[1982] OLRB Rep. March 314
1648-81-R; 1714-81-R United Steelworkers of America, Applicant, v. Aluminart Products Limited, Extrusion Division, Respondent, v. Group of Employees, Objectors
BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members F. W. Murray and O. Hodges.
APPEARANCES: B. Shell for the applicant/complainant; R. J. McComb, L. Marzari, J. Dorsay for the respondent; Joe Placido for the objectors.
DECISION OF THE BOARD: March 4, 1982
The Board directs that the above application and complaint be and the same are hereby consolidated.
This is an application for certification which was heard together with a complaint under section 89 of the Labour Relations Act. Originally, the union contended that the Board should issue a certificate pursuant to section 8 of the Act. After the initial days of hearing, the union withdrew this request. However, because the conduct of a representation vote might be affected by the outcome of the section 89 complaint, the parties were content that the related application/complaint should continue to be heard together and disposed of by a single decision.
Almost all of the membership cards in the trade union were signed on October 28, 1981. There is no other evidence concerning the union's organizing campaign. The application for certification itself was filed on October 29, 1981. On October 30, a number of the respondent's employees were indefinitely laid off.
The union concedes that the October 30th lay-off occurred before the respondent would have had formal notice of the application for certification, and further, that a lay-off would have occurred sometime in the fall in any event. It is admitted that the respondent's business is highly seasonal and that production cutbacks and consequent lay-offs usually occur around this time. The union contends however, that the timing of this particular lay-off, and the selection of the individuals terminated were both influenced by anti-union considerations.
On a complaint of this nature, section 89(5) casts an onus upon the respondent to demonstrate that its conduct was motivated solely by bona fide business considerations, and was not influenced in whole or in part by anti-union animus. That is the respondent's position in the instant case.
The Board heard considerable evidence concerning the deteriorating business conditions which allegedly precipitated the October 30th lay-off. Lou Marzari, the owner of the respondent, and Jack Dorsay, the general manager of the Extrusion Division, both gave evidence, and their testimony was supplemented by extensive extracts from the respondent's sales and production records. The Board found both Marzari and Dorsay to be open, candid and entirely credible witnesses; moreover, when the statistical material is considered, it graphically demonstrates the difficult market situation faced by the respondent in the weeks immediately preceding the lay-off. We do not consider it necessary to set out this evidence in its entirety, nor is it necessary to review all of the oral testimony. It will be sufficient if we outline the respondent's general business situation and the factors which prompted it to act as it did.
Aluminart Products Limited is Canada's largest manufacturer of aluminum storm doors and windows. It was established in 1972 and now employs approximately 100 employees at its assembly plant in Mississauga. In November 1980, Aluminart established an extrusion division in Georgetown. The employees of the extrusion division were the object of the union organizing campaign which eventually culminated in the present certification application.
Prior to the establishment of its own Extrusion Division, Aluminart purchased extruded metal products the components for its own manufacturing and assembly operation from such large aluminum producers as Kaiser, Reynolds, and Alcan. This source of supply was unstable, not only because of fluctuations in the marketplace, but also because these companies were also Aluminart's competitors. When market demand was strong, it could be expected that they would supply their own needs first. Accordingly, Marzari decided that it would be advantageous to have a guaranteed source of supply from his own extrusion plant — provided that neither Aluminart itself nor its Extrusion Division would be wholly dependent upon one another. Each was to be an independent, self-sustaining operation.
It was expected that Aluminart would absorb about 1/3 of the Extrusion Division's total output. The rest was to be sold to third parties with a complementary production cycle. These third parties were to provide a cushion to even out the "boom or bust" features of the market.
The capital investment for the Extrusion Division was substantial, but it was anticipated that the plant would become an economic proposition when it reached a level of activity requiring two full shifts. That level of activity was never reached, nor was outside demand ever strong enough to support it. The third party customers did not materialize as quickly as expected, and, in consequence, the Mississauga assembly plant continued to absorb some 2/3 of the Extrusion Division's total production. This close economic relationship weakened the Extrusion Division's position, for without a body of outside customers to cushion the blow, any softening in Aluminart's own market would be immediately transmitted to its Extrusion Division. This is what happened in October 1981.
