Ontario Labour Relations Board

[1983] OLRB Rep. August 1370

0093-83-U London and District Service Workers Union, Local 220. S.E.I.U., A.F.L., C.I.O., C.L.C., Complainant, v. St. Raphael's Nursing Home, Respondent

BEFORE: G. Gail Brent, Vice-Chairman and Board Members F. W. Murray and B. Lee.

APPEARANCES: Randy L. Levinson and Paul Middleton for the complainant; Bernie McGarva, Hugh MacLean and Arthur Schelter for the respondent.

DECISION OF THE BOARD; August 11, 1983

1. The complainant has alleged that the grievors have been dealt with by the respondent contrary to sections 15 and 50 of the Labour Relations Act.

2. On November 18, 1981 the complainant was certified as bargaining agent for the respondent's employees. The complainant and the respondent subsequently began negotiations but failed to reach a first collective agreement. On August 25, 1982 a board of arbitration was appointed pursuant to the Hospital Labour Disputes Arbitration Act to resolve all outstanding contractual issues in dispute.

3. On September 21, 1982 the Inflation Restraint Act was given first reading in the Legislature. The board of arbitration had scheduled a hearing to take place on October 4, 1982. The respondent attended the hearing and requested that the board adjourn in view of the introduction of the Inflation Restraint Act. The board of arbitration did not grant an adjournment as requested, and the respondent refused to participate in the hearing. The board of arbitration attempted to get the respondent to participate in the hearing; however, despite those attempts and a clear warning that it would be leaving at its peril, the respondent left the site of the hearing and refused to participate whenever invited to do so. Specifically, the respondent was given the opportunity to send the board a written response to the complainant’s brief, and refused to make any submissions to the board at all.

4. On November 25, 1982 the board of arbitration issued its award to the parties. The respondent refused to execute a collective agreement based on the award.

5. On December 15, 1982 the Inflation Restraint Act was passed and proclaimed in force as of September 21, 1982.

6. On December 29, 1982 the complainant requested the board of arbitration to order the parties to sign the collective agreement. The board of arbitration complied with that request on January 12, 1983. Pursuant to section 10(7) of the Hospital Labour Disputes Arbitration Act a collective agreement comes into effect five days after the order if the agreement is not executed. The agreement was not executed by the respondent.

7. The collective agreement which is the subject of the board of arbitration's order purports to cover the period from November 18, 1981 to November 17, 1983.

8. On January 20, 1983 Ontario Reg. 57/83 was promulgated dealing with first collective agreements and the Inflation Restraint Act.

9. The respondent has refused to implement any of the collective agreement which arose out of the board of arbitration's order. Its position throughout has been, and continues to be, that the collective agreement is a nullity, and that the award of the board of arbitration is a nullity and of no force and effect whatsoever. On January 26, 1983 the Union filed group and policy grievances regarding the respondent's non-compliance with the collective agreement. The respondent refused to entertain the grievances and refused to name a nominee to sit on a board of arbitration to deal with the grievances.

10. On March 2, 1983 the complainant applied to the Office of Arbitration to have both an employer nominee and a chairman appointed. The Office of Arbitration took the position that it could not appoint anyone until it had evidence that the collective agreement had been filed with the Inflation Restraint Board pursuant to O. Reg. 57/83 and had met the requirements of that regulation. On March 24, 1983 the complainant and the respondent met and the complainant took the position that the last year of the awarded collective agreement (November 18, 1982 to November 17, 1983) should be designated as the year for the 5% increase pursuant to section 2(2)(a) of 0. Reg, 57/83. The respondent took the position that there was no collective agreement and that negotiations for a first collective agreement should start afresh. The respondent also took the position that, pursuant to Part II of the Inflation Restraint Act, the maximum increase which it could give to the employees was 9% and that it would so increase the wages. Needless to say, the awarded collective agreement calls for increases in compensation which are greater than 9% and 5%

11. On April 13, 1983 the respondent applied to the Inflation Restraint Board and filed a copy of the awarded agreement with it. On April 29, 1983 the Inflation Restraint Board informed the complainant that the collective agreement did not meet the requirement set out in section 2(2)(a) of 0. Reg. 57/83 and would therefore be subject to Part II of the Inflation Restraint Act.

