Ontario Labour Relations Board

[1984] OLRB Rep. March 443

2498-83-U Labourers' International Union of North America, Local 183, Complain­ant, v. Curtis Property Management Ltd., Respondent

BEFORE: Kevin M. Burkett, Alternate Chairman and Board Members F. W. Murray and B.

L. Armstrong.

APPEARANCES: Roger Aveling for the applicant; Z. Tress, G. Mintzberg and M. Contini for the respondent.

DECISION OF THE BOARD; March 27, 1984

1. This is a complaint filed under section 89 of the Labour Relations Act alleging a violation of sections 15, 64, 66 and 79 of the Act. Section 79 was not relied upon before the Board and there is no evidence of a "freeze" violation.

The facts, as proven in evidence, are as follows:

— The purchase by Curtis Property Management of two adjacent apart­ment buildings at 221 and 265 Balliol Street, Toronto, closed on June 27, 1983. Curtis owns four other apartment buildings in Metropolitan Toronto.

— Mr. G. Mintzberg was hired as general manager of Curtis Property Management effective July 1, 1983.

— Mr. Mintzberg commenced a review of all facets of Curtis' business at that time. He met with the resident superintendents of the build­ings on Balliol Street in early July, informed them that "everything about the buildings was going under review", and indicated that no one's job was guaranteed.

— Mr. Tress, the president of Curtis, suggested to Mr. Mintzberg in late July that the feasibility of using contractors to clean and maintain its properties be explored. Mr. Mintzberg testified that other aspects of the general review took precedence and coupled with Jewish holidays prevented the company from obtaining quotes until October and November.

— The complainant trade union was certified as bargaining agent for the employees of Curtis at 221 and 265 Balliol Street on September 15, 1983. Notice to bargain was sent to the company on September 26, 1983.

— Curtis received the notice to bargain on October 3, 1983 and Mr. Mintzberg notified Mr. Tony Spada, the union business representa­tive, that the company was in the process of moving its offices and would be unavailable to meet for "a couple of weeks." Mr. Spada said he understood but applied for conciliation services which were granted on October 19, 1983. Mr. Mintzberg and Mr. Spada did not speak between October 3rd and October 19th.

— The parties met to bargain on November 15, 1983. The company re­ceived the union's proposals for a collective agreement and arrange­ments were made to meet again in mid-January.

— Curtis received quotations from two outside cleaning firms. M. S. Maintenance Systems Inc. quoted an all-inclusive price of $3,600 per month to clean the two Balloil Street apartment buildings. It was costing Curtis $4,700 per month (including labour supplies and ma­terials) to clean these buildings.

— Curtis notified the union by letter dated December 20, 1983 of its decision to contract out the cleaning work at the two Balloil Street buildings. The letter reads:

As you may be aware, our company purchased the building at 221 and 265 Balliol Street just prior to the Application for Cert­ification brought by your union. Since the time of our acquisi­tion, we have been reviewing the manner in which these buildings have been operated and managed and have been considering changes which might improve efficiencies in this regard.

Our analysis indicates that our present cleaning costs for the two buildings are between $4,400.00 and $4,600.00 per month. On the other hand we have been advised by an outside contractor that we can get the same cleaning work done for both buildings for $3,650.00 per month.

As a result, we have decided to contract this cleaning work out.

Because of its significance, we wished to bring this matter to your attention prior to our meeting scheduled for January.

— Mr. Spada, who was on vacation during the latter part of December, did not respond to this letter. No one from the complainant union responded. The affected employees were given notice of termination dated January 27, 1984 with the last one to be effective March 23, 1984.

— Curtis decided not to utilize cleaning contractors at its other prop­erties explaining that it would have been required to maintain in its employ the assistant superintendents who work at these other build­ings (and provide relief for the resident superintendent) even if con­tractors were employed. There are no assistant superintendents at either of the Balliol Street buildings. Because the Balliol Street build­ings are adjacent to one another and because there is an office staffed by a clerical employee in one of these buildings (who receives and records the rental payments; a function performed by the resident su­perintendent at Curtis' other premises) the resident superintendents at the Balliol Street buildings are able to cover for one another.

— Curtis tabled a proposed collective agreement at the negotiation meet­ing presided over by a provincial mediator on January 15, 1984. The parties agreed on the wage rate for the resident superintendent and the union asked for the lOC per hour which the company had des­ignated for Welfare to be put on the wage rate for cleaners. There had been no discussion with respect to the letter of December 20th notifying the union of the company's intention to contract out.

— During the course of the discussions with respect to the wage rate for cleaners, the company reiterated its intention to contract out its cleaning. Mr. Spada, who testified that he had taken from the fact that a wage rate had been proposed by the company for cleaners that the company intended to continue to employ its own cleaners and not contract out, advised the company that the union would be initiating legal proceedings and walked out of the negotiations.

— Mr. Mintzberg testified that the company was surprised when the union did not respond to its letter of December 20, 1983 advising of its intention to contract out the cleaning work. He maintained that the company proposed a wage rate for cleaners because it thought that the collective agreement had to have a rate for each function in the buildings. He maintained further that the proposed wage rate for cleaners was not intended to constitute an abandonment of its right to contract out.

