William R. Stewart et al. v. Teamsters Union, Local 419

2403-80-U William R. Stewart, Amarnath Bhatia, John McDougall, Ed Northcott and Dale Wendover, Complainants, v. Teamsters Union, Local 419, affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Respondent, v. K-Mart Distribution Centre, Intervener.

BEFORE: R. 0. MacDowell, Vice-Chairman and Board Members F. W. Murray and D. B. Archer.

APPEARANCES: J. P. Wearing for the Complainants, Harold F. Caley for the Respondent, and R. J. Drmaj for the Intervener.

DECISION OF THE BOARD; October 20, 1981

1. This is an application under section 89 of the Labour Relations Act. The complainants are a group of employees employed by K-Mart Limited and currently represented for collective bargaining purposes by Teamsters Local 419. Local 419 is a composite Local of some 5,000 members embracing a number of disparate bargaining units. It is alleged that the Union has contravened, inter alia, sections 15, 72 and 68 of the Labour Relations Act. There are no allegations of misconduct levelled against K-Mart; however, since the company was potentially affected by this proceeding, it was added as an interested party and extended a full opportunity to participate.

2. The principal allegation against the union can be stated quite simply. Following its certification and protracted negotiations, K-Mart proposed terms of settlement which would form the basis for a 3 year agreement. A narrow majority of the employees in the bargaining unit (i.e. 18 to 17) rejected those terms. Nevertheless, the union agreed to accept the employer's position, and conclude an agreement on that basis, rather than call a strike, continue what it considered to be fruitless negotiations, or abandon the bargaining unit altogether. The complainants characterize this decision as "arbitrary" and "flaunting the will of the majority"; but the situation is more complicated than that. The union's decision was not taken lightly, and in order to understand its motivation, it is necessary to appreciate the entire collective bargaining context. It will be convenient to review the facts chronologically, beginning with the union's defeat and subsequent dissolution in 1976. It is against this background which its current bargaining with K-Mart must be judged.

3. In 1975, the union was certified as the bargaining agent for a unit of employees similar to that which it now represents. There followed a long and unsuccessful effort to negotiate a collective agreement. The company remained resolutely opposed to the principle of union security a position which the union interpreted as opposition to collective bargaining itself. The union concluded that the only way it would achieve a collective agreement was to call a strike. The strike dragged on for almost 6 months and many employees drifted back to work before it ended. No agreement was ever concluded and, eventually, the union agreed to abandon its bargaining rights on the undertaking that the company would reinstate some of the striking employees without discrimination.

4. This 1976 experience profoundly influenced the union's assessment of K-Mart, and this in turn would significantly affect its bargaining stance 4 years later. In the union's view, the company was prepared to go to any lengths to prevent its employees from establishing a collective bargaining relationship through an independent trade union. The 1976 organizing campaign had been marred by employer unfair labour practices and the use of spies and "agents provocateurs". Criminal charges had later been laid against certain private investigators hired to infiltrate and disrupt lawful union activities. Senior K-Mart officials had been charged with criminal conspiracy. In short, K-Mart was regarded as a determined adversary prepared to flaunt the law when it suited its purposes to do so.

5. The results of the strike itself had been devastating. The employees suffered considerable financial hardship, but more important, the number of employees in the bargaining unit was reduced from more than 100 to 40, as during and after the strike, the company transferred their functions to other parts of its organization. The union believed that its unsuccessful attempt to establish a collective bargaining relationship had resulted in the loss of at least 40 bargaining unit jobs; and whether or not this assessment is correct, it goes a long way to explain the union's caution in 1980 when it found itself across the bargaining table from K-Mart once again.

6. Following the union's defeat in 1976, K-Mart permitted the formation of an employer-employee committee which would meet from time to time to discuss employer-employee relations. This arrangement proved unsatisfactory to some of the employees, and more importantly, to some of the members of the committee. One of them told the Board that the committee's function did not involve negotiations at all, but consisted largely of endorsing what the company had already decided to give its employees. This nucleus of discontent prompted a further approach to the Teamsters in 1979.