12. Were it not for the Inflation Restraint Act and its regulations there would be no question that the parties were bound by a collective agreement and that the collective agreement by which they were bound was the one awarded by the board of arbitration. The essence of the problem before us is to determine what effect, if any, the Inflation Restraint Act has had on this situation.

13. The regulation dealing with first collective agreements (O. Reg. 57/83), which has been referred to above, is set out below:

14. In this Regulation, "first collective agreement" means a collective agreement that is not an interim agreement for an increase in compensation rates entered into by a bargaining unit referred to in subsection 2(1) in contemplation of a further agreement.

15. (1) Where, on or before the 21st day of September, 1982, a trade union has been certified as bargaining agent of the employees in a bargaining unit to whose compensation plan this Part applies, and such employees have not entered into their first collective agreement with their employer prior to the 22nd day of September, 1982, Part II of the Act terminates with respect to the compensation plan of such employees when,

(a) they have entered into a first collective agreement that fully complies with the provisions of this section; and

(b) the first collective agreement so entered into has been filed with the Board at least thirty days before the agreement is to take effect.

(2) A first collective agreement complies with this section if it provides for the minimum increases under subsections 12(2) and (3) of the Act, and if,

(a) subject to subsections 12(2) and (3) of the Act, the compensation plan included in the collective agreement provides, for any period of twelve months beginning not earlier than the 1st day of October, 1982, and not later than the 1st day of October, 1983, for an increase in compensation rates of neither more nor less than 5 per cent over the compensation rate applicable on the day immediately preceding the twelve-month period; and

(b) subject to clause (a), the provisions of the first collective agreement for the whole period of the agreement ending with the expiry of the twelve-month period referred to in clause (a) are substantially comparable with the provisions of collective agreements of employees in similar occupations in the same or related labour markets for that period.

14. The Board has already considered the effect of the Inflation Restraint Act in two collective bargaining situations: Broadway Manor Nursing Home, [1983] OLRB Rep. Jan. 26 and The Doctors Hospital [1983] OLRB Rep. Feb. 227. Although the first case specifically stated that it did not speak to the Inflation Restraint Act’s effect on first contract negotiation, the Board took the position, at paragraph 21. "that every effort should be made to interpret Bill 179 in a manner which does not interfere with the rights of employees under the Labour Relations Act", and further, in the same paragraph, stated:

The rights established under the Labour Relations Act and the Hospital Labour Disputes Arbitrations Act ought not to be interfered with by the operation of another statute unless it is manifestly clear on a reading of the other statute that such a result is intended.

15. The Doctors Hospital case, supra did deal with a first collective agreement under the Hospital Labour Disputes Arbitration Act; however, in the context of a totally different fact situation than that which we face. There the Board was not dealing with a possible first collective agreement but with the appointment of a conciliation officer. The approach taken in The Doctors Hospital case, supra was consistent with that taken in Broadway Manor Nursing Home, supra in that both cases accept the proposition that the two labour relations statutes with which we are concerned should be presumed to be left intact unless the Inflaint Restraint Act specificially intends some other result.

16. It is clear that 0. Reg. 57/83 applies to first collective agreements. We believe that it is equally clear, especially following The Doctors Hospital case, supra, that, while the Inflation Restraint Act and O. Reg. 57/83 operate to affect compensation in first collective agreements, they do not operate to suspend the procedure set up in the Hospital Labour Disputes Arbitration Act to achieve that first collective agreement. In our case, those procedures were already underway before the Inflation Restraint Act and O. Reg. 57/83 were introduced, and the arbitration board decided to continue after the lnflation Restraint Act had received first reading. We accept that the board of arbitration had the jurisdiction to continue even in the face of the impending inflation restraint legislation.

