United Steelworkers of America and its Local 9011 v. Radio Shack Division Tandy Electronics Limited, 1985 CanLII 988

United Steelworkers of America and its Local 9011 v. Radio Shack Division Tandy Electronics Limited

[1985] OLRB Rep. June 901

2113-84-U United Steelworkers of America and its Local 9011, Complainant, v. Radio Shack Division Tandy Electronics Limited, Respondent

BEFORE: Robert D. Howe, Vice-Chairman, and Board Members J. A. Ronson and L. Collins.

APPEARANCES: James Hayes, Bernard Hanson and Sheila McIntyre for the complainant; L. Bertuzzi, M. J. Addario and W A. Potter for the respondent.

DECISION OF ROBERT D. HOWE, VICE-CHAIRMAN, AND BOARD MEMBER J. A. RONSON; June 14, 1985

1. This is a complaint under section 89 of the Labour Relations Act in which the complainant (also referred to in this decision as the "Union") alleges that the respondent (also referred to in this decision as the "Company") has contravened sections 15, 50, 64, 66, 70, and 73 of the Act.

2. The principal matters initially covered by the complaint (as supplemented by Union counsel's letter dated November 29, 1984) were: (1) the Company's refusal to sign a collective agreement embodying the terms of a Company offer of May 2, 1984, which the Union purported to accept on October 25, 1984 (the "bargaining issue"); (2) the Company's discharge of five and suspension of two bargaining unit employees on October 25, 1984; (3) the Company's alleged delay in reinstating employees pursuant to section 73 of the Act; (4) the Company's alleged discriminatory treatment of strikers following their return to work; and (5) the contracting out of certain work by the Company. However, at the commencement of the hearing of this complaint on December 19, 1984, Union counsel advised the Board that his client wished to revise the complaint by eliminating the paragraphs pertaining to "contracting out". Having permitted that amendment and having determined that the parties were in agreement that the Company would proceed first with its evidence on all aspects of the case, the Board proceeded to hear the evidence of William Potter, the respondent's Employee Relations Director.

3. Examination in chief of Mr. Potter by Company counsel continued on December 21, 1984 and was to further continue on March 20, 1985. However, on that day, after hearing the submissions of counsel with respect to the complainant's request that the "bargaining issue" be severed and dealt with by the Board as a discrete issue prior to hearing and determining the other aspects of the complaint, the Board ruled as follows (in a unanimous oral ruling):

We are prepared to permit the "bargaining issue" to be severed but, in doing so, will sever all of the allegations in Mr. Hayes' letter of November 29, 1984. Thus, paragraph 4 of that letter will become one of the matters which is deferred, along with the other outstanding matters.

We will also permit Mr. Bertuzzi to elect whether he wishes to proceed with the respondent's evidence or to have the Union proceed with its evidence in chief before adducing any further evidence on behalf of the respondent.

On March 20, 1985, the Board, without objection by the respondent, also permitted the Union to withdraw the portion of its complaint pertaining to the Company's alleged delay in reinstating employees pursuant to section 73 of the Act.

4. At the continuation of hearing on March 29, 1985, Company counsel advised the Board that he had elected to have the Union proceed with its evidence in chief (concerning the "bargaining issue") before adducing any further evidence through Mr. Potter or any other witness. Accordingly, the Board proceeded to hear the evidence of David Patterson, the Director of District 6 of the respondent, and Frank Berry, the Union Staff Representative responsible for the bargaining unit in question. At the continuation of hearing on April 18, 1985, Mr. Potter was recalled to complete the Company's evidence concerning the "bargaining issue . On the following day the Board heard argument on that issue and reserved its decision in order to afford it an opportunity to carefully review the evidence and the jurisprudence to which it was referred by counsel.

5. In addition to the testimony of the aforementioned three witnesses, the Board also has before it 17 exhibits which were entered during the course of these proceedings. In making the findings of fact set forth in this decision, the Board has carefully considered all of that oral and documentary evidence, the submissions of the parties concerning that evidence, and such factors as the firmness of the the witnesses' respective memories, their ability to resist the influence of self-interest to modify their recollections, the consistency of their evidence, their capacity to express their recollections clearly, and their demeanour. We have also assessed what is most probable in the circumstances of the case and what inferences may reasonably be drawn from the totality of the evidence.

6. The relationship between the complainant and the respondent dates back to November of 1978. That relationship got off to a very rocky start as a result of a series of flagrant unfair labour practices engaged in by the respondent, as described in the following passages from the Board's decision dated December 5, 1979 in File No. 1004-79-U (reported in [1979] OLRB Rep. Dec. 1220):

7. The Complainant brings this complaint on behalf of itself and all employees in the bargaining units it represents at the Respondent's distribution centre in Barrie, Ontario. It complains that the employees and their union have been dealt with by the Respondent contrary to sections 14, 56, 58, 59, and 61 [now sections 15, 64, 66, 67, and 70] of The Labour Relations Act.

8. The history of this case is considerable. Radio Shack is a division of Tandy Electronics Limited (Alberta) which in turn is a wholly owned subsidiary of Tandy Corporation, Forth Worth, Texas - a company engaged in the manufacturing and retailing of stereo and other electronic equipment on a worldwide basis. This collective bargaining relationship is very recent in origin. It is also fair to say that its establishment was subject to considerable litigation before this Board and the courts. The present application arises out of the Complainant's attempt to negotiate a first collective agreement with the Respondent.

9. The history of this application begins with a decision of the Board dated September 27, 1978, written reasons being issued October 12, 1978 (Board File No. 274-78-U). That decision dealt with complaints under section 79 [now section 89], wherein it was alleged that five employees had been dismissed by the Respondent contrary to sections 56, 58 and 61 of The Labour Relations Act. Evidence before that panel, and confirmed by evidence before this panel, established that the complainant's campaign to organize the employees of the Respondent at its Barrie facility formally began in March of 1978. Meetings with employees were held on April 17th, 24th and May 1st of 1978. The employees were terminated on May 3rd. The Board found that two of these employees (Henry North and Stephen Gradon) had been discharged in contravention of The Labour Relations Act. Both employees were reinstated into the employ of the respondent with the direction that they be compensated for their monetary losses. Subsequently, the Complainant alleged that the Respondent was in wilful non-compliance of the Board's decision. Explaining that North had found employment elsewhere, the Complainant proceeded only on its non-compliance complaint with respect to Gradon. By decision dated December 4, 1978, 119781 OLRB Rep. Dec. 1128, the Board found that the Respondent had failed to restore Gradon to his previous job as directed and at paragraph 19 of its decision observed:

'In the Board's view Gradon in presenting himself for employment on October 2nd, and in accepting the assignments given him between October 2nd and 18th, and in endeavouring to have his work assignments brought within the terms of the Board's Order, through discussions with his superiors, had acted with mature discretion and had done everything which could be reasonably expected of him to facilitate an implementation of the Board's Order. The Respondent employer, on the other hand, was embarked on a deliberate course of devising work assignments for Gradon such as would isolate him from contacts with other bargaining unit employees, and it is this course which is at the root of the failure to restore Gradon to his previous job."

8. By decision dated November 24, 1978, 119781 OLRB Rep. Nov. 1043, the Board certified the Complainant as the exclusive bargaining agent for a full-time bargaining unit excluding office, sales staff and part-time employees, inter alia, and reserved its decision with respect to a unit of part-time employees, pending the receipt of evidence under section 7a. This decision also reviewed evidence submitted by the Respondent in support of an allegation that membership support had been obtained by intimidation and coercion. The Board concluded that the charges were unfounded. The Board further concluded that it was not satisfied that a statement of desire filed in opposition to the certification application represented a voluntary expression of those employees who signed it and therefore declined to order a representation vote. It held that the Respondent had given its tacit support and approval to the circulation of the anti-union petition on company premises during working hours. Finally, in that same decision, the Board refused a request by the Respondent to inquire into the Form 8 charges filed by the Complainant holding that it had no allegation before it that if proven would support the impeachment of the declarations made in the Form 8.

