United Steelworkers of America v. Shaw-Almex Industries Limited, 1984 CanLII 1101

United Steelworkers of America v. Shaw-Almex Industries Limited

[1984] OLRB Rep. October 1502

1649-83-U United Steelworkers of America, Complainant, v. Shaw-Almex Industries Limited, Respondent

BEFORE: Owen V. Gray, Vice-Chairman, and Board Members J. D. Bell and W. F. Rutherford.

APPEARANCES: C. M. Mitchell and N. Carriere for the complainant; J. Heather, T. Churchinuch, A. J. Lenczner, Q.C. and J. Shaw for the respondent.

DECISION OF OWEN V. GRAY, VICE-CHAIRMAN, AND BOARD MEMBER J.D. BELL;

October 10, 1984

1. This is a complaint filed under section 89 of the Labour Relations Act. The complainant alleges violations of sections 3, 15, 64 and 66 of the Act. The major complaint is that the respondent has failed to bargain in good faith with respect to the renewal, with amendments, of the parties' last collective agreement, which expired January 31, 1983. Procedural matters which arose during the hearing of this complaint are the subject of two previous decisions reported at [1984] OLRB Rep. January 109 and [1984] OLRB Rep. April 659. This decision deals with the merits of the complaint.

2. The respondent manufactures equipment and machinery used in splicing and repairing conveyor belts used in the mining industry. Its market is international. Its plant is located in Parry Sound, Ontario. The respondent is owned by Doris Shaw and her husband James. Each of them plays a senior management role. Perceptions differ as to their relative importance when it comes to decision-making in industrial relations matters. Their son, John Shaw, is employed in the business. He is responsible for sales and marketing in South East Asia, and in that capacity reports to the Sales Manager, Mr. Kramer. Since 1981, he has also had responsibility for industrial relations. In that regard, he reports directly to his parents. In his view, his parents make industrial relations decisions jointly. The complainant's perception is that Doris Shaw exercises the ultimate authority in labour relations matters.

3. The complainant was certified in 1974 to represent a plant unit of employees of the respondent. When the last collective agreement expired in January of 1983, there were forty employees in that unit, six of whom were on layoff. That collective agreement had been the fourth collective agreement entered into between the complainant and the respondent. There had been no resort to economic sanctions by either party during the negotiation of the first and last of those four collective agreements. The complainant engaged in lawful strikes during the negotiation of the second and third agreements. The first of those strikes lasted six weeks, the second lasted five. In each of those four sets of negotiations, the respondent retained labour relations professionals to advise it and act as its spokesman. The negotiations which led to the fourth agreement involved a number of meetings, during which progress appeared to the union to have been made concerning "language" changes sought by the union on so-called non-monetary provisions of the previous agreement. At the conclusion of those negotiations, however, the respondent only agreed to a one year extension of the previous agreement, with some changes in wage and benefit amounts, but no changes in contract language. Many of the complainant's initial bargaining goals were left unfulfilled in the settlement to which it ultimately agreed at that time. There was no complaint that the respondent's bargaining had been in bad faith on that occasion. Whatever difficulties there may have been between the complainant and the respondent in the negotiation or administration of the parties' first four collective agreements, there is no evidence before us to suggest that at anytime before the events in question here the respondent had refused to recognize or sought to undermine the complainant's bargaining rights or otherwise displayed "anti-union animus" as that phrase is understood in this Board's jurisprudence.

4. As noted earlier, this complaint focuses on the parties' bargaining with respect to a fifth collective agreement, the fourth having expired January 31, 1983. The commencement of those negotiations was discussed at a labour-management meeting in December, 1982. The union gave notice to bargain on January 5, 1983. On January 20th, Doris Shaw wrote to Norman Carriere, the staff representative who would be acting as the union's spokesman in the negotiations, to advise him that arrangements had been made to meet on January 27th and 28th. While these dates had earlier been proposed by the union, they were no longer available for Mr. Carriere. He telephoned Mrs. Shaw to tell her that and discuss alternate dates. In response, John Shaw contacted Homer Seguin, the union s area representative for North Eastern Ontario and Carriere' s immediate supervisor. Shaw pressed Seguin for an early start in negotiations; Seguin, in turn, pressed Carriere to make himself available for the two days set aside by the respondent.

5. The union's proposal for renewal of the collective agreement had been forwarded to the respondent under cover of a letter dated January 18, 1983. The union proposed a number of changes to the language of the non-monetary provisions of the collective agreement. Some were said to be merely "housekeeping", of which the clearest example addressed the fact that the existing agreement contained two articles numbered "8.03" and proposed a renumbering to eliminate the duplication. Many of the language proposals had been the subject of discussion in the previous set of negotiations. As matters developed, some of the most critical proposals concerned seniority and its application to temporary layoffs and the extent to which any factor other than seniority would govern in layoffs. This was not the only serious issue raised by the proposals. We do not consider it necessary or desirable to review each of the proposals in detail or trace the way with which each was dealt during the initial and subsequent negotiation meetings. The fact that we do not refer to those proposals in detail should not, however, be taken as reflecting a judgement about their importance to either party, nor should the reference in this decision to any particular proposal be taken as reflecting a judgement that that proposal was more worthy of consideration by the parties than others. Major elements of the union's initial monetary proposals were vague, as would normally be expected at this stage of negotiations. These included "a Pension Plan for all employees (details to be negotiated)", "substantial wage increase to all classifications.. ." and "review classifications and Labour Grades". The union was asking for a one year agreement.

