United Brotherhood of Carpenters and Joiners of America v. Aristokraft Vinyl Inc., 1985 CanLII 993

[1985] OLRB Rep. June 799

1532-84-U United Brotherhood of Carpenters and Joiners of America, Complainant, v. Aristokraft Vinyl Inc., Respondent.

BEFORE: Harry Freedman, Vice-Chairman, and Board Members F. Burnet and P. J. 0 'Keeffe.

APPEARANCES: Douglas I. Wray, Walter Oliveira and T G. Harkness for the complainant; M. G. Horan and Hindy Ste gman for the respondent.

DECISION OF THE BOARD; June 12, 1985

1. The United Brotherhood of Carpenters and Joiners of America, hereinafter referred to as the union, filed this complaint alleging that Aristokraft Vinyl Inc., hereinafter referred to as the company, violated sections 15, 64, 66, 70, 72, 75 and 80 of the Labour Relations Act. The complaint was filed on September 13, 1984, approximately one and a half weeks after the company commenced a timely, but allegedly unlawful, lock-out of the majority of the employees in the bargaining unit represented by the union. The complaint before us relates to the conduct of the company and the union from the time the union served notice to bargain on the company shortly after the Board certified the union in March of 1984 to the first hearing in this matter which took place about two months after the lock-out began.

2. The union was certified on March 13, 1984. The union's notice to bargain, dated March 22, 1984, was served on the company and requested a first meeting during the week of April 9, 1984. The company's reply, in writing, was prompt and suggested a meeting on April 11, 1984 after 3:00 p.m. at a location to be determined by the union. The first meeting took place at the union's premises at 5:30 p.m. on April 19, 1984. The company's negotiating team was comprised of Marvin Zeifman, the sales manager of the company, Jerry Zeifman, Marvin Zeifman' s brother and the marketing director of the company, and Hindy Stegman, the company's general manager and the Zeifmans' sister. Two employees of the company and Walter Oliveira, the full-time business agent for the union's Local 2679 were the members of the union's negotiating team. The arrangements for the meeting were made by Mr. Marvin Zeifman and Mr. Oliveira, who also were the spokesmen for their respective negotiating teams. The first meeting lasted approximately a half hour. The union presented the company with a document containing its opening proposals. The company negotiating team briefly reviewed the document and then suggested that the meeting adjourn in order to permit the company negotiating team to carefully study the union's proposals and prepare a reply to it.

3. Mr. Jerry Zeifman testified that Mr. Oliveira, in presenting the document to the company, suggested that it was a good agreement and that the company could sign it that day. Mr. Oliveira denied suggesting at that meeting that the company should sign the document. In our view, it is not material to the outcome of this case to resolve that particular factual issue. There were similar types of differences between the evidence of the company's witnesses and the union's witnesses. However, most., if not all of those differences can be attributed to differing perceptions of the events, and imperfect recall, rather than a deliberate attempt on the part of a witness to mislead the Board. It appears to us that the material evidence relating to the parties' observable conduct was not in conflict, although we are asked to draw different inferences from that evidence and conduct.

4. At the meeting of April 19th, Mr. Oliveira asked the company to provide the union with a list for the next meeting showing the employee's names and wages. The company prepared the list requested and gave it to the union at the next meeting, which was held on Friday, June 1, 1984 at the union's premises. That second meeting was arranged over the telephone by Mr. Marvin Zeifman and Tom Harkness, the union's Canadian Director of Organizing. The company had proposed to meet with the union on Saturday, June 2nd or Sunday, June 3rd, as well as on Friday, June 1st when the June 1st meeting was arranged orally and later confirmed in writing by a letter from Mr. Marvin Zeifman to Mr. Harkness.

5. At the June 1st meeting, Mr. Harkness advised the company that he would be the union's spokesman, and Mr. Jerry Zeifman advised the union that he would be the company's spokesman. The company presented the union with a document containing its collective bargaining proposals that had been prepared by the company negotiating team in consultation with its legal counsel. The union committee briefly reviewed it, and advised the company that they would need time to review and study it. The second meeting lasted approximately a half hour.