9. The Respondent applied to the Court for judicial review of the Board's decisions dated November 24, 1978 and December 4, 1978.

10. The application for certification under section 7a for a bargaining unit of part-time employees was granted by the Board in its decision of March 29, 1979, [19791 OLRB Rep. March 248. Certification under section 7a of the Act is directed at those extraordinary situations where employer misconduct has, in the opinion of the Board, eliminated the reliability of any representation vote that might be held. In granting the union's application under this section, the Board relied on the earlier unfair labour practice dismissals; the failure of the Respondent to comply with the Board's order in respect of the employee Gradon; and the Respondent's conduct in relation to the circulation of the anti-union petition. It was also established that, in violation of the Act, a company foreman warned two bargaining unit employees that if the union gained a foothold the company would 'move out west , thereby lending substance to rumours to this effect in the plant. The Board also took strong exception to the Respondent's written comment disparaging an examination conducted under the Act into the duties and responsibilities of four employees whose inclusion [ml the bargaining unit the Respondent had challenged. The examination was conducted by a Labour Relations Officer at the direction of the Board as is the Board's practice. At paragraph 25 of its decision the Board wrote:

"There is no question that the company's statement was designed to give the employees a false impression of the Board's procedures and, more importantly for our purposes, to convey to the employees the employer's disrespect for these procedures. It is the Board's view that the statement, which borders on contempt, served to further erode the confidence which employees normally have in the processes established under the Act to guarantee freedom of choice and redress employer violations of the Act. The statement must be considered by the Board in conjunction with the continuing failure of this employer to comply with the Board's order in respect of the reinstatement of Mr. Gradon in deciding whether or not, in the context of this organizing campaign, the true wishes of the part-time employees would likely be ascertained in a secret ballot vote."

Finally, the Board took notice of the Respondent's conduct in distributing bright red "T" shirts embossed on the front with the words, "We're company finks" and on the back with . 'and proud of it". The Board viewed these actions as "a deliberate and unsophisticated attempt to polarize the workforce..

11. The Respondent again applied to the Court to have this decision reviewed and this application together with the earlier application pertaining to the Board's "interim" certification of the full-time bargaining unit were dismissed by that Court in its decision of August 8, 1979 referred to above.

12. In accordance with our ruling that the Board would admit evidence relating to the Complainant's organizing campaign, Donald Gallagher was called as a witness by the Complainant. He is now employed by National Grocers, but was employed by the Respondent in the Barrie area as a security officer from March 1977 to September 1978. He and Roy Murden (who until recently occupied the position of Director of Personnel and Security) had known each other as colleagues in the City of Oakville Police Department....

13. Gallagher testified that through Roy Murden the Respondent hired certain persons to infiltrate and obtain information about the union. He testified that Murden hired a private investigation firm to take pictures of persons attending union meetings. He further testified that Murden told him he had been advised by "Fort Worth to get rid of the union no matter the cost." Neither Murden nor any other person employed in the management of either the Respondent or its parent corporation was called to rebut this testimony. Gallagher was cross-examined extensively with respect to the timing of the matters he attested to. While this cross-examination revealed some uncertainty over the issue of timing, we cannot find that the answers obtained from him on cross-examination were anywhere near sufficient to impeach the testimony or to render it so uncertain that this Board should not rely on it. We therefore find that the events to which he testified are factual. We further find that the hiring of the private investigation firm to perform the service it did and the hiring of persons Gallagher knew to be informants to infiltrate and obtain information about the union and its supporters amount to flagrant violations of sections 56, 58, and 61 of The Labour Relations Act. These actions, without rebuttal testimony, must be seen as going hand in hand with the termination of two employees and the threat of plant removal which the Board, in earlier proceedings, also found to be in violation of the Act. We have difficulty in imagining conduct that could be in greater conflict with an employer's obligations not to interfere with the selection of a trade union (section 56) and not to intimidate employees exercising their rights under the Act (section[sl 58 and 61). Even if the employees lacked the knowledge that they were being watched and reported on, we are of the opinion that surveillance activity can only have purposes of aiding an employer in "interfering" with the selection of a trade union and in "coercing" and "restraining" employees from engaging in protected activity and, with these purposes, constitute a per se violation of sections 56, 58, and 61 of The Labour Relations Act....

14. We further find that the overt taking of movie pictures or photographs of employees on the picket line at the very commencement of the strike, in the context of this case had the coercive purpose of intimidating the employees engaged in protected strike and picketing activity against the Respondent....

15. In the facts at hand, the Respondent commenced bargaining after having dismissed two employees; threatened to move the company out west; given tacit support to an anti-union petition; refused to reinstate an employee at the direction of the Board; and disparaged the Board's normal certification procedures. It also engaged in the other flagrant unfair labour practices established in this case and commented on above. Notice to bargain was given in November of 1978 and meetings began in January. As bargaining commenced the Respondent was distributing T-shirts to its employees that another panel of this Board described as 'further polarizing the workforce and further identifying itself as a combatant in the process." Against this background, we then find the Respondent sending a newsletter to all of its employees at the conclusion of each bargaining session and exchange of proposals. The Board has held that parties in first agreement situations ought not to bargain "in the dark" and that an employer is obligated to provide an employee bargaining agent on request with the details of all existing terms and conditions of employment of bargaining unit employees. See De Vilbiss 119761 OLRB Rep. Mar. 49. The failure to provide such information is a failure to make every reasonable effort to make a collective agreement and only perpetuates confusion and distrust at the bargaining table. The Complainant made a request of the Respondent for this kind of information and, while it was eventually provided, the newsletter to employees dated January 9, 1979 ridiculed and disparaged the request. The review of the union's first proposal in its newsletter of January 11, 1979 is in equally intemperate language. These communications, in this particular context, can only be considered as having the purpose of discrediting the Complainant in the eyes of the employees in order to undermine its position as their exclusive bargaining agent. While an employer is entitled to communicate directly with his employees notwithstanding the certification of a trade union, thisright must be exercised judiciously and cannot be used to undermine the trade union's bargaining role. Nor, obviously, can it be used for subtle or not so subtle coercion and intimidation of employees. These communications, in our opinion, carried with them a veiled reminder of the Respondent's earlier coercive conduct and evidenced to them that the issuance of the certificate had had no impact on its anti-union attitude. We also find that the contents of these newsletters cannot be justified as attempts either to clarify employee misunderstandings or to persuade employees about the merits of a particular employer proposal....

We therefore find that the Respondent's direct communications with its employees violated sections 14, 56, 58, 59 and 61 of The Labour Relations Act.

76. We are also of the view that the content of the Respondent's first contract proposal was calculated to impair any progress in the negotiations by inserting the inflammatory relationship clause and the almost equally destructive open-ended proposal on employee conduct with its related penalties....

77. Bargaining over these inflammatory proposals then dragged on until the month of June 1979 with no discernible progress. Stopping at this point, we have no hesitation in concluding that the Respondent from November 1978 until June of 1979 utterly failed in its duty to bargain in good faith and make every reasonable effort to make a collective agreement. We are also of the view that its negotiating conduct during this period was a blatant continuation of its earlier anti-union animus and clearly aimed at further dividing its employees and undermining the trade union's statutory role in violation of sections 56, 58, and 61 of The Labour Relations Act....

78. After carefully analyzing all of the evidence, we have also come, on balance, to the more general conclusion that the Respondent was not bargaining in good faith and making every reasonable effort to enter into a collective agreement from June to August. This is not to deny that "progress" was made in negotiating the language of a possible agreement. But we think it more likely than not that the Respondent's rigid position on union security, as well as other items central to the negotiations, had the purpose of avoiding a collective agreement and was part and parcel of its earlier conduct aimed at undermining the trade union in the eyes of the employees in order to foster its early demise....