6. The parties' first meeting was on January 27th, 1983. Norman Carriere was spokesman for the union bargaining committee. He had been staff representative assigned to this bargaining unit since some time during the currency of the collective agreement which expired in January, 1982. This was his second set of negotiations involving this company. John Shaw was the respondent's spokesman. The respondent did not employ a labour relations professional as its spokesman, as it had on previous occasions. Up to this point, John Shaw's labour relations experience consisted of participation in labour-management meetings during the term of the expiring collective agreement. He had been an observer at only two of the many meetings which took place during the 1982 negotiations. He told the union that the respondent had reviewed the union proposals. He spoke about the company's economic difficulties. The economic context was a period of recession. The company had received no orders since August of the previous year. It needed to remain competitive. It was trying to survive. It wanted to treat its employees as best it could, but was not prepared to waste a lot of time on bargaining as it had been done in the previous set of negotiations. The company was satisfied with the present language of the collective agreement, and said its proposal was for a one year extension of that agreement with a wage freeze. Carriere reviewed the union's language and non-monetary proposals in detail, outlining the reasons for each. After Carriere's presentation, the company maintained its position that the language should remain unchanged, but said that it would be willing to look further at monetary issues. Carriere took this to mean that the union would have to abandon its non-monetary proposals before it could learn what the company's monetary proposal was. John Shaw felt he was signaling a preparedness to move on monetary issues without necessarily having to first resolve the non-monetary ones. At some point in the discussion, Carriere mentioned that conciliation might become necessary. The meeting ended without either party having moved off its initial position.

7. Although the respondent had not retained a labour relations professional to act as its spokesman in the negotiations, it did consult from time to time with James Heather and Terry Churchmuch at the Central Ontario Industrial Relations Institute; they had each been involved in earlier collective agreement negotiations on behalf of the respondent. Following the meeting of January 27, 1983, John Shaw contacted Mr. Heather and instructed him to file an application for the appointment of a conciliation officer. Heather did so, completing the standard form on the basis of information supplied by Shaw. Much was made of some inaccuracies in the information contained in that application. We are satisfied that they reflect genuine misunderstandings by John Shaw which have no significance other than to highlight his admitted inexperience in labour relations matters. Nothing in these inaccuracies was sufficiently troubling to the complainant as to become the subject of any discussion at any of its subsequent bargaining meetings with the respondent.

8. As a result of the respondent's application for conciliation, Mr. J. Leonard was appointed conciliation officer on February 28, 1983. A first conciliation meeting was set for March 11th, and rescheduled to March 27th.

9. On March 7, 1983, a notice was posted on the respondent's bulletin board advising the employees that it was considering establishing a sales and servicing facility in the United States, and that people would be brought in to the plant for training. On March 11th another notice went up, saying that certain people would becoming to the plant for training in connection with the earlier notice. Carriere heard about both notices from employees in the bargaining unit who feared that the respondent's plant would be relocated or that they would be obliged to train persons outside the bargaining unit to do service work which they had previously done at the plant. At the meeting of March 27th, Carriere expressed concern about the effect the March 11th notice had had on employees. He did not, however, seek any further information about the plans referred to in the notices. The union's complaint alleges that the posting of these notices amounted to intimidation or coercion of the sort proscribed by section 64 and 66 of the Act. Curiously, during his cross-examination of Carriere about the effect these notices had had on employees, Mr. Churchmuch put it to Carriere that a belief that the company was moving would not have been totally bad, as it might have led employees to agree to settle a contract. In contrast to that suggestion, it was John Shaw's evidence that the notices were put up purely for information purposes in accordance with the company's standing practice of keeping employees informed in this manner of company's developments; he said that the timing of the announcements had nothing to do with the bargaining process. The complainant led no evidence to show that the content of the notices was untrue or that company developments had not previously been the subject of such notices. Despite Mr. Churchmuch's peculiar question to Mr. Carriere, we accept Mr. Shaw's evidence with respect to these notices, and conclude that the posting of them was not in violation of the Labour Relations Act.

10. At the meeting of March 27th, the conciliation officer suggested that the union go over its proposals in the presence of the company. Carriere did that. The conciliation officer then met with the parties separately. By the end of the day, the company's position on "language" or "non-monetary" issues was unchanged. It had, however, put forward a fresh monetary offer. This involved a 3 percent wage increase to be effective upon shipping a large piece of machinery (an event which the company hoped would occur in May or June) or on July 1st whichever first occurred, and a further 3 percent wage increase to be effective October 1, 1983. The complainant did not accept that proposal, and made no fresh proposal of its own. The meeting ended without agreement. A "no board report" issued on April 5, 1983. The complainant's bargaining committee met with the membership April 14th. The membership rejected the company's "three and three" offer, and voted to strike.

11. On April 21, 1983, the parties met with Mr. M. C. Skinner, a mediator from the Ministry of Labour. The parties met face to face at the beginning of the meeting, and it opened with a review by Mr. Carriere of the union's position. During those remarks, Mr. Carriere said that the respondent was the worst company he had ever dealt with or seen. He said that the company had "dumb management", and made it clear that the language of the collective agreement might not have been an issue except for the kind of management the company had and the way it applied the collective agreement. These general criticisms of the company were not the only observations Carriere made at this meeting. He again offered a specific rationale for each of the union's proposals, albeit in somewhat less detail than at the conciliation meeting. Neither party had changed its position when this meeting ended. Employees in the unit affected went on strike the following day, April 22, 1983.

12. When the meeting of April 21st ended, the parties seemed to have had a common understanding that any further meetings should be arranged through the mediator, Mr. Skinner. Skinner called Carriere about one month later to find out if the parties had had any meetings of their own. Carriere reported they had not. Carriere was not concerned about this; he expected the strike to last about six weeks before there would be further developments. In mid June, Carriere telephoned John Shaw to discuss a recent released arbitration award involving these parties. Carriere says that he told John Shaw in this conversation that he, Shaw, ought to contact Mr. Skinner and get back to the bargaining table. He says Shaw replied that things were okay in the shop, and that he did not see any change in the union's position. Carriere did not suggest that there had been any change in the union's position and, as he says, "I didn't push." Carriere says he again spoke by telephone to John Shaw concerning the arbitration award at the end of June, and again said that Shaw should contact Skinner. Shaw recalls only one telephone conversation about an arbitration award. He does not recall any suggestion that he contact Skinner. He does recall that Carriere gave no indication that the union's position in bargaining had changed in any way, and in that respect his evidence is uncontradicted. Carriere spoke to Skinner himself and expressed the desire for further meetings. John Shaw says he heard from Skinner from time to time; the first time Skinner suggested a further meeting, however, was in July. The dates Skinner proposed fell in Shaw's vacation period. Shaw proposed dates following his vacation. Those dates fell within Skinner's vacation period. They left it that Skinner would contact Shaw again near the end of August, when Skinner returned from his vacation.

