Teamsters, Local 419 v. K Mart Canada Limited, 1982 CanLII 881

[1982] OLRB Rep. June 903

2420-81-U Teamsters, Local 419 affiliated With the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Complainant, v. K Mart Canada Limited, Respondent.

BEFORE: R.O. MacDowell, Vice-Chairman, and Board Members S. Cooke and J. A. Ronson.

APPEARANCES: D. J. Wrav and J. Bigeau for the complainant; R. A. MacDermid and C. A. Cumiskey for the respondent.

DECISION OF R.O. MACDOWELL, VICE-CHAIRMAN, AND BOARD MEMBER S. COOKE; June 30 1982

1. This is a complaint under section 89 of the Labour Relations Act. The section of the Act primarily at issue is as follows:

"43 (1) Except in the construction industry and subject to section 47, where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision requiring the employer to deduct from the wages of each employee in the unit affected by the collective agreement, whether or not the employee is a member of the union, the amount of the regular union dues and to remit the amount to the trade union, forthwith."

(2) In subsection (1), "regular union dues" means,

(a) in the case of an employee who is a member of the trade union, the dues uniformly and regularly paid by a member of the trade union in accordance with the constitution and by-laws of the trade union; and

(b) in the case of an employee who is not a member of the trade union, the dues referred to in clause (a), excluding any amount in respect of pension, superannuation, sickness insurance or any other benefit available only to members of the trade union.

2. The complainant trade union is the certified bargaining agent for a unit of the respondent's employees. Following certification, the parties engaged in a protracted and difficult process of negotiations which ultimately resulted in a collective agreement. (The bargaining background is more particularly set out in K Mart Canada Limited, [1981] OLRB Rep. Oct. 1421.) The union security clause incorporated in that collective agreement was the statutory minimum required by section 43 (formerly section 36a). It provides:

"19.01 In accordance with section 36a of the Ontario Labour Relations Act, each employee covered by this Agreement, whether or not such employee is a member of the union, shall have deducted from his wages the amount of the regular union dues. The total deductions made by the employer shall be remitted to the trade union forthwith."

This clause was the employer's response to a union request for a "section 43" union security provision - a provision to which it was entitled as a matter of law. The parties are agreed that Article 19 was drafted in intended compliance with section 43, and was accepted by both of them on that basis. The union requested, and the employer conceded the minimum required by the statute. It was only later that a dispute arose between the parties as to what section 43 actually required, and whether the employer was complying with this minimum statutory requirement. The agreement also contains a seniority clause giving preferential treatment to senior employees, and a clause providing that probationary employees will not acquire seniority until they have worked for the company for 60 days.

3. The collective agreement was concluded on February 18, 1981. On March 5, 1981, the secretary-treasurer of the union wrote to the company setting out the procedure which the union intended to follow with respect to the calculation, collection, and accounting of union dues:

"March 5, 1981.

Please be advised that the union dues for the members of Local 419 employed in the bargaining unit at K Mart Canada Limited will be $20.00 a month effective as of March 1, 1981.

We would appreciate it if you would send us the original listing of names, addresses, social insurance numbers and seniority date for those employees covered by this bargaining unit along with your cheque for the first month's dues. We will have these records converted to our computer system and from then on billing for the monthly dues.

If you have any further questions on this matter, please do not hesitate to call our Bookkeeper, Mrs. Mary Yamich, at the above number."

This is the standard procedure adopted by the union in respect of its 2 million members and their employers throughout North America, and is a common method by which parties handle such matters.

4. As the letter indicates, the union does the paper work, submitting a monthly list of employees and their required dues. The employer need only indicate additions to or deletions from its employee complement, and whether for one reason or another, (for example, illness or lay-off) an employee was not immediately required to pay monthly dues.