7. The union was initially cautious about becoming involved with K-Mart again. It was acutely conscious of its previous defeat; but it now appeared that a significant number of employees wished to be represented by an independent trade union. Charles Stewart Russell, the spokesman for about a dozen "fence-sitters", had opposed the union and the strike in 1976, but on canvassing employee opinion in 1979, concluded that the majority were in favour of an independent union. In consequence, he decided to support the union too, but vowed to oppose any attempt by the individuals he regarded as union activists, from promoting another strike. Not surprisingly, this concern was echoed by a number of union supporters who were in favour of collective bargaining through an independent union, but concerned about the prospect of another strike. The union was also conscious of the 1976 debacle, and assured potential supporters that it would not lightly take them out on strike again.

8. On February 4, 1980, the union applied for certification. A group of employees opposed that application including some of the complainants herein. At the certification hearing it was agreed that there would be a representation vote. A vote was conducted, and the union won. In April 1980, the union was certified once again as the employee's bargaining agent. Following its certification, the union set about establishing a bargaining committee and formulating bargaining proposals. Some of the members of the old employer-employee committee continued as members of the union's bargaining committee; however, efforts to solicit employee views about those bargaining proposals, to advise of meetings, or to report the progress of negotiations, were hampered by the employer's refusal to permit the union to post notices on its premises. This position, it might be noted, was in marked contrast to the way in which the company had treated the employer-employee committee. That body had held meetings on company time, conducted elections on company premises, had been permitted to post notices or distribute material in the cafeteria, and had announcements on its behalf announced over the company P.A. system. Notification of union meetings held by Teamsters Local 419 had to be by word-of-mouth among the employees in the warehouse. In the circumstances, there is nothing objectionable about this practice; nor was this form of notice in any way inadequate. As will become apparent, there was a large turnout for important union meetings of which both union opponents and supporters were well aware.

9. By the end of April, the union and employer had exchanged bargaining positions. As before, K-Mart was not prepared to accede to the union's position on union security and it is perhaps significant that the company was prepared to consider more generous economic terms if the union security demand was dropped. The union interpreted this position as an attempt to undermine its organization, but continued to hope that the exposure of the company's activities in 1976, and the pending criminal charges against its officials, would soften its bargaining stance. It didn't. The parties soon reached an impasse. A conciliation officer was appointed on April 24, but his efforts did not lead to a settlement. By the end of June the union was in a legal position to strike, but there was no employee support for this, the only effective means of applying pressure upon the company to modify its position. The company perceived, quite correctly, that the employees were not prepared to strike, and it governed its bargaining accordingly.

10. Sean Floyd, Secretary of Local 419, decided that some tactical advantages might be achieved if a strike vote were conducted and the bargaining committee were given a strike mandate. A meeting for this purpose took place on or about June 25,1980, but the employees were unwilling to vote in favour of a strike until they were assured that it was purely for tactical purposes and the union had no intention of calling a strike without further authorization. On this basis those present voted unanimously in favour of a strike — a fact which Floyd hoped might induce the company to be more flexible. It didn't. The company was well aware of the union's weakness, and the employees' aversion to strike action. Indeed, the only suggestion that there was any willingness to go on strike came from certain of the complainants, and since these individuals had generally opposed the union from the outset and never become members, it is a little difficult to accept that they were now prepared to go on strike to establish a collective bargaining relationship. Their assertions in this regard serve simply to undermine their personal credibility and throw some light on the motivation and character of some of the union's opponents.

11. Following the June strike vote there were several meetings with the company and the submission of various alternative union proposals. All of these were rejected. Counsel for the company assured the union that it had K-Mart's final offer, and while certain cosmetic changes might be considered, there would be no substantial change in the company's position. When the bargaining committee pointed out that the company had granted a larger wage increase in the previous year, it was reminded that the employees had been told at the time that this was an extraordinary increase which was unlikely to be repeated.

