International Woodworkers of America Local 2-69 v. Consolidated Bathurst Packaging Ltd.

[1984] OLRB Rep. March 422

0290-83-U International Woodworkers of America Local 2-69, Complainant, v. Consolidated Bathurst Packaging Ltd., Respondent

BEFORE: George W. Adams, Q.C., Chairman, and Board Members W. H. Wightman and B. K. Lee.

APPEARANCES: Paul J.J. Cavalluzzo, David I. Bloom and William Kaplan for the applicant; and Michael Gordon and Ronald Gruber for the respondent.

DECISION OF CHAIRMAN, GEORGE W. ADAMS, Q.C. AND BOARD MEMBER B. K. LEE; March 16, 1984

1. In the Board's earlier decision it directed that this matter be rescheduled for hearing to provide the complainant with an opportunity to establish by reasonable proof those losses sustained by the union and bargaining unit employees, if any, arising from the loss of opportunity to negotiate on the matter of the plant closing together with interest as appropriate. This decision relates to that remedy. The complainant is seeking the following relief:

— a "make whole" order to provide bargaining unit members improved severance payments, improved pension and life insurance benefits, extension of welfare benefits, and relocation, retraining, and preferential hiring rights at other plants of the respondent;

— tn the alternative, an order directing the respondent to make whatever payments are necessary to ensure that the bargaining unit employees receive the same severance and/or termination benefits which were granted to employees and/or persons outside the bargaining unit;

— an order directing the respondent to compensate the complainant for all legal costs incurred as a result of the respondent's illegal conduct.

2. This matter arises out of joint negotiations involving the respondent and the complainant and its locals representing employees of the respondent at six of the respondent's plants in Ontario and Quebec. The plants are located at Etobicoke, Hamilton, Whitby, St. Thomas and at St. Laurent and Montreal East in Quebec. This style of bargaining had been in effect between the parties since approximately 1969. The outcome, however, is not one master agreement but rather six separate collective agreements. The unions conducted their most recent negotiations pursuant to the guidelines applicable in 1980. The 1980 guidelines read:

3. The decision by the local membership to participate in joint negotiations is final and binding up to the point where a final decision is reached by the joint vote referred to below.

4. Any settlement presented to the membership involved will be decided by secret ballot vote. The result of this vote is binding on all participants.

5. When the main agenda has been agreed upon and submitted to the Company, no item can be deleted therefrom without the majority decision of the joint negotiating committee, except in the case where a local membership has instructed its committee that such an item is a major strike issue. Strike issue's are to be identified at the time the guidelines are signed.

6. With the exception of strike issues the joint negotiating committee has full authority to modify or amend main agenda proposal's during negotiation by a majority vote of the committee.

7. When the main agenda is finalized and presented to the Company no items can be added to or substracted therefrom, unless there is a unanimous vote.

8. A representative shall attend all balloting meetings and seal all ballot boxes.

9. The membership involved will take a strike vote on or as close as possible to November 2, 1980.

10. Strike issues are designated as such by the representatives from the local plants and, for the purposes of bargaining, these issues remain strike issues for the other locals unless withdrawn by the local initially designating the issue a strike issue. Mr. Jean-Marie Bedard, Regional Director of the complainant, testified that had the respondent advised all of the locals during bargaining the Hamilton plant was to close the trade unions would have maintained their request for an improvement to the plant closure clause and would have made additional proposals on retraining, relocation, priority on hiring, recall rights, and the inclusion of every employee in the Hamilton pension plan together with an improved pension plan in the area of early retirement. Also of interest would have been prepaid life insurance, OHIP, and weekly indemnity coverage for "some period of time".

11. The provision in the expired collective agreement dealing with plant closure was Articles 18.26 to 18.29. They provided:

18.26 PLANT CLOSURE

In the event of the planned closure of the entire plant, the Company will notify the Union as soon as possible of such plans but in any case not less than two (2) months prior to the closing date.

18.27 Eligible employees terminated as a result of the plant closure will receive severance pay as follows:

(a) An eligible employee with one (1) to ten (10) years of service will receive twenty (20) hours pay for each year of service at the employee's current hourly rate.

(b) An eligible employee with more than ten (10) years of service will receive twenty (20) hours pay for each year of service up to and including ten (10) and forty (40) hours pay for each additional year of service at the employee's current hourly rate to a maximum of one thousand and forty (1,040) hours total severance pay.

18.28 In order to be eligible for severance pay under this Article, employees must be on payroll at the time of the announcement of plant closure, have one or more years of service and remain in the employ of the Company until the closing of the plant or until the employee's services are no longer required. Employees eligible for any early retirement benefits proposed by the Company will be entitled to either the early retirement benefit or the severance pay.

18.29 Employees eligible for severance pay as provided by Government legislation will receive either the Government legislated provision or the Company severance pay provision, whichever is greater.

5. The proposed amendment to which Mr. Bedard referred is found at page 12 and 13 of the union's proposed amendments to the collective agreement. This proposal which was unilaterally withdrawn during bargaining read:

(ix) Section 18.26 Plant Closure

Amend to read:

In the event the Company decides to cease, in whole or in part its operation at the location covered by this agreement, regular employees affected will be given a minimum notice of two months. A regular employee holding seniority rights, whose employment with the company ceases because of plant closure, in whole or in part, will be paid a severance allowance based on the formula of two weeks pay for each year of service or fraction thereof. The allowance will be paid upon severance.

In the event the Company relocated any operation, in whole or in part, the employees so affected shall have the right to exercise full seniority and recall rights in the new location. It is understood that this particular provision shall not apply to any Consolidated-Bathurst operation currently under agreement with the International Woodworkers of America.

Any employee affected by any closure outlined above shall have the right to take a job elsewhere following closure announcement and at the same time, retain his eligibility to all entitled severance pay which shall be paid to him immediately upon his departure.

(NEW) In the event of a lock-out or strike, and the Company decides to close plant, severance pay will be paid.