13. As tends to be the case in matters such as these, the effects of, and interest in, the strike extended beyond the immediate parties. In mid August, Mr. Carriere became aware of a letter dated August 3, 1983, from Stan Darling, member of parliament for Parry SoundMuskoka, to Ken Hunter, Reeve of the Township of Foley where, as we understand it, the respondent's plant is located. Mr. Darling's letter purports to respond to a letter from Reeve Hunter of July 28, 1983, on the subject of the Shaw-Almex strike. Mr. Darling's letter sets out information he says he received from "Mr. Shaw" concerning existing terms and conditions of employment and the course of negotiations to date. Among the several items referred in Mr. Darling's letter, there is a reference to Mr. Shaw's as having been in touch with the Ministry of Labour and a meeting having been set for August 23rd. There is also a suggestion that "the employees will not even talk wages". The respondent's representative objected to the introduction of Mr. Darling's letter. We initially upheld the objection. The complainant then established that Mr. Carriere had responded to Mr. Darling's letter with a letter of his own to Mr. Darling and, further, that Carriere's letter had been reproduced in the local newspaper as had portions, if not all, of Mr. Darling's letter. Mr. Carriere's letter having been accepted in evidence as Exhibit 15, we reconsidered our earlier ruling of the admissibility of Mr. Darling's letter, and ruled as follows:

We will accept the letter of M. P. Darling which is referred to in Exhibit 15. We can give it no weight whatsoever as evidence of the company's position, or as evidence of what was said by the company to Darling. However, it may be relevant to demonstrate the union's state of mind —a state of mind of which the employer was aware because, as counsel for the respondent conceded, both letters were published in the local press and did come to the attention of the respondent. Without ruling whether the letters or the employer's response to them are "improper or irregular conduct" required by Rule 72 to be particularized in advance of the hearing, counsel for the respondent told us he had been aware since November 22nd that the complainant sought to rely on them. There is no surprise to remedy.

As our ruling indicates, Mr. Darling's letter is made significant by Carriere's reply of August 17th. We do not propose to reproduce that three page letter in full. The following extracts will be sufficiently illustrative for our purposes:

I fell obligated to reply on behalf of the workers on strike at this plant and try and set the records straight.

I was upset that, as an elected member of Parliament, who claims [sic] does not want to take sides, that you would write such a letter before first contacting all of the parties involved in this dispute.

before accepting a statement from Management, "that the employees have not been willing to negotiate", you ought to have tried to confirm that statement with Mr. Skinner and myself. The truth is the Union has always been willing to meet and that it is the Company who are not interested in coming to the bargaining table.

Mr. Shaw obviously failed to mention to you that his Company refused to discuss any contract language, especially in the area of seniority rights and job security. The Company's application of the present language and their philosophy that an employee's responsibility is first to the Company and not his family makes it impossible to live with the present language.

At this point in the letter, Carriere refers to the reasonableness of two major union proposals, the proposed seniority provisions and the requirement that certain work be returned to the bargaining unit. He goes on to say:

I was also surprised to hear that Mr. Shaw made a new offer to you and not to the parties involved in this dispute.

Mr. Darling's letter had described existing benefits as including the right to four weeks vacation after ten years. Carriere's letter describes this as a new company proposal. Mr. Darling's letter said that Shaw-Almex benefits were more generous, in Shaw's opinion, than those provided by C.I.L., another employer in the area. Carriere's letter sets out the new company proposals that would have to be made in order to provide benefits more generous than those at C.I.L. Carriere then goes on to say:

The last Company offer was in the amount of 2 3/4% over the year and their new offer, through you, is 5 to 6%.

I doubt very much that the Company is prepared to make such an offer and believe that Mr. Shaw is doing to you what he has been doing to his employees for years.

Mr. Carriere's letter bears the following notation below his signature:

xc to:K. Hunter

B. Kerr

The Parry Sound North Star

A. Skinner

The Beacon — Parry Sound

Elie Martel MPP — NDP

Ed Broadbent MP — NDP Leader

Homer Seguin

This long list of persons to whom Carriere copied his letter does not include Shaw-Almex Industries Limited or any member of its management. Carriere did not speak or write to John Shaw to find out which "Mr. Shaw" had spoken to Mr. Darling or to obtain clarification of any concerns he had as a result of reading Mr. Darling's letter. When he became aware of these letters, through the press, John Shaw similarly made no efforts to clarify the situation.

14. In late August and early September Carriere spoke to Ray Illing, the Director of the Ministry of Labour Conciliation & Mediation Service, to try to arrange further meetings. Mr. Illing's office had been speaking with the respondent and James Heather. As a result of those discussions, a meeting was arranged for September 16, 1983, in Mr. Illing's office. The meeting was confirmed by letter from Heather dated August 29th, indicating that "the principals" of the respondent would be meeting with Mr. Illing at that time, and that Heather would be attending with them. Heather testified that he understood the principals of the respondent to be James and Doris Shaw. James Shaw went with Heather to that meeting. The result of the meeting was that Heather gave Mr. Illing an undertaking that if the union prepared fresh counter-proposals, he would meet Carriere and go through them and see whether fresh ideas would work. Illing then spoke with Carriere. A meeting was arranged for September 26, 1983. Heather, and through him the respondent, understood that a fresh union position would be presented at this meeting.

15. Heather and Carriere met in Toronto on September 26th. The mediator, Mr. Skinner, was present. Heather told Carriere he had no authority to negotiate, but only to listen. Carriere presented the union's new proposals; he and Heather discussed them. Heather said nothing about whether or not the company's pre-strike offer was still open for acceptance. There is no suggestion that Carriere asked about this, nor that the union had any interest in making an agreement on the basis of that offer. Heather did mention that the company position might be one of requiring restraint, and said that in that regard there was some question whether the company would continue its commitment to its existing benefit package. No particular part of the package was mentioned as being under review, and neither of the participants pursued this issue further. Without committing the company to any position on the union's new proposals, Heather told Carriere that they warranted a response by the company. Carriere was generally happy with Heather's response. Near the end of the meeting, however, Carriere told Heather he was considering filing unspecified charges against the company. He related this to problems he thought the company had caused with respect to workers' U.I.C. claims and charges he thought the company might have laid against him. Another reason he gave Heather for filing charges was that he intended to "frustrate the old bitch". The reference was to Doris Shaw. When he testified before us, Heather noted that the filing of charges had had the effect Carriere had intended.