79. In the facts at hand, the Board is of the view that a broad range of remedies is required to attempt to redress the persistent and flagrant unfair labour practices of the Respondent. The Complainant has advised the Board that its supporters are almost totally demoralized and that many have quit the Respondent's employ. Its opinion in this respect is not inconsistent with the history of this collective bargaining relationship. Any remedy should have the purpose of redressing monetary losses and providing the Complainant with a reasonable opportunity to recapture the early momentum that sparked both certification applications.

(a)(i) The Board declares that the Respondent has failed to bargain in good faith and make every reasonable effort to make a collective agreement at all times relevant to this complaint.

(ii) The Board further declares that the Respondent's position on union security violates sections 14, 56, 58, and 61 of The Labour Relations Act.

(iii) The Board declares that the Respondent contravened sections 56, 58, and 61 of The Labour Relations Act in hiring persons to infiltrate the Complainant; in hiring a private investigation firm to survey meetings held by the Complainant; and in photographing employees on the picket line at the commencement of the strike.

(iv) The Board declares that various conversations of Jack MacDonald with employees on the picket line about possible decertification applications amounted to violations by the Respondent of sections 56, 58, and 61 of The Labour Relations Act.

(v) The Board declares that the Respondent's earlier direct communications with its employees by way of newsletters violated sections 14, 56, 58, 59, and 61 of The Labour Relations Act and that the recent publication thanking non-striking employees violated section 56.

(b)(i) The Board directs the respondent to bargain in good faith and make every reasonable effort to make a collective agreement. To this end, the Board specifically directs the respondent, on the receipt of this decision, to convene forthwith a series of bargaining meetings between itself and the complainant with the assistance of a Ministry of Labour mediator and, at the initial meeting, to make a complete proposal that the respondent is willing to accept as a collective agreement. In making this proposal the respondent is directed to cease and desist in its position on union security that we have found to be part of a continuing scheme to divide the loyalties of its employees; to undermine the exclusive bargaining agent status of the trade union; and to coerce employees into withdrawing support from the complainant or from commencing to support [thel complainant.

(ii) The respondent and its agent are directed to cease and desist from all other activities found by the Board to have been in violation of the Act and, more specifically:

A. Engaging in surveillance of employees' activities in respect to union organization;

B. Intimidating and coercing employees into withdrawing from the complainant union or from supporting the complainant union;

C. Causing employees to act as informers in an effort to determine the extent of union activities of other employees in the bargaining unit;

D. Communicating directly with employees with a view to undermining the exclusive bargaining agent status of [thel complainant union;

E. In any other manner interfering with, restraining, or coercing its employees in the exercise of their right to self- organization, to form, join or assist the United Steelworkers of America or any other labour organization, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining, or to refrain from any or all such activities.

(c)(i) The respondent is directed to post copies of the attached notice marked "Appendix" after being duly signed by the respondent's representative, in conspicuous places at its places of business where bargaining unit employees are employed in Barrie, Ontario, including all places where notices to employees are customarily posted and to keep these notices posted for 60 consecutive working days. Reasonable steps shall be taken by the respondent to insure that the said notices are not altered, defaced or covered by any other material. Reasonable physical access to the premises shall be given by the respondent to two representatives of the complainant to satisfy itself that this posting requirement has been and is being complied with.

(ii) The respondent is directed, at its own expense, to mail a copy of the attached notice marked "Appendix" after being duly signed by the respondent's representative, to the residence of each employee in the said bargaining units forthwith. An employee who must scan the Board's notices hurriedly while at work under the scrutiny of others, will not be able to absorb the meaning and hence to understand his legal rights as one who reads them at home in a more relaxed fashion.

(iii) The respondent is further directed to publish, at its own expense, a copy of the notice marked "Appendix" duly signed by the respondent's representative, in the next issue of "Watts-Up" following the receipt of this decision, or the next subsequent issue thereto. The order is aimed at counteracting the widespread impact of the respondent's earlier improper statements made in this employee publication.

(iv) The Respondent is directed forthwith to convene during working hours a meeting of all bargaining unit employees in both bargaining units currently working on company premises and a representative of the Respondent is directed to read the attached notice marked "Appendix" to the employees. The Respondent is further directed to afford two representatives of the Complainant a reasonable opportunity to be present at the said meeting and to address the employees for no longer than thirty minutes immediately following the reading of notice by the Respondent's representative.

(v) The Respondent is directed forthwith to provide the complainant with a list of names and addresses of all the employees in both bargaining units and to keep this list updated for one year from the receipt of this decision....

(vi) The Respondent is directed to provide the Complainant for a period of one year from the receipt of this decision with reasonable access to all employee notice boards at the subject locations for the posting of union notices, bulletins and other union business literature in order that the employees may have free and ready access to information in the workplace from the Complainant concerning all aspects of collective representation and the collective bargaining negotiations.

(d)(i) The Board further directs the Respondent to pay all of the Complainant's negotiating costs incurred to the date of this decision and all extraordinary organizing costs arising out of the organizing of both the full and part-time bargaining units as damages caused by the improper actions of the respondent....

(ii) The Board further directs that the Respondent is obligated to pay to all bargaining unit employees all monetary losses that the Complainant can establish by reasonable proof as arising from the loss of opportunity to negotiate heretofore a collective agreement due to the Respondent's earlier unlawful conduct, the said damage, if any, running up to the date of the first meeting convened by the Respondent in accordance with paragraph (b)(i) of the Board's order, together with interest as appropriate. The Registrar is directed to reschedule this matter for hearing and determination on the issue of damages on the application of the Complainant and the Board remains seized of this case for such purposes.

(e) Having regard to the history of unfair labour practices in this case, the Respondent is directed to give the Complainant reasonable notice should any supervisor or company agent convene any group of bargaining unit employees and address them on the question of union representation within one year from the receipt of this decision. The respondent is further directed to afford two representatives of the Complainant a reasonable opportunity to be present at the speeches and upon request to permit one of them to address the employees for the same amount of time as the Respondent's address.

7. Following that decision, no further bargaining took place between the Company and the Union until the Divisional Court had dismissed an application for judicial review of the Board's decision and the Ontario Court of Appeal had refused to grant the Company leave to appeal. When bargaining resumed, the Company announced that it was discharging for strike-related misconduct Lisa Devoe, the Vice-President of the complainant, and Linda Lloyd, another member of the Union's negotiating committee. In the negotiations which followed that announcement, the parties agreed that those discharges would be referred to arbitration. With that difficult matter out of the way, the parties proceeded to enter into a one-year collective agreement. (In the ensuing arbitration proceedings, one of the discharged employees was reinstated with a one-month suspension and the other was reinstated with a two-week suspension.)

8. Mr. Potter joined the Company in September of 1979. Prior to that he held a variety of personnel and labour relations positions with various other employers, including Smith Transport, Fibreglass Canada, Duplate, Benson & Hedges, and Reynolds Extrusion. During that time, he acquired extensive collective bargaining experience, dealing with the Teamsters, U.A.W., the Steelworkers, and the United Tobacco Workers. Prior to September of 1979, the respondent's personnel functions were generally the responsibility of its security department. However, following the arrival of Mr. Potter, a personnel department was established to handle wage, salary, and benefit administration. That department was subsequently given responsibility for labour relations and employee relations, including recruiting.

9. During the term of the first collective agreement between the parties, there were many grievances and arbitrations. In an attempt to improve the situation, in the latter half of that contract year Mr. Potter invited to his office Donna Cadogan, the President of the complainant, and suggested that she speak with him whenever any problem arose among the employees, to see if the matter could be resolved promptly and fairly through "objective problem solving" without the necessity of grievance and arbitration proceedings. Mrs. Cadogan agreed to give this a try.

