[1985] OLRB Rep. December 1789
1093-85-U United Steelworkers of America and its Local 9011, Complainant, Radio Shack Division of Tandy Electronics Limited, Respondent
BEFORE: R. 0. MacDowell, Vice-Chairman, and Board Members M. A. F. Stockton and C. A. Ballentine.
APPEARANCES: James Hayes and Nancy Makepeace for the complainant; L. Bertuzzi, M.J. Addario and W A. Potter for the respondent.
DECISION OF R. 0. MACDOWELL, VICE-CHAIRMAN, AND BOARD MEMBER M.A.F. STOCKTON; December 6, 1985
I
This is a complaint under section 89 of the Labour Relations Act alleging that the respondent employer has contravened sections 15, 64, 66 and 80 of the Act. It is the second unfair labour practice complaint arising from the parties' most recent round of negotiations. The earlier complaint was filed in November 1984 and had two related aspects: an assertion that the respondent had bargained in bad faith; and an allegation that the discharge of a number of employees - purportedly for picket line misconduct - was really motivated by unlawful considerations. The parties in the earlier proceedings agreed to sever these two aspects of the complaint and proceed, initially, only with the bad faith bargaining issue. The propriety of the discharges would be considered later. After several days of hearing, the bargaining in bad faith allegation was dismissed for reasons given, at length, in a decision of the Board (differently constituted) dated June 14, 1985. The hearings concerning the discharges are currently ongoing.
The parties in the present proceeding agreed that, in the interests of economy, the Board should rely upon the factual findings and legal analysis made in the earlier case, without the necessity of further elaboration or formal proof. They were agreed that the current complaint can only be understood against the background of the earlier one, and the pattern of collective bargaining which the earlier panel of the Board has already thoroughly reviewed. In addition, since the thrust of the present complaint is primarily (but not exclusively) a new breach of the statutory duty to bargain in good faith, the Board was urged to consider the other panel's analysis of that issue.
With these agreements of counsel, the Board was able to complete the hearing in a single day and can render a decision with somewhat more abbreviated reasons than would otherwise have been the case. We see no need to undertake a general restatement of the content of the "duty to bargain in good faith", nor is it necessary to undertake a complete recitation1790 of the facts of the parties' particular collective bargaining relationship. Both can be found in the earlier Board decision, and similar legal questions have been explored in such recent cases as Canada Trustco Mortgage Company, [1984] OLRB Rep. Oct. 1356, and T Eaton Company Limited, [1985] OLRB Rep. March 491. (A useful summary of the law can also be found in the new edition of J. Sack and M. Mitchell, Ontario Labour Relations Board Law and Practice, (1985) at pp. 447-570.) However, it will be necessary to refer to some of the background in order to put more recent events in their proper perspective.
II
The relationship between the union and the respondent dates back to November 1978, and got off to a very rocky start because of the respondent's flagrant unfair labour practices. The details of those unfair labour practices need not be outlined here (however, see the various Radio Shack decisions beginning in Board File 0274-78-U (unreported), and following with the reported decisions at [1978] OLRB Rep. Nov. 1043, [19781 OLRB Rep. Dec. 1128, [1979] OLRB Rep. March 248, and [1979] OLRB Rep. Dec. 1220). Even after the union was certified, the respondent refused to recognize its legitimacy. There was a long and bitter strike, as well as a finding by the Board that the respondent had committed "egregious" unfair labour practices and had not bargained in good faith (see the decision reported at [1979] OLRB Rep. Dec. 1220). The Radio Shack situation became something of a "high profile" case, generating much emotion, much litigation, and, at the time, considerable debate in the labour relations community.
Despite these inauspicious beginnings, the strike was eventually settled and the parties developed a working (if not warm) collective bargaining relationship. In September 1979, the company hired Mr. W. A. Potter to establish a personnel department and take over labour relations matters. Mr. Potter is a sophisticated and experienced industrial relations practitioner, having held a variety of personnel and labour relations positions with such employers as Smith Transport, Fibreglass Canada, Duplate, Benson & Hedges, and Reynolds Extrusions. He has acquired extensive collective bargaining experience dealing with unions such as the Teamsters, the UAW, the United Tobacco Workers, and the Steelworkers.