6. The union bargaining committee consisted of four representatives from each plant for a total of twenty-four union representatives. They were accompanied by three representatives, including Mr. Bedard from the International. Mr. Bedard testified that if the company had not agreed to the union proposals on the plant closure, he and his colleagues would have recommended strike action very strongly to the entire committee. Mr. Bedard believed that a strike would have ensued. Mr. Bedard testified that the company wanted an agreement very badly because of customer uncertainty. Subsequent to the closure, the other locals agreed to share in whatever legal costs were incurred as a result of the legal challenge to the closing. On cross-examination, Mr. Bedard agreed that it was the union that pushed the negotiations into a post-conciliation negotiating mode. He agreed that the trade union did not identify strike issues to the company and that the union took the position that there would be no negotiating until the company removed its proposals from the bargaining table. He also agreed that strike action would take, in accordance with the guidelines, a majority vote of all six plants. He agreed that the respondent was a tough bargainer and had been willing to take strikes in the past, both company-wide and at individual plants. For example, it had locked out the Hamilton bargaining unit in 1978-79 in order to remove the incentive system then in place. During a strike the trade union pays between $40.00 to $60.00 in strike pay to each bargaining unit member depending on marital and family status. Mr. Bedard estimated the strike fund in January of 1983 to be approximately $300,000.00 and that the cost of strike pay would have been approximately $50,000.00 per week. He suggested that the trade union might have obtained additional financial support from the other trade union's in the industry. But they were just coming off a six month strike during which all of the employees of the respondent worked. Bargaining unit employees of the respondent, however, did provide some support to striking employees at the other companies in the amount of $10.00 per person per week with the exception of the Quebec locals. Mr. Bedard expressed the opinion that the members of the other plants would have "stood up" for the Hamilton employees. But he acknowledged that the other locals would only accept a priority of hiring at their locations for Hamilton employees only after all employees laid off at those locations were recalled. It was also agreed that Hamilton employees could rely on their company-wide seniority only for the purposes of benefit entitlement. He said that very few employees would forego their own seniority for others. Said Mr. Bedard: "I'm not congratulating them but it's a fact". He ticknowledged that 89.9% of the employees voted in favour of the proposed settlement with the company, a settlement adopting the industry pattern. He agreed that Article 18.26 had been in the collective agreement for a number of years, having come about as a result of a closure in Montreal some twenty years ago. He further agreed that there had been plants closed by Consolidated-Bathurst since that time. He agreed with the company's counsel that Hamilton employees had brought a grievance which successfully challenged the compulsory nature of the company s pension plan at that location. He also produced and identified the complainant's legal costs as of July 5th, 1983 in relation to this matter in the amount of $12,487.92.

7. Mr. Rudy Oliverio is President of the Hamilton local. He testified that had the complainant been advised of the impending plant closing, job security and contract benefits such as the dental plan, glasses, life insurance, CPP, severance allowances and pension would have become major issues. He testified that only thirty hourly employees were part of the company pension plan. He testified that the trade union would have been looking for benefit coverage for at least the three year period of the collective agreement. He again referred to the age breakdown of the one hundred and seventy bargaining unit employees. Seventeen were between the ages of sixty-one and sixty-four years of age. Fifty-eight were between the ages of fifty-one to sixty. Forty-four were between the ages of fourty-one to fifty. Twenty were between the ages of thirty-one to forty. And thirty-one were between the ages of twenty-one to thirty. In excess of one hundred and ten employees had twenty years of service with the company on closing. Mr. Oliverio testified that of the one hundred and seventy employees, ninety employees were still unemployed. He testified that quite of few of these ninety employees fell within the forty-five to sixty-five years age group. Mr. Oliverio himself is fifty-six years of age and still unemployed. He expressed the opinion that there would have been a strike had the company not made an adequate response to the plight of these older workers during bargaining. He testified that at the very least all of the plants would have struck to cause equal treatment between bargaining unit and non-bargaining unit employees at Hamilton. Severance for salaried employees was on a sliding scale to a 52 week maximum. An employee with twenty-five years service received the maximum. An employee with nineteen years service received 37 weeks severance pay. An employee with fifteen years service received twenty-four weeks severance pay. On cross-examination he agreed he would have felt threatened by an announcement of a plant closure during negotiations but the union would have had to take everything into consideration. He acknowledged that as part of the plant closing employees were given the opportunity to convert their life insurance to whole life without a medical. He agreed that even if all the Hamilton employees voted for a strike there would have had to be an overall majority in favour of strike action for a strike to occur over the Hamilton plant closing. He acknowledged that the company was a very tough negotiator and that the Hamilton employees had been locked out for five weeks in the late 1970's. He explained that he and other union officials signed the collective agreement in April after the plant closing announcement because they felt the memorandum of settlement was final and binding. He acknowledged that the proposal to amend Article 18.26 was a proposal which had been made in a number of earlier rounds of bargaining between the parties.

8. Alan Strickland is President of the Etobicoke local. There are one hundred and seventy employees in that bargaining unit. He was involved in the 1982 negotiations. He said he would have recommended strike action to Etobicoke employees over the Hamilton closing had adequate conditions not been agreed to by the company. The majority of employees in his bargaining unit are considerably younger than the Hamilton employees. He agreed that the pension proposal made on January 5th for a fully paid non-contributory pension plan was eventually dropped by the trade union. He further agreed that a no-contracting out proposal was dropped. He also was aware of the arbitration brought on by Hamilton employees which succeeded in "knocking out" the company's compulsory contributory pension plan. Nevertheless, he felt that Etobicoke employees would have supported the Hamilton Local. The Etobicoke employees have not struck in the past.

9. John Gray is President of the Whitby local. There are one hundred and eighty employees in that bargaining unit. He was involved in the 1982 negotiations. He believed that the members of his local would have supported the Hamilton employees for a better severance provision and for whatever else might be necessary. The average age of his bargaining unit is lower than that of the Hamilton bargaining unit. The Whitby plant opened in 1956. He acknowledged that the company was a tough negotiator. He also acknowledged that an announcement by the company might have been construed as a bluff or a threat. He said he believed his members would have struck over the matter of the Hamilton closing because any relief achieved would have benefited the Whitby local "down the road". He acknowledged that after the Hamilton closing was announced the other locals agreed to the movement of Hamilton employees to other plants only if Hamilton seniority was confined to benefit entitlement. There have been three or four strikes at Whitby. He testified that the Hamilton and Whitby locals have always negotiated in the past and have always been ready to support each other.