16. Heather wrote to Carriere on September 27th:

Further to our mediation meeting yesterday with Mr. Skinner from the Ministry of Labour, this will acknowledge receipt of your proposals for settlement which I am forwarding to the Company for consideration.

As you are aware, the appropriate principals of Shaw-Almex Industries Limited will be out of the business for a short while.

I have advised the Company that a response to your proposal would be in order and possibly a meeting for such purpose can be arranged through Mr. Skinner.

17. John Shaw did not a attend the meeting of September 26th. He knew fresh union proposals would be presented, but felt it was more important to prepare for a month-long business trip to South-East Asia which was to start September 28th. He left on that trip without making any arrangement for the continuation of negotiations during his absence. However, the reference in his letter to the appropriate principals' unavailability was, so far as Heather was concerned, to Doris Shaw's anticipated absence. At that point in time he had been told that she planned a short business trip to Europe. We accept John Shaw's evidence that he told Heather about his trip too, but it is apparent Heather did not regard that as critical. He obviously thought of Doris and James Shaw as the key participants in formulating a company response, and felt a response should be forthcoming promptly. At their meeting with Illing, Heather had told James Shaw that the involvement of Heather's firm was to continue, fresh union proposals would have to be responded to.

18. The company did not respond promptly. September ended without further word to the union. October days passed and turned into weeks, and still there was no company response. Strlking workers reported to Carriere that they saw Doris Shaw going to and from the plant each day. There was no sign of any business trip to account for a delayed response; as it happens, her business trip had been cancelled. The strike was six months old when the complainant filed this complaint on October 21, 1983, and there still had been no company response to the union proposals presented September 27th. There is no evidence of any company effort to respond, not even to arrange a date for a meeting, until after John Shaw returned from South-East Asia; there is no explanation for this delay except John's absence abroad. Once John Shaw returned, Mr. Skinner was able to arrange a meting for November 24th.

19. The parties met with Mr. Skinner on November 24th, the first day of hearing in this matter having been completed on November 22nd. Heather was now spokesman for the company; John Shaw accompanied him. Carriere was again spokesman for the union bargaining committee. Heather said that the strike had hurt the company, it had had difficulties with its bank, it did not have a lot of new orders, it had lost business and the recession was killing its markets. As a result, it was looking at suspending some of the benefits provided for in the expired contract. The company was prepared to and did discuss "non-monetary" issues. Some of these were disposed of in one way or other. The seniority matter was still a major sticking point. The company proposed looking at a quality circle approach as an alternative; the union was not interested in exploring such a radically new proposal at that stage in the negotiations. The company made it clear that a wage increase was no longer part of its proposals. Carriere was surprised by this. The union made a monetary proposal of its own, but from the company's response to that proposal, Carriere took it that they had heard the company's final position. When the meeting ended, the parties were far apart on both monetary and non-monetary issues.

20. The position the company took at the November 24th meeting became the subject of additional charges in these proceedings. In his letter of January 3, 1984, counsel for the union alleged that the respondent had sought to avoid a collective agreement by making new demands for concessions on benefits and by withdrawing from its previous position on wages. The hearing of this complaint continued on January 10 and 12, 1984, and adjourned to February 3rd. During settlement efforts on January 12th, at the urging of the union and management representatives on this panel of the Board, the parties agreed to meet and bargain again before the next hearing date, and went to speak to Mr. Illing to arrange dates on which Illing might be available to assist them. Mr. Illing was not in his office at that time, so the parties spoke to Mr. Grossman of his office about Mr. Illing's availability. January 23rd and 24th were agreed upon as dates on which the proposed participants were all available. For the company's part, the proposed participants were John Shaw and T. Churchmuch, a colleague of Mr. Heather's who had served as the company's representative in these proceedings since November 22, 1983, had been involved in the negotiation of an earlier collective agreement between the parties and had been involved in the periodic negotiations in which the parties had engaged for various periods on days scheduled for the hearing of this complaint. John Shaw was to accompany Churebmuch, and he was to come with the power to make decisions. Carriere and the bargaining committee were to be present, and there was some suggestion that Homer Seguin would join the union delegation.

21. Heather, not Churchmuch, accompanied John Shaw to the meeting of January 23rd in Toronto. Carriere and his committee were present; Homer Seguin was not. Mr. Illing was occupied elsewhere; Mr. Grossman and Mr. Skinner met with the parties. The meeting began around two o'clock in the afternoon. The mediators first met with the parties separately. They all met face to face shortly before six o'clock, when the company presented a written proposal covering certain of the outstanding items. The union participants retired to consider their position, and then spoke to the mediators. There was a further face to face meeting at about seven o'clock, at which the company presented further proposals in writing. The union delegation retired again, then returned to say they felt it would be best to break for the day at this point and continue in the morning. Heather then announced that he was not prepared to continue the following day as he had another commitment. This was the first that the union knew that the company would not follow through on the arrangements agreed upon earlier. Carriere met alone with Heather and the mediators. He asked for a full proposal from the company to take back to the members. Roughly two hours later the company presented a further document which, together with the two earlier documents, was said to represent the company's final offer. This offer included two wage increases of three percent each, effective on dates later that those originally proposed in March, 1983. There was no further discussion. Carriere and his committee took the offer to a membership meeting on January 31, 1984. It was rejected, and Carriere so advised Skinner and the company by letter dated February 1st.

