[1982] OLRB Rep. December 1954

1252-82-U International Association of Machinists and Aerospace Work­ers, Complainant, v. Treco Machine & Tool Limited, Respondent, v. Group of Employees, Interveners

BEFORE; Kevin M. Burkett, Alternate Chairman and Board Members J. A. Ronson and H. Kobryn.

APPEARANCES: Maurice A. Green, Len Froggatt and Joyce Holden for the com­plainant; B. R. Baldwin, W S. Cook, Lou Treml and Gary Alexi for the respondent; Robert Adourian for the interveners.

DECISION OF THE BOARD; December 7, 1982

1. This is a complaint filed under section 89 of the Labour Relations Act in which it is alleged that the respondent employer has violated sections 15, 64 and 66(a) of the Act. More specifically, it is alleged that the failure of the employer to execute a collective agreement containing the terms and conditions set out in the employer's last offer constitutes a breach of the duty to bargain in good faith and unlawful interference with the trade union.

2. The complainant asks the Board to direct the respondent to enter into a collective agreement effective from September 13, 1982. There is a termination application before the Board which was filed on October 19, 1982. Counsel represent­ing the employees who are seeking to terminate the union's bargaining rights appeared at the hearing in this matter and asked to be given status to participate. In the normal course, the Board would refuse to accord individual employees party status in a complaint of this type brought by the union against the employer. (See Re Canadian General Electric, [1980] OLRB Rep. Aug. 1179). However, where, as in this case, the relief sought by the union, if granted, would create a bar to the termination application brought by the employees seeking to participate in these proceedings, we concluded that their interests are potentially affected to such an extent as to allow them to participate as an interested party. We hereby confirm our oral decision to allow the employees who have filed the termination application in respect of the complainant's bargaining rights and who stand to be adversely affected by the outcome of this matter, to participate as an interested party in these proceedings. These employees who were represented by counsel, cross-examined witnesses, called their own evidence and made submissions on the issues before us.

3. The complainant was certified as the bargaining agent for the employees of the respondent, following a pre-hearing vote, on October 13, 1981. The complainant won the election by a single vote. The complainant served the respondent with notice of its desire to bargain for a first agreement by letter dated October 15, 1981.

Negotiations took place over an extended period and on June 24, 1982, Mr. W. Cook, the respondent company's representative in the negotiations, provided the union with a "last proposal" by letter of that date. The letter reads in part:

"If this proposal is accepted by the majority of the employees at a fairly conducted meeting, I am instructed to inform you that the principals of the company will consider whether or not to ratify it."

Mr. Froggatt, the Directing Business Representative of the complainant union, com­plained to Mr. Cook about the apparent uncertainty of the company ratification of its own proposal. Mr. Cook replied by letter dated July 6, 1982 that:

"(1) The company will ratify the agreement if it is satisfied that it was properly ratified by the employees; and

(2) The term of the agreement will be one year from the date of ratification ."

4. Article 3.03 of the collective agreement proposed by the company stipulates:

"The union agrees that the total bargaining unit as set out in this Article will participate in the ratification of the collective agree­ment."

5. The union conducted a ratification meeting on August 30, 1982. The notice of the meeting read in part that ..... all hourly paid employees have the right to vote on the company's final offer." The company's offer was explained to those present and, by a vote of 52 to 19, the offer was rejected. Mr. Froggatt testified that, in accord with the union's constitution, he then decided to conduct a strike vote and explained to those present that if there was not sufficient support for a strike the union would enter into a collective agreement with the company on the terms set out in the company's offer of settlement; the same offer that had been rejected by the employees a few minutes before.

6. Mr. Nishan Atikian and Mr. Norman Bain, two of the employees seeking to terminate the complainant's bargaining rights, testified that the employees who attended the ratification meeting were not told in advance of the ratification vote that if they did not ratify there would be a strike vote and if they did not vote to strike the union would enter into an agreement on the basis of the last company offer. Mr. Bain voted against the proposed contract although he testified that he is happy with his terms and conditions of employment. He also voted not to strike. Mr. Atikian testified that he too is satisfied with his terms and conditions of employment and no matter what the union did he does not want the union to represent him. He also voted to reject the offer and not to strike. Mr. Froggatt testified that he informed those present prior to the taking of the strike vote that the union would sign a collective agreement if the employees were not prepared to strike.

