Ontario Labour Relations Board
File No.: 0638-81-R Date: September 30, 1981
United Electrical, Radio and Machine Workers of America (UE), Applicant, v. Magna International Inc., Respondent, v. Group of Employees, Objectors.
BEFORE: George W. Adams, Chairman, and Board Members F. W. Murray and O. Hodges.
APPEARANCES: Art Jenkyn and Marie Peters for the applicant; E. L. Stringer, Q. C., J. Hoffman, H. Huber, W. Ertland G. Zimmer for the respondent; and G. A. Meiklejohn, Maria Melo and Maria Martins for the objectors.
DECISION OF THE BOARD
This is an application for certification.
The bargaining unit which the applicant claims to be appropriate for collective bargaining consists of all employees of the respondent at its plants in Richmond Hill save and except foremen, those above the rank of foreman, office and sales staff. The respondent asserts that the combined unit is not appropriate and that there should be a separate bargaining unit for each plant.
By decision dated July 10, 1981 and in response to the applicant's request for a pre-hearing vote, the Board found that not less than thirty-five per cent of the employees of the respondent in the voting constituency consistent with the applicant's request were members of the applicant at the time the applicant was made. A vote was therefore directed but because of the differences of the parties with respect to the appropriate bargaining unit, the Board also directed that separate ballot boxes be used for each plant and that those ballot boxes be segregated and sealed until the requisite investigation was made on the issue of the appropriate unit. The vote was taken July 21, 1981.
The Automotive Division of the respondent is organized into seven major groups of companies according to product mix and/or geographical location. Annual divisional sales represents about eighty per cent of the respondent's revenues according to its 1980 Annual Report. The three plants in Richmond Hill to which this application pertains are part of a group of eight plants which make up the Trim Group. All of the eight plants come under the same Group General Manager; all eight have the same customers (Chrysler, Ford and General Motors); the employees at all of the plants have comparable skills; and all eight plants produce very similar products.
Each of the three Richmond Hill plants take on different corporate forms although there is no dispute that the respondent controls them all. Speedex Manufacturing (hereinafter referred to as "Speedex") is a division of the respondent and constitutes one plant located on Ohio Road in Richmond Hill. It was the first plant to be established in that community and employs about seventy employees. In 1976 another plant was established under the corporate form of Speedstamp Manufacturing Ltd. (hereinafter referred to as "Speedstamp"). It is located about three quarters of a mile from Speedex on Enford Road. It employs approximately sixty employees. In 1978 the third plant was established as Rollstamp Manufacturing Ltd. (hereinafter referred to as "Rollstamp") and it is located one mile and three quarters from Speedex on Edward Avenue. A number of employees at this location retained counsel and participated in the hearing dealing with bargaining unit configuration. It was their position that three separate bargaining units were the only appropriate units. Rollstamp employs approximately one hundred employees.
Each of the plants has a general manager. All three general managers gave evidence. Helmut Huber is the general manager for Rollstamp. He testified that he had authority over rates of pay and the evidence reveals some variation between the three plants. He denied any obligation to consult in this area with head office of the respondent, with his Group Manager or with the other general managers. However, the evidence reveals that wage reviews occur at the same time, at six month intervals, for all three plants. His evidence and that of the other two general managers reveals some variation between the three plants in the area of employer contribution to fringe benefits (a.d. & d. and dental) and differences in shift premium. Huber testified that he and his foreman do the recruitment and hiring. They are also responsible for all other personnel decisions including discipline and promotion. The evidence does, however, reveal assistance from the respondent's Personnel Director. Each general manager is given personnel guidelines in the form of a booklet although this document was not filed with the Board. The reversal of a discharge by Huber at the request of the Director also reveals centralized assistance in this area. The evidence indicates that the general managers of the Trim Group meet at the head office of the respondent on a monthly basis and the Director of Personnel attends these meetings. However, Huber testified the meetings emphasized product quality not labour relations.
The respondent attracts the work from the three major automobile companies but the operating units, through the general managers, determine whether the work is suitable for them and, if so, they then bid against each other for that work. Each general manager views his counterpart as a competitor and he is on a bonus arrangement to reinforce this attitude. This organizational approach of the respondent is set out in its 1980 Annual Report at page 3:
- The Operating Unit.
Each operating unit is an autonomous business operation under the control of a General Manager. The General Manager has complete authority and responsibility for the operation of his unit. These decentralized units generally employ approximately 100 persons thereby allowing the General Manager to have close contact with his personnel and control of all matters affecting the efficiency and profitability of his unit.
- The operating units are grouped by products or markets under the direction of a Group Manager. The Group Manager is an individual with proven general management capabilities from on-line experience.
The Group Manager provides support to the individual General Manager who is free to draw upon his experience, council, and advice.
The Group Manager also monitors the implementation of operating policies as outlined by Executive Management.
