United Steelworkers of America v. Stanley Precision, Inc., 1981 CanLII 984

[1981] OLRB Rep. November 1631

000l-81-R United Steelworkers of America, Applicant, v. Stanley Precision, Inc., Respondent, v. Group of Employees, Objectors

BEFORE: R. D. Howe, Vice-Chairman, and Board Members J. D. Bell and B. L. Armstrong.

APPEARANCES: Brian Shell, Hugh MacKenzie, Harry Hynd and Jim Marlow for the applicant; J. P. Wearing and R. Gratton for the respondent; no one appearing for the objectors.

DECISION OF R. D. HOWE, VICE-CHAIRMAN, AND BOARD MEMBER J. D. BELL;

November 23, 1981

1. This is an application for certification in which the applicant seeks to represent the following unit of employees:

All employees of the respondent in the City of Hamilton who are designated "foremen" save and except persons who exercise managerial function, office and sales staff and persons covered by a collective agreement between Local Union 4444, the United Steelworkers of America and the respondent herein designed on May 9, 1979.

2. By decision dated May II, 1981 in this matter, the Board, differently constituted, appointed a Board Officer to inquire into and report to the Board on the duties and responsibilities of the sixteen persons (listed in that decision) classified by the respondent as "foremen". During the four days of examinations, six of the foremen were examined on the agreement of the parties on the basis that a decision would be made as to whether or not further witnesses would be called after examination of the six had been completed. Upon completion of the examinations of those six foremen, the Board Officer ruled that sufficient evidence was deemed to have been heard unless either party indicated that evidence new or significantly different would be heard from other foremen on the list. Neither party requested examination of other foremen on the list. However, the respondent called General Foreman Ronald Gratton as a witness having knowledge of the duties and responsibilities of the fore­men in question. (As a general foreman to whom a number of the foremen affected by this application report, Mr. Gratton is not included in the bargaining unit set forth above.)

3. After receiving the Board Officer's Report, each of the parties submitted written representations to the Board and also made oral submissions to the Board at a hearing held for that purpose at the request of the applicant. At that hearing, counsel for the applicant conceded that Stanley Furlanetto, one of the six foremen examined, exercises managerial functions within the meaning of section l(3)(b) of the Act and should, accordingly, be excluded from the bargaining unit. However, counsel for the applicant contended that the other foremen are not within the purview of section 1 (3)(b). Counsel for the respondent, on the other hand, submitted that the application should be dismissed since all of the foremen exercise managerial functions within the meaning of section 1 (3)(b), which provides, in part, as follows:

"Subject to section 90, for the purposes of this Act, no person shall be deemed to be an employee,

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

4. In Hvdro Electric Commission of The Borough of Etobicoke, [1981] OLRB Rep. Jan. 38, the Board was called upon to determine whether certain foremen who worked for the respondent Commission exercised managerial functions. (The bargaining unit applied for in that case was a "tag end unit of approximately thirteen foremen".) In that decision, the Board summarized the pertinent jurisprudence under section l(3)(b) as follows:

"20. In making determinations under section l(3)(b) of the Act the Board has continually recognized that effective collective bargaining necessitates an arms length relationship between employees on the one hand and management on the other. In acknowledgement of a fundamental divergence between the objectives, priorities and interests of the two groups, the managerial exclusion in section l(3)(b) functions to exclude from the scope of 'employee' those persons who, because of the exercise of managerial functions and allegiance to management, would be placed in a position of conflicting interests if allowed to engage in collective bargaining.

21. The term 'managerial functions' is not defined by the Act. The Board, therefore, must assess the facts of each case to determine whether the duties and responsibilities in question have true managerial significance. In Cottage Hospital (Uxbridge), [1980] OLRB Rep. March 304, the Board at pp. 305-306 summarized the approach it takes to evaluating whether an individual exercises managerial functions:

Over the years the Board has developed general guidelines to assist it in evaluating whether an individual exercises managerial functions (see Inglis Limited, [1976] OLRB Rep. June 270, Chrysler Canada Limited, [1976] OLRB Rep. Aug. 396 and Mcintyre Porcupine Mines Limited, [1975] OLRB Apr. 261). For those persons whose work has little or no impact on the employment relationship, the Board looks to whether or not they exercise independent decision-making responsibilities in matters of policy or the running of the organization. The Act does not operate to exclude those who only make effective recommendations in this regard. Nor does it exclude persons whose independent decisions are either circumscribed within pre-determined limits set by others or limited to technical and procedural determinations flowing from their expertise in a limited field. (See Libby, McNeil and Libby of Canada, [1976] OLRB Rep. May 193, Inglis Limited, supra; and Dominion Stores Limited, [1976] OLRB Rep. Aug. 44 and Canadian General Electric, [1979] OLRB Rep. Jan. 12).