10. In their second round of negotiations, the parties held eight meetings and reached a settlement before the expiry of the first agreement. Although the Union applied for conciliation following the first meeting, a settlement was reached before a conciliation officer was appointed. During those negotiations, the Company agreed to delete the "long list of rules and penalties for infractions" that was contained in the first agreement, and also agreed to combine the part-time and full-time seniority lists. The application of "objective problem solving techniques", as suggested by Mr. Potter and agreed to by the respondent, resulted in a significantly improved relationship between the parties during the term of that (1981-83) collective agreement. In the first year the parties had only one grievance and no arbitrations. During the second year there were only three grievances and one arbitration.

11. The third set of negotiations between the parties involved a total of 17 meetings. The main issue in those negotiations was seniority as it applied to bumping rights on layoffs and temporary transfers. In what the Company viewed to be a major overhaul of seniority rights, it agreed to permit bumping between departments, subject to a requirement of 60 days' experience in respect of certain positions. Although the Union representatives viewed those modifications as being considerably less dramatic, they agreed to incorporate them into a one-year collective agreement which was entered into prior to the expiry of the 198 1-83 collective agreement, without resort to conciliation. Although the Company introduced a number of changes in the work place, there were no grievances during the first nine months of that collective agreement. However, several grievances were filed after the onset of bargaining in early 1984.

12. With regard to the relationship between the Union and the Company during the period from 1980 to 1984, Mr. Patterson testified that he "did not get the feeling from the Staff Representative that he [Mr. Berry] felt entirely comfortable with the relationship". He also testified that the relationship was "based on the fact that [the Union] had taken relatively short term collective agreements which were not 'Cadillac' agreements." However, it is clear from the evidence as a whole that following the very rocky start described above, the relationship between the parties gradually matured into a workable collective bargaining relationship which, although not wholeheartedly embraced by all members of management, the Company was prepared to live with, in accordance with its obligations under the Labour Relations Act.

13. The Union gave the Company written notice to bargain on December 21, 1983. Bargaining sessions were held on January 26, February, 13, 14, and 27, and, following the appointment of a conciliation officer, on April 4 and 5, 1984. The most prominent subjects of discussion at those meetings were seniority, bumping rights, temporary transfers, and grievance time limits. Each of the parties proposed some compromises but no progress was made since the Union remained firmly of the view that substantial changes were needed, while the Company remained steadfast in its view that no such changes were necessary or appropriate as, in its view, there had been a "complete overhaul" just twelve months earlier. Following receipt of a "no board" report dated April 16, 1984, the Union established 12:01 a.m. on May 3rd as a strike deadline. Mediation sessions were held on May 1 and 2 with the assistance of mediator Fraser Kean. Various compromises were proposed concerning the items in dispute but did not meet with acceptance. On the afternoon of May 2, the parties left those issues and turned their attention to monetary issues. They also agreed to extend the strike deadline to 12:01 a.m. on May 6. The Company's introductory economic offer was then presented to the Union through the mediator. When that offer did not generate a satisfactory response, the Company, after carefully considering its position, decided to put together its "settlement offer" (Exhibit #6) for presentation to the Union by the mediator. That offer was not acceptable to the Union. When further efforts by the mediator to effect a settlement did not meet with success, the Union representatives advised the Company through the mediator that they were going to hold a strike vote on May 5 on the Company's offer.

14. At a meeting held on May 5, Union representatives presented the Company's "settlement offer" to the membership and recommended that they reject it. A secret ballot vote was then conducted, in which voters were given the choice of either accepting the offer or going on strike. The majority voted in favour of striking. After that meeting Ms. Devoe telephoned Mr. Potter and advised him that a strike would commence on Monday morning (May 7) as the membership had turned down the Company offer and voted in favour of striking. After receiving that information, Mr. Potter sent the following telegram to Mrs. Cadogan and Mr. Berry:

This will acknowledge receipt of your notification to us that your members are taking strike action against the company commencing May 7th, 1984.

Please be advised the company recognizes the right of the union and its members to conduct a strike and to picket and to ask others to respect the picket line. However, the union and its members must respect the right of the company to carry on its business in every respect and they must provide free access to non-striking employees to go to and come from work unobstructed. Free access must also be provided for the delivery of goods and services.

Further, the company agrees to abide by the law during the dispute and it is expected that the union and its members will act lawfully also and conduct a peaceful strike. Disciplinary action will be taken by the company against any employee engaging in misconduct during the strike.

Pay cheques will be mailed to employees on the regular pay day unless they make other arrangements to pick them up. Further, insurance benefit premiums will not be paid by the company on behalf of striking employees beyond May 31st, 1984. Coverage for weekly indemnity benefits cease immediately. OHIP. certificate of payment forms will be issued during June if the strike continues beyond May 31st.

[emphasis added]

15. As a result of its 1979 experiences with incidents on the picket line and mass picketing, the Company arranged to have a bright light installed at the entrance to its property on the night before the strike began. A line was also painted to demarcate the Company's property line. Arrangements were also made for additional security personnel and for cameras to photograph picket line activity. (The Union did not contend that any of those actions violated the Labour Relations Act in the circumstances of this case.)

16. On May 7, the Company implemented the (first year) increase of 4% (and the new mileage rates for truck drivers) contained in its "settlement offer". On May 11, Marvin L. Cash, the respondent's Vice-President and Managing Director, wrote as follows to each employee in the bargaining unit:

It is unfortunate that the Company and the Union were unable to reach a settlement on a new contract. The Company's offer brings the weighted average average hourly rate to $7.90 per hour in the first year, which we feel is appropriate for warehouse work in the Barrie area. The improved wage rates were put into effect on May 7th. A copy of the rate schedule is attached for your information.

The Company does recognize the Union's right to conduct a strike. However, the Union and our employees must also recognize the right of the Company to continue its business in all respects. You also have the right to work if you should wish to do so. Again, your legal right to take part in the work stoppage is recognized if that is your decision. However, in the event that you want to come to work, you are perfectly welcome to do so. You can arrange this by calling Radio Shack at 728-6242 and talk to your Supervisor.

As you are probably aware, no employee will be required to drive his or her own vehicle through the picket line as transportation is being provided by the Company.

17. On May 24, 1985, Ray Illing, the Director of the Ontario Conciliation and Mediation Service, convened an exploratory meeting at the request of Mr. Patterson, in an attempt to determine if it would be useful for the parties to return to the bargaining table. The Company was represented at that meeting by Mr. Potter, Larry Bertuzzi (its Canadian counsel), Stewart Gordon (its U.S. counsel), and Mr. Van Ispen (its Controller). The Union was represented by Mr. Patterson, Mr. Berry, and Ms. Cadogan. At that meeting Mr. Patterson advised the Company that the Union had the support of the Canadian Labour Congress and the Ontario Federation of Labour. The parties then proceeded to discuss interplant job opportunities, with the Union representatives asserting that some members of the bargaining unit were being "dead-ended" while other employees with less seniority were getting better job opportunities, and the Company, through Mr. Potter, citing examples of employees who had progressed up through the ranks, and expressing the view that the changes represented by the Union were unnecessary. Although the Union representatives had prepared a "bottom line monetary position" for presentation to the Company, they decided not to table it because they did not feel that it would be a fruitful exercise in view of the fact that the parties were far from agreement on non-monetary items. The parties engaged in a candid discussion of their respective positions on the outstanding issues, but no progress was made at that meeting, which lasted approximately 45 minutes. Near the end of the meeting, Mr. Patterson said, "Perhaps the strike hasn't gone on long enough", to which the Company representatives replied, "You said it, not us." The meeting ended shortly after that exchange, when Mr. Patterson suggested that there was no point in continuing. It was not suggested by the Union that the Company was bargaining in bad faith at that meeting, or at any other time during the negotiations prior to October 25, 1984. Indeed, Mr. Patterson testified that the discussions were "very civil" and that they involved "two parties in a difficult situation trying to come to a resolve" concerning matters about which they had an honest difference of opinion.