12. The only break in the bargaining came when legislative change removed union security from the items in dispute. With this issue now resolved, the company proposed a new three year package which, in the union's view at least, contained economic terms much less generous than previous informal discussions had indicated the company was prepared to implement in the absence of the dues check off provision which the legislation now made mandatory. Sean Floyd concluded that the employer's proposal merely evidenced its unwillingness to enter into any agreement, but he agreed to put it before the employees together with the bargaining committee's recommendation that it be rejected. And it must be emphasized that at no time has the union complained to the Board that the company was bargaining in bad faith.

13. A meeting to consider the company's proposal took place on September 13. It was well attended and included those who supported the union as well as those who opposed it. The appearance of the latter was quite a surprise since they had taken no interest in the bargaining process previously, and a number of them had expressly stated their opposition to any collective bargaining relationship involving the union. Floyd carefully explained every item in the package, going through the contract clause by clause. The employees had a full opportunity to consider its contents, however, they were advised by Floyd and the bargaining committee to reject it. A secret ballot vote was conducted and the company proposal was unanimously rejected (29 - 0). Floyd told the Board that, in the view of the number of union opponents who had, in his view "packed" the meeting, he was surprised at the time that the vote was unanimous.

14. The rejection by the employees made no difference to the company's bargaining posture. Following the meeting, Floyd was advised that the union already had the employer's "final offer", and it was not prepared to change it. Nor did the appointment of a mediator alter the situation. Mediation did not bring about any material change in the company's position. Conscious of its superior economic strength, the employer was simply not prepared to compromise, and the inability of the union to mount a successful strike removed any incentive to do so. The union eventually concluded, correctly in our view, that further negotiations would be pointless. Although, from the union's point of view, the agreement was not a good one, it was all that the employer was prepared to offer. It was that or nothing. In the circumstances, the bargaining committee decided that it had no other choice, and agreed to reluctantly recommend that the employees accept the company's proposed package.

15. It might be noted at this point that the Labour Relations Act does not specifically require that a trade union conduct a ratification vote. Had the union simply signed the agreement, there might well have been no basis for the present complaint. Indeed, from a purely tactical point of view, the union and its supporters later acknowledged that it was probably unwise to conduct a further vote when opponents of the union would be permitted to cast a ballot, but be motivated as much by their perception of how best to undermine the union, as their concern about the actual contents of the agreement.

16. A meeting to consider the employer's final proposal was scheduled for December 3. That day, William Stewart and Amarnath Bhatia, two of the complainants herein, circulated about the warehouse mobilizing opposition, and urging non-members and union opponents to attend the meeting. As a result, virtually the entire bargaining unit was present.

17. The meeting was turbulent and at times disorderly. John MacDougal, one of the complainants, was drinking in the back, and there was periodic heckling from union opponents. Stewart asked repeated questions, tried to dominate the discussion, interrupted other speakers, and refused to yield the floor to others. Despite these disruptions, however, there was a thorough, if sometimes heated, debate on the company's proposals. Copies of the proposed agreement had been circulated at the beginning of the meeting, and the employees were given a full opportunity to study them.

18. Jean Bigeau, the Vice-President of Local 419, chaired the meeting. He explained the details of the package and told those present that there was no possibility of any further movement on the part of the company. This was its final position. The union had exhausted all other options. And since neither the union nor the employees were prepared to engage in a strike, the bargaining committee was reluctantly recommending acceptance.

19. Bigeau, and two members of the bargaining committee Jack Priestly and C. Stewart Russell all testified that there was no sentiment in favour of a strike. When that option was raised during the debate, shouts of "No strike. No strike" resounded from various parts of the hall. When C. S. Russell (who, it will be recalled, had initially opposed the union, and always opposed a strike) mentioned that possibility, he was howled down, "booed", and told to "shut up". Even Bhatia, one of the complainants, acknowledges that "nobody" was in favour of a strike as did Ed Northcott in his initial evidence (he contradicted himself when called in reply, some days later).

20. All of the members of the bargaining committee acknowledged that the agreement was not a good one — in fact, it differed very little from the package which had been put before the employees on previous occasions. Now, however, the members of the bargaining committee, and the union officials urged acceptance. While the agreement left much to be desired, there were certain non-monetary benefits, and the union would be established. It could solidify its position, and seek improvements in the next round of negotiations.

