International Woodworkers of America, Local 2-600 v. Amoco Fabrics Ltd., 1982 CanLII 845

[1982] OLRB Rep. March 314

1666-81-U International Woodworkers of America, Local 2-600, Complainant, v. Amoco Fabrics Ltd., Respondent.

BEFORE: M. G. Picher, Vice-Chairman, and Board Members S. Cooke and J. A. Ronson.

APPEARANCES: . J. Sack for the complainant; F. R. von Veh and Steve McCormack for the respondent.

DECISION OF THE BOARD; March 26, 1982

1This is a complaint under section 89 of the Labour Relations Act. The complainant alleges that the respondent has bargained in bad faith and committed other unfair labour practices in respect of the layoff of a large number of its employees and the transfer of certain parts of its production from its plant at Hawkesbury to its plant at Cornwall. The union submits that the employer has violated sections 3, 15, 60, 64, 66, 70, 72, 75 and 76 of the Act.

2Initially the complainant requested broad relief, including a cease and desist order, an order directing the respondent to bargain in good faith and an order directing the respondent to reinstate the grievors, with compensation, to their jobs or to substantially equivalent jobs at the Cornwall plant, including all costs of moving and relocation. The employees in the company's Cornwall plant are represented by a separate union. At the initial hearing that union, the Amalgamated Clothing and Textile Workers Union, (A.C.T.W.U.), and two of its locals sought to intervene in these proceedings to protect their interest as bargaining agents in the respondent's plants at Cornwall and Brantford.

3A preliminary issue respecting the standing of the A.C.T.W.U. and its locals was disposed of at the outset of the hearing. To the extent that the initial relief requested would have involved the displacement of employees at Cornwall represented by the A.C.T.W.U. that union would have had standing in these proceedings. The seniority provisions in its collective agreement with the company would have been abrogated by an order of this Board ordering the reinstatement of Hawkesbury employees into the Cornwall plant with full seniority for service accrued in Hawkesbury. To that extent the A.C.T.W.U. had a legal interest in the outcome of this complaint. In face of the preliminary motion counsel for the complainant union amended the prayer for relief. Apart from the declaratory and cease and desist orders he limited the reinstatement remedy sought to an order allowing Hawkesbury employees ninety days to accept a first opportunity to hire into new vacancies at the Cornwall plant. That amendment removed the possibility of any adverse impact on the contract rights or representation rights of the A.C.T.W.U. at Cornwall. The Board therefore ruled that that union and its two locals were without standing to participate in the hearing of this complaint.

4A number of facts are not in dispute. The respondent is a subsidiary of Standard Oil of Indiana. It manufactures artificial fibres from petrochemical products. Since June of 1972, after certification by this Board, the complainant has had a series of collective agreements at the plant of the respondent and its predecessor, Patchoque Plymouth, at Hawkesbury. Negotiations for the most recent collective agreement were long and difficult, involving a protracted strike. It is those negotiations that give rise to this complaint. Following the expiry of the collective agreement ending December 30, 1979 negotiations between the parties took place from November 1979 through September 1980. A lawful strike took place from May 12, 1980 to September 22, 1980. Neither party disputes that it was a heated and widely publicized strike marked by picket line violence, injunctions and criminal prosecutions. Between April of 1980 and the reaching of a settlement in September the parties had the assistance first of a conciliator, then of a mediator and lastly of a two-man advisory committee appointed by the Minister. In the fall of 1980 the strike ended, a collective agreement was signed and production resumed.

5changes occurred after the strike. At the outset of the strike the bargaining unit numbered approximately 540 employees. When the employees returned to work certain changes had been implemented and others were in the course of being effected. A computerized extruder which was installed prior to the strike had been dismantled and moved to the company's Cornwall plant. A few months after the strike, in December of 1980 and January of 1981, more machinery and equipment began to move out of the Hawkesbury plant: 47 looms were moved to Cornwall in January and February, 10 looms were moved to another plant at Brantford in April, and 20 looms were moved to plants in the United States. A further 10 looms were moved to Cornwall in June.

6During and following this period layoffs took place. Forty-one employees were laid off at the Hawkesbury facility effective January 4, 1981, 27 of whom were later recalled. On February 12, 1981 a further 9 employees were laid off at the Hawkesbury facility. A policy grievance filed in relation to that layoff was dismissed at arbitration. The 9 employees laid off were later recalled.