22. On February 21, 1984, Heather wrote to Carriere enclosing draft Minutes of Settlement said to reflect the terms offered by the company at the meeting of January 23rd. The letter stated that that offer was still open for acceptance. Neither the Minutes of Settlement nor the written offers presented January 23rd made any reference to certain items on which the union thought it had secured the company's agreement in the meeting of November 24th. In the hearings before us, the union argued that this reflected an unexplained retreat from which we should draw an adverse inference about the company's motivation in bargaining. The company says that the documents of January 23rd focused on issues which were still outstanding, not on issues already settled, and that the omission of the latter in the Minutes of Settlement was an oversight. It is not clear when the union first noticed the omission. There is no evidence that the union sought clarification or brought the company's attention before raising it in these proceedings as a further allegation of bad faith bargaining.

23. The next hearing date after January 12th was February 3rd. That day was consumed with procedural questions arising out of a fresh allegation by the complainant that the respondent was providing strike replacements with wages and benefits greater than those being offered to bargaining unit employees at the bargaining table. The result, inter alia, was an order requiring production of certain records of the respondent: see, [1984] OLRB Rep. April 659. When the Board's hearings in this matter continued in May, we heard a great deal of evidence and argument about these records and their meaning. Much of the detailed evidence concerning individual office employees and strike replacement employees was heard in camera on the unopposed joint application of the parties. We do not propose to recite that evidence in detail in this decision. An overview will suffice. The respondent continued its operations during the strike, on a reduced scale. Office and managerial employees did production work in addition to their office functions. Until about November, they were paid for the same number of hours per week and at the same salary as had been the case before the strike began. Starting in November, they began to receive higher weekly gross pay, which John Shaw explained was due to their being paid for the number of hours they were actually working. He says this is not because they were working significantly more hours than they had been in the early months of the strike, but merely because they were being paid for their overtime hours for the first time. Their regular hours of work were also increased from 39 to 40 hours per week around this time, and their gross pay increased accordingly.

24. The company began hiring strike replacements when the strike began. For the first six months, payroll records for these employees were maintained in a manual system. Thereafter, the records were incorporated into the computerized payroll system used for permanent employees. The records show that the basic wage received by striking employees was, in some cases at least, more than the wage they would have received under the expired collective agreement. On the other hand, they did not receive any benefits other than those required by statute. When the value of the additional benefits contemplated by the expired collective agreement is taken into account, it becomes unclear whether strike replacements were at any relevant time receiving more in wages and benefits than had been offered at the bargaining table. If that did occur, and we make no finding to that effect, the difference was a subtle one which did not continue after the meeting on January 23rd. There is certainly no evidence that this became the subject of discussion or questioning at the bargaining table, or that the differences were communicated to the striking employees in any way which would have suggested to them that they could earn more by abandoning collective bargaining.

25. Section 15 of the Labour Relations Act provides:

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

The scope of the duty imposed by this section has been reviewed in a number of this Board's decisions. The basic themes emerge in this passage from Pine Ridge District Health Unit, [1977] OLRB Rep. Feb. 65:

13. The scope of the duty to bargain in good faith has been fairly clearly outlined in three recent decisions of this Board. DeVilbiss (Canada) Limited [1976] OLRB Rep. March 49; Canadian Industries Limited [1976] OLRB Rep. May 199; Graphic Centre (Ontario) lnc., [1976] OLRB May 221. As was stated by the Board in DeVilbiss (Canada) Limited, supra:

The duty reinforces the obligation of an employer to recognize the bargaining agent and, beyond this somewhat primitive purpose, it can be said that the duty is intended to foster rational, informed discussion thereby minimizing the potential for "unnecessary" industrial conflict.

The Board necessarily looks to the manner in which the parties conduct their negotiations to determine whether a breach of the duty has occurred. It will infer from their conduct whether there has been demonstrated a refusal to recognize the status of the other party or an unwillingness to engage in the open and rational discussion that is sound collective bargaining relationship.

14. It should be stressed, however, that section 14 of The Labour Relations Act is not intended to redress any imbalance of bargaining power that may exist between the parties. A party whose bargaining strength allows it to force the acceptance of hard terms at the bargaining table does not thereby bargain in had faith. The very word "bargain" presupposes that the parties will seek to maximize their own best interests. Hard bargaining, albeit ruthless, is not bad faith bargaining.

In Canadian Industries Limited, [1976] OLRB Rep. May 199, the Board discussed the duty in these terms:

15. .. .satisfaction of the duty to bargain in good faith depends on the manner in which negotiations are conducted and not upon the content of the proposals brought to the bargaining table. To take the latter approach would mean that the Board would be put in the position of an interest arbitrator, having to assess the relative merits of the bargaining proposals of both parties.

16. Recognition requires each party to approach collective bargaining with the objective of entering into a collective agreement. This means that a failure to reach a collective agreement cannot be motivated by an unwillingness to recognize the other party. The requirement to recognize the other party does not mean, however, that a party can establish failure to bargain in good faith by simply proving that its terms were not accepted by the other party. This type of proof, going to content of the proposals rather than to the conduct of the negotiations, would be insufficient to establish a lack of recognition.

17. The conduct of the negotiations is not only judged in terms of mutual recognition but also in terms of quality of discussion. This latter factor is somewhat broader in its application, extending to those situations where there may be present the common objective of entering into collective agreement, but where there is absent any willingness to discuss how that common objective might be reached.

18. The requirement of rational discussion imposes upon the parties a duty to communicate with each other, recognizing that proper collective bargaining depends upon effective communication. Although a failure to communicate might not appear to be the same kind of wrong as an unwillingness to recognize the other party, it does, in fact, have a very serious effect on the collective bargaining process as a whole. The breakdown of established bargaining relationships, because of an unwillingness to engage in full discussion with the other party, is likely to lead to more frequent resort to economic sanctions, and to greater dissatisfaction with the collective bargaining process. The obligation to bargain in good faith recognizes the importance of collective bargaining as a structure within which a full dialogue can be conducted between a trade union and the employer.

