United Steelworkers of America v. Storwal International Inc., 1981 CanLII 986

[1981] OLRB Rep. March 366

2359-80-R United Steelworkers of America, Applicant, v. Storwal International Inc., Respondent, v. Group of Employees, Objectors.

BEFORE: M. G. Picher, Vice-Chairman, and Board Members F. W. Murray and B. L. Armstrong.

APPEARANCES: A. E. Munro and J. Grills for the applicant; Bill Phelps, Phil Goodfellow and Jean Bigras for the respondent; Gorden McLaughlin and Scott Deugo for the objectors.

DECISION OF M. G. PICHER, VICE-CHAIRMAN, AND BOARD MEMBER F. W. MURRAY; March 10, 1981

1. This is an application for certification.

2. The Hoard finds that the applicant is a trade union within the meaning of section 1(1)(n) of The Labour Relations Act.

3. Having regard to the agreement of the parties, the Board further finds that all office, clerical and technical employees of the respondent in Pembroke, Ontario, save and except Secretary to the General Manager, Secretaries in the Personnel Department, the Accountant, Supervisors, persons above the rank of supervisor and outside sales staff, constitute a unit of employees of the respondent appropriate for collective bargaining.

4. The Board is satisfied on the basis of all the evidence before it that more than fifty-five per cent of the employees of the respondent in the bargaining unit at the time the application was made, were members of the applicant on February 11, 1981, the terminal date fixed for this application and the date which the Board determines, under section 92(2)(j) of The Labour Relations Act, to be the time for the purpose of ascertaining membership under section 7(1) of the said Act.

5. The parties are disagreed on the employment status of three persons described as "Work Measurement Applicators". The respondent submits that they should be excluded from the unit because they exercise managerial functions and are confidentially employed in matters relating to labour relations within the meaning of section 1(3)(b) of the Act. The applicant submits that they are employees and should be included in the bargaining unit. The parties submitted an agreed statement of fact in addition to certain oral representations to assist the Board in resolving this dispute.

6. The agreed statement of fact is as follows:

The plant collective agreement agrees on a Methods Time Management incentive system, (Ex. 'F'). That system requires the specification of a standard time for each operation on each part of each product. For example the operation of drilling holes in a sheet metal panel is allowed a standard time and the forming of that panel in a brake is allowed a separate standard time. There will be approximately 20,000 of these standards for the plant.

In February of 1980 the Company determined to replace its old production standards with new standards and transferred the 3 persons from doing other duties to become Work Measurement Applicators. At that time the development of the 20,000 new standards was commenced.

Methods Time Measurement develops standard times not by 'time study' with stop watches but rather by analyzing the individual body movements (e.g. reaching, gripping, lifting, placing) involved in an operation (e.g. drilling holes in a panel) and assigning a time to each movement. The total of those times becomes the standard time for that operation.

The responsibility of the Work Measurement Applicator is to analyze the operation, make the judgment on what motions are involved, assign times to those motions from a table of predetermined data and compute the total standard time for that operation. The WMA must exercise judgment in defining the constituent motions in the operation and determining which motions are necessary to the operation in the first place.

The fact that there are judgments to be made is illustrated by the fact that there have been disagreements between the Company and the Union over hundreds of these standards. Most of those disagreements are over the question of what motions are properly included in the operation.

The procedures of the collective agreement provide that the standards are developed by the Work Measurement Applicators on behalf of management in the first place. They are then shown to the Union and in the event of disagreement there is discussion between the representatives of the parties over whether the standard is correct. The WMA represents management in those discussions with the Union Incentive Representative.

Although a few of the standards are checked by a Supervisor most of them go forward to the Union directly from the WMA. Thus management's only input on the majority of the standards is through the WMA.

Payment of incentive workers is based upon these standards.

Work Measurement Applicators have been involved in re-checking operations following their discussions with Union time study representative. They also created the 'check sheets' for each department and determined the standard times for each motion at the outset of the new standards program.

