Service Employees International Union v. Ottawa General Hospital, 1981 CanLII 880

0193-81-R; 0567-81-U Service Employees International Union, Applicant/ Complainant, v. Ottawa General Hospital, Respondent.

BEFORE: R. D. Howe, Vice-Chairman, and Board Members M. J. Fenwick and W. H. Wightman.

APPEARANCES: C. M. Mitchell and 1. Nicholls for the applicant; M. P. Moran and R. Rivet for the respondent.

DECISION OF THE BOARD; October 7, 1981

1. File No. 0193-81-R is an application for certification in which the applicant re­quested a pre-hearing representation vote. By decision dated May 15, 1981, another panel of the Board directed that a pre-hearing representation vote be taken in the following voting constituency (hereinafter referred to as the "bargaining unit"):

All office and clerical employees of the respondent in Ottawa, Ontario, save and except supervisors, persons above the rank of supervisor, secretary to the president, secretaries to vice-presidents and directors, secretaries to assistant vice-presidents and assistant directors, secretaries to chief of staff, director of medical education and administrative assistant, employees of human resources directorate, payroll clerks, persons regularly employed for not more than 24 hours per week, students employed during the school vacation period and persons covered by subsisting collective agreements.

In the vote that was taken pursuant to that direction, 86 ballots were marked in favour of the applicant and 134 ballots were marked against the applicant. There were also 2 spoiled ballots and 2 ballots that were segregated and not counted.

2. File No. 0567-81-U is a section 89 complaint in which the complainant union alleges that the respondent contravened sections 64 and 79 of the Labour Relations Act and requests certification under section 8. The complaint also requests various remedies under section 89 and requests that a new vote be ordered if certification pursuant to section 8 is not granted. However, on the final day of hearing of these matters, counsel for the union advised the Board that his client was only requesting certification without a vote and was withdrawing its request for any other relief. He further stated that if the Board was not prepared to grant certification pursuant to section 8, his client consented to the dismissal of these proceedings.

3. The essence of the applicant's complaint is that the respondent breached the Act and unfairly influenced the outcome of the vote by including a substantial retroactive wage increase in the employees' May 28, 1981 pay cheques and attaching to each of those pay cheques a letter from the President of the respondent with regard to the June 4, 1981 vote. The respondent, on the other hand, contends that it did not breach the Act by making the payment in question. It is the respondent's position that it would have violated section 79 of the Act if it had failed to pay the increase to the employees on that date.

4. During the summer of 1980 the respondent began to operate a 450 bed teaching hospital which was originally called the Ottawa Health Sciences Centre General Hospital, but was later renamed the Ottawa General Hospital. (For purposes of convenience we will refer to that institution as the "new hospital".) At the same time the old Ottawa General Hospital (the "old hospital") ceased to be an active treatment hospital and became a chronic care facility known as Elizabeth Bruyere Health Centre (the "Health Centre"). Approximately 85% of the persons employed at the new hospital were previously employed at the old hospital. Their seniority at the old hospital was "voluntarily recognized" at the new hospital.

5. A wage increase effective from the commencement of the calendar year was given to non-unionized staff each year at the old hospital. The increase in 1980 was 4% effective January 1, 1980 with a further 4% increase effective April 1, 1980. In 1979, the increase was 7%. A number of such annual increases were not granted until after the beginning of a calendar year, but were always made retroactive to January 1st. A note or letter of explanation generally preceded or accompanied the payment of such increases at the old hospital.

6. The old hospital had collective agreements with the Canadian Union of Public Employees, Ontario Public Service Employees Union, International Union of Operating Engineers and Ontario Nurses Association. At the new hospital, the respondent voluntarily recognized and entered into collective agreements with the Canadian Union of Public Employees, Ontario Public Service Employees Union, and the Ontario Nurses Association. It also voluntarily recognized and entered into a collective agreement with the Canadian Union of Operating Engineers "instead of the International Union of Operating Engineers". The collective agreements that had been in force at the old hospital remained in force at the Health Centre.

