[1982] OLRB Rep. January 126
1071-81-U The Amalgamated Clothing and Textile Workers' Union, Complainant, v. Trimarine (Canada) Ltd., Respondent
BEFORE: Ian Springate, Vice-Chairman, and Board Members J. A. Ronson and B. L. Armstrong.
APPEARANCES: B. W. Adams, C. Clark and M. Robillard for the complainant; W McNaughton and P. Rossi for the respondent.
DECISION OF THE BOARD; January 5, 1982
- This is a complaint under section 89 of the Labour Relations Act in which the complainant alleges that the respondent dealt with the following grievors contrary to section 3, 66, 70 and 79 of the Act, namely:
Mrs. Judy Hollinsky
Miss Linda Rojek
Miss Carol Oriet
Mrs. Victoria Pukay
Mrs. Susham Sood
The respondent, which commenced operations in 1979, makes flotation vests and jackets out of nylon and a lightweight material called "airex". The business is a highly seasonal and competitive one. Mr. Peter Rossi, the respondent's president and part owner, testified that some ninety per cent of all annual orders are placed during the months of January through April for eventual use during the following summer, and that the company must be able to promptly fill orders when they do come in. It should be noted that from the very beginning the respondent appears to have suffered from a lack of financial resources, a problem compounded by the need to build up an inventory prior to the heavy January to April sales period.
The complainant was certified to represent the respondent's employees on April 27, 1981. The driving force behind the union's organizing campaign was Mrs. Judy Hollinsky. Mrs. Hollinsky signed eleven of the respondent's fourteen bargaining unit employees into membership in the union. The complainant filed its application for certification on April 3, 1981. The respondent received notice of the application on Friday, April 10th, along with a request from the Board to forward "documents, from among existing employment records, containing signatures of the employees.. .". These sample signatures were to be used to check the signatures on the union's membership evidence. On the afternoon of April 10th, Mr. Rossi held a meeting with all of the respondent's employees. At this meeting, Mr. Rossi indicated that he needed sample signatures to send to the Board and asked that employees sign their time cards for this purpose. Mr. Rossi also indicated that he had a document for employees to sign expressing their faith in the company. At the hearing, counsel for the respondent indicated that the document in question was meant to be a petition against the union. Mr. Rossi arranged to have a translator at the meeting who could speak to a number of Vietnamese employees in their own language. The Vietnamese were told that there was no need to be afraid of pressure from either the union or the company and that they could do what they wanted. During the course of the meeting, Mrs. Hollinsky stated loudly that none of the employees should sign anything. Only one employee signed the petition and her pay card.
Subsequent to the meeting with the employees on April 10th, the respondent posted a notice which read as follows:
"Due to the unexpected delay in our current shipment from our supplier of nylon, we are forced to announce a temporary lay-off effective Monday, April 13, 1981."
Subsequent to the lay-off most of the respondent's employees were recalled for varying periods of time. None of the grievors were recalled. The complainant contends that the lay-off was prompted by the application for certification, and that the grievors were not recalled due to the fact that they were union supporters. Counsel for the respondent conceded that in the circumstances the timing of the lay-off "looked bad", but he contended that the timing was coincidental and that the lay-off and subsequent action on the part of the respondent had been motivated strictly by business considerations.
The Board heard considerable evidence from the respondent concerning its financial situation and the difficulties it was facing at the relevant time. This evidence was for the most part not challenged by the complainant. This evidence indicates that the respondent had originally projected a heavy sales volume for its 1981 season. This projection was based in large measure on its 1980 sales, which included a sale of some 1,100 units to a Vancouver-based distributor. The same distributor had indicated that in 1981 it would be placing an order of between 1,000 and 1,400 units. The respondent also had discussions with Peter Storm, a well known supplier of marine equipment about supplying the company with vests and jackets bearing the Peter Storm name. These discussions led the respondent to believe that in 1981 Peter Storm would be placing two separate orders of 500 units each. Based on these and other projected sales, the respondent concentrated on building up its inventory to meet the orders expected to be placed between January and April of 1981. However, the result of this inventory build-up was that the respondent found itself in a deteriorating liquidity position. By October 31, 1980 the respondent owed a total of some $129,000.00.
