Ontario Labour Relations Board
[1981] OLRB Rep. May 519
0034-81-U International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, Local #637, Complainant, v. Coulter Copper & Brass Limited and Arthur Andersen Inc. as interim receiver of Coulter Copper Brass Limited, Respondents
BEFORE: D. E. Franks, Vice-Chairman, and Board Members C. A. Ballentine and T. G. Armstrong.
APPEARANCES: Chris G. Paliare and Jon McManus for the complainant; Michael Gordon, Marshall Sone and Michael Coulter for the respondents; Gordon Stewart for Tn-Canada In.
DECISION OF THE BOARD; May 19, 1981
This is a complaint under section 79 of The Labour Relations Act alleging a violation of section 14. The respondent named in the original complaint is Coulter Copper& Brass Limited (hereinafter referred to as "Coulter"). Prior to the hearing in this matter there was filed in this application an intervention in Form 35a by Arthur Andersen Inc. which was appointed an interim receiver by order of the Supreme Court of Ontario dated March 10, 1981 pursuant to a proposal made under The Bankruptcy Act over the assets of the respondent Coulter. Also filed was an intervention by Tri-Canada Inc. a company which has an option agreement with Arthur Andersen Inc. with respect to the purchase of certain assets held by the interim receiver. Also filed in this matter was a reply by Michael Coulter "on his own behalf but not on behalf of the respondent Coulter". After some prelimary discussions with counsel it was agreed that Tri-Canada Inc. was not a party to these proceedings and that the respondent should be named as "Arthur Andersen Inc. as interim receiver of Coulter Copper & Brass Limited." Further, it should be noted that no objection was taken by the parties to the jurisdiction of this Board to proceed with this matter notwithstanding the proceedings under The Bankruptcy Act.
In the course of the hearing the problem of the identity of the respondent reemerged. Counsel for the complainant asked the Board to include "Coulter Copper & Brass Limited" as well as "Arthur Andersen Inc. interim receiver of Coulter Copper & Brass Limited" as party respondent to this application. It should be noted that prior to this point no reply had been filed by "Coulter Copper & Brass Limited." After a short recess Mr. Gordon entered an appearance on behalf of Coulter Copper & Brass Limited and tendered as the reply for that respondent the reply filed by Michael Coulter personally. Mr. Gordon explained that he had done so on instructions from Arthur Andersen Inc. subject to the condition that in the event that the Board found any liability or damages payable by Coulter Copper & Brass Limited in the present matter the liability having occurred prior to the proposal being filed on 9th, and the order of the Court appointing Arthur Andersen Inc. on March 10th, there would be no finding of liability on the part of Arthur Andersen Inc. for events occurring prior to that date. Accordingly, both "Coulter Copper & Brass Limited" and "Arthur Andersen Inc. as interim receiver of Coulter Copper & Brass Limited" are respondents in the present matter.
Except for one minor detail, the facts giving rise to this application are not in dispute. The complainant trade union and Coulter were parties to a collective agreement which expired at the end of December 1980. Bargaining for the renewal of that collective agreement had taken place on December 22, 1980 and January8, 1981. On February 11, 1981, the complainant and the respondent Coulter met with a Conciliation Officer and concluded a Memorandum of Settlement. That Memorandum of Settlement was filed as Exhibit 2 in these proceedings and resolves all issues in dispute between the parties. It is signed by a representative of the complainant and Mr. Coulter on behalf of the respondent Coulter. It is subject to ratification by both parties.
The evidence of Mr. Malanso, the chief steward for the union in the plant was that the union conducted a ratification vote on February 12, 1981 and after that vote was conducted he informed the plant superintendent Al Peterson that it had been ratified by the union. The e evidence of Mr. Coulter conflicts with this. His evidence is that he was not told by the chief steward Mr. Malanson that the agreement had been ratified until February 24th. Nothing turns on this discrepancy in the evidence although we are prepared to believe Mr. Coulter's version of the facts over Mr. Malanson's version. We therefore take it as fact that on February 24 1981 the trade union informed Coulter that the Memorandum of Settlement had been ratified by the trade union.
Shortly thereafter in the words of Mr. Michael Coulter, "the bank pulled the plug on his business." He was forced to lay off his employees on February 26th. On March 9th a proposal was made pursuant to The Bankruptcy Act and on March 10th the Supreme Court of Ontario appointed an interim receiver being Arthur Andersen Inc.
It appears that shortly after the interim receiver was appointed a representative of the complainant union Mr. Jon MacManus attended upon Mr. Coulter at his office with a collective agreement reflecting the changes to the previous agreement resulting from the Memorandum of Settlement of February 11th. At this point Mr. Michael Coulter informed Mr. McManus that he had been instructed by Mr. Sone of Arthur Andersen Inc. that he had no power to sign anything on behalf of Coulter after the Court order of March 10th. As a consequence, from that date to the present, the formal document reflecting the agreement arrived at in the Minutes of Settlement of February 11th remains unsigned.
The complainant in this matter alleges that the refusal on the part of the respondents to sign the formal document which was tendered as Exhibit 4 in these proceedings constitutes a violation of section 14 of the Act. The complainant argues that all issues in dispute were resolved by the parties and that all that remains to be done is for the document incorporating the agreement between the parties to be signed. The complainant argues that on the evidence of Mr. Coulter once the union communicated its ratification of the agreement to the employer on February 24th there was in effect on that day a collective agreement between the parties. The remedy asked for by the complainant, therefore, simply reflects the existence of that collective agreement.