While they heralded a more expansive remedial approach to violations of the duty to bargain in good faith, the Board's decisions in Radio Shack, [1979] OLRB Rep. Dec. 1220 and Fotomat Canada Limited, [1980] OLRB Rep. Oct. 1397 reiterated the cautious approach this Board must adopt in assessing any claim that an employer has engaged in "surface bargaining". In Radio Shack, supra, the Board observed:

66. ... The duty to recognize a trade union and to bargain in good faith does not require an employer to enter into any collective agreement proposed by a union. It is apparent from the structure and history of the legislation that the Legislature has assumed that the parties are best able to fashion the details of their relationship. The assumed strength of this approach is that labour and management are more likely to accept an employment relationship which they themselves create than one that is imposed on them. So too, their agreement is likely to be more accommodative of the economic and social demands that each faces. Accordingly, both parties are entitled to bargain hard for the agreement that they believe to be acceptable. This isso even if one of the parties has an overwhelming strength at the bargaining table and is able to achieve most or all of its needs. The exercise of such raw bargaining power in good faith does not offend the bargaining duty imposed by this Act. See York Regional Board of Health, (1978), 1978 CanLII 3478 (ON LA), 18 L.A.C. (2d) 255 at 263 (Adams).

67. Thus, from an employee viewpoint the right to engage in collective bargaining is not a right to achieve the terms of employment employees may wish. It is simply an opportunity to combine together to try and achieve their needs with the possibility that economic realities will dictate quite a different result in any particular situation. This perspective of the bargaining duty was explained by the Board in CCH Canadian Limited [1974] OLRB Rep. June 375 at page 381 in the following way:

"There was no evidence to suggest that the company's position on these items was other than "hard bargaining". There is no requirement that a company must make concessions or agree to a particular agenda of discussions. The parties met often and bargained hard. Because the union might have to accept an agreement "tailored to the company's measurements", to use a modified version of Mr. Peacock's own chosen words, is no reason to conclude that the company was bargaining in bad faith. (see Regina ex. rel. Hearn v. Norfolk General Hospital (1957) 1957 CanLII 515 (ON MAGCT), 119 C.C.C. 290 (Ont. Mag. Ct.). There was no evidence to suggest that the company was unprepared to sign an agreement; but of course it wanted an agreement on its own terms. Collective bargaining is redolent of self interest and without evidence to suggest that the company's terms were so unreasonable as to suggest that, in reality, it wanted no agreement and no trade union, the Board is unprepared to grant the application."

68. Of course, difficulties may arise in trying to distinguish those actions of an employer that are properly characterized as "hard bargaining" from conduct designed to destroy the union. And first contract bargaining presents the Board with no greater challenge in this respect.

69. In order to make necessary but sensitive assessments of bargaining conduct the Board must assess the totality of a collective bargaining relationship. For example, the occurrence of flagrant employer unfair labour practices at the same time the parties are engaged in collective bargaining may belie an employer's claim that a negotiating position is merely hard bargaining with a trade union unwilling to accept its lack of negotiating "clout". Or patently unreasonable contract proposals lacking any semblance of business justification may suggest an employer's desire to embarrass the union and encourage its abandonment by the employees. The legislation requires the parties to make every reasonable effort to make a collective agreement, a duty which patently unreasonable proposals fly in the face of. On the other hand, this Board must exercise considerable restraint in intervening in negotiations between parties who are committed to reaching a collective agreement — a commitment which is more and more self-evident as parties proceed together beyond their first collective bargaining agreement. Too penetrating a review by this Board will only insert it as a third party in the bargaining arena to be tactically used by the negotiators, diverting their attention from the principal task at hand....

The Board made similar remarks in Fotomat Canada Limited, supra:

26. ... The duty to bargain in good faith and make every reasonable effort to make a collective agreement must be applied in the practical context of collective bargaining. However unpleasant the fact, collective bargaining is inevitably a power relationship. The legislation assumes that the resolution of differences between union and management rests on the balance of the relative bargaining power of the two parties. If bargaining power is defined as the ability to secure another's agreement on one's own terms, there is nothing in itself unlawful about either an employer or a trade union wanting its demands met and bargaining to achieve this end. The result may he perceived as unfair, unnecessary, and selfish, but the Ontario Labour Relations Board has not been given the role of interest arbitrator. See Ottawa Journal, [1977] OLRB Rep. June 309 at p. 323, para. 57. The Board has, however, said it will scrutinize the first contract relationships that come before it to sort out hard bargaining from unlawful conduct. An employer cannot use his raw bargaining power for the objective of operating without a trade union. On the other hand, no newly certified bargaining agent can afford to lose sight of the fact that collective bargaining remains a power struggle. See Goldraft Printers, [1980] OLRB Rep. April 448 at p. 456, para. 26.

27. The Board has also said that it will assess the content of bargaining postures in making judgments under section 14 (Goldrafi Printers, supra, para. 20), but this assessment too must be made against the reality of collective bargaining outlined above. Where a trade union impugns an employer's position on one particular provision or on its tough overall posture at the bargaining table and this alone, the Board has to be as careful to avoid being used by that trade union to supplement its bargaining power as we must be cautious to ensure that the hard bargaining does not have as its purpose, the destruction of the trade union. While it may be that a bargaining agent has its "heart set" on a particular provision as a matter of principle, it must still have the bargaining power to achieve this end. Moreover, tactical errors can have a dramatic effect on a party's bargaining power or lack thereof and, in the words of a relevant fairy tale, this Board cannot be expected "to put all of the pieces back together again." See Ottawa Journal, supra, para. 59. Complainants must realize that section 14 allegations will be considered in the light of the conduct of both parties and the remedies requested must bear a direct relationship to the beach established as a matter of causation. The Board must be particularly sensitive to the reality of collective bargaining in prolonged strike bound negotiations where interpersonal conflict can become quite embittered and where the temptation to turn to the Labour Board to supplement a party's bargaining power may be great. See Ottawa Journal, supra. It has long been recognized that the content of the bargaining duty may change as a bargaining continues. Strikes can be lost as well as won. See New Method Laundry and Dry Cleaners (1957), 57 CLLC ¶ 18,059.

