Canada Cement Lafarge Ltd. v. United Cement, Lime & Gypsum Workers International Union and its Local 368, 1981 CanLII 833

[1981] OLRB Rep. December 1722

1561-80-U Canada Cement Lafarge Ltd., Complainant, v. United Cement, Lime & Gypsum Workers International Union and its Local 368, Respondents.

BEFORE: George W. Adams, Chairman and Board Members J. D. Bell and B. L. Armstrong.

APPEARANCES: F. G. Hamilton for the complainant; and Paul J. J. Cavalluzzo and Martin L. Levinson for the respondents.

DECISION OF THE CHAIRMAN; December 7, 1981

1. By decision dated November 18, 1980, the Board declared that the United Cement, Lime & Gypsum Workers International Union and its Local 368 (hereinafter referred to as the "International" and "Local 368") were required to submit to the results of a section 40 vote held on Thursday, October 16, 1980 and that they had failed to bargain in good faith and make every reasonable effort to enter into a collective agreement by refusing to execute a collective agreement presented by Canada Cement Lafarge Ltd. (hereinafter referred to as "CCL") on October 17, 1980. The Board directed both trade unions to execute the agreement and requested the Registrar to reschedule the case for hearing on the issue of damages. In the last paragraph of its decision the Board wrote:

We have found that both trade unions have violated section 14 and it is now firmly established that a breach of this section may support a request for all resulting damages. However, in this particular case the trade unions did not execute the proposed collective agreement because of a dispute over the legal effect of [section 40] section 34e (an issue of first impression) and because they did not believe the vote reflected the true wishes of the employees. The latter concern was the product of a last minute controversial statement by the respondent and this decision now puts that concern aside. It is also not readily apparent that both trade unions should be equally liable and from when damages should run, if damages are appropriate in this situation.

At the outset of the hearing into these issues, the trade unions asked the Board to determine first whether compensation is ever an appropriate remedy in the context of a section 40 vote. The Board refused this motion and, thus, most of the evidence received by the Board and reviewed below relates to damage assessment. However, we have summarized, in the next two paragraphs, many of the earlier findings of the Board pertinent to the preliminary issue raised by the unions. These two paragraphs also provide a useful review of the background to this decision.

2. The Board's November 18th, 1980 decision noted that the last offer vote was held on Thursday, October 16, 1980 in Woodstock and that CCL held a press conference in Woodstock at 10:00 a.m. on that same date where its President read a text setting out the company's views. The last paragraph of the text read:

A positive vote could signal the return to work of the employees involved immediately. A negative vote could, at best, see this plant closed for many months, at worst, closed forever.

The Board noted that at no time prior to the results of the vote being disclosed did representa­tives of the trade union express the view that the vote would not be binding. The Board also noted that the trade unions did not object to the content of CCL's press conference before the ballots were counted. 58 employees marked ballots in favour of acceptance of the final offer. 57 marked ballots for rejection of the offer. Paragraph (d) of paragraph 5 of the Board's decision contains a description of the events immediately following the vote in the following terms:

Soon after the counting of the ballots Mr. King, President of Local 368, advised CCL representatives that the union's lawyers would be preparing an intervention. He also said that the offer submitted to the employees was not really an offer because the negotiating committee had not recommended it to the membership as required by the attached memo­randum of agreement. He expressed concern about the press conference and the earlier press releases of the company. And he may also have said that the execution of an agreement on the basis of the vote was contrary to the trade unions constitution. On Friday, October 17 at approxi­mately 7:55 p.m. CCL officials presented Mr. King with a proposed collective agreement based on the vote for signature. He refused either to accept or to sign the document. He said that all the company had achieved "was to split the union right down the middle." He stated "that at least 57 employees were still on strike and on the picket line." He said that he had been advised by the union's lawyers that the Labour Board would not order them back to work. It was also stated that the execution of the agreement by Local 368 would be contrary to the union s constitution which required the International Vice-President's approval. Thereafter, CCL sent a telex to King indicating that it would have to take steps to bring about the completion of the agreement and that the company "[was] holding the union liable for any losses or damages incurred by [it] due to the continuation of the strike." [emphasis added]

3. Thereafter, the trade unions filed a complaint with the Board on October21, 1980 in part objecting to the content of CCL's press conference and defended against the company's October 23, 1980 section 15 complaint on this same basis. However, at paragraph 26 of the Board's decision it found that the last minute statement of CCL was not an unlawful threat under the Act nor did it undermine the reliability of the vote. In this respect the Board ruled:

On the other hand, an employer is equally entitled to achieve proper bargaining objectives through the use of economic sanctions and the statute acknowledges an employer's freedom to express his views (see section 56). The statement that "a negative vote could, at best, see this plant closed for many months" conveys that this employer is serious about its final offer and that it is not going to be easily moved into making further concessions. It is a public commitment to this effect and draws its credibility from the fact that three other plants have already accepted the same offer and the employer has already experienced a month long strike. We are satisfied that the average bargaining unit employee would and should understand this portion of the statement as a statement of bargaining reality. If employees were threatened by the prediction of a longer strike, it was a threat that CCL was entitled to make. In this respect, CCL's statement was a reasonable prediction based on available facts. Indeed, for the Board to prevent employers from making such statements could have the effect of depriving employees of information that conveys an accurate picture, however unfavourable to the union, of what is in store if the voters choose to reject the employer's last offer. Can we so characterize the rest of the statement as it relates to a permanent plant shutdown? Can the ending to the Bath plant statement be similarly characterized? While the situation is very close to the line, we have come to the conclusion that neither statement should be viewed as an unlawful threat under the Act or as undermining the reliability of a vote (past or future). This is a longstanding bargaining relationship. A strike had been in progress for a month and a negative vote could have had the effect of hardening the differences between the parties. CCL's competitors are not on strike. The industry and CCL are operating substantially below their capacities. The full text of the President's statement emphasized all of these contextual matters and the permanent plant closing was put forward as "the worst" case. At this stage of bargaining and under these conditions, the Board cannot conclude that the observation can reasonably be construed as an improper threat to close the plant regard­less of market conditions. See First Data Resources Inc. (1978-79) CCH NLRB 29,409. Moreover, any doubt in this respect must be combined with our doubts that the statement ever reached bargaining unit employees before they voted. The offer had been accepted by three other locals of the same trade union and, on balance, we cannot conclude that the vote reflects anything other than the attractiveness of the last offer and the unattractiveness of continued strike action. [emphasis added]

4. The particulars of CCL's damage claim covering the period of October 18, 1980 to November 24, 1980, when the employees and trade unions gave up their strike and returned to work, are set out in a letter dated May 26, 1981 from CCL's counsel to counsel for the trade unions. The letter reads:

"In order to provide you with a statement of the Company's damage claim in better form and content than the hand-written summary given you at the last hearing, we wish to advise as follows:

1. Security Expenses (including the required minimum payment) $697,593.73

This amount consists of the payment of the six in­voices enclosed with my letter of April 21st, 1981 for services provided by Securecor at the Woodstock plant totalling $567,813.73.

The balance consists of payments for the 1 / 3 of the crew transferred to Bath for the remainder of the required minimum termination period and consist­ing of 5 amounts at the rate of $25,956. per week for the period November 23rd to December 28th aggre­gating $129,780.

2. Truck Rental Expense $ 8,210.23

1st Week Avis 2 Trucks — $1,540.26 1,538.99 2nd Week Ryder #79670 739.74 (Invoice 33065) 48218 747.67

3rd Week Ryder 79670 738.49 (Invoice 33155) 39727 748.51

4th Week Ryder 79670 696.41 (Invoice 33244) 48218 744.20 39727 715.96

Fuel 528.54 3. Truck Damage 3,093.19

The following trucks were damaged on the picket

line on or about November 19th:

Vehicle 79670

#044677 Towing to yard $ 65.00 #044678 Rad. Repair 952.75

Vehicle 39727

#044981 Repair Cab Wiring 24.50 #045048 Repair Air Lines 131.79 #048774 138.75

Vehicle 48218

#044973 Rad. Repair 1,427.22 #044982 — Window Repair 55.50

#045047 Repair Air Lines 177.68

Enclosed please find a complete set of invoices covering claims 2 and 3 for ease of reference at the hearing."

5. Mr. Robert Brannen, Manufacturing Manager of the Ontario Region for CCL and a member of CCL's negotiating committee, testified that in mid-September officers of Securicor Investigation and Security Ltd. (hereinafter referred to as "Securicor") inquired whether CCL would be in need of their services. Discussions ensued which led to a contract being executed and it is the monies expended under this contract that make up the bulk of the claim before us. An introductory letter dated October 2, 1980 and describing Securicor's services was sent to Mr. Brannen by Mr. Paul Downing, President of Securicor. The letter reads:

"Pursuant to our recent conversation, I wish to outline concisely the methods and services provided by Securicor for your protection during a labour dispute. As you are aware, we have assisted many corporations such as yours over the years and each company during their dispute has had their own intricacies which must be dealt with on an individual basis. I have enclosed, for your perusal, a general check list of preparations which should be attended to at this time.