5. There are approximately 40 employees in the bargaining unit and this number is apparently relatively constant (although there are also a number of "temporary" employees who are not considered part of the bargaining unit). It is evident therefore, that the effort required to meet the union's request is minimal. The number of employees involved is not large, the union's computer does most of the work and generates a convenient format, and, in any event, the company must maintain its own record of employee dues for payroll purposes, and in order to furnish employees with accurate T-4 forms after the end of the taxation year.

6. The company concedes that it would require no effort to accede to the union's request, and verify the monthly list provided so that the union would be able to identify which employees had paid their dues and which had not. But the employer maintains that section 43 does not require it to do this. It refuses to submit a list of employees in the bargaining unit, and refuses to specifically identify either those employees for whom dues have been deducted, or those who may be in arrears. Instead, the respondent submits a cheque for a lump sum referrable to a number of employees in the unit and a number of employees "in arrears" but without specifically identifying who those individuals are. The February 18, 1982 remittance is typical:

"February 18th, 1982

Enclosed is union dues for the employee's [sic] at Kmart [sic] Distribution Centre. 36 employee's [sic] by $20.00 equals $720.00

Plus 3 in arrears @ $24.00 $72.00

Cheque enclosed for total of $792.00"

It is left to the union to figure out as best it can who has paid the regular monthly dues, who is in arrears, to what extent, and why.

7. The union listed a number of reasons why it was important for its internal administration to have a list of employees in the bargaining unit it represents, together with a verification that each of them has or has not paid the required dues, or is justifiably "in arrears". A union has a statutory obligation under section 68 or the Act to represent all such employees, whether or not they are union members; and its ability to meet this statutory responsibility could well be impeded if the employer refused to provide current information as to who those employees are. Certainly, it is unusual in the Board's experience to encounter an employer who asserts the right to mask the identity of the individuals whom the union has the obligation to represent — particularly where the collective agreement itself seems to envisage the preparation of a seniority list for employees in the bargaining unit, and the identification of "new hires" who, in the course, will pass their probationary period. Moreover, the union too provides employees with receipts for income tax purposes, and cannot do so unless it can verify that dues in a particular amount have in fact been paid. Without an employee name to match to a particular dues payment, this is difficult to do. Finally an accurate accounting of the employee dues payments is also important for the internal administration of the union. "Good standing" in the union is contingent upon maintaining proper payments. The availability of "withdrawal cards" (for people off sick, or out of work but still in good standing), the right to participate in certain union affairs, (eligibility for union office, the right to vote for union officers, and so on, all depend upon the payment of dues in accordance with the constitution. All of these matters are somewhat remote from the wage-work bargain with which the employer may be legitimately concerned, and in the union's submission, the Legislature could never have intended an interpretation of section 43 which raises such difficulties.

8. Of course, these problems are not insurmountable. Each month, upon receipt of the employer's remittance, a union representative could conduct a canvass of all of the employees whom he believes to be in the bargaining unit, going from employee to employee, in order to identify who has or has not paid the required union dues, who was in arrears, and why. Each employee potentially in the unit could be asked whether his dues had been properly deducted, whether he was "in arrears" whether he had been ill, and so on. By this method, it might well be possible, with appropriate effort, to verify the employee complement and confirm that the union security provision required by the statute has, in fact, been complied with. But is that what the Legislature intended when section 43 was enacted? And why has the respondent taken a position which exfacie has no other purpose than to make things as difficult for the union as possible? It is clear that there is no business justification for the respondent's position. Its sole purpose is to hinder the union in the conduct of its affairs. The respondent contends however that its conduct is in strict compliance with the limited requirements of section 43 and the collective agreement, and it is under no obligation to go further. In its submission, it need not have any business justification for its position.

9. Section 43 (then an amended section 36a) was introduced in 1980, and replaced the "old" section 36a which provided for a voluntary revocable checkoff of union dues from employees who indicated their wish to support the union financially. The "old" section 36a read as follows:

36a.-(1) Except in the construction industry, where a trade union that is the bargaining agent for employees in a bargaining unit so requests, there shall be included in the collective agreement between the trade union and the employer of the employees a provision that at the written request of an employee in the bargaining unit the employer shall deduct from the wages of the employee the amount of the regular union dues payable by members of the trade union and remit the amount to the trade union.