In the years following Mr. Potter's appointment, the relationship stabilized and even improved. In the second round of bargaining, the parties concluded a two-year collective agreement without the necessity of conciliation. In the third round of bargaining, the parties agreed to a further one-year agreement - again, without conciliation. The number of grievances was sharply reduced. In its June, 1985 decision, the Board observed:
In concluding that this phase of the complaint must be dismissed, we have not overlooked Union counsel's contention that the Board must carefully scrutinize the actions of the respondent, which Union counsel described as having been "one of the most notorious labour law violators in the Province". However, the egregious unfair labour practices described above were all committed over five years ago. The evidence adduced before us indicates that during the ensuing period, the parties have developed a viable collective bargaining relationship which has yielded three collective agreements, the two most recent of which were negotiated without even the intervention of a conciliation officer. There is no evidence that the Company has committed any unfair labour practices during the period covered by those collective agreements or during the bargaining which preceded the October 25, 1984 meeting [i.e., between December, 1983 and October 25, 1984]. While we do not doubt that the Company,like many other employers, would prefer to operate without a union if it were in a position to legally do so, the evidence as a whole indicates that the Company is (and has for the past several years been) complying with its legal obligations under the Labour Relations Act in respect of collective bargaining with the Union.
We have no reason to disagree with that assessment.
The most recent round of bargaining did not go so smoothly. The union gave the company written notice to bargain on December 21, 1983, and took the position that substantial changes were needed in the areas of seniority, bumping rights and grievance procedures. In the company's view, such changes were neither necessary nor acceptable. There were a number of meetings between January and early May 1984, and various compromises were proposed, but none of them met with mutual acceptance. Despite the intervention of a conciliation officer and mediator, the parties were unable to compose their differences.
By early May it became apparent that there was a considerable difference of opinion on both non-monetary issues and the appropriate range of the monetary settlement. The parties' positions were quite far apart, and, at the time, totally irreconcilable. At a union meeting held on May 5, 1984, union representatives presented the employees with the company's outstanding "settlement offer" and urged them to reject it. They did. The majority voted in favour of a strike, and the union advised the company that a strike would commence on Monday, May 7, 1984. In response, the company implemented its first year wage offer, and indicated that it intended to continue operations with non-striking employees. The company also warned that disciplinary action would be taken against any striking employees who engaged in misconduct during the strike. There is no suggestion that there was anything illegal about any of these company positions.
The strike was a dismal failure. Despite considerable employee solidarity, the union was not able to significantly impede the employer's operations, and without that leverage, the company was unwilling to accede to the union's bargaining demands. The strike dragged on for several months. Periodic mediation efforts did not result in a mutually satisfactory compromise.
By October 1984, the union officials had come to the conclusion that the strike was lost and that the employees' bargaining objectives were probably not attainable. The union's focus then shifted to ways in which it could get its members back to work and protect those who might find themselves in jeopardy because of their conduct during the strike. Twenty-six employees faced criminal charges for alleged strike-related offences, and the union feared that the company would discharge a number of them. At the beginning of the strike, the company had warned that it would take disciplinary action if employees engaged in picketing behaved inappropriately. Without a collective agreement in places the company would not have to demonstrate "just cause", nor would the company's decisions be subject to review by an arbitrator. Thus, from the union's point of view, it was important to get a collective agreement even if its terms were previously or from other perspectives considered unsatisfactory. The union was also worried that if the strike extended beyond six months, its supporters would not have a clear statutory right to return to their former jobs. [See section 73 of the Act.]
On October 25, 1984, the union purported to "accept" the company's "outstanding settlement offer" which had initially been made and rejected early in May prior to the commencement of the strike. At the same time, the employees purported to exercise their 1792 statutory right to return to work under section 73 of the Act. The union took the position that, having accepted the company's outstanding offer, there was a collective agreement in place and there was no need for further negotiations; and, of course, if there was a collective agreement in place before the company took disciplinary action against the employees, such action would be subject to arbitral review. That was the union's objective. What the union did not know was that, anticipating a capitulation, the company had already discharged five employees and suspended two others. Whatever its legal consequences, the purported acceptance came too late.
The earlier panel of the Board characterized the timing of these discharges as a "lawful attempt to make them inarbitrable under the collective agreement which [the company] anticipated would be entered into later that day or shortly thereafter, and not an unlawful attempt to avoid entering into a collective agreement". The Board commented:
One of the issues on which 'hard bargaining" may occur is the arbitrability of discharges and suspensions imposed during a strike for picket-line misconduct. The Act does not impose any legal obligation to arbitrate disciplinary action imposed during a strike. However, it is open to a union to attempt to use its bargaining power to obtain a decision on such disciplinary action or an agreement to refer it to arbitration. Similarly, it is open to an employer to attempt to use its bargaining power to resist reinstatement or arbitration, provided such resistance is not motivated by anti-union animus or a desire to avoid entering into a collective agreement.