It is not disputed that the 1981 season turned out to be a disaster for the respondent. According to Mr. Rossi this was due in part to a general slump in flotation vests and jacket sales, which caused a large Vancouver manufacturer to "dump" its product on the market well below the price which the respondent could afford to charge. Whatever the reason, it is clear that the respondent's sales were well below projected levels. The Vancouver distributor which had indicated that it would be placing an order of between 1,000 and 1,400 units, did not place its order until May 21, 1981, and then it was only for 97 units. In April an order did come from Peter Storm for 500 units, but with the word that there would not be a second order.
As of April 10th the respondent had not yet received even the disappointingly low orders from either Peter Storm or the Vancouver distributor. Instead, it had firm orders for only between 300 and 400 units. The respondent's inventory at this point stood at some 1,100 units, and additional units were being completed at a rate of 40 to 50 per day. By this time the respondent's liquidity problem had, not unexpectedly, become worse, with its debt now totaling some $199,000.00.
The respondent's growing liquidity problem had not gone unnoticed. On April 9, 1981 the bank telephoned Mr. Rossi and advised him that a $2,000.00 overdraft had arisen with respect to the respondent's account, and that the bank would not tolerate any overdraft. The overdraft was paid off by one of the respondent's other shareholders using his own funds. On April 9th the bank also indicated to Mr. Rossi that it wanted additional guarantees for a loan the respondent had outstanding. During the conversation Mr. Rossi asked if the bank would issue a letter of credit to Consoltex, its supplier of nylon, but the bank refused.
Back in October of 1980 the respondent had ordered a total of 5,500 meters of nylon from Consoltex. It appears that originally the end of December 1980 had been set as the delivery date, but that this was later pushed back to April of 1981. About 3:30 p.m. on April 10th, after the meeting with the employees about the union, Mr. Rossi was telephoned by Consoltex and advised that the nylon was ready to be shipped, but the company would not ship the material until the respondent first paid it some $8,000.00 to cover part of the cost of an earlier shipment, and as advance payment for this shipment. The respondent lacked the funds to make the payment, and at the time was running out of nylon.
Mr. Rossi testified that it was his conversations with the bank and Consoltex which prompted him in consultation with the respondent's other shareholders to temporarily lay-off all staff while some decisions were made as to what should be done. It should be noted that on three previous occasions the respondent had laid off all of its employees due to excess inventory, namely on August 27, 1979, December 10, 1979 and July 11, 1980. Following these earlier lay-offs, all of the employees had been recalled.
Subsequent to April 10, 1981 the respondent recalled a number of employees for various lengths of time. Mr. Rossi testified that over the weekend following April 10th it was decided to finish off those units which were already near completion. Both Mr. Rossi and Mrs. Eloranta, the respondent's production manager, testified that the decision as to which employees should be recalled was made by Mrs. Eloranta. Mrs. Eloranta testified that initially she recalled three employees who normally did the finishing work. Subsequently, the Peter Storm order came in along with an advance deposit. The existing inventory of finished units did not meet the Peter Storm specifications and accordingly additional employees were recalled to finish off units using nylon purchased with the Peter Storm deposit. The first three employees were recalled on April 14, 1981. One additional employee was recalled on each of April 20th, April 29th, May 6th, May 11th, May 20th and June 3rd. All of these employees were laid off on June 19th. Three employees were subsequently recalled on July 6th, two on July 13th, one on July 16th, another on July 22nd and two on August 4th. By October, the respondent was back down to two employees who were working on jackets and vests which had been left on the floor at the time of the April 10th lay-off. On October 19, 1981 a third employee was recalled. Mrs. Eloranta testified that in deciding on which employees should be recalled during this period, she chose those who were capable of efficiently doing a number of different jobs so as to reduce the number of employees required. It should be noted that on May 6, 1981 Mrs. Jo Anne Kam Kim, Mrs. Hollinsky's sister, who normally sews airex, was recalled to do some sewing work. Mrs. Kim was subsequently recalled for two other periods to do the same type of work. Mrs. Kim was a union supporter.
The five grievors were not recalled by the respondent at all after April 10, 1981. On August 4, 1981 they were each forwarded termination pay pursuant to the Employment Standards Act. It is the contention of the complainant trade union that this was due to their support for the union.