7. Gloria King, a medical secretary employed by the respondent, testified that the applicant's organizing campaign began in November of 1980. Leaflets were distributed in the (new) hospital to interested employees after work and during coffee breaks and lunch hours. Several persons served as membership card collectors. In November of 1980, Raymond Rivet, who was at that time the respondent's Director of Human Resources, became aware that the applicant was attempting to organize the respondent's office and clerical employees. He also "heard remarks around December or January from supervisory staff' to the effect that union literature was being distributed among employees. However, he "thought the whole thing had fizzled out by February (of 1981)". The credibility of that statement is enhanced by the fact that only about 10% of the cards submitted by the applicant in support of this application are dated after February of 1981; over two-thirds of the cards were collected in November and December of 1980.

8. Members of the respondent's administration "started work on [1981] wage increases" in the fall of 1980 by surveying wage rates at other hospitals and gathering other pertinent data. Their deliberations culminated in a decision to recommend that salary scales for non-unionized employees (other than senior management) be. increased by 10.5% for the period from January 4, 1981 to December31, 1981. One of the bases of that recommendation was the fact that "close to 10%" had been offered to C.U.P.E. in "central negotiations"; the fact that the Ministry of Health gave the new hospital a 9.9% budget increase was also an influential consideration. That recommendation was presented to the "Management Committee" of the respondent's administration in January or February of 1981 where it was approved for forwarding to the Personnel Committee of the respondent's Board of Trustees.

On April 9, 1981, the Personnel Committee decided to recommend to the Board the proposed increase of 10.5%. As a result of that recommendation, the following motion "carried unanimously" at the April 21, 1981 meeting of the Board of Trustees:

"It was moved and seconded that the salary scales of non-unionized employees, except for senior management remuneration, be immediately revised to 10.5% for the period from 04/01/81 to 31/12/81. The percentage increase excludes fringe benefits which are to be part of a further study."

9. At a Management Committee meeting on the following day, Jean-Pierre Kingsley, the President of the respondent, reported that the Board of Trustees had approved the recommended salary increase. It was decided at that meeting that each of the four vice-presidents and the two directors would be responsible for advising their own staff of the increase. Yvon Vaillant (manpower planning specialist on loan to the respondent for two years from the Public Service of Canada), who became the respondent's Director of Human Resources in February of 1981, explained to the Board that this method of informing employees was decided upon because "everybody was anxious to know; the fastest was to have the vice-presidents and directors pass the word around."

10. On April 23, 1981 various members of management from the finance and human resources departments met to discuss the implementation of the increase. As a result of discussion concerning how long it would take to gather the necessary information, perform the required calculations (which involved 175 separate salary scales applicable to the "460 to 470" non-unionized employees) and otherwise process the necessary documentation, it was decided that the retroactive increase would be included in the employees' May 28th pay cheque. It was the uncontradicted evidence of Payroll Manager Charles Berube that the period of time between approval of the increase in question and payment thereof was similar to that which elapsed between approval and implementation of a retroactive increase for the employees in the C.U.P.E. bargaining unit, which involved approximately the same number of employees.

11. It is clear from the evidence that the amount and probable time of receipt of the increase were known by many, if not all of the employees in the bargaining unit before(Form 5) notices of this application were posted at the new hospital on May 1, 1981. Luc Bouchard, Director of the respondent's Patient Relations Centre, testified that he became aware in late March or early April of 1981 through friends in the finance department that the increase for non-unionized personnel would be about 10% and would probably be paid "in late May". Mr. Bouchard gave that information to his staff on April 16th at one of their regular monthly meetings. When he found out from his boss (the Vice-President of Paramedical Services) on April 24th that the increase would be 10.5% and that the staff would be receiving it "in two or three pay periods" (i.e. in four to six weeks), he immediately relayed that information to his staff. A number of other employees affected by this application were given similar information that day by Louise Cote, who was at that time the Assistant Director of Medical Records. It is clear from the evidence that this information spread rapidly through the hospital "grapevine" to the employees in question, who had been expecting a wage increase retroactive to the start of the year, and had engaged in much general discussion among themselves concerning when they would receive it and how much they would be getting.

