Teamsters, Local 419 v. K Mart Canada Limited, 1983 CanLII 900

[1983] OLRB Rep. May 649

1248-82-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. D. Howe, Vice-Chairman, and Board Members C. G. Bourne and C. A. Ballentine.

APPEARANCES: Douglas J. Wrap and Gene 0 Driscoll for the complainant; Robert A. MacDermid and C. A. Cumiskey for the respondent.

DECISION OF THE BOARD; May 1, 1983

1. This is a complaint under section 89 of the Labour Relations Act in which the complainant (also referred to in this decision as the "union") alleges that the grievors have been dealt with by the respondent (also referred to as "K Mart") contrary to the provisions of sections 64, 66, 67, 70, 72, 75, and 80(1) of the Act.

2. The essence of the complaint is the union's allegation that the respondent contravened the Act by terminating or reducing the hours of the grievors, who are persons supplied to the respondent by various personnel agencies, as a result of a grievance filed by the union in which it sought declaratory relief and compensation on the basis of its assertion that the persons in question are employees of the respondent covered by the collective agreement in force between the respondent and the union.

3. At the commencement of the hearing of this complaint, counsel for the respondent asked the Board "to exercise its discretion to defer the matter to arbitration". He also raised the issue of whether notice should be given to the personnel agencies who supplied the persons in question to the respondent. After hearing and considering the submissions of the parties concerning those preliminary matters, the Board made the following oral ruling, which is hereby confirmed:

"The Board is of the view that this is not an appropriate case in which to defer to arbitration. If the subject matter of the complaint were merely the issue which has been grieved by the complainant under the collective agreement, i.e., whether the respondent violated the collective agreement by failing to treat as employees covered by it certain persons regularly employed for more than twenty-four hours per week, the Board might well defer to arbitration of that matter. However, the essence of the present complaint is that the respondent reacted to that grievance by either terminating the employment, or reducing the hours of all the employees to whom that grievance related. It cannot be said that the matters in dispute between the parties are primarily contractual in nature or that the resolution of the grievance which has been filed will be congruent with the resolution of this unfair labour practice. While an arbitrator could deal with the alleged terminations, it is not self-evident that an arbitrator would have jurisdiction to remedy the alleged reduction of work hours. Such reduction might be a management right unfettered by the terms of the collective agreement but nevertheless restricted by the provisions of the Labour Relations Act. Even if an arbitrator could apply and interpret those statutory provisions, which is not free of doubt, it is this Board which has the primary responsibility of so doing and which is in the best position to interpret those provisions on a continuing basis in. light of the evolving needs of the Ontario labour relations community. In view of the fact that this is a first agreement situation which affects a substantial segment of what is alleged to be the respondent's work force which allegedly should be covered by the provisions of the collective agreement, the need for the Board's broader remedial approach, including the posting of notices, is also a matter of significance. Thus, in accordance with the principles set forth in Valdi Inc., [19801 OLRB Rep. Aug. 1254, we will not defer this matter to arbitration.

With respect to the question of notice to the personnel agencies through whom the respondent is alleged to have hired the individuals in question, in the absence of any allegation by the complainant that any of those agencies has breached the Act, and in the absence of any attempt by the complainant to have the Board direct a remedy against such agency, the Board does not find it necessary or appropriate to require that notice of these proceedings be given to those agencies."

4. This complaint relates to the respondent's distribution centre (the "Centre") on Torbram Road, Brampton, which is the main distribution centre for K Mart (and Kresge) in Canada. For many years the respondent has used workers supplied by various employment agencies to supplement its work force during the busy periods which precede Christmas, Easter, and Mothers' Day. Requests for such workers are made by Roy Westbrook, the Assistant Manager of the Centre, who telephones one or more of the agencies with which the respondent does business, and requests that a specified number of workers be sent to the Centre.

5. Prior to the opening of the Centre in 1975, the respondent's distribution centre was located on Progress Avenue in Scarborough. In addition to its regular work force of 50 to 60 employees, the respondent also used workers supplied by various employment agencies during peak periods at that location. However, those persons generally worked there for only a week or two.

6. In 1975 the union was certified in respect of a bargaining unit of the respondent's employees similar to that for which it currently holds bargaining rights. A strike commenced in June of 1976 and continued until December of that year, at which time the union agreed to abandon its bargaining rights and the respondent agreed to recall approximately 90 of the employees who had been on strike. By 1977 there were between 100 and 110 regular employees of the respondent employed at the Torbram Road distribution centre. However, that number was reduced because the respondent found that fewer employees were needed due to the efficiency of the Centre's mechanized systems.

7. During the period from January 1977 to February of 1980, the employees of the Centre were not represented by a trade union. However, the respondent established a committee of management and employee representatives (the "Committee") to meet periodically to discuss working conditions and other matters relating to the Centre. The four employee representatives on the Committee were elected annually by secret ballot.

8. The respondent laid off about 40 employees from the Centre in the early summer of 1977. Some of those employees were recalled to an evening shift in the fall of that year, and continued to work on that shift until January of 1978 when the respondent terminated that shift and transferred them to the day shift. At a Committee meeting on January 11, 1978 at which Jack Priestley (who is now the complainant's chief steward at the Centre) was one of the four employee representatives in attendance, management indicated that K Mart did not intend to hire additional staff at the Centre even though the work force had significantly decreased (to approximately 40 employees) over the preceding year. Instead, it planned to use temporary help to deal with any backlogs in order to avoid the disruptions associated with layoffs arising from staff reductions, and in order to stay within the "cost to sales" ratio established by management. A further discussion of "temporary help" took place at the April 20, 1979 meeting of the Committee, at which it was agreed that it was in the best interests of the respondent's permanent employees that "temporary men be hired rather than hiring full-time employees", since the use of temporary employees "meant job security for the permanent employees" who were less likely to be laid off when business slowed down.

9. The applicant was certified by the Board, differently constituted, in an unreported decision dated February 20, 1980 (Board File No. 2062-79-R), for the following bargaining unit: "all employees of the respondent working in its distribution centre in Brampton, Ontario, save and except foremen, those above the rank of foreman, office and sales staff, persons regularly employed for not more than twenty-four hours per week and students employed during the school vacation period". At the time of that application there were about 45 employees in the bargaining unit.

10. During the ensuing negotiations, the union tabled detailed proposals concern­ing "temporary" workers. It proposed that the following language be included in the recognition clause:

"No temporary or casual help will be retained, and no work will be contracted out, which will result in a reduction of the working force or which would deprive employees of overtime or while regular full-time employees are working fewer than the normal hours, or while regular full-time employees are laid off and are then available and able to do the work required; provided that no employee who has acquired seniority shall lose his seniority by refusing temporary work while on layoff. Temporary work, for the purpose of this section, shall be any period less than 30 calendar days."

The union also proposed the following appendix:

"APPENDIX 'A'

1. Students, part-timers and temporary employees will for the purposes of this Agreement be termed to be Casuals and shall not work in excess of twenty-four (24) hours per week except as specifically covered in Article 12 hereunder.

2. Casual employees are employees retained to cover short term fluctuations in the workload and to replace regular employees who are on vacation or absent.

3. Casual employees will acquire seniority after they have served thirty (30) worked days of employment and will be on a separate seniority list.

4. Casual employees will be called in for casual work in accordance with seniority.

5. Casual employees who decline the opportunity of casual work three (3) times in a month period will be removed from the Casual Seniority List.

6. Casual employees who have worked their probationary period as provided in Article 3 above will have the right to the Grievance Procedure as provided in Article 4 of the Agreement governing regular full-time employees.

7. Casual employees will be paid the probationary rate during their probationary period and will be paid the applicable job rate thereafter. Casual employees will also be paid the applicable overtime rate as outlined in this Agreement if they work outside the standard hours of work.