28. Whatever else might be said about the bargaining which preceded the strike, we can find no illegality in the parties' behaviour in that time frame. Each of the parties took an opening position from which some retreat was possible, then quickly set a climate in which it became difficult for the other to make any concessions. The insensitivity of the company's rigid opening position was matched by the union's unpalatable position that language changes were necessary because the Shaws were "dumb" managers. Each adopted positions which the other took as insults. This provides part of the context in which later events must be assessed. The history of the parties' relationship is another part of that context. These parties had an established relationship; the collective agreement provisions sought to be changed were provisions to which both parties had once agreed.

29. Counsel for the complainant concedes that nothing in the respondent's behaviour prior to June is, by itself, suggestive of improper motive on the respondent's part. He acknowledges that in these circumstances the union could not insist that the respondent meet with it again, bunless it first made a significant reduction in the proposals that it last made to the company prior to the onset of the strike": see Artistic Woodwork Company Limited, [1973] OLRB Rep. Nov. 566 at paragraph 11. He submits that condition was met in September at the conclusion of Heather's meeting with Carriere, and that the respondent's failure to meet promptly in response to the union's fresh proposals violated section 15. We agree. The only explanation offered for the delay in John Shaw's business trip. There is no suggestion that Doris and James Shaw were both incapacitated during the five or six week period following the presentation of the union's new proposals. There is no reason why one or other of them could not have made the necessary effort themselves, or instructed someone else to take the necessary steps as their representative. As the Board observed in Fotomat Canada Limited, supra, at paragraph 29:

An employer must make himself reasonably available to bargain and if he selects a representative for bargaining purposes who is in fact too busy to take on the assignment, he puts himself in jeopardy of violating section 14 [now 15].

28. The respondent's monetary position in the November meeting cannot fairly be described as a withdrawal of an outstanding offer. The union had rejected the offer in question by commencing its strike. The union could hardly expect that the offer it had so rejected would still be open for acceptance after months of strike. The company did adopt a changed position. In Wilson Automotive (Belleville) Ltd., [1980] OLRB Rep. July 1136, the Board noted that there is nothing per se illegal about a change in position:

29. We start with the long held view of this Board that "the parties are best able to fashion the law which is to govern the workplace and that the terms of an agreement are most acceptable when the parties who live under them have played the primary role in their enactment." (See the DeVilbiss (Canada) Ltd., case, [1976] OLRB Rep. March 49 at para. 13.) This Board recognizes the concept of voluntarism as relied upon by the respondent [sic] company. As a general proposition a party is free to take whatever position best satisfied its self interest providing it maintains the intention of concluding a collective agreement. The difficult cases arise where a party tables a position which it maintains is legitimately in its self interest but which the other side maintains is destructive of the process or designed to avoid a collective agreement and to undermine the trade union. In the Pine Ridge District Health Unit case, [1977] OLRB Rep. Feb. 65 the Board noted:

"Collective bargaining does not take place in a vacuum or in a period where time and events are frozen. Generally, as in this case, it occurs over an extended period of time against a fluid backdrop of events. A party may thus come to reshape its view of its own best interests from one point in time to another and so wish to change its position at the bargaining table. The party opposite cannot be taken to be unaware of the increasing likelihood of that happening with the passing of each successive day and week. The old caution, "Take it before I change my mind" reflects a widely accepted bargaining precept that has its proper application in collective bargaining..

(See also Toronto Jewellery Manufacturers' Association [1979] OLRB Rep. July 719).

However, the Board's views as expressed in the Pine Ridge District Health Unit case, supra, cannot be taken as a carte blanche to alter one's bargaining position at any time and for any reason. Clearly, an alteration of position designed to wreck the critical decision-making framework necessary for collective bargaining would be contrary to section 14 of the Act. (See the Graphic Centre (Ontario) Inc. case, [1976] OLRB Rep. May 221.) Similarly, the move to a position tailor-made for rejection would betray an intention not to conclude a collective agreement contrary to the duty imposed by section 14 of the Act. It follows, therefore, that while the parties may govern themselves by self-interest and may alter bargaining positions in response to changes in relevant conditions, a party which alter its bargaining position may leave itself open to the allegation that it is bargaining in bad faith. It falls to the Board in these cases to examine the evidence in light of the labour relations dynamics and draw the appropriate inferences.

The respondent's change of position on wages and benefits followed a number of months of strike, during which its financial position underwent changes. The respondent says those changes, as they appeared to it at the time, prompted its changed position on economic issues at the bargaining table. On the basis of financial information unearthed by subpoena and cross-examination during the hearing of this complaint, counsel for the complainant argues that things were not as bad as the respondent says they seemed, criticizes the respondent's failure to make a more elaborate and detailed financial presentation at the bargaining table and submits that the respondent has failed to prove to us that in November, 1983, it could not afford to maintain the existing benefits and pay the wage rates it had offered in March and April before the strike began. The issue is not whether the company could have afforded a more generous offer, any more than it is whether the union could have lived with a more modest one. The simple answer to the argument about the amount of financial data offered at the bargaining table is that the union did not ask for any more. There is nothing to suggest that the company was withdrawing from a position which it had reason to believe the union was about to accept. The new position did not create for the employees a Hobson's choice of the sort with which the Board was concerned in Wilson Automotive (Belleville) Ltd., supra.

29. We do not propose to comment on each of the events which counsel drew from the evidence and held up as representing part of a pattern from which he submitted we would divine in the respondent a desire to avoid making a collective agreement. We will comment on some. There is the matter of the letters published in the local press. Counsel says the respondent's failure to clarify the concerns raised in Carriere's letter to Darling represents an inappropriate indifference to the bargaining process. We are obliged to observe that the Labour Relations Act imposes no obligation to bargain in or through the press. The most direct and appropriate way for Carriere to explore any concern he had about conflicting information about the company's position would would have been to speak to John Shaw and, if it seemed a misunderstanding stood in the way of further progress in negotiation, to seek a further meeting to ensure that he and his committee had an accurate picture of the respondent's then current position. The same could be said of the omissions in the offer presented by the respondent at the meeting of January 23rd and in the later draft minutes of settlement. Communication is a major focus of the duty to bargain in good faith, and it seems odd to be exploring in hearings before us matters which the union knew about and yet failed to explore at the bargaining table.

