Canadian Union of Operating Engineers & General Workers, Local 111 v. M & O Bus Lines (Handicab) Ltd., 1983 CanLII 741

[1983] OLRB Rep. April 582

0831-82-U Canadian Union of Operating Engineers & General Workers, Local ill, Complainant, v. M & 0 Bus Lines (Handicab) Ltd., Respondent

[This decision was inadvertently omitted from the March 1983 issue]

BEFORE: N. B. Satterfield, Vice-Chairman, and Board Members B. L. Armstrong and M. Eayers.

APPEARANCES: Thomas P. Norton, Robert MacLeod and Kim Saddler for the complainant; William T Mclnenly and Robert Moran for the respondent.

DECISION OF N. B. SATTERFIELD, VICE-CHAIRMAN AND BOARD MEMBER M. EAVERS; March 14, 1983

1. This complaint has been filed under section 89 of the Labour Relations Act alleging that the respondent has violated sections 15, 66, 67, 70 and 79 of the Act.

2. In respect of sections 66, 67 and 70, the complainant Canadian Union of Operating Engineers & General Workers, Local 111, ("the union") alleges that M & O Bus Lines (Handicab) Ltd., ("the employer") has attempted to require employees to sign individual contracts of employment; that it issued a written warning to an employee, Richard Sarrazin, for attending a union meeting during his lunch hour; that an employee, Kim Saddler, was suspended for three days primarily because of his activity in support of the union; that the employer had told union members who had engaged in a lawful strike that they were no longer welcome as employees and that the employer stated so to a reporter for Radio Canada. The union alleges also that the employer violated section 79 of the Act, the section which prohibits the alteration of, inter alia, rates of wages or any other term or condition of employment without the union's consent, by reducing the hours of work of employees Bob McLeod, Gregory Kelly, Kim Saddler and Timothy Reynolds and by increasing the hours of work for Andre Dubuc. The complaint alleges that McLeod, Kelly, Saddler and Reynolds are union supporters, Dubuc is not and the employer was motivated by those circumstances in its treatment of these employees. Consequently, it is alleged, the alteration of hours is a factor as well in the alleged violations of section 66, 67 and 70. In a similar manner, the disciplining of Sarrazin and Saddler is alleged to be a change in working conditions and part of the violation, alleged, of section 79.

3. Finally, the union is alleging that the employer has failed in its section 15 duty to bargain in good faith and make every reasonable effort to make a collective agreement by challenging the union from the start of bargaining to go on strike because, to quote from the particulars of the complaint, the union ..... would look stupid setting up a picket line on the handicapped... ."; and by the nature of its offers for settlement made after conciliation and mediation, particularly two offers made after conciliation that, it is alleged, were less than those made at conciliation.

4. The complaint sets the time frame for the employer's alleged misconduct as the three months preceding the making of the complaint and ongoing. The complaint was made July 30th, 1982.

5. This matter first came to hearing and continued during three further days of hearings, the last of which was in December. The Board heard the testimony of 12 witnesses, 11 for the union and one for the employer. The union's witnesses included all of the grievors named in the complaint and the solicitor who had acted for the employer during the early stages of the negotiations between the union and the employer. The Board has reviewed and considered the evidence of all of the witnesses to arrive at the findings of fact herein, but finds it unnecessary to set out the evidence in any detail. The Board has made its findings of fact after taking into account, as well, the consistency of each witness' evidence, their ability to recall the events about which they were testifying, the firmness of their memory, their ability to resist the influence of self-interest to modify their recollections clearly and their demeanour.

6. With respect to those allegations on which the union bases its claim that the employer has violated sections 66, 67, 70 and 79 of the Act, the evidence before the Board fails to make out the asserted allegations. Therefore, the Board finds that there has been no violation of those sections. Accordingly, the complaint is dismissed with respect to the alleged breaches of sections 66, 67, 70 and 79 of the Act.

7. There remains, therefore, the employer's alleged breach of its section 15 good faith bargaining duty. The bargaining duty of both parties to the collective bargaining process is prescribed by section 15 in the following terms:

8. The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

9. The parties were engaged in bargaining for a first collective agreement following certification of the union by the Board. They commenced to bargain in late November or early December 1981. The union requested the appointment of a conciliation officer after their second meeting which was in late December. An officer was appointed on January 20th, 1982 and met briefly with the parties on February 5th. They resumed direct negotiations and then met again with the officer on April 7th. The parties were advised by letter dated April 23rd, 1982 that the Minister of Labour would not be appointing a conciliation board. The parties met on July 28th with a mediation officer and the employer agreed to submit its best offer for settlement within 10 days. The employer, through its solicitor, made a written offer on August 6th. It is this offer and an earlier one also made in writing on June 21st when bargaining resumed after it became lawful for the parties to strike or lockout, an offer which the union contends was a lesser one than the offer which it alleges was made at conciliation on April 7th and another which it alleges was made at the second negotiating meeting. This allegation is the primary thrust of the complaint with respect to section 15.

