International Union of Elevator Constructors, Local #50 v. Beckett Elevator Company Limited
Citation: [1984] OLRB Rep. February 169 File No.: 2026-81-M
Between: International Union of Elevator Constructors, Local #50, Applicant, v. Beckett Elevator Company Limited, Respondent, v. National Elevator and Escalator Association, Intervener
Before: R. O. MacDowell, Vice-Chairman, and Board Members J. Kennedy and F. W. Murray.
Decision of the Board: February 6, 1984
I
1This is a request for reconsideration of a decision of the Board dated September 23, 1983 (now reported at [1983] OLRB Rep. Sept. 1391). That request from the respondent Beckett reads as follows:
We are the solicitors for Beckett Elevator Company Limited, the Respondent in the above matter. Pursuant to Section 106 of the Labour Relations Act, on behalf of the Respondent, we request reconsideration of the Board's decision dated September 23, 1983 on the following grounds.
(1) During argument, the Board's attention was drawn to the case of Girvin v. Consumers Gas (1973) 1973 CanLII 706 (ON HCJDC), 1 OR. (2d) 421. The Board's attention was drawn to the fact that none of the grievors appeared at the hearing to testify and no official from any company or employer testified before the Board. The only evidence before the Board were statements by the union witnesses of what they had been told or believed they had been told and transferred to their record cards concerning the dates of employment of the grievors, their rates and classifications. The Board's attention was drawn to the fact that there was thus no direct evidence but only hearsay evidence on the essential matters that it must determine i.e. who the grievors were if the grievors were at work or laid off and when, whether the grievors were available for work, and the grievors' classifications and rates of pay.
In such circumstances, it was submitted that given the Divisional Court's Decision in the Girvin case, there was not "credible" evidence on the essential points the Board must determine and that the case before the Board therefore ought to be dismissed for lack of evidence. The Board's decision makes no reference to the argument of the parties in relation to the Girvin case and we would request that the Board, consider the effect of the case on its decision.
(2) At the time of the hearing, the parties made only a cursory reference to the question of the payment of interest. The Applicant requested interest and I believe made reference to the Board's practice note and the cases referred to therein. Counsel for the Respondent argued more or less in the terms outlined by the Board. The Board has provided 19 pages of discussion concerning whether or not interest ought to be paid on amounts found due. The Board has made repeated references to a large number of cases, none of which apparently were referred to by the parties and many of which are listed as unreported. In order that we might properly consider the basis for the Board's decision regarding interest, would you kindly provide the parties with, as a minimum, copies of all the cases listed as unreported so that they might be reviewed by counsel for the parties and if deemed advisable, submissions made thereon.
(3) The Board has awarded damages to the Union and interest on the total sum to the Union for distribution to the grievors. The employer, however, it is submitted has a liability under the Income Tax Act where monies are paid to the benefit of employees to withhold tax and has a specific liability under the Unemployment Insurance Act where monies are paid to the benefit of employees pursuant to an arbitration award to withhold the equivalent UIC payments and remit the same, if any, to the Unemployment Insurance Commission. The Board's order in its present form appears to place the employer in a position where it is ordered to pay monies in circumstances in which it is unable to comply with the relevant federal statutes. The Respondent therefore requests that the Board reconsider its decision and award specific amounts to specific grievors so that the Company might meet its legal obligations.
(4) The Board in paragraph 8 of its decision indicates the gross number of dollars to be paid for wages and benefits without any breakdown of how the specific amounts are calculated. Based on a review of the notes and exhibits filed at the hearing, it appears the Board has included in the total, amounts for benefits which are paid directly to the union and not to the employees. On the facts of the Board's award, in a situation where compensation is being paid to employees who are denied the opportunity to bump employees who are then working and for whom benefits were, by definition, being paid to the Union, the effect of the Board's order is to make the employer pay union benefits twice for the same hours of work. It is submitted that the Union is only entitled to one set of benefit payments for each hour "worked" and the Board's order constitutes a penalty against the employer and an unjust enrichment of the union in the sense that it is being paid twice for the same hours of work. The Respondent therefore requests the Board reconsider its decision and delete the "benefits" portion of its award.
(5) Similarly, there is no claim by the union before the Board that it did not receive any benefit payments and thus, to award that benefits be paid a second time, is to make a decision on a matter not before the Board and upon which it had no evidence or argument. The Respondent therefore requests that the Board reconsider its decision and delete the benefit portion from its award.
(6) To the extent the interest is awarded on the double payment of benefits to the Union, it is submitted that portion of the interest award is in itself an additional penalty being imposed upon the employer and not compensatory as the Union has suffered no loss by reason of the employer's actions having been paid the benefit portion at the time the original "bumped" employees worked. The Respondent therefore requests the Board reconsider its decision and delete the portion of the interest award applicable to the benefits the Company has already paid.