During negotiations for the 1980 renewal of the plant agreement it was clear that the impact of the new standards system (averaging a 35% reduction) would be a major issue. The WMA's prepared confidential preliminary analyses of the impact of these new standards several weeks prior to the negotiations and prepared further confidential analyses during the progress of negotiations. While the new standards are all eventually shared with the Union it was the advance analysis which was necessary to the determination of the magnitude of the problem which management faced and the preparation of a fair and constructive proposal.

The WMA's have made recommendations on the reduction of manpower in several production areas as a result of their analyses. These recommendations has been accepted in several instances (e.g. Storwal & Bigfellow lines).

7. Several more undisputed facts emerged during the course of argument. The three WMA's work under a supervisor. It is clear, however, that the standards which they produce become the standards adopted by the company. The sheer volume of the standards does not allow the supervisor to review each and every standard established by the work measurement applicators. The standards system is central to the incentive compensation scheme in the collective agreement. Consequently the decision of the WMA's have a direct impact on the wages of employees.

8. Those decisions are sometimes challenged by the union. The collective agreement makes express provision to deal with the development of standards and disputes about the appropriateness of a standard established by the work measurement applicators. It provides, in part, as follows:

Incentive Grievances

Before protesting the fairness of a production standard, the operator will give such standard a fair trial, consisting of four (4) hours, or one-third of the run, whichever is most practical.

When an employee believes that the standard time for his operation is sufficient, he shall first notify his foreman and his department steward.

The foreman and steward shall make a check to determine if the proper method is being followed.

If no satisfactory settlement is effected, the foreman shall immediately notify the Standards Department, who will immediately review the complaint and make a disposition of the case.

If the disposition is unsatisfactory, the Union Incentive Representative and the Grievance Committee, or, if desired, any accredited representative of the Union Engineering Department shall be called in to review the complaint. They shall then meet with the Standards Department to effect a settlement by:

(a) reviewing the Standard Specification sheet to be certain that all elements are included;

(b) review the application of standard data, if such has been used, to ascertain that the standards have been correctly applied;

(c) should not settlement be effected after steps (a) and (b) then both parties, in presence of each other, shall re-evaluate the operation in question to determine the correct time value as herein defined;

(d) whenever a re-evaluation becomes necessary as a result of an alleged inadequate time value, the aggrieved employee shall be studied whenever possible. There shall be an exchange of the performance rating of the employee being observed before the time study representative of the parties leave the job in question. All such re-evaluation will be performed by the MTM method;

(e) if no agreement is reached by the above procedure, then the grievance shall follow the regular grievance procedure set forth in the collective agreement;

(f) all grievances relating to the interpretation and administration of the Wage Incentive Plan shall be handled as grievances in conformity with the regular grievance procedure.

9. The union submits that the work measurement applicator is a technician whose job is to mechanically apply pre-established criteria to arrive at standards consistent with the internationally recognized Methods Time Management incentive system. In its view by observing an employee and applying pre-set values to each movement observed the WMA does not exercise any real decision-making authority that would make him managerial within the meaning of section 1(1)(n) of the Act. It further submits that while in the exercise of his functions he may have advance knowledge of standards to be applied to various jobs, that is knowledge which becomes known to the union in due course. In the union's view that knowledge is not confidential in the same sense as detailed knowledge of a company's budget or other data that goes to its bargaining strategy and is never made known to a union.

10. Counsel for the respondent concedes that within the scheme of the collective agreement the standards established by the WMA's must, in time, be disclosed to the union. He submits, however, that the time at which that information is released can have an impact on bargaining. He suggests that a union's response to company proposals on its compensation package could depend on its advance knowledge of standards about to be introduced if those standards might adversely affect the earnings of its members. He submits, that the company was faced with that problem as the new standards system was introduced and could again face that difficulty as new equipment, new processes and new standards are brought into the plant. On that basis counsel for the respondent maintains that the WMA's are confidentially employed in matters relating to labour relations.