8. Casual employees will not be covered by Health and Welfare benefits provided in Sections 12.01, 12.02 and 12.08 of Article 12 of the Agreement of which this Appendix is a part, and will only be covered by the following benefits:

9. (a) Vacation pay in accordance with the Ontario Employment Standards Act;

(b) Statutory Holidays as set forth in Article 8 upon acquiring seniority;

(c) O.H.I.P. for casuals who work in excess of sixty-four (64) hours in any calendar month.

9. Casual employees who desire full time work with the Company will make this known to the Company in writing on an annual basis. These employees will then be considered for full time work by seniority if this work is available. If accepted for full time employment by the Company, these employees must complete the thirty (30) worked days probationary period from the date of this employment as outlined in Article 6.01, notwithstanding any other section of this Agreement.

10. No casual employee shall be retained for overtime until four (4) hours of overtime have been offered to all full time employees within the warehouse where the work is to be performed. In the case of Saturday, Sunday, or Statutory Holiday, no casual employees shall be retained for work until all full time employees within the bargaining unit have been offered eight (8) hours' work.

11. The probationary rate for casual employees shall be 50.15 per hour less than the casual rate.

12. Casual employees may work thirty eight and three-quarters (38-3/4) hours per week on a one for one basis to cover employees on vacation."

13. On February 19, 1981, the parties entered into a collective agreement effective from September 1, 1980 to August 31, 1983, in respect of a bargaining unit identical to that described in the aforementioned certificate issued by the Board on February 29, 1980. The events which led to the signing of that document are set forth in K Mart Distribution Centre, [19811 OLRB Rep. Oct. 1421 (in which the Board, differently constituted, held that the union had not contravened the Act by signing that agreement, notwithstanding the fact that bargaining unit employees had rejected K Mart's proposals by a margin of one vote). That collective agreement did not contain any of the language proposed by the union with respect to the use of temporary workers, nor any other express limitations on the use of such workers. There is no evidence before the Board that during the course of the negotiations which led to that collective agreement, either party made any assertions or representations concerning the respondent's future use of temporary employees.

14. One of the respondent's sources of "temporary" workers is Bayjan Help Ltd. ("Bayjan") which carries on business under the name "Help Unlimited". Its manager, Robert Harper, testified that K Mart is one of approximately 100 clients to which Bayjan supplies workers. Persons seeking work attend at Bayjan's office in downtown Toronto between 5:30 and 7:00 a.m. Bayjan generally has between 50 to 100 persons available for work daily. If it appears that work may be available for an individual who has not previously been registered, Bayjan's dispatcher registers him by taking his name, address, social insurance number, and skills (if any). If an individual who is sent to work is "short on cash", Bayjan will provide him with an advance of up to $2.00 per day. The workers are paid by Bayjan each Friday for the work performed by them during the week ending on the preceding Wednesday. Bayjan then immediately bills its clients at an agreed upon rate for each hour of work performed by workers whom it has provided to the clients. Bayjan pays overtime if an individual works more than 44 hours in a particular week. If all that work is performed for one client, Bayjan bills the client for the overtime. However, if the work is performed for two or more clients, Bayjan merely bills each of the clients at their normal rates, and absorbs the overtime cost as a business expense. Bayjan also has a bonus system by which it pays a bonus to each worker who consistently reports for work on time. Bayjan also pays vacation pay (4% of earnings) twice a year, and makes the normal employment deductions such as income tax, unemployment insurance contributions, and Canada Pension Plan contributions. It also pays Workmen's Compensation assessments in respect of the workers it supplies to clients. Workers are transported from Bayjan's office to the Centre and back in a van operated by Bayjan for the purpose of transporting workers to and from customers' locations beyond the area served by the Toronto Transit Commission.

15. Bayjan began to supply workers to the respondent near the end of January of 1982 after Mr. Harper contacted Ed Prostebby, the Director of the Centre, and persuaded him to "give Bayjan a try". Since then, K Mart has become one of Bayjan's biggest customers, accounting for approximately 10 percent of its total business. Some of the persons supplied by Bayjan worked at the Centre for only a few days or weeks. Others worked there for several months, although some of them also occasionally worked during that period at the premises of various clients of Bayjan, sometimes because of lack of work at the Centre, and other times because they arrived at Bayj an's office too late to obtain a ride to the Centre. If a worker who had been working at the Centre failed to report for work on a particular morning, Bayjan would simply send another worker in his place. Mr. Harper candidly testified that it was "abnormal" for workers supplied by Bayjan to work regularly for a single client, as occurred at K Mart; it was his evidence that "the norm is one or two days". Mr. Harper also testified that if a client wishes to "hire" one of Bayjan's workers, it is supposed to either pay Bayjan a placement fee of $350, or continue to obtain the worker's services through Bayjan for a period of three weeks after notifying Bayjan of its desire to hire that person. However, the respondent never took any such action since it did not desire to make any of the agency workers regular full-time employees.

16. The Board also heard the evidence of Lou Duggan, who operates A.P. Careers Ltd., which carries on business as "Armor Personnel" and "Tempo". K Mart is one of Tempo's 350 clients. It is unnecessary to describe the operation of Mr. Duggan's company in detail, as it is essentially quite similar to the Bayjan operation described above, although it draws its workers from different sources in view of its Brampton location. Since Tempo does not provide transportation for workers, they report directly to the client's premises until a particular assignment has been completed.

17. Five of the six grievors named in the grievance (described below) were supplied to K Mart by Tempo, namely, Leslie Bodi, Gery O'Donnell, Lutchman Persaud, Stephen Rank and Paul Miller. Mr. Bodi worked an average of about 31 hours per week at the Centre from late April to September of 1982. During that period, Tempo did not assign him to work anywhere else. Mr. O'Donnell averaged about 30 hours per week at the Centre in the period from mid May to September of 1982, although he also worked a total of about 25 hours for two other Tempo clients during that period in order to "fill out his work week" during weeks when K Mart did not provide him with a sufficient number of hours. Mr. Persaud worked exclusively at the Centre from January 4, 1982 until October 10, 1982. During 32 of the 38 weeks in that period, he worked over 30 hours (per week) at K Mart. Mr. Rank also worked exclusively at the Centre from mid January to September of 1982, working over 30 hours per week in all but six of those weeks. Mr. Miller also averaged over 30 hours per week at the Centre between mid July of 1982 when he commenced working there, and the time of the grievance. The sixth grievor, Bruce James, was supplied to K Mart by another employment agency known as "Bestwork". Mr. James also worked quite steadily at the Centre from mid January to September of 1982. During that period he averaged over 35 hours of work at the Centre per week.

18. When a new worker is sent to the Centre by an employment agency, he is given a time card bearing his name and the name of the employment agency which referred him. That time card is placed in the same rack as the time cards of the respondent's regular full-time employees, who punch the same time clock as agency personnel. After showing the new worker around the Centre and explaining its operations, Mr. Westbrook then takes him to the department where he will be working and introduces him to the departmental supervisor who will direct and control his work. If after a day or two the supervisor is not satisfied with the pace or quality of the work being performed by the new worker, Mr. Westbrook calls the agency and directs it to replace him (if the respondent continues to need the services of such a worker).