Demand for storm doors and windows follows a characteristic pattern building up through the summer months, and (depending upon economic conditions and the weather) peaking in September or October. From that peak, there is always a precipitous decline in orders, so that within a few weeks of the peak, the Mississauga plant is forced to lay off more than a third of its employees. The employees are recalled again in the spring. The pattern is the same for Aluminart's competitors.
In early 1981, market demand was exceptionally strong, with monthly orders exceeding the levels reached in previous years. The economic picture looked favorable for both Aluminart and its Extrusion Division. But orders peaked in August six to eight weeks before it was expected that they would, and the peak was below the level achieved in 1979 and 1980. Marzari was deeply concerned for if the earlier trend had been maintained, the peak should have been much higher and should have occurred much later. Moreover, if the decline followed the past pattern, orders would now begin to plunge. It would be necessary to cut back production early and scramble to balance his inventory. Marzari speculated about whether the drop in orders was a temporary aberation and concluded, correctly as it turned out, - that it was not. The weakening economy, high interest rates, and a slowdown in residential construction, all contributed to an early decline in the market for Aluminart's products. Marzari decided that he would have to significantly cut back his own production, and this, in turn, would require a production cutback and lay-off in the Extrusion Division.
Aluminart sought first to cancel orders of extruded material which it had placed outside its own organization. On September 11, 1981, it cancelled a 7,000 pound order from Kaiser. On September 29, 1981, it cancelled delivery of 46,000 pounds of material from Alcan, and negotiated a delay in the delivery of an additional 10,700 pounds (representing material Alcan had already produced) until November 10. On October 9, it cancelled orders from Reynolds involving in excess of 16,000 pounds, and delayed delivery of a further 34,000 pounds until November. Thus, before turning to its own Extrusion Division in Georgetown, it either cancelled or delayed deliveries from other suppliers in respect of about 114,000 pounds of material.
The cancellation of deliveries from its own Georgetown plant were taken in consultation with Jack Dorsay, the plant manager. Those discussions occurred periodically throughout September and early October. On October 16, Marzari cancelled orders from the Extrusion Division involving 100,000 pounds of material. On October 19, an additional 30,000 pounds were cancelled. Finally, on October 29, following an inventory of Aluminart's existing stock and an assessment of its immediate needs, Dorsay was advised of the cancellation of an additional 63,000 pounds.
Before the bottom dropped out of the market in October 1981, the Extrusion Division had appeared to be progressing successfully. It started slowly after its inception in November 1980, and had initial difficulties hiring the required skilled employees from the local labour market. But these were gradually assembled, and by the summer of 1981, Dorsay was optimistic that the Extrusion Division could become a viable entity. By late summer, orders and manpower were sufficient to sustain an extra half shift less than the two full shifts necessary for a profitable operation but still an improvement over previous months. The early peak in the storm window business was an ominous cloud on the horizon but Dorsay was hopeful that the production fall off would not be as serious as anticipated, and that the development of third party sales would provide the needed cushion. Dorsay's optimism faded early in October when it became apparent that the burden of Aluminart's problems would inevitably have to be shared with its own Extrusion Division.
In September, running with one and a half shifts, the Extrusion Division's production exceeded 200,000 pounds. It had orders for just under 200,000 pounds. In October, its production level was approximately the same, but orders had dropped to well below that. The cancellation of 130,000 pounds destined for the Mississauga plant convinced Dorsay that a severe production cutback and a lay-off were both inevitable, but he had to await the annual inventory at the Mississauga plant before he could determine the extent of further cancellations, and consequently, the extent of the lay-off in the Extrusion Division. In the meantime, on October 23, he cut back from one and a half to one shift, thereby cutting output by about 1/3. This was accomplished primarily through attrition, although the evidence also indicates that many of the employees left were not fully occupied in the days between October 23 and October 30.