The areas of prime concern are as follows:

A. Gathering of Intelligence Information for Legal Use.

B. Protection of Corporate Assets and Executive Protection.

A. Gathering of Intelligence Information for Legal Use

The most important aspect of good security is intelligence. It allows us to know what will transpire before it happens. Effecting this service immediately will enable us to plan ahead and reduce any possibility of undesireable situations. Internal undercover is suggested immediately. External undercover is incorporated when hiring an internal investiga­tor is not possible.

B. Protection of Corporate Assets and Executive Protection

In order to prevent acts of sabotage and wilful damage, susceptible areas can be guarded by uniformed personnel. Upon inspection of the material premises we can surmise where the guards and surveillance cameras will be best deployed. (As Securicor specializes in strike security, personnel are trained to avert potentially volatile situations.)

As you are well aware police have special procedures with respect to legal strikes. Police procedures are similar throughout Ontario but co­operation varies with the different forces. A rapport with the applicable force should be developed. Establishing exactly what their commitment will be with respect to security and laying of charges is strongly suggested. It should be kept in mind that it is the employers legal right to bring shipments of materials into or out of the plant during a labour dispute and that the police have a duty to uphold this basic right.

Sometimes situations arise whereby company executives are the target of threats, intimidation or physical assaults. Securicor can provide indivi­duals in plainclothes capable of handling these types of occurrences. Our employee will also act as a personal aid or chauffeur and will follow instructions given to him by any executive he is assigned to, with of course, their safety in mind.

ALL RETAINERS One weeks billing, applied to last weeks billing.

COST

A— Intelligence Internal..$l5.00/man/hour, plus wages, plus expenses Intelligence External.$50.00 / man! hour, plus expenses

— General

Investigations $28.00/man/hour, plus expenses

— Photographers $30.00/man/hour, plus expenses

Follow Cars $28.00/man/hour, plus expenses

B — Physical Uniformed

Security Guards . . $ 12.50/ man/hour

— Security

Supervisors $14.50/man/hour

Executive

Protection $35.00/man/hour, plus expenses

All Transportation .$00.30/klm.

I look forward to assisting you in the near future and at that time dis­cussing in more detail, services which will assist you to project your company's desired image."

Attached to this letter was a specific proposal for the Woodstock and Bath plants. The Woodstock proposal took the following form:

Bob:

The following proposals are based on our summation of requirements when we visited your two above mentioned facilities. We have suggested what we at Securicor have agreed would provide you with blanket coverage. With the fact in mind, that you know your locations better than us, we are open to your suggestions regarding your protection. Further recommendations can and will be more easily made after a period of familiarity.

Objectives: Securicor will endeavor to establish and maintain a secure and safe atmosphere encompassing corporate property and both bargaining unit and non-bargaining unit personnel, by means of photography and factual reporting and documen­tation. Also of importance, is the safety and well being of the general public. Keeping the peace is of great concern.

Dress: Security guards will maintain low profiles (blazers and slacks). Investigators will be dressed in plain clothes.

Duties: Security guards will patrol all inside property, while investi­gators and photographers will be responsible for exterior patrols, picket monitoring, company traffic surveillance, photographic evidence, documentation and police liasion.

WOODSTOCK ONTARIO PLANT

Service Requirements: One photographer/investigator to oversee this location and to act as liasion officer between management and security.

Days: 7:00 a.m. — 7:00 p.m.

Security Guards:

Investigators:

To foot patrol the plant interior.

2 Teams of 2 Men

Mobile patrol standing by some 300 feet

from the picket line at the main entrance.

1Team of 2 Men

Roving patrol of central exterior and eastern perimeter, including railway line, natural gas facility, and water station.

4 Guards

(12 hrs ea)

1 Investigator

1 Photographer

(12 hrs ea)

1 Investigator

1 Photographer

(12 hrs ea)

1 Team of 2 Men

Roving patrol of central exterior and western perimeter, including hydro facilities, crusher station, property encompassing the pit, and water pump stations.

1 Team of 2 Men

1 Investigator

1 Photographer

(12 hrs ea)

Shift supervisor responsible for stationary monitoring of both visual and radio com­munications (established in plant main office).

1 Photographer (12 hours)

1 Man

Photographers:

Day Shift Total Hours:

Will be second man in mobile patrol vehicle during the days only, investigators will be used during nights only. (The night super­visor only will be a photographer). This is to facilitate personnel backup, witness and photographic evidence in the event of a breach of the peace.

Guards 48 Hours Investigators 36 Hours Photographers 48 Hours

Investigators:

Nights: 7:00 p.m. – 7:00 am.

Security Guards:

10 Guards (12 hrs ea)

Patrols will increase to

5 Teams of 2 Men

Patrols will remain the same.

3 Teams of 2 Men

6 Investigators

1 Photographer

(12 hrs ea)

One shift supervisor

Photographers:

Not applicable.

Night Shift Total Hours: Guards 120 Hours

Investigators 72 Hours Photographers 12 Hours

DISBURSEMENTS

Equipment required to be arranged for by Securicor

Vehicles: Each roving patrol will require a four wheel drive pick up truck.

3 Patrols Per Shift

Shift changes will require either a van with ample seating or two station wagons.

Strike supervisor will be floating between both Bath and Woodstock plants and, there­fore, will need a separate vehicle. A passenger van would be suitable.

Radio Communications: One base unit will be required to be situated within the main plant office.

Each team or individual will require a por­table unit. Maximum requirements for pro­posed service.

Also of necessity are:

Camera Equipment: To be supplied by Securicor.

2Wagons

3Trucks

2 Wagons

1 Van

1 Base

16 Units

3 Power Bars

16 Chargers

16 Extra Batteries

Accommodations and

Food: Meal allowance $15.00/man/day.

One room for every two men (arrangements 16 Rooms to be made by Securicor.)

Maintenance of Production

Non-union personnel can be recruited. These personnel will be screened according to the situation in order that a low profile be maintained. They will be experienced in the required skills and it is suggested that management personnel be used (where possible) in supervisory capacities. Our internal supervisors can record payroll hours and perform other personnel record keeping functions.

Shipping and Receiving of Product

Product movement can be maintained by use of non-unionized truck drivers. Each driver will be accompanied by a helper who acts as a lookout and provides corroboration of any possible situation. The use of "Follow Cars" can assist truck drivers being followed, thereby insuring union sabotage is kept to a minimum, and deliveries made on time.

COST

Maintenance of Production Regular Salary Plus 40%

Shipping and Receiving of Product $30.00/hour — $60.00/hour

6. Brannen testified that the arrangements for security services were actually made on October 17, 1980, although the written contract for the services is dated October 20, 1980. He testified that a quotation for similar services had also been obtained from Lilly and Company but that company eventually withdrew its offer. He said the quoted charges were higher but a copy of the quotation was never produced. A key provision of the contract related to its termination. In this respect the contract read:

The above mentioned security will be initiated upon the receipt of the agreed upon retainer and will be removed only upon the termination of the current labour dispute or upon receipt of 60 days notice in writing by either party.

Bob, as you are aware there is a 4 week minimum billing per location should the dispute be quickly settled. Trusting this meets with your approval, I remain,"

7. Brannen testified that CCL purchased the services to protect the company's assets. It was worried about an escalation of the labour dispute if as CCL intended, operations were commenced. The property of Woodstock embraces approximately five hundred acres with the plant site occupying thirty to forty acres of this area. By letter dated October 31, 1980 Brannen gave Securicor "a 60 day notice" of termination of services under the above clause. It was his understanding that this is how the contract had to be terminated regardless of when the dispute stopped. With the conclusion of the dispute at Woodstock on November 20th and a return to work scheduled for November 23, it was agreed between CCL and Securicor that two thirds of the staff at Woodstock would be released with two weeks notice for a charge of $90,216. The remainder were transferred to Bath and Utilized there at a weekly charge of $25,956.00 for the remainder of the notice period triggered by Brannen's letter of October 31. A summary of the cost of the services including the effect of the termination arrangements were set out in the following form:

SECURITY— SUMMARY

SECURICOR INVESTIGATION & SECURITY LIMITED

October 18 – 26 : $ 87,668.98

October 27 - November 2 : 87,635.87

November 2 — November 9 : 88,651.44

November 10 November 16 : 100,523.95

November 17 — November 23 : 113,117.49

November 27 Termination (14 days) : 90,216.00

Approximately 2/3 of crew. Remainder require 1 month notice and are charged on Bath Invoices ($25,956.00 per week).

