United Food and Commercial Workers International Union v. Manuel DaSilva Foods Ltd., 1984 CanLII 976

[1984] OLRB Rep. June 834

2899-83-U United Food and Commercial Workers International Union, AEL, CLO, CLC, Complainant, v. Manuel DaSilva Foods Ltd., Respondent, v. Canadian Union of Restaurant and Related Employees, Hotel Employees and Restaurant Employees Union AFL-CIO-CLC, Local 88, Intervener

BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members B. L. Armstrong and D. Blair.

APPEARANCES: M. Levinson and Kevin Corporan for the complainant; Bruce Pollock, Ken Ottenbreit and Frank Charron for the respondent; Liana Turrin and Jim Whyte for the intervener.

DECISION OF THE BOARD; June 20, 1984

I

1. This is a complaint under section 89 of the Labour Relations Act alleging a breach of section 79(2) of the Act. The complainant alleges that the respondent has unlawfully altered certain "privileges" or duties of some of its employees, while the complainant's certification application is pending before the Board. In particular, the complainant contends that:

(a) employees were informed that they would have to give notice in writing two weeks in advance if they required time off or wished to change shifts when previously they had been able to do so verbally and without any requirement of advance notice;

(b) employees were told that one Saturday morning every month they would be required to attend a staff meeting when such mandatory Saturday morning meetings had not previously been required; and

(c) the employees were told that they must ask permission to go to the washroom when previously, they had simply been able to have another employee cover for them.

Section 79 of the Act reads as follows:

79.-( 1) Where notice has been given under section 14 or section 53 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,

(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and,

(i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or

(ii) fourteen days have elapsed after the Minister has released to the parties a notice that he does not consider it advisable to appoint a conciliation board,

as the case may be; or

(b) until the right of the trade union to represent the employees has been terminated,

whichever occurs first.

(2) Where a trade union has applied for certification and notice thereof from the Board has been received by the employer, the employer shall not, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty of the employer or the employees until,

(a) the trade union has given notice under section 14, in which case subsection (1) applies; or

(b) the application for certification by the trade union is dismissed or terminated by the Board or withdrawn by the trade union.

(3) Where notice has been given under section 53 and no collective agreement is in operation, any difference between the parties as to whether or not subsection (1) of this section was complied with may be referred to arbitration by either of the parties as if the collective agreement was still in operation and section 44 applies with necessary modifications thereto.

2. A hearing in this matter was held in Toronto on April 10, 1984. At that hearing, the Board made certain oral rulings, with reasons, which at the request of the parties it undertook to reduce to writing. Following the hearing, but before the issuance of those written reasons, the employer and the intervener both wrote to the Board to request reconsideration. The requests for reconsideration substantially repeated the representations made at the hearing. Before dealing with those submissions, however, it may be useful to identify the parties in this matter and the context in which the present proceeding arises.

II

3. The complainant is the United Food and Commercial Workers International Union (UFCW). The complaint names L. DeSousa Enterprises Ltd as the respondent employer. The respondent employer's reply, however, identifies the correct name of the respondent as "Swiss Chalet Employers Association on behalf of its member Manuel DaSilva Foods Ltd.". In the intervention, the intervener describes itself as the Canadian Union of Restaurant and Related Employees, Hotel Employees and Restaurant Employees Union AFL-CIO-CLC, Local 88 and asserts that it represents the employees of the respondent (which again is listed as L. DeSousa Enterprises Ltd.) by virtue of a collective agreement between the Swiss Chalet Employers Association and the Canadian Union of Restaurant and Related Employees. It is a matter of record that, until recently, the Canadian Union of Restaurant and Related Employees, (CURRE) and the Hotel Employees and Restaurant Employees Union (HERE) were two separate and unrelated entities which have appeared from time to time in proceedings before the Board. It was evident to the Board, therefore, that its first task was to sort out the identity of the respondent employer and the correct name of the union which purports to be their current bargaining agent. That is the first question which the Board raised at the hearing.