7The most contentious layoff, the incident giving rise to this complaint, came on November 10, 1981 when 131 employees at the Hawkesbury plant were laid off indefinitely. Twelve individual grievances and one policy grievance have been filed in respect of the layoff and are proceeding to arbitration. On that basis counsel for the respondent urged this Board to decline to hear this complaint and defer to the arbitration process. The Board reserved on that motion at the hearing, preferring to hear the evidence before ruling. Having regard to the nature of the complaint and the remedies being sought, some of which transcend the limits of the collective agreement, we do not consider this to be a case in which the Board should defer to boards of arbitration (See Valdi Inc., [1980] OLRB Rep. Aug. 1254).

8The union complains that the company with anti-union motive, has deliberately and systematically reduced the bargaining unit from 540 employees to approximately 260 employees as a reprisal for the union's militancy and as a means of discouraging the exercise of collective bargaining rights by the employees at Hawkesbury. The union further maintains that the company violated its duty to bargain in good faith. On the theory of Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577, it submits that the respondent failed in its duty to discuss with the union relocation plans that were to have an impact on the union and its members. The two branches of the complaint give rise to two separate burdens of proof. The burden is upon the complainant union to establish that the company has failed to bargain in good faith and make every reasonable attempt to make a collective agreement; the burden is upon the company to establish that the layoffs and the transfer of work from Hawkesbury was not the result of an anti-union motive or an intention to chill lawful union activity.

9The evidence of the company was given by Mr. Ken Thompson, President of Amoco Fabrics Ltd. In 1979, 1980 and until September of 1981 Mr. Thompson was the Vice-President of the respondent in charge of marketing. Mr. Thompson's evidence is that moving part of the company's operations from Hawkesbury to Cornwall is part of an overall strategy to rationalize production in three Ontario plants. According to his evidence the plan was under consideration for a considerable period of time and its implementation began before the events giving rise to this complaint. He testified that the decision to implement the plan is entirely unrelated to the labour difficulties or union activity at Hawkesbury.

10Mr. Thompson's evidence included a lengthy account of the structure and operations of Amoco Fabrics Ltd. It is not necessary to dwell on the detail of his testimony, which can be readily summarized for the purposes of this complaint. The company has three principal products: carpet backing, industrial fabrics - including produce bags, bulk packaging and industrial applications of synthetic textiles and lastly, fibre and yarns which are used in woven textile goods.

11The carpet backing manufactured by the company is of two kinds; primary carpet backing (the mat into which the carpet yearn is tufted) and secondary carpet backing (the heavy synthetic jute which is laminated onto the first layer of backing and forms the underside of carpeting). In the past fifteen years synthetic fibres have succeeded in displacing natural jute, generally imported from India and Bangladesh, as the primary material in secondary carpet backing. According to Mr. Thompson however, upward pressure in the world prices of oil and the relationship of North American currencies to the pound sterling, the trading currency for jute, have had an adverse impact on the competitive position of synthetic fibres. As a result jute is now available at 1967 prices and the carpet manufacturers who are a significant portion of the market previously serviced by Amoco Fabrics Ltd. are increasingly turning to jute as an alternative. The respondent's industrial fabrics production appears not to have been immediately affected by these developments. In addition to its commercial bagging products for feed, seed, fertilizers and produce it has developed new markets in furniture, bedding, swimming pool liners, asbestos containers, intermediate bulk containers and the production of reinforcing fabrics for engineering applications such as roads and railbeds. The competitive price of jute has also not affected the yarn and fibre production of the respondent.

12In 1979 the respondent had only one production plant in Canada, located at Hawkesbury. It was devoted to the manufacture of the entire range of products described above. That became a cause of concern for the company from the standpoint of efficiency. Changes in production runs from one product to another could cause considerable down time in the plant, ranging from eight hours for an extruder being transferred from one yarn to another to twenty hours, sometimes thirty-two, for looms. In contrast to Hawkesbury, the company's U.S. plants tended to have the three different product lines concentrated in different plants. In the late 70's the company, largely through studies and suggestions from Mr. Thompson himself, formed the opinion that producing the entire range of its products under one roof at Hawkesbury had substantial inefficiencies and costs that could be avoided. It was felt that a plant that was devoted to fewer product lines with longer runs and fewer changeovers and shutdowns would be less costly in terms of lost time and maintenance and would, in the long run, be more profitable. The company had concerns that the inefficiency of the Hawkesbury plant, producing the widest range of product of any Amoco plant in the world, was actually costing the company in direct sales and its ultimate market share.