6. The third meeting between the parties took place on Sunday, June 3, 1984, at the union's premises. That meeting was not a productive one. The company wished to negotiate using the document containing its proposals as a basis for discussion, while the union wanted to negotiate using the document it had presented to the company at the first meeting. Mr. Harkness advised the company that its proposals were not acceptable to the union committee. The union then introduced a new proposal, which was the master agreement between the union's Local 2679 and members of the Canadian Woodwork Manufacturers Association. There were some discussions about the purpose clause, geographic area to be covered by the agreement, probationary period, union security, grievance procedure, overtime, statutory holidays and vacations. Those discussions were quite heated, with shouting and exchanges of obscenities.

7. At that meeting, Mr. Jerry Zeifman had asked Mr. Harkness whether the union was prepared to be flexible with respect to its proposals, as set out in the Canadian Woodwork Manufacturers Association agreement. Mr. Harkness testified in examination-in-chief that his response to Mr. Zeifman's question was that there was flexibility in some areas, such as travel allowance, union label and cost of living, and no flexibility at all in respect of probationary period, hours of work, vacation pay and statutory holidays. Mr. Harkness also stated that its demand for a union shop, that is, all employees to become and remain union members after completion of the probationary period would not be moderated. Mr. Harkness explained to the Board that the union could not change any of those provisions because if it did, the other companies that were bound by the Canadian Woodwork Manufacturers Association agreement would also want those changes which, in Mr. Harkness's opinion, would have caused "real problems" for the union.

8. During the course of that third meeting, Mr. Harkness referred to a completed, but unsigned application for appointment of a conciliation officer, and made it clear to the company that unless there was some progress, the union would be requesting conciliation. The company's response was that there should be further meetings before the union resorted to the conciliation process. The meeting ended with the company indicating to the union that it wanted more time to study the Canadian Woodwork Manufacturers Association contract. The meeting had started at about 10 a.m. and had concluded at about noon. Nothing had been agreed to at that meeting. Indeed, the parties had not even agreed to the document which might form the focus of the discussions.

9 At the close of the June 3rd meeting, the company indicated that it would get back to the union with further dates for meetings within the next week. Mr. Jerry Zeifman spoke with Mr. Oliveira on Friday June 8th, and confirmed the conversation by letter to Mr. Oliveira dated June 14, 1984. Mr. Oliveira, in his examination-in-chief, testified that Mr. Zeifman's June 14, 1984 letter set out the conversation that he had had with Mr. Zeifman. That letter stated:

"Dear walter:

Regarding meeting for contract negotiations I undertook to call you back respecting dates for continuing our negotiations. when I called you on June 8th to tell you that we would like to meet with you on Friday, June 15th and Saturday June 16th you told me you had already applied for the appointment of a conciliation officer.

Under these circumstances I think that we would be best advised to meet with the officer after his appointment. It is unfortunate that at such early stage of negotiations you feel a need for a conciliator.

Sincerely,

ARISTOKRAFT VINYL INC.

Jerry Zeifman"

Although Mr. Oliveira indicated that the union was prepared to meet with the company prior to the appointment of a conciliation officer, the union did not specifically request the company to meet with it prior to the meeting with the conciliation officer.

10. The conciliation officer convened a meeting with the parties on July 25, 1984. Mr. Jerry Zeifman testified that prior to the conciliation meeting, the company carefully studied the union's proposals, as set out in the Canadian Woodwork Manufacturers Association agreement. He said that the company felt that there were areas in it that were inapplicable to its operations, other areas that were acceptable in principle, and other areas, such as probationary period, union security, and grievance procedures, that had to be negotiated. The company also compared the union's proposals with a collective agreement between another union and an employer carrying on a similar business to that of the company.

11. At the conciliation meeting, the company agreed to use the union's second proposal, the Canadian Woodwork Manufacturers Association agreement, as a basis for discussions. The parties agreed to a purpose clause and a recognition clause. The union agreed with the company's position that the recognition clause reflect the Board's certificate. The next area for discussion was the probationary period. The company's proposal was unacceptable to the union. Mr. Jerry Zeifman testified that Mr. Harkness, who continued to be the union's spokesman, made it clear to the company that because the company was a woodworking company, and as the Canadian Woodwork Manufacturers Association agreement was the agreement for that industry, the Canadian Woodwork Manufacturers Association agreement was the one the union wanted. Mr. Zeifman responded by saying that the company was not a woodworking company, or a cabinet shop, but rather was engaged in the converting or laminating business (that is, applying different materials, such as papers, foils or vinyls to various media, such as hardboard or particle boaird). Mr. Zeifman also advised the union that the company wanted the agreement to reflect the kind of business in which the company was engaged. It was made clear by Mr. Harkness that the union would not move from its position with respect to the probationary period and union security. The company explained to the union why it thought that the union's proposals were not acceptable. Negotiations then broke down. The union committee discussed the conduct of negotiations up to that point and formed the opinion that little progress had been made. Mr. Oliveira and Mr. Harkness met with the conciliation officer in the presence of Mr. Jerry Zeifman and Ms. Stegman and requested a no-board report be issued. Mr. Zeifman commented at that point that he thought a no-board report was premature. The conciliation meeting ended at about 5 p.m. on that day. The no-board report was issued on August 8, 1984.