Miss Linda Rojek, Mrs. Victoria Pukay and Mrs. Susham Sood did not testify at the hearing, and no one else presented evidence to indicate that they had been active union supporters. Indeed, in the certification proceedings, the union did not even file a membership card on behalf of Mrs. Sood. Mrs. Eloranta gave uncontradicted testimony that Miss Rojek and Mrs. Sood and Mrs. Pukay each had experience on only one job operation, and further that Mrs. Pukay was a new employee. Miss Oriet did testify. Miss Oriet had worked primarily as an airex cutter, ajob which has apparently not been performed since April 10th. Miss Oriet had performed a number of other job functions in which her work quality was highly regarded, but her speed was less than that of other employees. Miss Oriet admitted that her only involvement with the union had been to sign a union card. Because of the widespread support the union enjoyed among the employees, eleven of the fourteen bargaining unit employees having signed union cards, it is clear that most of the employees who were recalled had also been union supporters.
This brings us to Mrs. Hollinsky, who signed up the employees into union membership. Mrs. Hollingsky's comments at the meeting on April 10th, would have made it clear to the respondent that she was an active union supporter, and indeed Mr. Rossi acknowledged this to be the case. Mrs. Hollinsky commenced work with the respondent on September 8, 1980. This was the first time she had done this type of work. Mrs. Hollinsky, who primarily worked on waist bands, acknowledged that she had never been fast enough to be paid at the set piece rate basis, but instead had always been paid an hourly rate. Mrs. Hollinsky also acknowledged that there had been complaints about the speed at which she worked. Mrs. Eloranta testified that Mrs. Hollinsky's work needed to be re-done more often than that of any other employee, and estimated that forty per cent of her work had to be re-done.
In a complaint such as this, section 89(5) places the onus on the respondent to come forward with a credible explanation for its actions devoid of any anti-union motive. The respondent must prove that it did not violate the Act and in doing so it must establish certain facts on the balance of probabilities. The Board outlined the extent of the onus in The Barrie Examiner case [1975] OLRB Rep. Oct. 745, wherein at paragraph 17 the Board stated:
"Given the requirement that there be absolutely no anti-union motive, the effect of the reversal of the onus of proof is to require the employer to establish two fundamental facts — first, that the reasons given for the discharge are the only reasons, and, second, that these reasons are not tainted by any anti-union motive. Both elements must established on the balance of probabilities in order for the employer to establish that no violation of the Act has occurred."
One issue in this case is whether the lay-off of all the employees, including the grievors, announced April 10, 1981 was the result of the respondent learning of the complainant's application for certification earlier in the day. The timing of the announcement of the lay-off certainly adds weight to the allegation. On the other hand there is no question as to the seriousness of the respondent's situation, as its inventory and debts mounted and projected sales failed to materialize. Indeed, one would have thought that long before April 10th the respondent would have re-assessed its situation, and concluded that production should be cut back. As it was, the respondent appears to have faced reality only when forced to do so by the phone call from the bank and later the call from Consoltex demanding payment in advance for needed materials. Against this background the drastic action of laying off all employees until some decisions could be made about how to proceed and what work should be finished was not at all unreasonable. In this regard it should be noted that the decision to lay off the employees was not made upon the respondent becoming aware of the application for certification, but only later when the call came from Consoltex. Although the decision is admittedly not an easy one to make, given the timing involved, in all of the circumstances we are satisfied, on the balance of probabilities, that the respondent's decision to lay off all of the employees was not motivated by anti-union considerations.
Not all of the employees recalled by the respondent were recalled at the same time, and some appear to have been recalled for only short periods of time. The grievors were not recalled at all. However, there is no basis on the evidence before us to indicate that four of the grievors, namely, Rojek, Oriet, Pukay and Sood, might have been singled out for their support of the union. None of the four had actively been involved in the organizing campaign, and other union supporters were recalled. Further, the respondent led evidence as to the restricted type of work Rojek, Pukay and Sood had performed, and as to Miss Oriet's slowness and fact that there was no call for the work she normally performed. We are satisfied that the decision not to recall these four was not motivated by anti-union considerations.
The situation with respect to Mrs. Hollinsky is rather less clear cut in that she was known by the respondent to be an active union supporter. However, the respondent did establish that it did not require all its staff, and that Mrs. Hollinsky was among its slowest and less accurate employees. In these circumstances, it would have not been unreasonable for the respondent not to have recalled her. It is of some note also that the respondent for varying periods of time did recall Mrs. Hollinsky's sister. It would have been reasonable for the respondent to assume that Mrs. Hollinsky's sister was a union supporter, as in fact she was. Accordingly, her recall would not have been consistent with an attempt to ensure union supporters were not recalled. In these circumstances, we are satisfied on the balance of probabilities that the respondent's action is not recalling Mrs. Hollinsky was also not motivated by anti-union considerations.
Having regard to the above conclusions, the complaint is hereby dismissed.