12. Mrs. King, who also became aware of the 10.5% retroactive increase on May 24, 1981, testified that "most people were surprised that it was so large" and that "most people thought that it was a good increase". She also testified, however, that she and a number of other employees who had moved from the old hospital to the new hospital "didn't think it was so large because [they] had taken a 7% decrease when [they] moved from the old to the new" since their hours were increased from thirty-five to thirty-seven and one-half hours per week without any change in salary. It is clear from her testimony taken as a whole that although the 10.5% increase was perceived to be a good increase "for employees who had started at the new hospital", it was not perceived to be a good increase by a number of the employees who had been employed at the old hospital before becoming employees of the new hospital. The evidence also indicates that at least 90% of the employees in the bargaining unit were originally employed at the old hospital before commencing employment at the new hospital.

13. About a dozen employees met with union official J. Nicholls on the evening of April 22, 1981, and decided to apply for certification by way of a pre-hearing representation vote "because [they] didn't have a majority". Most of the employees who had signed cards were told by the organizers or by other employees within the following three days that "there was going to be a vote".

14. The union filed its application for certification on April24, 1981 and the respondent received notice of the application from the Board on May 1, 1981. In support of its application, the union submitted membership cards on behalf of approximately 41% of the employees in the bargaining unit. On May 8, 1981, the parties met with C. Robicheau, Labour Relations Officer, and agreed upon June 4, 1981 as the date for the representation vote.

15. On May 25th, the respondent distributed the following memorandum (in English and French) to each employee in the bargaining unit:

"To: FELLOW EMPLOYEES From: Head of Department

SUBJECT: UNION MOVEMENT

The Ontario Labour Relations Board has set Thursday, June 4, 1981 as the day for a secret ballot vote on whether or not you wish to be represented by the Service Employees International Union (S.E.I.U.). The election will be held from 0700 hours to 1100 hours and 1400 hours to 1600 hours in the Cafetorium A. We urge you to participate in this most important decision since a bare majority of the ballots cast will determine whether or not this union represents you.

No one representing either a union or management may interfere with you in reaching your decision.

You may hear a good deal about what the union says it will do for you; you ought to know that membership in a union also involves new obligations. Before committing yourself, you should carefully consider the union's constitution and by-laws; what initiation fees, dues and special assessments may be levied, and whether joining a union may involve you in strikes and picketing.

If the union is certified, then by law it represents all employees in the bargaining unit. This means that whether or not you have signed a union card or supported the union, you will be represented by the union. The union may hold out the promise of many things such as higher wages and greater job security. Promises are easily made. You should bear in mind that all improvements in wages and working conditions are subject to negotiation between the union and management and are not effective unless agreed to by both sides.

You may wonder why the hospital does not express an opinion as to what decision you should make. You should not interpret our hesitancy to become involved and answer questions as a lack of interest. The hospital is concerned with your welfare, but we would not want to say anything that might be misconstrued as an attempt to interfere or unduly influence your decision.

Before casting your vote, you should obtain answers from the union seeking clarification to the following questions:

a) What services will you receive for the monthly dues you will be required to pay?

b) Do they have permanent representatives working in and out of the

area who can deal with you in your official language?

We urge you to give this matter your most serious consideration in arriving at this most important decision.”

The memorandum was drafted by Mr. Vaillant and signed by the employee's department head. It also contained the following postscript:

"Please be sure to vote on Thursday, June 4th."

16. Bargaining unit employees also received the following letter which was attached to their pay cheques on May 28, 1981:

"Dear employee:

In an earlier letter, your supervisor informed you that Service Employees International Union had applied to the Ontario Labour Relations Board to represent you in matters relating to your employment with this hospital. You were also informed that a secret ballot vote would be held on June 4, 1981 in the Cafetorium A between the hours of 0700 and 1100 and from 1400 to 1600 hours. This vote will be conducted and supervised by a representative of the Ontario Labour Relations Board.