10. Mr. Verne Warren is President of the St. Thomas local. He testified that the Quebec locals amounted to about 25% of the employees involved in the negotiations. He testified that he would have recommended going on strike to St. Thomas employees in support of achieving at least what the trade union initially proposed as an amendment to Article 18.26. The St. Thomas plant is the newest plant with the average seniority in the bargaining unit in the order of ten years. The Hamilton plant was the original plant in the Bathurst chain. He pointed out that if all of the Hamilton employees bumped into the St. Thomas bargaining unit they would eliminate or bump out all existing St. Thomas employees; hence the limitations on the access of Hamilton employees to jobs at other existing plants. He agreed that most of the St. Thomas employees have voluntarily joined the company's pension plan. He also agreed that St. Thomas employees wanted the industry settlement and there was no other major issue for them. The St. Thomas plant has been on strike before but Mr. Warren agreed that January was not the best month to be on strike. He asserted that the company's demand for a three year agreement "lulled the locals to sleep" on the issues of job security. He testified that raising the Hamilton plant closing at the last minute of the negotiations would have been perceived as bad faith in the sense that he believed the company should have known earlier and should have given fair warning.

11. Walter K. Lopata was employed at the Hamilton plant and a member of the negotiating committee. He acknowledged that "things were tough all over" in April of 1982. The Hamilton plant and all other plants were on a one shift, four day a week basis but the Hamilton local never discussed a plant closure. He testified that Mr. Beettam had been sent to Hamilton to make things better not to close the plant. The major issue at the Hamilton plant was contracing out but this was given up during bargaining. On cross-examination he agreed that an announcement by the company of a plant closing during bargaining would have thrown the negotiating committee into a turmoil. He agreed it was hard to say just what would have been done with the Hamilton local being only one of six locals involved in the bargaining.

12. Mr. Bernard Holmes, Plant Manager at the Etobicoke plant, testified that after the plant closing announcement he advised the President of the Etobicoke local, Mr. Strickland, that applications for employment had been received from Hamilton employees. He testified that Mr. Strickland replied "We don't want any of these buggers in this plant, we don't want any troublemakers". Mr. Strickland testified that he did have a conversation with Mr. Holmes but denied saying what Mr. Holmes said he stated. Instead, it was Mr. Strickland's evidence that he took the position with Mr. Holmes that employees from Hamilton would have to start at the bottom of the seniority list and would retain their company-wide seniority only for the purposes of benefit entitlement.

13. Mr. Ronald Gruber was the lead company negotiator during the 1982 negotiations. He confirmed that the first day of negotiations was December 15th and negotiations continued on January 4th, 1983. The union's proposals on plant closures had been, he thought, withdrawn by that time. The trade union's proposal on pension plans was made January 5th. He, however, acknowledged some discussion on Article 18.26 with respect to how the Employment Standards Act would be integrated into the collective agreement provision, the Employment Standards Act providing a greater benefit for an employee with more than fIve year's seniority. Mr. Gruber testified that the mediators recommended the company make a final offer on January 6th. He consulted his superior Mr. Haiplik who is head of the Container Division. It was decided to make a final offer with a time limit for its acceptance in the full knowledge that if it was not accepted a strike would ensue. The union strike deadline was January 8th. He testified that the settlement with the six locals was on the basis of the industry settlement and its estimated cost was two million a year for all six plants. He explained that the plant closing provision was inferior to the Employment Standards Act for an employee with five years or more of service in that the Employment Standards Act provides for one week of pay per each year of service up to a maximum of 26 weeks. He was asked by the company's counsel to cost the following damage proposals submitted by the complainant:

1- All employees to be paid a severance allowance based on the formula of two weeks pay for each year of service or fraction thereof.

2- Life insurance and all other welfare benefits to be maintained during the life of the collective agreement as per 18.30.

3- Relocation and training — The Company to give priority to Hamilton employees when hiring in any of its Ontario corrugated plants with the necessary training if required.

4- Pensions — Bargaining unit employees shall be entitled to receive early retirement pension benefits payable at age 49 with bridging formula.

5- All employees to be provided with a paid up life insurance policy.

6- a) Employees age 45 and over shall be entitled to receive their pension contributions upon request;

b) Pension monies frozen prior to 1962 to be released to employees involved.

7- Any improvements resulting from the meeting concerning Pensions as per the Memorandum of agreement dated January 13th, 1984 shall also apply to Hamilton employees.

8- The arbitration case re: probationary employees to be resolved.

9- The Union to be re-imbursed for all legal costs incurred resulting from hearings before the Ontario Labour Relations Board and any subsequent hearings that may follow the decision of the Ontario Labour Relations Board.

14. His costing notes took the form of Exhibit 13 which reads:

15. Severance Pay"

— As Per Union Proposal:

2 weeks per year of service -

7203 wks x 40 hrs x $11.11 = $3,201,013.

Less Paid Out 1,534,243.

*Additional Severance $1,666,770. +

Fringe Benefits:

— As per Union Proposal: (Dec/82 — $25,000.)

• $300,000/Yr x 4 Yrs = $ 900,000. Paid Up Life Insurance" — As per Union Proposal: $11.11 avg. rate x 2080 x 2 = $46,000.

• $46,000. x .33~/mo/thou. x 12 = $182.16 x

177 employees = $32,240/Yr.

x 20 yrs.

Relocation:

— As per Union Proposal:

• Assume 150 relocations at $2500. @ = $375,000.

Early Retirement Same as Salaried

— Triple actual cost= $465,540 x 3= $1,400,000.

Less paid 465,000.

• $ 935,000.