7. Mr. Froggatt advised the company following the meeting on August 30th, that the union was prepared to sign an agreement on the basis of the company's last offer.

He was referred to Mr. Cook and spoke with him on September 7, 1982. He confirmed that conversation by letter of the same day which reads:

"This letter will confirm our telephone conversation of September 7, 1982 advising you that the union will sign the collective agreement as presented at conciliations plus your letter spelling out the one year term from date of notification.

Would you be kind enough to prepare the documents for signing as soon as possible."

Mr. Cook replied by letter dated September 13, 1982 as follows:

"I have been instructed to inform you that the condition for acceptance of the contract has not been met. In this regard, I would refer you to my letter of June 24, 1982 and article 3.03 of the draft agreement."

Mr. Froggatt replied in turn by letter dated September 27, 1982, enclosing copies of the agreement proposed by the company signed by the union. His letter reads:

"Further to your letter of September 13, 1982, please find enclosed the collective agreement signed by the legal representative and negotiating committee pursuant to our letter of September 7th, 1982.

We consider that conditions in your letter of June 24, 1982 and your first condition as stated in your letter of July 7, 1982 to be illegal and to be bargaining in bad faith and we therefore will take action accordingly unless we receive the enclosed Collective Agreement duly signed by the company within 48 hours after receipt of this letter."

The company did not sign the document and the union in turn launched these proceedings.

8. Mr. Cook testified on behalf of the respondent company. He testified that the company included article 3.03 in its proposed collective agreement because of the unsettled condition in the plant. He testified that the vote to certify the union had been very close and that there was a split in the shop so that the company wanted to be certain that the agreement was one accepted by the employees. He testified that "the company wanted to be satisfied from day one that its offer would be taken to a fairly conducted vote — to show support for the agreement as made." He maintained that he was shocked when informed of the procedure followed by the union at the ratification meeting with the "various votes and rejections". It is his evidence that in the result, the company refused Mr. Froggatt's request to sign the proposed collective agreement.

9. The union argues that the incorporation of a clause into the company's final offer that the offer be ratified by the entire bargaining unit is both an unlawful demand, which constitutes a breach of section 15 of the Act, and an act of unlawful interference in the administration of the trade union contrary to section 64 of the Act. The union maintains that the testimony of Mr. Cook establishes that the company is attempting to deny the existence of the union by reaching over it to the individual employees in the unit. Furthermore, it is the position of the union that the company is attempting to support those who were opposed to the Union by refusing to sign an agreement based on its last offer of settlement. The company asks the Board to direct the respondent to enter into a collective agreement effective from September 13, 1982. The union cites Wilson Automotive, [1980] OLRB Rep. Sept. 1337, Casimir, Jennings and Appleby, [1978] OLRB Rep. June 507, and Fotomat Canada Limited [1981] OLRB Rep. Feb. 145 in support of its position. The union maintains that the existence of an application for termination of bargaining rights is irrelevant to both the Board's determination with respect to alleged breaches of the Act and to the claim for remedial relief by the union.

10. The intervening employees, through their counsel, argue that the union acted contrary to the instructions of those in the bargaining unit when it attempted to enter into a collective agreement. In these circumstances, counsel for the intervening employees, while acknowledging the authority of the Board to direct the company to enter into a collective agreement effective from a specified date if satisfied of a breach of section 15, argues that in this case it would not be fair to the employees seeking to terminate the union's bargaining rights to frame a remedy which would have the effect of preempting the termination application.

11. The company argues that this case should be distinguished from the cases relied upon by the union on the grounds that there is no history of egregious unfair labour practices by the company, that the requirement to ratify as contained in article 3.03 has been present from the outset and was clearly not added to force the matter to impasse, and finally, that a termination application has been filed in this matter. The company maintains that where, as in this case, it has legitimate concerns as to the possible impact in the work place if it entered into a collective agreement without employee concurrence, it is entitled to incorporate article 3.03 as a condition of settlement. Furthermore, where, as in this case, the union seeks to execute a collective agreement which lacks employee support, the company argues that it is entitled to refuse to sign that agreement. The company argues in the alternative that even if the Board finds a breach of the Act, it has a broad discretion with respect to the exercise of its remedial authority and should not, where the union has flouted the will of the majority, frame a remedial response which has the effect of barring the termination application.