19. Agency personnel begin work and leave work at the same time as the respondent's regular workers; they also work the same number of hours per day and have the same coffee and lunch breaks. The work performed by agency personnel is the same work that is performed by regular bargaining unit employees, namely, "warehousing and handling freight". Agency personnel work "right alongside" regular employees and are '"indistinguishable" from them. The respondent's supervisors give directions to agency personnel in the same manner that they direct the respondent's regular work force. All supervision of their work is done by K Mart supervisors; none of the employment agencies have their own supervisors at the respondent's premises. Agency personnel are permitted to purchase damaged merchandise at a reduced price in the same way that regular employees do. At the end of each week, Mr. Westbrook fills out a time sheet for each of the agencies. The agencies use those sheets to determine the number of hours of work for which each of the workers is to be paid in respect of work performed at the Centre. When the respondent no longer requires the services of one or more agency workers, management either calls the agency and instructs them to cease sending those workers, or tells the workers directly not to come in the following work day.

20. There is some evidence that Messrs. O'Donnell and Rank, the two "temporary" employees who testified before the Board in these proceedings, perceived themselves to be employees of Tempo rather than the respondent; in cross-examination they agreed with counsel for the respondent that it would be necessary to fill in an employment application at the respondent's front office "to become an employee of K Mart". Indeed, Mr. Rank testified that he had completed such an application and submitted it to the respondent. However, their signing of the grievance (set forth below) indicates that their perception in that regard was not altogether unequivocal.

21. Over the years, and particularly since the aforementioned collective agreement was entered into, the respondent has used an increasing number of workers supplied by the employment agencies. In addition to substantially increasing the number of such workers, the respondent has used such workers for considerably longer periods of time. In 1978 agency personnel worked a total of only twelve full-time weeks at the Centre. In 1979 that figure increased to 79, with a further increase to 87 in 1980. However, in 1981 that figure increased by over 600% to 574 full-time weeks. By October 22, agency workers had worked a total of 947 full-time weeks in 1982. (The number of part-time weeks worked at the Centre by agency personnel also showed a very great increase from 5, 25, and 22 in 1978, 1979, and 1980, respectively, to 364 in 1981 and 699 in the first ten months of 1982).

22. In February of 1981 there were approximately 40 regular full-time employees of the respondent covered by the collective agreement. Although the respondent hired one or two regular full-time employees during the period from the execution of the collective agreement to the commencement of hearing of this complaint, there was a net reduction in the total number of such employees through attrition during that period. Thus, it is apparent that the respondent has ordered its affairs so as to handle its substantially increased work load by using workers supplied by agencies rather than regular full-time employees hired directly by K Mart. Thus, on the evidence as a whole, it is clear that over the years, and particularly since the union and the respondent entered into a collective agreement in February of 1981, the respondent has substantially changed its usage of temporary employees. Instead of using them only during peak periods, it has come to use them throughout the year; for example, from October of 1981 to September of 1982, the respondent generally had between 20 and 25 agency personnel working at the Centre alongside its regular work force. Moreover, a number of the persons supplied by agencies have worked more than 24 hours per week at the Centre for an extended period of time, rather than merely working there for a few days or weeks as was originally the norm.

23. Mr. Prostebby testified that the increased use of agency workers in 1982 resulted from a substantial increase in the Centre's work load due to the remodelling of sixty Canadian K Mart stores, the closing of approximately 30 K Mart automotive centres, the promotion of a large scale "soap program" in the respondent's stores, and the doubling of the respondent's shipping scheduled (from once a week to twice a week) on an experimental basis. However, the respondent's use of a substantial number of temporary employees continued in September of 1982 after the bulk of that work had been completed. Accordingly, there is ample support for counsel for the complainant's contention that by September of 1982, the respondent's use of such workers could no longer be accurately described as "temporary".

24. Mr. Prostebby also testified that the "two main advantages of using temporary employees rather than regular employees" are that the respondent can adjust the number of people it needs to do "casual labour" on a day to day basis, and that the rates the agencies charge are substantially less than the amount the respondent would otherwise pay for the performance of the work in question. During 1982, K Mart paid the agencies between $6.10 and $7.28 per hour for the services of each worker supplied by them. That rate is substantially less than the cost of employing a regular employee under the terms and conditions specified in the collective agreement between the complainant and the respondent. Under that agreement, the hourly wage rate in effect in 1982 ranged from $5.55 to $10.42, and the agreement also provided for a number of fringe benefits which cost the respondent "approximately 30% of base salary".

25. As a result of inquiries by some of the agency workers concerning whether there was anything the union could do to assist them in obtaining the protection and financial benefits of the collective agreement, Mr. Priestley contacted union business agent Joe Bigeau, who arranged for Mr. Priestley to meet with a member of the union's law firm to discuss the situation. Following that consultation, the following grievance was prepared by that firm:

"The Union grieves on its own behalf and on behalf of those persons who are regularly employed for more than twenty-four hours per week with respect to the following:

A number of persons are, in fact, regularly employed for more than twenty-four hours per week yet are not being treated as employees covered by the collective agreement.

The relief requested is a declaration that the collective agree­ment has been violated and that the Company cease violating the collective agreement, and a declaration that these persons are employees covered by the collective agreement.

Further relief is requested in terms of compensation and damages, union dues, etc. for the violation.

The persons affected are those listed on on Schedule A' attached hereto and there may be more that we are not aware of.

This grievance may be dealt with at Step I or Step 11 depending upon your wishes."

The persons listed on Schedule "A" to that grievance are Lutchman Persaud, Leslie Bodi, Paul Miller, Stephen Rank, Gery O'Donnell, and Bruce James (hereinafter referred to as the "grievors").

24. After the grievors had signed the grievance (with the exception of Mr. Miller, whom Mr. Priestley was unable to locate at the Centre prior to filing the grievance), Mr. Priestley folded and stapled the grievance and brought it to Mr. Prostebby's office around 3:30 p.m. on September 17, 1982. When he found that Mr. Prostebby was not in his office, Mr. Priestley left the grievance with Helen Vail, Mr. Prostebby's secretary, who placed it on Mr. Prostebby's desk without reading it. Mr. Prostebby was away from the Centre from about 12:30 to 4:00 o'clock that afternoon. By the time he returned to the Centre, Mrs. Vail had left for the day. In view of the hour, he "locked up and went home" without reviewing any of the materials on his desk. Thus, he did not become aware of the grievance until Monday, September 20th, when he found it on his desk early that morning.

25. The grievance that was initially filed with the respondent was not on the union's usual grievance form that had been used for all previous grievances filed with the respondent. However, after the respondent returned the original grievance to Mr. Priestley, a grievance that was virtually identical to the original grievance was subsequently filed on the usual form by the union's business agent. Although Mr. Prostebby suggested that he "didn't take it at first as a grievance" because it "wasn't on a grievance form" and "wasn't signed by a steward", it is clear from the evidence that he quickly recognized that the document was a formal complaint that various temporary employees were "working more than 24 hours per week and not getting the benefit of the collective agreement".

26. After they had discussed the matter, Mr. Prostebby told Mr. Westbrook to "reduce [the agency workers] to three days a week". Consequently, Mr. Westbrook called the agencies and directed them to limit the number of hours worked by any individual worker to a maximum of 24 hours per week. He also subsequently advised them that no agency worker was to work at the Centre for more than three months. Thus, agency personnel, many of whom had been working four or five days a week at the Centre, began to work there a maximum of three days a week. However, there was no decrease in the total number of hours worked by agency personnel, since the number of agency personnel working at the Centre increased from 20 or 25 to approximately 40.

27. Mr. Prostebby conceded in cross-examination that he knew what the union wanted was to have the grievors covered by the collective agreement. However, in his testimony, Mr. Westbrook told the Board that it was his understanding that the union was dissatisfied with the agency people working more than twenty-four hours per week and wanted their hours reduced. Thus, he suggested that management was doing "what the union wanted" when they decided that "the best thing to do was to have [agency personnel] work twenty-four hours". That evidence, in the light of all the circumstances including the contents of the grievance, Mr. Prostebby's understanding of it, and Mr. Westbrook's demeanour as a witness, is not at all credible and casts doubt on the reliability of the balance of Mr. Westbrook's testimony concerning the timing and motivation of the respondent's impugned actions. It is also not entirely without significance in determining the respondent's motivation for its impugned actions that when counsel for the union suggested to Mr. Westbrook in cross-examination that his interpretation of the grievance did not "make sense", Mr. Westbrook stated, "Nothing makes sense to me as far as the union is concerned".

