every reasonable effort to make a collective agreement." On numerous occasions this Board has said that the bargaining duty fortifies the employer's obligation to recognize the duly certified bargaining agent of its employees. See generally De Vilbiss (Canada) Limited, supra. This means that employer conduct during the bargaining process aimed at undermining the credibility of a trade union in the eyes of the employees not only violates sections 56, 58, and 61, it will also amount to a failure to negotiate in good faith. Section 14 demands that both parties have the common intention of signing a collective agreement provided that they can reach agreement on its terms.

However, the Board went to note that the application of this legal framework was often difficult in section 14 cases because a party is not obligated to agree or to make concessions. The duty to bargain in good faith and make every reasonable effort to make a collective agreement must be applied in the practical context of collective bargaining. However unpleasant the fact, collective bargaining is inevitably a power relationship. The legislation assumes that the resolution of differences between union and management rests on the balance of the relative bargaining power of the two parties. If bargaining power is defined as the ability to secure another's agreement on one's own terms, there is nothing in itself unlawful about either an employer or a trade union wanting its demands met and bargaining to achieve this end. The result may be perceived as unfair, unnecessary, and selfish, but the Ontario Labour Relations Board has not been given the role of interest arbitrator. See Ottawa Journal, [1977] OLRB Rep. June 309 at p. 323, para. 57. The Board has, however, said it will scrutinize the first contract relationships that come before it to sort out hard bargaining from unlawful conduct. An employer cannot use his raw bargaining power for the objective of operating without a trade union. On the other hand, no newly certified bargaining agent can afford to lose sight of the fact that collective bargaining remains a power struggle. See Goldraft Printers, [1980] OLRB Rep. April 448 at p. 456, para. 26.

27. The Board has also said that it will assess the content of bargaining postures in making judgments under section 14 (Goldraft Printers, supra, para. 20), but this assessment too must be made against the reality of collective bargaining outlined above. Where a trade union impugns an employer's position on one particular provision or on its tough overall posture at the bargaining table and this alone, the Board has to be as careful to avoid being used by that trade union to supplement its bargaining power as we must be cautious to ensure that the hard bargaining does not have as its purpose, the destruction of the trade union. While it may be that a bargaining agent has its "heart set" on a particular provision as a matter of principle, it must still have the bargaining power to achieve this end. Moreover, tactical errors can have a dramatic effect on a party's bargaining power or lack thereof and, in the words of a relevant fairy tale, this Board cannot be expected "to put all of the pieces back together again." See Ottawa Journal, supra, para. 59. Complainants must realize that section 14 allegations will be considered in the light of the conduct of both parties and the remedies requested must bear a direct relationship to the breach established as a matter of causation. The Board must be particularly sensitive to the reality of collective bargaining in prolonged strike bound negotiations where interpersonal conflict can become quite embittered and where the temptation to turn to the Labour Board to supplement a party's bargaining power may be great. See Ottawa Journal, supra. It has long been recognized that the content of the bargaining duty may change as a bargaining impasse continues. Strikes can be lost as well as won. See New Method Laundry and Dry Cleaners (1957), 57 CLLC ¶18,059.

28. We have already noted that the instant case lacks the surrounding unlawful conduct evidenced by earlier Board decisions as existed in Radio Shack. The certifications would appear to have been without unlawful incident. While three complaints were filed with the Board prior to the instant matter, only one was adjudicated and it was dismissed by a unanimous Board decision. This being the case, the complainant's case lacks much of the contextual support that has persuaded the Board in other cases to draw inferences about the unlawful intention of a respondent when in doubt.

29. We now turn to the bargaining conduct and other matters subject to this complaint. Before February 25th, the complainant contested the delay in bargaining and the ever changing identity of the respondent's representatives. It also complained that it had to make all the concessions and that the respondent engaged in "surface bargaining." We accept that the repeated cancellation (and abbreviation) of meetings by von Veh; the sending of an articling student without a negotiating mandate and without notice to the complainant; and, finally, the substitution of another solicitor in September 1979 was inconsistent with the respondent's duty to make every reasonable effort to make a collective agreement. An employer must make himself reasonably available to bargain and if he selects a representative for bargaining purposes who is in fact too busy to take on the assignment, he puts himself in jeopardy of violating section 14. See Insulating Fabricators Inc. NLRB (1963), 54 LRRM 1246; enforced 1964), 57 LRRM 2606 (CA-4). The pattern of conduct of the respondent in July and August of 1979 does not pass the standard of reasonableness on the evidence before the Board. Negotiations, particularly first contract negotiations, must be pursued with reasonable diligence. The unilateral and frequent cancellation and abbreviation of the bargaining sessions was not consistent with the reasonable efforts required by section 14. Von Veh did not testify and explain his conduct, leaving only Mills' evidence before us with respect to this stage of the negotiations. However, we are of the view that the respondent's conduct in the summer of 1979 is not, in the circumstances of this case, relevant to a complaint filed in December and actively pursued in June of 1980, particularly where the complainant did not protest the delay in writing and engaged in a form of self help by expediting the issuance of a "No Board Report." Once Steve McCormack took over the negotiations for the respondent the evidence also reveals that significant progress was made whether or not Mills thought the complainant was making all the concessions. A review of the provisions agreed to suggests this was not entirely the case, but even if it was, it is a result which is not inconsistent with lawful collective bargaining negotiations. Making all the concessions may simply reflect Mills' assessment of his own bargaining power in the circumstances. The bargaining units are small and spread across southern Ontario. Most of the employees are paid at or near the minimum wage and there would appear to be a high monthly turnover of personnel. Indeed, such an assessment by Mills would not have been unreasonable in the light of Lackland's testimony that the respondent is effectively operating despite the strike and that sales are climbing. We are satisfied that McCormack's involvement cured the earlier problems with the respondent's availability.