(2) In subsection 1, "regular union dues" means,

(a) in the case of an employee who is a member of the trade union, the dues uniformly and regularly paid by a member of the trade union in accordance with the constitution and by-laws of the trade union; and

(b) in the case of an employee who is not a member of the trade union, the dues referred to in clause a, excluding any amount in respect of pension, superannuation, sickness insurance or any other benefit available only to members of the trade union."

(emphasis added)

The amendment was part of a package which included section 40 permitting an employer to require a vote of his employees on his contract proposals, and section 72(5) which increased the rights of non-members to participate in strike or ratification votes. The package, therefore, represents a balance: non-members are given enhanced rights to participate in decisions which may affect them, but, by the same token, each employee must bear some of the financial burden for the union's representational activities.

10. Both the old section 36a and its amended version in section 43, deal with the question of "union security". There is perhaps no single issue which has contributed more to industrial conflict in this province - especialy in first contract situations where the union may be seeking to establish its legitimacy in the face of employer opposition. Once certified, unions typically insist on a "checkoff' of dues from all employees as the natural concomitant of their statutory obligation to represent members and non-members alike (see section 68), and as the only means of financial support for the representational activities which benefit all employees. But not infrequently, employer resistance on this issue has resulted in a strike. Sometimes this opposition is merely a manifestation of loyalty to non-member employees; but sometimes, it has been part and parcel of an employer refusal to recognize the union, despite its certification, or an element in a general pattern of unfiar labour practices designed to undermine the union's position. (See for example: Radio Shack [1979] OLRB Rep. Dec. 1220; Fotomat [1980] OLRB Rep. Oct. 1397; Wilson Automotive [1980] OLRB Rep. July 1136,[1980] OLRB Rep. Sept. 1337; Fleck Manufacturing Company [1978] OLRB Rep. July 615). These cases maybe atypical, however, even when the employer's opposition is legitimate, (see: Cross Tube Products Inc. [1980] OLRB Rep. May 669), there is little doubt that the effort to attain union security has been a key factor in a number of protracted, difficult and often ugly disputes which have marked the collective bargaining scene in recent years. Indeed, in 1975, the "checkoff' was the principal issue in dispute between the parties herein, leading to a six month strike, and it might have precipitated a strike in 1980, when the union was certified for a second time, if the legislation had not removed that item from the bargaining table. See: K Mart Canada Limited, supra). The recognition that the union security issue was a flash point in the bargaining process is what prompted the Legislature to enact the succession of amendments mentioned above. And until the instant case arose, it was widely thought that a demand for the "checkoff' could no longer be the basis for a strike in this jurisdiction.

11. The question raised by this complaint then, is the extent to which the union security issue in the form of a statutory "checkoff', has been removed from the bargaining table. Does the union have a right to know specifically the identity of the employees in the bargaining unit it represents, and whether dues have been properly remitted on behalf of those specific individuals? Or is the right to this information a bargaining issue for which the union must ultimately strike if the employer is not prepared to provide it? If the principle of the checkoff has now been given statutory recognition and underpinning, must the union still strike to achieve a formula that is workable from an administrative point of view. In other words, is the "checkoff' a "live" bargaining issue and a potential source of industrial conflict despite section 43 - for it must be remembered that although the bargaining unit is relatively small in this case, the principle flowing from it would be equally applicable in a much larger bargaining unit where there would be no effective means of verification.