We should also note that this issue was not a new one for these parties. During the troubled 1979 negotiations, theyhad agreed to arbitrate the discharge of two individuals accused of strike-related misconduct. In neither case was the discharge sustained - a result which troubled the company and strengthened its resolve in 1984, to resist submitting its disciplinary decisions to arbitral review.
The earlier Board panel had to consider whether, by October 25, 1984, there was still "an offer" outstanding for the union to accept; and whether, in the circumstances, the company's unwillingness to enter into a collective agreement embodying the terms of its May 2nd position, constituted a contravention of section 15 of the Act. In both cases the answer was "no". The May 2nd offer had already been specifically rejected, almost six months had elapsed and, over the course of the strike, the company had hired over 100 temporary replacement workers. The Board concluded that the earlier offer had expired and that there were legitimate "return to work" issues to be discussed - especially since the union had clearly lost the strike. The Board further held that the company was also legitimately concerned about the status of the individuals whom it believed had engaged in serious strike-related misconduct. The discharges did not demonstrate that it was unwilling to enter into any collective agreement at all and, in fact, came as no surprise. Indeed Frank Berry, a union official, was surprised that so few had been fired, given the larger number of outstanding charges. Finally, nothing turned on the failure of the company's representatives to provide a more detailed explanation of their position on October 25th, given the union representative's "repeated assertions that there was nothing to bargain about because the parties already had a collective agreement".
In the result, the Board dismissed the complaint and the parties were required to return to the bargaining table. At that point there had been no bargaining for about thirteen months. No meaningful negotiations had taken place while the employees were on strike between May 1984 and October 25, 1984. Thereafter, no bargaining took place because the union was asserting that there was a collective agreement in place.
It is not for us to comment upon the wisdom of the union's decisions to call a strike or pursue a complaint before the Board. The practical result was that, having been unsuccessful in both initiatives, it had to return to the bargaining table after a hiatus of more than a year and with virtually no bargaining power. Mr. Potter testified that never in his 25 years of experience had he represented an employer with such a commanding bargaining position. The company had successfully resisted the union's demands for concessions, weathered a long strike, and resisted the allegation that it had been bargaining in bad faith. It had ''won~~ on all counts. It was now in a position to secure an agreement on its own terms.
Following the release of the Board decision, the parties agreed to meet on July 13, 1985 at a hotel in Barrie. The meeting began about 10:00 a.m., and was over by early afternoon. There was some bargaining and some movement, but no consensus and no collective agreement. The union takes the position that the employer stance taken on July 13th amounts to bargaining in bad faith and unlawful discrimination. Accordingly, it returned to the Board with the present complaint which was filed on July 31, 1985.
Before examining the company position taken on July 13th, it may be useful to refer briefly to certain features of the company settlement offer rejected in May 1984, then purportedly accepted six months later. It may also be useful to refer once again to some of the comments made by the Board in its earlier decision.
In May 1984, the company had been unwilling to accede to the union's demand for significant monetary gains and changes in the areas of seniority, bumping rights, temporary transfers, and grievance time limits. The company was only willing to "fine tune" the status quo. The company's monetary proposals were also relatively modest: a three-year collective agreement with a four per cent across the board increase effective on ratification, an additional three per cent effective March 13, 1985, and a further three per cent effective March 13, 1986. This offer was not particularly generous, but neither was it completely out of line with other settlements being negotiated at the time. There is nothing in the events after May 1984 which would prompt the company to offer more.
The Board in the earlier decision noted that, with the passage of time, the company could legitimately expect to bargain about questions of contract term, the return to work of striking employees, and the status of the individuals accused of strike-related misconduct. In the Board's view,there was nothing improper in the employer's resistance to reinstating the accused employees, or its refusal to submit their cases to arbitration. The May 2nd position was no longer "on the table", and all of these new issues could legitimately be raised.