18. Although almost all of the employees in the bargaining unit went on strike, the Company continued to operate during the strike and used rented mini-buses to transport across the picket line members of management, non-bargaining unit employees, temporary replacement workers, and bargaining unit employees who elected not to strike (or to return to work prior to the end of the strike). During the course of the strike, approximately ten of the strikers abandoned the strike and elected to return to work. However, the rest of the employees, including a number of employees who had refused to participate in the Union's "first agreement" strike, remained on strike until late in October.

19. In explaining why the Company decided to exercise its right to use replacement workers to carry on business during the strike, Mr. Potter testified that the Barrie facility was the Company's only warehouse and distribution centre in Canada, and that if it had not continued to operate, the Company would have been unable to deliver goods to its 800 retail outlets and might have been forced to layoff 1,800 sales people, as well as many non-bargaining unit employees at the Barrie facility. It is also reasonable to infer that the Company was seeking to maintain its profitability and its bargaining power. Although Mr. Potter testified that there were isolated cases where the boycott [by the union movement] had effect, he conceded in cross-examination that he was not aware of the Company's "ability to pay" being impaired by the strike.

20. Although officials of the Ministry of Labour were in touch with each of the parties from time to time as the strike continued, no further meetings between the parties occurred at any time between May 24 and October 25, 1984. It is also clear from the evidence that at no time during that period did the Company expressly renew its offer of May 2 following its rejection by the membership, or indicate to the Union whether or not that offer remained available for acceptance. However, it is an undisputed fact that Mr. Bertuzzi advised Mr. Kean on behalf of the Company that a settlement might involve "return to work issues".

21. Near the end of October of 1984, Mr. Berry and the other members of the Union's bargaining committee did some very serious "soul searching" in recognition of the fact that they were nearing the end of the six-month period during which the striking employees were entitled to apply for reinstatement under section 73 of the Act. Since Mr. Berry had come to the conclusion that the strike was lost, he turned his attention to getting the strikers back to work. In this regard, he was concerned that the Company might discharge the 26 employees who had been charged with various strike-related criminal offences during the course of the strike. He was also concerned that the Company might attempt to use its bargaining power to insist that those employees remain discharged as a condition of settlement. Having considered various options, Mr. Berry, after consulting with his immediate supervisor (Ed Hearst), decided about an hour before the October 25th meeting was to begin that he would "use [his] authority as a staff representative to ratify the contract" by accepting the Company's May 2 offer. It was Mr. Berry's view that if he adopted that course of action, any discharged employees would have access to the grievance procedure.

22. After the Company was advised by the Ministry of Labour that a meeting of the parties had been called for October 25, 1984, the Company's bargaining committee met in caucus on October 24 to decide upon the position which they would take on the following day. Since they anticipated that a settlement would soon be reached, they considered what their position would be with respect to various changes which had been implemented during the strike, and with respect to "return to work" issues. They also discussed the outstanding contract issues and developed a revised proposal. Company officials also reviewed all of the "employee misconduct" which had occurred during the strike and decided to discharge five employees, and to suspend two other employees for four weeks. None of the discharged employees was a member of the Union's bargaining committee although one of them, Catherine Ritchie, was the Union's financial secretary. Mr. Potter was unaware that Ms. Ritchie held a position with the Union, but he was aware that one of the two suspended employees was a Union steward. In explaining why the Company took disciplinary action at that time rather than earlier in the strike, Mr. Potter testified: "It hasn't been my style, or the Company's, to discharge people during a strike. [To do so] heats up the dispute. No one wants that. We hadn't had mass picketing. We didn't want to generate any more heat than was already there." He also testified that he took into account the Board's decision in the Becker Milk Company Ltd. [1977] OLRB Rep. Dec. 797, and that the prime reason for discharging the employees prior to the meeting on October 25 was to make the discharge inarbitrable, as the Company felt very strongly about their misconduct and "wanted to do everything legal that lit] could to keep them discharged." He also candidly conceded in cross-examination that he realized that after a six-month strike the discharge of five employees would be a very difficult issue for the Union, that those discharges might render the achievement of a collective agreement very difficult for the Union, and that the Union might be faced with a choice of agreeing to the five discharges or continuing the strike beyond six months and thereby jeopardizing the return to work of the remaining strikers. Mr. Potter testified that the Company was "hard bargaining" and that it "was in a strong negotiating position" and 'intended to have those five employees no longer employees." He also told the Board that he expected that the Union would raise the discharges and suspensions in bargaining and that "if it came to bargaining, [the Company] would take the position that they remain fired, not as a bargaining tool, but as one of the parts of the return to work agreement". He further testified that the Company could have been influenced by discussion if there had been an opportunity to discuss the matter during the negotiations which the Company expected to occur concerning return to work issues.

(We make no finding at this stage of the proceedings as to whether or not any of the employees in question engaged in strike-related misconduct and, if so, whether that was the sole reason for the discharges and suspensions. That issue remains to be decided at a later date in the event the parties are unable to resolve that matter themselves. In this regard, we note that at the time he asked the Board to sever this aspect of the complaint and decide it in advance of the balance of the complaint, Union counsel acknowledged that for purposes of this phase of the complaint, the Board must treat the discharges and suspensions as not involving any illegality, although he expressly reserved the right to argue that the timing of the discharges and suspensions should lead the Board to conclude that the Company was attempting to avoid entering into a collective agreement contrary to section 15 of the Act.)

23. As a result of their discussions on October 24, it was the Company representatives' plan for the October 25 meeting to first inform the Union of the various operational changes which had been made during the course of the strike, and then to "negotiate the return to work and outstanding contract issues". Those operating changes included the contracting out of certain computer repair work and of certain "truck runs in Quebec and the West", the establishment of the entire warehouse as a "no smoking" zone, the banning of the use of private radios in the warehouse, the establishment of a new (non-bargaining unit) job in the parts department, the establishment of a second shift, and the Company's decision to open a new distribution centre in Western Canada (as an expansion, rather than a replacement, of the Barrie operation to which this complaint pertains). Although the Company did not intend to negotiate with the Union concerning those changes (which had already been implemented and which the Company planned to continue in effect after the strike), they considered it to be part of their bargaining obligation to inform the Union of those changes. The Company also planned to advise the Union of the five discharges and the two suspensions, which were imposed on October 25 between 11:30 a.m. and 12:30 p.m. by means of telegrams sent by Mr. Potter to the seven employees affected.

24. The October 25 meeting was scheduled to begin at 1:00 p.m. at a Ministry of Labour meeting room in Toronto. However, the commencement of that meeting was delayed for approximately half an hour at the request of Mr. Berry. When Mr. Kean entered the meeting room at 1:30 p.m., he announced that the Union had a document which it wanted to present to the Company and which he had not read. Mr. Berry then immediately handed the Company representatives four copies of the following letter (Exhibit #10):

DELIVERED BY HAND United Steelworkers

of America,

25 Cecil Street,

TORONTO, Ontario

25 October, 1984

Radio Shack Division

Tandy Electronics,

Bayview Drive,

BARRIE, Ontario.

Dear Sir:

Re:Labour Dispute

By this letter the union accepts the outstanding offer of the company made in writing on May 2nd, 1984, in all respects.

We therefore take the position that there is a collective agreement in place from the moment of delivery of this letter to you.

The union is prepared to sign a formal collective agreement incorporating the amendments agreed to as soon as one has been prepared.

This will further advise you that all persons presently on strike are prepared to return to work pursuant to this settlement and Section 73 of the Labour Relations Act.

Yours truly.