21. As we have already noted, a secret ballot vote was conducted and by a margin of one vote (18- 17), the employees present disapproved of the company's proposal. The bargaining committee and many union supporters were disappointed. The union opponents were elated. Bhatia told the Board that he considered the vote to be a repudiation of the union which would prompt it to abandon its bargaining rights. At the end of the meeting, Bigeau merely indicated that he would put the matter before the union Executive Board for its consideration. It was uncertain how the union would respond to the vote, but clearly neither further negotiations, nor strike action were viable alternatives. Moreover, the union constitution empowered the Executive Board to accept a final company offer which had not been rejected by at least two-thirds of the membership. While these constitutional provisions, of course, are in no way binding upon this Board, they nevertheless reflect the collective bargaining reality that only a strong majority would be in a position to conduct a strike or assert sufficient pressure to improve an employer's final offer.

22. The bargaining committee, the President of the union, and several members of the executive board discussed the matter in mid-December. The K-Mart employees advised the Executive Board that they had taken soundings of the employees after the meeting, and were convinced that they were prepared to accept the agreement rather than lose the union. Both Jack Priestly and C. S. Russell, members of the bargaining committee, gave evidence before the Board, and there is no doubt that they sincerely believed this to be the case, and that in the circumstances, accepting the company's position was in the employees' long-run best interest. They advised the Executive Board that the employees still supported the union, and urged them not to abandon these supporters. Privately, however, they were worried that the union would simply walk away. It had already expended considerable money and effort over 4 years to organize this group of employees and was unenthusiastic about the prospect of signing a mediocre agreement in circumstances where at least a significant minority of the employees opposed the union altogether.

23. These and other considerations were reviewed at the January Executive Board Meeting where the pros and cons of the various alternatives were debated. Serious consideration was given to abandoning the bargaining rights, but this would necessarily mean abandoning its members some of whom had remained committed to the union throughout the 1976 strike and had actively assisted in the 1979 campaign. Floyd reminded the Executive Board of the jobs which had been lost during the last strike and indicated that 13 or 14 of the votes against the agreement must be regarded as opposition to the union per se, which had mobilized during the organizing campaign and had surfaced in organized form, from time to time thereafter. Moreover, there was a real concern that to abandon its members now, would leave them exposed to employer retaliation. Such reprisals would, of course, be illegal; but, in view of the union's previous experiences, there was a genuine concern for its supporters' job security. And there was absolutely no doubt (nor does this Board have any) that the union had to either accept the employer's proposed agreement, or there would be no agreement and no bargaining relationship at all.

24. There was no doubt that the agreement represented a capitulation to superior bargaining strength, but the fact that any agreement had been achieved at all was regarded as a positive step. It achieved a foothold in a company which was regarded as staunchly anti-union. From this base, the union hoped that it could strengthen its organization and improve the employees' position in future contracts. The union president volunteered to intervene personally and act as business agent servicing the K-Mart employees something he hadn't done for almost ten years. In the end, a combination of reluctance to abandon the bargaining unit, concern about possible reprisals against its supporters, and optimism about the future, prompted the union to sign what it does not dispute is a mediocre agreement. It does not seem to have occurred to anyone that concluding an agreement in these circumstances might be illegal or that the union might have been better advised to call a further meeting of the K-Mart employees to review the options once again and hold another ratification vote. Instead, it acted upon the advice of the K-Mart employees on the bargaining committee and its own sense of obligation and assessment of the situation.