4. Counsel for the respondent advised the Board that L. DeSousa Enterprises Ltd. should be deleted from the style of cause and Manuel DaSilva Foods Ltd. substituted as the proper and only employer respondent. Counsel explained that Manuel DaSilva Foods Ltd. is a successor franchisee to L. DeSousa Enterprises Ltd. The latter is no longer the employer of the employees affected by this complaint. Although Manuel DaSilva Foods Ltd. is also a member of the Swiss Chalet Employers Association, counsel advised that for the purposes of this proceeding, the Association, as such, should not be treated as the respondent employer. Nor did it seek status as a party.

5. The intervener's request for reconsideration (drafted by different counsel than appeared at the hearing) mentions an entity known as "Foodcorp" which apparently is the p franchisor of the Swiss Chalet outlet run by the respondent Manuel DaSilva Foods Ltd. "Foodcorp" does not appear in any of the pleadings filed. It was not named as an entity with an interest in these proceedings nor did it seek to intervene. It is not a party and does not seek to become one — regardless of any commercial interest it may have in the fate of one of its

franchises. The reference in the intervener's letter is an error — arising, no doubt, because there are other proceedings involving the applicant and intervener which do involve Foodcorp. It was to avoid such errors that the Board sought first to ascertain the proper parties in this case.

6. There are certain other matters which are not substantially in dispute. On February

17, 1984, the UFCW applied for certification as the bargaining agent for the employees of the respondent employer. That application (Board File No. 2686-83-R) is currently pending before the Board. It is one of a series of similar applications respecting various "Swiss Chalet" outlets in Ontario. At the present time, these applications have not been dismissed or terminated. There are ongoing hearings respecting a series of issues (see infra) which are common to all of these applications.

7. These cases are not before this panel of the Board, but in order to appreciate the argument of the respondent and intervener in this proceeding, it is necessary to briefly advert to some of the issues which the other panel will have to decide.

III

8. For many years CURRE has been the bargaining agent for the employees of various Swiss Chalet outlets in Ontario. On a number of occasions it has been certified by this Board. Those decisions and certificates are a matter of record. Tb'~ respondent runs one of the Swiss Chalet restaurants where the employees are represented by .URRE. The most recent collective agreement purporting to bind the employees of the respondent was negotiated between CURRE and the Swiss Chalet Employers Association of which the respondent is now a member. That collective agreement, by its terms, does not expire until November, 1984.

9. The intervener, in its present name and form, results from a purported merger of CURRE and the Hotel Employees and Restaurant Employees Union — an International union also recognized by this Board and representing employees in a variety of business establishments throughout Ontario. The intervener submits that as a result of this merger, it is the successor of CURRE and has "inherited" the CURRE collective agreement. That collective agreement, it is said, binds the employees of the respondent and bars the UFC W's certification application. Section 5(4) of the Act provides that where there is a subsisting collective bargaining relationship and collective agreement, a "raiding" union like the UFCW, may only seek certification during the last two months of that agreement. If the agreement with CURRE is a valid collective agreement, the UFCW's certification application in February is untimely because it has not been made during the two month "open period" prescribed by the Act.

10. The UFCW's position in the certification application is that there is no valid and subsisting collective agreement which would hinder its bid to represent the respondent's employees. The UFCW argues that CURRE was not an independent representative of the employees, but rather a "company union" which was the recipient of employer support. The UFCW relies on section 48 of the Act which read as follows:

11. An agreement between an employer or an employers' organization and a trade union shall be deemed not to be a collective agreement for the purposes of the Act,

(a) if an employer or an employers' organization participated in the formation or administration of the trade union or if an employer or an employers' organization contributed financial or other support to the trade union...

The UFCW's position is that the purported agreement with CURRE is a nullity and cannot be an impediment should a majority of the respondent's employees seek to be represented by another union. There is no open period" or raiding period restriction. A certification application can be made any time. The UFCW also contests the validity of the merger between CURRE and the Hotel Employees and Restaurant Employees Union.