28. As indicated above, prior to the receipt of the aforementioned grievance the respondent had for a number of years used some temporary employees during peak periods without any complaint from the union or any of its regular employees. Mr. Priestley conceded in cross-examination that although he was aware of the grievors' situation, and was also aware that after the collective agreement was signed the number and length of service of temporary employees increased substantially, he never complained, grieved, or otherwise expressed concern to the respondent about the matter until the filing of the aforementioned grievance, nor did any other union official.

29. When the parties came before another panel of the Board in March of 1982 with respect to a complaint (Board File No. 2420-81-U) by the union (under section 89 of the Act) that the respondent was in breach of the collective bargaining obligation required to be in its collective agreement by section 43 of the Act, they agreed for purposes of that case that there were about 40 employees in the bargaining unit and that there were "a number of 'temporary' employees not considered part of the unit". Their agreement is reflected in the following passage from the Board's decision (reported in 119821 OLRB Rep. June 903):

"5. There are approximately 40 employees in the bargaining unit and this number is apparently relatively constant (although there are a number of 'temporary' employees who are not considered part of the bargaining unit) ...."

While that agreement clearly indicates that the union was aware of the respondent's use of "temporary" employees, it does not preclude the union from pursuing the present complaint for, as noted by union counsel, that factual agreement was made only for the purpose of the earlier complaint in which the employment status of the temporary workers was of little or no relevance to the legal issues in dispute in those proceedings.

30. When asked in cross-examination why the union waited so long to grieve the matter, Mr. Priestley stated that it was only in late 1981 and 1982 that the "numbers" of temporary workers "really struck home". He also testified that there was "no particular reason" that the issue came to a head in September; he merely told the Board that "it took a while" because of his "lack of communication with some of the people".

31. Mr. Westbrook testified that on Friday afternoon, September 17th, he directed the supervisors to tell the men supplied by the agencies not to come in on the following Monday because the work was "caught up" and things were "very slow" at the Centre. That temporary cutback in agency personnel resulted from the "very small" orders received by the Centre during that period. Thus, near the end of their shift on September 17th, a number of temporary employees, including Messrs. O'Donnell and Rank, were told not to come in on the following Monday because there was "not enough work for everybody". However, it was their understanding that they were to report for work at the Centre on Tuesday. Indeed, Mr. Rank testified that his foreman, Walter Pitka, specifically told him to "show up on Tuesday" (September 21st). Although Mr. Pitka denied giving Mr. Rank any instructions on September 17th about not reporting for work on September 20th or reporting for work on September 21st, we are satisfied that his recollection in that regard is less reliable than that of Mr. Rank. The unreliability of Mr. Pitka's recollection of the pertinent events on the day in question is underlined by the fact that his testimony as to his belief that Mr. Rank was not at work on September 17th is contradicted by the respondent's documentary evidence which clearly confirms that Mr. Rank was indeed at work at the Centre that day. His evidence is also inconsistent with that of Mr. Westbrook.

32. Although we are satisfied that the respondent's decision to direct various agency workers, including the grievors, not to report for work at the Centre on September 20th was motivated solely by the paucity of work required to be performed that day, having regard to all of the circumstances we find that the fact that they signed the grievance and authorized the union to file it with the respondent on their behalf was at least one of the reasons why the respondent refused to continue to have Mr. Rank and Mr. O'Donnell perform work at the Centre after September 20, 1982. In reaching this conclusion, we have considered the demeanour of the various witnesses who testified before us and their respective credibility, as well as the inferences which may reasonably be drawn from the established facts. The circumstances surrounding the termination of Mr. Rank are particularly enlightening with respect to the issue of the respondent's motivation. Mr. Rank was described by Mr. Prostebby as "one of the longest service temporary employees" at the Centre. He had worked in "repack" and in shipping where he had become a "checker". Although he was removed from the latter position due at least in part to certain errors which he made, that removal occurred about a month before he was terminated. After ceasing to be a checker, Mr. Rank continued to work in the shipping department. Thus, it is apparent that his errors as a checker were not at the time viewed by management as being such a serious matter as to require his removal from the Centre. Similarly, it is apparent from the evidence that certain order "mix-ups" involving Mr. O'Donnell took on an importance after September 17th which had not previously been attributed to them by management. Indeed, some of the incidents had never been drawn to Mr. O'Donnell's attention until he testified in these proceedings. There was also some suggestion by management in these proceedings that Mr. O'Donnell was unable to see well enough through the cracked lenses in his glasses to properly perform his job duties. However, the evidence as a whole suggests that this was not a matter of any real concern to management prior to the grievance. Although Mr. O'Donnell's supervisor asked him about his glasses about a week before he was terminated, he accepted as legitimate Mr. O'Donnell's concern that his new glasses might be broken if he wore them at the Centre and, accordingly, did not tell him that he had to wear his new glasses while at work.

33. In reaching the above conclusion concerning the respondent's motivation, we have also taken into account the fact that there were a number of substantial conflicts in the evidence concerning the termination of various grievors as workers at the Centre. Mr. Westbrook testified that earlier in the work week of September 13-17, he "could have" contacted Tempo about terminating some of the Tempo workers. He vaguely recalled telling Tempo, ostensibly at some point prior to the grievance, not to send Mr. O'Donnell to the Centre anymore, but he apparently had no recollection of instructing Tempo to terminate any of the other grievors, and offered no satisfactory explanation for the respondent's decision to terminate them. With respect to the decision to terminate Mr. O'Donnell, Mr. Westbrook told the Board, "O'Donnell's supervisor said he was too slow so we just cut him." Mr. Prostebby testified that he had a short meeting with Mr. Westbrook on Thursday, September 16th at which they decided "that the number of days at work for the temporaries would be reduced for the following week" because of a shortage of work. It was also his evidence that he instructed Mr. Westbrook at that time to instruct the agency not to send Mr. Rank to the Centre anymore because his supervisor was unhappy with his work and his attitude. Mr. Duggan testified that Mr. Westbrook telephoned Tempo around noon on Thursday, September 16th, and asked the company to cease assigning Messrs. Bodi, O'Donnell, Persaud, and Rank to work at the Centre. However, we do not find his evidence concerning that matter to be reliable; not only is it entirely hearsay, but it also appears to us to be based upon his ex post facto rationalization of what "must have happened" in view of the documentary evidence which indicates that Mr. Rank's and Mr. O'Donnell's last day at work at K Mart was Friday, September 17th. Moreover, his testimony is in conflict with that of Barbara Amarol, the Tempo dispatcher who actually received Mr. Westbrook's call. It was Mrs. Amarol's evidence that Mr. Westbrook telephoned "somewhere around the start of the week of September 12th - either Monday, Tuesday or Wednesday, ... not on Thursday or Friday", and told her that he wanted to terminate Messrs. Persaud, Bodi, Rank and O'Donnell, who had been at the Centre "for quite a long time". It was also her evidence that she called each of those employees, except Mr. Persaud, at home "at the end of the week, either Thursday the 16th or Friday the 17th" and told them that their K Mart job was finished. Thus, her evidence in that regard contradicts not only that of Mr. Duggan but also that of Mr. Westbrook.