30. When dissatisfied with the progress in July and August, the complainant, requested the issuance of a "No Board" report. We are somewhat surprised that even when bargaining began to show some progress in September, the complainant set a mid-October strike date and met this commitment despite the absence of any real dialogue on the issue of wages. In fact, Mills failed to inquire why the respondent had not got back to him on the issue of wages after their October 12th meeting, although we note that McCormack made no particular effort to avoid the strike either. The strike then commenced and no further meetings were arranged between the parties. The next event was the filing of this complaint in early December with the explanation that the complainant was waiting for the Radio Shack decision. It is our opinion, however, that the parties had not narrowed their differences enough by October 12, 1979 to provide any bystander with a meaningful appreciation of their respective positions for the purpose of applying section 14. The complainant trade union had a 45% wage increase demand on the table; a number of articles were outstanding; and there was no meetings between the parties after October 12.

31. This brings us to the meetings of late January and February. von Veh's letter of March 3, 1980 indicates that at the end of bargaining on February 25, 1980 the respondent was proposing a voluntary check-off provision and the union wanted a compulsory union member/union dues provision. Mills testified that he believed the mediator had communicated to the respondent that the complainant would accept the Rand Formula. Although von Veh's letter indicates that the message may not have got through, earlier in August he had indicated a very rigid position on union security. Moreover, Lackland indicated the Rand Formula would not have been acceptable even if proposed and Mills' failure to reply to the March 3rd letter is consistent with his understanding that Rand was not acceptable to the respondent. Indeed, with the experienced mediators assisting the parties on February 25, it is unlikely that the Rand Formula would not have been explored if union security was the remaining issue, and von Veh did not testify to explain his letter or understanding at the time. But accepting that the respondent was aware that the Rand Formula was acceptable to the complainant, the fact remains that the final offers of the parties as of February 25, 1980 still conflicted on the issue of union security. Lackland acknowledged that a union security provision was fundamental to the survival of a union in this kind of employment situation, but explained that the respondent's rationale was based on its belief that the type of employee it employed was not interested in having union dues deducted from his pay cheque. The issue before us is one of motive. See generally Westinghouse Canada Ltd., [1978] OLRB Rep. April 577 at p. 600 et seq. Was the respondent rigid in its position on union security because it realized how essential it was to the trade union's survival and that there would be no collective agreement without it – an end it desired? Or was its posture a true reflection of the view that the deduction of union dues would be inconsistent with what its employees would want particularly in light of the monthly employee turnover rate? If this were the only evidence before the Board, the case would be most difficult. The respondent's position is so closely related to what it thinks its employees want that the bargaining posture almost seems to ignore the fact that the complainant trade union is the exclusive bargaining agent for all of the respondent's affected employees. It is for the union to plumb the wishes of these employees and to present their unified position for bargaining in light of its statutory duty of fair representation. On the other hand, an employer must deal with employee morale and have regard to recruitment problems and employee turnover, all of which can be impacted by the results of collective bargaining. However, in the circumstances of this case, the ambiguity of the intent or motive of the respondent in February must be viewed against the totality of the evidence and part of this evidence is a consideration of the respondent's actions in June.

32. The complainant contended that the respondent's actions in June in withdrawing the monetary elements of an outstanding offer constituted bad faith and demonstrated that it had simply been using the union security issue in February to keep the parties apart. The problem of one of the negotiating parties "reneging" on a position previously put forward has arisen in a number of American and Canadian cases. In the case of Pacific Grinding Wheel (1975), 220 N.L.R.B. 214 at p. 1389; affirmed (1978), 99 L.R.R.M. 2246 (CA-9) repeatedly lower wage proposals by the company during the course of a strike were held to constitute an unfair labour practice by a three member panel, reviewing a decision of an Administrative Law Judge: ­

"After the commencement of the strike, there was a dramatic change in Respondent's bargaining proposals. The first such proposal was by June 25 letter to the Union and, in it, Respondent eliminated several substantive terms which had been a part of the previous offer of June 7. Among the items which Respondent wishes to delete was the union-security clause, a provision which had been included in every collective bargaining agreement between the parties since their relationship was established by 1955. A bargaining session was held on July 11 at which no progress was made and, on July 15, Respondent made a new wage proposal which offered an increase in the starting rate for employees, but in all other respects provided for substantially lower rates than had been offered in the June 7 proposal. In fact, in some instances, employees were currently being paid at rates higher than those in the July 15 proposal and this prompted Respondent to offer to "red circle" the rates of those so affected. On August 19, the parties again met in a negotiating session and on August 20 Respondent offered another new wage proposal which was less than had been offered in the July 15 proposal; it was also significant in that it failed to renew the July 15 offer to "red circle" the rates of those employees who were earning more than the proposed rates would pay. In concluding that Respondent did not engage in overall bad-faith bargaining, the Administrative Law Judge failed to consider the fact that each of Respondent's proposals after the commencement of the strike was in turn more regressive than its predecessor and that there is no documentary evidence to support Respondent's claim that its proposals were prompted by economic considerations. While it may be true, as the Administrative Law Judge stated that there is no evidence to show that Respondent's proposals were "set in concrete," it hardly demonstrates an approach to bargaining which seeks to reach a mutually satisfactory agreement when, without adequate explanation each proposal is decidedly less favorable than the last one, and nothing in the way of a significant compensatory proposal is offered."