Frank Berry testified that he expected the company's settlement proposal to be totally and predictably unacceptable to the union bargaining committee. In his opinion, the company intended to propose settlement terms so unpalatable that no "self-respecting union" could accept them. In Mr. Berry's opinion, the company's real objective was to avoid any collective agreement at all with the applicant union. Indeed, so firm was he in this conviction that, he testified, he did not pay much attention to the company's explanation for some of its proposals.
The company's opening position on July 13, 1985 (exhibit 3) was somewhat different from its position on May 2, 1984 (exhibit 1). Many items were the same, but there1794 were certain elements which were different. The company had already implemented a four per cent across the board wage increase, effective on March 12, 1984. It now proposed an additional three per cent across the board increase, effective May 1, 1986, in a collective agreement that would expire April 30, 1987. In other words, in addition to a minor adjustment of the term of the agreement, the employer had dropped the 1985 three per cent wage increase which it had earlier offered prior to the strike. It had decided not to implement and make retroactive a wage increase for the period when employees were on strike or taking the position that no bargaining was necessary because there already was an agreement. This was particularly annoying for the union, because that summer the employer had granted a five per cent increase to its office and salaried staff.
Mr. Potter explained that the company had an established practice of conducting an annual salary review for its salaried personnel. The wages paid to salaried employees were not linked to those of the employees in the bargaining unit. On three occasions since 1979, the annual salary revisions for non-bargaining unit employees were comparable to those negotiated for employees in the bargaining unit. On four occasions they were different. Counsel for the company argued that the "4-3-3" offer of May 1984 had been an offer for settlement without a strike of a three-year agreement guaranteeing three years of labour peace. Instead, there had been a six-month strike and a refusal by the union to bargain between October 1984 and the end of June 1985. By that time the bargaining context was entirely different.
Another company proposal was the specification that time spent on strike would not be credited towards "seniority" for certain purposes under the collective agreement: stock participation plan, vacation service entitlement, job progression on the wage scales and personal day plan, and there would also be an adjustment to the earned vacation entitlement in 1985. These conditions were not new, having been the company's response to the employees' unconditional application to return to work in October 1984. Mr. Berry did not focus on these items either in formulating the union's response on July 13th or in his evidence before this Board. Nor were they raised in the earlier complaint or particularized in this one. We might also note that it is not unusual for an employer to try to avoid future interpretation problems by limiting the accumulation of seniority to periods of "active employment" or time "actually at work".
More troubling for the union was the following proposal:
INCENTIVE PLAN(S)
The Company has the right to introduce an incentive plan or plans for all or part of the employees in the bargaining unit. All details of the plan(s), including but not limited to eligibility and payments thereunder, will be determined in the exclusive discretion of the Company and cannot be made the subject of any grievance. The details of any plan introduced will be posted on the bulletin board. Employees eligible under a plan will not be paid less than the wage or mileage rates set out in the collective agreement. Mr. Berry viewed this proposal as one which would permit the company to discriminate against union supporters and "reward" objectors - although he conceded that the company might be able to introduce such plan even without specific contract language. The company indicated that it was not its intention to discriminate against anyone. In an effort to improve productivity, it was exploring the implementation of "quality circles" in which work groups would receive rewards for improved group performance. The exact nature of such rewards had not been settled, but the company had in mind the kind of incentive plans which it already had for other employees across Canada involving prizes, such as trips, merchandise discounts, free dinners, or even cash. Awards would be made on a team basis and would not impact upon the negotiated rates of pay.
The most disturbing proposal from the union's point of view was the following:
The Union agrees that all conditions in the employees' Return to Work letters of November, 1984 (sample copy attached hereto) are hereby confirmed. Further, all current job assignments are hereby confirmed and will not be the subject of any grievance or Complaint.
The Union agrees to withdraw all outstanding grievances and Labour Board Complaints and further agrees that no grievances, Complaints
or actions will be instituted with respect to any incident which occured [sic] up to and including the date of ratification.
The reference to "outstanding... Labour Board Complaints" relates to the "second phase" of the earlier complaint, which is still pending before the Board: namely, that five individuals were discharged and two suspended not for strike-related misconduct as the employer maintains, but rather for legitimate trade union activity protected by the statute. We shall have more to say below about this aspect of the company's proposal. At this point, it is sufficient to note Mr. Berry's evidence that it is not unusual, as part of a final settlement, to attempt to "wrap up" all outstanding legal matters or grievances. That had been part of the 1978-79 settlement process and is a common concern for all parties in the bargaining process. Mr. Berry indicated that the proposal came as no surprise and that ordinarily one doesn't strike over such issues. He also admitted that the union 's last proposal prior to the strike was a demand that the company forego its right to initiate proceedings in respect of an allegedly unlawful work slowdown which had occurred during the course of bargaining. The union hoped through bargaining, to avoid litigation and to protect itself and its members against a finding of liability.