12. There is no legitimate employer interest in masking the identity of its employees, and it is a little difficult to appreciate why the Legislature would choose the formula which the respondent's interpretation involves. If anything, it is the union which has a legitimate interest in obtaining such information because of sections 43 and 68 of the Act, and its statutory role as the employees' bargaining agent. The dues deducted do not "belong" to the employer. It is merely the agent for the union for the purpose of collection. Thus, we do not find particularly compelling the employer's submission that the information the union seeks is a matter for collective bargaining. On the contrary, in our opinion, the acceptance of this position would put back on the bargaining table the very kind of inflammatory issue which section 43 was designed to resolve — with obvious detriment to the orderly process of collective bargaining which the amendment was intended to promote. This Board does not lightly contemplate an interpretation of the Act that would once again see strikes in Ontario on the issue of union security — not for the principle of a checkoff, for that was clearly established by section 43 but this time for a formula that would make section 43 workable. In our view, such an interpretation of section 43 flies in the face of its obvious intent, and we should not embrace it in the absence of clear and compelling statutory language.

13. Section 43 requires a clause providing for dues to be deducted "from the wages of each employee in the unit affected by the collective agreement". The use of the word "each" certainly suggests an individual treatment rather than the remission of an undifferentiated lump sum on behalf of the unit as a whole. If the latter had been intended, one would have expected more generalized language referring to the employees in the bargaining unit as a group. For example, section 72(5) (which as noted above was enacted at the same time as section 43) extends voting rights to "all employees in the bargaining unit". Moreover, section 43(2) clearly envisages different classes of employee, and different benefits to which they might contribute or be entitled. Since it is not unreasonable to expect that an employee may change status from time to time (for example on completion of a probation period), or for one reason or another be relieved of paying dues under the union's constitution, this too suggests the need to identify the employees concerned.

14. The Concise Oxford Dictionary defines the word "each" as: "of two or more, every one taken separately". On one gloss of the language of section 43, therefore, one might suggest that an employer was required to forward to the union a number of separate and distinct sums in respect of each individual employee. On the other hand, the employer maintains it need only send an undifferentiated lump sum, leaving it to the union to ascertain who the dues payments should be attributed to. But the former view is not in accordance with common sense and business efficacy, while the interpretation proposed by the respondent would undermine the significance and effectiveness of section 43. In view of the background and purpose of section 43, we cannot conceive that the Legislature intended that a union would have to bargain about, and strike for, disclosure of the identity of the employees on whose behalf the remission of dues is required by statute. A lump sum remittance but identifying who the money comes from seems a much more reasonable interpretation, and, as noted above, is the usual way the "check-off' is handled. In our opinion, the obligation to deduct the designated amount from the wages of each employee carries with it the concomitant obligation to specify for whom such payments are being deducted and who is in arrears. It is our view that the clause envisaged by section 43 requires more than the remittance of an undifferentiated lump sum on behalf of an unidentified group of employees. We find therefore that the respondent is in breach of the collective bargaining obligation required to be in its agreement by section 43. The Board directs the respondent to provide the union, at the end of each month, with: the name of each employee on whose behalf union dues have been deducted: the amount of union dues so deducted; the amount by which any individual in the bargaining unit is "in arrears", and the apparent reason for such arrears.

15. The union also requested that the respondent divulge the employees' social insurance numbers, since that is the way that the information is cross-referenced in its computer. In our view, however, the respondent need not reveal the employees' social insurance numbers. No doubt, the possession of such information would facilitate the union’s task in accounting for the funds received; but while the efficacy and utility of section 43 requires identification of the employees in the unit, in the manner described above, we do not think there is any basis for requiring disclosure of those employees' social insurance numbers.

16. In view of the decision we have reached concerning the interpretation of the employer's obligations under section 43 (which, as noted above was the primary issue before us), it is unnecessary to address the union's alternative argument that the employer's conduct constitutes a breach of section 64.