But in the case of Randle-Eastern Ambulance Service Inc. (1978), 99 L.R.R.M. 3377 (CA-5), the Court declined to enforce part of a Board order which had resulted from a finding of bad-faith bargaining in a case where previous positions were withdrawn by the company. In evidence is the Court's reluctance to allow the doctrine of bad-faith bargaining to "bail out" a party which has engaged in a strike: ­

"By April 22, the necessity and advisability of the pre-strike concessions appeared in an entirely different light. The worst case had happened. A strike had occurred and the County had cancelled the Company's contract. Revenues were way down. The Union had withdrawn its agreement to arbitrate and had shown little sign of relenting on its economic demands. In these circumstances the Company's withdrawal from the previous proposals was a natural response to the economic pressures it was experiencing. By June l, the date the Company submitted its new proposals, the situation had changed again. It was by that time apparent that the Company had won the strike, for a substantial number of replacements had been hired, an equal number of strikers had crossed the picket line and returned to work, and the Company had been assured that the County would restore its contract.

We think this case simply a classic example of what collective bargaining is all about. When the Union had the upper hand, the Union negotiators extracted as many concessions as they thought they could. However, the employees decided that the Company could be pushed further and voted to strike instead of to accept the proposed contract. The employees guessed wrong, and the Company balked instead of caving in. As the post-strike bargaining progressed, the balance of power shifted. The economic pressure on the strikers grew and that on the Company lessened. The Company's June 1 proposals reflected the Company's new estimate of its strength – an estimate that proved not far wrong, as demonstrated by the Union's acquiescence in most of the Company's proposals."

This case demonstrates how a strike may change a bargaining situation, and how, after a strike, a company may legitimately withdraw previous offers. However, had the Court thought that the company's motives were other than legitimate, the withdrawal of previous positions would have been seen in the same light: ­

"Of course, more sinister characterizations of the Company's conduct are possible. But the evidence adduced before the Board, considered as a whole, does not support such a characterization."

Another case of interest is Hilton International (1971), 187 N.L.R.B. 947, case 24 CA-2783 where is was found that the Company's reneging on previous offers represented an attempt to avoid a collective agreement: ­

"It is clearly evident from the record that Respondent sought to avoid rather than to reach an agreement with the union. Until October 10, it had firmly adhered to its original wage proposals. However, on October 10, the day the last of the replacement notices were dispatched, Respondent suddenly increased its basic wage offer but only to the extent of a mere 1 cent per hour in both the second and third years of the proposed 3-year contract. And, when the Union accepted the new wage proposal on October 14, the day Gascot and Medina were reinstated, Respondent withdrew the union-shop provision, previously agreed to by it, and announced that the provision would be restored when the Union – certified by the Board only 5 months previous – was able to establish an 80 percent interest in the unit including all replacements. The only justification for the withdrawal appears indirectly in the examination of Martinez by Respondent's counsel. Apparently, Respondent argues that, since the Union had changed its position on the subject of wages, it was at liberty to do the same with respect to a union shop. The argument, if such be the case, stumbles into difficulty on the undisputed fact that there was an agreement as to a union shop but no agreement as to wages. In these circumstances, I am of the opinion and find that Respondent reneged on the union-shop provision because it had no intention of concluding an agreement with the Union. Though not expressly stated, the reason for Respondent's attitude is clear enough. It obviously believed that a contract could be avoided because it had broken the back of the strike by its threats and promises of financial reward, and by the fact that two of the striking employees had offered to return to work. The Union's acceptance of a 1-cent-wage increase, above the original proposal, confirmed this belief as it signalled the demise of the strike effort. Further, by requiring, as a condition to the restoration of the union shop, that the Union establish an 80 percent interest in the interest in the unit including strike replacements who were not likely to be union supporters, Respondent thought it had rid itself of the Union forever. In short, the totality of Respondent's conduct reveals a predetermined plan or strategy opposed to the concept of good-faith bargaining and committed to undermining the Union and subverting the collective-bargaining process. Respondent thereby violated the duty to bargain in good faith as required by Section 8(a)(5) and (1) of the Act and I so find."

This case is also interesting because the Board found that the strike was prolonged by the company's failure to bargain in good faith, and therefore re-instated the strikers, even though some had been replaced and had no immediate "right" to their jobs back under normal circumstances – an application of the "conversion" doctrine to be discussed below.

33. Ontario cases also make it clear that a sudden unexplained change in the bargaining stance of one of the parties can raise serious doubts about that party's good faith. In Graphic Centre, [1976] OLRB Rep. May 221 the Ontario Board said: ­

"The tabling of additional demands after a dispute has been defined must, in the absence of compelling evidence which would justify such a course, be construed as a violation of the duty to bargain in good faith."