13In the late 1970's Mr. Thompson became aware that the Hawkesbury plant had a lower return on investment performance than other Amoco plants in the U.S. and abroad. When he looked at the structure of other companies in the fabrics field he found that Amoco's competitors were switching to smaller plants with more specialized product lines. Mr. Thompson felt that that was the way Amoco Fabrics Ltd. should go in Canada if it was to compete successfully.

14In October of 1978 the company commenced negotiations to purchase a plant owned by Thiokol Fibres in Brantford. With 80 hourly rated employees and 17 salaried staff it was a small plant producing primary carpet backing, a light scrim material used in the lumber industry and a small amount of momofilament yarn. Mr. Thompson, himself a former manager with Thiokol, instigated the purchase of that plant as part of a plan to diversify and rationalize the company's production facilities. He saw the purchase of the Brantford plant, a unionized facility with established bargaining rights held by the A.C.T.W.U., as an opportunity to test first hand the theory that a smaller production unit would be more profitable. The plant was purchased in December of 1979. The performance of the Brantford plant, as reflected in the production books at the time of the takeover, gave him the evidence that he needed; with its production concentrated chiefly on primary carpet backing the Brantford plant yielded product at a lower unit cost than was otherwise possible. Partly on the strength of that evidence Mr. Thompson received approval from the U.S. to implement a plan shifting the company's Canadian production facilities to smaller scale operations. In February of 1980 the company decided to investigate alternative manufacturing sites in Ontario as part of a plan to remove certain product lines from the Hawkesbury plant.

15It was decided that the company's new plant would be dedicated principally to the manufacture of industrial bagging, the principal market for which is in Montreal, with secondary markets in Toronto. After studying possible locations in Cornwall, Brockville, Belleville, Lindsay, Gault, Cambridge, Perth and Smith Falls, the company decided on Cornwall as the site for its new plant. The search for a new plant site was commenced at a time when the plant in Hawkesbury was in negotiations for a new collective agreement; at that time bargaining had been ongoing for some three and a half months, although the strike which was to commence in May 1980 was still some three months away. The search for a new location, however, went on during the strike and the decision to purchase a plant in Cornwall was made in August of 1980, during the last month of the strike.

16The Cornwall site was ideal. The respondent was able to take over an existing vacant building of approximately 100,000 square feet, located on a railway siding and equipped with a sub-station for electrical energy. The location was good for servicing the Montreal and Toronto markets. Cornwall was also ideal from a labour standpoint; an established textile manufacturing centre, it provided a substantial labour pool, particularly in light of the layoff at that time of approximately 140 employees by a large carpet manufacturer located in the city.

17Production started in the Cornwall plant in November of 1980. The evidence establishes that apart from one computerized extruder no equipment was moved from Hawkesbury to Cornwall in 1980. The initial equipment installed in Cornwall came from the respondent's facilities in the United States, the United Kingdom and included some looms imported from Switzerland. While the plant in Cornwall initially employed approximately 44 employees, by the summer of 1981 its complement had risen to over 100. At the time of the hearing it had some 168 employees.

18According to Mr. Thompson the company's production in Canada was rationalized in the following way with the opening of the Cornwall plant:

A Brantford

1. Primary carpet backing (for South-Western Ontario manufacturers)
2. Light scrim (small quantities)
3. Fibrilated yarns (small quantities)

B Hawkesbury

1. Primary carpet backing (for Quebec manufacturers)
2. Industrial and civil engineering fabrics
3. Staple fibres and fibrilated yarns

C Cornwall

1. Secondary carpet backing (lenowoven)
2. Industrial bagging (lenowoven)
3. Spun yarns and staple fibres (open end spinning)

19The foregoing breakdown reflects some mix of the three production divisions in each of the plants. According to Mr. Thompson it would not have been practical to have one plant dedicated exclusively to each of the divisions of carpet backing, industrial fabrics and yarns. The impact of the company's move, however, was to significantly narrow the lines of production at Hawkesbury. With the introduction of plants in Brantford and Cornwall the following product lines left Hawkesbury.

I. Industrial bagging products 2. Lenowoven mech bags 3. Lenowoven secondary carpet backing

In addition the company decided to install a new "open end" spinning process for making yarn in Cornwall rather than Hawkesbury, as orginally planned.