• 2 M already paid

• Pension for all 2/M

• Retraining 3,000,000 (1 mo./employee 2000x150)

15. Exhibit 13 totals $6,742,000.00. He testified that the company clearly would have taken a strike in the face of such a demand over the plant closing given that the total cost of the economic package for all six plants was 6 million dollars. The profits for the year 1982 for Consolidated-Bathurst Inc. were 53.4 million dollars. He agreed with counsel for the trade union that the company would have seriously considered any proposal made by the complainant on the plant closing. He also agreed that it was in the company's interest to "get a deal" and thereby keep its market share and its customers. He testified that he believed 72% of the hourly employees who had availed themselves of the manpower adjustment service in Hamilton since the closing are now employed. However, only one or two of the former Hamilton employees are employed by MacMillan-Bathurst which now owns and operates the remaining five plants. On cross-examination, he testified that the total cost to the company of the severance and pension rights accorded bargaining unit and non-bargaining unit employees was approximately 3 million dollars. Two million was the unionized employees' portion (i.e. one hundred and seventy-seven employees) and the other million was paid out to sixty or seventy salaried or non-bargaining unit employees.

16. In the summer of 1982 the Vice-President and General Manager of the Container Division of Consolidated-Bathurst Packaging Limited was Mr. Theodore Haiplik. Mr. Gruber reported to Mr. Haiplik. Mr. Haiplik testified that the respondent was not prepared to go beyond the economic pattern established by the respondent's competitors after a six month strike. He testified that Mr. Gruber got him out of bed on January 6th to discuss the possibility of putting a final offer to the trade union. He decided to make that final offer as advised by the mediators and face the possible consequence of a strike if the offer was not accepted. He testified that the company would not have been prepared to pay an additional 6 1/2 to 7 million dollars in respect of the Hamilton plant closing. That amount of money was "outside the realm of possibility".

17. Also submitted into evidence were several collective agreements of competitors in the industry. None of the ten agreements contained a provision measurably better than that of Article 18. 16 and four of the ten agreements contained no provision relating to a plant closing.

18. On behalf of the trade union it was submitted that the losses sustained by bargaining unit employees were "real and substantial". If the company had disclosed its intent to close the Hamilton plant, counsel submitted, collective bargaining would have been dramatically different. It was stressed that the company wanted an agreement and would have considered the trade union's proposals seriously. It was pointed out that the nature of the respondent's breach of the statute created an inherent uncertainty with respect to the losses sustained by bargaining unit employees and that therefore the respondent ought not to be able to benefit from its own wrong doing by relying on this uncertainty. Counsel submitted that this Board should find, on the balance of probabilities, the union would have achieved significant gains and even if these gains were difficult to assess the Board was obligated to do its best in this respect. Reference was made to United Steelworkers of America and Radio Shack, [1979] OLRB Rep. Dec. 1220; Canada Cement Lafarge Ltd. and United Cement, Lime and Gypsum Workers International Union et al., [1981] OLRB Rep. Dec. 1722; Penvidic Contracting Co. Ltd. and International Nickel Co. of Canada Ltd. (1975), 1975 CanLII 6 (SCC), 53 D.L.R. (3d) 748 (SCC); Re Burrard Yarrows Corporation and International Brotherhood of Painters, Local 138 (1981), 1981 CanLII 4436 (BC LA), 30 L.A.C. (2d) 331 (Christie); Academy of Medicine and Communication Workers of Canada, [1977] OLRB Rep. Dec. 783; and Ontario Haulers Association Inc. and Repac Construction and Materials Limited, [1976] OLRB Rep. Oct. 610. It was submitted that the Board ought to take the monies paid out to salaried employees as the bench mark for the assessment of the appropriate damages. It was further submitted that the Board should take into account the savings to the respondent resulting from the closing of the Hamilton plant.

19. On behalf of the respondent counsel submitted that it was in an impossible situation in early January. It was being pushed to a deadline by the trade union and all witnesses agreed that the announcement of a plant closing would have thrown the negotiations into turmoil. Counsel submitted that the conduct of the trade union in pushing the company to this deadline effectively took away the company's ability to inform the complainant of the closing and for the closing to be discussed in a rational manner. It was further submitted that the possibility of a plant closing should have been known to the complainant and was ignored in order to quickly gain the benefit of the industry settlement. Counsel questioned the sincerity of those trade union officials who testified they would have recommended strike action on the Hamilton closing. He pointed out that the Etobicoke plant had never before struck and that the proposed amendment to Article 18.26 revealed the participating locals were not at one on the manner of dealing with plant closings. Counsel stressed that if the total settlement was in the order of 6 million dollars, the company's position that it would take a strike on a demand for an additional 6 million dollars is obviously believable. It was also pointed out that no other collective agreement in the industry provided a pattern materially in excess of the plant closing formula found in the Hamilton collective agreement. It was also submitted that the announcement of a plant closing, had it precipitated a strike, would have placed the trade unions on a disastrous course. The unions had a very small strike fund; the industry was just coming off a strike; and there was very high unemployment in all regions at the time. Accordingly, it was contended the trade unions and their members would have experienced dramatic losses in attempting to achieve an "impossible goal". The failure of the company to reveal the closing therefore saved the trade union and its members from incurring these losses. From this perspective, counsel contended, only nominal damages were in order. Counsel argued that the breach of the statute was technical in nature and the losses contended by the trade union are entirely too speculative. In this respect the Board was referred to Re Publishers' Syndicat (1904), 7 OLR 223; Canadian Woodmen of the World v. Hooper, 1935 CanLII 342 (MB KB), [1935] 2 D.L.R. 802; Kinkle v. Hyman, 1939 CanLII 7 (SCC), [1939] 4 D.L.R. 1; TTC v. Acqua Taxi Ltd. (1956), 1956 CanLII 443 (ON HCJ), 6 D.L.R. (2d) 721; Wyman v. Vancouver Real Estate Board (1960), 1960 CanLII 329 (BC CA), 23 D.L.R. (2d) 21; Grand Restaurant Ltd. v. City of Toronto (1981), 1981 CanLII 3019 (ON HCJ), 123 D.L.R. (3d) 349; and Bowlay Logging Ltd. v. Domtar Ltd. (1982), 1982 CanLII 449 (BC CA), 135 D.L.R. (3d) 179. Reference was also made to Journal Publishing Company, [1977] OLRB Rep. June 309; Foto-Mat Canada Ltd., [1982] OLRB Rep. July 1020; and Globe Spring and Cushion Ltd., [1982] OLRB Rep. Sept. 1303. It was also submitted that this was not an appropriate case for legal fees; that the salaried employees were governed by a different legal regime; and that the Hamilton employees have consistently shown a disregard for their economic future as evidenced by their attack on the pension plan through the arbitration process. Counsel contended and stressed that the trade unions had substantially contributed to the situation by failing to ask questions in bargaining about possible plant closings; by pressing the company for a quick settlement; and by ignoring the earlier economic indications of potential plant closings.