By now, you should have seen the Ontario Labour Relations Board notices of the vote and the voting list which have been posted throughout the hospital.

Your name is included on the voting list and you will be directly affected by the outcome of the vote. That is, if the union is certified, then by law it represents all employees (including you) in the bargaining unit and not just those who have signed authorization cards or who support the union. The union will be certified if it obtains a bare majority of the votes cast by employees who actually vote on June 4, 1981.

No one representing either the union or management may interfere with you in reaching your decision on how you vote. However, in order that the result of the vote truly reflects the wishes of all employees in the bargaining unit it is imperative that you and every other eligible employee vote on June 4, 1981.

Sincerely yours,

(signed) Jean-Pierre Kingsley

President"

The pay cheques received by non-union employees that day, which was a normal pay day, included as a salary adjustment the 10.5% increase, retroactive to January 4, 1981. No letter or note of explanation concerning the salary adjustment was provided to employees by the respondent.

17. Although Mr. Vaillant was less than perfectly candid with the Board in his testimony during cross-examination with respect to the purpose of the memorandum dated May 25, 1981, the Board is of the view that in distributing the memorandum in question and the letter dated May 28, 1981 to employees, the respondent legitimately exercised its freedom to express its views under section 64 of the Act, and did not violate the Act by using coercion, intimidation, threats, promises or undue influence, or by engaging in other conduct prescribed by the Act (see Greb Industries Limited, [1979] OLRB Rep. Feb. 89, in which the Board considered the scope of the employer's "freedom to express his views" under section 64). Indeed, counsel for the applicant did not argue otherwise. However, as noted above, he did contend that the respondent violated section 64 of the Act by paying the retroactive increase to employees on May 28, 1981. It was his position that to avoid breaching the Act, the respondent should have waited and paid the increase on June 11, 1981, the next pay day after the vote. (Employees at the new hospital receive a pay cheque every second Thursday for the two week period ending on the previous Friday.)

18. The applicant seeks certification under section 8 of the Act, which provides:

"Where an employer or employers' organization contravenes this Act so that the true wishes of the employees of the employer or of a member of the employers' organization are not likely to be ascertained, and, in the opinion of the Board, a trade union has membership support adequate for the purposes of collective bargaining in a bargaining unit found by the Board pursuant to section 6 to be appropriate for collective bargaining, the Board may, on the application of the trade union, certify the trade union as the bargaining agent of the employees in the bargaining unit."

19. The initial issue which must be addressed in this case is whether the respondent has contravened the Act. Counsel for the applicant contended that by paying the retroactive increase to the employees in the bargaining unit a week before the vote, the respondent interfered with the selection of a trade union in contravention of section 64 of the Act, which provides:

"64. No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence."

Counsel for the applicant argued that the respondent had paid the funds in conjunction with the vote in order to influence the outcome of the election. It as his position that this amounted to "buying votes" and that the impact of such conduct cannot be remedied by section 89 relief in conjunction with a new vote.

20. Counsel for the applicant cited a number of American cases in support of the proposition that an unconditional payment of monies prior to a representation vote for the purpose of impinging upon employees' freedom of choice with respect to unionization constitutes an unfair labour practice. In the leading case in this area, N.L.R.B. v. Exchange Parts Co. (1964), 375 U.S. 405, the U.S. Supreme Court stated:

"[The National Labour Relations Act] prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect. In Medo Photo Supply Corp. v. Labor Board, 321 U.S. 678,686, this Court said: 'The action of employees with respect to the choice of their bargaining agents may be induced by favors bestowed by the employer as well as by his threats or domination.' Although in that case there was already a designated bargaining agent and the offer of 'favors' was in response to a suggestion of the employees that they would leave the union if favors were bestowed, the principles which dictated the result there are fully applicable here. The danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged. The danger may be diminished, if, as in this case, the benefits are conferred permanently and unconditionally. But the absence of conditions or threats pertaining to the particular benefits conferred would be of controlling significance only if it could be presumed that no question of additional benefits or renegotiation of existing benefits would arise in the future; and, of course, no such presumption is tenable.