UNITED STEELWORKERS OF

AMERICA and its LOCAL 9011

(signed) Frank Berry

When Mr. Berry presented that letter to the Company, he was unaware of the aforementioned discharges and suspensions.

25. The Company representatives then requested and were given an opportunity to caucus in order to consider their position. Mr. Potter's evidence concerning his reaction to that letter was: "I was quite shocked. I had been in labour relations and contract negotiations for 30 years. I've never seen anything like this before. I reacted that there was no meeting, no opportunity to talk about issues. I was puzzled, particularly over the Union saying that there is a contract and yet employees propose to come back to work under section 73, which occurs when there is no contract."

26. After caucusing for about ten minutes to consider their position, the Company representatives met again with the Union representatives and informed them that they did not agree with the Union's position and that, in their view, there was no contract. They then asked the Union representatives if there was any point in trying to negotiate the term of the collective agreement and return to work matters, to which Mr. Berry replied in the negative. In the ensuing discussion, Mr. Berry remained firm in his view that there was nothing to negotiate because the parties had a collective agreement since the Union had accepted the Company's offer of May 2. However, he also told the Company representatives that the Union was prepared to listen to anything the Company had to say. Following repeated statements by the Union that there was a collective agreement and repeated statements by the Company that there was no collective agreement, the Company proceeded to advise the Union of the aforementioned operational changes and of the five discharges and two suspensions. The Company also assured the Union that none of those operational changes would result in any layoffs since the affected employees would be absorbed into other (bargaining unit) jobs. After receiving this information, Mr. Berry stated that as far as the operational changes were concerned, the Company could probably do all of that under the collective agreement anyway, but that as far as the discharges and suspensions were concerned, the Company was "half an hour too late". When Mr. Berry indicated that the Union would be grieving the suspensions and discharges, the Company asserted that they had taken place earlier that day and that they were not grievable. Mr. Berry replied that the Union was going to grieve them anyway. When the Company asked Mr. Berry if it was the Union's position that the striking employees would be returning to work under section 73, Mr. Berry replied, "Yes, everyone will be in to work on October 29." The meeting closed with the Company stating that it would accept all of the employees back to work under section 73, except the five employees who had been discharged.

27. It was Mr. Berry's evidence that he was not surprised by the discharges. Indeed, he testified that he was "surprised that there weren't more fired". He readily conceded that he was "trying to outmaneuver the discharge of people". However, he adamantly resisted Company counsel's suggestion that his actions were "sneaky", and asserted that the Union gave up its right to further negotiate in order to "ensure that the Company couldn't discharge employees without recourse to the grievance procedure and use it to scuttle the negotiations".

28. Mr. Potter testified that the matters which in his view had to be negotiated in order to arrive at a settlement included the term of the collective agreement, return to work matters, and resumption of benefits. He also testified that "depending on the term, the offer could have been different in terms of dollars". With respect to the term of the agreement, Mr. Potter noted that the Company had proposed a three-year collective agreement that, under the terms of its May 2 offer, was to expire on March 12, 1987. Under the terms of that offer, there was to be a 4% increase effective as of the date of ratification, a 3% increase effective March 13, 1985, and a further 3% increase effective March 13, 1986. ln this regard, it was Mr. Potter's uncontradicted evidence that "it is not new to the United Steelworkers for an adjustment Ito be made] to the agreement dates where there's been a strike; it's common at Inco and other employers they represent." With respect to return to work issues, Mr. Potter testified that the Company viewed those issues as being an integral part of a settlement, and suggested that the matters to be negotiated included "who comes in first, when, and to what jobs". In this regard, he noted that in view of the displacement of some of the employees such as the truck drivers whose work had been contracted out, there would be some bumping rights to be exercised. He also noted that the Company had approximately 140 employees working in the bargaining unit at that time, 91 of whom were to be displaced by the returning strikers. (The Company's work force had increased during the strike as a result of normal seasonal fluctuations in bargaining unit work.)

29. Counsel for the Union contended that the Company's October 25 repudiation of its offer of May 2, and its interjection of the aforementioned discharges, constituted bad faith bargaining prohibited by section 15 of the Act. He conceded that a party cannot necessarily expect that an offer that has been made and rejected will remain available for acceptance in all circumstances without being formally withdrawn. However, he submitted that that principle must be applied with caution to assure that it cannot be used to cover conduct which is unlawfully motivated. In this regard, he urged the Board to find that the timing of the discharges was designed to make it virtually impossible for the Union to enter into a collective agreement, by presenting the Union with a "Hobson's choice, tailor-made for rejection", between accepting the inarbitrable discharge of five members of the bargaining unit or continuing the strike beyond the six-month period contemplated by section 73, thereby jeopardizing the return to work of the remaining strikers. He further submitted that the Company's decision to effect the five discharges at that time crossed over the boundary of hard bargaining and amounted to unlawful interference with the Union's right to represent them. Thus, he submitted that the Company contravened not only section 15 of the Act, but also sections 64 and 66. It was also his contention that the Company had failed to provide to the Union, and to the Board, an adequate explanation of why the May 2 offer was no longer available for acceptance by the Union on October 25. The relief sought by the Union includes a declaration, a cease and desist order, and a direction that the parties execute a collective agreement embodying the terms of the Company's offer of May 2.

30. In his submissions to the Board, Company counsel contended that his client had not contravened the Act in any way. It was his position that no collective agreement was reached on October 25 because at that time there was no Company offer capable of acceptance by the Union, the Company's offer of May 2 having been rejected not only by the Union bargaining committee, but also by the Union membership in May of 1984. He further argued that the Company was under no obligation to provide the Union, or the Board, with an explanation of why the Company's May 2 offer was no longer available for acceptance by the Union on October 25. However, he also submitted, in the alternative, that the Company had provided an adequate explanation by referring to the need to negotiate about "return to work matters" and the term of the collective agreement. In this regard, he contended that it was self-evident that a number of matters would have to be negotiated, such as the expiry date of the collective agreement, adjustment of benefits, and the timing of the return to work of the strikers who had been temporarily replaced by other workers during the strike. In support of that submission he noted that what the Company was offering on May 2 was wage increases totalling 10%, in the context of a collective agreement that would run for approximately 34-1/2 months. He further noted that in the absence of a revision of the proposed expiry date of the agreement, the Company would obtain only 28-1/2 months of "labour peace" in return for the 10% increase, rather than the 34-1/2 months contemplated at the time the offer was made. Company counsel also submitted that it would be unreasonable to expect his client to disclose all of the bargaining possibilities in the face of a refusal by the Union to engage in any further bargaining. It was also his contention that insofar as the Union's bargaining complaint was based on the five discharges, it was entirely premature in that the Union had not yet even attempted to bargain about those discharges, much less reached a point in bargaining at which it could legitimately claim that the Company's position with respect to those discharges was tailor-made for rejection.

31. As reflected by a number of the cases to which counsel referred the Board in their able submissions, this is not the first case in which the Board has been called upon to resolve issues of the type raised in these proceedings. It is well established in the Board's jurisprudence that a party which possesses superior bargaining power is legally entitled to engage in "hard bargaining" with a view to obtaining a collective agreement that contains terms favourable to its economic and other legitimate interests. See, for example, Pine Ridge District Health Unit, (19771 OLRB Rep. Feb. 65, at paragraph 14, in which the Board wrote:

….. [section 151 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.

See also CCH Canadian Limited, [1974] OLRB Rep. June 375; Radio Shack, [1979] OLRB Rep. Dec. 1220; and Canada Trustco Mortgage Company, [1984] OLRB Rep. Oct. 1356, in which the Board wrote, in part, as follows (at pages 1363-4):

30. . ... In recent years the Board has been scrupulous to protect the framework of collective bargaining: the independence of the union, the integrity of its role as the employees' exclusive bargaining agent, and the right to information necessary for it to properly perform its statutory role. But the Board has been equally clear that it will not act as interest arbitrator, or prescribe the precise contents of the parties' collective agreement - even in the face of an "egregious" breach of the duty to bargain in good faith (see Radio Shack, supra). The content of the agreement is for the parties to determine, in accordance with their own perceived needs and relative bargaining strengths. 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. Despite the adversarial aspects of collective bargaining, there are substantial areas of mutual interest between employers and employees which informed discussion may reveal. 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.