11. We do not have to make any determination with respect to any of these issues —at least, not at this stage. They will eventually be determined by another panel of the Board. We need only observe that the arguments raised by the UFCW are not patently frivolous, nor without legal foundation — assuming, of course, that it is able to establish the requisite evidentiary basis for them. Those allegations may or may not be substantiated on the evidence, but they are nevertheless substantive. That is why the Board has scheduled a series of hearings to entertain the parties' evidence and representations, and that is why as new certification applications have been filed, they have been consolidated with those already before the Board. If the agreement between CURRE and the Swiss Chalet Employers Association is void, it may affect the timeliness of all of the certification applications and the ability of the intervener to assert its position as the employees' established bargaining agent. These issues, although as yet unresolved, are an important part of the background of this case and put the arguments raised here in perspective.

IV

12. In the instant case, the respondent and the intervener union both take the position that the Board should not enquire into the UFCW's allegation that there has been a breach of the section 79(2) freeze. The respondent argues that section 79(2) has no application where there is an incumbent union and a subsisting collective agreement. To hold otherwise, it is said, would impair the exclusive bargaining rights of the incumbent and intrude upon an established bargaining relationship. The respondent contends that it should not have to deal with two purported representatives of its employees, nor should it have to accede to a restriction of management rights which are not otherwise curtailed by its current collective agreement with the intervener. It would follow from this submission, of course, that despite a pending certification application (and subject perhaps to section 64 of the Act), the respondent could unilaterally alter any aspect of the employment relationship not specifically regulated by the collective agreement and, with the concurrence of the intervener, could even change wages or working conditions expressly spelled out in that agreement. The freeze would be confined to situations in which the employees were not already organized. On a "raid" there would be no obligation to preserve the status quo pending the outcome of the case before the Board.

13. In the alternative, the respondent and intervener submit that section 79(2) of the Act should not apply and/or the Board should not inquire into this complaint because the complainant union's certification application bid is untimely on its face. In their submission, a certification application which does not ex facie meet the timeliness requirements of section 5(4) of the Act cannot trigger the section 7 9(2) freeze and the Board should not entertain this complaint until the timeliness question has been resolved.

14. Finally, the respondent employer and the intervener assert that the collective bargaining relationship — that is, the "status quo" for the purposes of the statutory freeze — is

determined solely by the subsisting collective agreement between them. If there has been a failure to comply with that agreement (which the respondent denies), it is a proper matter for a grievance and arbitration in accordance with the terms of the agreement. The respondent and the intervener argue that their collective agreement is valid until the Board otherwise declares, and that the Board should defer to the grievance-arbitration process which has been established to resolve disputes concerning its interpretation or administration.

15. The position of the complainant UFCW is also fairly straightforward. The UFCW relies on the strict wording of section 79(2). There is an application for certification currently pending before the Board. It has not been dismissed or terminated. It may be that its application for certification ultimately turns out to be untimely. It may be dismissed for other reasons. But while it is pending before the Board, the section 79(2) freeze applies. The section does not distinguish between certification applications where there is an incumbent bargaining agent and those where there is not. The Board has no jurisdiction to decline to enforce the section 79(2) freeze. It cannot disregard the allegation that entrenched employee privileges have been denied or duties altered. The UFCW asks rhetorically: why should statutory rights be prejudiced because the respondent's employees may be temporarily represented by another bargaining agent — particularly when it remains an open question whether there is even a bonafide collective agreement applicable to them? It is the UFCW's rights as an applicant union that are at issue under section 79(2) and such rights will not necessarily (although here they are) be coincident with the interests of employees in the bargaining unit. Having met the terms of section 79(2), the UFCW argues that the Board is obligated to entertain this complaint.