(See also International Shoe Company v. United Shoemakers of America(1959), 123 NLRB 682; 43 LRRM 1520; J. C. Penney Co. v. NLRB(1967), 66 LRRM 2069 and 2272 (U.S. Court of Appeals, Tenth Circuit); Connecticut Foundry Co. (1980), 103 LRRM 1496 (N.L.R.B.) and Coronet Instructional Media (1980), 104 LRRM 1470 (N.L.R.B.).) However, in Micro Measurements (1977), 96 LRRM 1402, the National Labour Relations Board held that an employer did not interfere with a certification vote where it implemented a planned increase prior to the vote without deviating from its planned course of action either with regard to the timing or the amount of the increase, and where there was no evidence that the increase was disproportionate to increases previously given by the employer.

21. In Scythes & Company Limited, 52 CLLC ¶1 17,018, this Board rejected as "a matter of conjecture" a submission, made on behalf of a trade union applying for certification, that employees would be less likely to vote in favour of the applicant in a representation vote where the employer granted an unconditional retroactive wage increase immediately before the onset of the "silent period". The Board stated:

"As to the wage increase, it was granted without qualification when, for all the respondent knew, the employees were on the point of selecting the applicant as their bargaining agent. It was not a benefit conferred which was to be continued in effect or withdrawn depending on the outcome of the vote. The employees were not the less free to vote in favour of the applicant because they had received a wage increase."

However, in Arnold Steele. General Contractor, [1966] OLRB Rep. Oct. 510, the Board found that "the action of the employer of granting a wage increase. . . following the filing of [the] application [for certification] not only casts doubt in turn upon the petition but also…. renders it most unlikely that the true wishes of the employees would be disclosed by a representation vote." Although we find the rationale contained in Exchange Parts case to be persuasive, it is unnecessary in the instant case for the Board to adopt that reasoning or otherwise attempt to reconcile the apparent conflict between the approaches applied in Scythes and Arnold Steele since the present case is distinguishable from both of those decisions in that it involves the implementation of a wage increase that was planned by the respondent and announced to employees before the respondent was notified of the application for certification. Thus, section 64 cannot be considered in isolation in the present cast, but rather must be read in conjunction with section 79(2) of the Act, which provides:

"Where a trade union has applied for certification and notice thereof from the Board has been received by the employer, the employer shall not, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer or the employees until,

(a) the trade union has given notice under section 14, in which case subsection (1) applies; or

(b) the application for certification by the trade union is dismissed or terminated by the Board or withdrawn by the trade union."

22. As stated by the Board in St. Mary's Hospital, [1979] OLRB Rep. Aug. 795, at paragraph 9, section 79(2) "manifests a legislative intent to maintain the prior pattern of the employment relationship in its entirety". The Board has consistently accepted and applied a "business as before" approach in recent cases. In Spar Aerospace Products Limited, [1978] OLRB Rep. Sept., 859, at paragraph 23, the Board commented on the effect of that approach as follows:

"23. The 'business as before' approach does not mean that an employer cannot continue to manage its operation. What it does mean is simply that an employer must continue to run the operation according to the pattern established before the circumstances giving rise to the freeze have occurred, providing a clearly identifiable point of departure for bargaining and eliminating the chilling effect that a withdrawal of expected benefits would have upon the representation of the employees by a trade union. The right to manage is maintained, qualified only by the condition that the operation be managed as before . .