November 30th total paid re Bath : 25,956.00

153,755.89

December 1 - 7th total paid re Bath : 25,956.00

142,329.48

December 8 – 14 : 25,956.00

December 15 – 21 : 25,956.00

December 22 – 28 : 25,956.00

$697,593.73

TERMINATION OF SECURICOR SERVICES @ WOODSTOCK PLANT

• 2 Photographers

2 x 12 hours x 14 days @ $30.00 per hour = $10,080.00

• 9 Investigators

9 x 12 hours x 14 days @ $28.00 per hour = 42,336.00

-*18 Guards

18 x 12 hours x 14 days @ $12.50 per hour = 37,800.00

• 29 men $90,216.00

• NOTE:

12 guards terminated at Woodstock plus 6 guards terminated at Bath.

Personnel transferred to Bath

5 - Supervisors

12 - Photographers : 6 replaced guards terminated at Bath

6 were used as additional guards at Bath

3 — Investigators

The following are charged on Bath invoices

5 - Supervisors x 12 hours x 7 days x $30.00/hr. $12,600.00

3 - Investigators x 12 hours x 7 days x $28.00/hr. 7,056.00 6 - Guards x 12 hours x 7 days x $12.50/hr. 6,300.00

$25,956.00

8. At the request of the Board and by letter dated April 21, 1981 counsel to CCL provided counsel to the unions with copies of the invoicing CCL intended to rely upon to establish its claim. In a number of recent cases involving claims for substantial damages the Board has entertained pre-hearing motions requesting production of documents and greater particularity. In granting these requests, in whole or in part, the Board has relied upon section 103(2)(a) which provides:

103.-(2) Without limiting the generality of subsection (1), the Board has power,

(a) to summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath, and to produce such documents and things as the Board considers requisite to the full investigation and consideration of matters within its jurisdiction in the same manner as a court of record in civil cases;

[emphasis added]

Reliance has also been placed on Rule 47(3) of the Board's Rules of Practice which provides:

47.-(3) Where a statement in an application or complaint or in any document filed under these Rules in respect of the application or com­plaint is so indefinite or incomplete as to hamper any person in the pre­paration of his case, the Board may, upon the request of the person made promptly upon receipt of the application, complaint or document direct that the information stated be made specific or complete and, if the person so directed fails to comply with the direction, the Board may strike the statement from the application, complaint or document.

And, in some of these cases, a labour relations officer has been appointed by the Board to facilitate the exchange of material between the parties and to assist in settlement efforts. Clearly, if such cases are to be litigated fairly and, particularly, if there is to be any chance of settlement, full and frank disclosure by the parties of both the detailed particulars of a damage claim and the documentary evidence that will be relied upon must occur prior to a hearing before the Board.

9. Mr. Brannen was extensively cross-examined on the contents of the invoices. It is clear that he had tried to use a few rough mathematical calculations to check the accuracy of the charges levied by Securicor but, many charges such as the $5,040 for 840 photographs on invoice #0764, were simply accepted at face value. Mr. Brannen had not seen any of these photographs and he could not explain why so many had been taken. He did not know of any specific investigation undertaken by Securicor staff and he never saw an investigation report pertaining to the Woodstock location. He had not asked to see any vouchers or details pertaining to charges for meals, motel accommodation, cars, gas, radios and other miscellaneous charges before paying the charges as invoiced.

10. The maximum deployment of Securicor personnel included 43 people over two shifts. Brannen estimated that at the same time 40 non-bargaining unit personnel of CCL were on the site operating the plant and equipment. Some of CCL's people had been transferred from other locations for the duration of the strike. He testified that CCL's own personnel could not be involved in surveillance because they were required to work. CCL had decided assistance from the OPP detachment in Woodstock would not be adequate in the circum­stances. Brannen understood that the police would not patrol the perimeter of the company's property on a regular basis nor station themselves on the picket line. However, he agreed that the police responded to occurrences on November 18 and 19; that there had been no incident requiring police prior to retaining Securicor; that ninety percent of the bargaining unit had ten years of seniority with the company or more; and that there had never been acts of violence during earlier Woodstock strikes. But Brannen stressed that until October 20, 1980 CCL had not tried to operate nor had it tried to operate in any earlier strike. Moreover, strikes at the Bath plant had apparently involved violent conduct. Brannen also testified that on or about September 22 and 23 pickets from Woodstock had impeded entry and exit of vehicles at a St. Mary's Cement location twenty-five miles away and that he expected to have a similar problem if and when CCL commenced operations.

11. Keith Downing, Director of Security Services for Securicor, supervised Securicor personnel at the Woodstock site. He testified at some length about how transformers could be "knocked out" or "blown up" and buildings and equipment destroyed. However, on cross-examination he exhibited very little knowledge of the precise nature of CCL's operations, plant and equipment. He also did not seem to know very much about the demography of this particular workforce. He testified that the number of people used by Securicor was designed to deter violent acts; that photographers took pictures to be used if charges were laid; that escort vehicles were used to discourage damage to trucks; and that a large number of guards was needed to patrol the perimeter of the property and deter picket line violence. However, he advised that, as a rule, his personnel would not physically stop an offence. He pointed out that during his presence at the strike, picketers had removed air hoses; tires had been slashed; a truck window broken; radiators had been punctured; and a car had been severely rocked. He agreed that there had not been any vandalism to property or the presence on CCL property of unauthorized persons. Securicor personnel were paid anywhere from $5.00 to $12.00 depending on their assignment. A guard was paid the least and a photographer the most. It does not appear that the personnel receive extensive training. Because two shifts were employed, personnel worked up to eighty-four hours a week and overtime rates were at time and one-half, Downing testified. Downing did not present any vouchers or other documen­tation for the invoiced charged to CCL.

12. Andrew Robb, the Plant Manager at Woodstock, testified that CCL decided to operate on October 21, 1980 after the majority of the bargaining unit had voted in favour of the employer's last offer. At least eighty percent of the bargaining unit came to the work site on that date, but no one crossed the picket lines. In any event, the plant was started up and CCL began to ship. CCL felt the strike was over and that work opportunities should be provided to those wanting to work. It appears to be Robb's evidence that he spoke to the OPP police in Woodstock twice; once before the company had decided to ship and once after. The first time related to a fear that Bath pickets might come to Woodstock; however, his testimony was principally directed at a contact on Monday, October 20, 1980. He said he learned at this time that the police would respond to any complaint about a problem, but they were very concerned not to appear to be taking sides. He understood there was not a large OPP staff at Woodstock and, for this reason, it could not provide continuous surveillance. Until the company began to operate only non-bargaining unit personnel were engaged in surveillance including some staff from the Bath and Toronto offices. These people had apparently expressed concerns about what might happen in crossing the picket line if the company began to operate and this appears to have played a role in the decision to retain security services. Robb had no indication that problems would arise, but he wanted to be prepared. Laidlaw Transport hauls cement for CCL from Woodstock to its customers and Robb testified that Laidlaw's employees are unionized and had advised their employer they did not wish to cross the picket lines at the CCL Woodstock site. Accordingly, CCL decided to rent an adequate number of tractor trailor units to haul the product to the Laidlaw equipment. Invoices from Ryder Truck Rental Ltd. and Avis Canada Inc. were submitted to support the claim of $8,210.23 together with a $528.24 fuel charge. Until the last day or two of the strike, CCL did not experience any substantial problems in moving through the picket lines. However, during the last two days damage to the leased vehicles was sustained in the amount of $3,093.19 for which invoices were submitted to CCL by Ryder Truck Rental and paid. Although no damage was sustained to the trucks during the first part of the strike, picketers did stand in front of the trucks; trucks were followed into Woodstock; and placards were placed across windshields in an effort to obstruct the driver's view. CCL shipped every day from October 21 to November 21, 1980 with six loads on the first day and up to sixteen to seventeen loads on the last day. After the damage was done on November 19, Robb said the police stationed a constable within view of the plant gate. He also agreed that the police come out to investigate incidents any time they were called, but prior to November 19, 1980 there had been "hardly any aggressive acts." On November 19, 1980, one day after the release of the Board's decision, the picketers were "most agitated and angry" and it is on this day that a truck window was broken; radiators were punctured; and a car was rocked. He said he took a copy of the Board's decision to the union's trailer on November 19th, but trade union officials said they would get their own. On November 20th, CCL continued shipping but it was agreed with the union that the pickets would be removed if Securicor personnel were removed. This agreement was carried out; a collective agreement was signed on November 21; and the employees returned to work on November 21.