31. One cannot quarrel with the proposition that the "duty to bargain in good faith" must encompass an obligation to engage in informed and rational discussion, and in exceptional circumstances an employer's position at the bargaining table may be so patently unreasonable or devoid of apparent business justification as to evidence a desire to avoid any collective agreement altogether. So may an unexplained retreat from a previous agreed position, or the untimely insertion of new issues into the bargaining process. However, the Board must be careful that in adjudicating disputes and giving a reasoned elaboration for its decisions, it does not impose its own model of decision-making as the normative standard for the collective bargaining process. Collective bargaining is not simply a matter of presenting proofs and reasoned arguments in an effort to achieve a favourable outcome, nor is that outcome necessarily arrived at, or explained, by a logical development from given and accepted premises. It is a process in which reason plays a part - but not the only part. There may be a range of potential outcomes or solutions and the ultimate result may have more to do with economic strength than abstract logic. In particular collective bargaining situations there simply may not be any commonly accepted principles or criteria and, in consequence, no objective basis for distinguishing a "claim of right" from a "naked demand". Reason and self-interest are inextricably intertwined. Ultimately the parties may reach agreement only because of a realistic appraisal of the value of their objectives in relation to their ability to obtain them, including the costs they are able to inflict on one another. It may have little to do with what some outsider might consider a "fair" settlement, or a just allocation of rewards to capital and labour.

32. 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 recision of 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. See John T. Hepburn, Limited, [1985] OLRB Rep. Jan. 75, at paragraphs 12 and 16. See also International Wallcoverings, [1983] OLRB Rep. Aug. 1316, in which the Board, after finding that three strike-related discharges were not motivated by anti-union animus, wrote as follows (in paragraph 37):

It is important to point out in light of the earlier discussion of principle, that even a non-motive section 64 analysis of these three discharges and refusal to arbitrate would not produce a different result to this point, We have found that, given the circumstances, the decision to discharge was not clearly excessive and by itself a hallmark of anti-union animus. The decision not to arbitrate merited no different characterization. Were we to intervene on the basis of section 64, the Board would be saying that all discipline issued during a strike must be submitted to arbitration because any potential excessiveness could deter participation in protected activity. This extreme sensitivity to protected activity might well be seen as insufficiently sensitive to improper picket-line misconduct and would not obligate trade unions to take all such issues to arbitration instead of placing them on the bargaining table. It would also be difficult to reconcile our sensitivity to any adverse impact on protected activity with the absence of a legal obligation to arbitrate arising under the Act. A clear imbalance in favour of protected activity does not exist. In this type of situation it seems to us that a non-motive approach to section 64 should be reserved for instances of clear mistake or for discipline clearly out of all proportion to the misconduct in issue.

33. A party may alter or revise its position at the bargaining table in response to changed circumstances, such as a diminished "ability to pay". However, an alteration of position will contravene section 15 of the Act if it is designed to avoid entering into a collective agreement. The following passage from Wilson Automotive (Belleville) Ltd., [1980] OLRB Rep. July 1136, is instructive in that regard:

34. We start with the long held view of this Board that 'the parties are best able to fashion the law which is to govern the workplace and that the terms of an agreement are most acceptable when the parties who live under them have played the primary role in their enactment. ' (See the De Vilbiss (Canada) Ltd. case, [1976] OLRB Rep. March 49 at para. 13.) This Board recognizes the concept of voluntarism as relied upon by the respondent company. As a general proposition a party is free to take whatever position best satisfies its self interest providing it maintains the intention of concluding a collective agreement. The difficult cases arise where a party tables a position which it maintains is legitimately in its self interest but which the other side maintains is destructive of the process or designed to avoid a collective agreement and to undermine the trade union. In the Pine Ridge District Health Unit case, [19771 OLRB Rep. Feb. 65, the Board noted:

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

(See also Toronto Jewellery Manufucturers' Association [19791 OLRB Rep. July 719)

However, the Board's views as expressed in the Pine Ridge District Health Unit case, supra, cannot be taken as a carte blanche to alter one's bargaining position at any time and for any reason. Clearly, an alteration of position designed to wreck the critical decision-making framework necessary for collective bargaining would be contrary to section 14 [now section 151 of the Act. (See the Graphic Centre (Ontario) Inc. case, [19761 OLRB Rep. May 221.) Similarly, the move to a position tailor-made for rejection would betray an intention not to conclude a collective agreement contrary to the duty imposed by section 14 of the Act. It follows, therefore, that while the parties may govern themselves by self-interest and may alter bargaining positions in response to changes in relevant conditions, a party which alters its bargaining position may leave itself open to the allegation that it is bargaining in bad faith. It falls to the Board in these cases to examine the evidence in light of the labour relations dynamics and draw the appropriate inferences.

In that case, which involved negotiations for a first agreement, the company waited until five and a half months after the commencement of the strike, and five and a half months after it had put into effect the rates contained in its last offer, to announce that the owner of the company was only prepared to negotiate a collective agreement if the union would reimburse it for the $100,000 or more lost during the strike, or accept a 50 per hour reduction in rates of pay. In finding the company to be in violation of what is now section 15 of the Act, the Board wrote:

10. A natural suspicion attaches to the motives of an employer who alters his bargaining position at a critical stage in negotiations; this is especially so where the negotiations are for a first agreement. When as in this case, the employer does not simply table a revised position based on his projected ability to pay, but requires the trade union to agree to a calculation of the company's losses during the strike and the subtraction of these losses from the company's last offer, the concern increases. When the employer who is revising his position in this manner has paid those working during and after a strike on the basis of his last pre­strike offer and has not unilaterally cut these rates in response to changing economic conditions as he is entitled to do, the Board must draw the inference that the employer no longer has the intention of entering into a collective agreement. The decision of the company to continue to pay at the level of its past pre-strike offer throughout the period, coupled with the tabling of a position which requires the union to agree to a calculation of its losses during the strike, and makes the signing of a collective agreement conditional on a reduction in wages equal to the company's losses, creates a Hobson's choice for the trade union. The union is put in the position of having to agree to the company's proposal, thereby identifying itself as the cause of a reduction in the employees' wages based on the cost to the company associated with a legitimate exercise of the right to strike (in effect the imposition of a penalty on employees for having exercised the right to strike), or of abandoning the employees who have chosen the union to represent them collectively. In the circumstances, the proposal must be characterized as having been designed for rejection. Even if the trade union was prepared to accept such a proposal, which is doubtful to say the least, the employees whose wages would be reduced to make the company whole for the losses incurred by it during the strike, would most certainly reject it. On the facts we can come to no other conclusion but that the company's bargaining strategy was designed with this result in mind.

Similarly in Fotomat Canada Limited, [1980] OLRB Rep. Oct. 1397, the Board found a contravention of section 15 of the Act where an employer, whose "position on union security was primarily aimed at avoiding a collective agreement", withdrew its outstanding monetary proposals in order to continue that avoidance in the face of legislation (Bill 89, which amended the Act to include what is now section 43) that effectively eliminated union security as a matter of impasse between the parties. (See also Shaw Almex Industries Limited, 11984] OLRB Rep. Apr. 659.)