20The foregoing production changes brought about a substantial movement of equipment away from Hawkesbury. In the early part of 1981 a total of 67 looms were moved to the two other Canadian plants. Forty-seven narrow looms were moved to Cornwall in January and February of 1981 and 10 looms to Brantford in June and July. In addition some 20 looms were moved from Hawkesbury to the company's plant at Hazleton, Georgia where it stocks excess equipment and modifies it for new applications.

21The movement of capital, however, was not entirely out of Hawkesbury. The evidence establishes that both immediately before the strike and after the strike substantial capital investment was made in the Hawkesbury plant. Mr. Thompson estimates recent capital expenditures in Hawkesbury at approximately four million dollars. Three million of that was attributable to the completion of a new meltspin operation, the construction of which had commenced prior to the strike. Approximately one million is new capital, invested entirely after the strike, principally in the form of two heavy duty face yarn online reclaim systems and two five roll drawstands for an extrusion line which is scheduled to produce fibrilated fibre for artificial grass carpet. In addition, the company has ordered a new bobbin stripper and has commenced the coversion of a production line described as the F.L.W. line. On the whole the evidence is not consistent with an intention to stagnate or wind down operations at Hawkesbury.

22The evidence also establishes a clear diversification of functions between Hawkesbury and Cornwall. The Hawkesbury plant now concentrates primarily on the markets for non-woven industrial and civil engineering fabrics, primary carpet backing, staple fibres and fibrilated yarns. According to Mr. Thompson the plant has temporarily maintained 10 looms devoted to the production secondary carpet backing principally to save some twenty-five jobs and minimize the impact of the layoffs. The Cornwall plant, on the other hand, staffed with experienced weavers, is dedicated to the production of material requiring more stringent quality standards including industrial bagging, lenowoven yarns, open end spun yarns and secondary carpet backing. According to Mr. Thompson the division of labour between the plants was designed to promote efficiency and productivity by allowing longer production runs, less changeovers, shorter down time and a greater streamlining in overall administration. His unchallenged evidence is that to date the company's projections in that regard have been confirmed. According to Mr. Thompson records monitoring output per hour disclose that overall efficiency has improved. Mr. Thompson testified that the experience in Canada, beginning with the positive performance of the small Brantford plant, has inspired a move to smaller production facilities in the United States, where four small specialized facilities have been built or purchased, following the pattern in the Canadian operations.

23Against this background of evidence Mr. Thompson was asked two questions fundamental to this complaint. Why, in March of 1980, when the company was in negotiations at Hawkesbury did it not raise with the union the possibility of opening a plant elsewhere in Ontario which might take over some of the production previously performed in the Hawkesbury plant? Secondly, why were some 147 employees at Hawkesbury laid off?

24The decision to open another plant in Ontario was made in March of 1980. At that time Mr. Thompson was not directly involved in the negotiations for the renewal of the collective agreement at Hawkesbury. As the chief architect of the corporate plan for production in Canada, however, he was aware of the production activity projected for each of the three locations, including Hawkesbury. According to his testimony the company saw no need to advise the union at Hawkesbury of its plans for the location of a new facility in the province. Mr. Thompson explained that in the spring of 1980 the company was experiencing a strong economy in its industry with no apparent end in sight to the growth of its markets. While it was anticipated that some work would move from Hawkesbury, the company had reason to believe that the shift of production would be more than compensated for by growing sales in its new production lines. Specifically, it anticipated an expansion in its production of intermediate bulk containers at Hawkesbury. It also expected that the completion in its multi-million dollar meltspin facility for the production of staple fibres, then under construction in Hawkesbury, would minimize any significant impact on the employment levels there. According to Mr. Thompson, given the economic buoyancy which the company was experiencing in the spring of 1980 and the prospects for an expansion of certain of its production lines at Hawkesbury, the company did not anticipate that the opening of a third plant in Ontario would reduce the Hawkesbury work force in any significant way. For that reason it did not consider that its decision to open another plant should be the subject of bargaining with the union at Hawkesbury.

25If the company did not anticipate any substantial lay off at Hawkesbury why were 131 employees laid off on September 15, 1981? The evidence of Mr. Thompson is that the layoff was not caused by the company's decision to open a plant in Cornwall. He stated that beginning in June or July of 1981 a number of the company's markets experienced a serious downturn, causing an unanticipated build-up of inventory through the summer and fall. One of these was the carpet industry which, at the time of the hearing, had declined to some fifty or sixty per cent of its level of activity of the previous year. Mr. Thompson attributed this decline to the present low level of housing construction. By his account the level of housing starts, which at the relevant time were at their lowest since 1961, has a substantial impact on the sale of carpet.