16. The UFCW further points out that the language of section 79(2) goes beyond wages or the strict terms and conditions of employment spelled out in a collective agreement —assuming that there is one. It encompasses established employee rights, '~privilege" and duties which may not be dealt with in the agreement at all, but which are nevertheless frozen by section 79(2) until the certification application has been disposed of. The use of the term ~privilege" in itself connotes a benefit or concession which the employees are accustomed to receiving but which is not an enforceable legal right. Nor is there anything particularly unusual about ascertaining the terms of the employment relationship on the basis of established practice rather than some written document. In the case of an unorganized employer (to which section 79(2) also applies) there would be no collective agreement at all. The incidents of the employment relationship would probably have to be determined entirely by the existing practices. It is this overall pattern, or status quo, which the union asserts must be maintained — not just the terms of the relationship spelled out in the agreement.

V

17. We have considered the submissions of counsel and, on balance, prefer the view enunciated by the U FCW. The purpose of section 79(2) is to preserve the established framework of the employment relationship — including privileges — until an applicant union's certification application has been disposed of. It maintains the status quo while representation questions are being resolved and is intended, primarily, to protect the position of an applicant union. We see no basis for the submission that some certification applications trigger the freeze while others do not. If the Legislature had intended to exempt displacement applications from the ambit of section 79(2), appropriate language could easily have been included to effect that purpose. No such language is present and from a policy point of view, we see no sound basis for distinguishing between unorganized situations where the status quo must be maintained and "raids" where, it is said, the situation can fluctuate. If stability is a desirable objective, it is equally desirable in both situations. In our view, once the terms of the section have been met, the freeze is triggered. (We leave aside for now, whether there actually has been any change in circumstances which could arguably amount to a breach of section 79(2).)

18. We do not think there is any special significance to the ~timeliness" question raised in the certification application. It is but one of many issues which might have to be determined (trade union status is another) and which might result in its dismissal if there is a ruling adverse to the applicant union. That is a matter to be determined by the panel seized with the certification application. We do not think we would be warranted in assuming the outcome one way or the other. Nor is it necessary. All that is required to trigger section 79(2) is an application for certification.

19. There may be cases which are absurd on their face or amount to an abuse of process so that the Board would exercise its discretion under section 89 not to inquire into them. We are not persuaded this is such a case. The questions raised on the certification application(s) are not frivolous or without an arguable legal basis. Similarly, the present complaint discloses at least an arguable (if perhaps innocent) breach of section 79 of the Act. We also note parenthetically that it would be a curious result if it turns out that there is no valid collective agreement and also that there is no statutory freeze to prevent the alteration of the terms and conditions of employment while the case is before the Board.

20. We are not persuaded that the Board should defer this question to arbitration. In the first place, what we are dealing with here are statutory rights under section 79(2), not, strictly speaking, contractual rights under the collective agreement. Moreover, those rights are being asserted by the UFCW, which is not a party to that collective agreement, which is not in a position to invoke the grievance procedure or influence the process by which any grievance might proceed to arbitration and which probably has no status to participate in the arbitration proceeding. By the time of the hearing, CURRE had not even filed a grievance on the employees' behalf, nor was it able to identify or articulate any contractual basis for doing so. In our view, it would he inappropriate to defer a claim by the UFCW based upon an alleged statutory violation to a private forum where the UFCW's status is uncertain and which is controlled by the employer and the intervener — both parties adverse in interest to the UFCW in the certification proceeding which triggered the freeze in the first place. Why should the complainant have to depend upon them for its remedy? We also note that section 79(3) contemplates an arbitration option for the resolution of freeze questions arising under section 79(I) and there is no similar procedure contemplated in respect of alleged breaches of section 79(2). The wording of section 79(3), by implication, suggests that section 79(2) questions should be resolved by this Board.

21. In any event, it is by no means clear that arbitration could provide an effective remedy to the complainant in this case or that the alleged alteration of employee duties and privileges would even be an arbitrable matter. The respondent does not concede that its actions constitute a breach of the collective agreement and, when asked by the Board, the intervener could not point to any specific clause upon which a grievance could be based. The only suggestion was that the intervener could wait until an individual defied the employer and was disciplined —for example, by refusing to attend one of the allegedly mandatory Saturday morning staff meetings. The reasonableness of the employer's position might then be raised, indirectly, in a grievance alleging that the employee had been disciplined without just cause. But why should an employee have to put her job in jeopardy to test the propriety of a change in circumstances to which section 79(2) of the Act might apply?