Different considerations apply to the work of a second group of persons who may be characterized as having a direct effect on the employment relationship or the terms and conditions of employment of those in the employ of the organization. Supervisors of employees or those technical experts whose work affects terms and conditions of employment or hiring and employment policies would fall within this group. In determining whether such persons whose work has a direct effect on the employment relationship exercise managerial functions, the Board assesses whether or not they exercise effective control and authority over employees either in direct contact with the employees or through their decisions. In making this evaluation, the Board looks to whether the person has, at a minimum, the authority to make effective recommendations relating to conditions of employment. An effective recommenda­tion is a 'serious recommendation that the evidence demonstrates is usually acted upon, and therefore a recommendation that materially affects the economic lives of employees'. (McIntyre Porcupine Mines Limited, supra, at 289).

22. Concerning the evaluation of foremen in particular, the Board made the following comment in Peterborough Civic Hospital, [1973] OLRB Rep. Mar. 154 at pp. 155-156:

We have long recognized that in the early stages of industrial organization the foreman was a key person in the management hierarchy. Persons looking for a job came to the foreman, who had the right to hire, to fire, to grant raises and to assign work. The fore­man was effectively 'the king of the shop' insofar as the employees were concerned. He had a great deal of discretion and he was able to make decisions which greatly affected the welfare of the employees. Moreover, he exercised considerable control over their day to day work life. The evolving position of the foreman in industry is more fully described in the Spruce Falls Power and Paper Co. Limited case 47 CLLC ¶ 16,489, and it is not necessary for us to describe that situation any further.

However, a very important and significant factor in arriving at decisions about whether foremen were managerial was the conflict of interest theory which recognized that foremen owed a duty to management to control and discipline employees, and if the foreman was placed in the bargaining unit so as to become a union member, it would seriously impair his management function. As such, the duty to be owed to management would be incompatible with the trade union interests that he held in common with his fellow employees; cf. Ferranti Packard Electric Limited, [1968] OLRB Rep. Sept. 572.

The evolution of industrial organization and the advent of collective bargaining altered the position of the foreman in many situations. He is no longer the 'king of the shop'; hiring and firing are done by the personnel department; the work may be controlled by the terms of a collective agreement or where there is no collective agreement the work may be controlled in a similar fashion. The result of the many changes in the hierarchical structure has diminished the foreman's responsibility to the point where he may be left with the vestiges of power that he once exercised and where he previously stood visibly with management he now stands on the periphery between being a member of management and being an employee.

23. In Mclntyre Porcupine Mines Limited, supra, the Board at pp. 278-279 noted the existence of some 'rules of thumb' for foremen. In the industrial context, for example, foremen are generally excluded from bargaining units. In the construction industry a distinction is regularly drawn between working and non-working foremen, with working foremen regularly falling within the bargaining unit and non-working foremen falling outside. These 'rules of thumb' merely reflect common practice and are not hard and fast rules. They do not themselves determine whether any particular foreman or group of foremen are employees for the purposes of the Act. Whenever a question arises over the appropriateness of the application of the 'rule of thumb' in a particular case, the question must always be whether the foremen in question in fact exercise managerial functions within the meaning of section l(3)(b) of the Act.

24. Exercising supervisory functions does not by itself exclude a person from engaging in collective bargaining. Even when a person is primarily engaged in the supervision of others he is not managerial unless he also has effective control over their employment relationship. (See Falconbridge Nickle Mines Limited, [1976] OLRB Rep. Sept. 379 and Mcintyre Porcupine Mines, supra.) Scheduling work for employees and co-ordinating their efforts (something regularly done by the foremen in this case) is not itself a managerial function. (See, in addition to the cases previously cited, Second Manufacturing, [1975] OLRB Rep. Sept. 658; Thames Steel Construction Limited, [1979] OLRB Rep. May 440 and Caledon Hydro-Electric Commission. [1979] OLRB Rep. Oct. 924.)