10. In fact, that is the only basis on which the complaint could be founded, since the evidence fails to establish that the employer challenged the union from the start to go on strike; which was the other leg of the complaint with respect to section 15.

11. As noted above, negotiations between the parties began in late November or early December 1981. The union submitted a proposed collective agreement for a one year term to be effective January 1st, 1982 and which included rates and other monetary terms. The union was represented by a three-man committee of which Robert Mahoney, an officer of the union and its national organization, was spokesman. The employer was represented by a lawyer from its solicitors and Robert Moran, the employer's president and sole shareholder. The proposed contract was reviewed clause by clause for clarification.

12. A second meeting held in the latter part of December was attended by Mahoney, the employer's solicitor and Moran. According to Mahoney the employer made a counter-proposal, including a wage proposal of 10% in each year of a two year agreement, the first wage increase and the agreement to be effective from January 1st, 1982. The two 10% increases would yield rates of $7.11 per hour and $7.82 per hour in the first and second years, respectively, for full-time handicab drivers. The proposal was put to a vote of the members and rejected. The testimony of a member of the union's bargaining committee describes the vote as an informal "straw" vote and stated that an informal vote was held because the offer had been made informally and was not a complete offer.

13. Immediately after the second meeting, the union requested the appointment of a conciliation officer. Mahoney was replaced on the union's committee by Tom Norton, business representative of the union, at about the same time as a conciliation officer was appointed. Three or four days before the February 5th meeting with the officer, Norton and a member of his committee presented a complete new set of proposals to Moran. They were in the form of a proposed collective agreement for a two-year term and included wage rates and other monetary terms. The proposed wages differed in part from those in the first set of proposals. There were no discussions of the proposals with the conciliation officer, instead the parties agreed with the officer that they should resume direct negotiations.

14. The parties did meet during the last week of February and discussed the new proposals clause by clause. No written counter-proposal was made by the employer. Again the union and employer disagree whether the employer made a verbal offer for settlement. The union contends that an offer was made which was very similar to the one it claims was made to Mahoney and that the first wage increase was to be retroactive to January 1st, 1982. The employer denies that it made any offer or proposal for settlement, but admits that the parties agreed on many non-monetary clauses. Moran testified that he also discussed a maximum settlement cost in a range related to the rate at which the cost-of-living index was increasing. He estimated this at 10% to 12% and stated to the union that the maximum acceptable settlement cost would be about 10%, which, if applied entirely to wages, would yield a wage rate of $7.11 in the first year and $7.82 in the second year for full-time handicab drivers.

15. The parties met with the conciliation officer a second time on April 7th. At that meeting and all subsequent ones, the employer was represented by Moran and employer counsel herein, who is one of the partners of the employer's solicitors. The parties reviewed clause by clause the union's proposals, but the meeting ended without any written proposal or offer being made by the employer. The union, however, contends that the employer reiterated orally the offers which the union claims were made on the two earlier occasions, including the first year wage increase being made retroactive to January 1st, 1982. The employer maintains that it stood by its original position that the maximum settlement cost in the first year would be a 10% increase from date of signing and the union could have it applied anyway it wished as long as hourly cost of wages and benefits did not exceed $7.11 for regular full time drivers, with a further 10% for a second year. The employer maintains further that it told the union it would not make the first year wage increase retroactive to January 1st and that it told the officer that it would make no concessions in excess of the 10% increase in costs.

16. The union and the employer had a further meeting on or about April 21st at which time they discussed whether the employer's school bus drivers were included in the bargaining unit. Moran advised the union that, if school bus drivers were to be included in the unit, a 10% increase applied to wages would result in an average rate for drivers of approximately $6.85 in the first year because of the effect of the different wage rates and hours of work for school bus drivers. Again the union construed this as an offer and the employer insists it was nothing more than a discussion because the status of the school bus drivers was not resolved.

17. All of the events detailed above took place prior to the start of the time frame in which the union has set this complaint; that is, the three months preceding the making of the complaint and ongoing.

18. On June 21st, Moran and employer counsel met with Norton and presented the following proposal for settlement:

We may advise that we are the solicitors and agents of M & 0 Bus Lines (Handicab) Limited, hereinafter referred to as the Company.

