[1981] OLRB Rep. April 436

1483-80-M Canadian Union of Public Employees Local 1007, Applicant, v. Corporation of the Township of West Lincoln, Respondent

BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members O. Hodges and F. W. Murray.

DECISION OF THE BOARD; April 21, 1981

1. This is an application under section 95(2) of The Labour Relations Act. A question has arisen between the parties concerning the "employee status" of Gary Ricker, Erhard Kern and Lorne Nelson who occupy the positions, respectively, of: "supervisor" in the water and sewer department, arena manager, and "building inspector/zoning by-law enforcement officer and administrator". The respondent employer contends that these employees exercise managerial functions and accordingly, cannot be considered "employees", under The Labour Relations Ad. The parties seek the opinion of the Board with respect to this matters. The relevant provision of The Labour Relations Act is as follows:

1(3) Subject to section 80, for the purposes of this Act, no person shall be deemed to be an employee,

(b) who, in the opinion of the Board, exercises managerial functions or is employed in a confidential capacity in matters relating to labour relations.

2. Section l(3)(b) excludes from collective bargaining persons who in the opinion of the Board exercise managerial functions. The purpose of the section is to ensure that persons who are within a bargaining unit do not find themselves faced with a conflict of interest as between their responsibilities and obligations as managerial personnel, and their responsibilities as trade union members or members of the bargaining unit. Collective bargaining, by its very nature, requires an arm's length relationship between the "two sides" whose interests and objectives are often divergent. Section l(3)(b) ensures that neither the trade union, nor the employer and its management team, need be concerned that its members will have "divided loyalties". This purpose has been succinctly stated by the British Columbia Labour Relations Board in Corporation of the District of Burnaby [1974] 1 CLRBR at page 3:

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

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

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

3. The Labour Relations Act does not contain a definition of the term "managerial functions", nor are there any specific criteria to guide the Board in reaching its opinion. The task of developing such criteria has fallen to the Board itself, and in recognition of the fact that the exercise of managerial functions can assume different forms in different work settings, the Board has, over the years, evolved various general approaches to assist it in its inquiry. In the case of so called "first line" managerial employees, the important question is whether the individual can significantly affect the economic lives of his fellow employees so that he is inevitably put in a position that creates a conflict of interest with them. Thus, the right to hire, fire, promote, demote, grant wage increases, or discipline employees are all manifestations of managerial authority, and the exercise of such authority is incompatible with participation in trade union activities as an ordinary member of the bargaining unit. In the case of more senior managerial personnel whose decision making may have a less direct or immediate impact on bargaining unit employees, the Board has focussed on the degree of independent decision making authority over important aspects of the employer's business. It is evident that persons making significant executive or business decisions should be considered a part of the "management team" even though they do not exercise the kind of direct authority over employees which is characteristic of a first line foreman.

4. The line between "employee" and "management" is often shaded, and while it is helpful to consider the principles articulated by the Board in previous cases, ultimately the determination must turn on the facts of the particular case. There is no litmus test which is universally applicable and dictates the result in every situation, and in assessing each case, the Board must have due regard to the nature of the industry, the nature of the particular business, and the individual employer's organizational scheme. There must, of course, be a rational relationship between the number of superiors and subordinates, consultation or "input" should not be confused with decision making, and neither technical expertise nor the importance of an employee's function can be automatically equated with managerial status. On the other hand, there may be individuals whose formal authority appears to be limited, but nevertheless make recommendations affecting the economic position of their fellow employees which are so frequently forthcoming, and consistently followed by superiors, that it can be said that, in fact, the effective decision is made by the challenged individual. It is this kind of recommendation which the Board has characterized as an "effective recommendation" and the inclusion of these persons in the bargaining unit would also raise the kind of conflict of interest which section l(3)(b) was designed to avoid.