25. The union and employer agreed that on February 19,1980 (that is, after the filing of the present complaint) the parties would meet for the purpose of concluding a collective agreement on the terms proposed by the company. This meeting was not without incident, for the company inquired for the first time about the union's reaction to a one-year agreement embodying the same terms as the first year of the three-year package. This proposal, however, was informal, tentative, and apparently intended to be the basis for further negotiation. It was clear that the company had no intention of improving the actual terms of the agreement, and the union was suspicious that this eleventh hour offer was merely a ploy to avoid signing an agreement, or extend negotiations beyond the one-year period (from the date of certification) during which the union would be protected from a "raid" or a termination application. There was no assurance that the company was actually prepared to sign such a one-year package immediately, and in the circumstances, the union insisted upon execution of the agreement upon which the parties had previously agreed and for which the February 19th meeting had been scheduled. At that point C. A. Cumiskey, the company official who (with counsel), had conducted the negotiations on behalf of the company, announced, for the first time, that he had no authority to sign a collective agreement on behalf of the employer. The agreement would have to be executed by his superiors and could be picked up the following day. The union signed the document on February 19, as planned, and the agreement, duly executed by the company, was picked up on the following day. That agreement has now been fully implemented.

26. The provisions of the Act upon which the complainants rely are as follows:

15. The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

72(4)A strike vote or a vote to ratify a proposed collective agreement taken by a trade union shall be by ballots cast in such a manner that a person expressing his choice cannot be identified with the choice expressed.

72(5)All employees in a bargaining unit, whether or not such employees are members of the trade union or of any constituent union of a council of trade unions, shall be entitled to participate in a strike vote or a vote to ratify a proposed collective agreement.

72(6)Any vote mentioned in subsection 4 shall be conducted in such a manner that those entitled to vote have ample opportunity to cast their ballots.

68. A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.

It will be convenient to deal with each of them in turn.

27. The complainant contends that by concluding a collective agreement on terms which the majority of the bargaining unit had previously rejected, the trade union was "bargaining in bad faith". There is no merit to this contention. In the first place, a group of individual employees does not have status to assert a violation of section 15. The section, by its terms, appears to create obligations and regulate relations only as between the trade union and employer (see Canadian General Electric, [1980] OLRB Rep. Aug. 1179). But even if the complainants could rely on section 15, there has been no breach of that provision in the instant case. It is manifest that throughout, the trade union has bargained in good faith and the evidence amply demonstrates that it has made every reasonable effort to achieve, and did in fact achieve, a collective agreement. Had the union not acknowledged the employer's superior bargaining power and eventually acceded to the employer's position, it is doubtful whether a collective agreement would ever have been achieved. In the circumstances, there is clearly no breach of section 15.

28. The complainants' principal contentions involve section 72 and 68. Counsel argues that these provisions deprive a trade union of its independence in the conduct of collective bargaining, and make it the instrument of the majority voting in a strike or ratification vote. Thus, if the majority endorse a proposal put to them by the union, the union must execute an agreement on those terms and cannot accept anything less. If the majority reject such proposal, the union cannot, in any circumstances, accept it, or sign an agreement on that basis. If the majority of employees in the bargaining unit do not authorize strike action, the union is precluded from calling a strike; but if the majority votes in favour of strike action, its wishes must be respected and a strike must be called however ill-advised or unwarranted a strike may appear to the union officials directly engaged in the bargaining. All of this, it is argued, is implied by sections 72 and 68. The complainants argue that the trade union has breached these obligations, and that consequently, the subsisting collective agreement must be set aside, and the union directed to resume bargaining.

29. Section 72, on its face, does not address the question of the effect of a strike or ratification vote, if the union decides to hold one. There is no language similar to that found in section 7(4) or 57(4) stating the outcome or result which must follow if "more than fifty per cent of the ballots cast" are in favour of one of the options presented. Of course, if the union has already executed an agreement "subject to ratification", the result of a positive ratification vote would be a binding collective agreement; but section 72, by itself, does not bring about this result, nor does it address the situation where the vote is negative. Indeed, there is no statutory requirement to hold a strike or ratification vote. The latter may be triggered by the Minister of Labour pursuant to section 39, or the employer itself pursuant to section 40; but unless these actions are resorted to, the issue is left to the union to be determined in accordance with its constitution and/or its own appraisal of the tactics of the situation. The rigid and binding effect of a vote, which the complainants contend is implicit in section 72, seems oddly out of tune with the fact that the vote itself is entirely discretionary. And it is equally curious (or at least arguably so) that an organized minority opposed to collective bargaining itself could "tip the balance" so as to frustrate the ratification of a proposed agreement and precipitate a strike in which they had no intention of participating. There is no doubt that many of the complainants in this case are, first and foremost opponents of the union itself. Bhatia was the most candid in this regard when he explained to the Board that in his view a vote against the proposed agreement would induce the union to walk away.