— This complaint was filed on January 31, 1984 and there has been no bargaining since January 19, 1984.

3. The union, citing Westinghouse Canada Inc., [1982] OLRB Rep. July 1098 and Sunnycrest Nursing Homes, [1982] OLRB Rep. Feb. 261, argues that there was a duty on the company under section 15 of the Act to have been honest with the union with respect to its intention to contract out and not to have tabled "notional wage rates" designed to mislead the union. Furthermore, it is the position of the union that the company w~s required to fully discuss its decision to contract out and its failure to do so constitutes a breach of section 15. Although acknowledging that there is no direct evidence of anti-union motive, the union main­tains that it must be inferred from the evidence that the decision of the company to contact out was motivated by a desire to operate union free or, at the very least, to pay lower wage rates for cleaners than those which it would be required to pay under a collective agreement. The union relies on Westinghouse Canada Inc., supra, in support of the proposition that if the decision to contract out was even partly motivated or "tainted" by anti-union consider­ations the implementation of the decision constitutes a breach of sections 64 and 66 of the Act. The union seeks the remedial relief granted in re Sunnycrest Nursing Homes, supra, that is, reinstatement, an order to return to the bargaining table, the termination of the sub-contract and compensation.

4. The company, relying on the sequence of events as established in evidence, asks the Board to find that there has been no breach of section 15 of the Act. The company points to the letter of December 20, 1983, from Mr. Mintzberg to the union, advising the union of its decision to contract out as constituting timely and complete notice to the union of its in­tention. The company maintains that from this point forward the onus was on the union to raise the matter if clarification or discussion was sought. The company disputes that in cir­cumstances where a written notice is provided the tabling of a wage schedule can be char­acterized as an undertaking not to contract out or as an attempt to mislead. In the face of the full and complete proposal tabled by the company on January 19th the subsequent resolution of most of the items in dispute, the preparedness of the company to enter into a collective agreement on that date and the break off of its negotiations by Mr. Spada, the company argues that there has been no breach of section 15 of the Act.

5. The company, also relying on the sequence of events as established in evidence, asks the Board to find that there was no anti-union motive in its decision to contract out. The company argues that it was to be expected that it would review its operations at 221 and 265 Balliol Street immediately after having purchased the properties on June 27th especially in view of the fact that it hired a new general manager at the same time. The company reminds us that the affected employees were told in early July (some two months before the union filed its application for certification) that there was no guarantee of continued job security so that the timing of the company's decision is not suspicious. The company maintains that there was a significant cost saving to it (over $1,000 per month) in going to contract cleaners and asks the Board to find its motive was purely economic. The company asks the Board not to confuse this case, where there was full disclosure, with the cases relied on by the union where there was no disclosure of an intention to contract out.

6. We have been persuaded by the submissions of the company. Turning to the issue of anti-union motive. The company, having purchased the properties at 221 and 265 Balliol on June 27, 1983, and having employed a new general manager at the same time, commenced to review those operations in early July, well before the union arrived on the scene. The ad­vice to the employees at that time, therefore, that their job security was not guaranteed, had nothing to do with the advent of the union. The events which subsequently unfolded must be assessed in light of the review that was commenced in July and the notice to employees given at that time. The ultimate decision to contract out resulted in substantial savings to the com­pany; consistent with the objective of the overall review of operations commenced in July. Furthermore, the explanation given by Mr. Mintzberg as to why contractors were retained to clean the Balliol Street buildings and not retained at its other properties is credible. This case is to be contrasted with both the Westinghouse Canada Inc. and Sunnycrest Nursing Homes cases, supra, where the employer failed to disclose his intentions. In this case the company advised the union by letter dated December 20, 1983 of its decision and, as we shall elaborate on later, was prepared to negotiate on this issue and to enter into a collective agreement. Al­though the timing of the receipt of quotations from contractors, as distinct from the decision to consider contracting out as an alternative, standing alone is suspicious, we have been sat­isfied on all the evidence that the decision of the company to contract out was not made for anti-union reasons and, therefore, is not in breach of the Act.

7. The union is correct when it asserts that there is a duty on an employer under sec­tion 15 of the Act to reveal at bargaining decisions that have been made that may affect the job security of those in the bargaining unit. However, the company advised the union by letter dated December 20, 1983 of its intention to contract out the cleaning at the 221 and 265 Bal­liol Street buildings. This letter satisfied the requirement to disclose and in the face of that notice the tabling of wage rates for cleaners cannot be seen as an attempt by the company to mislead. It was incumbent upon the union to seek clarification of that notice, if clarification was required, and to fashion an appropriate bargaining response to deal with it. The evidence discloses that the company was prepared to bargain and to conclude a collective agreement on the basis of the terms that were being discussed and that the negotiations terminated when Mr. Spada walked out after being informed that the company remained firm in its intention to contract out. In these circumstances, we are unable to find that the company has breached its duty to bargain in good faith and make every effort to conclude a collective agreement. The bargaining process has been suspended in mid step and it now remains for the parties to return to the bargaining table to complete the process.

8. Having regard to all of the foregoing this complaint is hereby dismissed.