5. In each instance, the Board seeks to determine the nature and extent of the individual's authority as well as the extent to which that authority is actually exercised. If managerial functions are not actually exercised, neither a "managerial" job title nor a purported "managerial" job description are likely to be given much weight. Even the performance of certain co-ordinating functions may not be determinative. Where numbers of people work at a common enterprise (especially in the white collar - service sector) many persons may be engaged in co-ordinating activities which are largely routine, carried out within a pre-established framework of rules and policies, and subject to actual managerial authority exercised from above. In addition, persons who perform technical functions or exercise craft skills which have been acquired through years of training and experience, will frequently have a considerable influence over unskilled employees or less experienced "journeymen' or technicians. These experienced personnel will commonly supervise the work of those who ~re less experienced, and it is part of their normal job functions to train and direct such persons, and to instill good work habits. Often, it is only the most senior or skilled employees who will fully understand the technical requirements of the job and the tools and material required; and accordingly, it is they who will allocate work between themselves and the other employees in order to accomplish the task in a safe and efficient manner. In such circumstances, it is inevitable that they will have a special place on the "team" and will have a role to play in co-ordinating and directing the work of other employees; but this does not mean that they exercise managerial functions in the sense contemplated by section l(3)(b) (and must therefore be excluded from the ambit of collective bargaining) - especially when most of their time is spent performing functions similar to those of other individuals in the bargaining unit and there is little or no evidence of the kind of conflict which section l(3)(b) is designed to avoid. The situation of persons who exercise some degree of control over others, but who also perform bargaining unit work was discussed by the Board in Falconbridge Nickel Mines Limited [1966] OLRB Rep. Sept. 379, as follows:

"Most of the persons in dispute have more than one function and generally speaking it is the weight or emphasis attached to the different functions which must determine on which side of the managerial line the persons fall. Senior or skilled employees often have more responsibilities than other rank and file employees and they exercise certain control and direction over the other employees because of their greater experience and skill. It is the Board's difficult task to determine whether the additional responsibilities are managerial functions within the meaning of section 1(3)(b) of the Act or are merely incidental to the prime purpose for which the employee is engaged (i.e., to perform work properly performed by persons within the bargaining unit). If the majority of a person's time is occupied by work similar to that performed by employees within the bargaining unit and such person has no effective control or authority over the employees in the bargaining unit but is merely a conduit carrying orders or instructions from management to the employees, the person cannot be said to exercise managerial functions within the meaning of section l(3)(b) of the Act. On the other hand, if a person is primarily engaged in supervision and direction of other employees and has effective control over their employment relationship, even though the person occasionally performs work similar to the rank and file employees when an emergency arises or to relieve an employee during occasional periods of absence or even to perform a particularly important job requiring special skill and experience, such occasional work in no way derogates from his prime function as a person employed in a managerial capacity. When assessing a person's duties and responsibilities the Board does not look at any one function in isolation but views all functions in their entirety. As stated in the McDougall Case above referred to, titles alone are not much assistance in determining what a person's functions really are.

While the cases cited above would seem to indicate that while a person may have minor supervisory function or very limited confidential function in matter relating to labour relations, if such functions are merely incidental to their main function and are of such a nature that they cannot be said to materially effect the employment relationship of the respondent's employees, such persons should not be excluded from collective bargaining by reasons of section l(3)(b) of the Act. Unless a person who regularly performs work similar to persons in a bargaining unit has independent discretionary powers rather than merely incidental reporting functions which are subject to the discretion and authority of higher persons in management, there is no reason to exclude such a person from collective bargaining."

6. The present case does not raise any novel question of law, nor are the facts especially complicated. The task facing the Board is simply to weigh the factors which point in one direction against those which point in the other, and assess the evidence in light of the statutory purpose which section l(3)(b) was designed to accomplish. It will be convenient to deal with each of the employees separately.

7. Gary Ricker, the "water supervisor", has held his position since 1976 and reports to Charlie Street, the water and sewer department "superintendent". There are three individuals working in the department: Ricker, Street, and a sewer operator. If the applicant is correct in its contention, in this particular department there are more "managers" than there are "employees".

8. The functions of the department, as its name might suggest, include the operation of a water and sewage plant. When asked to describe his daily duties, Ricker indicated that these included pumping water, maintenance, repair of breaks in water mains, installation of mains and meters, and meter reading. All, three employees are engaged in these activities. Ricker estimated that about eighty per cent of his duties were of a "physical nature" and twenty per cent were "clerical". There is little to distinguish his principal activity from those of the sewer plant operator, and it is clear that such supervisory responsibilities as he may exercise are ancillary to us principal responsibilities. Indeed, his relationship with the operator does not differ significantly from that of most senior employees, who commonly have some limited role co-ordinating and directing the work of less experienced personnel (see paragraph 5 above).

9. Much of the evidence from which one might infer managerial authority was given in response to entirely hypothetical questions. Ricker testified he could impose discipline if the superintendent was not available, although no one had expressly so advised him and he merely assumed he had this authority because he was the senior man. He has never in fact disciplined anyone, and was unsure whether he could give a written warning without consultation with Street. He has never recommended a wage increase. He has never conducted an evaluation of other employees, and the decision to fill a vacancy, he testified, would be made by Street -although he might be consulted, might make recommendations, and those recommendations might be added upon. He could not recall concretely whether any such discussion had occurred with respect to the sewer operator currently employed. In the event of a possible lay-off within the department, he assumed that he would discuss the matter with Street although, again, the occasion has never arisen.