12. Mr. Jerry Zeifman testified that following the no-board report, he spoke with Mr. Harkness and with a mediator to arrange a mediation meeting and suggested August 20 or 21, 1985. Mr. Harkness did not recall speaking to Mr. Zeifman about the mediation meeting. Mr. Harkness did remember that August 20 and August 21 were dates suggested for mediation but that they were not acceptable to the union because he could not attend a mediation meeting on those dates. The parties agreed to a mediation meeting on August 31, 1985, which was the Friday before the Labour Day long weekend and after the date on which a timely strike or lock-out could take place. The parties agreed, through the mediator, that they would not resort to economic sanctions until the mediation meeting had taken place. That agreement was confirmed by a telegram from the mediator to the parties. That telegram stated:

“wiIl convene mediation meting [sic] between Aristokraft Vinyl Inc. and United Brotherhood of Carpenters and Joiners of America Friday August 31, 1984 ten a.m. Boardroom fifth floor Ministry of Labour 400 University Avenue Toronto Ontario Both parties have undertaken that there will be no interruption in the operation prior to the conclusion of this meeting."

Mr. Zeifman did not recall receiving the telegram but agreed that such an undertaking was given by the company.

13. Both parties wished to adduce evidence about what was said by them to the mediator and what was said by the mediator to them in the absence of the other party to establish the truth of what was said by the mediator, that is, for a hearsay purpose. The Board raised its concern about the admissibility of such evidence, but permitted that evidence to be adduced since neither party objected to that type of evidence being introduced.

14. The evidence of what the mediator said to each party in the absence of the other is not helpful, and in our view, should not have been admitted into evidence despite the position of both parties that such evidence should be received by the Board. In our opinion, that kind of evidence, besides being hearsay, and given the role of the mediator, not likely to be "reliable" hearsay evidence, runs contrary to the policy underlying section 111 of the Labour Relations Act. The better approach to attempts to introduce this kind of hearsay evidence was set out by the Board in Shaw Almex Industries Limited, [1984] OLRB Rep. Jan. 109. We note that in that case, one party objected to the introduction of evidence about what the mediator had said to one party in the absence of the other party. The Board ruled such evidence inadmissible. The Board stated at page 113-117:

"The Board reviewed the scope of subsection (2) of section 11 1 again in C C H Canadian Limited, [1974] OLRB Rep. June 375, where the trade union applicant applied for consent to prosecute the respondent employer for its alleged failure to bargain in good faith. The issue which arose there, and its resolution, are set out in the following passage from the decision in that case:

9. Mr. Cavalluzzo, through his witness Mr. H. Peacock, who was present at most of the negotiation sessions, wanted to adduce evidence of the course of negotiations through both conciliation and mediation. There was a strong implication that this involved the tendering of evidence about what the conciliation officer or mediator said to Mr. Peacock or what he said to the officers and a strict reading of section 100(2) would preclude any evidence of this kind. However, in Bakery and Confectionary Workers' International Union of America, Local 415 and Gorman Eckert and Company Limited OLRB M.R. December 1969, p. 1135, the question arose as to whether a proposed collective agreement submitted by one party to the other during conciliation (it was submitted to the conciliation officer) was admissible in evidence. After extensively reviewing the case of Building Service Employees' International Union, Local 183 and Trenton Memorial Hospital 64 CLLC 16,302 which gave rise to the enactment of sections 100(2), 100(3), 100(4) and 100(5), the Board ruled that "the purpose of Section 83(2) [now section 100(2)] was intended to protect those conversations of a private nature but that conversations or matters of a non-private nature are not protected by section 83(2) [now section 100(2)]". Accordingly, the proposed collective agreement presented to the applicant and to the conciliation officer was found to be a non-private nature and properly admissible in evidence.