On the other hand, a previously made offer was withdrawn without a section 14 violation being found in the case of Toronto Jewellery Manufacturers'Association, [1979] OLRB Rep. July 719. The complainant union attempted to accept a proposal made over two months prior to the date the membership voted to accept the proposal. The union argued first that a collective agreement was in effect by virtue of the offer and acceptance. In the alternative it was argued that the respondent was in breach of section 14 in not holding to its previous position. In finding that there was no such breach, the Board made the following comments: ­

"The complainant, after determining that no further proposal was forthcoming, then resorted to the ultimate form of rejection by embarking on a strike. Is it entitled to expect, after being on strike for up to three weeks, that the offer is still there for the taking? It would seem from the Association's silence that it thinks not, however, that is a matter for the Board to determine. Having regard to the Board's comments in Pine Ridge, supra, about the collective bargaining process, it would be naive in the extreme for parties to collective bargaining to expect that conditions which prevailed before a strike or lockout to still prevail afterward. That is not to say that both parties might not see it to be in their best interests to agree to pick up bargaining where they left off before a strike or lockout; rather it is to say that neither party is entitled to rely on that being the situation. The Board's jurisprudence on section 14 complaints recognizes this reality when it is dealing with the refusal of one party to resume bargaining during or following a strike or lockout. One of the factors the Board takes into account is whether the party requesting that bargaining be resumed has indicated that it is prepared to make significant concessions from its position prior to the onset of economic sanction. In the absence of such an indication, the Board usually will not find a refusal to resume bargaining to be a section 14 violation. The evidence in this case establishes that the complainant, by going on strike, has taken its best shot at the Association to try and get an improved settlement offer. It has failed and is now trying to salvage the terms which were available before the strike."

34. Unlike in the Toronto Jewellery case, supra, the respondent before us did not take the position in June that the offer made the previous February had lapsed. Rather, by the wording of its letter of June 17, 1980 and by its conduct before and on that day, it is apparent that the respondent assumed that its offer had remained outstanding over the intervening time and it sought to "withdraw" all the monetary provisions previously proposed. Before the Board, it sought to justify this change in position on the basis of changed economic circumstances as reflected in the parent corporation's financial performance in 1979; and on its own financial performance in 1979 as compounded by the strike. On all the evidence before us, however, we are not satisfied that this was the respondent's motive particularly when the existence of Bill 89 is taken into account. When the respondent made its final offer to the complainant on February 25, 1980, the parent corporation and the respondent were fully aware of their 1979 financial performances. Lackland's testimony reveals a sophisticated monitoring of the financial affairs of the parent corporation including the respondent's activities. This monitoring was particularly sensitive after the commencement of the strike. It is inconceivable that the detail of the 1979 losses for both the respondent and its parent were unknown to Lackland when he was directing the negotiations in February. It is also relevant that the respondent made no attempt to quantify the kind of savings it could effect by withdrawing its offer. Indeed, the evidence indicates that the respondent has sustained losses in almost all of its years in Canada and that the 1979 and 1980 losses were or are no more significant than in previous years. The respondent made no effort to explain the increased losses in 1979 by reference to the work stoppage engaged in by the complainant's supporters. Similarly, there is little indication that any savings in the respondent's negotiations would make an appreciable "dent" in the parent's losses (now that the respondent has been folded into it) or in the respondent's 1979 loss. Indeed, the annual report suggests that the parent's losses reported in 1979 were more the product of unusual litigation costs than of a downtrend in the parent's performance or market share.

35. On the other hand, the respondent's withdrawal of its monetary offer is consistent with the timing and effect of Bill 89. Moreover, Lackland's explanation of his lawyer's reaction to the bill is not particularly credible. It is not disputed that the legislation was introduced to the Legislative Assembly on June 3rd; it received third reading on June 12th; and it received royal assent on June 17. McCormack's letter was hand delivered on June 17 after Mills had asked mediator Speranzini to arrange a meeting between the parties. Lackland testified that he began a worry about the offer "hanging out there" towards the end of May or early June and that he spoke to von Veh at that time about the matter. He also admitted that von Veh told him about the introduction of Bill 89 but did so in an "off hand" manner. In our view and in light of the financial data reviewed above, Lackland had no credible explanation for why he suddenly became worried about the offer in early June. Withdrawing the offer in mid-June could be of no benefit to the parent in responding to shareholders at its annual meeting on May 29, 1980 and, as noted above, Lackland knew nothing more about the parent's overall 1979 performance in May or June than he knew in February. Lackland also admitted that the respondent had recovered quickly from the strike and that strike related costs were not a significant issue. Lackland's evidence that Bill 89 was only of passing interest to him and his lawyers stretches credulity. The bill spoke to the only issue separating the parties and, in effect, took that matter off the bargaining table. Because the respondent viewed its February proposal as in effect in June, Bill 89, if and when enacted, would have had the effect of creating a consensus between the parties. The bill, therefore, was central to the negotiations between the parties and any experienced labour lawyer would have recognized this fact. We note that neither von Veh nor McCormack testified.