10. Ricker's benefits and working conditions do not differ significantly from those of the bargaining unit employee within the department. Ricker occasionally sits on what he described as management meetings if Street is not available, but in those instances when he has done so he has never had occasion to discuss problems within his area, has never made suggestions about running the department, and has no knowledge of any discussion of employer-employee relations. In the case of a department budget, he and Street consult about the matter and forward their needs and requests to higher levels of management. The evidence discloses that actual decision-making power resides elsewhere. Ricker's influence does not appear to he decisive, nor is it evident why the making of a request for new equipment, building maintenance or repair should be considered a "managerial function". It was clear that Ricker was unaware of the details of, and played no significant part, in the budget making process.

11. Ricker has certain limited authority to grant casual time off and perhaps to authorize overtime if circumstances require it. In Street's absence, he may even call in an outside contractor if he and the other operator are unable to cope with a problem. However, on balance, we are satisfied that his authority to act independently is highly circumscribed. In our opinion, Ricker does not exercise managerial functions within the meaning of section l(3)(b) of The Labour Relations Act.

12. Erhard Kern has been the "area manager" for more than five years and reports to the chairman of the arena board. The difficulty faced by the Board in assessing his position is the paucity of evidence respecting his duties and responsibilities, or the operation of the arena itself. It appears that that operation involves six part-time employees engaged in resurfacing the ice, clean-up, and repairs. These employees work on a rotating shift basis on evenings and week-ends. Kern selects and trains them, makes up their rotation schedule, checks on and corrects their work as required, allocates work when required and administers such discipline as is necessary. The evidence discloses one specific incident of a firing, but at another point Kern indicates that if people "do not work out" we 'lust have to let them go". This is his responsibility, as his hiring or replacement employees - which he does from application forms which he keeps on file.

13. Kern grants time off and approves shift changes but has not real authority over the employees' other terms and conditions of employment. They are excluded from the union s bargaining unit. They get no vacations. They are paid the minimum wage.

14. Kern attends the monthly meeting of the arena board but only to make reports. He has no real decision-making authority nor can he commit the board to expenditures of any significance. Indeed, he has no authority over the snack bar in the arena - the employees, prices and products sold coming within the direct authority of the arena board. While he testified that he is engaged in physical rather than clerical work, the matter was not pursued and it is difficult in the absence of such evidence to make the assessment contemplated by Falconbridge Nickel Mines, supra. The insufficiency of the evidence however does not relieve the Board of its obligation to make a determination and it might be noted that both parties had full opportunity to cross-examine the witness and lead such other evidence as they might consider relevant. On the basis of the evidence before us, it is the opinion of the Board that Mr. Kern exercises managerial functions within the meaning of section l(3)(b) of the Act.

15. Lorne Nelson has occupied his position for about one and half years and reports directly to the municipal counsel. He is concerned with zoning, by-law infractions, and dispensing information to rate payers. Prior to assuming his full-time position he performed the same functions on a part-time basis for some three years. He is assisted by a single clerical employee who is a "full-time" member of the bargaining unit but works with Nelson two or three days a week. There is no evidence of the proportion of his time spent in "supervisory functions" but it would appear that such supervisory functions as are exercised are only incidental to Mr. Nelson's principal responsibilities and in connection with clerical work which he asks the clerk to perform. On the other hand, his description of his authority over this clerk was not cross-examined upon and accordingly, stands uncontradicted. He has actually participated in the hiring of two previous individuals, having conducted the interview and recommended their hiring - a result which subsequently occurred. It is he who decides on the actual hours of work required and on at least one occasion about a year ago, initiated the discharge of a part-time employee whom he considered unsatisfactory. The licensing commission advised him of his authority when he first assumed his present post. There is no formal evaluation process nor does Nelson have a decisive input into the clerk's wages. His participation in other aspects of the respondent's "business" does not demonstrate managerial functions. Nevertheless, his evidence concerning his relationship with his clerk was neither contradicted nor supplemented by other evidence which might minimize the obvious inference that his inclusion in the bargaining unit could raise the very kind of conflict to which section l(3)(b) was directed and which was discussed in paragraph 2 above.

16. On the basis of the evidence before us, it is the opinion of the Board that Lorne Nelson exercises managerial functions within the meaning of section l(3)(b) of The Labour Relations Act.