While the union was disappointed with the company's settlement offer, and had real doubts about the company's motivation, it was still prepared to negotiate. Unfortunately, its counterproposal was as "predictably unacceptable" as that of the company, and, we are constrained to note, somewhat unrealistic in the circumstances. The union proposed (inter alia) that the company reinstate the five discharged employees with no backpay and that, in return, the union would withdraw its complaints before the Ontario Labour Relations Board and all outstanding grievances. This represented a compromise of the two suspensions, but also a continued insistence on the return to work of the five individuals accused of strike-related misconduct. Of course, this is precisely what the company refused to do, having made its position abundantly clear during the course of the earlier proceedings. In addition, the union sought to confirm the four per cent wage increase already implemented in May 1984 and secure a further three per cent increase on February 12, 1985, a three per cent increase on July 15, 1985, and a five per cent increase on July 15, 1986, in a collective agreement to expire on February 12, 1987. This represented a monetary demand more generous than the union had rejected in May 1984, then purportedly accepted six months later. From the company's point of view, this proposal was not even "in the ballpark".
After further consideration the union made another proposal. This time the union indicated that it would withdraw all complaints from the Labour Board and all outstanding 1796 grievances if the employer would arbitrate the discharges of the five accused employees. The union submitted that in the absence of an agreement to arbitrate, the company's proposal to withdraw all Labour Board proceedings was illegal. The union further suggested a monetary package confirming the four per cent wage increase on May 6 1984 and providing for a five per cent wage increase on July 15, 1985, and a further five per cent increase on July 15, 1986. Once again, this monetary demand was not only much higher than the company's current proposal, but also more generous than the pre-strike company offer which the union had initially rejected, then purportedly accepted six months later. The proposal to arbitrate the discharges was one which the company had already rejected.
Mr. Berry explained that there had never been any doubt about the company's ability to pay. It had recently sent a letter to all employees in Canada thanking them for contributing to a prosperous year. Since the local salaried employees had received (on average) a five per cent salary increase, it was the union's view that the same increase should be available to bargaining unit employees and, further, that five per cent was the appropriate bench mark for 1986. It is not obvious why the arbitration proposal should now be acceptable when it was not acceptable before, nor is it obvious why the company would be prepared to pay more than the union was willing to accept in October 1984.
From the company's perspective, the revised union proposal was no more acceptable than the earlier one. There was still an insistence on arbitration of the discharges which, in light of its experience in 1979, the company had always adamantly refused. The union was also seeking a monetary package inconsistent with the company's previous proposals and even more 'out of line" with the company's present offer. Both sides concluded that they were "spinning their wheels" and negotiations broke down. Two and a half weeks later the union filed the present complaint.
III
- As we have already indicated, much of the law has already been canvassed in previous proceedings involving these same parties and it is unnecessary to duplicate that analysis here. However, certain statements drawn from earlier cases bear repeating:
(1) ... [section 15] of the Labour Relations Act is not intended to redress any imbalance of bargaining power that may exist between the parties. A party whose bargaining strength allows it to force the acceptance of hard terms at the bargaining table does not thereby bargain in bad faith. The very word '~bargain" presupposes that the parties will seek to maximize their own best interests. Hard bargaining, albeit ruthless, is not bad faith bargaining. (from Pine Ridge District Health Unit, [1977] OLRB Rep. Feb. 65.)
(2) There is no requirement that a company must make concessions or agree to a particular agenda of discussions. The patties met often and bargained hard. Because the union might have to accept an agreement '~tailored to the company's measurements", to use a modified version of Mr. Peacock's own chosen words, is no reason to conclude that the company was bargaining in bad faith.. . .There is no evidence to suggest that the company was unprepared to sign an agreement; but of course it wanted an agreement on its own terms. Collective bargaining is redolent of self-interest and without evidence to suggest that the company's terms were so unreasonable as to suggest that, in reality, it wanted no agreement and no trade union, the Board is unprepared to grant the application. (from C. C.H. Canadian Limited, [1974] OLRB Rep. 375).