To this the applicant trade union responds:
This will acknowledge receipt of your letter of October 14th, 1983 in which you enclosed a copy of a letter from the solicitors for Beckett seeking reconsideration of the Board's decision, dated September 23rd, 1983. The following constitutes my response to the submissions of company counsel contained in Mr. McNaughton' s letter of October 11th, 1983.
- The proposition contained in paragraph 1 of Mr. McNaughton' s letter was put to the Board during argument. My response was made at that time. The circumstances set out in the first paragraph of the request for reconsideration do not contain anything that is new or which would fall within the Board's well established criteria for reconsideration.
[2] With respect to the representations in the second paragraph of Mr. McNaughton's letter, both parties had an opportunity to make representations to the Board with respect to interest and did so at the hearing. The Board's decision to review the basis for allowing interest is not a matter which would justify reconsideration, given that both parties not only had a full opportunity but chose to make their submissions with respect to interest at the hearing. Needless to say, I have no objection to the Board forwarding copies of decisions as a courtesy to Mr. McNaughton.
[3] With respect to paragraph 3, the Board's damage award is in a form frequently used by arbitrators. I am not aware of employers other than the respondent to this proceeding which have had difficulty complying with terms similar to those in the original Board's decision. In any event, it is my submission that the matters set out in paragraph 3 would not warrant reconsideration of the Board's decision.
[4] It is submitted that the points raised in the fourth, fifth and sixth numbered paragraphs in Mr. McNaughton' s letter are patently absurd. The union makes no claim for payment of benefits already paid for its members who worked. On the other hand, the benefits are payable under the collective agreement. The Board has concluded that the grievors should have been working and would have earned the amounts set out in paragraph 8 of the award had the employer not been in violation of the collective agreement. The respondent chose not to lead evidence. In any event, the reference to benefits shows a misconception of the claim and of the Board's award. Those employees who worked and received benefits are not in issue. The award of the Board is to compensate the grievors for lost wages and benefits they would have earned had they been properly assigned to work. There was no evidence that those employees who worked and were paid would have been laid off if the grievors had been properly assigned to work. In any event, the benefit portion of the Board's award is not to require the employer to pay benefits twice for hours worked but to pay compensation, including benefits for hours that ought to have been worked but were not worked.
[5] In addition, in the last paragraph, the respondent's counsel argues interest is a penalty to the respondent. Interest was not claimed as a penalty nor awarded as such in my reading of the Board's decision.
For the reasons set out above, it is my submission that the Board ought to reject the respondent's request for reconsideration.
It will be convenient to deal briefly with each of the submissions made; however, we might note at the outset that much of what Beckett now submits either was raised or could have been raised at the hearing in this matter. It would appear that, having been unsuccessful, Beckett now seeks to shore up its case or limit its liability. That is not the purpose for the broad power of reconsideration set out in section 106 of the Act.
The evidence tendered on behalf of the applicant union is summarized in the Board's decision. The details need not be repeated here. That evidence included work records for the aggrieved employees maintained by the union and used in the administration of its hiring hall. Although not business records in the usual sense, they are records kept in the ordinary course of the union's "business" in running the hiring hall established under the terms of the agreement. Those records indicate when and where the union's members are employed, as well as by whom. The union officials who administer the hiring hall both gave viva voce evidence in respect of these records and their effort to place their unemployed members in the employ of the respondent company. That evidence included telephone conversations in which Mr. A. Hopkirk, an official of Beckett, flatly refused to accept these out-of-work members into employment (as the collective agreement requires) then relented some days later. That refusal formed the basis for the alleged violation of the collective agreement. The duration of that refusal delimits the level of compensation.
The oral and documentary evidence are consistent and mutually supporting. There is no reason to doubt the accuracy of the union's records or the veracity of the union's witnesses. The respondent had the opportunity to cross-examine the union officials and/or call its own evidence to contradict their version of events. Mr. Hopkirk, whose refusal to hire the aggrieved employees triggered this grievance, was present in the hearing room, but was not called to dispute the union's account of the facts. Beckett called no evidence at all. We drew an adverse inference. In the circumstances, the Board was and remains satisfied that there was sufficient basis for its finding. The circumstances of this case and the nature of the evidence before the Board are both different from that in Girvin, and we do not think that decision is of any assistance to the respondent.
Both parties had a full opportunity to address the question of interest at the hearing, and each of them did so. The respondent's arguments are summarized in the Board's decision at paragraph 9. Counsel for the respondent may now be disposed to characterize those submissions as "cursory"; but surely it is a novel proposition for a party to suggest that because it only gave cursory treatment to a legal issue (which incidentally was characterized as "jurisdictional") the Board should do the same. The Board took the parties' arguments seriously, and sought to determine which was more consistent with the established judicial and arbitral jurisprudence. The fact that a party does not canvass readily available legal materials which may bear upon its argument, does not preclude the Board from doing so, nor can such party demand that the proceeding be reopened so that it can make further submissions on matters which could have been dealt with in the first place.