25. To determine whether the foremen in this case exercise managerial functions within the meaning of section l(3)(b) of the Act, the Board will look to whether or not they exercise effective control and authority over the people they supervise as may be seen by an ability, at a minimum, to make effective recommendations in areas that materially affect the economic lives of the employees. If they act merely as conduits for management and do not themselves effectively control the economic lives of their employees, they would not be exercising functions with true managerial significance. As well, foremen would not be exercising managerial functions if they merely gather facts relating to their men from which management is then able to make its own decisions as to how to deal with particular situations. Even if foremen's evaluations of employees are given serious consideration and are relied on by their supervisors in making their decisions affecting employees, the foremen would not be making effective recommendations unless the recommendations are so consistently and frequently followed that it could be said that through the recommendations the foremen are effectively controlling or determining the decisions. A recommendation would not be effective, for example, if it was merely one of several factors considered or relied on by a supervisor in the course of making his own independent decision. Similarly, foremen would not be viewed by the Board as exercising managerial functions if they merely act within strict supervisory guidelines set by others.

26. Areas of fundamental importance to the economic lives of employees and thus areas that would assist the Board in deciding whether a foreman has effective control and authority over people he supervises would include, among others, the foreman's participation in the hiring, discharging and disciplining of employees, his input into their general performance evaluation, participation in the grievance procedure and, to a lesser extent, the foreman's ability to give time off and assign overtime....

(See also Weldo Plastics Limited. Board File No. 1545-80-R, decision dated May 19, 1981, unreported; Corporation of the Township of West Lincoln, [1981] OLRB Rep. Apr. 436; The Chatham Hvdro Electric System, [1979] OLRB Rep. Sept. 857; City of Timmins, [1979] OLRR Rep. May 373; and Chrysler Canada Limited, [1976] OLRB Rep. Aug. 396.)"

5. The report indicates that the extent of the authority exercised by the foremen in question — that is, the foremen who were examined other than Mr. Furlanetto (hereinafter referred to as the "foremen") — varies somewhat from individual to individual. However, we are of the view that those Variations are relatively minor and more likely reflect personality differences among the individuals in question than actual differences in duties and respon­sibilities.

6. The respondent is in the business of rolling, annealing and slitting of carbon steels. Each of its foremen supervises between nine and twenty-five employees in the various departments of the respondent's operations. Each foreman reports to one of the three general foremen. The other positions in the respondent's managerial hiearchy are Plant Manager and President. The foremen generally have very little involvement with hiring, although the evidence indicates that at least one of them has effectively recommended the hiring of a particular individual. However, once persons have been hired, the foremen under whose supervision they work orient them, ensure that they are properly trained and prepare weekly written evaluation reports through which the foremen can effectively recommend termination of their employment during their probationary period.

7. The foremen also play a significant role in disciplining employees. Under the respondent's "Responsible Discipline" process, a foreman initially' "consults" an employee with respect to misconduct, performance deficiencies or other problems. If that performance counseling does not correct the problem, the foreman then gives the employee a "verbal reminder", which is somewhat analogous to an oral warning. A further infraction will generally result in the issuance by the foreman of a "written reminder" to the employee, which is akin to a written warning. Foremen have the power to take each of those steps on their own authority, although some of them do occasionally consult with a general foreman before delivering a written reminder. The foremen also have the authority to suspend an employee for the balance of his shift if he engages in serious misconduct such as reporting for work in an inebriated state. However, as in the Etobicoke case, supra, the decision as to whether the employee will be paid for the balance of the shift is made by someone other than the foreman who suspended the employee. Thus, the disciplinary impact of such "suspensions" is not determined by the foremen but rather by their superiors. Nevertheless, as stated by counsel for the respondent, a foreman's decision to send an employee home for the balance of his shift can have a substantial impact on production regardless of whether or not the employee ultimately receives remuneration for the period of "suspension". Moreover, it may be inferred that the foreman's report with respect to the events which gave rise to the "suspension" will generally be a significant factor in the determination of the disciplinary action (if any) that is ultimately taken as a result of such an incident. Thus, it is clear from the evidence as a whole that the foremen do play a significant role in the respondent's disciplinary process.