30. Section 72, by its terms, appears only to regulate the voting constituency and procedure. It does not purport to bind the trade union to any particular course of conduct in light of the results. Nor is the "dispute settlement" rationale discussed by the Board in Canada Cement Lafarge, [1980] OLRB Rep. Nov. 1583, readily applicable to a vote conducted entirely at the discretion of the union, and in a case where the union chose to avoid a damaging strike by accepting a company offer acceptable to at least forty-nine per cent of the employees in the bargaining unit, (and perhaps more if one accepts the bargaining committee's evidence that some of the opponents had had a change of heart after the vote when the alternative of the trade union withdrawing altogether was raised). In Canada Cement Lafarge, the Board had before it a union refusing to end a strike despite a vote (fifty-eight to fifty-seven) in favour of the employer's outstanding settlement offer. Here we have the converse. The situation in Canada Cement Lafarge would be parallel to that in the instant case only if the employees in Canada Cement Lafarge had voted 58 to 57 against accepting the company's settlement offer, but the union had concluded that it was untenable to maintain a strike in face of such significant opposition, and had executed an agreement on the company's terms. And even in Canada Cement Lafarge, the Board did not conclude that the vote, in itself, led inevitably to any particular result. The Board ruled only that a majority acceptance of an employer's offer in a vote held pursuant to section 40 (which we again emphasize this is not) would, unless there were extenuating circumstances, usually obligate a trade union to execute an agreement on that basis, because of its obligations under section 15 of the Act. The result was not automatic, nor was the union's obligation implied solely from the language of section 40. And of course the language of section 40 is quite different. Accordingly we do not think Canada Cement Lafarge answers the issues raised in this case.

31. In our view, section 72 should be read literally and in accordance with its express terms. Those terms concern the voting constituency, and voting procedures in a strike or ratification vote which the union decides to hold. They require only that the vote be by secret ballot, that there be adequate notice, and that all employees in the bargaining unit be permitted to vote. We are satisfied that there has been no contravention of these specific terms of section 72, and we are not prepared to read into that section the collateral obligation which the complainants contend is implicit. The remedy which the complainants seek, if it is to be granted at all, must be founded on a breach of section 72 of the Act.

32. Section 72 prohibits a union from acting in a manner that is "arbitrary", "discriminatory" or "in bad faith", but leaves it to the Board to determine how this general language should be interpreted and applied in any particular case. It is beyond doubt that, the duty of fair representation owed to employees in a bargaining unit is just as relevant during the negotiation of the collective agreement as during its term of operation although, of course, the context is quite different, and this must be taken into account when the propriety of a union's conduct is being assessed. This point was discussed by the Board in Diamond Z Employees Association [1975] OLRB Rep. Oct. 791 in a long passage to which we might usefully refer:

12. What then constitutes a breach of the trade union's duty of fair representation? We have concluded that a breach of the duty most often comprehends conduct that is so wanton that the most modest of employee expectations to the benefits of collective bargaining have been betrayed by his trade union. (See; The Canadian Union of Public Employees Local 1000 and Ontario Hydro Employees Union OLRB M.R. May 1975 444 at pp. 450 to 464 for a review of the authorities.) In defining the type of misconduct contemplated by the Legislature the Board requires that a trade union not act "arbitrarily" in the sense that it fails to address itself to the particulars of an employee complaint and thereby disposes of it without regard to its merits. In short, a union is constrained from treating employee complaints in a capricious or perfunctory manner. A trade union must not act "discriminatorily" in that the benefits of representation are conferred on one member of the bargaining unit and denied another without reasonable excuse. Like situations ought to be treated in a like manner and without favour to any one individual. And finally a trade union must act in good faith and without malice or hostility to the complainant. An employee is entitled to be represented by his trade union with candour and with honesty in connection with the disposition of his concerns. A trade union that declines upon proof thereof to satisfy these simple employee expectations will be liable to pay the penalties contemplated by the remedial provision of The Labour Relations Act. (See: The Alfred Compton case OLRB M.R. October 1972 917; El Mocambo case OLRB M.R. October 1972 862; The Joseph Pap case M.R. January 1974 60).