20. In Radio Shack, supra, at paragraphs 10 1-1 12 and 115 the Board had the following to say about assessing the loss of opportunity to negotiate a collective agreement when that loss was occasioned by a breach of the Act:

21. It can, of course, be argued that damages for the loss of such an opportunity are too speculative to estimate and if arbitrarily set would be punitive in nature — a result that would appear to contravene the first tenet discussed. The argument, however, is inconsistent with the long accepted principle that one whose wrongful act precludes the exact determination of damage should not be able to evade his duty to compensate for that damage because of an uncertainty caused by his own wrongdoing. See Mayne and McGreger on Damages 12th ed., 1961, para. 174. In private litigation before our courts, a party is not burdened with an unattainable standard of accuracy in the assessment of damages. Business losses in commercial law suits and the compensation awarded in personal injury cases to persons who may never have been employed are important examples. See for example: Withers v. General Theatre Corporation, [1933] 2 K.B. 536; Roach v. Yates, [1938] 1 K.B. 256 (C.A.). Even more directly in point are those cases that explicitly grapple with the wrongful loss of an economic opportunity.

22. Chaplin v. Hicks, [1911] 2 K.B. 786 (CA) first recognized the principle of compensating for the loss of an opportunity in the context of a beauty contest. The case involved a breach of contract to enter a contest from which the loss of opportunity to win a prize flowed. In determining whether the breach of contract resulted in injury to the plaintiff, Lord Justice Fletcher Moulton, at 795 commented:

"Is expulsion from a limited class of competitors an injury? To my mind there can be only one answer to that question; it is an injury and may be a very substantial one. Therefore the plaintiff starts with an unchallengeable case of injury and the damages given in respect of it should be equivalent to the loss."

103. A similar situation arose in Domine v. Grimsdall, [19371 2 All E.R. 119 where a plaintiff recovered £15 from a defendant bailiff who had improperly failed to execute judgment against a debtor of the plaintiff, the loss of chance being that the debtor would pay off his debt to avoid the execution against his goods.

104. In Hall v. Meyrick, [1957] 2 Q.B. 455 a solicitor negligently failed to warn the plaintiff that her marriage would revoke a will made in her favour by her intended husband. The damage she suffered as a result of this negligence was the loss of opportunity to secure the benefits of a new will. However, in valuing the opportunity Ashworth, J. at 471 noted that, "[Tihe more the contingencies the lower the value of the chance or opportunity of which the plaintiff was deprived." The damages awarded were £1250.

105. The Supreme Court of Canada approved this principle in Kenkel et al. v. Hyman et at., 1939 CanLII 7 (SCC), [1939] 4 D.L.R. 1 where the defendant directors had sold the plaintiff's stock in a company without obtaining the consent of 51 % of the shareholders for whom it was held in trust. The plaintiff had resold stock to the defendants for an option to repurchase provided that the defendant directors called a meeting of the shareholders to ratify the first transaction. The defendants failed to call a meeting within the life of the option. The court found a breach of contract, but awarded only nominal damages as there was no proof that the shareholders would have ratified. At page 7 Mister Justice Crockett observed:

"For my part I can find no authority in either Chaplin v. Hicks or Carson v. Willitts justifying any Court in awarding any more than a nominal sum as damages for the loss of a mere chance of possible benefit except upon evidence proving that there was some reasonable probability of the plaintiff realizing therefrom an advantage of some real substantial monetary value."

[Emphasis addedi

106. In the B.C. Supreme Court case of Hornak v. Paterson et al (1967), 1967 CanLII 576 (BC SC), 62 D.L.R. (2d) 289, the plaintiff established a breach of contract by the defendant union in failing to notify him of an employment opportunity. Damages were awarded for the lost wages of the particular job in question but were not awarded for the loss of opportunity for future employment, again because of lack of proof of the opportunity materializing. In discussing the onus of proof Mister Justice Aikins, at 298, had this to say:

"In my view before damages may be awarded for the loss of a chance the existence of the chance said to have been lost must be established in accordance with the usual requirement in a civil case, that is on the balance of probabilities. The proof is insufficient if it is left as a matter of conjecture whether there was a loss of a chance or not. This simply means that there must be acceptable evidence showing directly that there was the chance claimed or leading to the same conclusion by reasonable inference."

107. McWhirter v. University of Alberta (1978), 1977 CanLII 1662 (AB SCTD), 7 A.R. 376; 80 D.L.R. (3d) 609 is another and very recent case involving this issue. A professor alleged that the University had failed to follow certification procedures set out in the University of Alberta Faculty Handbook when considering him for tenure. As a result, he lost the chance to be considered the following year for tenure. The Court assessed damages for breach of contract at $12,000 which reflected the chance of success in the new hearing and the likelihood he would have been accepted and have remained at the University in any event.

108. American cases have also adopted this principle. In Kansas City, M. & O.R. Co. v. Bell, 197 S.W. 322, the defendant delayed a shipment of pedigree hogs in breach of contract. The plaintiff recovered as damages the value of the chance to win the amount of the price he claimed he would have won at the stock show in which he missed entering his pigs. Boyce, J. discusses how the chance would be valued:

"Evidence as to all such matters as would tend to show the probability that the plaintiff would be successful in the competition would be admissible, and, as one of the judges in the English case says, it would then be left to the good sense of the jury trying the case to determine the value of the plaintiff's chance on the competition."