Further to our recent meetings and discussions concerning the above-noted contract negotiations, we wish to inform you that the Company is now prepared to make the following contract proposals with a view to entering into a collective agreement concerning the employees of the bargaining unit.

1. BARGAINING UNIT:

The Company wishes to define the bargaining unit as all full time drivers employed by the Company in the transportation of handicapped persons pursuant to a contract entered into by the Company with O. C. Transpo. The union would be recognized as the sole bargaining agent for the said employees. The collective agreement would specifically exclude the following persons from the operation of the agreement and the bargaining unit:

(1) an employee employed as a driver for handicapped persons for a period of less than six months.

(2) all school bus drivers employed by the Company whether or not they perform part time duties in the driving of handicapped persons.

(3) supervisors, persons above the rank of supervisor, office and clerical staff, maintenance workers, mechanics, and persons regularly employed for not more than 24 hours per week.

2. "FULL TIME DRIVER": of a motor vehicle used in the transportation of handicapped persons under a contract entered into by the Company with O. C. Transpo, who works an average of not less than 40 hours a week in that capacity for the Company. The attached list of employees appear to be within the said bargaining unit.

3. DURATION OF AGREEMENT:

The agreement would take effect on execution and expire on December 31st, 1983 which coincides with the termination date of the Company's contract with 0. C. Transpo.

4. WAGE RATES FOR FULL TIME DRIVERS IN THE BARGAINING UNIT

(a) from the signing of the Agreement to December 31, 1982, the hourly wage of the employees would be $7.00;

(b) from January 1, 1983 to December 31st, 1983. the hourly wage would be increased to $7.63.

S. BONUS:

In lieu of any provision for retroactivity, the Company is prepared to offer a bonus of $250.00 to all employees in the bargaining unit as shown on the list attached to this letter.

6. VACATION PAY:

The Company is prepared to offer vacation pay and paid holidays in accordance with the terms of the Employment Standards Act; The paid holidays would be: New Years Day, Dominion Day, Thanksgiving Day, Christmas Day, Good Friday, Victoria Day, and Labour Day.

7. COMPANY MANUAL:

The employees agree to be bound by the terms and conditions outlined in the Company's work manual, attached hereto.

8. No employee of the Company or bargaining unit will be obliged to join the union nor shall it be a condition of employment for any employee present or future to join the union.

This offer is subject to obtaining agreement on the further standard terms of a collective agreement. However, should the above terms prove acceptable to the employees, it is not anticipated that there would be any major obstacle in reaching final agreement.

We would appreciate a response at your earliest convenience.

This proposal was rejected by the members. While the evidence is that the employer was not advised by the union of this result, it did learn of it. Whereupon employer counsel asked Norton to put forward the bottom position acceptable to the union. Norton admits that he told counsel orally that the union would accept a two year agreement with a wage rate of $7.11 per hour for regular full-time handicab drivers retroactive to January 1st, 1982 in the first year and $7.82 per hour effective January 1st, 1983. Nothing was given in writing by the union. The evidence of both parties establishes that there were only minor unresolved issues between them apart from the basic monetary issue, of which the question of retroactivity was the principle obstacle.

18. At this point, Norton was removed from the negotiations and replaced by another official of the union, Roger Claimont. When counsel requested the union's position in writing, Claimont respondent with the following proposal for a one year agreement in a letter dated July 8th, 1982:

Here are the counter proposals requested by yourself regarding M & O Bus Lines Drivers (Handcab [sic] Ltd.).

The drivers requests are as follows: (1) Wage settlement of $7.35 hourly (2) Retro-active pay back to January 1, 1982 (3) 50% of OHIP premium (4) Rain coats for all drivers.

Your prompt attention in this matter would greatly be appreciated. These proposals are for a one (1) year period.

19. There was no further exchange of proposals until after the parties met on July 28th with the mediation officer. By this time Norton had been reinstated as spokesman for the union. The union said it would accept a settlement based on the issues settled on and a two year agreement with wage rates for drivers of $7.11 per hour effective January 1st, 1982 and $7.82 per hour effective January 1st, 1983. The employer agreed to respond in writing following the meeting and, within the agreed time limits, made the following proposal by letter dated August 6th:

Further to our meeting with Mr. Pryor of the Ontario Labour Relations Board, we now are prepared to make the following final offer in connection with the above-noted contract negotiations.