As illustrated by the Board's decision in Scarborough Centenary Hospital. [1969] OLRB Rep. Jan. 1049, the existing pattern of an employment relationship may contain a prospective element. In that case the Board held that section 79(2) preserved not only the wages actually paid to employees at the onset of the freeze, but also any amounts promised prior to the freeze that were to be implemented within the period of the freeze. See also Hostess Food Products Ltd., [1975] OLRB Rep. Mar. 210, in which the Board found that the employer contravened section 79(2) of the Act by failing to implement a substantial wage increase announced by the employer prior to the commencement of the freeze. To avoid the application of the freeze, the employer's decision to increase wages must have been communicated to employees prior to the onset of the freeze period (see Carleton University, [1978] OLRB Rep. Feb. 184).

23. Having regard to all of the evidence, the Board finds that the decision to pay the retroactive increase on May 28, 1981 was made by the respondent before it received notice of the union's application for certification on May 1, 1981. Moreover, we are satisfied that the decision to pay the retroactive increase to employees on May28, 1981 or on June11, 1981 was communicated by management to many of the employees affected by this application before the respondent received such notice.

24. ln view of the Board's jurisprudence, we are of the view that (in the absence of consent by the applicant to a delay in the implementation of the increase) the respondent was required by section 79(2) to pay the 10.5% retroactive increase to non-unionized employees on May 28, 1981 or on June 11, 1981, since the amount and timing of that retroactive increase had been promised to employees prior to the onset of the freeze. Moreover, we cannot accept the applicant's contention that to avoid breaching section 64, the respondent should have delayed payment until after the vote by paying the retroactive increase on June 11, 1981 rather than on May 28, 1981. Although we are not called upon to express a final view on the matter in the instant case, there appears to be some merit in the respondent's contention that it might have contravened the Act if it had intentionally delayed the implementation of the increase until after the vote. Such action might have given rise to a concern on the part of employees that voting for the union would result in the loss or indefinite postponement of the promised increase. As Mr. Vaillant stated during cross-examination "not giving a retroactive pay increase that was due and which [the employees] knew was due could have influenced the vote." In any event, having regard to all of the evidence before us, including the fact that the respondent has evidenced its willingness to engage in collective bargaining by voluntarily recognizing four trade unions as the respective bargaining agents for four bargaining units at the new hospital and by entering into collective agreements with those unions, we are not satisfied that the respondent's payment of the 10.5% retroactive increase to employees on May 28, 1981 was prompted by anti-union considerations, which motivation is an essential element of the type of contravention of section 64 alleged by the applicant in this case (see Skyline Hotels Limited, [1980] OLRB Rep. Dec. 1811); rather, we find on the balance of probabilities that the respondent paid the increase on that date in accordance with a decision that had been made prior to the time that the respondent became aware of the union's application for certification, which decision was not reversed because of legitimate concern on the part of management that to delay payment of the retroactive increase until after the vote might itself be construed as an attempt to unduly influence the outcome of the representation vote. Although the increase was somewhat larger than the increase paid to employees at the old hospital in 1979 and 1980, we are satisfied on the evidence before us that the size of the 1981 increase was determined exclusively on the basis of legitimate financial considerations such as the level of increases to be paid to other employees and the funds available to the hospital.

25. For the foregoing reasons, the Board finds that the respondent did not contravene the Act. Thus, the application for certification without a vote pursuant to section 8 cannot succeed as the first prerequisite of that section has not been established. Moreover, even if we were of the view that the payment in question contravened section 64 of the Act, we would not in any event be inclined to grant a section 8 certificate in this case since the act of paying a retroactive wage increase to employees who are expecting such increase is not the type of conduct which would lead the Board to concluded in the circumstances in this case that the true wishes of the employees in the bargaining unit are not likely to be ascertained. However, it is unnecessary to consider whether this would be an appropriate case in which to set aside the original vote and direct a new representation vote since, as noted above, counsel for the applicant expressly withdrew the applicant's request for such relief and indicated that if the Board was not prepared to grant certification pursuant to section 8, his client consented to the dismissal of these proceedings.

26. For the foregoing reasons, these proceedings are hereby dismissed.