(3) Accordingly, both parties are entitled to bargain hard for the agreement that they believe to be acceptable. This is so even if one of the parties has an overwhelming strength at the bargaining table and is able to achieve most or all of its needs. The exercise of such raw bargaining power in good faith does not offend the bargaining duty imposed by this Act. (from Radio Shack, [1979] OLRB Rep. Dec. 1220).
(4) The content of the agreement is for the parties to determine in accordance with their own perceived needs and relative bargaining strength. The legislation enables employees to combine together to bargain collectively and compels the employer to recognize their bargaining agent. It further provides a framework within which there can be an exploration of the parties' differences and a sincere effort to reach some accommodation. . .but the statute does not require any particular concessions, nor does it stipulate the content of a collective agreement or even that a collective agreement always must be the necessary outcome of the parties' bargaining.... Rational discussion is an important aspect of the bargaining process. So is power. Persuasion is an effective tactic to gain one's bargaining objectives. So is economic pressure....A party whose bargaining strength allows it to virtually dictate the terms of the agreement does not thereby bargain in bad faith, and that proposition is applicable whether it is the union or the employer which 'has the upperhand". (from Canada Trustco Mortgage Company Limited, [1984] OLRB Rep. Oct. 1356.)
These passages merely underline a basic characteristic of our collective bargaining system:bargaining power is the ultimate arbiter of the clash between management's drive for productive efficiency, and the workers' demand for job security and a bigger share of the "economic pie". Parties strike their own bargain, based upon a realistic appraisal of the value of their objectives in relation to their ability to obtain them. Unless the parties' bargaining power is relatively equal (a situation not compelled by statute), the agreement will inevitably reflect the wishes of the stronger party.
- We think it is also important to bear in mind the sage observations of Professor Archibald Cox in his seminal article in the 1958 Harvard Law Review (v.71, no.8, p. 1401 at 1440):
There is also a danger that the regulation of collective bargaining procedures may cause negotiators to bargain with a view toward making the strongest record for NLRB scrutiny. The report of the Truitt negotiations bears ample evidence of the jockeying of lawyers [Truitt M.F. G. Co., 110 N.L.R.B. 8561. Hammering out a labour agreement requires all the negotiator's skill and attention. To divert them from the main task by putting a value on building up or defeating an unfair labour-practice case diminishes the likelihood that the negotiations will be successful.
In the same vein, the former Chairman of the Board wrote in the 1979 Radio Shack case:
On the other hand this Board must exercise considerable restraint in intervening in negotiations between parties who are committed to reaching a collective agreement - a commitment which is more and more self-evident as parties proceed together beyond their first collective bargaining agreement. Too penetrating a review by this Board will only insert it as a third party in the bargaining arena to be tactically used by the negotiators, deferring their attention from the principle task at hand.
The Board has an obligation to ensure compliance with the law, but litigation should not be regarded as a substitute for bargaining or bargaining power; nor should the Board's process be viewed as the means of salvaging an untenable bargaining position, or securing an otherwise unobtainable bargaining objective.
Leaving aside for the moment the company s demand to drop the unfair labour practice proceedings pending before the Board, we are of the view that all of its other proposals are properly characterized as "hard bargaining". There is nothing unusual in the fact that the employer's bargaining position may have changed between May 1984, and July 1985. In a volatile strike situation, the parties' demands may well change in accordance with economic circumstances and their tactical assessment of the effectiveness of their own bargaining power. A successful strike may prompt the union to escalate its demands so that a company offer which may have been acceptable prior to the strike no longer looks so attractive. Similarly, a company may be prepared to make an offer prior to a strike in order to avoid its potential impact, which the company is not prepared to make once it has taken a strike or it has been demonstrated that the impact of the strike has been overestimated. A change of position resulting from the interplay of market conditions and relative bargaining power does not, in itself, constitute a breach of the duty to bargain in good faith; moreover, here, neither party adhered to its pre-strike proposals. On July 13, 1985, the company advanced a monetary proposal less generous than it was prepared to accept to avoid a strike in May 1984, but the union submitted a monetary demand greater than that contained in the position which it had purportedly accepted some eight months before. In this and in other stated positions (again, excepting, for the moment, the demand to withdraw pending unfair labour practice complaints), we are satisfied that the employer was merely engaging in "hard bargaining" based upon its demonstrably superior bargaining power.