34. Mr. Rank testified that he was given no indication by anyone that his K Mart work was finished until Mrs. Amarol telephoned him around 4:00 p.m. on Monday, September 20th and told him that K Mart was '"cutting back on all the temporaries because of a shortage of work". It was also his evidence that when he inquired how long the cut-back was going to last, Mrs. Amarol said "around a couple of weeks" but that she "wasn't sure". It was Mr. O'Donnell's evidence that he was unaware of his termination until Monday, September 20th when he telephoned Tempo around noon (to confirm that he would be working at the Centre the next day) and was told that "the job was finished" because K Mart "didn't want [him] back anymore. Mrs. Amarol also recalled that conversation, but maintained that it was her second telephone conversation with Mr. O'Donnell about that matter. It was also her evidence that when she spoke with Mr. O'Donnell on September 20th, he was upset with the situation because he did not think it was fair. It was her recollection that the conversation occurred about 8:30 in the morning rather than at noon.

35. On balance, we find the evidence of the grievors to be more reliable concerning the timing of their terminations than that of the witnesses called by the respondent, whose conflicting versions are incapable of being reconciled and appear to the Board to be based more on ex post facto rationalizations than on their independent recollection of the events in question. We have also taken into account the fact that the calls would probably be of greater importance to the grievors, whose economic well-being was on the line, than they would be to Mrs. Amarol, who makes a great many calls to workers as part of her normal duties. Therefore, having regard to all of the circumstances, including the high degree of improbability that management's decision to terminate four of the six grievors shortly after they signed the grievance was merely a remarkable coincidence, we find that on or about September 20th, after becoming aware of the grievance, management contacted Tempo and instructed that agency to advise Messrs. Rank, O'Donnell, Bodi, and Persaud to cease reporting for work at the Centre. Tempo was unable to contact Mr. Bodi, who continued to work at the Centre for about two more weeks before the respondent again directed Tempo not to send Mr. Bodi back to the Centre anymore. When Mr. Westbrook advised Mr. Duggan later in the week of September 20th that K Mart had need of another agency worker since one of them had not reported for work that day, Mr. Duggan told him that Mr. Persaud was available and asked if it would be all right to send him. Mr. Westbrook agreed and, accordingly, Mr. Persaud returned to work at the Centre for several more days, until the week of October 4th, when he quit working at the Centre due to the economic consequences of the reduction of his hours of work to less than 24 hours per week. Paul Miller and Bruce James also quit working at the Centre after the grievance was filed and their hours of work were reduced to less than 24 per week.

36. One of the issues which the Board must decide in these proceedings is whether or not the grievors are employees of the respondent. The Board's power to make that determination is derived not only from section 89, but also from section 106(2) of the Act, under which "the decision of the Board thereon is final and conclusive for all purposes". Counsel for the union contended that the grievors were employees of the respondent for purposes of the Labour Relations Act. In support of that contention, he referred the Board to a number of Board decisions and arbitration awards. Counsel for K Mart, on the other hand, argued that the persons in question were employees of the respective agencies which supplied their services to the respondent. He also referred the Board to a number of judicial and administrative authorities, and emphasized that "control", which originated as one of the primary tort law criteria pertinent to the issue of an employer's vicarious liability, should be entirely disregarded, or given very little weight in determining whether the respondent is the employer of the "temporary" employees supplied to K Mart by various employment agencies.

37. The criteria which the Board considers helpful in determining which of two (or more) entities is the employer for purposes of the Labour Relations Act include the following:

(1) the party exercising direction and control over the employees;

(2) the party bearing the burden of remuneration;

(3) the party imposing discipline;

(4) the party hiring the employees;

(5) the party with authority to dismiss the employees;

(6) the party who is perceived to be the employer by the employees; and

(7) the existence of an intention to create the relationship of employer and employee.

(See, for example, Windsor Airline Limousine Services Limited, 119811 OLRB Rep. March 398; Sutton Place Hotel, 11980] OLRB Rep. Oct. 1538; Toronto Arts Productions, [1980] OLRB Rep. Sept. 1556; and The Tower Company (1961) Ltd., [1979] OLRB Rep. June 583; and the numerous authorities cited therein.) The cases have generally not assigned any particular order of priority to those factors, but rather have tended to indicate that the weight to be given to each factor must depend upon the facts of each case. However, the Board has tended to attach considerable significance to "overriding control" in determining which of two or more entities is the employer of certain persons. Moreover, the Board has consistently found that neither private arrangements as to who is the employer, nor administrative paymaster arrangements, are indicative of the true employer.

38. In the present case the respondent exercises a high degree of control over the workers in question. The respondent's supervisors not only tell them what tasks they are to perform, but also direct them in the manner in which they are to be performed. It is the respondent which determines what hours will be worked by those workers at its premises, when they will take their breaks, and when they will eat lunch. Although the particular workers to be assigned to the respondent's premises are initially determined by the various employment agencies as the respondent's agents, it is the respondent which makes the ultimate determination concerning whether an individual will be permitted to continue to work at the Centre or will be discontinued or replaced. Thus, the respondent exercises substantial control over those workers, similar in many respects to the control which it exercises over regular full-time K Mart employees. Although the agencies serve as paymasters for K Mart in respect of the workers which they supply to the Centre, it is the respondent that bears the ultimate burden of their remuneration; as indicated above, after paying the workers, the agencies immediately invoice K Mart for each hour of work performed by them at the Centre. The evidence concerning imposition of discipline is of little assistance to the Board in resolving this matter since little or no disciplinary action is taken against any of the employees in question by either the respondent or the agencies. Instead of using any form of progressive discipline, the respondent simply removes any unsatisfactory agency worker from the Centre through a direction that the agency cease referring that person to the respondent's premises. That removal is tantamount to a discharge vis-a-vis the respondent, although the individual in question may thereafter be assigned by the agency to provide services to another client. Thus, the respondent clearly has the authority to direct that any of the employees in question cease working at its premises.

39. Although neither of the two agency workers who testified before the Board identified the respondent as their employer, their signatures on the grievance provide some indication that their perception in that regard is not unequivocal. Moreover, the perception of the employees is but one of the factors to be considered and is not conclusive [see Re Seafarers' International Union of Canada and Kent Line Ltd. (1972), 1972 CanLII 1085 (FCA), 27 D.L.R. (3d) 105 (Fed. C.A.)], particularly in a situation where an employer has structured its affairs in a manner which deliberately attempts to evade collective agreement obligations in respect of a substantial number of individuals performing bargaining unit work on its premises. Similar observations are applicable to the seventh criterion, i.e., the existence of an intention to create the relationship of employer and employee. On balance, we find that the respondent's intention was to create an arrangement whereby it could have all of the advantages of an employer-employee relationship without incurring the collective agreement obligations that apply to an employee in the context of a unionized operation such as the Centre. While its original intention of using temporary employees in peak periods to minimize layoffs among its regular full-time employees may not have been objectionable, the respondent's intention took on an anti-union aspect after the union duly obtained bargaining rights and the respondent directed virtually all of its increased work load to "temporary employees" whose numbers and length of service increased dramatically, thereby enabling it to avoid hiring regular full-time employees who would unquestionably be within the bargaining unit. Moreover, the respondent's reference to cost-saving is not a valid defence to its actions. It is common knowledge that unionization of a work place can have an economic impact on an employer's business. Indeed, it is the potential for increased remuneration which (at least in more prosperous economic times) constitutes one of the primary "selling points" of the union movement. In dealing with somewhat similar considerations in Westinghouse Canada, [1980] OLRB Rep. Apr. 577, the Board:

"63. The purpose of The Labour Relations Act is to provide a statutory framework within which employees are encouraged to join together and bargain collectively with their employer. The underlying assumption is that employees who bargain collectively are on a more equal footing with their employer than unorganized employees and have a greater say in determining their terms and conditions of employment. It is axiomatic, therefore, that collective bargaining as established under the Act has an economic impact in terms of both the price of labour and the scope of the employer's unilateral authority. Under our Act the employee's share of the economic pie and the scope of management's authority vis-a-vis employee relations must be determined at the bargaining table and against the backdrop of possible economic sanctions by either side. An employer whose employees have decided to bargain collectively cannot escape his obligations under The Labour Relations Act and any decision taken to avoid these obligations or to defeat the legitimate collective bargaining aspirations of his employees is in violation of the Act. Under our statute accommodation is sought at the bargaining table. An employer who contracts out his work, relocates or closes his plant or takes any other major business decision to avoid having to deal with his employees collectively through a trade union or to avoid the possibility, in the abstract, of being subject to economic sanctions is guilty of an unfair labour practice and the Board has so found in a number of cases

40. This is not the first case in which the Board has been called upon to determine whether workers supplied to a company by an employment agency are employees of the agency or employees of the company. For example, in The Welland County Board of Education, [1972] OLRB Oct. 884, the Board found that certain secretaries who had been transferred by the School Board to the payroll of Office Overload, an existing employment agency, remained employees of the School Board for purposes of the Labour Relations Act. Similarly, in Ralston Purina Canada Inc., [1979] OLRB Rep. June 552, the Board found that persons applied to that company by International Personnel Ltd. were employees of the former on the basis of the following facts (set forth in paragraph 3 of the decision):

"Ralston Purina is party to a verbal agreement with International Personnel under which International Personnel assigns persons who are selected by Ralston Purina to work for Ralston Purina at a leased facility in Mississauga. International Personnel is responsible for paying these persons an hourly rate agreed to in negotiation with Ralston and for providing and administering the benefit plans covering these persons. The Unemployment Insurance premiums and Ontario Health Insurance Plan premiums are paid through Interna­tional Personnel on behalf of these persons. International Personnel is paid a fee by Ralston which allows it to recoup its costs and to realize a profit. The persons supplied by International Personnel work for Ralston, are supervised by employees of Ralston and may be terminated by Ralston. The facility at which these persons work is a temporary facility. The company occupies a permanent facility in Mississauga for which the Grain Millers Union holds bargaining rights covering that specific location. The officials of Ralston were never of the view that the persons supplied by International Personnel to work as its temporary location were its employees."

41. The issue of whether a personnel agency ("Manpower Business Services") or its client (Templet Services) was the employer of "five or six persons" who were installing library shelving at a research centre came before the Board in Templet Services, [1974] OLRB Rep. Sept. 606. In that application for certification by Carpenters' Local 93, the Board found the individuals in question to be employees of the agency. Although a number of the pertinent facts of that case are similar to those of the present case, it is distinguishable on the basis of the relative permanence of the relationship between a number of agency workers (including the grievors) and K Mart, the existence of bargaining unit employees who work side by side with agency workers performing identical tasks under common supervision and control, and the anti-union animus which we find to have been a significant element in the respondent's substantially expanded use of such workers at the Centre in 1981 and 1982.

42. There are also a number of arbitration awards which have found workers supplied to companies by employment agencies, under arrangements similar to those between K Mart and the agencies described above, to be employees of those companies for labour relation purposes. See, for example, Re Regional Municipality of Waterloo and London and District Service Workers' Union, Local 220 (1977), 1977 CanLII 2965 (ON LA), 16 L.A.C. (2d) 280 (Brandt); Re Goodyear Tire & Rubber Co. of Canada Ltd. and United Rubber, Cork, Linoleum & Plastic Workers, Local 232 (1977), 1977 CanLII 2969 (ON LA), 16 L.A.C. (2d) 177 (Gorsky); Re Board of Governors of Riverdale Hospital and Canadian Union of Public Employees, Local 79 (1974), 1974 CanLII 2341 (ON LA), 7 L.A.C. (2d) 40 (Shiff); and International Association of Machinists and Philco Coip. of Canada Ltd. (1963), 13 L.A.C. 291 (Hanrahan). (Cf. Re City of Kelowna and Canadian Union of Public Employees, Local 38 (1980), 1980 CanLII 4062 (BC LA), 25 L.A.C. (2d) 314 (Larson), in which an arbitration board found that although workers obtained from an employment agency did not normally become employees of the City, the City had "an obligation to contract for them upon terms consonant with the collective agreement mutatis mutandis. See also Re Ford Motor Co. of Canada Ltd. and Plant Guard Workers, Local 1958 (1981), 1981 CanLII 4460 (ON LA), 1 L.A.C. (3d) 141 (MacDowell), which contains a useful review of the pertinent arbitral and Board jurisprudence. In that case, the arbitrator found that security guards provided by a security service company remained employees of that company and did not become Ford employees since all of the indicia, except control, pointed to the security company as employer, and "control" presented a '~mixed and equivocal" picture.)

43. Accordingly, having regard to all of the circumstances and the relevant jurisprudence, the Board finds that the grievors were at all material times employees of the respondent for purposes of the Labour Relations Act. We further find that at the time the grievance was filed, the grievors were bargaining unit employees under the collective agreement in that they were "employees of the respondent] Company working at its distribution centre in Brampton, Ontario" and were not foremen, those above the rank of foreman, office and sales staff, persons regularly employed for not more than twenty-four hours per week, or students employed during the school vacation period.

44. Dismissing or otherwise discriminating against a person for filing a grievance, or causing a grievance to be filed, is a breach of section 66 of the Act; see, for example, Bedard Girard Ontario, 11981] OLRB Rep. Oct. 1338, at paragraphs 30 and 31. (See also The Fanshawe College of Applied Arts and Technology, [19801 OLRB Rep. Oct. 1392; K-Mart Canada Limited, [1982] OLRB Rep. Jan. 64; and Canadian Red Cross Blood Transfusion Service, Hamilton, [1981] OLRB Rep. Apr. 425. In the latter case, the Board held that the circulation of a petition by a '"temporary full-time employee" who was not in the bargaining unit, in an effort to obtain effective union representation for temporary employees, was a right protected by section 66 of the Act.) Such actions may also contravene section 80(1) of the Act which provides:

"No employer, employers' organization or person acting on behalf of an employer or employers' organization shall,

(a) refuse to employ or continue to employ a person;

(b) threaten dismissal or otherwise threaten a person;

(c) discriminate against a person in regard to employment or a term or condition of employment; or

(d) intimidate or coerce or impose a pecuniary or other penalty on a person,

because of a belief that he may testify in a proceeding under this Act or because he has made or is about to make a disclosure that may be required of him in a proceeding under this Act or because he has made an application or filed a complaint under this Act or because he has participated or is about to participate in a proceeding under this Act."

In Ontario Nurses' Association, [1982] OLRB Rep. Oct. 1546, the Board held that a grievance hearing before a board of arbitration or a sole arbitrator is a "proceeding under the Act" within the meaning of section 80. Accordingly, if an employer dismisses, discriminates against, or imposes a pecuniary or other penalty on a person in whole or in part because of a belief that he may testify at an arbitration hearing, or because he has participated or is about to participate in an arbitration proceeding, the employer thereby contravenes section 80(1) of the Act. (See also The International Association of Bridge, Structural and Ornamental Iron workers, 11982] OLRB Rep. Oct. 1487, at paragraphs 67 to 72, in which the Board confirmed the applicability of the "taint theory" to section 89 complaints involving alleged contraventions of section 80).