13. The situation presently before the Board is unique in that the complaint pertains to a trade union's conduct after certification in negotiating its first collective agreement. There is no dispute that the duty of fair representation owed employees in a bargaining unit is just as relevant during the negotiation of a collective agreement as during its term of operation once concluded. It is also without dispute that the pivotal period anticipated in the collective bargaining process is the conclusion by the parties of a collective agreement. The supervisory jurisdiction of the Board as expressed in the Act in connection with the conduct of both union and employer during negotiations is restricted to the requirement that the parties "shall bargain in good faith and make every reasonable effort to make a collective agreement". Save for this mandatory requirement the Board in applying a standard owing employees in the bargaining unit during the negotiating process is conscious that it must not interfere with the wide discretion conferred the employees' "exclusive bargaining agent" to reach a settlement. The Board is cognizant, especially during the negotiation of a first agreement that the period preceding the making of a collective agreement is often when employees' hopes for improved terms and conditions of employment are at their height. Indeed the trade union may have induced these expectations by representations made during the course of an organizational campaign or at the twilight of an agreement about to expire. The realities of the negotiating process however may often result in some measure of employee disappointment with respect to the ultimate settlement. The synthesis contemplated in the bargaining process where the initial positions of the parties are subjected "to the give and take" of compromise and concession is bound to cause some measure of alteration in those positions. In this context the trade union representative must be at his most adroit. He must convince the rank and file that the sacrifice of long term benefits for immediate gains is desirable having regard to the particular circumstances. The employees must be convinced that the benefits not included in a settlement are merely deferred benefits until the onset of the next bargaining session. In the same context the employer's strategy of containing the more excessive demands of the trade union may have resulted in the avoidance of a work stoppage by virtue of acceding to the minimal requirements that constitute in the circumstances a fair settlement. Achieving this mutual accommodation requires the unfettered discretion of the representatives of the parties to explore all avenues of accommodation without the intervention of this Board in setting standards of conduct that may be characterized as an unwarranted intrusion in their private affairs. We are of the view that the representative trade union despite its obligation to employees in complying with the duty of fair representation must necessarily have "a free hand" in setting strategies that will best forward employees' interests irrespective of their expectations. (See; The Nicholas E. Erderly case OLRB M.R. September 1972 844).

14. What then ought to be the minimum expectation of employees with respect to their union's compliance with the duty of fair representation during the negotiating process? We do not intend by raising this question to prescribe a standard of conduct that could be construed to interfere with the internal procedures of trade union. A Union may have adopted its own procedures, whether governed by regulations contained in its constitution or by past practice, for communicating business matters to its constituents. Some trade unions as a matter of general practice will seek the approval of the rank and file prior to concluding a formal collective agreement; whereas, other unions may be authorized by their principals to enter into an agreement without prior consultation. Of those trade unions that do refer tentative settlements to the rank and file some may require the recommendation of their representatives; others may not. In other words the practice that is adopted by a trade union in negotiating process is not intended to be assessed in determining whether a breach of the duty of fair representation has occurred. Matters pertaining to that issue ought to be resolved privately by the parties having regard to their particular needs. (See; The Arthur Joseph Roberts case OLRB M.R. March 1974 169 at p. 172; The General Impact Extrusions case OLRB M.R. August 1972 798; The Canadian Textile and Chemical case OLRB MR. August 1971 469 at p. 470 for Board expression of its concern in interfering in internal union affairs). What the Board is concerned about in measuring the conduct of union representatives during the negotiating process is whether the employees affected have been treated honestly and in good faith. The adequacy of the settlement and the formal processes adopted in order to arrive at an accommodation are not necessarily in issue. What is in issue is whether the trade union by its conduct has acted fairly in the interest of employees in dealing with the employer with respect to their terms and conditions of employment.