12. Our determination in this matter begins with a discussion of the purpose and legal effect of certification under the Labour Relations Act. Trade unions are not permitted to strike in an attempt to secure recognition. Rather, the Act, in furtherance of the purpose of encouraging the practice and procedure of collective bargaining, contains an elaborate statutory scheme for the selection by employees of a bargaining agent of their choice. This scheme is based on an application of the majority principle. The Board is given the authority under the Act to determine trade union status, to determine the appropriate bargaining unit on a case by case basis and to determine if a trade union has the support of a majority of those in the bargaining unit. Majority support is determined by means of a secret ballot vote by those within the bargaining unit, as in this case, or, as is more often the case, on the basis of the signed evidence of membership of those within the unit submitted by the union in support of its application. If the Board is satisfied that the applicant is a trade union within the meaning of the Act and that it has the support of a majority of those within the unit, it is certified by the Board as the exclusive bargaining agent for all of the employees in the bargaining unit. The certificate thus issued alters the legal relationship between the employer and the employees in the bargaining unit. The employer is no longer permitted to deal with the employees in the bargaining unit on an individual basis but must deal with the trade union as the certified bargaining agent of all of the employees in the unit.

13. The exclusivity of the union's bargaining rights, as conferred by a Board certificate, and the requirement upon the employer to deal with the union, as the certified bargaining agent, and not to go behind the certificate, has received extensive judicial support. In Re Syndicat Catholique des Employes de Magasins de Quebec Inc. v. Compagnie Paquet Ltee (1959) 1959 CanLII 51 (SCC), S.C.R. 206, 18 D.L.R. (2d) 346, the Supreme Court of Canada expressed the concept in these words:

"The union is, by virtue of its incorporation under the Professional Syndicates' Act [R.S.Q. 1941, c. 162] and its certification under The Labour Relations Act [R.S.Q. 1941, c. 162A], the representative of all the employees in the unit for the purpose of negotiating the labour agreement. There is no room left for private negotiation between employer and employee. Certainly to the extent of the matters covered by the collective agreement, freedom of contract between master and individual servant is abrogated. The collective agreement tells the employer on what terms he must in the future conduct his master and servant relations. When this collective agreement was made, it then became the duty of the employer to modify his contracts of employment in accordance with its terms so far as the inclusion of those terms is authorized by the governing statutes. The terms of employment are defined for all employees, and whether or not they are members of the union, they are identical for all."

In McGavin Toastmaster Ltd. v. Ainscough [1975] 1975 CanLII 9 (SCC), 1 S.C.R. 718, [1975] 5 W.W.R. 444, 75 CLLC ¶14,277, 54 D.L.R. (3d) 1, Laskin C.J.C., speaking for the majority in another judgment of the Supreme Court of Canada stated:

"The reality is, and has been for many years now throughout Canada, that individual relationships as between employer and employee have meaning only at the hiring stage and even then there are qualifications which arise by reasons of union security clauses in collective agreements. The common law as it applies to individ­ual employment contracts is no longer relevant to employer—em­ployee relations governed by a collective agreement which, as the one involved here, deals with discharge, termination of employ­ment, severance pay and a host of other matters that have been negotiated between union and company as the principal parties thereto. To quote again from the reasons of Judson J. in the Paquet case, supra, at p. 214:

'If the relation between employee and union were that of mandator and mandatory, the result would be that a collective agreement would be the equivalent of a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees. This seems to me to be a complete misapprehension of the nature of the juridicial rela­tion involved in the collective agreement. The union contracts not as agent or mandatory but as an independent contracting party and the contract it makes with the employer binds the employer to regulate his master and servant relations according to the terms."'

(See also Winnipeg Police Association and City of Winnipeg, 1979 CanLII 2571 (MB QB), [1979] 5 W.W.R. 193.)

14. This Board has dealt with a number of cases in which it has found that an employer's attempt to require employee ratification of an offer of settlement acceptable to the union constitutes an attempt to repudiate the union as exclusive bargaining agent and hence is in breach of the Act. In Wilson Automotive, supra, the employer requested a section 34(e) vote (now section 40) on an offer which the union had already signed and returned to the company for execution. In response the union filed a section 14 (now 15) complaint alleging that by requesting a section 34(e) vote in the circumstances the employer had bargained in bad faith. In upholding the complaint the Board found that:

"By refusing to accept the union's execution of the collective agreement and insisting on a ratification vote among all of the employees, the respondent has in fact refused to recognize the union as the body with the exclusive authority to make a collective agreement ....