The Company is prepared to offer the following wage rates for full-time drivers in the bargaining unit as defined in our letter of June 21st, 1982:

(a) From the signing of the agreement to December 31st, 1982, the hourly wage would be $7.10.

(b) From January 1st, 1983, to December 31st, 1983, the hourly wage would be $7.73.

The other terms of our offer are as contained in our previous offer of June 21st, 1982, and we are not prepared to accede to your request that the wage increase be retroactive to January 1st, 1982.

In the meantime, this complaint had been made on July 30th.

20. The burden of proof in a complaint of violation of section 15 of the Act is on the complainant, the union in this case. There is no dispute that the employer made only two written offers; those of June 21st and August 6th. Not only are they the only written offers made by the employer, they are the only offers of any kind made by the employer within the time period within which the employer's actions are said to have constituted its failure to bargain in good faith. The main thrust of this complaint is that those two offers represent an unjustified retreat by the employer from two very similar offers which the union claims that the employer made at the April 7th meeting with the conciliation officer and, prior to that, at the second negotiating meeting with the union. The principal change, according to the union, was the employer's refusal or failure in its two written offers to make the first year wage increases effective from or retroactive to January 1st, 1982.

21. The employer contends that throughout the negotiations prior to its June 21st offer, when it was discussing possible settlement terms it was discussing the parameters of a possible settlement in which any first wage increase would be effective from the date of execution of an agreement. The employer's evidence was consistent with the evidence of the first two meetings given by its solicitor who was called by the union as one of its witnesses. If the employer did in fact make an offer for settlement either at the second negotiating meeting or the second meeting with the conciliation officer on April 7th, the union's evidence stops well short of providing the Board with grounds for reasonably concluding that to be the case.

22. Had an offer been made at the second negotiating meeting, the Board would not have found it binding on the employer in the circumstances. Assuming, without finding, that the union members voted on something that they believed to be a settlement proposal from the employer, they rejected whatever it was they voted upon. Following that event, Norton replaced Mahoney as spokesman for the union and promptly submitted a complete new set of proposals for an agreement for a two year term instead of one year and with different wage proposals. That move, in the Board's view, had the effect of wiping the slate clean. With respect to the April 7th meeting with the conciliation officer, Moran was unshaken in his testimony that he made no offer at that meeting but only outlined, as he had done previously, the parameters of a possible settlement. On the other hand, the union's claim that the employer had reiterated the offer alleged to have been made at the meeting with Mahoney was unsupported by any cogent evidence. Therefore there are no grounds on which the Board could find that the employer's offers of June 21st and August 6th constitute a retreat from earlier offers.

23. What has happened, in the Board's view, is that, as one consequence of the union changing spokesman from Mahoney to Norton to Claimont to Norton along with the change in the employer's spokesman, there has been substantial miscommunication and confusion between the parties during their negotiations. In the result, the union may have misconstrued discussions concerning possible settlement parameters as oral offers. In these circumstances, the Board does not find that the employer has failed in its section 15 duty to bargain in good faith and make every reasonable effort to make a collective agreement with the union.

24. For these reasons, the complaint with respect to section 15 is dismissed. Therefore, having dismissed the complaint with respect to sections 66, 67, 70 and 79 of the Labour Relations Act for the reasons given at paragraph 6, the complaint is dismissed with respect to all alleged breaches of the Act.

DECISION OF BOARD MEMBER, B. L. ARMSTRONG;

1. I concur with the decision of the majority dismissing the complaint with respect to the alleged violations of sections 66, 67, 70 and 79 of the Act. The evidence adduced by the complainant does not support these allegations. However, I find that the evidence does support the alleged violation of the employer's duty to bargain in good faith and to this extent I dissent from the decision of the majority.

2. I will not review the negotiating history as this has been recounted in detail in the majority decision (see paras. 10-19). I will simply set out the point where my view of the evidence diverges from that of the majority and explain how this divergence leads me to the conclusion that the employer violated section 15.

3. In paragraph 21 the majority accepts the employee's assertion that it had not made a binding offer on wages prior to its first written offer of June 21, 1982. I reject this conclusion and find that in fact the employer did make a binding verbal wage offer on 2 occasions prior to its first written offer. This offer was $7.11 per hour in the first year and $7.82 per hour in the second year of the collective agreement. It was originally made in late December, 1982 and was repeated in late February, 1983 and early April 1983. Therefore, I find that the employer's written proposals of June 21 and August 6 did in fact include a retreat from its earlier verbal wage offers.