45. Having regard to all of the circumstances, including the rather vague, contradictory, and generally unsatisfactory evidence adduced by the respondent with respect to the timing of its actions, and the implausibility of the reasons given by management for those actions, the Board finds that a desire to penalize the grievors for filing the grievance formed at least part of the respondent's motivation for refusing to continue to employ the grievors Stephen Rank and Gery O'Donnell on and after September 20, 1983, for refusing to continue to employ Lutchman Persaud on and after October 4,1982, and for reducing the hours of work of Messrs. Persaud, Bodi, Miller, and James to less than 24 hours per week following receipt of the grievance. In making this finding, we reject the respondent's contention that it was merely a coincidence that at or about the time of the grievance, it directed Tempo to cease sending to the Centre four of the six grievors. We are also not persuaded that the respondent's subsequent decision to permit Messrs. Bodi and Persaud to continue working at the Centre with substantially reduced hours is inconsistent with a finding of anti-union motivation. As noted above, approximately two weeks later the respondent renewed its refusal to continue to employ Mr. Bodi. Moreover, the reduction of the weekly hours of work of the other grievors ultimately prompted each of them to cease working at the Centre. Under the circumstances, we infer that this consequence was both expected and intended by management. Accordingly, the Board finds that the respondent contravened section 66 of the Act by refusing to continue to employ Stephen Rank, Gery O'Donnell, and Lutchman Persaud, and by reducing the hours of work of Paul Miller, Bruce James, Leslie Bodi and the said Lutchman Persaud to less than twenty-four hours per week. We also find that those actions contravened section 80(1) in that they were motivated at least in part by a belief that the grievors might testify in arbitration proceedings flowing from that grievance.

46. We further find that the respondent intentionally interfered with union representation of the grievors contrary to section 64 of the Act. As noted above, we are satisfied on the balance of probabilities that the respondent was motivated at least in part by anti-union animus when it substantially increased its use of workers supplied by employment agencies following the certification of the union in February of 1980. This finding of a breach of section 64 is not dependent upon our finding that the grievors were employees of the respondent; the respondent's contravention of section 64 consists of intentionally depriving the grievors of representation by the applicant by ordering its operations in such manner as to attempt to keep them beyond the ambit of the bargaining unit, nothwithstanding the fact that they were regularly performing bargaining unit work at the Centre for more than twenty-four hours per week. In effect, the respondent sought to undermine the union's bargaining rights by "contracting in" temporary employees such as the grievors, to handle substantial increases in warehouse work that would otherwise have been performed by employees in the bargaining unit for whom the union had been certified. In Sunnycrest Nursing Homes Limited, [19811 OLRB Rep. Feb. 261, a case involving the somewhat analogous situation of an employer who contracted out the work of one quarter of its work force, the Board wrote as follows:

"24. In this jurisdiction, the Legislature has mandated collective bargaining as a socially desirable means by which employees, through self-organization and collective representation, can participate in the determination of their terms and conditions of employment. To support this process, the Labour Relations Act proscribes various employer practices which could undermine the freedom of employees to select a trade union and engage in collective bargaining. The principal employer unfair labour practice provisions are [sections 64, 66 and 70, read in conjunction with sections 3 and 89(5) of the Act] …….These sections, together with the broad remedial authority granted to the Board, shore up the exercise of employee rights and protect freedoms which, without them, would be largely illusory. So important are these employee rights that the Legislature has considered it appropriate to cast a legal onus upon the employer to demonstrate that he has not interfered with their exercise. (See section 89(5).)

25. It is self evident, of course, that an employer can carry on his business as he sees fit, so long as he does not contravene a collective agreement or the applicable labour legislation. An employer is entirely free to expand or contract his enterprise, close down all or part of it, transfer operations, change the methods of production, or 'contract out' work so long as in so doing, he is motivated by genuine business considerations, rather than a desire to defeat or impede his employees in the exercise of their statutory rights.

26. The onus cast upon an employer to demonstrate the propriety of its conduct has been succinctly stated by the Board in The Barrie Examiner 11975] OLRB Rep. October 745, at paragraph 17:

……….the appearance of a legitimate reason for discharge does not exonerate the employer, if it can be established that there also existed an illegitimate reason for the employer's conduct.

This approach effectively prevents an anti-union motive from masquerading as just cause. Given the requirement that there be absolutely no anti-union motive, the effect of the reversal of the onus of proof is to require the employer to establish two fundamental facts— first, that the reasons given for the discharge are the only reasons and, second, that these reasons are not tainted by any anti-union motive. Both elements must be established on the balance of probabilities in order for the employer to establish that no violation of the Act has occurred.'

It will be noted that the anti-union motivation need not be the sole reason for the employer's decision. A contravention is also estab­lished in cases of mixed motives—some lawful, others unlawful. (C.f. section 382 of the Criminal Code R.S.C. 1970 Chap. C-234; and see: R v Bushnell Communications et al (1973) 1 O.R. (2nd) 422 (O.H.C.), aff'd 1974 CanLII 559 (ON CA), 4 O.R. (2d) 288 (C.A.); Sheehan and Upper Lakes Shipping Limited et al (1977) 1977 CanLII 3060 (FCA), 81 D.L.R. (3d) 208; Westinghouse Canada Limited 11980] OLRB Rep. April 577—application for judicial review dis­missed, 80 CLLC ¶14,062 (Ontario Divisional Court).) The issue of motivation is decisive, and the Board must draw inferences and reach a conclusion on that issue in light of the established facts.

27. We do not think it is necessary to review the many Board cases in which the employer's conduct has been impugned because its decision-making — otherwise lawful—has been tainted by anti-union animus, an attempt to avoid its statutory obligations, or a desire to undermine the exercise of its employees' statutory rights. The cases are legion, and each, to some extent, turns on its own facts. It will be sufficient in our view, to refer briefly to several cases which, in various ways, resemble the instant one. As will become apparent, the situation here is by no means novel. Several previous Board decisions have involved business decisions not unlike those currently before us.

28. In Academy of Medicine, 11977] OLRB Rep. December 783, the Board found that an employer's decision to close its telephone answering service (one of a variety of services it provided to its clientele) 'was motivated in whole or in substantial part by anti-union considerations' and was therefore an unfair labour practice. In that case, the employer, as it said it would, shut down a part of its operation because its employees had decided to join a trade union and participate in collective bargaining. In Humpty Dumpty Foods Limited, [1977] OLRB Rep. July 401, the Board found that an employer's decision to transfer its warehouse operation beyond the scope of the union's recognition and set up remote satellite warehouses to serve the same market was an unlawful lockout. It was 'motivated by a desire to compel or induce its employees to refrain from exercising rights or privileges under the Act'. In Humber College of Applied Arts and Technology, [1979] OLRB Rep. June 520, the Board found that an employer's decision to subcontract the work of its security guards was unlawful because its purpose was 'to insulate itself from the natural and inevitable consequences of the exercise by the security guards of their right to strike'. It was an attempt by the employer to avoid its obligation to bargain, and abrogate the employees' right to participate in the bargaining process. In Consolidated Sand and Gravel, 11978] OLRB Rep. March 264, a decision by a quarry operator to switch from a system of direct hiring of its drivers to one in which the drivers were assigned through a broker was found to be actuated by anti-union animus and 'an attempt to ensure that the respondent would not be required to deal with its employees through a trade union'. In Westinghouse Canada Limited (supra), the Board found that a partial plant closure and relocation was motivated by anti-union considerations, and amounted to an unlawful refusal to continue to employ a number of its employees. In Doral Construction Limited, 11980] OLRB Rep. May 693, an employer's decision to subcontract the maintenance and security work performed by some of its employees, was found to have been induced, in part, by their decision to opt for trade union representation. The resulting decision to terminate the employees was held to be a breach of section 58(a) [now section 66(a) of the Act]. Finally, in Dr. Hillers Peppermit Canada Limited, [19791 OLRB Rep. May 375, an employer in the construction industry—where subcon­tracting is a common and accepted practice, was found to have engaged in a particular subcontract to impede its own employees in their efforts to join a union and bargain collectively. In each of these cases, therefore, an employer's 'business' decisions were found to be illegal because they were motivated, in whole or in part, by a desire to avoid its statutory obligations, or frustrate the exercise of its employees' statutory rights. (See also: C.A.L.E.A. and North Canada Air Ltd., 11979] 3 Can L.R.B.R. 239.)"