13. Carl Hutter, Manager of Distribution and Market Planning, testified that he caused CCL to pay Ryder Truck Rental for damage it claimed had been sustained by its Truck going through CCL's picket lines. H utter did not see the damage sustained but was aware of the various incidents. He did not know if the persons charged with the damage had been ordered by a court to pay for the losses caused. He did not know if CCL was suing the people who caused the damage claimed for or whether CCL even knew who had caused the damage. There also was no evidence that any employees had been disciplined or dismissed for their conduct on the picket line.

14. John Grignon and Robert Overfield are employees of Securicor and testified about damage to vehicles sustained on November 19, 1980. Grignon identified several photographs capturing picketers breaking a truck window and a headlight; removing air hoses; and rocking a vehicle. Individuals engaged in these acts were identified as CCL employees and a Mr. Brunsdon, Secretary-Treasurer of the Local union, was the individual identified as having a screw driver in his hand for the purpose of damaging radiators. A number of photographs identify Brunsdon as a participant in the picket line misconduct and clearly indicate he was doing nothing to discourage the improper conduct. The Board was advised that he has been charged with certain offences in connection with his conduct on the picket line. Brunsdon was not called as a witness by the unions to explain or defend his conduct on the picket line. Neither employee of Securicor knew whether the police had been called although they indicated the police were at the picket line "two or three times" that particular day. Grignon testified that for most of the day ten fellow employees sat in a van "as reserves". They apparently assisted through the picket line the car that was being rocked.

15. Lorne King, President of the Local 368, described a thirty-three day strike in 1961 and a nine week strike in 1975 as peaceful. The 1980 strike began September 19 and King described it as uneventful. He said a local union official told bargaining unit employees to conduct themselves in a peaceful manner and to stay off the company's property. On cross-examination, King admitted that the union had not taken any action against members who had breached these instructions. King said there were six to a dozen strikers picketing at the main gate on a twenty-four hour basis and two or three strikers at the main gate. King said he would not sign the collective agreement presented to him by Robb on October 17 after the positive last offer vote. He said he had received an opinion indicating it was unclear that he was obligated to abide by the vote. He said he did not feel the union had a collective agreement based on the vote and the union subsequently filed a complaint on or about October 21, 1980 (Board File No. 1535-80-U). On cross-examination, he said he was not in favour of the employees returning to work until the Labour Board ruled on the issue and that he under­stood, at the time, there was a risk that the Board would rule against the union and award damages. He said the union was prepared to run that risk. He said the International Vice-President could not sign the collective agreement and King also refused — a decision he described as being that of the local trade union.

16. King testified that he learned of the Labour Board's decision from his own lawyers on November 20, 1980. The Board, however, takes notice that copies of the decision were provided to counsel for all parties on the afternoon of November 18, 1980. Copies were also made available to the media shortly thereafter on the same day. King said "a lot of animosity" had arisen because of the presence of Securicor and he thought this could be best dissipated by "a cooling off period" whereby both the pickets and Securicor were removed.

17. Staff Sargeant Douglas K. Ross is the Detachment Commander for the OPP unit in Woodstock. He testified that the unit consists of thirty-three officers. He said that he heard about the strike through the local news and then alerted his staff to it. He said the first time he was approached from anyone from CCL was by Mr. Robb on October 20, 1980. He advised that the company would be shipping the next day and that CCL had Securicor coming in. He did not ask for additional police to be present. On cross-examination he admitted he could not deny that Robb may have had a conversation with someone at the station on or about September 5, 1980 but he would expect to have been advised of such a discussion by his subordinates and was not.

18. The OPP unit is responsible for Oxford County which consists of some nine hundred square miles. He admitted that it would be hard for his unit to surveil the company's property. However, he said that his officers quickly responded to the twenty-one occurrences reported during the strike and said that nothing happened the OPP could not handle. He said that in difficult circumstances reinforcements can always be requested. He said seven criminal code charges, two careless driving charges and one dangerous driving charge arose out of the strike.

Submissions

19. On behalf of CCL it was submitted that the company had reasonably limited its claim to expenses directly arising from the continuation of the strike in violation of section 15. Being direct expenses, the claim did not raise an issue of "remoteness". Counsel emphasized the testimony of Brannen, Downing and Robb that the expenses related to reasonable steps taken by CCL to protect its property and carry on business as it was entitled to. Counsel contended that service from the OPP was inadequate because it had to be based on a complaint basis. CCL wanted to prevent the need for any complaint. It was submitted that the trade unions took no steps to avoid or minimize picket line confrontation and, indeed, one senior official of Local 368 engaged in such misconduct. Counsel further contended that there was little or no evidence that King refused to sign the collective agreement tendered to him on October 17, 1980 out of concern for the last minute press conference conducted by CCL's President. Counsel agreed that both King and Burshaw acted to support negotiations elsewhere in the county. It was also submitted that the union's could have removed the pickets until this Board ruled on the matters before it. Counsel urged the Board to find that a collective agreement should have been executed by October 18, 1980 and that CCL was entitled to compensation for all monetary losses sustained after this date as claimed. The Board was referred to Grey-Owen Sound Health Unit, [1980] OLRB Rep. Feb. 223; Radio Shack,[1979] OLRB Rep. Dec. 1220; Academy of Medicine, [1977] OLRB Rep. Dec. 783; Westinghouse Canada Ltd., [1980] OLRB Rep. April 577; De Vilbis (Canada) Limited, [19761 OLRB Rep. Mar. 49; Maine and McGregor on Damages l2thed. 1961, p. 38, pp. 131-132 and pp. 145-156; and Brown and Beatty, Canadian Labour Arbitration (1977), pp. 60-61, p. 515. Referring to paragraph 33 of the Board's earlier decision in this matter, counsel submitted that all of the cases referred to had been cases of first impression on the particular facts therein and yet the Board did not refrain from awarding damages. Finally, counsel asked that liability be allocated equally between the two trade unions having regard to the facts as established.

20. On behalf of the trade union it was submitted that damages, apart from wage claims, amounted to extraordinary relief and, on the cases, had only been awarded when supported by the following principles: (1) Damages have been awarded only where the order promotes collective bargaining. In this particular case the strike was lawful; the effect of section 40 was uncertain; the last minute statement of CCL clouded the responsibility of the trade unions; and the unions had not been guilty of any earlier unfair labour practices. The Board was referred to Radio Shack, supra; Academy of Medicine, supra; The Journal Publishing Company of Ottawa Limited, [1977] OLRB Rep. June 309; Grey-Owen Sound Health Unit, supra; Fotomat Canada Limited, [1980] OLRB Rep. Oct. 1397; K-Mart Canada Ltd., [1981] OLRB Rep. Feb. 185. Counsel emphasized that the Board must keep in mind its statement in Radio Shack that the reasons for a statutory violation have to be taken into account and that remedies were primarily instruments of regulation and education. It was counsel's submissions that these purposes clearly had been served. (2) Remedies must be tailored to individual cases after all the circumstances have been considered. In this respect, counsel stressed that the strike was lawful and that the positive section 40 vote did not affect its legality. The Board's attention was directed to the Board's decision, The Journal Publishing Company of Ottawa Limited, supra; where it was held that losses cannot be recovered when they arise from a lawful strike. (3) Damages must be compensatory and reasonably foresee­able. Relying on Grey-Owen Sound Health Unit, supra, counsel submitted it was not reasonable to obtain any kind of security service. The bargaining relationship was a mature one. Ninety percent of the bargaining unit consisted of high seniority employees. Violence broke out in the picket line on only one day at the conclusion of the strike immediately on release to the Board's decision. The police had no difficulty maintaining order. It was counsel's submission that, if anything, CCL's actions reflected a "commando mentality" that exacerbated the situation. Alternatively, counsel contended that the level of security service was far beyond the limits of reasonableness in the circumstances. No investigation reports were submitted; no one knew why so many photographs were necessary; the police had not been relied upon; and very little professional knowledge was known to Securicor about CCL's plant and workforce. In short, "CCL had used an army to deal with gold watch employees." It was also submitted that CCL did not reasonably review and check Securicor charges. Counsel pointed out that CCL had made no real effort to rely upon the OPP and there was nothing unusual about the strike at the Woodstock location. Counsel also argued that the losses sustained by damage to the trucks was not caused by the trade union and that they had not been properly established in any event. Counsel stressed that the union did not sanction this kind of misconduct and CCL or the rental company should go against the individuals responsible. It was also pointed out that, on the face of the contract between Securicor and CCL, CCL was not entitled to recoup anything after November 20, 1980 when the strike ended and that, in any event, CCL got full value for the services transferred to its Bath plant. (4) Damages should not be awarded if they arise from legal economic sanctions, counsel submitted. He contended that the picketing was clearly lawful and that the Board, in Canteen of Canada, [1978] OLRB Rep. Mar. 207, has stated it has jurisdiction only with respect to picketing arising out of an unlawful strike.