The respondent argues that the Memorandum of Settlement is not a collective agreement and that settlement was never ratified by Mr. Coulter. The respondent argues further that in effect there has been no violation of section 14 because on the one hand Coulter was until March 10th prepared to sign any formal document reflecting the terms of the Memorandum of Settlement. After the Court order of March 10th the interim receiver could not sign the agreement without creating a fraudulent preference in favour of the employees over the creditors of Coulter Copper & Brass Limited. The respondent further argues that in the absence of an intention to violate section 14 the Board has no power to make any remedial order and further that if the Board contemplated making any order the Board should recognize the supremacy of The Bankruptcy Act as a federal statute and not interfere with the operations of the interim receiver appointed on March 10, 1981.
We are of the view that as of February 24, 1981, when the union clearly communicated to Mr. Coulter that it had ratified the Memorandum of Settlement, a collective agreement existed between the complainant and the respondent Coulter Copper & Brass Limited. Mr. Coulter's evidence was that ratification by the employer occurred when the formal collective agreement was signed. We cannot accept this interpretation of the Memorandum of Settlement. The Memorandum of Settlement is in a standard format used by conciliation officers. The heading reads as follows:
"MEMORANDUM OF SETTLEMENT'
Between:
'Coulter Copper and Brass Co. Ltd.'
and
'Brotherhood of Boilermakers Local 637'
The undersigned representatives of both the Company and the Union agree to the following basis of settlement of all matters in dispute as witnessed by the undersigned Conciliation Officer of the Ministry of Labour and agree to recommend its acceptance unanimously to their principals for ratification.
I. The term of the collective agreement shall be from Jan. 1, 1981 to December31, 1981.
All matters previously settled and agreed to by the parties prior to conciliation shall be incorporated.
..."
At the bottom it is signed by Michael Coulter as "employer". Since it is clear that Michael Coulter was his own "principal" in what sense must it be further ratified by Coulter Copper and Brass Limited? Michael Coulter could not subsequently refuse to ratify after having agreed to recommend to himself "its acceptance unanimously" when he signed the Memorandum of Settlement. In short, his signature on the Memorandum of Settlement can only mean that he also, in fact, ratified the settlement at that time. This is consistent with Michael Coulter's evidence that he was prepared to sign the collective agreement (as a formal document) whenever it was presented to him by the union. We are therefore of the view that ratification by the employer occurred when he signed the Memorandum of Settlement on behalf of Coulter Copper & Brass Limited. The Board has in the past held that a Memorandum of Settlement can become a collective agreement between the parties. (See, Windsor Tube and Mual Inc., [1978] OLRB Rep. Sept. 882. In the present case, the Memorandum of Settlement became a collective agreement when the employer was notified by the trade union that the trade union had ratified the settlement. We therefore declare that as of February 24, 1981, there existed a collective agreement between the complainant and the respondent Coulter Copper & Brass Limited.
The complainant has requested the Board to issue an order such as that issued by the Board in the case of The Municipality of Casimir, Jennings and Appleby, [1978] OLRB Rep. June 507. In that case the Board held that the refusal to sign the formal collective agreement where nothing was left in dispute between the parties was of itself a violation of section 14 of The Labour Relations Act. The complainant's case in the present instance is even stronger. We are of the view that there already exists a collective agreement between the complainant and the respondent and all that remains is the formal engrossing of a document reflecting the Memorandum of Settlement. This refusal to execute such a document; constitutes a violation of section 14 of the Act.
The relief requested by the complainant in this matter is as follows:
A declaration that the Respondent employer has violated The Labour Relations Act.
A finding that the Respondent employer has breached its duty to bargain in good faith contrary to the Section 14 of The Labour Relations Act.
A declaration that the Respondent Employer is bound by a collective agreement.
A mandatory order directing the Respondent employer to sign the collective agreement, the terms of which had been agreed to on February 11, 1981.
As noted in paragraph I and 2 above, there are two respondents to the present application, Coulter Copper & Brass Limited and Arthur Andersen Inc. as interim receiver of Coulter Copper & Brass Limited. Further, it is clear that Arthur Andersen Inc.'s interest in this matter dates solely from March 10th. We have, however, found that as of the 24th of February there existed a collective agreement between the complainant and the respondent Coulter Copper& Brass Limited.
In his evidence, Mr. Marshall Sone, a representative of Arthur Andersen Inc., indicated tf at he had instructed Mr. Michael Coulter that he could not sign on behalf of Coulter Copper & Brass Limited after March 10th, and further that Mr. Sone would not sign a collective agreement if it created a preference in favour of the employees over the other creditors of Coulter Copper & Brass Limited. We are prepared to issue an order directing the respondent to sign the collective agreement; however, we leave it to Mr. Sone to determine his obligations as interim receiver under The Bankruptcy Act.
In view of the fact that the employees affected by this application were indefinitely laid off on February 26, 1981, we are of the view that this is not a case where the normal Notice of Employees should be posted. We, therefore, order as follows:
The respondent has breached their duty to bargain in good faith contrary to section 14 of The Labour Relations Act.
The Board declares that the respondent Coulter Copper & Brass Limited is bound by a collective agreement from February 24, 1981 as set out in Exhibit #4 in this complaint.
The Board orders the respondents to sign the collective agreement, the terms of which had been agreed to on February 11, 1981 in the Memorandum of Settlement filed with this Board and given effect in the form of agreement filed as Exhibit #4 in this complaint.