The week of October26 was a critical one. As we have already noted, on October29, Dorsay learned of the cancellation of orders for an additional 63,000 pounds of material destined for the Mississauga plant. In addition, between October 23 and October 29, outside customers cancelled orders for a further 75,000 pounds of material. Since the production of one shift amounts to about 50,000 pounds per week, in the weeks immediately preceding the lay-off, Dorsay had been informed of the loss of 5 weeks work. Dorsay testified that orders to be filled in the week following the October 30th lay-off amounted to about 35,000 pounds or less than the production capacity of one complete shift. It was obvious to Dorsay, and it is obvious to this Board that a lay-off was called for, and its timing had nothing to do with the trade union. Indeed, it may well be that the reverse is true and that the employees, anticipating a further cutback, turned to the union in the hope of protecting their job security.
We turn to the question of the selection of the employees to be laid off.
Of the eighteen employees on the rolls of the Extrusion Division as of October 30, 1981, seven were laid off. Of these, only two had been employed long enough to acquire seniority under the employer's established personnel policy. All but one of the employees laid off were labourers, and one, the most senior, has since been recalled. For the most part, the employees laid off were the ones hired in July and August to put together the extra half shift. The only non labourer was Curtical Lecky, a press operator whose job became redundant when Dorsay reduced the number of hours that the equipment was operating. After October 30, the press was running at a level which could easily be handled by the other (more senior) operator.
Aluminart has an established policy with respect to lay-offs. The selection is based upon the employees' relative seniority and ability. On October 30, there were three exceptions to the seniority principle and we are satisfied with the respondent's explanation with respect to each of them. The respondent asserts, and we accept, that each of the junior employees retained, had capabilities beyond those of the employees who were laid off, which outweighed their lower seniority (which in any event differed from that of those laid off by only a few weeks). The Board notes that, with the exception of Lecky whose situation we have already mentioned, each of the junior employees kept on was already being paid at a higher rate than the employees laid off. This wage premium was established well before there was any thought of a lay-off or the union, and tends to support the respondent's claim, that these employees had skills or abilities beyond those of the individual laid off.
Curtival Lecky testified that on the morning of October 29, the day before the lay-off, he was approached by Murko Gavez, the plant foreman, and the two had a brief discussion about the union. Gavez is alleged to have pointed out two other employees Nick Stipelski and Stewart Leslie and remarked that they were the bastards organizing the union. Gavez is alleged to have said to Lecky (who was a lead hand, considered himself part of management, and was not a union supporter) that all the company had to do was lay off the offending employees, close down for a couple of weeks and open up again with a new name and new employees. If that happened, Lecky could be laid off too. Gavez denied this conversation as did Ev Pacheco who is alleged to have been present.
Having regard to the manner in which the various witnesses gave their evidence and their performance under cross-examination, we prefer Lecky's evidence wherever it conflicts with that of Gavez or Pacheco. This does not mean that Lecky was laid off for trade union activity however. It is rather unlikely that Gavez would have made these remarks to Lecky if he were thought to be a union supporter as, of course, he was not. We do not accept that Lecky's lay-off had anything to do with the union and it is interesting to note that the two individuals singled out by Gavez as union's supporters were not laid off. Thus, while we accept that Gavez became aware of the employees' union activities on October 29, and was disturbed by it, we are not satisfied that anti-union motivation entered into the selection of the individuals to be laid off. Dorsay testified that seniority, ability and flexibility were the criteria applied, and we accept his evidence in this regard.
For the foregoing reasons, the Board finds that neither the timing of the lay-off nor the selection of the individuals to be laid off was motivated by anti-union consideration. The complaint under section 89 is therefore dismissed.
The Board finds that the applicant is a trade union within the meaning of section l(l)(p) of the Labour Relations Act.
The Board further finds that all employees of the respondent company in the Town of Halton Hills, save and except foreman, persons above the rank of foreman, office and sales staff, constitute a unit of employees of the respondent appropriate for collective bargaining.
On the basis of all of the evidence before it, the Board further finds that not less than forty-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 November 10, 1981, the terminal date fixed for this application and the date which the Board determines pursuant to section 103(2)(j) of the Act, to be the date for ascertaining membership under section 7(1) of the said Act.
A representation vote will be taken among the employees of the respondent. The employees will be asked to indicate whether or not they wish to be represented by the applicant union in their employment relations with the respondent. Those entitled to vote will be all employees of the respondent in the bargaining unit on the date hereof who do not terminate their employment or are not discharged for cause between the date hereof and the date on which the vote is taken.
The matter is referred to the Registrar.