109. Similarly in Wactel v. National Alfalfa Journal Co., 176 N.W. 801, a contestant in a magazine subscription contest recovered the value of the chance to win where the defendant wrongfully declared the contest abandoned in the plaintiff's district.

110. More recent cases valuing the losses sustained in the breach of vacation contracts are further examples of the willingness of the courts to provide effective relief for the violation of private rights. See Jarvis v. Swans Tours Ltd., [1973] 1 All E.R. 71 (C.A.).

111. If the courts have not shied away from attempting to provide effective monetary relief for the violation of private rights, should the Ontario Labour Relations Board be any less sensitive when confronted with the intentional defiance of statutory policy? The answer must surely be in the negative unless this approach conflicts fundamentally with more important principles and we do not think this is the case.

112. A general damage award to all of the employees in the bargaining unit of the kind we have in mind, would not amount to the dictation of contract terms. Rather, it acknowledges that the wrong the Board is addressing is not the denial of a right to a particular collective agreement, but rather the right to bargain collectively in pursuit of such a contract. Thus, it is the prospects of the employees of increased earnings from the exercise of the trade union's bargaining capacity in negotiations which have been impaired by the employer's wrongful acts and refusal to engage in collective bargaining. It is therefore this "loss" — the bargaining expectancy — that must be assessed. Never having tried to value this loss, we are unable and unwilling to conclude that such losses cannot be established from relevant and statistically meaningful material available to the parties. The law of damages has recognized as probative the experience of others similarly employed and, with the plethora of collective bargaining data available to the parties, it would not seem rash to think that reasoned argument can be made on this issue too. Indeed, at least one American statute specifically provides for such an approach. See California Labor Relations Act of 1975, incorporated as Part 3.5 (sections 1.40 to 1166.3) of Division II of the California Labor Code. Also see

Yates, The "Make Whole" Remedy for Employer Refusal to Bargain: Early Experienced Under the California Agricultural Labor Relations Act (1978) 29 Lab.L.J. 666.

115. We are sensitive that too arbitrary an approach to this kind of monetary loss might have the effect of unduly burdening employers and, accordingly, we embark on this new direction with caution. However, if we make no effort to chart this course, employees and trade unions will continue always to bear the loss. The fear of over compensation, in many contexts, has all too often resulted in no compensation with iniquitous results. To a very real extent, bargaining orders simply direct an employer to do what was originally required except that by virtue of the unlawful conduct the employer may have weakened the bargaining position of the union and thereby strengthened his own position. If awarding employees compensation for economic losses established by reasonable proof has the incidental effect of making such misconduct less attractive, it would be unduly restrictive to rule out this more effective remedy because of the incidental deterrent effect. Clearly, the preamble to the Act demands this Board to devise a compensatory remedy where this is at all possible. See Note, The Need for Creative Orders Under Section 10(c) of the NLRA (1963), 112 U.Pa.L.Rev.69.

116. In Canada Cement Lafarge Ltd., sup ra, at paragraph 32 the Board noted that, while common law damage assessment principles provide helpful analogies, remedies had to draw their purpose from the Labour Relations Act and distinctive labour relations policy considerations. In this respect, the Board wrote:

Earlier in this opinion we said that compensation awarded under section 89 and the other remedial provisions should draw its purpose from the Labour Relations Act and the particular substantive provisions in issue. Principles of damage assessment developed in contract and tort law may provide useful analogies but, in the final analysis, labour law principles must prevail. Legal concepts such as "reasonable foreseeability", "causation" or "remoteness" all tend to reflect the aims of either contract law or tort law. When studied carefully, they amount to formulae by which loss and risk are allocated in light of what contract and tort law are trying to accomplish. In essence, they amount to policy determinations in particular cases. Professor Swinton, in her very learned article, has observed:

Fuller and Perdue, in their classic article "The Reliance Interest in Contract Damages", noted that it is just as important to decide where to stop in the enforcement of promises as it is to decide where to begin in that process. Should the defaulting promisor be required to compensate the promisee for all the losses caused by his failure to perform (leaving aside for the moment any debate over the flexibility of the concept of causation)? Or should he be protected to some degree from liability which could be a crushing burden out of all proportion to the benefit which he expected to receive under the contract?

Should the taxi driver who promises to deliver the business tycoon to his plane on time be liable for the loss of a lucrative deal because he gets tied up in a traffic jam? Should a manufacturer supplying substandard cloth to a company making shirts be liable for the loss of future orders from customers dissatisfied with the product?

Courts have had to make difficult decisions in assessing where to stop in the enforcement of contracts. They may purport to adhere to the general principle that the innocent party should be placed in the position in which he would have been had the contract been performed, yet invariably they invoke doctrines which place some limit on the defaulting party's liability; certainty, causation, mitigation, or foreseeability. The focus of this study is the last of these four doctrines, that of foreseeability.

And dealing specifically with the doctrine of foreseeability, she writes:

Even if the foreseeability rule is a justifiable one, its application in the courts has not always been satisfactory. This flows largely from the judicial failure to acknowledge that the "rule" is really little more than a statement of general principle. The decision to find certain types of losses foreseeable and not others is the result of a conscious policy decision to protect certain interests. Such decisions require elaboration and exploration, yet too frequently the application of the foreseeability rule is treated as an exercise in fact determination, and any efforts to elaborate reasons have focussed on an exegesis of the words in Hadley v. Baxendale. Judges and commentators have made valiant attempts to articulate the precise degree of foreseeability required in order that damages for breach of contract be compensable, yet the products of their efforts are frustrating in their abstraction. Canadian courts on the whole have tended to adopt the developments and elaborations in the English courts. Thus, resort has been made to the range of cases from Victoria Laundry to H. Parsons (Livestock) Ltd. v. Uttley Ingham Ltd., which have struggled with the meaning of damages expected "reasonably" to arise naturally or damages "reasonably" within the contemplation of the parties expected to arise as the "probable" result of the breach. Does this mean that a reasonable man must foresee that a loss was "likely to result," "liable to result," a "serious possibility," a "real danger" or "on the cards"? Do any of these tests really help in allocating loss? Lord Asquith 's efforts to explain Hadley v. Baxendale in the Victoria Laundry case caused some consternation in the House of Lords in the Heron II case, particularly with regard to the phrase "on the cards." As a result, the various Law Lords tried to elaborate their versions of foreseeability, with Lord Reid strenuously trying to avoid imposition of liability in contract law as wide as that in tort law and each of the judgements making an effort to describe the proper degree of foreseeability. Similarly, in the H. Parsons (Livestock) case, Lord Scarman tried to describe what would be a "serious possibility" at the time of contracting.