Huber testified that he has never been directed to bid on a job and said that he determines the price for the job. There is no consultation with the other general managers during the bidding process although the actual submission of the successful quote to the customer is done through the head office. He testified that he has independent authority to purchase equipment but a co-signature of someone from the head office on any cheque over $5,000 is required. The other two managers testified that they required permission for purchases over either $7,000 or $7,500. Each plant is responsible for obtaining its own raw materials. Purchasing power does not appear to be combined by the plants. Each plant is responsible for its own layout. There is no functional relationship between the three plants. None perform functions or work for the other two. They process their own work independently.
Each plant has its own bank account. Customers are invoiced in the name of the individual plant and monies paid directly to that operating unit. Each unit is responsible for its own payroll, O.H.I.P. contributions, U.I.C. contributions, and tax deductions. There have been no temporary transfers of employees between the three plants for at least two years. The only permanent transfers have been on the opening of each new plant with the exception of one employee at Rollstamp who wished to work with a friend at the Speedex plant. Each general manager draws up an annual budget for his operating unit. They do not do this in consultation with each other. The budget then goes to the head office.
Warner Ertl is the general manager of Speedex. His evidence indicates that the extent of work emanating from any one of the automobile companies varies from plant to plant. His evidence also reveals the independent role of the general manager; the lack of Integration between the plants: and the absence of any employee interchange. He admitted that the respondent's Personnel Manager acted as an advisor to him and that a respondent-wide profit sharing plan for employees existed. The plan is mentioned in the respondent's annual report. He testified that the Group General Manager tends to give advice on engineering problems. Gunter Zimmer is the plant manager for Speedstamp. His evidence was very similar to that given by the other two general managers. He claimed responsibility for recruitment, hiring, discipline, promotion and wage increases. He emphasized that he alone determined whether the unit would bid on a job. He testified that the Group General Manager played an important role in major capital acquisitions. He admitted that he was aware of what employees were earning at the other two plants and that the general managers may talk about this subject "once in a while." He also indicated that the Personnel Director may assist in recruitment by checking referees for example.
The union introduced evidence that the same independent coffee truck caterer frequents all three plants. It also established that many of the employees at all three plants live in the same community in Toronto. Each plant has its own bus which picks up the employees at the same stops in Toronto. When a bus breaks down, the buses from the other two plants may help out. The same truck may remove parts from each of the three plants. The union also established that as many as twenty-five employees transferred from Speedstamp to Rollstamp when the Rollstamp plant was first opened. Employees at all three plants work a common number of hours and similar shifts; and they receive the same overtime rate and lunch and coffee breaks.
Section 6(1) of The Labour Relations Act charges the Board with the responsibility of determining "the unit of employees that is appropriate for collective bargaining." The Act, however, does not furnish precise criteria of "appropriateness." Consequently, the Board has developed certain broad policy guidelines which attempt to balance the right of self organization guaranteed in section 3 of the Act with the requirements of a viable collective bargaining relationship. There is no lack of cases where the Board has had to choose between single plant or location bargaining units and multiplant or location bargaining units in trying to strike this balance. Generally, unions will advocate the former (since, although they may be more difficult to service, they are generally easier to organize) while employers will generally advocate the latter (since they are generally more difficult to organize but also because larger bargaining units present the employer with a more easily administered and potentially less disruptive collective bargaining relationship). The position of the parties in the instant matter makes this case somewhat exceptional.
In determining the appropriateness of bargaining units which include employees at more than one location the Board has outlined certain fundamental criteria as in Usarco Ltd., [1967] OLRB Rep. Sept. 526. (For an excellent and recent review of this see K-Mart Canada Ltd., [1981] OLRB Rep. Sept. 1250). The criteria are: (I) community of interest of the employees; (2) centralization of managerial authority; (3) economic factors; and (4) source of work. The first criterion has been subdivided further to include; the nature of work performed, the conditions of employment, the skills of employees, administration, geographic circumstances, and functional coherence and interdependence. It has been pointed out on numerous occasions that the factors are obviously interdependent and that all factors do not take on the same weight in any given case. Moreover, they must be considered in light of the purpose of the Act which is to facilitate employee access to collective bargaining. The Board has been careful to avoid an overly technical or rational process to collective bargaining structures in order not to frustrate employee wishes. However, the criteria are useful standards for analysis and when applied in the instant case, we get the following;
(1) Community of Interest
(a) Nature of work performed: There is no dispute that employees at all three operations perform the same type of work involving similar operations.
(b) Conditions of employment: Employees at all plants have similar benefit and profit-sharing schemes, although there are slight differences in A.D. & D. and dental coverage. There is evidence, however, of variances in wages even in the same or similar classifications. On the whole, however, comparable or similar working conditions prevail at all three plants.
(c) There is dispute that the skills of the employees as a group are similar at all three plants since all plants manufacture similar products.