26The unchallenged evidence of Mr. Thompson is that the respondent's competitors in Canada have been equally affected by the current economic conditions. A Dominion Textiles Ltd. production facility also located in Hawkesbury has recently been required to lay off over forty per cent of its employees. A plant of the respondents located in Roanoke, Alabama was recently closed indefinitely, causing the layoff of some 700 employees. The respondent has also reduced production schedules at its Brantford and Cornwall plants, although there have been no layoffs in those facilities to date.

27Mr. Thompson's evidence on the events at Hawkesbury is fairly simple and direct. According to his testimony at the time the decision was made to locate a third plant in Ontario, the company did not anticipate the falling markets which later developed. While the company's officers knew that the reduction in looms at Hawkesbury would have an impact on jobs, they anticipated that the new meltspin operation would create about fifty new jobs. In addition the company anticipated strong markets for its staple fibre production, for its grass carpet line, for its intermediate industrial bulk containers and civil engineering fabrics. All things being equal, in a good economy the company felt that it would be able to retain something close to a full complement in its work force at Hawkesbury. The lay off of 147 employees, in addition to the lay off of certain supervisory and office staff, was eventually necessitated because the company's economic predictions were not borne out.

28The union called very little evidence to directly contradict the testimony of Mr. Thompson. It did not subpoena any company documents in relation to its complaint nor did it ask the Board to order Mr. Thompson to produce such documents during the course of his testimony. Counsel for the union rested his case largely on the argument that since Mr. Thompson did not adduce company records and documents in evidence to substantiate his oral testimony the respondent has not discharged its burden under section 89(5) of the Act. Specifically, according to the complainant, the company did not satisfactorily explain the motives or reasons for the lay off of the employees in September of 1981. The union asserts that the evidence is not sufficient to discharge the burden of proof on the company to establish that the lay offs were not unlawfully motivated. Counsel for the union submits that where documents would confirm the position being asserted by a party in litigation, the failure to produce those documents or to call as witnesses persons with the best knowledge of the events can give rise to adverse inferences against the party with the custody of the documents or access to those persons. In this regard he referred to Murray v. Saskatoon(1952), 1951 CanLII 202 (SK CA), 2 D.L.R. 499 (Sask. C.A.), at page 505-06; N.L.R.B. v. Evans Packing Company, 463 f. (2d) 193 (1972) (U.S. Court of Appeals); McGregor Hosiery Mills, [1976] OLRB Rep. Oct. 583 at para. 31-32; Levesque et al. v. Comeau et al. (1970), 1970 CanLII 4 (SCC), 16 D.L.R. (3rd) 425 (S.C.C.); Wigmore on Evidence, 1979 Edition Vol. 2 Page 182; Sopinka and Lederman, The Law of Evidence in Civil Cases, pages 535-37. Other dicision of the Board relied on were Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577; Inglis Limited, [1977] OLRB Rep. Mar. 128; Webster and Horsefall (Canada) Ltd. [1968] OLRB Rep. Sept. 780; Humpty Dumpty Foods Ltd., [1970] OLRB Rep. July 401; Accutext Limited, [1980] OLRB Rep. Feb. 131; Tillotson — Sekisui Plastics Limited, [1979] OLRB Rep. Oct. 1027; Silverwood Dairies, [1981] OLRB Rep. Mar. 321, Modern Pattern Works Ltd., [1976] OLRB Rep. Mar. 67, Starplex (Scientific Division of Canadian Medical Laboratories Limited), [1981] OLRB REP. MAR 346; B & S Furniture Manufacturing Limited, [1980] OLRB Rep. May 645; Doral Construction Limited, [1980] OLRB Rep. May 693.

29As the Board has noted there are two separate burdens of proof in these proceedings. The burden is upon the union to establish that the respondent has breached the duty which it owed to the union under section 15 of the Act to bargain in good faith by failing to bring its plans for expansion in Cornwall to the bargaining table. The company bears the burden of coming forward with a full and satisfactory explanation establishing the reasons for the layoff of the employees at Hawkesbury.

30The unchallenged evidence establishes that Mr. Thompson was the chief architect of the respondent's production strategy for Canada from 1979 to the present. He testified for the better part of two days, giving a lengthy and detailed explanation of the origins and implementation of the company's decision to locate in Cornwall. He also explained the market conditions affecting the company's production in the middle and late part of 1981 and into the early part of this year. When he was cross-examined on facts that could be borne out in company documents, he was asked a number of times by counsel for the union whether such documents existed. Although he replied in the affirmative, he was never asked to produce the documents.