It should be emphasized, however, that Diamond Z was a case in which the Board found dishonesty and bad faith on the part of a union officer who had lied to, and actively misled the members of the unit. In this respect, Diamond Z is readily distinguishable from the instant case; however, we endorse the general approach enunciated above.

33. It is argued by the complainants that the union's conduct was "undemocratic" and thus contrary to section 68. There are several answers to this submission. First the Act does not purport to regulate internal union democracy per se — perhaps in recognition of the fact that a union is a "fighting organization" and may have its effectiveness as a collective bargaining mechanism impaired if its officers were regarded as "delegates" rather than "representatives" of the employees in the unit. Secondly, the reference to democracy is not really very helpful. Not only does it ignore the special collective bargaining context but even in "democratic" institutions such as the Legislature or Parliament, once representatives are elected they are left to vote as they wish or enact laws even though a majority of their constituents may not agree with their position. The remedy is at the ballot box, or in the present context, through a termination application. In determining whether there has been a breach of section 68 in the instant case, we have found it more helpful to ask what the union could/should have done? What were its options?

34. On the basis of the evidence before us, it is clear that further negotiation would have been fruitless. The union had the employer's final offer, and there was no prospect whatsoever that it would be improved. Even if we were to grant the complainants' request to set aside the collective agreement, there is not the slightest indication that the company is prepared to alter its bargaining stance. Indeed, counsel for the complainant conceded as much, alluding, in passing to other possible resolutions (presumably a termination application) of the "problem". Equally clearly the trade union could not have called a strike. It would have been irresponsible in the circumstances to do so as well as possibly contrary to the union s constitution. (As we have already mentioned, the constitution's requirement for a special majority to reject an employer's final offer reflects the realities of collective bargaining; moreover, the fact that the union was purporting to act pursuant to its constitution, while not determinative, does suggest that it was not in "bad faith" or in "arbitrary" or "discriminatory" fashion). Finally, the union could have abandoned its bargaining rights, leaving its supporters to fare as best they could.

35. We do not think that the union was required to resume futile bargaining, engage in an unpopular and abortive strike, or walk away from its bargaining rights, for, to hold that it was required to adopt any of these options would be to say either that it must participate in a pointless charade, and engage in an exercise in self-destruction, or that the repudiation of the employer's offer should be construed (as Mr. Bhatia did) as an effective termination of its bargaining rights. We are not prepared to make such finding. There is no doubt that the union carefully considered the options open to it, and weighed all of the circumstances including the collective bargaining reality of the situation, the terms of its constitution, and the motivation of its opponents. There was no "bad faith" in the sense of personal animus against the employees in the unit. Indeed we were impressed by the sincerity of the respondent's witnesses and their obvious concern as they grappled with a difficult decision. The situation here is in marked contrast with that in Diamond Z (supra).

36. A heavy onus lies upon a trade union which flouts the will of the majority of the employees in the bargaining unit, to demonstrate that its conduct does not amount to a breach of section 68. In the instant case, we are satisfied that that onus has been met. The union might have been better advised to have made a further effort to build support for its position before accepting the employer's offer, and probably should have made it clear from the outset that in the absence of a commitment to strike action the employees were unlikely to achieve a very good agreement. However, in all of the circumstances of this case, we cannot find that the union's decision to accept the employer's offer was an unreasonable one; and while one might fault its judgment at various times, we do not think its conduct amounts to a breach of section 68 of the Act.

37. Having regard to the foregoing, the complaint is dismissed.

DECISION OF BOARD MEMBER F. W. MURRAY:

1. I agree with the result my colleagues have reached in this matter. It should be noted however, that despite the union's assessment of K-Mart, there were no allegations of misconduct during the most recent organizing campaign, and no allegation that the company bargained in bad faith. It is the union, not the company which is the respondent in this case, and we express no opinion on the character or conduct of the former.