(d) Administration: This is the one criterion which most clearly points in a particular direction. Each plant is responsible for administering its own payrolls. Benefit schemes and each plant is responsible for its own invoicing and supply of materials. The three workforces are separately administered with no interchange. This separateness may have important implications for employees in the context of collective bargaining. For example, the place of these three plants together in one bargaining unit could work to the disadvantage of lower seniority employees at the youngest plant; indeed, because of the absence of any interchange, employees at one plant may fail to comprehend why they should be affected by the wishes of employees at the other two plants.
(e) Geographic circumstances: The three plants are located within a mile and a half radius of each other. In the Usarco case (supra) a distance of two and one-half miles between plants did not prevent the Board from finding a multi-plant bargaining unit to be appropriate.
(f) Functional coherence and interdependence: It seems clear that there is no functional integration between the three plants and this factor points strongly to three bargaining units. The evidence discloses that due to the corporate philosophy of the respondent the three plant managers consider themselves to be in competition with each other and manage their affairs accordingly. Further, there is no significant evidence of temporary or permanent employee transfers between plants as noted above.
(2) Centralization of Managerial Authority
On this point there is conflicting evidence. While the general managers of each plant view themselves as directing autonomous enterprises and they have given considerable discretion to foster this perception, this is not entirely the case. Exhibit #2 for example, Magna's 1980 Annual Report, shows at page 3 that there is a Group Manager who is responsible for directing the Trim Group. And, while each plant establishes its own budget, individual plant budgets are submitted to the respondent and, without evidence to the contrary, appear to be very limited in nature. It is also clear that a general manager operates under precise financial parameters as Indicated by the evidence on capital expenditures of over $7,000. Finally, even in cases of hiring and firing the evidence suggests limitations on autonomy. An appeal of a discharge at Rollstamp to the respondent's Personnel Director resulted in the Rollstamp manager deciding to re-instate the employee. There was also evidence of the existence of a personnel manual supplied to each general manager. In addition, all Trim managers meet on a monthly basis.
(3) Economic Factor
In the Usarco case (supra) it was held that the creation of separate bargaining units could create an economic disadvantage to the company in that it might impede the transferability of employees between locations. In this case the creation of one bargaining unit has the potential for interference with the respondent's corporate philosophy and its related structure which emphasizes individual operating units. To the extent that the philosophy has been financially successful, its resulting impairment may result in an economic disadvantage.
(4) Source of Work
Although each plant is responsible for securing its own supplies the source of work at all plants 15 the same.
It is our view that in the circumstances of this case the balance of factors tilt in the direction of three separate units. From an employee perspective we are very much influenced by the lack of temporary and permanent transfers and the identical nature of the work. Employees would not see work at the other plants as part of any promotional opportunity and may well feel threaten by anything more than plant-wide collective agreement administration. It may be no coincidence that the employees who felt sufficiently strong about the appropriateness of separate units to hire a lawyer and participate in the proceedings were from the most recently established plant. This more local community of interest of employees is accentuated by the respondent's corporate organization and the considerable autonomy granted to individual operating units. While there is important co-ordination by the respondent, labour relations and matters of personnel appear to be related primarily to the local industrial plant.
For all of these reasons we find three separate bargaining units to be appropriate for the purposes of collective bargaining. Having regard to the corporate relationship of these three plants to the respondent, the respondent is properly designated as the employer. The bargaining units appropriate for collective bargaining are therefore described as:
#1. All employees of the respondent at its Rollstamp plant in Richmond Hill save and except foremen, those above the rank of foreman, office and sales staff.
#2. All employees of the respondent at its Steedstamp plant in Richmond Hill save and except foremen, those above the rank of foreman, office and sales staff.
#3. All employees of the respondent at its Speedex plant in Richmond Hill save and except foremen, those above the rank of foreman, office and sales staff.
No statement of objections and desire to make representations has been filed with the Board within the time fixed under subsection 2 of section 45 of the Board's Rules of Procedure following the taking of the pre-hearing representation vote pursuant to the Board's direction of July 10, 1981.
Having regard to the membership evidence filed by the applicant with the Board, the Board is satisfied that less than thirty-five per cent of the employees of the respondent in bargaining unit #1 were members of the applicant on the date of application.
Accordingly, the application is dismissed with respect to bargaining unit #1.
Having regard to the membership evidence filed by the applicant with the Board, the Board is satisfied that not less than thirty-five per cent of the employees of the respondent in bargaining unit #2 were members of the applicant on the date of application.
The Registrar is therefore instructed to unseal the ballot box pertaining to bargaining unit #2 and cause the ballots to be counted.
Having regard to the membership evidence filed by the applicant with the Board, the Board is satisfied that not less than thirty-five per cent of the employees of the respondent in bargaining unit #3 were members of the applicant on the date of application.
The Registrar is therefore instructed to unseal the ballot box pertaining to bargaining unit #3 and cause the ballots to be counted.
The Registrar will destroy the ballots cast following the expiration of 30 days from the date of this decision unless a statement requesting that the ballots should not be destroyed is received by the Board from one of the parties before the expiration of such 30 day period.