22. In its request for reconsideration, counsel for the respondent objects to this suggestion which, he says, came from the Board. But it was not the Board that suggested that employees might have to put their jobs on the line in order to test the propriety of the employer's position. It was the intervener, their bargaining agent. If respondent counsel's submission is that this is not the most appropriate way to resolve the issues raised in this case, we agree with him.

23. As of the date of the hearing, no grievance had in fact been filed. The collective agreement was not filed with the Board either, although the intervener had the opportunity to do so. And, as we have already noted, section 79(2) of the Act, by its terms, is broader than the terms of the collective agreement because it extends to employee privileges which may not be covered by the agreement at all. The UFCW does not rely upon there being a specific breach of the agreement but asserts that, in any event, there has been an unlawful alteration of the status quo "frozen" by section 79(2). In the UFCW's submission the terms of the purported agreement do not apply to the conduct here in question, and, in any event, there is no valid agreement upon which a claim could be founded.

24. In all the circumstances, we are not prepared to defer to arbitration in a case such as this or to leave the UFCW's claim to the protection of the statute to a process controlled by parties adverse in interest.

25. It may be that while the certification application is pending, the respondent and the intervener will have to reckon with the UFCW and conduct themselves in a manner consistent with the requirements of section 79(2). But we do not think the requirement to preserve the status quo significantly impairs the established collective bargaining relationship or undermines the incumbent union's status as the employees' exclusive bargaining agent. It is, after all, merely an injunction to carry on business as usual. (See: Spar Aerospace Products Limited, [1978] OLRB Rep. Sept. 859.) It does not paralyze an employer's operation or prevent the intervener from representing the employees, policing the agreement, or seeking to rectify employee grievances or complaints — whether or not such complaints might technically constitute a breach of the agreement. If there is some friction and uncertainty it results because the same statute which creates the intervener's exclusive bargaining agency also permits a challenge by another union and preserves the status quo while that challenge is being resolved by the Board. And, of course, at this point, we do not have to decide the precise content of the status quo (i.e. what is frozen) and whether there has in fact been a contravention of section 79(2).

VI

26. We turn then to the status of the intervener to participate in the present proceeding.

27. The UFCW claims that the intervener has no legal interest which warrants its participation. The fact that it may be the employees' collective bargaining agent and their exclusive representative in bargaining matters does not make it the custodian of rights under the Act, enforceable at the instance of the UFCW and incidentally affecting those employees. The intervener claims that as the incumbent union and the employees' bargaining agent it has an automatic right to participate.

28. For the purpose of this decision, we are prepared to assume that the intervener represents the respondent's employees for collective bargaining purposes and that until the Board otherwise declares there is a subsisting collective agreement between the respondent and the intervener. What is at issue here, however, are statutory rights under section 79(2) and the question is: does the intervener have a sufficient legal interest in the prosecution or result of this case to warrant participation in the proceeding?

29. Now, clearly, the intervener has an "interest" in the outcome of this proceeding if that term is used in a colloquial sense. If successful, the UFCW may be able to claim credit for restoring certain employee privileges thereby giving a "boost" to its organizing campaign. That, in fact, is how the intervener characterized the purpose of this proceeding in its reply. But suppose the UFCW is successful and, therefore, is able to claim credit for enforcing section 79(2) of the Act. Is that a sufficient interest to warrant granting the intervener status to participate in this proceeding? We do not think so. It is a commercial or incidental interest rather than a legal one. See Napev Construction Limited et al., [1976] OLRB Rep. March 109, application for judicial review, dismissed 1977.) It is a matter of tactics, saving face or sharing credit, rather than a legal interest in the proceeding which justifies participation as a party.