The fact that the company's proposals may not have been acceptable to the union, does not mean that the company was not prepared to enter into a collective agreement - albeit on its own terms; nor is it really very helpful to suggest that the proposals were "predictably unacceptable". That characterization is equally applicable to the union's proposals, and if that were the test for a breach of section 15 of the Act, then the legality of a party's bargaining stance would turn on the willingness of the other side to accept it. It may be that a union's failure to achieve its stated goals will diminish its stature in the eyes of its members and make it less attractive to prospective members. But this does not mean that employer resistance is illegal. The union may simply have overestimated its ability to wring concessions from an unwilling employer and misjudged the effectiveness of its strike weapon.
This is not to say that the Board is totally unconcerned with the content of the parties' proposals or that there are no limits whatsoever on the scope of bargaining. In some circumstances, the Board may well have to assess the content of the items tabled in order to determine whether an employer does not really intend to enter into any collective agreement or whether it is really refusing to recognize the union as the exclusive bargaining agent (see Radio Shack, [1979] OLRB Rep. Dec. 1220; Fotomat Canada Limited, [1980] OLRB Rep. Oct. 1397; Irwin Toy Limited,[1983] OLRB Rep. July 1064, and, particularly, Wilson Automotive (Belleville) Ltd., [19801 OLRB Rep. July 1136). Bargaining proposals may provide evidence of such unlawful motive, and the Board may also review the content of those proposals to assess whether any of the proposed items is "illegal" (see infra). However, in general, the Board's role under section 15 of the Act is one of monitoring the process of bargaining, and not the content of the proposals advanced.
IV
We turn then to the company's demand that the union withdraw the unfair labour practice complaints currently pending before the Board. The union contends that this was an "illegal demand"; or, at least, that if the matter was negotiable, then it was illegal for the company to "press it to impasse". In counsel's submission, the company is not entitled to make statutory rights the subject of an exercise of bargaining power. The company cannot demand that, as a condition of settlement, the union withdraw the pending complaints and compromise such employee rights or remedies as may be available to them under the statute.
We are inclined to agree with the union's general proposition that, however broad the scope of bargaining, it does not encompass demands which are illegal or inconsistent with the scheme of the Labour Relations Act. A simple example would be a union's insistence on maintaining the right to strike to enforce compliance with a collective agreement, when the Act quite clearly provides that such matters must be resolved by arbitration. Another simple example might be a union demand for a wage increase beyond the ceiling provided in wage restraint legislation (see Croven Limited, [1977] OLRB Rep. March 162), or an employer demand which interfered with internal union affairs or the representation of employees by a union (see the discussion in A.N. Shaw Restoration Ltd., [1976] OLRB Rep. Sept. 504 at paragraphs 10-13). More subtle was the situation in United Brotherhood of Carpenters & Joiners of America, [1978] OLRB Rep. Aug. 776. There, a trade union certified to represent employees in a specific geographic area, struck to force the employer to extend recognition beyond the bounds of the Board certificate. The Board held that this was tantamount to a recognition strike. It was an illegal demand which was inconsistent with the scheme of the Act and contrary to the duty to bargain in good faith. Although the parties were entitled to negotiate about the scope of bargaining rights, a dispute could not be pressed to impasse. Similarly, in Toronto Star Newspapers Limited, [1979] OLRB Rep. May 451, [1979] OLRB Rep. Aug. 811, the Board held that it was illegal for a union to threaten a strike in order to secure a particular work assignment when section 91 of the Act provided a statutory mechanism for resolving disputes of this kind. In both cases the Board observed that it was lawful, and often sensible, to raise those matters at the bargaining table and seek to resolve them through negotiations. But neither party was entitled to use its superior bargaining power to force the other party to forego rights or abandon remedies available under the statute.
In our view, that approach is equally applicable here. It would be abhorrent and contrary to public policy if an employer could rely on its superior bargaining power to avoid the consequences of its own illegal acts. Continued bargaining or willingness to enter into a collective agreement cannot be made dependent upon the acceptance of provisions in that agreement which, in their effect, are repugnant to the Act's specific language, protections, or basic policy. We do not think that an employer is entitled to rely upon its superior bargaining power to compel the withdrawal of a pending unfair labour practice complaint, nor can it make the signing of a collective agreement contingent upon such withdrawal. To do so would be interfering with the union's right to represent those employees, and penalizing other members in the bargaining unit because the discharged workers were seeking legal vindication. To hold otherwise would make the employees' statutory rights illusory, and subject to the balance of bargaining power rather than the rule of law.