31There is no unconditional obligation on a party, whether employer or union, appearing as a respondent before this Board to adduce in evidence all documents relevant to a complaint. A union charged with counselling or procuring an unlawful strike may satisfy the Board of its innocence through the oral evidence of an officer or officers with knowledge of the facts alleged; if their testimony is credible the union need not adduce all correspondence, memos, minute books and business records in its possession to purge the accusations. In proceeding before this tribuanl, it is for the parties to determine what evidence they will advance to make their case and for the tribunal to determine whether, on the whole of the evidence, the case is made.

32We find the evidence in the case of the respondent to be credible and compelling when viewed in its entirety. The evidence establishes that beginning in 1979 the company began to implement a new production strategy. Its goal was the achievement of greater efficiency through an increased specialization of product lines in its plant. Its experience with the Brantford plant justified the decision to puchase a plant in Cornwall.

33In can scarcely be suggested, as was the case in Westinghouse, that the company was looking for a way to operate union free. The unchallenged evidence is that the entire textile industry in Cornwall is organized by the Amalgamated Clothing and Textile Workers Union. In choosing the Cornwall location the company had little doubt that its new plant would soon be unionized - an expectation which quickly materialized. A Board certificate issued to the A.C.T.W.U. for bargaining rights in the Cornwall plant on December 18, 1980 (Board File No. 1843-80-R).

34To say that the respondent didn't attempt to make its operations union free is not, of course, a complete answer to this complaint. In any case it would be a violation of the Act to lay off employees as a reprisal for the exercise of their lawful rights, including the right to strike. The union called evidence to establish that the reduction of operations at Hawkesbury was implemeted as a reprisal for the union's strike. Joseph Tomiczek, an employee of the respondent in Brantford, gave evidence that on one occasion after the strike the superintendent of his department, Bill Hempel, commented that because of the level of sabotage taking place at Hawkesbury, there would probably be a gradual phasing out of the Hawkesbury operation. Later, in late September or early October of 1981, Mr. Hempel told Mr. Tomiczek that Hawkesbury would probably continue to run for a while because the company had got rid of all the people that were causing problems.

35There is no evidence to suggest what knowledge, if any, Mr. Hempel has of company decisions beyond the level of his department in Brantford. It is difficult to place this evidence above the level of the idle comment of a departmental supervisor in a plant hundreds of miles removed from Hawkesbury. Moreover, if militancy during the strike is what Mr. Hempel meant by people causing problems, there is little evidence to substantiate a company scheme to rid itself of the troublemakers. The evidence establishes that except for its president, Florent Lariviere, a fairly junior employee elected in the fall of 1980, virtually all of the union executive are still at work in the Hawkesbury plant. The evidence does not disclose any systematic elimination of the employees who supported the strike or who were criminally prosecuted for acts of violence during the strike. While the evidence of Mr. Lariviere and of Mr. Jean Villeneuve, his predecessor as president of the local, give the Board some concern for the respondent's judgment in how to deal with its employees and their elected representatives, we cannot find in their evidence, or in any evidence adduced by the union, the kind of proof that would undermine the respondent's case or sustain the broad allegations made in this complaint.

36In addition to retaining a large number of employees who were obviously dedicated union supporters, the respondent has made a substantial commitment of capital to the Hawkesbury plant, totalling some four million dollars in value since the conclusion of the strike. While the strike caused the company to lose some of its market share, a factor contributing to some extent of the layoffs in January and February of 1981, the evidence shows a pattern of genuine effort on the part of the company to minimize the impact on employment levels at Hawkesbury and to maintain the facility's capacity to respond to such demands for its product as sales allow.

37The evidence of Mr. Thompson respecting the economic decline in the synthetic fibres industry in North America went virtually unchallenged. If the union had wished to dispute the mass layoff of employees of the respondent's competitor in Hawkesbury or of its own employees in Roanoke, Alabama, it could easily have done so. Unchallenged evidence of that kind, coming as it does from the president of the respondent's company, an individual responsible for monitoring the economic conditions in the industry, is evidence which this Board accepts. On the whole we found Mr. Thompson to be a credible witness. He was forthright in his demeanor and was neither evasive nor contradictory in his responses.