Decision

21. We first wish to deal with the issue of whether compensation is ever an appropriate remedy by which to enforce a party's obligation under section 40. In its previous decision in this matter, the Board held that the failure to execute a collective agreement reflecting the results of a last offer vote conducted under section 40 "may constitute a violation of section 14 [section 15] which can be remedied by the Board on the filing of a complaint under section 79 [section 89] of the Act" (emphasis added). Earlier in the opinion the Board was again tentative in stating "that the wording of the section makes it abundantly clear that a vote in favour of accepting a last offer creates, in the usual case, the basis upon which a binding agreement between the employer and trade union is to be entered into" (emphasis added). The Board explained its qualification of the obligation arising out of a section 40 vote in the following terms:

... However, we emphasize the qualification "in the usual case" because there may be circumstances where a trade union would be justified in refusing to submit to the results of a vote. For example, if a vote has been influenced by improper or illegal conduct of an employer, it would be patently silly to conclude that the trade union is violating section 14 [section 15] by continuing to negotiate and refusing to submit to an outcome that does not represent the true wishes of the employees in the affected bargaining unit. Or a last offer may appeal to the majority of bargaining unit employees and, yet, be in blatant violation of the trade union's duty under section 60 [section 68] because of the invidious treatment of a minority of employees.

A similar but much more difficult situation may arise where the outcome of the vote has been clearly influenced by the segregated ballots cast by a large number of strike replacement employees. If the vast majority of the employees in the bargaining unit who were employed at the commencement of the strike have, however, voted to reject the last offer and to continue their strike, it would be counter-intuitive, in an industrial relations sense, to conclude that the trade union is automa­tically bound by the wishes of employees it does not really represent. Indeed, the employer's offer in such circumstances might even contain terms which are very damaging to the trade union as an entity, i.e. See Wilson Automotive (Belleville) Ltd., [1980] OLRB Rep. July 1136 where an employer's offer contained a demand that the trade union compensate it for losses sustained during a strike. Whether the trade union is obligated to submit to the balloting in these kinds of situations may well depend on the duration of the strike at the time of the vote and other important industrial relations facts. Quite different approaches may also be needed where the employer and trade union have agreed at the outset of negotiations to multi-plant negotiations or other format conditions of bargaining. All of the above, therefore, are useful examples by which to illustrate that a collective agreement need not automatically follow an affirmative vote in a bargaining unit to accept an offer and that section 14 [section 15] must be applied in light of accepted principles of collective bargaining. As will be elaborated below, the section is intended to end industrial conflict and cannot be used as a vehicle to achieve some destructive aim wholly inconsistent with the overriding purposes of the statute.

22. Further, at paragraph 6 the Board observed:

..........Pre-vote conduct or communications involving coercion, intimida­tion, threats, or undue influence can undermine the reliability of a directed vote and cannot be tolerated or have been intended. To require the trade union to execute a collective agreement where an employer has engaged in such conduct would simply contribute to the illegality and reward the wrongdoer.

23. Indeed, this latter point was the very issue before the Board and required it to set out a standard for assessing the propriety of pre-vote communications. In this respect, the Board wrote:

A vote pursuant to section 34e [section 40] is, in effect, an extension of the bargaining process or, at least, a product of an impasse that has arisen out of negotiations. Therefore, it makes sense to provide for the Noranda Metals Industries type of latitude as section 34e [section 40] vote is approached. In both instances, the parties have an equal opportunity for reply and possess the common object of entering into a collective agreement. The "laboratory conditions" approach which tends to be the standard applied in representation votes has been geared to a very different labour relations context where the parties are often drama­tically opposed and unrepresented employees may be easily influenced. However, section 34e [section 40] does involve a vote and provides an employer with a legitimate opportunity for direct access to employees. This vote will be rendered meaningless and the opportunity abused if an employer is permitted to unlawfully coerce or intimidate employees into accepting last offers and abandoning their right to concerted activity. In this case we are confronted with an alleged threat to plant closure at a time when the parties were at an impasse and the employees had been on strike for almost one month. Several issues, therefore, present them­selves in light of the above analysis and in light of the facts before us. First of all, did the employees receive the employer's message? This is a factual issue and arises in this case because the impugned statement was made at a press conference immediately prior to the last offer vote. Newspapers in different cities at different times reported different interpretations of the press conference. Secondly, if they in fact received information emanating from the press conference, was its content such that the average employees would have reasonably construed it as a threat by the President of CCL to close the plant regardless of economic conditions'? If there was the clear implication in the statement that the employer would take action solely on its own initiative for reasons unrelated to economic necessities, the statement would not be a reasonable prediction based on available facts but a threat of retaliation based on misrepresentation and coercion. Where an employer's conduct breaches this standard, the reliability of the vote will be in doubt and he will be taken to have forfeited the limited opportunity provided under the section. Moreover, this loss of opportunity should provide a strong disincentive to improper communications independent of the complaint processes of the Act.

24. Applying these principles together with section 61 of the Act, the Board acknow­ledged that the disputed statement was "close to the line", but found it was not improper; the unions were therefore required to submit to the results of the vote; and the unions had failed to bargain in good faith and make every reasonable effort to enter into a collective agreement by refusing to execute the collective agreement presented by CCL on October 17, 1980. It is against this background we must now determine whether or not damages are an appropriate remedy as requested by CCL. The Board has a discretion not to award compensation under section 89, but it is a discretion which should be exercised judicially and only in accord with compelling labour relations considerations. The trade unions have urged the Board to refuse compensatory relief to CCL because (a) the legal effect of section 40 was unknown at the time they acted; (b) they believed in good faith that their constitution prevailed; and (c) they believed the last minute statement of CCL's President to be improper.

25. Clearly arguments (a) and (b) are of no force. Neither are proper defenses. All new provisions of a statute must have a first case and parties must comply with such laws. Laws, of course, must be written as clearly as possible but much must often be left unsaid. General language is employed because every factual situation cannot be taken into account. Parties regulated by such statutes must assume the risk that their conduct may violate the provisions in question and, when in doubt, caution is recommended. Effective administration of these laws would be severely impeded if a complaint could be successfully defended by the argument that the violation was unclear. This position is unaffected by the International's reliance on its constitution. Unless provided for, parties cannot contract out of a statute and the risk of being wrong in this regard must reside with the respondents for the same reasons as it does in the "first case" situation. However, argument (c), the alleged effect of the last minute statement of CCL's President, is more difficult to deal with.

26. Clearly, if employers are to be subject to compensatory orders for breach of the bargaining duty so should trade unions. But not all violations, be they by employers or trade unions, are properly remedied by monetary compensation. For example, failures to rationally discuss items as in CIL, [1976] OLRB Rep. May 199 or to provide vital information as in De Vilbis, supra, are best remedied by a simple direction. Even if there exists the possibility of some monetary loss occasioned by the resulting delay, this Board should, in the normal course of events, be reluctant to evaluate the loss in monetary terms. Serious consideration of such claims may deflect the Board and the parties from the central purpose of the complaint and add unwarranted time in the processing of such matters. The difficult questions of causation associated with such potential loss particularly raise this spectre and with nowhere near the same justification for a compensatory approach as exists in the blatantly bad faith situation such as in Radio Shack and Fotomat, supra. Judicial approaches in respect of damage assess­ments draw their purpose from the substantive law of torts and contracts and therefore should not be imported wholesale into labour relations. This Board must be sensitive to the purpose of its own statute and the particular provisions being construed in fashioning remedies. More will be said about this later.

27. What has to be remembered in this case is that it centers on a vote and involves an issue which commonly arises out of a balloting process, i.e. whether or not certain communi­cations unfairly or unlawfully affected the results of that vote. Section 40 provides no specific indication of how such controversies are to be resolved. Indeed, section 40 provides no explicit guidance as to how the unequivocal results of such balloting are to be enforced. This latter silence was the focus of the Board's earlier decision wherein it declined to hold that a section 40 vote had no binding effect or that the statute contained no enforcement mechanism. In order to make sense of and give practical effect to the new provision, the Board decided sections 15 and 89 were convenient vehicles for the enforcement of section 40 and consistent with legislative intent. This decision was recently upheld by the Supreme Court of Ontario in a unanimous decision. This initial decision having been made, would it be equally sensible and practical to assess damages against a party who has, in good faith and on reasonable grounds, unsuccessfully contested the results of a section 40 vote on one of the foreseeable bases set out in the Board's earlier decision? We think not. When considering the silence of section 40 on the question of enforcement, we though it inconceivable that the Legislature wished the interven­tion of balloting without intending that a vote in favour of accepting the employer's last offer be binding. We think it equally inconceivable that the Legislature would have intended substantial compensatory awards to be issued in response to disputes over the usual kind of issues that can arise from balloting procedures. For example, the final results of balloting could hang on the Board's disposition of an employer's objection to the entitlement of certain persons to vote. In the context of strikes, allegations that employees working elsewhere during the strike have severed their employment are not unusual. See Brooker Trade Bindery Ltd., [1973] OLRB Rep. Dec. 612. If the employer was successful before the Board and the Board therefore concluded that the trade union was obligated to submit to the results of the vote, would the added remedy of substantial compensation capture the Legislature's intention in enacting section 40? To ask the question is to answer it in our view. The purpose of section 40 is to end a collective bargaining impasse where this is in accord with the wishes of the majority of the bargaining unit. Where a party in good faith and on reasonable grounds challenges the result of a vote as an accurate representation of the majority's wishes, we do not see how the purpose of section 40 would be served by causing compensation to run before those challenges have been dealt with and the majority's wishes authoritatively identified. Indeed, awarding compensation in the face of proper objections would more likely inflame relations between the parties and create unwarranted and distracting employee anxiety over last offer balloting. Employees should know that such balloting will be carried out fairly and correctly before any issue of compensatory relief for non-compliance arises and this employee state of mind is also in the interest of employers who elect to make use of the section.