8. Under the collective agreement in force between the applicant's Local 4444 and the respondent in respect of the approximately 175 workers whom the foremen supervise, the foremen are responsible for replying in writing to individual grievances at the first step of the grievance procedure. Although foremen sometimes consult with their respective general foremen concerning the precise language to be used in replying to a particular grievance, it is clear from the evidence that the foremen have authority to, and do in fact often reply to step one grievances without consulting with their superiors. Of equal if not greater importance to the effective administration of the collective agreement is the role of the foremen in discussing employee complaints with individual employees before a formal grievance has been launched, in an effort to resolve potential grievances before they are reduced to writing. This early involvement in potential grievances frequently results in the denial by the foremen of grievances which are ultimately filed with them. This is not surprising in that such a grievance would generally be resolved by a foreman prior to the formal filing if the foreman were of the view that the grievance had merit. However, this does not detract from the fact that, as in Chrysler Canada Limited, supra, the foremen have authority to settle some grievances, including those involving simple monetary claims and improper distribution of overtime, and have the responsibility and authority to provide a written response on behalf of management at the first step of the grievance procedure.

9. The foremen also have authority to sign employee time cards so as to authorize payment for time worked by employees which for one reason or another is not otherwise reflected on the time cards. Some of the foremen grant casual time off to employees although the evidence indicates that such requests are generally referred to the general foremen. There is no evidence that foremen perform work similar to that performed by persons whom they supervise, except in emergency situations and in relation to checking product quality. Unlike their workers, each foreman receives a salary which is adjusted annually on the basis of his individual performance. Foremen have the power to stop production if they detect deficiencies in product quality. They are also responsible for reassigning employees to other tasks in the event of an equipment breakdown. When one or more of his employees are absent, a foreman calls in one or more off-duty employees to replace the missing employees by working overtime, or arranges for employees to be shifted from another department to fill the void. Each foreman has keys for his office, the main gate of the plant, the time office, the first aid room, the water shut-off for the sprinkler system and the store room which contains "a minimum of half a million dollars in stock"; the employees supervised by the foremen do not have any such keys.

10. Foremen attend foremen's meetings at which matters including personnel, production, Company policies, grievances and the administration of the collective agreement are discussed, and at which some decisions are made. Some of the foremen have also attended supervisory courses outside of the plant at the expense of the respondent concerning "functions of supervisory management". One of the prevailing themes that runs through much of the evidence contained in the report is that of the overall responsibility of the foremen to maintain productivity and quality, and to ensure the "smooth running" of their respective departments and shifts.

II. Viewed as a whole, the evidence clearly indicates that many of the duties and responsibilities of the foremen have true managerial significance. Although the foremen in question may not be "Kings of the shop", having regard to all of the evidence and the submissions of the parties, and having particular regard to the foremen's assessment of probationary employees, participation in the disciplinary process and participation in the grievance procedure, the Board is of the opinion that the foremen exercise managerial functions within the meaning of section l(3)(b) of the Act. Accordingly, there are no ''employees'' in the bargaining unit for which the applicant seeks bargaining rights.

12. For the foregoing reasons, this application is hereby dismissed.

DECISION OF BOARD MEMBERS B. L. ARMSTRONG;

1. I dissent.

2. The Labour Relations Act is designed to encourage collective bargaining and this Board should strive to ensure that this right is not unduly limited. Where supervisors and foremen do not materially affect the economic lives of employees under their jurisdiction they should not be denied the right to collective bargaining.

3. The Officer's Report, with the exception of the shift foreman Ron Bereza and the maintenance foreman Stanley Furlanetto, who should be designated managerial, reveals that the functions performed by the rest of the foremen are, at best supervisory, and are not managerial.

4. These supervisors have no involvement in hiring. They assist with orientation and training and complete an evaluation report on probationary employees by marking the appropriate boxes on a prepared form. They can deal with employees with respect to misconduct or job performance but must consult with a general foreman before disciplining an employee with a written warning. More severe discipline is imposed by the general foreman or other managerial employer. Request for casual time off by employees must be referred to the general foreman by these supervisors.

5. The evidence clearly indicates that the duties and responsibilities of these people called foremen are merely conduits for management with no independent control over the people they supervise, no authority or participation in hiring, discharging or evaluating permanent employees, no power to give time off or assign vacations, no input into the work or work assignment.

6. The general foreman must be notified of all changes with respect to quality or quantity of work performed by individuals and changes if necessary in production.

7. The foremen are not managerial but are merely supervisors who carry out the instruction of management and should not be deprived of the right to participate in collective bargaining.