... The union's bargaining rights therefore continue in full force and effect. Whatever reservations the employer may have, it is not entitled to doubt or deny these rights at the bargaining table.

By not making a better offer and then insisting on a ratification vote of all employees, the employer would set the stage for a plebiscite calculated to undermine the union. The most plausible inference to be drawn from the employer's conduct is that it wants the vote on its offer among the employees to be a vote of non-confidence in the union so overwhelming as to effectively terminate the union's bargaining ability, if not its bargaining rights ."

In Selinger Wood Limited, [1980] OLRB Rep. Nov. 1688, the Board found that the employer's refusal to execute a collective agreement which it believed had not been properly ratified violated section 14 of the Act. Finally, in Fotomat Canada Limited, supra, the employer, as part of a final offer, included a clause requiring employee ratification of its offer. However, the trade union accepted the offer. The employer in turn took the position that "ratification is a necessary and required prerequisite to the proper execution of the collective agreement in question." The Board, in finding that the employer had breached the then sections 14, 46 and 58, stated:

"13. Part IV of the respondent's proposal is a clear attempt to reach around the exclusive bargaining agent and deal directly with bargaining unit employees. This is its obvious effect. Such conduct violates sections 14, 56 and 58 of The Labour Relations Act. As the United States Supreme Court held in NLRB v. Borg-Warner Corp. (1958), 356 U.S. 342, 42 LRRM 2034 at 2037 (per Barton J.), this type of proposal 'substantially modifies the collective bargaining system provided for in the statute by weakening the independence of the 'representative' chosen by the employees. It enables the em­ployer, in effect, to deal with its employees rather than with statutory representative.'

16. We also find that the ratification proposal is not a proper subject of collective bargaining negotiations and the respondent's insistence on this aspect of its proposal contravened sections 56 and 14. Employees ratification is an internal trade union affair. There is no statutory requirement that such procedures be adopted, although the good sense lying behind the concept of ratification has been commented on by this Board in the past and is well understood in the industrial relations community ....

17. Finally, we find that the respondent's purpose in proposing Part IV was to provide the bargaining unit employees with an opportunity to reject or accept the complainant trade union and not the proposed contract. It is simply non-sensical for an employer to request such a procedure when the bargaining agent has already expressed its intention to accept the contract. What is the more likely reason for insisting on employee ratification in such circum­stances?

Is the employer genuinely concerned that the contract is not sufficiently attractive or rich' to be acceptable to the employees?"

(emphasis added)

15. Reference can also usefully be made to K-Mart Distribution Centre, [1981] OLRB Rep. Oct. 1421 as a case in which the Board dismissed a complaint by a group of employees that the union had breached the duty of fair representation section of the Act by entering into a collective agreement which had been rejected by a majority of the employees in the bargaining unit. The Board, in dismissing the complaint, found that section 72 of the Act, which regulates the voting constituency and the voting procedure in connection with a ratification vote, does not bind the trade union to any particular course of conduct in light of the results. The Board concluded in that case that:

"35. We do not think that the union was required to resume futile bargaining, engage in an unpopular and abortive strike, or walk away from its bargaining rights, for, to hold that it was required to adopt any of these options would be to say either that it must participate in a pointless charade, and engage in an exercise in self-destruction, or that the repudiation of the employer's offer should be construed (as Mr. Bhatia did) as an effective termination of its bargaining rights. We are not prepared to make such a finding." ...

16. We can come to no other conclusion in this case but that the employer, by insisting on the inclusion of article 3.03 in its proposed collective agreement, was attempting to side step the trade union as the certified bargaining agent and deal directly with its employees. Accordingly, for the same reasons articulated in Fotomat, supra, we also find that the ratification proposal advanced by the employer in this case is not a proper subject of collective bargaining negotiations and the respondent's insistence on this aspect of its proposal contravenes sections 64 and 15 of the Act.

17. We are also compelled to conclude that the company's refusal to execute a collective agreement on the basis of the terms of settlement proposed by it (with the single exception of article 3.03 which we have found to have been an unlawful demand) constitutes an unlawful attempt to repudiate the union as the lawfully certified bargaining agent of its employees and to deal directly with these employees. The refusal of the employer to execute a collective agreement on the basis of the terms of settlement proposed by it constitutes a breach of sections 15 and 64 of the Act.