36. The respondent's withdrawal was not only consistent with the introduction of Bill 89 and its effect, but also with the timing of its passage into law. Seldom has such a significant labour law reform been passed into law so quickly. No bystander on June 3, 1980 could have predicted that the bill would be given third reading on June 12, 1980 and become law on June 17, 1980. The respondent's actions in causing its June 17th letter to be hand delivered on the very day Bill 89 received royal assent and immediately following the request made of Speranzini by Mills reflects both the respondent's surprise and an attempt by it to react to Bill 89 and its perceived impact on an outstanding comprehensive offer. For all of these reasons, therefore, we must conclude that the respondent withdrew its monetary proposals because it had no intention of concluding a collective agreement. Its actions in this respect constitute a fundamental and flagrant breach of section 14 and, in the circumstances of this case, resolve any ambiguity in the respondent's conduct of February. It is our view that the actions of the respondent in June are tantamount to an admission that its position on union security was primarily aimed at avoiding a collective agreement. We are therefore satisfied, in the light of all of the evidence, that the respondent's position on union security from February to June constituted a violation of section 14.

37. This continuing violation of section 14 having been found, we now turn to the complainant trade union's request that the Board must reinstate the striking employees. Its argument was essentially twofold. It first took the position that the correspondence directed by the respondent to strike replacement employees dated February 21, 1980, March 26, 1980 and June 27, 19S0 constituted a refusal or threatened refusal to re-employ striking employees contrary to section 64 and, presumably, contrary to section 14, 56, 58 and 61. Its second argument was that these letters indicated an existing intent to resist the re-employment of the striking employees and that to fail to reinstate them would simply reward the respondent for its unlawful conduct. The relief to which the complainant employees are entitled either in their own right or as beneficiaries of the relief to which the complainant is entitled is a substantial question and one of first impression for the Board. Looking at the alleged threatened refusal to re-employ first, we can begin by examining the provision of section 64(1) and (2). They provide:

(1) Where an employee engaging in a lawful strike makes an unconditional application in writing to his employer within six months from the commencement of the lawful strike to return to work, the employer shall, subject to subsection 2, reinstate the employee in his former employment, on such terms as the employer and employee may agree upon, and the employer in offering terms of employment shall not discriminate against the employee by reason of his exercising or having exercised any rights under this Act.

(2) An employer is not required to reinstate an employee who has made an application to return to work in accordance with subsection 1,

(a) where the employer no longer has persons engaged in performing work of the same or similar nature to work which the employee performed prior to his cessation of work; or

(b) where there has been a suspension or discontinuance for cause of an employer's operations, or any part thereof, but, if the employer resumes such operations, the employer shall first reinstate those employees who have made an application under subsection 1.

In Becker Milk Company' Ltd., [1977] OLRB Rep. Dec. 797 the Board discussed the provision and observed:

Three conditions must be met to bring that section into effect:

1. The employee must be returning to work after engaging in a lawful strike.

2. He must make an unconditional written application to return to work.

3. The application must be made within six months of the beginning of the strike.

Subject to the exceptions described in subsection (2) of section 64, when these conditions are met "the employer shall... reinstate the employee in his former employer". (emphasis added). The effect of that section is to put the striker who returns to work under its protection in a better position than a striker who returns to his employer with only the protection of section 1(2).

The Act is clear that the section 64 applicant is not merely to be reinstated as an employee (because by virtue of section 1(2) he has never lost his status as an employee) but that he must be reinstated in his former employment. In other words, "former employment" in this context means his job and unless the exceptions in section 64(2) operate, he is to be put back into his job or into work of a similar nature.

38. It is well established that a striking employee continues to be an employee for purposes of The Labour Relations Act regardless of the passage of time provided for in section 64. Section 1(2) of the Act provides the statutory basis for this assertion:

(2) For the purposes of this Act, no person shall be deemed to have ceased to be an employee by reason only of his ceasing to work for his employer as the result of a lock-out or strike or by reason only of his being dismissed by his employer contrary to this Act or to a collective agreement.

Cartwright J., discussed the effect of this section in C.P.R. v. Zambri (The "Royal York Case") (1962), 1962 CanLII 11 (SCC), 34 D.L.R. (2d) 654 at 664:

It is not necessary to decide the exact nature of the relationship of employer and employee the existence of which this subsection preserves, or creates, during the continuance of a strike; two of the main features of the ordinary relationship are absent, the employee is not bound to work and the employer is not bound to pay wages. Whatever the relationship be, it is obvious that if the employer is entitled to terminate it on the sole ground that the employee refuses to work while the strike continues, the subsection is rendered nugatory.

And in that case the employer was found to be in contravention of the Act because it had discharged striking employees (to engage in strike activity being a right under the Act). The protection given to striking employees in the absence of rights under s. 64 was also discussed in Becker Milk Company Ltd., supra, where at paragraph 25 the Board stated:

Under The Labour Relations Act strikers continue to be employees and they are not to be discriminated against for having exercised their right to strike. When a strike that lasts beyond six months ends in failure there may be existing job vacancies that subsequently arise by the departure of replacements or the creation of new jobs. The qualifications of the former strikers to fill those jobs may in many cases be inferred from their original hiring and past employment. An employer who refuses to give those jobs to returning employees qualified to fill them commits an unfair labour practice to the extent that the refusal amounts to a calculated penalizing of a group of employees for having exercised their lawful right to strike (cf. Fleetwood Trailer Co.; Laidlaw Corp. (supra). The refusal of an employer to put employees back to work in those circumstances is no less a breach of the Act than any attempt to discharge them our right for engaging in the right to strike (cf. Webster v. Horsfall 69 CL.LC ¶16,050). But, subject to whatever better rights their union can obtain for them, that appears to be the limit of the protection that strikers in that circumstance can expect. An integral feature of the balance of power in collective bargaining is that strikers who return to work without the protection of section 64 of the Act cannot, as a legal right, displace replacements who were hired in their stead.