11. The main thrust of the respondent's argument is that the WMA's exercise managerial functions and that the very nature of their work would place them in a conflict of interest if they must also be part of a union. He submits that the WMA's are an integral part of the management team since what they do goes beyond merely recommending standards to be decided upon by some higher authority. He stresses that in establishing standards they make management's decision. He also emphasizes that the WMA's are the sole representatives of the company when the union grieves a standard. According to counsel for the respondent if the work measurement applicators are to deal with the union in those grievances they must do so from a point of view, and that point of view must be the company's. On that basis the respondent maintains that the WMA's would be in an obvious conflict of interest if they were themselves employees and not members of management. The union's representative replies that there can be no conflict of interest since the office and production employees are in different bargaining units and the union local contesting the standard is a different local from the one which would represent the WMA. It also argues that since the standards established by the WMA's are largely the result of a mechanical application of pre-established norms their decisions are not essentially a matter of independent judgment and grievances over standards are generally matters of objective fact.

12. The general principles to be applied in this case in assessing whether the individuals in question exercise managerial functions were usefully summarized in the decision of the Board in Cottage Hospital (Uxbridge), [1980] OLRB Rep. Mar. 304 when, at pp. 305-306 the Board stated:

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 condition of employment of those in the employ of the organization. Supervisors of employees of those technical experts whose work affects terms and conditions of 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 Limited, supra, at 289).

13. In light of the foregoing principles the issue becomes whether the WMA's are managerial because they exercise at least a power of effective recommendations affecting the economic lives of employees in establishing standards, and in subsequently compromising or refusing to compromise standards which are grieved by the union.

14. While we appreciate that there are some technical differences in the work performed by traditional "time study analysts" and the WMA's in the instant case, these two kinds of industrial engineering technicians do perform comparable functions. The Board's previous decisions respecting the inclusion or exclusion from bargaining units of time study men or methods men are therefore instructive for the disposition of this case. We should emphasize, by way of caution, that this general area tends to require close factual calls and the employment status of persons classified as work measurement applicators must, like the status of time study men, be determined on the merits of each particular case.

15. In Canadian Acme Screw & Gear Limited, [1967] OLRB Rep. Feb. 872 the Board was required to determine whether time study technicians exercised management functions. In that case the Board found that the responsibilities of the time study analysts extended beyond a merely technical role of performing and reporting on certain mechanical calculations. The individuals in that case made recommendations affecting the assignment of employees and the size of the work force. They also were involved with management in the discussion of employee grievances, and represented management in dealing with the union's representatives and its time study technicians. More particularly, they represented management in resolving differences between the union and the company on the application of time study data. They also advised management in assessing bargaining table proposals from the union relating to changes in standards and the method of setting standards. In those circumstances the Board concluded that the time study technicians were both managerial and confidential within the meaning of section 1(3)(b) of the Act.

16. In several subsequent cases the Board concluded that time study analysts were not managerial. In Ferranti-Packard Electric Limited, [1968] OLRB Rep. Sept. 572 the Board found that a group of time study and methods men were not confidentially employed in matters of labour relations. It was not alleged that they were managerial. The Board concluded that they did not exercise confidential duties, noting in the reasons for its decision that they exercised no substantial degree of independent decision-making. Essentially they provided their employer with facts. While they might make recommendations the ultimate decision was always made by some higher authority. The Board also noted that the time study and methods men in that case did not participate in the grievance procedure on behalf of management, "but rather are there in the neutral capacity of supplying facts".

17. The Board came to a similar conclusion in The Canadian Blower and Forge Company Limited, [1974] OLRB Rep. Nov. 771. The respondent in that case sought to exclude from the bargaining unit two methods planners who spent a significant portion of their work in methods and time study work. The Board found that there were no piecework rates for employees in the plant so that the time study work did not affect rates of remuneration. It further noted that the time study technicians had little or no contact with bargaining unit employees concerning the establishment or review of standards, such disputes being resolved by higher authorities. On those facts the Board found that the time study men exercised a mechanical reporting function that did not involve the exercise of managerial authority.