Even the concern about what the strike replacements were receiving could have been raised at the bargaining table. The company's ability to pay was an issue it had raised. If something the company seemed to be doing was inconsistent with what it was saying, then the bargaining table was the first place the union could have raised its concerns. There is also the company's initial refusal even to consider renumbering two identically numbered articles. Silly as that position seems, we have to remember that the company moved off that position when the union moved off its opening position, a position which, to the company, may have seemed equally silly. We must be careful not to adopt the approach that concessions that can be made must be made quickly. That would require that this Board decide what the parties' agreement ought to be, and that approach would be completely inconsistent with the notion of free collective bargaining which is central to the Labour Relations Act. We must be equally careful about focusing on the degree of sympathy one party shows to the other's presentation, whether by agreeing, offering concessions or asking questions, as a measure of good faith. If the reason for such caution is not inherently obvious, it may be illustrated by asking, rhetorically, how we should react to a complaint that a trade union bargaining committee had responded with insufficient concern and sympathy to an employer's careful explanation of the financial circumstances which, in its view, required that its employees agree to a substantial reduction in pay and benefits. Less hypothetically, how are we to react to Mr. Carriere's failure to ask questions about the financial matters raised by the respondent, and his summary dismissal of these as "the usual financial speech"?

30. Having said all that, we must make it clear that we have carefully considered all of the evidence to determine whether the respondent's behaviour betrays a desire to avoid making a collective agreement. While we are not without our doubts about the motivation for some of the respondent's actions, on the evidence now before us we cannot find, on the balance of probabilities, that the respondent was not prepared to enter into a collective agreement or sought to avoid doing so. It has revealed, when asked, the terms to which it says it is prepared to agree. If the respondent has been bluffing, the union has not yet called its bluff.

31. We have found that the respondent failed to "bargain in good faith and make every reasonable effort to make a collective agreement" in the period immediately following the meeting of September 26, 1983. We do not find the more extensive violation alleged by the complainant. Counsel for the complainant says that this Board's jurisprudence has established that an award of damages is the appropriate remedial response to a violation of section 15. In Canada Cement Lafarge Ltd., [1981] OLRB Rep. Dec. 1722, the Board noted that an award of damages is not always the appropriate remedy for a violation of section 15 of the Act:

32. Clearly, if employers are to be subject to compensatory orders for breach of the bargaining duty so should trade unions. But not all violations, be they by employers or trade unions, are properly remedied by monetary compensation. For example, failures to rationally discuss items as in CIL, [1976] OLRB Rep. May 199 or to provide vital information as in DeVilbiss, supra, are best remedied by a simple direction. Even if there exists the possibility of some monetary loss occasioned by the resulting delay, this Board should, in the normal course of events, be reluctant to evaluate the loss in monetary terms. Serious consideration of such claims may deflect the Board and the parties from the central purpose of the complaint and add unwarranted time in the processing of such matters. The difficult questions of causation associated with such potential loss particularly raise this spectre and with nowhere near the same justification for a compensatory approach as exists in the blatantly bad faith situation such as in Radio Shack and Fotomat supra. Judicial approaches in respect of damage assessments draw their purpose from the substantive law of torts and contracts and therefore should not be imported wholesale into labour relations. This Board must be sensitive to the purpose of its own statute and the particular provisions being construed in fashioning remedies.

33. This is not, in our view, an appropriate case for an award of damages. When the hearing of this complaint was completed in May, the parties had met and bargained, with the assistance of a Ministry of Labour mediator, on two occasions following the respondent's breach. It is apparent from the evidence that by then the parties' failure to reach agreement had little, if anything, to do with the respondent's earlier delay in responding to the complainant's proposals of September, 1983. Both parties are responsible for the state that collective bargaining between them was in when our hearings concluded, and from a labour relations perspective it would be inappropriate to now award any remedy which suggests that that responsibility was otherwise than evenly divided at that point in time. For those reasons, we feel it would also be inappropriate at this stage to direct that the respondent meet and bargain with the complainant at such times and for so long as a Ministry of Labour mediator deems necessary. That is what we would have done had the respondent not returned to the bargaining table, or if there had been any subsequent breach, but neither situation exists here.

34. In summary, we have found and hereby declare that the respondent failed to "bargain in good faith and make every reasonable effort to make a collective agreement" in the period immediately following the meeting of September 26, 1983. It failed to respond promptly to the union's new proposals by returning to the bargaining table to discuss them. It did, however, return to the bargaining table in November, 1983, and again in January, 1984. While it bargained hard on those occasions, we cannot say that it bargained in bad faith. For the reasons we have set out above, we do not consider it appropriate to supplement our declaration with any other order or award. If, as we suspect, the parties have not yet concluded a collective agreement, we urge them to turn their undivided attention to bargaining and devote some creative energy to finding new ways of resolving the differences which remain between them.

DECISION OF BOARD MEMBER W. F. RUTHERFORD;

1. I dissent. The evidence in this case would suggest that Doris Shaw, Vice-President of Shaw-Almex and her husband James Shaw had complete control over the company's operations.

2. John Shaw, son of Doris Shaw, was in charge of labour relations for the company. It appears from the evidence that the United Steelworkers representative did not consider John Shaw to have the authority to make labour relations decisions for the company.

3. It was in this atmosphere that contract negotiations for a renewal agreement took place. The union was questioning the authority of John Shaw; the company was unhappy with the attitude of the Steelworkers representative.

4. My opinion from the evidence is that as negotiations proceeded the company kept changing its position on wages, benefits and contract language. The result was that the union could not present what they felt was an acceptable proposal to the membership for adoption, with strike action the final result.

5. I would have found that the company manouvered contract language at the different meetings with the union, made their wage proposals vague and unacceptable to the union membership and throughout negotiations and mediation and frustrated the union with an appearance of surface bargaining.

6. I would have in this decision forced the company to present again the best positions that they had proposed during negotiations, conciliation and mediation meetings on both wages, benefits and contract language changes so that the union could then submit the complete offer to the union for membership action.