28. We point out that the two sections, sections 15 and 40, are functionally inter-related and the precise effect of section 40 may have to await the Board's intervention where challenges arise out of the balloting. This is to be contrasted with the typical section 15 situation where the respondent trade union or employer must only contend with its obligations under section IS and harmonize its bargaining objectives and tactics with the requirements of that sole provision. The position of a trade union objecting in good faith and reasonably to the validity of a section 40 vote is more closely like that of an employer who contests the validity of a representation vote conducted under section 7 of the statute. Fortunately, in representation matters there is no immediate obligation to recognize the trade union following the vote. Instead, the Board first entertains the employer's objections and then, if dismissed, a certificate issues which then triggers the bargaining duty. However, we see no reason why a similar approach cannot be fashioned in respect of good faith and reasonable objections to section 40 votes by exercising our discretion under section 89 not to award compensation until after the Board's decision dealing with the objections. We also see no reason why the Board could not expedite such hearings in order to facilitate industrial peace and minimize any potential economic loss. Last offer vote balloting may raise very significant challenges to voting entitlement; the conduct of the parties; or pertain to the very degree of voter support necessary to trigger a binding result. In discussing these possible complexities, the Board stated in its earlier decision "that section 14 (now section 15) must be applied in light of accepted principles of collective bargaining". We know of no other section of the Act that is so closely intertwined with section 15 while at the same time potentially requiring the Board's intervention to dispose of very proper objections that may arise out of the actual administra­tion of the section. Clearly, the situation in this case is distinguishable from those found in Grey-Owen Sound Health Unit, De Vilbis and Fotomat, and relied on by CCL, supra. We also point out that the employees were engaged in a lawful strike with all the "emotional baggage" that conflict of this kind entails. It seems to this Board unrealistic to require a trade union, having raised a proper objection to the vote's result, to end an otherwise lawful strike for the period of time required to process the objection before the Board. It is our view that the Legislature intended this intervention into collective bargaining to be accomplished with as little disruption as possible and this is the spirit of the Board's approach herein. It is, therefore, the Board's view that while a refusal to accept the results of a section 40 vote immediately triggers the bargaining duty, refusals made in good faith and on reasonable grounds will not be met by the automatic imposition of monetary orders under section 89 running from the date of the vote if and when the underlying objections are dismissed. Following the dismissal and the Board's decision, the full remedial force of section 89 will respond to continued refusals. We wish to stress that objections must have a reasonable basis to them to activate the Board's discretion. Only by so requiring can we balance the competing interests of employers and trade unions in these matters.

29. The Board must therefore ask itself whether the refusal of the trade unions to sign a collective agreement on October 17, 1980 was based, in whole or in part, on their objection to the last minute statement of CCL's President and, if so, whether that objection was reasonable and made in good faith.

30. In its earlier decision, the Board noted that neither party objected to the conduct of the vote and the trade union did not take exception to the company's earlier conduct before the vote was counted although, at paragraph 3, we noted that "soon after the counting of the ballots.... [Mr. King] expressed concern about the earlier press releases of the company". We would also point out that objections to CCL's last minute statement formed a central part of the complaint filed by the trade unions on or about October 21, 1980. In the circumstances, we are prepared to accept that one of the reasons for the trade unions' refusal to be bound by the results of the vote related to the last minute statement of CCL's President. We do not think it realistic to require all objections to be made before the actual balloting or counting of the ballots. Objections must be made in a timely fashion, but there are any number of acceptable reasons why an objection might not be raised until after the balloting has been completed. In the facts at hand, the disputed statement of CCL was not made until a few hours before the employees cast their votes. It would obviously take some time to evaluate the seriousness of such a statement and what the trade unions' position ought to be. The timing of the trade unions' objection in the facts before us does not undercut the assertion that this was one of the reasons why they refused to sign the collective agreement. Accordingly, there will be no compensation awarded CCL for the period up to November 18, 1980, the date of release of the Board's decision to the parties. However, CCL claims compensation for expenses sustained after this date. Damage to the rented vehicles occurred after this date and some portion of the payment relating to truck rental and security services also relates to a period of time after November 18, 1980. We therefore turn to CCL's entitlement to compensation for losses sustained after the issuance of the initial decision in this matter.

31. CCL's claim brings into issue the appropriate principles to be applied by this board in assessing claims for economic loss. A handful of recent cases have indicated the Board's willingness to award compensation outside the context of a backpay order where warranted but few of these cases have required an analysis of the appropriate labour law approach to damage assessment. The parties before the Board in this case joined issue on a number of matters in this area and, thus, a general review of the evolving principles is appropriate.

32. Earlier in this opinion we said that compensation awarded under section 89 and the other remedial provisions should draw its purpose from the Labour Relations Act and the particular substantive provisions in issue. Principles of damage assessment developed in contract and tort law may provide useful analogies but, in the final analysis, labour law principles must prevail. Legal concepts such as "reasonable foreseeability", "causation" or "remoteness" all tend to reflect the aims of either contract law or tort law. When studied carefully, they amount to formulae by which loss and risk are allocated in light of what contract and tort law are trying to accomplish. In essence, they amount to policy determina­tions in particular cases. Professor Swinton, in her very learned article, has observed:

Fuller and Perdue, in their classic article "The Reliance Interest in Contract Damages", noted that it is just as important to decide where to stop in the enforcement of promises as it is to decide where to begin in that process. Should the defaulting promisor be required to compensate the promisee for all the losses caused by his failure to perform (leaving aside for the moment any debate over the flexibility of the concept of causation)? Or should he be protected to some degree from liability which could be a crushing burden out of all proportion to the benefit which he expected to receive under the contract? Should the taxi driver who promises to deliver the business tycoon to his plane on time be liable for the loss of a lucrative deal because he gets tied up in a traffic jam? Should a manufacturer supplying substandard cloth to a company making shirts be liable for the loss of future orders from customers dissatisfied with the product?

Courts have had to make difficult decisions in assessing where to stop in the enforcement of contracts. They may purport to adhere to the general principle that the innocent party should be placed in the position in which he would have been had the contract been performed, yet invariably they invoke doctrines which place some limit on the defaulting party's liability: certainty, causation, mitigation, or foreseeability. The focus of this study is the last of these four doctrines, that of foreseeability.

And dealing specifically with the doctrine of foreseeability, she writes:

Even if the foreseeability rule is a justifiable one, its application in the courts has not always been satisfactory. This flows largely from the judicial failure to acknowledge that the "rule" is really little more than a statement of general principle. The decision to find certain types of losses foreseeable and not others is the result of a conscious policy decision to protect certain interests. Such decisions require elaboration and exploration, yet too frequently the application of the foreseeability rule is treated as an exercise in fact determination, and any efforts to elaborate reasons have focussed on an exegesis of the words in Hadley v. Baxendale. Judges and commentators have made valiant attempts to articulate the precise degree of foreseeability required in order that damages for breach of contract be compensable, yet the products of their efforts are frustrating in their abstraction. Canadian courts on the whole have tended to adopt the developments and elaborations in the English courts. Thus, resort has been made to the range of cases from Victoria Laundry to H. Parsons (Livestock) Ltd. v. Uttlei' Ingham Ltd., which have struggled with the meaning of damages expected "reasonably" to arise naturally or damages "reasonably" within the contemplation of the parties expected to arise as the "probable" result of the breach. Does this mean that a reasonable man must foresee that a loss was "likely to result," "liable to result," a "serious possibility," a "real danger" or "on the cards"? Do any of these tests really help in allocating loss? Lord Asquith's efforts to explain Hadle v. Baxendale in the Victoria Laundry case caused some consternation in the House of Lords in the Heron II case, particularly with regard to the phrase "on the cards." As a result, the various Law Lords tried to elaborate their versions of foreseeability, with Lord Reid strenuously trying to avoid imposition of liability in contract law as wide as that in tort law and each of the judgements making an effort to describe the proper degree of foreseeability. Similarly, in the H. Parsons (Livestock) case, Lord Scarman tried to describe what would be a "serious possibility" at the time of contracting.