10. It must be recognized that neither section 14 nor section 100(2) can be read to the exclusion of the other. The Board must attempt to accommodate and integrate the purposes of each of these sections and only where there is an irreconcilable difference between the them should the Board read the more specific wording of section 100(2) as overriding the values of section 14. It is believed that the Gorman Eckert decision follows such an admonition. The "private-non-private" distinction breaths meaning into the obligation to bargain in good faith during the conciliation and mediation processes while recognizing the fragile function of the conciliator or mediator - a function of integrity of which depends upon the confidentiality of private communications. This confidentiality was outlined by the Board in Canadian Stakepole Ltd. 59 CLLC 18,412 wherein the majority wrote at p. 1778;

Although the extent to which an administrative board may rely on official notice has not been clearly defined, it would be preposterous to suppose that the members of this Board, constituted as it is, can fail to take cognizance of the fact that most successful conciliators have achieved their success by the use of manifold techniques among which are those of conferring separately with each of the parties and of meeting only with key principals and of the further fact that conciliators in this jurisdiction have from time to time relied on each of these last two mentioned methods of breaking down the barriers to the settlement of a dispute. It is common knowledge that skilled conciliators act as a channel of communication between the employer, on the one hand, and a senior official of the trade union, on the other, at time without a single employee even being aware that the conciliator is dealing with either of the "principals". It would require clear and unequivocal language in the Act to convince us that it was the intention of the Legislature, in enacting the several provisions of the Act that are included under the heading "Negotiation of Collective Agreements", to lay down that conciliation officers must desist from resorting to such techniques should they in their wisdom in any particular case deem it desirable to do so, except perhaps where the other party to the proceeding consents thereto. similarly we cannot bring ourselves to believe that the Legislature in enacting the sections referred to, intended to deny to conciliation boards freedom to resort to tested and time-honoured methods of reconciling the parties to an industrial dispute, as they have done so in this jurisdiction time without number in the past.

Accordingly, private communications - communications with the conciliator or mediator when the parties are not in presence of each other - must have the protection of section 100(2). This is so because the mediator or conciliator must be able to discover a party's true "resistance point" [see; Stevens, Strategy and Collective Bargaining Negotiations (1963) p. 122 and Simkin, Mediation (1973)] and to do so a party must be assurred [sic] that the confidentiality of such communications is inviolable. However public statements - statements made while the parties are in each others presence - if admissible in evidence do not undermine the integrity of the conciliator's or mediator's function and hence are not precluded by section 100(2).

11. Applying these principles to the facts at hand, the Board was prepared to permit Mr. Peacock to give his opinion that at the conclusion of the conciliation and mediation processes the parties were little closer to reaching an agreement but the Board was not prepared to allow him to elaborate on this opinion if it entailed the description of communications he had had with the mediator or conciliator while our of the presence of the company's negotiators. Such communications would be clearly of a private nature.

12. Finally, Mr. Cavalluzzo argued that section 100(2) should be analogized to the privilege of solicitor and client. In other words, he suggested that section 100(2) was a privilege of the parties before the Board and therefore could be waived by any one of the parties. The Board rejected this contention. Section 100(2) is intended to protect the integrity of the conciliator's or mediator's office - it is not a privilege of the parties. If one of the parties could waive the application of section 100(2) and reveal the communications between it and a conciliator for instance, the effectiveness of this official could be seriously impaired. He may have tempered the comments received from the parties or made projections that were based on his own informed but personal speculation. Such revelations would only undermine the usefulness of such offices.

The Board's approach to these questions has always recognized that the primary function of a conciliation officer or mediator is not to act as a postman, courier or telegraph service. He is not the agent of either party for the delivery or receipt of messages to and from the other. The officer has no duty to repeat to one party everything he is told by the other. Indeed, as the above-quoted passages demonstrate, he attempts to have the parties disclose to him things that they do not wish disclosed to the opposite party. Each party is aware that this occurs. This adds to the effectiveness of the officer's private communications which are often carefully crafted so as to blur the line between speculation and revelation. Of course, conciliation officers do convey those positions and changes of position which either party wishes conveyed. Even these communications, however, take place within a context of confidential discussion of the nature sought to be protected both by the principles outlined in Trenton Memorial Hospital and the express provisions of section 111 of the Act, and are ordinarily inseparable from the context when they occur in the absence of the party from which they originate.