The striking characteristic of all of these judicial efforts to deal with the foreseeability test is their lack of practical assistance in determining whether any particular loss was or was not foreseeable "on the facts of this case." One has only to refer to the extensive discussion of the rule of foreseeability in damages in Reid's judgement in the Heron II case followed by an extremely brief and conclusory application to the facts of the case for a striking example. A strictly legal or mechanistic analysis of the rule is inadequate to aid in the determination of the proper scope of liability in a given case. Judges are not undertaking a factual determination on the basis of the rule (or rules) described above. They are making important determinations as to who should bear a loss which has resulted from the breach of a contract. In doing so, they may be adapting the concept of foreseeability at times to meet changing circumstances.

See Katherin Swinton, Foreseeability: Where Should The Award of Contract Damages Cease?, found in Reiter and Swan, Studies in Contract Law (1980).

Tort law's grappling over the years with economic loss is a classic illustration of how loss allocation principles are, in effect, policy determinations grounded in the purposes of a particular field of law. See Linden, Canadian Tort Law (1977), p.³⁶⁷. Labour law can be no different. Indeed, damage cases have already begun to emphasize distinctive labour relations policy considerations.

22. We have carefully reviewed the evidence and the able submissions of counsel and have concluded that the complainant and grievors sustained real and substantial losses as a result of the respondent's failure to disclose during bargaining that the Hamilton plant would be closed. The closing of the Hamilton plant and its impact on the affected employees could only have provoked an emotional response from all the other locals and employees participating in the negotiations. The effects of closing would have presented a strong psychological claim by Hamilton employees for support from their fellow trade unionists. As well, we think it very unlikely that a "standpat" response from the respondent would have been accepted by the locals given that the enriched severance pay proposal had been made during numerous previous rounds of bargaining. It is more likely than not that such a stance would have provoked a strike of employees. Furthermore, while a strike would have been difficult for the employees, the respondent would not have looked favourably on this prospect either. It wished a collective agreement quickly to maintain its own markets. Its competitors were commencing operations and would have been more than willing to service the respondent's customers. Nor would prolonged labour conflict have made its discussions with MacMillan Bloedel any easier. Finally, the closing of the Hamilton plant presented the respondent with some savings. There was the breakup value of the Hamilton plant and the fact that the three year labour settlement did not have to be applied to the Hamilton employees. The industry pattern on wages would not have been challenged by the complainant's claim for relief for the Hamilton employees and, therefore, being willing to take a strike in response to a demand in excess of the industry pattern does not tell a great deal about the respondents likely approach to the plant closing. We therefore find it more likely than not that the complainant would have achieved some greater relief for affected Hamilton employees than was contained in the collective agreement actually negotiated.

23. Assessing just how much additional relief, however, requires a review of a number of balancing factors. We think it entirely unlikely that a plant closing proposal in the order of six million dollars would have been achieved. The respondent would have been most reluctant to establish a pattern for future closings it could not afford or that would prevent it from achieving necessary adjustments. The industry pattern and this trade union's own history of dealing with plant closing issues would also have created a natural resistance in the respondent. If the six locals were forced to strike, employees would have had to incur considerable wage losses to achieve their aims. In the case of Hamilton employees, this result would have been self-defeating at least to some degree. Support by fellow employees at other locals would, over the course of a strike, depend on the reasonableness of the demands being made by Hamilton employees. Indeed, the support of the Quebec locals was not attested to before this Board and the statement made by Mr. Strickland to Mr. Holmes could cause one even to question the support that would be forthcoming from the Ontario locals. Also of relevance is the failure of the complainant to pursue an improvement to the existing provision. The new contract was for three years and, given the economic state of the industry, the prospect of a plant closing sometime during the three years could not be lightly ignored. The willingness of the locals to submit this prospect to the existing plant closure provision gives some indication of how they assess this type of event. Finally, there is the response of the Hamilton employees to the respondent's earlier attempt to put a pension plan in place. The claim for pension relief in the instant matter strikes one as belated enlightment and not particularly persuasive.

24. Balancing all these considerations, we find it more likely than not that negotiations on the plant closing would ultimately have focussed on improved severance payments and priority of hiring demands. We further find it more probable than not that the severance negotiations would have turned from the union's historical demand to a demand for equal treatment with the salaried staff. The severance entitlement of salaried staff would have constituted a natural internal bench mark as events after the announcement unfolded and questions were asked about the treatment to be accorded to other employees. On the other hand, the respondent would likely have taken the position that its policy in respect of non-unionized employees was based on its assessment of common law requirements and that the approach was not relevant to its unionized staff. Therefore, it would have resisted the demand and, thus, an additional complication would have been added to the complainant achieving the relief it sought. Assessing all of these considerations, we believe a discount of 75% should be applied to the difference between what a grievor actually recovered and what he or she would have recovered under the policy applied to non-bargaining unit employees. In other words, we assess the loss of the grievors at 25% of the difference between these two approaches to the closing and direct the respondent to pay this amount to each of the grievors.