4. It is well established in the Board's jurisprudence on the duty to bargain in good faith that a change in bargaining position and particularly a withdrawal or reduction of an outstanding offer can in the appropriate circumstances, constitute bargaining in bad faith. Whether or not a retreat from a bargaining position amounts to bargaining in bad faith depends generally on whether or not there is some objective justification for the retreat. In practical terms there is an onus on the retreating party to put forward a credible explanation for its change of heart. (See, for example, Fotomat [1980] OLRB Rep. Oct 1397 where the Board rejected the employer's explanation of its withdrawal of a monetary offer as unbelievable and found that the withdrawal was prompted by the passage of Bill 89 and motivated by the desire to avoid reaching a collective agreement.) Although the cases make it clear that reneging is prima facie evidence of bad faith bargaining and that there is a practical onus on the reneging party to rebut this evidence by indicating justifying circumstances (e.g. the financial and psychological costs resulting from a strike: Pine Ridge, [1977] OLRB Rep. 65, Toronto Jewellry Manufacturer's Assoc., [1979] OLRB Rep. July 719), the Board has never explicitly held that reneging raises a presumption of bargaining in bad faith. I would have made this implicit rationale explicit in this case and have held that reneging raises a presumption of bad faith and places a legal onus on the respondent to prove that its conduct was not unlawful.

5. In this case the respondent has adduced no evidence which could satisfactorily explain why it reduced its original wage offer. The informal rejection of this offer by the union cannot, by itself, justify the reduction of the offer. How was the company prejudiced by this rejection? The logic applied by majority on this point (see paragraph 21 where the majority declares that the union's rejection of the company's monetary offer had the "effect of wiping the slate clean") leads to the dubious result that the binding force of an offer in collective bargaining is totally contingent on its immediate acceptance by the offer. Thus, adopting the reasoning of the majority, if an employer says $10.00" and the union says "No way — $15.00" each side would be free to come back the next bargaining session with a lower offer and higher demand respectively. This would clearly lead to total chaos in bargaining and is totally contrary to established collective bargaining practice. Common-sense clearly dictates that unless an offer is explicitly made contingent on acceptance by a certain date or on the occurrence of some other future event, both sides are bound by the positions they take on specific issues unless there is some demonstrable justification for a retraction. (The most common types of justification would be trade-offs of various sorts and the costs incurred as a result of either the sheer prolongation of bargaining or the initiation of industrial action by the opposite party). This dictum is clearly borne out by established collective bargaining practice which abhors capricious and arbitrary changes of position by either side. Collective bargaining is a sufficiently perilous process without the added danger of whimsical and unpredictable changes of heart.

6. In the absence of any evidence from the employer to explain and justify the reduction of its original wage offer one is forced to conclude that this original offer was made in bad faith and therefore constituted a violation of section 15.

7. I also find that the employer failed to bargain in good faith insofar as it failed to present any sort of comprehensive written proposal until 7-8 months after the commencement of negotiations and generally engaged in sheer procrastination of the sort that is clearly designed to undermine the status of the union vis-a-vis the employees in the bargaining unit. In fact I would not hesitate to state that, in the absence of a very cogent explanation, any party that comes back to the second bargaining meeting without a complete or, at least, comprehensive written proposal for settlement, is guilty of bad faith bargaining. There is no excuse for not knowing what you can live with or for failing to communicate this promptly to the other side.

8. Unfortunately this sort of dilatory bargaining conduct on the part of employers is all too common, especially in first contract negotiations, for all too obvious reasons. The threat of contract arbitration as a possible remedy in bad faith bargaining complaints would go a long way towards curing recalcitrant employers of the nasty habit of procrastination. The time has clearly come for the Board to reconsider the position it adopted in Radio Shack that it lacks jurisdiction under section 89 to impose a collective agreement as part of a bad faith bargaining remedy. Our experience over the last 4 years has clearly demonstrated the need for the Board to adopt bolder and more imaginative measures in remedying employer refusal to recognize a certified bargaining agent.

9. In this case I would have proposed the following remedy for the employers violation of section 15:

(i) a declaration that the employer had failed to bargain in good faith, etc.;

(ii) a cease and desist order;

(iii) a direction to the employer to restore its original wage offer;

(iv) a direction to the employer to forthwith provide the union with a complete proposed collective agreement including the original wage offer and any other offers it had made to the union during the course of bargaining;

(v) a direction to both parties to return forthwith to the bargaining table and to bargain in good faith, etc.

I would also have notified the parties that the Board would remain seized of this complaint and that if a collective agreement had not been reached within 3 months of the date of the Board's order, either party could apply to the Board for determination of a collective agreement on the basis of the final positions of the parties.