There being no basis for the Board to receive further submissions in the circumstances, it is unnecessary as a matter of courtesy or otherwise to provide Beckett with copies of the unreported decisions which the Board found when conducting its own research in respect of the submissions made to it. The unreported decisions merely supplemented and confirmed the arbitral trend evident in the reported decisions published in the standard reporting services. In any event, this unreported material is as available to the respondent as it was to the Board and from the same sources — the Public Service Grievance Settlement Board, and the Ontario Office of Arbitration, and can be photocopied at modest cost.
6The compensation award was based upon the evidence before the Board as to what the aggrieved employees would have earned had they been employed by Beckett as required by the agreement. It represents their lost earnings from the refusal to employ them until Beckett relented or, in one case, the aggrieved individual found alternative work. That evidence was not contradicted or challenged at the time, and we do not think that it is open for the respondent to do so now. As we have already noted, that is not the purpose of section 106. Few decisions would ever be "final and binding" as the section contemplates if a party could relitigate evidentiary questions which were not squarely put in issue at the time.
II — The Interest Calculation
7The interest calculation was based upon the formula set out in the decision itself. It involved the rate of 17.25 per cent for a period from October 18, 1981 to September 23, 1983, the date of the Board's final decision. This period, it will be observed, is just three weeks short of two full years. That was the time that the aggrieved employees were "out-of-pocket" and, conversely, the respondent was enriched to the extent that it retained and had the use of monies which should have been paid much earlier. Interest was compounded on an annual basis.
8For six of the aggrieved employees — Messrs. Smith, Carlisle, Burton, Litterick, Naughton, and Stark - the loss of earnings (including employer contributions to employee benefit funds) totalled $121.68 per day for the seven days until Beckett relented and hired them. For each of these employees the total direct cost, therefore, amounts to $851.76. For the grievor Murphy, the loss is $108.24 per day, for three days until he found alternative employment. His loss for these three days amounts, therefore, to $324.72. When these sums are added together, it will be seen that the total direct losses to the grievors, as a group, amounts to $5,435.28 — as the Board decision indicates. It is that amount upon which interest is payable.
9If these sums had been outstanding for a full two years, the calculation would have been much simpler and compounded annually would have resulted in a total amount owing of $7,472. 19. As it is, however, the sum attributable to interest must be reduced by a small amount to reflect the fact that the monies owing were unpaid for three weeks less than two years. That explains why the total sum owing on this method of calculation is only $7,408.76, as the Board decision indicates. We might also note that "rounding" to simplify calculations may result in an inaccuracy to the extent of a few cents one way or the other. Finally, it would seem that the total interest amount in paragraph 33 of the Board's decision, when calculated on an aggregate basis should read $1,973.48 rather than $1,972.98 — a difference of fifty cents. This typographical error may be the basis for the respondent's query about the calculation, and it was useful to have it drawn to our attention even though the actual sum involved was minimal.
10For the grievors Smith, Carlisle, Burton, Litterick, Naughton, and Stark, the Board applied the interest formula set out above based upon the original $851.76 debt over the almost two-year period up to September 23, 1983. The result was an amount of $1,161.02, owing to each of these grievors which reflects the original $851.76 and an additional $309.26 in respect of interest. For Mr. Murphy, on the same basis, the sums were: $442.62, comprising the original $324.72 and an additional $117.90 in interest. The total amount owing, then, was $7,408.74 — a difference of two cents from that stated in the Board's award of September 23, 1983 and attributable to "rounding".
As indicated, the Board's calculations followed the interest rate formula suggested in the Judicature Act, Hallowell House Limited, [1980] OLRB Rep. Jan. 35, and Practice Note No. 13 (i.e., choosing the prime rate in the month in which the proceeding was initiated which was then compounded on an annual basis). It appeared to the Board that this was the most realistic measure of the employees' loss, and, of course, charging compound interest is a common commercial practice. Had the grievors had the money in hand and invested it, they would probably have earned compound interest, and had they borrowed funds to the extent of the employer's non-payment until payment was forthcoming they would undoubtedly have paid compound interest. On the other hand, compound interest on sums unpaid for a long period necessarily involves the possibility of interest upon a sum attributable to interest; and it would seem that the courts prefer to levy only "simple interest" in order to avoid this payment of "interest on interest". Upon reflection, having embraced the court approach to the calculation of interest and in the absence of any submissions or arbitral guidance on the desirability of compounding, we have determined to reconsider and revise this aspect of our decision so that the employer's interest liability will be based upon the payment of simple interest from the time the debt arose. However, we do this not because simple interest is intrinsically more appropriate than the method we have used; but rather because the choice of this calculation formula (resulting in a more generous but more realistic interest payment to an aggrieved party) should probably be left to a case where the choices are more carefully drawn and argued. For now, it is sufficient to amend our decision to provide for the payment of simple interest and leave it for another case to determine whether the Board could or should go beyond that.