The striking characteristic of all of these judicial efforts to deal with the foreseeability test is their lack of practical assistance in determining whether any particular loss was or was not foreseeable "on the facts of this case." One has only to refer to the extensive discussion of the rule of foreseeability in damages in Lord Reid's judgement in the Heron II case followed by an extremely brief and conclusory application to the facts of the case for a striking example. A strictly legal or mechanistic analysis of the rule is inadequate to aid in the determination of the proper scope of liability in a given case. Judges are not undertaking a factual determina­tion on the basis of the rule (or rules) described above. They are making important determinations as to who should bear a loss which has resulted from the breach of a contract. In doing so, they may be adapting the concept of foreseeability at times to meet changing circumstances.

See Katherin Swinton, Foreseeability: Where Should The Award of

Contract Damages Cease?, found in Reiter and Swan, Studies in

Contract Law (1980).

Tort law's grappling over the years with economic loss is a classic illustration of how loss allocation principles are, in effect, policy determinations grounded in the purposes of a particular field of law. See Linden, Canadian Tort Law (1977), p. 367. Labour law can be no different. Indeed, damage cases have already begun to emphasize distinctive labour relations policy considerations.

33. In Grey-Owen Sound Health Unit, supra, the employer violated section 14 [section 15] by not complying with its contractual promise to the trade union to resort only to interest arbitration at contract renewal time. Economic loss sought to be recovered by the union and said to have arisen out of the statutory breach included compensation in respect of wages for employees who had been wrongly locked out and compensation to the union for having to engage counsel to make two applications to the Board and in respect of funds expended "in order to focus attention on the employer's conduct, mobilize public support for the trade union and make it clear that the trade union was not responsible for the work stoppage". With respect to the latter expense, the union tendered bills in respect of rental payments for a "lock­out headquarters", radio and newspaper advertising, long distance telephone calls, and certain printed material. While awarding compensation to the employees, the Board disallowed all compensation to the union. It did so on labour relations policy grounds even though the expenses were reasonable in quantum and could be said to have been "caused" by the statutory violation. The legal expenses were disallowed in accord with the Radio Shack holding refusing to award legal fees as compensation under section 89 to trade unions who win their cases because the Board lacks the power to award such compensation to employers when they win their cases by having trade union complaints dismissed. This inequality in result could impair the integrity of Board orders. Thus, while principles of causation, remoteness or reasonable foreseeability would support recovery, labour relations policy considerations have dictated otherwise. With respect to monies expended by the union to maintain "a favourable public image", the Board held that they did not "arise so necessarily and directly from the employer's breach that in order to effectuate the policies of the Act" it was necessary to grant compensation. The Board went on to say such expenses were simply "too remote" and that other effective remedies (compensation to the employees and the Board's direction under section 15) had been given. While not expressly identified, a number of labour law principles pertinent to damage assessment arise from these conclusions. In simple labour relations terms, the Board did not see the expenses so directly arising from the statutory violation as to merit compensation and despite the fact that contract and tort mitigation principles could easily have justified recovery. Indeed, the following passage of Lord Macmillan in Banco de Portugal v. Waterlow, [1932] A.C. 452, 506 relied upon by CCL nicely captures the kind of reasoning that would have sanctioned recovery:

"Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not to be weighed in nine scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticize the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken."

34. However, this Board regulates ongoing collective bargaining relationships and must keep in mind the requirements of industrial peace. "Deep pocketed" mitigation rules have the potential for prolonging such conflict and related adversary attitudes and ignore the speedy "injunctive like" relief available from labour boards. A labour board should be concerned more with the core purpose of a complaint and the remedies necessary to achieve that purpose. The employer in Grey-Owen Sound Health Unit, supra, had been directed to cease and desist in the lock-out and the employees had been compensated. It could not be said that the effectuation of important statutory rights depended on the union being compensated for its legal costs and public relations expenses. The requested relief was therefore characterized as too remote and denied.

35. The Journal Publishing Company of Ottawa Limited, supra, and its relationship with Radio Shack, supra, and Fotomat, supra, is equally instructive. The Journal was another bargaining case where the union had brought the complaint in response to a prolonged lock­out. The union sought compensation for the employees and itself. While the Board found "instances of bad faith bargaining", it refused to let minor or somewhat technical breaches of the statute trigger a landslide of monetary compensation. More specifically, the Board found that the breaches did not demonstrate a "plot to destroy the unions', but did reveal "a bitter and protracted dispute that [could] only be resolved by sensible and realistic attitudes on both sides of the bargaining table". The Board also refused to award damages to the employees and the union because (a) it would be required "to determine terms and conditions of employment" for a period in which no contract existed; (b) it would compensate for damages resulting from the legal use of economic sanctions; and (c) "neither side [could] be given a clean bill of health, both sides on different occasions having failed to meet the standard of good faith bargaining". Radio Shack and Fotomat clearly qualify reason (a). In Radio Shack, the Board directly examined the implications of granting compensation in bargaining cases. Having regard to its past experience, it concluded that previous refusals in this respect had taken "the freedom of contract" rationale too far. The Board is now of the view that the absence of power to impose a collective agreement leaves unaffected the Board's power to direct the execution of a collective agreement embodying terms that have been agreed upon, see Municipality of Casimir, Jennings and Appleby, [1978] OLRB Rep. June 507; to direct the removal of items from a bargaining position that constitute a breach of section 15 or to resubmit an offer which was withdrawn in contravention of the statute, see Fotomat Canada Ltd., [1981] OLRB Rep. Feb. 145; and to award compensation to employees who have likely experienced monetary loss due to flagrant breaches of the statute, see Radio Shack, supra. But this latter power to award compensation to employees for breach of the bargaining duty must be analyzed carefully and approached with caution. So must requests for compensation by trade unions and employers. The requirements of labour law policy must be kept clearly in mind.

36. Radio Shack reviewed a number of ways in which employee bargaining losses might be assessed. One focussed on the difference between (i) what employees received during the period of breach, and (ii) what they received multiplied by the percentage change in wages and other benefits reported, for example, in the monthly publication, Collective Bargaining Settle­ments and Negotiations in Ontario Ministry of Labour and Labour Canada for the month in which the delay began. Other equally authoritative sources of data might be resorted to. Another approach emphasized contracts between the complainant union and the particular employer or other employers and possibly in the same or a relevant geographic area. Where the parties have entered into a collective agreement after the violation, the level of wages in that contract is also available to evaluate the level of previous loss. This latter approach may still leave the employer with some windfall gain to the extent the wage levels in the agreement reflect the impact of unlawful delay. But damage assessment cannot be an exact calculus and the delay and complexity associated with a more precise determination may outweight the benefits of a more accurate approach.

37. We do, however, wish to point out that the Board has not turned its back on the concern expressed at paragraph 61 of the Journal case that "[t]he mere existence of an element of bad faith bargaining cannot convert an otherwise legal strike or lockout into an illegal act, that would give rise to extensive liability in damages." The Board went on in that case to say:

The wrong lies with the manner in which negotiations are conducted, not with the use of the economic sanction. To hold otherwise would introduce into the strike and lock-out an element of uncertainty that would disrupt the process of labour relations as it now exists in Ontario. In this case, although it is clear that the lock-out was not connected initially with any failure to bargain in good faith on the part of the employer, it would be argued that the employer's later failure to bargain in good faith subsequently tainted the lock-out. We do not accept this argument. The lock-out continued to be legal and damages, if any, must relate to extra negotiating costs that might have been caused by the employer's conduct and not to the economic losses resulting from the lock-out itself.