38In our opinion the facts in this case are clearly distinguishable from those considered by the Board in Westinghouse Canada Limited. In that case the Board was required to consider whether the duty to bargain in good faith had been violated by the respondent in the formulation of a decision to relocate part of its operation from a unionized plant in Hamilton to number of non-unionized, decentralized plant sites. While the Board concluded that the company's decision was not sufficiently finalized to require disclosure of its plans to the union, and thus dismissed the section 15 allegation, the Board made the following observation:

39Collective bargaining during the prescribed 'open period' is the preferred vehicle for establishing terms and conditions of employment for establishing terms and conditions of employment in this jurisdiction. With the exception of union recognition and inter-union jurisdictional disputes the scope of matters which may be bargained to impasse in this jurisdiction, as contrasted to bargaining under the National Labour Relations Act, is virtually unlimited as is seen from the statutory definition of collective agreement. A collective agreement is defined in the Act as an agreement in writing containing provisions respecting terms and conditions of employment or the rights, privileges or duties of the employer, the employers' organization, the trade union or the employees and under section 14 of the Act the parties are required to bargain in good faith and make every reasonable effort to make a collective agreement. Once an agreement is reached, however, the parties are bound to it for its stipulated term and are prohibited from engaging in economic sanctions during its term regardless of changing economic conditions or management initiatives. The restrictions place upon a trade union in this regard are to be contrasted with the freedom allowed under section 152 of the Canada Labour Code, c. L-l which permits a trade union to bargain to impasse about the effects of technological change occuring during the term of a collective agreement. Having regard to the importance of the exercise, the requirement for full and open discussion, the scope of matters open to bargaining and the statutory framework which binds the parties to the terms of their agreement for its full term, can there be any doubt that the section 14 duty requires an employer to respond honestly when asked in bargaining if he is contemplating initiatives of the type which have a real likelihood of significantly impacting on the bargaining unit. Similarly, can there be any doubt that an employer is under a section 14 obligation to reveal to the union on his own initiative those decisions already made which may have a major impact on the bargaining unit. Without this information a trade union is effectively put in the dark. The union cannot realistically assess its priorities or formulate a meaningful bargaining response to matters of fundamental importance to the employees it represents. Failure to inform in these circumstances may properly be characterized as an attempt to secure the agreement of the trade union for a fixed term on the basis of a misrepresentation in respect of matters which could fundamentally alter the context of the bargain.

39. As the foregoing paragraph discloses, it is inconsistent with the duty to bargain in good faith for an employer to bargain with a union in respect of terms and conditions of employment for work which it has, unbeknownst to the union, already decided to terminate during the term of the collective agreement being negotiated. Obviously, for example, it would reflect less than good faith to obtain concessions from a union in bargaining in return fro a more generous wage package deferred to a second year of the contract f a corporate decision had already been made to close the plant so that the bargaining unit would no longer exist in that second year.

40The duty to bargain in good faith, central as it is to the collective bargaining process, is a delicate concept which must at all times be dealt with by the Board with are and restraint. In Westinghouse the Board was careful to restrict the duty of disclosure to the circumstances described. It specifically alluded to the sensitive nature of corporate and business decision-making in a collective bargaining context, noting that it would risk a serious distortion of the bargaining process to impose a general obligation on employers to advise unions of plans which might never be implemented. It recognized that often the open-ended discussion of uncertain contingencies at the bargaining table could have serious negative industrial relations consequences. To require the employer during the bargaining process to discuss every plan and possiblitity in the company's contemplation would raise non-issues to the level of issues. It would frustrate the ability of the parties to come to grips with real problems by raising the unnecessary spectre of threats and possible litigation.

41The concerns expressed by the Board in Westinghouse have a similar application in the facts of this case. Counsel for the union questions the extent to which the company can, during bargaining, keep to itself a major decision which has been taken on the relocation of work and the alteration of its production strategy. The issue is whether the duty to bargain in good faith is violated when a decision of that kind is taken and the employer does not discuss it in bargaining because it believes that its decision will not adversely affect the job security of employees or the bargaining interests of their union.

42In Westinghouse the Board addressed the problem of requiring an employer to discuss with a union plans which were still in a formative stage. To the extent that a final decision has not been made it would, for the reasons expressed in that decision, be contrary to positive industrial relations to require the employer to disclose its tentative thinking to the trade union that represents its employees. Things uncertain and which may never come to be need not necessarily be the subject of bargaining.