18. In Inglis Limited, [1976] OLRB Rep. June 270, the Board came to a similar conclusion in respect of another group of time study analysts. In Inglis, as in the instant case, the collective agreement expressly provided for production standards to be established by the application of recognized industrial engineering techniques. As in this case, the collective agreement had a special grievance procedure for standards disputed by the union. In its decision the Board noted (at p. 280):

…The calculations of the time study analysts who are responsible for the initial timing of a job and for the 'line balancing' can give rise to union grievances. The time study analysts, are involved up to the point of restudying a job but have never been involved in the grievance procedure beyond this point. There is no evidence as to who performs the subsequent checks or who represents the company in discussion with the union or at arbitration. The evidence is clear, however, that it has never been the time study analysts.

19. In our view there are a number of vital distinctions between Inglis, Canadian Blower and Forge, Ferranti-Packard and the instant case. In the respondent's organization the work measurement applicators set the standards. That is not done by any higher authority in the respondent's organization and their decisions in that regard are not subject to any regular company review. When the company discharges its obligation to determine "methods of performance and sequence of elemental operations" as contemplated by the collective agreement it is the WMA's who make that determination for the company. While it is true that the setting of a standard is largely a mechanical exercise, there is room for some human judgment. For example, the WMA and the union may disagree on whether a certain movement is essential in a given operation. The very existence of a special grievance procedure attests to the fact that in this area the parties can and do differ.

20. When a dispute over a standard matures to the second stage of the grievance procedure it goes to the Standards Department where it is reviewed and can be disposed of in a manner favourable to the union. By the agreed statement of fact it is clear that at that point the Standards Department is represented by the work measurement applicator. If the matter is not satisfactorily resolved at that stage there follows a meeting between the union, represented in part by the Union Incentive Representative and the Standards Department in the person of the work measurement applicator. In the event of an agreed re-evaluation there is an exchange of data between the time study representatives of the parties, the company's representative again being the WMA. Disputes that remain unresolved beyond that point can proceed in the normal course to arbitration. Since the standards established by the WMA's have a direct impact on the earnings of employees it is not surprising that there have been a substantial number of grievances in this area. In all of them the WMA has represented the company, exercising the apparent authority to settle the dispute or see it carried to the next stage of the grievance procedure.

21. When these duties of the WMA's are considered in the light of section 1(3)(b)of the Act it is useful to recall the following passage from the Board's decision in Inglis Limited, (supra) at pp. 270-71:

Collective bargaining by its very nature requires an arm's length relationship between two sides whose interests, objectives and priorities are often divergent. It is critical in striking a bargain which is fair to both sides that the process elicit an open and exhaustive discussion of the respective objectives and priorities and that where these are in conflict the supporting rationale be advanced by persons whose loyalties are undivided. It is further imperative that the acceptance or rejection of whatever agreements arise from the bargaining process be made by persons of undivided perspective and that the subsequent on-going administration of the accepted bargain be by persons having a clear duty to one side or the other. The effective operation of the system of labour relations which presently exists in this jurisdiction is based on an underlying recognition of the inherent differences between the employer and the employees and the need for an arm's length relationship between the employer as embodied by those who exercise managerial function or are employed in a confidential capacity in matters relating to labour relations and the employees.

22. We agree with counsel for the respondent that the foregoing principles are paramount in the application of section 1(3)(b) of the Act. On the facts of this case they are controlling. It is clear that in establishing and defending standards which directly affect the wages of employees the WMA's act on behalf of the company. The respondent is entitled to expect that in so doing they operate from a perspective of undivided loyalty to their employer, and that is so regardless of which union may represent the employees affected by their decisions. If we were satisfied that the work measurement applicators were technicians with no responsibility beyond providing factual data to the company, as with the time study analysts considered in Inglis, our conclusion might be other wise. The facts in the instant case are, however, substantially different from those in Inglis Limited, Canadian Blower and Forge Company Limited and Ferranti-Packard (supra). Because the work measurement applicators make decisions on behalf of the company that directly affect the wages of employees and thereafter defend or compromise those decisions as the company's representative in the grievance procedure, they are more closely akin to the time study analysts in Canadian Acme Screw & Gear Limited, (supra). We must conclude that they exercise managerial responsibilities and are confidentially employed within the meaning of section 1(3)(b) of the Act. They are therefore excluded from the bargaining unit.