39. The October 24 and December 6, 1979 letters to striking employees emphasized the right of an employee to return to work. Thus, no striking employee could have had concern for his or her security of employment at that time. Similarly, the respondent's letter to the Registrar of this Board in January and its letter reviewing the positions of the parties in early March gave no indication that either the recall of striking employees as part of a negotiated settlement or their return under section 64 was in issue at those times. It is against this history of negotiations that the denial of Lackland that the respondent has indicated it would not recall striking employees that the three letters must be analyzed. For the first six months of any strike, striking employees have a right to their former jobs on making an unconditional application to this effect with their employer. The only qualifications are where the work is no longer being performed or the employer has ceased operations. The employer cannot refuse the application because another employee is performing the striking employee's job and there are no other vacancies. The striking employee must be returned to his former job even if this results in the layoff, transfer or termination of employment of the replacement employee. When the respondent wrote its first two letters to replacement employees, the six months under section 64 had not yet expired. The February 21 letter assures the replacement employees that their jobs are secure. Would a striking employee reasonably view this letter as a veiled threat that if he made an unconditional application to return to work he would be refused? One test might be to ask whether the respondent could honour both its assurance to replacement emp1oyees and its obligation to striking employees under section 64. Because there is no commitment in the February 21 letter that a replacement would not be transferred, it appears that the respondent could honour both the assurance it made and the section 64 right of an applicant striking employee. However, the March 26, 1980 letter contains the further assurance that a replacement employee will not be moved to a different store and this assurance makes the application of the test more difficult. As a solution the respondent might simply have expanded the number of employees where an applicant striking employee applied to return to a position occupied by a replacement employer, but this solution is not very practical. We have concluded, however, that even if this latter assurance was not possible to honour if a striking employee had applied under section 64, the issuance of the letter cannot be challenged in the circumstances of this case. Firstly, the complainant did not complain about this letter in its particulars of June 25, 1980. Secondly, there is no evidence before the Board that the letter was made available to striking employees by the respondent nor was Lackland cross-examined on the respondent's motive in sending the letter. And thirdly, no striking employee made an unconditional application for reinstatement under section 64. The June 27, 1980, letter was sent after the expiration of the section 64 time period and, by itself, does not violate the Act. As a strike endures, the commitment of an employer to the employees who have helped it resist the strike may become great and, in the usual case, it is for the negotiation process to reconcile this commitment with the interest of striking employees to return immediately to their jobs. Where the trade union is unable to negotiate their immediate return because of the employer's commitment to replacement employees, striking employees who make an unconditional application to return have to be treated, essentially, as employees on layoff and must be considered in filling subsequent vacancies. The rationale to this conclusion is found in the Becker Milk case quoted above and in Fleetwood Trailer Co. (1967), 66 LRRM 2737. Thus, while the letter of June 27, 1980 may convey the respondent's intention not to recall striking employees immediately to the detriment of strike replacement employees, this is not in itself improper. There is no indication in the letter that striking employees would, on their unconditional application, be refused access to subsequent vacancies.

40. We are therefore left with the complainant's second argument – that to fail to reinstate the striking employees would simply reward the respondent for having brought the complainant "to its knees" by unlawful means. This raises the appropriateness of such a remedy in the circumstances and the related question of whether it is necessary to effectuate the policies of the Act.

41. In many cases coming before the National Labor Relations Board, such as Laidlaw Corp. (1968), 68 LRRM 1252, affirmed (1969), 71 LRRM 3054 (CA-7), cert. denied (1970), 73 LRRM 2537 (U.S.S.C.), it has been plain that the employer's unfair labour practices caused the employees to initiate or prolong a strike and in such cases the Board has quite uniformly ordered the employer to reinstate the striking employees to their former positions, discharging if necessary replacements hired during the strike. That Board has, therefore, treated the unfair labour practice striker somewhat more favourably than the economic striker in the sense that the latter employee has no immediate right to reinstatement without a settlement to this effect. See NLRB v. MacKay Radio and Telegraph Co. (1938), 304 U.S. 333, 58 S.Ct. 904. This distinction can become very significant where a strike is initiated over bargaining demands but, during the course of the strike, the employer commits unfair labour practices. The employer's unfair labour practices will be held to "convert" the strike if it can be determined that the employer's actions prolonged the strike beyond the date it would have been terminated as only an economic strike. For example, in the Laidlaw Corp. case, supra, the Board applied the "conversion" doctrine and found that what had begun as an economic strike was converted into an unfair labour practice strike when it was prolonged by the union's vote to protest the employer's outright termination of strikers seeking reinstatement. The Board applied its usual rule that the strikers who were permanently replaced during the economic phase of the strike were not entitled to immediate reinstatement, while the strikers replaced after the date of conversion were.