43That general principle also applies to a decision that is finalized to the extent that there is no foreseeable impact on the employees or their union. Most private enterprise is a risk taking venture. There is always some element of uncertainty in a business decision. Where a corporate planning decision is made and the employer believes that its decision will not affect its employees there is inevitably some possibility of an error in the employer's prediction. Events beyond the employer's control, such as changes in the economy or the introduction into the market of competitors or competing products may affect production and sales and, ultimately, the welfare of the company and its employees. Should it follow that any time during bargaining a company make a decision that risks its capital and know-how, and by extension its production, sales and employment levels, it is required to disclose and discuss its business strategy and predictions with the trade union that represents its employees?

44An affirmative answer to that question would be tantamount to moving the union into the corporate boardroom. While some might see that as a positive step, it is not one which in our view can be conjured out of the statutory duty to bargain in good faith and make every reasonable effort to conclude a collective agreement mandated by section 15 of the Labour Relations Act. Collective bargaining under the Act is premised on the exercise of traditional management rights by employers to the extent that those rights are not abrogated by statute or by the terms of a collective agreement. Absent some contractual restriction, it is generally the prerogative of the employer to finance, organize, plan and direct its enterprise in the way that it sees fit. As some recent plant closures have demonstrated, errors of judgment in these areas can be fatal to an enterprise. As part of the scheme of collective bargaining employees and the trade unions that represent them understand and accept that they are generally vulnerable to the success or failure of decisions taken by management, just as they are to market forces beyond their employer's control.

45In some instances a more enlightened attitude of disclosure and discussion with the union might profit the employer in the long run. Secrecy and mistrust can undermine good labour relations. Communication with the union may produce some positive suggestions to improve the employer's strategy and enhance its chances of success. It may be wise to insure that a union is aware and onside when a major initiative is undertaken. The advisability of communication must, however, depend on the sophistication of the parties and the overall quality of their bargaining relationship. There is a difference between what is advisable or desirable from a labour relations standpoint, and what is the minimum required by the Act. In our view, it would be unrealistic and unresponsive to the sensitive nature of collective bargaining relationships to require employers to bargain with their unions about corporate decisions made in the belief, held in good faith and on reasonable grounds by the employer, that employees will not be adversely affected. In those circumstances the degree of disclosure remains in the discretion the employer.

46Considerable latitude must be given to management in the exercise of its judgment. In the instant case the respondent decided to reorganize its production in a way which it believed would maximize productivity without substantially jeopardizing existing jobs at the Hawkesbury plant. It did not advise the union of its plans because it did not believe that there would be any adverse impact on its employees. The evidence before the Board does not disclose that the implementation of the respondent's plans did adversely affect the complement of employees at Hawkesbury. Previous growth and the introduction of the meltspin operation suggested to the company that the opening of a plant in Cornwall would not cause any substantial loss of employment at Hawkesbury. We are satisfied that the respondent's belief was held in good faith and was based on reasonable grounds. The evidence establishes that when the lay off of 131 employees took place in Hawkesbury in September of 1981, almost a full year after the end of the strike, sales were depressed, inventories were high and economic conditions in the textile industry generally and the carpet industry particularly had taken a serious downturn. Having regard to the whole of the evidence we are satisfied that those are the reasons, and the only reasons, for the layoff of the employees of the respondent at Hawkesbury. There is no causal connection between the decision to open a plant in Cornwall and the layoff of the respondent's employees.

47For the foregoing reasons the Board finds that the respondent did not violate the duty to bargain in good faith and did not lay off or terminate its employees at Hawkesbury out of any anti-union motive or in violation of the provisions of the Labour Relations Act. The complaint is therefore dismissed.

DECISION OF BOARD MEMBER S. COOKE;

1. The decision of the company to expand its operations into Brantford and Cornwall was taken according to the evidence for the purposes of expanding the company ability to meet larger customer demand and to increases the product run thereby reducing changeovers resulting in lower cost.

2. This information had it been transmitted to the union early, i.e. before the difficult set of bargaining including the protracted strike, would have allowed the union and the workers it represents to understand and accept the motives of the company. The withholding of the information only heightens suspicion particularly when the above circumstances were followed by three layoffs.

3. I do not agree with the majority in its reasoning in paragraphs 40 through 45.

4. The absence of the best communication however, unless it can be shown to be a part of a deliberate plan to avoid agreement does not constitute a violation of the duty to bargain in good faith.

5. The complainant was able to show a history of behaviour by the respondent company that increased suspicion and mistrust of the workers but it did not show a breach of the duty to bargain in good faith or that the workers were terminated or laid off in violation of the provisions of the Labour Relations Act.