23. A certificate will issue to the applicant.

DECISION OF BOARD MEMBER B.L. ARMSTRONG;

1. I dissent.

2. I cannot agree with the majority determination concerning the alleged managerial and confidential status of the Work Measurement Applicators. In my view, these employees belong in the bargaining unit, and are not "managerial" or "confidential" in any meaningful sense of the terms.

3. The majority has apparently relied on the principles enunciated in Cottage Hospital (Uxbridge), [1980] OLRB Rep. Mar. 304. In that case, the Board said:

Over the years the Board has developed general guidelines to assist it in evaluating whether an individual exercise 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).

The principle would appear to be made to order for the case at hand. There is, in my submission, little difference between the Work Measurement Applicators and a typical time study analyst. As was pointed out in the majority decision, the Board has dealt with such employees in the past. Normally, such employees are not managerial - while they may make recommendations based on facts they have compiled, they do not exercise any independent decision-making power, and the ultimate power rests with some higher authority. (See specially Ferranti-Packard Electric Limited, [1969] OLRB Rep. Sept. 572. see also The Canadian Blower and Forge Company Limited, [1974] OLRB Rep. Nov. 771, and Inglis Limited, [1971] OLRB Rep. June 270.)

4. The case of Canadian Acme Screw and Gear Limited, [1967] OLRB Rep. Feb. 872 seems to support the majority view to some extent. However, the Board's language in that case seems to suggest that these particular time study technicians had a good deal of independent decision-making power:

In the instant case, however, the Board finds that in addition to certain reporting functions which are exercised by the time study technicians, they have other regular functions requiring the exercise of independent judgment. The time study technicians, in this case, make recommendations affecting the assigning of employees and at times affecting the reduction of the number of persons employed by the respondent. The time study technicians are involved in discussions with management with respect to the disposition of grievances, which discussions are confidential in matters relating to labour relations. They recommend that new employees be retained and are also asked to pick employees for the purposes of promotion. In addition, they represent management in dealing with union representatives and the union's time study technicians. They also represent management in resolving differences between the union's time study and the company's time study, and they act on behalf of management in assessing the union's proposals for changes in the collective agreement which would affect standards and the methods of setting standards in the future. On the basis of the uncontested evidence of the manner in which the time study technicians in this case act on behalf of management, the Board finds that the time study technicians are required to perform more than a simple reporting function and are employed in a confidential capacity in matters relating to labour relations and exercise managerial functions within the meaning of section 1(3)(b) of The Labour Relations Act and therefore are not employees of the respondent eligible for inclusion in any bargaining unit.

I cannot fit the case at hand into this mold. The situation more closely resembles that of Ferranti-Packard Electric Limited, supra.

5. I also must take issue with the majority application of the Board's principles as set out in Inglis, supra.

Collective bargaining by its very nature requires an arm's length relationship between two sides whose interests, objectives and priorities are often divergent. It is critical in striking a bargain which is fair to both sides that the process elicit an open and exhaustive discussion of the respective objectives and priorities and that where these are in conflict the supporting rationale be advanced by persons whose loyalties are undivided. It is further imperative that the acceptance or rejection of whatever agreements arise from the bargaining process be made by persons of undivided perspective and that the subsequent on-going administration of the accepted bargain be by persons having a clear duty to one side or the other. The effective operation of the system of labour relations which presently exists in this jurisdiction is based on an underlying recognition of the inherent differences between the employer and the employees and the need for an arm's length relationship between the employer as embodied by those who exercise managerial function or are employed in a confidential capacity in matters relating to labour relations and the employees.

When it is remembered that these employees would not be in a production bargaining unit, but rather an office unit, the "conflict of interest" approach is just not convincing. Any decisions made by the employees would not directly affect their own bargaining unit.

6. I agree with the union with respect to the alleged confidentiality of the Work Measurement Applicator job. The information to which the individuals have access is obtained by a simple application of pre-established criteria to tasks being performed by employees. There is nothing even remotely confidential about the knowledge so obtained.

7. For these reasons, I dissent from the majority's decision with respect to the status of the Work Measurement Applicators.