As indicated above, similar considerations have led us to conclude in the instant case that anti-union animus was at least part of the respondent's motivation for substantially increasing its use of workers provided by employment agencies following the certification of the union in February of 1980, and also for the reduction of the hours of work of such workers to less than 24 hours per week following the filing of the grievance. Such action was taken by the respondent at least in part for the purpose of continuing to deprive those employees of union representation and of the protection and benefits of the collective agreement.

47. As an alternative to his argument that the employment agency workers were not employed by K Mart, counsel for the respondent submitted that the union was estopped from claiming any relief in respect of them. In support of that contention, he referred the Board to a number of judicial and administrative authorities.

48. The doctrine of estoppel is succinctly summarized in the following passage from Brown and Beatty, Canadian Labour Arbitration (Agincourt: Canada Law Book Limited, 1977) at paragraph 2:2210:

"The concept of promissory estoppel is well established at common law and has been expressed in the following way:

The principle, as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word

Thus, the essentials of estoppel are: a finding that there was a representation by words or conduct intended to be relied on by the party to which it was directed; some reliance in the form of some action or inaction; and detriment resulting therefrom

(See also Canadian National Railway Co. et al. v. Beatty et al. (1981), 34 O.R. (2d) 375 (Div. Ct.); Vanbots Construction, [1982] OLRB Rep. July 1086; Comstock International, [1982] OLRB Rep. June 852; Sinclair Welding Limited, [1981] OLRB Rep. March 331, and The Master Insulators' Association of Ontario, Incorporated, [1979] OLRB Rep. Sept. 877.) It is firmly established that acquiescence or inaction can have the effect of a "representation": see Re Consolidated-Bathurst Packaging Ltd. and International Wood-workers of America, Local 2-242 (1982), 6 L.A.C. (2d) 30 (MacDowell), and Re City of Penticton and C.UPE. Local 608 (1978), 1978 CanLII 3523 (BC LA), 18 L.A.C. (2d) 307 (B.C.L.R.B.).

49. Counsel for the respondent submitted that the union's withdrawal of its collective agreement proposals concerning temporary employees estopped the union from asserting at any time during the term of that agreement that temporary employees are covered by it. However, as contended by counsel for the union, those proposals were made and withdrawn at a time when the respondent was using relatively few temporary employees for relatively short periods of time. The abandonment of those proposals cannot be taken to have given the respondent carte blanche to virtually freeze the size of the bargaining unit by using unlimited numbers of agency workers on a year-round basis to handle work that would otherwise be performed by regular full-time employees of the respondent. Accordingly, under the circumstances we are not persuaded that the union's conduct during negotiations estopped it from asserting the claims contained in the grievance of September 17, 1982 and in the present proceedings.

50. It was also submitted on behalf of the respondent that the union's inaction in the face of clear knowledge concerning the respondent's vastly increased use of temporary employees during 1981 and 1982 gave rise to an estoppel. In support of that submission, counsel noted that Mr. Priestley and other union stewards worked side by side with a number of workers supplied by agencies over long periods of time without giving management any indication whatever that the use of such personnel was unacceptable to the union at any time prior to September 17, 1982 when the grievance was filed. He further contended that in reliance upon the union's tacit approval of its actions, the respondent utilized such employees without applying its usual screening and probationary processes, and that in determining the number of such workers that it could afford to use at the Centre, the respondent proceeded on the assumption that the hourly rate paid to their respective employment agencies would be the only expense involved. Thus, counsel for the respondent submitted that his client had relied upon the union's acquiescence to its detriment. He also argued, in the alternative, that "promissory estoppel" requires no detrimental reliance.

51. It is well established that the doctrine of estoppel cannot be invoked to prevent the operation of a public statute such as the Labour Relations Act: see, for example, Culliton Brothers Limited, 11982] O.L.R.B. Rep. March 357, at paragraph 31, and the authorities cited therein. Thus, it is doubtful that the doctrine of estoppel can have any legitimate bearing on the disposition of this unfair labour practice complaint. However, quite apart from estoppel, the Board has a discretion under section 89 of the Act to take into account in fashioning an appropriate remedy such factors as acquiescence and undue delay. (See, for example, Irving Posluns Sportswear, 11979] O.L.R.B. Rep. Oct. 986.) Since the union has not provided an adequate explanation for its failure to launch any complaint, grievance, or other proceedings prior to the September 17,1982 grievance in respect of the respondent's extensive use of agency employees at the Centre, the Board is of the view that it would not be appropriate to grant any relief to the complainant in respect of the period prior to that date.

52. The Board therefore declares that the respondent has contravened sections 64, 66 and 80(1) of the Act, and hereby orders that the respondent:

(1) reinstate Lutchman Persaud, Leslie Bodi, Paul Miller, Stephen Rank, Gery O'Donnell, and Bruce James forthwith, and compensate them for all lost wages and benefits sustained by them after September 17, 1983, through the respondent's violations of the Act;

(2) pay interest on the compensation for lost wages ordered by the Board, such interest to be calculated in the manner described in Practice Note 13, dated September 8, 1980; and

(3) post copies of the attached notice marked "Appendix", after being duly signed by an authorized representative of the respondent, in conspicuous places at its distribution centre on Torbram Road, 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 insure that the said notices are not altered, defaced or covered by any other material.

53. The Board remains seized of this matter in the event that a dispute arises concerning the implementation of the Board's order.

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 AND THE UNION PART!CIFATED, THE ONTARIO LABOUR RELATIONS BOARD FOUND THAT WE VIOLATED THE LABOUR RELATIONS ACT BY SUBSTANTIALLY INCREASING OUR USE OP WORKERS SUPPLIED BY EMPLOYMENT AGENCIES FOLLOWING THE CERTIFICATION OF THE UNION, BY REFUSING TO CONTINUE TO EMPLOY STEPHEN RANK, GERY O'OONNELL, AND LUTCHMAN PERSAUD, AND BY REDUCING THE HOURS OP WORK OF PAUL MILLER. BRUCE JAMES. LESLIE BODI AND LUTCHMAN PERSAUD.

THE ACT GIVES ALL EMPLOYEES THESE RIGHTS:

To ORGANIZE THEMSELVES, To PORM, JOIN, AND PARTICIPATE IN THE LAWFUL ACTIVITIES OF A TRADE UNION,

To ACT TOGETHER FOR COLLECTIVE BARSAINING;

To REFUSE TO DO ANY AND ALL OF THESE THINGS,

WE ASSURE ALL OF OUR EMPLOYEES THAT:

WE WILL NOT DO ANYTHING THAT INTERFERES WITH THOSE RIGHTS,

WE WILL NOT DISMISS, REDUCE THE HORKINT HOURS OF, OR OTHERWISE PENRLIZE ANY PERSON BECAUSE HE HAS SIGNED OR FILED A GRIEVANCE, OR EXERCISED ANY OTHER RIGHTS UNDER THE

LABOUR RELATIONS ACT,

WE WILL REINSTATE LUTCHMAN PERSAUD, LESLIE BODI, PAUL MILLER, STEPHEN RANK, GERY O'DONNELL, AND BRUCE JAMES FORTHWITH, AND HILL COMPENSATE THEM FOR ALL LOST WAGES AND OTHER BENEFITS, PLUS INTEREST,

K MART CANADA 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 80 consecutive working days.

DATED this 2ND day of MAY , 1983