30. There are no allegations of misconduct against the intervener. The alleged breach of section 79(2) does not involve any actions taken by the intervener. The intervener's character or conduct are not in issue. No remedy is sought against the intervener. The intervener could not point to anything in its collective agreement which could be altered by the outcome of this proceeding. The complainant seeks no such remedy. The collective agreement will remain intact. This proceeding does not prevent the intervener from carrying out its responsibilities as the employees' bargaining agent, or from seeking to address their concerns through the grievance procedure or otherwise — whether or not such complaints are specifically dealt with in the collective agreement.

31. The intervener does not oppose the remedy sought by the UFCW (i.e., a return to the alleged status quo ante). Counsel told the Board that the intervener would be quite content with a restoration of these purported employee privileges. Indeed, while she was unable to articulate any contractual basis for a grievance to require the employer to restore the status quo, she told the Board that the intervener was investigating to see what could be done to meet the employees' concerns. On this branch of the case, the intervener did not align itself in interest with the employer, did not deny the UFCW's factual allegations, and, we repeat, was not opposed to the remedy sought by the UFCW. But if the intervener's conduct is not in issue and it neither opposes nor is directly affected by the proposed remedy, what is the basis for its assertion of a "right" to participate, call evidence, and cross-examine witnesses? In all the circumstances, the Board ruled at the initial hearing that CURRE did not have status to intervene.

32. The Board is prepared to reconsider this aspect of its ruling. Not only is this largely a case of first impression, but also it arises in connection with a parallel certification proceeding between the parties in which the intervener unquestionably has status. The intervener is not a stranger to the employer-employee relationship which is central to both proceedings. It is the employees' statutory bargaining agent with the right to represent their interests in collective bargaining matters until the Board otherwise declares. While at this stage it has difficulty enunciating or establishing an interest which would justify its active intervention, it may still be premature to deny it status altogether — even if, in the result, it takes no active position and merely holds "a watching brief'. It would be unfortunate if, as the case unfolded, a concern did crystallize prompting a delay to give the intervener notice, or perhaps even a hearing de novo. In situations such as this, the rights of the bargaining agent should probably receive a generous construction. And if the intervener was unable to clearly establish its potential prejudice, neither was the UFCW able to establish its prejudice should the intervener be permitted to take part in this proceeding. Its tactical concerns are just as irrelevant as those of the intervener. Moreover, such concerns on both sides are minimized by the Board's practice of giving full written reasons for its decisions reviewing the facts and the arguments put forward.

33. In summary then:

34. The Board is satisfied that it should proceed to hear this matter and determine whether there has been a breach of section 79(2) of the Act.

35. The Board is not satisfied that it should refuse to hear the case or defer to arbitration.

36. The Board has some doubt whether, at this stage the intervener has demonstrated a sufficient legal interest in this proceeding to warrant granting it status to participate, the Board is nevertheless prepared to permit such participation.

VII

34. While the Board has ruled that it is prepared to hear this matter, on its merits, this should not be construed as any prejudgment of those merits, nor should it dissuade the parties from their continuing efforts to settle this case without resort to further litigation. It may be that, with a little effort, the parties can amicably resolve the matters in dispute between them without resort to a further hearing. The intervener submitted, however, that there should be no such settlement discussions because any attempt to reach a settlement which will be satisfactory to the UFCW, and the respondent, would involve a breach of section 67 of the Act. We do not agree. The intervener is not the custodian of the statutory rights of the complainant and we see nothing improper in the search for a resolution of this matter which will avoid the necessity of a further hearing. The UFCW is not bargaining with the employer in the sense contemplated by section 67 nor is it seeking to enter into a collective agreement. No doubt employees may benefit if this case is settled but we do not think section 67 precludes such settlement discussions. If the Board, after a hearing, could direct a return to the status quo, we see no reason why the litigants could not agree to some similar and acceptable solution without the necessity of litigation — particularly where, as here, the intervener has already told the Board that it would not oppose the result which the UFCW seeks: a revision of the requirement for two weeks' notice of shift changes, etc. Finally, we might observe that, compared to the problems raised in the other proceedings involving these parties, the issues in this case are relatively minor. Some acceptable settlement may be possible which will avoid the expense and uncertainty of litigation.

35. This matter is referred to the Registrar for rescheduling.