The problem posed by this case is not the validity of the general proposition urged upon us by the union, but rather its application to the circumstances under review. As we have already noted, it is not illegal to raise outstanding complaints at the bargaining table or to seek a resolution short of litigation. It will often make good sense to do so. The Act itself contemplates and encourages settlement discussions and Mr. Berry testified that it was quite common to attempt a settlement of these matters at the bargaining table. That is what happened here.
At the meeting on July 13, 1985, the union did not refuse to discuss the outstanding unfair labour practice complaints, nor did it insist that the disposition of those complaints should be determined solely by the Board and not at the bargaining table. On the contrary, that issue was just one of several on which proposals were made and modified. It was an important issue for the union, but only one of several and not manifestly more important than, for example, the wage proposals. The union was prepared to withdraw the complaints if the company would reinstate the discharged employees without pay (in effect, an 8-1/2 month suspension), or would submit their cases to arbitration. In the union's bargaining proposal, the company's alleged illegality was linked to the company's perfectly lawful refusal to do either of these things - a position which it had maintained since October 1984. At no time did the union spokesmen state unequivocally that the matter was not a proper subject for negotiation or demand it be removed from the bargaining table. Nor did union spokesmen ever demand that the company table a bargaining position absent item 11. If the company had refused to do so, or if the company had tabled a response which could be construed as a "penalty" for refusing to forego statutory rights, the union might well have been able to make a successful complaint to this Board. But the bargaining never really got that far. The union never squarely put to the company the position now put to this Board, and thus the Board is not in a position to assess the company's response.
If it is said that this is an unduly technical reading of section 15 of the Act, it must be remembered that we are dealing here with issues that are clearly negotiable, frequently negotiated, and were resolved through negotiations between these same parties in the past. The compromise of a possible statutory claim was something the union itself raised earlier in the bargaining. If the union is now claiming that the company acted illegally by refusing to remove a similar item from the bargaining process, it is our view that it was incumbent upon the union to put that proposition directly to the company to give it an opportunity to respond.
For the foregoing reasons, the union's complaint is dismissed, and the parties will have to return to the bargaining table and try to compose their differences in light of the legal framework and practical realities dealt with in this decision.
DECISION OF BOARD MEMBER C. A. BALLENTINE;
I dissent from the majority decision. In my view, the "leopard has not changed its spots". The company has not changed its motive, only its methods. It remains determined to undermine the union and convince its employees that they will not benefit from collective bargaining. The company's entire package was designed for rejection. It believed that it had the union at its mercy, and knew that no self-respecting union could accept conditions so discriminatory to its membership.
The Board stated in the Irwin Toy Limited case, [1983] OLRB Rep. July 1064 at paragraph 15 that:
It is contrary to the Act to either punish or reward employees because of their preference for union representation. (See Empco-Fab Ltd., [19821 OLRB Rep. Aug. 1162; Peabody Coal Company, (1982) 111 LRRM 1480; NLRB v. Rubatex Corp., (1979) 601 F 2d 147, 101 LRRM 2660 (U.S.C.A. 4th Cir.).) It is also a violation of the duty to bargain in good faith for an employer to advance, without any economic justification, an offer to its unionized employees which is intended as a message that they will suffer economically as long as they choose to be represented by a union or exercise the rights of organized employees. For example, the Canada Labour Relations Board has recently found that an employer violated the Canada Labour Code by bargaining to impasse collective agreement terms which it found were intended to reward employees who did not participate in a lawful strike and punish employees who did. (Eastern Provincial Airways Ltd., decision dated May 27, 1983, as yet unreported).
In the instant case, the company's proposal dropped the three per cent 1985 wage offer made prior to the strike, however, the non-union workers were awarded a five per cent increase. There is no doubt about the company's ability to pay. The company boasted in a letter dated June 30, 1985 that it had a successful year. It also proposed an incentive plan that would give the company the exclusive discretion on details, without the union having the right to grievance. Above all, it proposed that the union withdraw all outstanding complaints, including those currently pending before the Board. When the company's conduct is considered as a whole and against the background of its prior history, I would conclude that it has not bargained in good faith. It has adopted a stance without clear economic justification, designed to penalize union members, undermine the union and impede its ability to represent employees. I would have sustained the complaint.