17. Part II of the lnflation Restraint Act encompasses sections 4 to 25 inclusive and is headed “PUBLIC SECTOR COMPENSATION RESTRAINT”. In section 2(1) of the regu­lation the conditions are set out by which Part II "terminates with respect to the compensation plan" of the employees concerned. Section 16 of the Inflation Restraint Act reads as follows:

18. Notwithstanding any other Act or agreement, any provisions of a compensation plan to which this Part applies that provides for an increase in compensation rates in excess of the limits set out in this Part on or after the 21st day of September, 1982 shall be of no effect.

19. In section 16 of the Inflation Restraint Act the Legislature has not gone so far as to declare the entire collective agreement to be void and of no effect. This provision takes the doubt out of the sort of situation with which employers and unions were faced during the period when the federal Anti-Inflation Board was rolling back wages, and when there was conflicting opinion about whether a rollback would void an entire collective agreement. Section 16 deals only with the compensation plan and provides that only the compensation plan is of "no effect". The conclusion that the Legislature did not intend to void collective agreements, but considered compensation plans to be severable, is further reinforced by reference to section 20 of the Inflation Restraint Act which allows the isolation and modification of a compensation plan which does not meet the requirements of the legislation. There is no indication in 0. Reg. 57/83 that the question of the validity of first collective agreements should be treated any differently than that of existing collective agreements.

20. The result, therefore, is that the parties have a valid collective agreement but since the agreement does not comply with O. Reg. 57/83, Part II of the Inflation Restraint Act applies with the result that the compensation plan provided therein is of no effect, but is replaced by a compensation plan, the terms of which comply with sections 10 and 12 of that Act. Since the collective agreement achieved through arbitration has not been voided by operation of the Inflation Restraint Act, then the duty to bargain in good faith in order to achieve a collective agreement cannot arise. Accordingly, there can be no violation of section 15 of the Labour Relations Act on these facts.

21. This Board therefore declares, pursuant to section 50 of the Labour Relations Act, that the parties have a collective agreement and are bound by the terms of that agreement' save for the "compensation plan" contained therein, since it is of no effect by virtue of section 16 of the Inflation Restraint Act. The Board could only make a declaration to the effect that the "compensation plan" contained in the collective agreement was binding on the parties if the relevant provisions of the Inflation Restraint Act were complied with and section 16 of that Act no longer applied to the "compensation plan". This Board has no jurisdiction to alter the "compensation plan" or to determine whether the original board of arbitration, or anyone else, has jurisdiction to alter or amend the compensation plan to meet the requirements of the Inflation Restraint Act.

22. It may be that the original board of arbitration could have retained jurisdiction to deal with the question of the compensation plan if the parties were unable to agree on its amendment or either party could have applied to the Inflation Restraint Board under section 14. What appropriate course of action either or both parties might take is a question that is beyond the jurisdiction of this Board to determine. In view of the provisions of the Labour Relations Act, the Hospital Labour Disputes Arbitration Act, and the Inflation Restraint Act we can only determine that all of those acts have combined to give the parties a valid collective agreement with a compensation plan which is severable, and is, at least for the meantime, of no effect. The extent of our jurisdiction is to make such a declaration and order the respondent to implement the entire collective agreement. The parties should now meet to amend the compensation plan to make it comply with the Inflation Restraint Act. The parties will have to determine the means which may be available to them, to alter or amend the compensation plan to comply with the requirements of the Inflation Restraint legislation and regulations.

23. Having regard to the foregoing, the Board hereby declares that the respondent is bound by the collective agreement which was established for the parties by the board of arbitration on January 12, 1983, save and except for the compensation plan contained therein, and hereby directs the respondent to implement the said collective agreement, save and except the compensation plan contained therein.