25. We also find that it is more likely than not that the complainant would have achieved some form of access for Hamilton employees to new jobs at other Ontario locations of the respondent subject to the prior claim of employees laid off at these locations and awaiting recall. The Hamilton employees are long service employees specialized in the corrugated box industry. They have a strong interest in following the work from their plant and, therefore, in new jobs that might be created or subsequently arise at the remaining locations. Taking all these considerations into account and, subject to the prior recall rights of employees at other locations, we direct the respondent for a period of one year from the issuance of this decision to offer in order of seniority new positions at its other Ontario plants to those grievors who refrain from immediately taking the money benefit flowing from this decision and register their interest for job offers through the complainant with the respondent. Such grievors will also be accorded a three month training period on the acceptance of a job offer. Should a grievor not be able to perform the job after the training period, he will be paid his monetary entitlement under this decision on his termination. Furthermore, should a grievor take a job at another Ontario location of the respondent and is subsequently terminated for a reason other than his own conduct within a year of hiring, he shall be paid his monetary entitlement under this decision on termination. Grievors who obtain jobs will retain their past service only for the purposes of benefit entitlement and may not exercise such service on a competitive basis against employees with greater service at the new locations. All grievors who register an interest for priority of hiring at other Ontario plants of the respondent and who do not gain a job at these other plants during the one year period shall be paid their monetary entitlement under the decision at the expiration of the period. Any employee who registers an interest may, during the year period, elect to take his monetary entitlement under this decision and, in so doing, waives any further consideration for priority of hiring by the respondent.

26. Having regard to all of the circumstances and to the Board's policy of not awarding legal costs, no other remedy is warranted.

27. We retain jurisdiction to resolve all difficulties encountered in the implementation of the remedies and to determine specifically the monies owing each grievor should the parties be unable to agree on same.

DISSENTING OPINION OF BOARD MEMBER W. H. WIGHTMAN;

1. Having dissented on the earlier decision, I could only have joined with the majority in this matter had the decision been to award nominal damages in the amount of one dollar.

2. As with the earlier case, my first concern has to do with the practical implications of the decision for collective bargaining. While "equal treatment With the salaried staff" may be a convenient point of reference for the majority of the Board to use retrospectively, it should be noted that at the time of bargaining the treatment to be accorded salaried employees was not known to the union. If, to use the words of the majority in the earlier decision (para. 53), "the impending closing was so concrete and highly probable (at the time of bargaining that) the company had a minimum obligation to (disclose)", are we to take it from this decision that the company also had an obligation to make and disclose a firm decision as to the treatment which would prospectively be accorded salaried staff in order that the union might have a target at which to shoot? If so, would the company not have been tempted to offer a less generous target? As one of its "signals" to the labour/management community is it the wish of the Board to signal that, as a matter of public policy, we encourage less generous treatment of persons who do not come under the ambit of the collective agreement or, in some cases, the Labour Relations Act?

3. As was pointed out by counsel for the respondent, salaried employees come under a different legal regime. They have not erected barriers such as to prevent the movement and integration of affected employees to other company locations as have the several bargaining units. Over the years they "negotiated" one-on-one with the company on the basis of their individual merit as opposed to collective clout and are entitled to expect no less than that the company would bear this in mind in determining their terms of separation. The company appears to have done this and, in so doing, has merely indicated it sees no compelling reason to equate those whose salary and other benefit improvements over the years were based on merit should be equated with those who choose to extract their gains on the basis of threats of economic sanctions.

4. This matter illustrates differences between theoretical models of collective bargaining and the actual process. Those who choose to be represented collectively in dealings with their employer must recognize the limitations inherent in the process. One of those limitations is considerable inflexibility in terms of rewarding individual merit. Instead, by its very nature, collective bargaining puts a premium on mediocrity as the price for collective power.

5. The bargaining process is not a search for truth or equity nor can its essential nature, that of a test of relative economic strength, be altered to any significant degree. It persists because people who believe in democratic principles cannot conceive that a society presuming to describe itself as democratic would not allow for collective withdrawal of services in support of interest claims in at least some sectors of the economy and under defined circumstances.

6. Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577 and the instant case represent attempts to alter that essential nature of collective bargaining. However, one suspects that the result will be not unlike the Employment Standards Act provisions regarding group lay-offs which have encouraged employers in some sectors to give periodic notices of lay-off as a matter of routine. This is done as a safeguard against the increased severance pay for which they would be liable. One suspects that this decision may lead to an added step in the negotiation ritual. It will consist of routine notice to the union at the commencement of negotiations to the effect that the plant "may close or suffer a substantial lay-off during the term of our next agreement". I describe the notice in these terms because the possibility of business reversals is inherent in any economic system and implicit in negotiations with unions, suppliers, shareowners or anyone else with whom any business deals.

7. Such disclosure will, I suspect be treated with no more gravity than when, on a number of occasions, the company attempted to inject economic realities into its dealings with this union. Not only did the union treat such information and the issue of severance pay provisions with disdain, it went to some lengths to frustrate the company effort to provide a pension plan. It is stating the obvious to argue that the authors of so much of this misfortune were the union negotiators.

8. I cannot conclude without reflecting on the "I'm alright Jack" attitude in the approach taken by the union in negotiating plant seniority clauses which effectively bar the movement of long service employees from one plant to another except at the price of relinquishing all their seniority rights. By way of contrast, I would point to the recent Board decision in Dufferin Concrete Products, [1983] OLRB Rep. Dec. 2014. That case involved two separate locals of the same union. As a result of a business decision to merge operations, one of the two locals disappeared. At a higher level of the union organization it was decided that members with ten or more years of service at the operation which was closing would merge into the seniority list at the continuing operation. This "formula" may have been arbitrary. It was in the eyes of some members with less seniority who brought charges against the union. Nevertheless, the decision suggested that the union considered that its responsibility to its membership was to be viewed at both a local level as well as in a broader regional or national context.

9. Surely a union representing employees in an ailing industry and faced with the prospect of plant closures would see it as part of its duty of fair representation to attempt to make special provision for long service employees in multi-plant operations. It seems unreasonable to me that responsibility should rest solely with employers (as imposed by legislation or negotiated provisions) and the community (as reflected in tax-supported programs such as transitional adjustment payments, relocation allowances and unemployment insurance benefits).

10. The award falls short of the estimated $6.7 million demanded by the union, and justifiably so in light of the union's conduct, but linked as it is to a formula which would not have been known to the Company (even if they had known of an obligation to disclose) I fail to see the justice to the Company. Nor do I see it making a positive contribution to labour/management relations in the future.

11. I would have awarded nominal damages.