42. We do not think that the OLRB needs to adopt all the American trappings of an unfair labour practice strike, but the concept's underlying purpose has considerable relevance to the exercise of this Board's jurisdiction under section 79. Where, for example, employees go on strike and it is subsequently determined that the employer has committed certain basic and flagrant unfair labour practices, their security of employment may become a remedial issue. This may, particularly, be the case where the period under section 64 has lapsed and the only opportunity for immediate reinstatement without a remedial order from the Board is through a negotiated settlement to that effect. If the trade union's capacity to negotiate that result has been put into question or eroded by the employer's unlawful resistance, the failure of the Board to provide for the return to work of striking employees would have the result of rewarding the employer for his unlawful actions. On the other hand, as a strike endures strike replacement employees who have been permanently hired develop an interest in their job which this Board cannot ignore. Their interests should be considered in light of the time and gravity of the employer's unfair labour practice together with any expectations they might have as a result of employer commitments.

43. In the facts at hand, Lackland testified that the respondent had never taken the position that it refused to recall or employ striking employees. Rather, he said that the matter was negotiable and ought to be part of the continuing negotiations. However, the problem with leaving the employment security of the striking employees to the negotiation process is that the complainant's bargaining power to seek their immediate reinstatement has been eroded with the passage of time and respondent's failure to bargain in good faith has contributed in a substantial way to this delay. To let the respondent now place the issue of the reinstatement of the striking employees on the bargaining table would permit it to reap a benefit from its earlier unlawful conduct. We also would note that the immediate recall of striking employees was not in issue between the parties in February and, indeed, was not raised by the respondent in its letter of June 17. We also note that the respondent experiences an employment turnover rate of ten percent a month providing vacancies for any of the strike replacement employees who might be affected by the immediate return to work of the striking employees. In fact, the striking employees have evidenced a commitment to the respondent that is in marked contrast to this turnover rate. Finally, none of the replacement employees could have been hired permanently to replace striking employees until towards the end of April 1980 (i.e. six months after October 22, 1979) and we have found that the respondent's unlawful conduct pre-dates that point in time. Indeed, had a settlement been negotiated in February subject to ratification, striking employees could have made an unconditional application under section 64 pending the ratification and still complied with the section.

ORDER

(a) Having regard to all of the above circumstances, we have come to the conclusion and so direct that regardless of the outcome of negotiations on the issuance of this order, striking employees should be given the opportunity to make an unconditional application to return to work on or before December 1, 1980 and if such application is made by any striking employee the respondent shall reinstate the said employee to his former position whether or not a strike replacement employee must be transferred, laid-off or terminated.

(b) The Board declares that the respondent failed to bargain in good faith and make every reasonable effort to make a collective agreement by withdrawing its monetary proposals by its letter dated June 17, 1980.

(c) The Board further declares that the respondent failed to bargain in good faith and make every reasonable effort to make a collective agreement in adopting the position that it did on union security on and about February 25, 1980 and March 3, 1980.

(d) The Board directs the respondent to bargain in good faith and make every reasonable effort to make a collective agreement. To this end, the Board specifically directs the respondent, on the receipt of this decision, to convene forthwith a series of bargaining meetings between itself and the complainant with the assistance of a Ministry of Labour mediator and, at the initial meeting, to resubmit for the complainant's consideration the entire offer made to the complainant on or about February 25, 1980 including the monetary proposals that it unlawfully withdrew on June 17, 1980.

(e) The respondent is directed to post copies of the attached notice marked "Appendix" after being duly signed by the respondent's representative, in conspicuous places at all its places of business where bargaining unit employees are employed in Ontario, including all places where notices to employees are customarily posted and to keep these notices posted for 60 consecutive working days. Reasonable steps shall be taken by the respondent to insure that the said notices are not altered, defaced or covered by any other material. Reasonable physical access to the premises shall be given by the respondent to two representatives of the complainant trade union to satisfy itself that this posting requirement has been and is being complied with.

(f) The respondent is directed, at its own expense, to mail a copy of the attached notice marked "Appendix" after being duly signed by the respondent's representative to the residence of each employee in the said bargaining unit forthwith.

(g) The respondent is further directed to pay to all bargaining unit employees all monetary losses that the complainant can establish by reasonable proof as arising from the loss of opportunity to negotiate a collective agreement due to the unlawful conduct of the respondent, the said damage, if any, running to the date of the first meeting convened by the respondent in accordance with paragraph (d) of the Board's order, together with interest as appropriate.

44. This order reflects the view of the Board that the complainant's current situation is also, to some degree, the natural result of collective bargaining. For this reason, all other relief requested in this matter is dismissed.

DECISION OF BOARD MEMBER F. W. MURRAY:

1. I agree with the Chairman's findings as to the company's breaches of the duty to bargain in good faith and his reasons for making those findings.

2. However, I feel that the union's bargaining strategy, beginning with the request for the appointment of a conciliation officer, was not conducive to achieving an early collective agreement. It applied for conciliation before making any monetary proposals, and then called a strike before receiving the company's reply to those proposals. It did not attempt to bargain during the beginning of the strike, but claimed it was waiting for the Radio Shack decision before filing its complaint with the Board. After further negotiations, the company and the union came to an impasse over union security. There was room for both parties to compromise. Rather than attempt to continue to bargain, the union once again left the table to engage in political action. Indeed, the union conceded that it was to its political advantage to continue the strike after the company refused to give in the union's demand on union security. Furthermore, the union did not consider the effect of section 64 upon the striking employees. Had they done so, the strike may have been settled earlier. I am therefore satisfied that while the company did not intend to reach a collective agreement as of February 25th, 1980, as evidenced by its actions of June 17th, 1980, I am of the opinion that the union shares much of the blame for permitting the strike to start and continue for such a long period of time. Therefore, in my opinion the remedies directed by the Chairman are unjustified in light of the union s conduct.