34. Of particular relevance to the instant complaint is the Board's decision in The Toronto Jewellery Manufacturers' Association, [1979] OLRB Rep. July 719. In that case the Association made a proposal to the union on January 30, 1979, which was rejected by the union by means of a counter-proposal. The Association renewed its offer in a letter dated February 12, 1979. After attempting unsuccessfully to obtain a further offer from the Association, the union embarked upon a strike. Approximately three weeks after the commencement of the strike, the union purported to accept that offer through a ratification vote. In dismissing the union's complaint alleging that the Association had contravened what is now section 15 of the Act, the Board wrote, in part, as follows:

35. It is clear from the facts in this case that the complainant, having been unable to use whatever bargaining power it possessed at the time to obtain a satisfactory proposal from the Association for settlement of negotiations, took the ultimate recourse of resorting to the economic sanction of a strike in an attempt to obtain bargaining objectives which it must have seen to be in its best interest. This action was taken some two months after the Association made its last offer. Albeit, the action was not taken until one last effort was made to gain a further offer from the Association. A little more than three weeks after it began the action, the complainant sought and obtained from its members acceptance of the Association's last offer. The question is, within the collective bargaining context, was the offer still there for the complainant to accept.

36. Collective bargaining is a dynamic process and it is also one to which the parties apply their relative bargaining strengths in an attempt to gain from each other concessions and compromises which eventually produce a collective agreement. There is an implied expectation in the give and take of collective bargaining that concession and compromise will result in agreement without the exercise of economic sanction. In fact, it is not uncommon for either party to make this an explicit condition attached to tentative agreement on any or all items so that, if there is either a lockout or strike, all issues are "back on the table". There is no evidence in our case that such a condition was attached to the Association's last offer and the evidence is that it did not subsequently withdraw its offer. The Board, therefore, must consider what effect, if any, the passage of time and the intervening events have had on the status of the offer.

37. In Pine Ridge District Health Unit, 119771 OLRB Rep. Feb. 65, the Board commented as follows about the collective bargaining process:

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

The Board found, in all the circumstances of that case, that the conduct of the employer following a lockout of withdrawing from tentative agreement on one of the major issues between the parties was not a breach of the section 14 obligation. The Board concluded that the employer's action might be tough bargaining but was not a violation of the Act. In so doing, the Board was recognizing that one of the realities of the bargaining process is that intervening events may be legitimate cause for the parties to alter their positions.

10. The question in the instant case is whether, absent a formal withdrawal of the Association's last offer, the passage of time and the intervening event of the strike have extinguished the last offer. The complainant rejected it in the first instance by making a counter­proposal. Whatever the Association's reasons were for writing its letter of February 12th setting out the offer in writing, it is reasonable to conclude that the offer was still open at the time. The complainant, after determining that no further proposal was forthcoming, then resorted to the ultimate form of rejection by embarking on a strike. Is it entitled to expect, after being on strike for up to three weeks, that the offer is still there for the taking? It would seem from the Association's silence that it thinks not, however, that is a matter for the Board to determine. Having regard to the Board's comments in Pine Ridge, supra, about the collective bargaining process, it would be naive in the extreme for parties to collective bargaining to expect that conditions which prevailed before a strike or lockout to still prevail afterward. That is not to say that both parties might not see it to be in their best interests to agree to pick up bargaining where they left off before a strike or lockout; rather it is to say that neither party is entitled to rely on that being the situation. The Board's jurisprudence on section 14 complaints recognizes this reality when it is dealing with the refusal of one party to resume bargaining during or following a strike or lockout. One of the factors the Board takes into account is whether the party requesting that bargaining be resumed has indicated that it is prepared to make significant concessions from its position prior to the onset of economic sanction. In the absence of such an indication, the Board usually will not find a refusal to resume bargaining to be a section 14 violation. The evidence in this case establishes that the complainant, by going on strike, has taken its best shot at the Association to try and get an improved settlement offer. It has failed and is now trying to salvage the terms which were available before the strike.

11. Having regard for all of the foregoing, the Board finds that the last offer has been extinguished by the passage of time and the intervening event of the strike between February 12, 1979, when the Association issued the letter containing its last offer and May 2, 1979, when the complainant first attempted to advise the Association that the complainant's members had accepted the offer.

12. For similar reasons, we are satisfied that the Company's offer of May 2, 1984 had been extinguished by the passage of time and by the intervening event of the strike long before its purported acceptance by the Union on October 25. As indicated above, the membership specifically rejected that offer on May S and voted in favour of striking. The strike commenced on May 7 and continued for over five and a half months until late October when the employees elected to exercise their right to reinstatement in their former employment under section 73 of the Act. Under the circumstances, Mr. Berry's attempt to salvage the terms that were available to the Union prior to the onset of the strike by accepting the Company's offer of May 2 did not result in a collective agreement as there was at that time no outstanding Company offer capable of acceptance.

13. We are also satisfied in the circumstances of this case that the Company's unwillingness to enter into a collective agreement embodying the terms of its May 2 offer without any changes did not constitute a contravention of section 15 (or any other provision) of the Act. Since almost six months had elapsed from the time that offer was made, during which period the Company had hired over one hundred temporary replacement workers in order to carry on its business, it is hardly surprising that the Company would desire to bargain with the Union concerning such matters as the term of the collective agreement and "return to work" issues, particularly in view of the fact that the balance of bargaining power had shifted from the Union, which had lost the strike, to the Company. That the Company's representatives did not provide a more detailed explanation of the matters about which they wished to bargain on October 25 is also not at all surprising in view of Mr. Berry's repeated assertions that there was nothing to bargain about because the parties already had a collective agreement.

14. Much of the argument presented on behalf of the Union in the present case was directed toward the timing of the five discharges and two suspensions (which, as indicated above, are to form the subject matter of the second phase of this complaint and must be presumed to be lawful for the purposes of this decision). As indicated above, Union counsel contended that by discharging those individuals at that time, the Company intended to avoid entering into a collective agreement by presenting the Union with the unsavoury choice between accepting the inarbitrable discharge of five members of the bargaining unit or continuing the strike beyond the six-month period contemplated by section 73, thereby jeopardizing the return to work of the remaining strikers. However, the evidence adduced before the Board, considered as a whole, does not support that characterization of the Company's conduct. At the onset of the strike, Mr. Potter advised Mr. Berry and Mrs. Cadogan (by telegram) that disciplinary action would be taken by the Company against employees who engaged in misconduct during the strike. Moreover, Mr. Potter provided the Board with a credible explanation concerning the timing of the discharges and suspensions. As indicated above, he testified that it is not his or the Company's style to discharge employees during a strike because to do so "heats up the dispute". That this was indeed the Company's practice is evidenced by the fact that the Company discharged two employees near the conclusion of the 1979 strike. It is not difficult to understand why an employer which had encountered mass picketing in an earlier strike would be reluctant to further "heat up" a situation already fraught with tension, particularly where, as in the present case, it was continuing to operate its business during the strike. Moreover, the Company's action did not come as a surprise to Mr. Berry, who was expecting the Company to discharge a greater number of employees and was hoping to make such discharges arbitrable by entering into a collective agreement before they were put into effect. Having regard to all of the evidence, we are satisfied that the discharges and suspensions were effectuated by the Company on October 25, 1984 in a lawful attempt to make them inarbitrable under the collective agreement which it anticipated would be entered into later that day or shortly thereafter, and not in an unlawful attempt to avoid entering into a collective agreement.

15. 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. 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.

16. For the foregoing reasons, the portion of the complaint to which this decision pertains is hereby dismissed.

17. The Registrar is directed to list the balance of this complaint for continuation of hearing, in consultation with the representatives of the parties.

DECISION OF BOARD MEMBER L. COLLINS;

1. I dissent.

2. I am of the view, on the basis of all the evidence, that the discharges and suspensions were announced by the respondent on October 25, 1984, in order to avoid enter­ing into a collective agreement. Thus, I would find the respondent to be in contravention of sections 15, 64 and 66 of the Act, and would grant the relief sought by the Union.