Simple interest on the amount of $851.76 at 17.25 per cent for the above-noted period of just less than two years amounts to $285.38. In grievor Murphy's case, on the same basis, the original unpaid wage debt of $324.72 attracts an additional increment of simple interest of $108.80. It will be seen that this reduced the respondent's liability to Murphy by $9.10 and to the other grievors by $23.88 each.
Having regard to the foregoing, the Board finds that Beckett is liable for and directs that it must pay the sum of $1,137.14 to Messrs. Smith, Carlisle, Burton, Litterick, Naughton, and Stark, and the sum of $433.52 to grievor Murphy. To the extent that these amounts may vary from those set out in paragraph 33 of the Board's original decision, that paragraph is hereby varied. These amounts shall be payable forthwith. Whether from these amounts there must be some deduction in respect of income tax or, alternatively, whether upon receipt of such monies there arises some personal liability as between the tax payers and the Crown we need not speculate. At the hearing the respondent did not raise this issue, nor does it now provide any information by which this Board could accommodate such concern in its calculations — particularly since the wage income and interest income may be treated on a somewhat different basis for tax purposes. In our view, it is sufficient to quantify the losses of the aggrieved employees and direct payment. Whether certain deductions should be made in respect of taxes (or unemployment insurance benefits for that matter) is a matter arising from the application of legislation which is not before the Board, or with which the Board need be concerned. However, we do not think that there is any reason to modify the form of our order, because under the Labour Relations Act it is the trade union which is the party to the collective agreement and the applicant union herein brought this grievance on behalf of its aggrieved members. We see no reason why we should not direct payment to the union on behalf of these aggrieved employees. Accordingly, the Board directs that the sum of $7,256.36 be paid forthwith to the applicant union in trust for its aggrieved members, to be distributed upon the basis set above.
III
It is said by the respondent Beckett that the Board's compensation award amounts, to some degree, to a kind of "double payment" in respect of persons who were working as well as those who should have been hired if the terms of the collective agreement had been complied with. That may be so to some minimal degree, but, even if it is, we do not think that there is any justification, at this stage, for varying the method of calculation of the compensation owing. In the first place, as before, no such submission was made at the hearing in this matter, although counsel for the union carefully outlined the basis and details of the compensation claim. No objection to "double payment" was made at the time and there was no direct evidence as to the union's bookkeeping practices and whether some or all of these benefits were credited to the employees individually. The union officials could have been asked about this but were not. Perhaps they should have been, but as we have already indicated, section 106 is not intended to provide a losing party the opportunity to reframe, refine, or amplify its argument with the benefit of hindsight and an existing Board decision. Moreover, some double payment is inevitable when an employer fails to comply with hiring requirements in a collective agreement. He will be paying wages to those who worked as well as compensation for those who should have worked. "Double payment" of wages is inherent in the nature of the breach of the collective agreement, and there is no reason why, for example, the grievors should be deprived of contributions to benefit funds because such payments were made in respect of the employees who actually did the work which the grievors should have been hired to do. We also note that some of the apprentices initially displaced when Beckett decided to comply with its collective agreement obligations were almost immediately rehired.
For these reasons, we have acceded to Beckett' s request for further clarification of the Board's compensation award, as well as some modification of that award. However, we do not wish to leave this matter without observing that, if the amounts owing in respect of interest appear to be a little high, it is only because Beckett initially chose to disregard its collective agreement obligations and engage in a protracted and time-consuming proceeding before this Board. As the earlier Board decisions in this matter amply indicate, once the union's complaint was crystallized, its grievance was submitted in accordance with the terms of the collective agreement to a joint union-management tribunal which determined that Beckett had, indeed, failed to live up to the terms of the agreement. That decision is one which Beckett later characterized before this Board as a "final and binding" but not "enforceable" determination as to its rights. Had Beckett chosen to abide by the decision of the Joint Industry Committee, there would have been no necessity to resort to this Board and there would have been no interest accruing during this litigation process. We make this observation not to deprecate Beckett's undoubted right to assert its legal position and require a determination before this Board, but only to underline why interest is an important component of compensation. An aggrieved party cannot recover its "costs" of a proceeding before the Board, but it should be able to recover a full measure of compensation, and should not be prejudiced by a delay in payment whether occasioned by the litigation process or otherwise.