When the strike or lock-out constitutes the very act of bad faith or breach of section 15 complained of, as it did in Grey-Owen Sound Health Unit, supra, the concern expressed above has no application. However, where employees go on strike in the face of bad faith bargaining, for example, or after going on strike the employer violates the duty, the Radio Shack approach to employee loss comes in direct confrontation with the Journal's policy concern of introducing an element of uncertainty that would disrupt labour relations... ." Clearly, the Board decided against accepting this concern in its entirety because compensation was awarded in Radio Shack. But in fashioning such economic relief, underlying policy considerations of the Journal decision must be kept in mind. Not every technical breach should be remedied by monetary compensation; a point made above in relation to the De Vilbis and CIL cases. Such breaches cannot realistically be identified as the primary cause of any economic loss. Equally important, employees are unlikely to be compensated for the wages they would have received had they not been on strike. While they should be awarded the difference between what they would have received had they continued to work and those wages multiplied by the percentage increase that would have resulted from good faith bargaining as outlined above, the award of complete wage loss arising during a strike runs the risk of prolonging economic conflict and encouraging unfounded bad faith bargaining complaints. It also ignores the fact that the employees voluntarily remained away from work while acknowledging the employer was bargaining in bad faith. In this sense, they have contributed to their own loss. In other words, the Board is attracted to the concept of awarding only the percentage increase that would have flowed from good faith bargaining from the point in time the bad faith bargaining commenced, taking into account a reasonable period of time that would have been required to negotiate a good faith wage increase. With respect to trade union claims for economic losses, we point to the refusal of the Board in Fotomat to award the trade union any compensation. That decision demonstrates the Board's willingness to look realistically at the respective bargaining power of the parties and any errors in bargaining judgment in assessing this type of claim. Unions that run headlong into first contract strikes while alleging bad faith bargaining should not take for granted that this Board will overlook what would naturally have resulted from economic confrontation had there been no bad faith bargaining.

38. Finally, at this level of general principle, the Board has some reservations that sections 89, 93 or 135 can make a proper contribution to industrial peace by the Board awarding economic compensation against individual employees jointly and severally for concerted activity clearly lacking union involvement. The United States Supreme Court in Complete Auto Transit v. Reis (1981), 107 LRRM 2145 recently came to a somewhat similar conclusion after an exhaustive review of legislative history. It is not the custom in Canada to place great reliance on the kind of material that permeates the Reis majority judgement but there is much in that judgment relevant to the Canadian context. At a more pragmatic level it can be argued that the Labour Relations Act and its practice and procedure is designed to provide expeditious relief in the form of a cease and desist direction in the case of individual employees engaged in "wildcat" actions. It is doubtful that substantial compensation orders against individual employees would contribute to industrial peace if the spontaneity of group action in a workplace setting has a psychological measure of inevitability to it. Moreover, other remedies available to employers under collective agreements, the Criminal Code and at common law constitute important supplementary devices. This perspective, of course, should not deter the Board from considering compensatory relief against the trade union where job action is so widespread as to impute trade union involvement. It might also be added that the Board's "reservations" might be overcome if other remedies prove to be inadequate.

39. In the case before us, the employer seeks $3,093.19 for damage sustained to certain rented trucks after the release of the Board's decision; a portion, approximately $2,000.00, of the truck rental payments also relates to the period after the release of the decision. Security service costs directly related to the period November 19, 1980 to November 23, 1980 total $64,977.00. Beginning first with claims for the damage inflicted on the rented trucks, we are satisfied, on the evidence before us, that the trucks were damaged by bargaining unit employees represented by the trade union. In the ordinary case such facts would not justify an order against the trade union. Where property damage is inflicted by individuals acting on their own initiative and without the trade union's approval no claim can be made against the trade union. Although it could be argued that had there been no picket line there would have been no damage, it is our view that the intervening act of the individual is the direct cause of the damage not the trade union in the example given. The loss as it relates to trade union conduct is too remote. Moreover, in such circumstances other remedies are available to the employer by civil action; under the collective agreement; and criminal charges can be preferred. However, in the facts before us, damage was inflicted on the vehicles only after the release of the Board's decision; counsel to the trade unions had notice of the Board's decision on November 18, 1980; and a key local trade union official was identified as having participated in the picket line misconduct. Brunsdon was not called as a witness to explain his actions on November 19, 1980. We are not prepared to accept King's evidence that he first learned of the decision on November 20, 1980. Rather, having regard to his reaction to Andrew Robb's offer of information on the afternoon of November 19 and to the reaction of the picket line on that day, we are prepared to infer knowledge as early as the evening of November 18 or the morning of November 19. Therefore, on the facts before us, we are prepared to find that the trade union sanctioned and condoned the misconduct on November 19, 1980. In coming to this conclusion, we have had particular regard to the timing of the misconduct; the actions of Mr. Brunsdon; and the inactivity of other trade union officials. It is therefore our finding that the two trade unions are jointly and severally liable for the documented damage to the rented trucks subject to any monies received from individual employees as a result of other legal proceedings. We wish to make clear, in awarding this loss, that the decision turns very much on the unions' obligations flowing from section 40 and section 15. It is not at all clear that section 15 by itself can be violated by such misconduct.

40. Turning to the rental expense for the trucks, we do not accept the argument that because the picket line was in connection with a lawful strike economic loss caused by it is not properly compensable. We do not believe Canteen of Canada Ltd., supra, goes that far. The continuation of the picket lines after the release of the Board's decision was the act of the two trade unions and directly inconsistent with their obligations under section 15 and section 40. It is also reasonable to conclude that they intended to frustrate the removal of product from the plant by having other unionized employees honour the picket line. In labour relations terms, we find that the renting of the trucks was a reasonable act of CCL to mitigate the consequences of the picket line and that the portion of the rental expenses incurred after November 18, 1980 should be shouldered by the two trade unions jointly and severally, and we so direct. We set the amount at $2,000.00.

41. This brings us to the security service expenses. Securicor personnel testified in some detail about the kind of violence that can arise out of industrial conflict. Sadly, industrial sabotage has been experienced by employers in some labour disputes. While such violence is exceptional and isolated, employers are clearly entitled to take steps to guard against and prevent the possibility of such losses. However, if a trade union is not to be made economically accountable for the actual losses inflicted by individuals where it has not sanctioned or encouraged such actions, it cannot be made accountable for the costs shouldered by an employer in seeking to prevent such individual acts. There is no evidence before us that the trade unions were planning to sabotage CCL's plant and equipment or that CCL had reasonable cause to believe that trade unions might engage in such improper conduct. We, therefore, are not satisfied that the level of expenditure for security services in this case can reasonably be said to have been caused by the trade unions' violation of the Act after November 18, 1980. While we have found that certain improper acts committed on the picket line are traceable to the trade unions, the level of security service provided by Securicor was not reasonably related to those acts involving, as they did, approximately $3,000.00. We also do not accept that CCL should simply have assumed the assistance from the Ontario Provincial Police would be totally inadequate to deal with picket line problems. The evidence indicates that the O.P.P. came when called and that on or about November 19, 1980 one police officer was stationed in the vicinity of the picket line. However, we agree that CCL might reasonably have hired additional employees to drive its trucks through the picket line after November 18, 1980 and to help it cope with and defend against the obstructive conduct by persons on that picket line. There are ample labour relations reasons why an employer might want to resort to outside security services in circumstances similar to those that existed on November 19, 1980. By continuing the picket line and by at least one of their officials engaging in picket line misconduct, it can reasonably be said that the trade union caused the expenditure for additional security services. In the circumstances, we have decided to set $8,000.00 as the additional operating expense reasonably incurred after November 18, 1980 in this regard or at about one third the level of daily charges actually shouldered by CCL on November 19th and 20th, accepting that the delay after that was reasonably related to the return to work.

42. We, therefore, direct the trade unions, jointly and severally, to compensate the complainant CCL in the total amount of $13,093.19. All other claims for compensation are dismissed.

DECISION OF BOARD MEMBER, B. L. ARMSTRONG;

1. I concur with the Chairman's decision except for that item of damages awarded against the respondent trade union with respect to the damage caused to the rented trucks.

2. The decision at paragraph 39 states that in the ordinary case the union would not be held responsible for damage caused by individuals acting in their own initiative and without the trade union's approval. However, the decision then goes on to find that in the present case the union sanctioned and condoned the misconduct.

3. To reach this conclusion, the decision seems to rely solely on the fact that a union official was identified as one of the persons who participated in the picket line misconduct. Apart from this evidence, the Board heard no testimony linking the trade union to the violence. There was no evidence that it encouraged, approved or condoned the violence at the picket line. The atmosphere at a picket line is unavoidably one of tension. A trade union can only attempt to keep things under control. If individuals, whether union officials or union members, go on a frolic of their own, the remedy should be against the individuals rather than against the union.

4. In the present case, the only evidence the Board heard was that Mr. Brunsdon participated in the misconduct. The Board has no basis to find the union culpable in any way. I would have dismissed the claim against the union as it related to the damage caused to the trucks.

DECISION OF BOARD MEMBER, J. D. BELL;

1. I agree with the Chairman's decision with one exception, the amount awarded for security costs. The company should be made whole for the costs of security incurred for the period of time after the Board's decision was issued, i.e. November 19 to November 23, 1980. The amount is $64,977.00, instead of the $8,000.00 awarded in paragraph 41 of the decision.

2. I would therefore direct the trade unions to compensate CCL for a total amount of $70,016.19.