3. One can only speculate as to why the employees on strike did not invoke section 64 to return to work. They chose instead to maintain their status of striking employees and, as the evidence disclosed, continue their political activity under the applicant's direction, activity they would riot be in the same position to continue had they altered their status. The Chairman, by directing the company to offer employment and to award damages, is rewarding the employees and the union for calling and continuing the strike which was protracted by the union for political gains. The strike was called by the union after the company had begun to bargain in good faith. Thus, in my opinion, a strike would have continued for some time and it can be concluded that it would have continued at least until the political activity was concluded in late May or early June. For these reasons I dissent from the Chairman's award in so far as it directs the company of offer employment to the striking employees and awards the employees damages.

4. I agree with the declarations made by the Chairman, and the directions to meet and bargain in good faith. However, I would simply direct the company to table an offer acceptable to it to the union. In the circumstances, I do not feel that the postings and mailings are necessary or desirable since much of the dissipation of the union's strength is directly attributable to the union's conduct during bargaining.

DECISION OF BOARD MEMBER W. F. RUTHERFORD:

1. The decision of the Chairman accurately sets out the evidence which was presented to the Board by the parties at the hearing. However, I disagree with some of the inferences which he draws from that evidence.

2. The Chairman and I agree that the conduct of counsel for the company in the early stages of negotiations, where he was either unavailable to meet or else sent an articling student without authority to negotiate, was conduct contrary to section 14 of the Act. One can understand that emergencies may arise which must result in the unavailability of a party's representative. However, the circumstances in this case leads me to the conclusion that the company, through its counsel, was not making reasonable efforts to reach a collective agreement at that time.

3. These deliberate delaying tactics in which the company engaged at the early stages of bargaining toward a first collective agreement set the tone for the balance of the negotiations. I disagree with the Chairman's finding that the subsequent negotiations carried on by Mr. McCormack cured this unlawful conduct. It may well be that the company made concessions over several issues, nevertheless, the totality of the bargaining conduct by the company was, in my view, directed towards frustrating the union's attempts at reaching a collective agreement.

4. The refusal by the company to include a mandatory dues check-off provision in the agreement was an integral part of the company's plan. It conceded on issues which were not that contentious, knowing full well that the union would not be in a position to concede the issue of union security. The company, in its evidence, acknowledged that it was necessary for the union to obtain mandatory dues check-off in order to survive. Although the company put forward an explanation for its position on union security, its conduct in June makes it clear that the company was using that issue as a way of avoiding a collective agreement.

5. In my opinion, had the company bargained in good faith, a collective agreement would have been reached no later than March 3rd, 1980, which agreement would have included a mandatory dues check-off provision. Furthermore, since the agreement would have been reached prior to the expiry of the time within which an application under section 64 could have been made, the striking employees would have been entitled to return to work on or shortly after that date.

6. For these reasons I believe that the remedies which the Chairman has determined are appropriate in this case do not go far enough. Because a collective agreement would have been reached on or before March 3rd, 1980, but for the violation of section 14 of the Act by the company, in addition to the remedies ordered by the Chairman, I would direct the company to reinstate all striking employees to the jobs which they were in prior to the strike with compensation for loss of wages and benefits from March 3rd, 1980, and direct the company to remit the regular union dues to the union from all employees in the unit as of March 3rd, 1980.

Appendix

The Labour Relations Act

NOTICE TO EMPLOYEES

Posted by Order of the Ontario Labour Relations Board

We have issued this notice in compliance with an Order of the Ontario Labour Relations Board issued after a hearing in which both the company and the Union bed the opportunity to present evidence. The Ontario Labour Relations Board found that we violated the Ontario Labour Relations Act and has ordered us to inform our employees of their rights.

The Act gives all employees these rights:

To organize themselves;

To form, join or help unions to bargain as a group, through a representative of their own choosing;

To act together for collective bargaining;

To refuse to do any and all of these things.

We assure all of our employees that:

WE WILL NOT do anything that interferes with these rights.

WE WILL NOT refuse to bargain collectively with the United Steelworkers of America as the certified bargaining agent representative of all employees for whom this trade union has been certified to represent.

WE WILL make whole all bargaining unit employees who suffered losses by reason of our failure to bargain in good faith as directed by the Board.

WE WILL comply with all other directions of the Ontario Labour Board including:

(1) the immediate reinstatement to his or her former position of any striking employee who makes an unconditional application to return to work on or before December 1, 1980;

(2) the immediate convening of a series of bargaining meetings with the United Steelworkers of America and, at the first such meeting, we will resubmit our entire offer made to that trade union on or about February 25, 1980;

(3) the mailing of a copy of this notice at our own expense to each employee in the bargaining unit.

WE WILL bargain collectively with the United Steelworkers of America as the duly certified collective bargaining representative of our employees in all certified units as directed by the Board and if an understanding is reached, we will sign a contract with the Union.

FOTOMAT CANADA LTD.

Dated: October 24, 1980. Per: (Authorized Representative)

This is an official notice of the Board and must not be removed or defaced.

This notice must remain posted for 60 consecutive working days.