18. The Board has been asked to direct the employer to enter into a collective agreement. The Board has consistently recognized that the principle of voluntarism underpins the collective bargaining process established under the Act and has, therefore refused to direct the execution of a collective agreement where there is not a complete understanding between the parties. In the absence of a complete understanding, the Board would be required to impose terms if it was to direct that a collective agreement be executed and this it has refused to do. (See Lake Ontario Steel Company Limited, [1979] OLRB Rep. July 671, The Journal Publishing Company of Ottawa Limited, [1977] OLRB Rep. June 309, Graphic Centre (Ont.) Inc., [1976] OLRB Rep. May 221. However, where the evidence establishes that all outstanding issues between the parties have been resolved, the Board has not hesitated to direct the execution of a collective agreement in the exercise of its remedial authority. (See Coulter Copper & Brass Limited, [1981] OLRB Rep. May 519, Fotomat Canada Limited, supra, Wilson Automotive, supra, Selinger Wood, supra and Municipality of Casimir, Jennings and Appleby, supra.)

19. In this case, all outstanding matters between the parties have been resolved. The draft collective agreement signed by the union and forwarded to the company for signature is the draft collective agreement proposed by the company exclusive of the unlawful ratification clause. In these circumstances, we have no hesitation in directing the respondent to execute the agreement. The respondent company is hereby directed to sign the draft agreement which was presented to it for signature on September 7, 1982. The complainant union advised the company of the union's decision to execute a collective agreement on the terms contained in the company's last offer on September 7, 1982. The employer replied by letter dated September 13, 1982 that it was not prepared to sign the agreement. We are satisfied that if it was not for the respondent's unlawful refusal to execute the collective agreement, it would have been executed on or about September 13, 1982 and accordingly, we hereby direct that the agreement be made effective from that date and that the terms and conditions contained therein be applied to the employees in the bargaining unit forthwith.

20. In the further exercise of our remedial authority we direct that the respondent post copies of the attached notice marked "Appendix", after being duly signed by the respondent's representative, in conspicuous places on its premises where it is likely to come to the attention of the employees, and keep the notices posted for sixty consecutive working days. Reasonable steps shall be taken by the respondent to ensure that the said notices are not altered, defaced or covered by any other material.

21. We will remain seized of this matter in the event of any difficulty with the implementation of our order.

DECISION OF BOARD MEMBER J.A. RONSON;

I concur in this decision but wish to make certain observations which will be set out in a concurring decision to follow.

Appendix

The Labour Relations Act

NOTICE TO EMPLOYEES

Posted by Order of the Ontario Labour Relations Board

WE HAVE POSTED THIS NOTICE IN COMPLIANCE WITH AN ORDER OF THE ONTARIO LABOUR RELATIONS BOARD ISSUED AFTER A HEARING IN WHICH WE, THE UNION AND THE EMPLOYEES WHO HAVE FILED AN APPLICATION TO TERMINATE THE UNION S BARGAINING RIGHTS PARTICIPATED. THE ONTARIO LABOUR RELATIONS BOARD FOUND THAT WE VIOLATED THE LABOUR RELATIONS ACT BY TABLING AN UNLAWFUL CONTRACT PROPOSAL AND BY REFUSING TO EXECUTE A COLLECTIVE AGREEMENT WITH THE UNION,

WE ASSURE ALL OF OUR EMPLOYEES THAT:

(l) WE RECOGNIZE THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS AS THE LAWFGLLY CERTIFIED BARGAINING AGENT OF ALL OF THE EMPLOYEES IN THE BARGAINING UNIT;

(2) WE WILL DEAL WITH THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS AS THE LAWFULLY CERTIFIED BARGAINING AGENT OF ALL OF THE EMPLOYEES IN THE BARGAINING UNIT.

WE WILL NOT INTERFERE WITH THE RIGHTS OF OUR EMPLOYEES UNDER THE ACT TO:

• ORGANIZE THERGELVES;

• FORM, JOIN AND PARTICIPATE IN THE LAWFUL ACTIVITIES OF A TRADE UNION;

• ACT TOGETHER FOR COLLECTIVE BARGAINING;

• TO REFUSE TO DO ANY AND ALL OF THESE THINGS,

TRECO MACHINE & TOOL LIMITED

PER: (AUTHORIZED REPRESENTATIVE)

This is an official notice of the Board and must not be removed or defaced.

This notice must remain posted for 60 consecutive working days.

DATED this 7TH day of DECEMBER . 1982