DECISION OF BOARD MEMBER S. COOKE;

1. I agree and comment:

(a) In addition to the reasons set out by Vice-Chairman R. O. MacDowell, section 64 proscribes support to the union in the following words "or contribute financial or other support to the union". The transmission of money from a company to a union must therefore be accompanied by detailed identification for each $1.00. Failing this, both parties would be unable to make a good defense should charges arise. Further in my opinion, the "administration of a trade union is interfered with contrary to section 64 by the refusal to provide the information on dues checkoff in such a way as to clearly identify how much money was deducted from the wages of "each employee in the unit" as set out in section 43.

(b) The respondent in this case could give no business reason for its action. The respondent attempts to hide behind a narrow interpretation of section 43. If that interpretation were accepted, the purpose of the legislated amendment which brought about this section would be lost. "Remove this contentious item from the bargaining table."

2. In my experience with collective bargaining, no other issue holds like potential for labour relations disruption. Union security and union dues checkoff as a minimum provision in that area have been an issue central to the disputes that have raged in this province for forty years. Any interpretation that tends to return this issue, to the bargaining table will cause great mischief.

DECISION OF BOARD MEMBER J. A. RONSON;

1. During the negotiations for the collective agreement now in place, the employer and the union came to an impasse over the wording of a clause that would comply with the requirements of what is now section 43 of the Labour Relations Act. Enacted in 1980, that section of the Act provides that, upon the request of the union, the employer shall collect regular union dues for the union (by way of payroll deduction from the wages of each employee, union member or not) and "remit the amount to the trade union, forthwith".

2. The union wanted the clause worded so that the employer would be obligated to provide the names, addresses and social insurance numbers of each employee for whom the employer was making a payment. The employer flatly refused to provide such names and numbers. Eventually the parties agreed to the following clause which conforms strictly to the wording of section 43.

"19.01 In accordance with section, 36a of the Ontario Labour Relations Act, each employee covered by this Agreement, whether or not such employee is a member of the union, shall have deducted from his wages the amount of the regular union dues. The total deductions made by the employer shall be remitted to the trade union forthwith."

3. Less than a month after the collective agreement was concluded the union, by letter, again requested the names, addresses and social insurance numbers of the employees for whom payment was being made, and again the employer refused. The union then brought this complaint to the Board, alleging that by so refusing the employer had contravened sections 43, 64 and 89 of the Act. It is noteworthy that the union did not see fit to bring a complaint against the employer for bargaining in bad faith when the employer first refused during bargaining. As a result, and since this is also a case of first impression, I intend to treat the application as one for declaratory relief only.

4. Anyone with some familiarity with labour relations issues will agree that the particular issue dealt with in section 43 can be described succinctly as explosive. Feelings run high in the employer and union communities and amongst those employees who are represented by union but are not union members. In such a situation it serves no useful purpose for the Board to climb down into the arena and act as champion for one of the combatants. Rather it is the Board's responsibility to try and effect the instructions of the Legislature when it has spoken to the issue.

5. Logically one must assume that the Legislature did not intend to create new problems when it enacted section 43. The nature of the obligation imposed on an employer is to deduct money from the employee's wages and, on behalf of that employee, remit the money to the union. In order to prevent grievances between employers and unions, and disagreements between employees and unions and employees and employers, the remitted money has to be identified in some way. The employee must be advised that the union dues amount has been deducted from his or her wages. Usually, as in this case, the notification is made on the payroll cheque issued to the employee. Conversely the union must be advised that it is receiving a specific amount to the credit of the employee.

6. Now this does not mean that the employer is obligated to keep accounts and records as to how much money has been sent to the union to the credit of each employee (although as a matter of prudence many employers may wish to do so). Nor does it mean that the employer has to concern itself with the situation of the dues account vis-a-vis the union and the employee. What it does mean, in the context of monthly union dues, is that once a month the employer must:

(a) deduct the regular union dues from the wages of each employee;

(b) advise the employee of the amount deducted;

(c) remit the amount deducted to the union; and

(d) advise the union of the specific amount remitted for each named employee.

7. And I would so declare.