Accordingly, we do not accept the argument that testimony concerning one party's private conversations with a conciliation officer or mediator should be accepted in evidence as prima facie proof of what must have taken place between the mediator or conciliation officer and the opposite party. Apart from the doubtful logic and, in the case of statements by the mediator, the hearsay dangers involved in that approach, its adoption would completely undermine the confidentiality of such private conversations. One party's revelations would force the other party to reveal his version of what he said to the mediator. Both parties, would then clamour for permission to call the mediator to resolve the inevitable inconsistencies. Even on a question (if relevant) of the party's mental state, any inference that might be drawn from the party's version of his conversations with the mediator is no more trustworthy than his direct statement of what he was thinking at the time, since the other participant in the alleged conversation is not a compellable witness. Reference to the conversation, therefore, adds nothing but further adverse pressure on the confidentiality, and thence the efficacy, of the conciliation process.

We have reviewed the reported decisions in The Ottawa Journal case, supra. Only one passage suggests that the Board there entertained any evidence of discussions which occurred between a "mediator" and one party in the absence of the other. That appears at paragraph 38 of the Board's first decision at [1977] OLRB Rep. June 309, at p. 318:

38. The parties then met with Ray Illing, a Ministry of Labour mediator. The meetings commenced on April 1st, and continued through the weekend. On Saturday, The Journal, through the mediator, presented a proposal in respect of the Joint Council. The proposal dealt with a number of proposals relating to the terms and conditions of employment of the pressmen, stereotypers, and mailers, and also a proposal referring to a "damage and good conduct clause and orderly return to work clause". At the mediator's request, The Journal provided a clarification of this latter matter on the next day. This clarification referred to specified damage to vehicles, property, and newspapers, and the reservation of the right to claim damages resulting from the union boycotts. On that same day, The Journal presented, through the mediator, its proposal for the Guild contract. Then, on Tuesday, April 5th, The Journal presented its proposal for the Ottawa Typographical Union contract. These two proposals also contained a proposal concerning damage, good conduct, and orderly return to work. The Unions apparently regarded the first two proposals at being bargainable, but regarded the proposal for the Ottawa Typographical Union as being completely unacceptable, primarily because, in addition to not-giving any concession on jurisdiction, it provided no job guarantees at all.

[emphasis added]

It is not clear how these facts were established in evidence. They might have been agreed facts. If they were, their admission would not have offended the principles established in the Board decisions reviewed in this decision. While we do not know from the Ottawa Journal decision how the parties established the facts recited in the passage quoted above, we do know there is no discussion of their admissibility of section 111 of the Act or of the underlying principles reviewed in the Board's previous jurisprudence. Any intended departure from that jurisprudence would, we believe, have been the subject of express comment by the Board. We do not, therefore, take that case as confirming or announcing a policy inconsistent with that jurisprudence.

In the result, we adopt the approach taken by the Board in C C H Canadian Limited, supra. We will not entertain evidence from either party as to what was discussed between its representative and a conciliator or mediator in the absence of the other party where, as here, the other party objects to the introduction of that evidence, We will give no weight to any evidence of that sort which may have been received up to this point.

Evidence of direct communications between the parties is not, of course, affected by this ruling. That is the answer to any concern that the Board's approach hinders enforcement of the duty to bargain in good faith. The course of negotiations can be charted by evidence of direct communications undertaken from time to time to confirm or obtain confirmation of changes in position. Each party, therefore, has the means to ensure that the confidentiality of the conciliation process is not used as a cloak for bad faith bargaining."

Since neither party objected to the admissibility of that type of evidence, and indeed, both parties sought to rely on statements made by the mediator to each of them in the absence of the other, it was received by the Board. However, we are inclined to place little weight on that evidence, particularly where the direct evidence of the parties conflicts with the factual assertions contained in what the mediator was alleged to have said to each party in the other's absence.

15. Mr. Harkness did not attend the mediation meeting. Mr. Oliveira advised the company at the meeting that Mr. Harkness could not be in attendance as he had other union business to attend to in Eastern Canada. Mr. Jerry Zeifman and Ms. Stegman were upset at Mr. Harkness's absence. Mr. Zeifman had been available on August 20 and 21. He had re­arranged an important business trip to Europe in order to attend the meeting on August 31. The mediation meeting had not been scheduled earlier because Mr. Harkness had not been available on those dates. The company felt that nothing useful could be accomplished in the absence of Mr. Harkness, although Mr. Oliveira had advised the company that he had authority to settle the contract.

16. The parties met and reviewed all of the provisions in the union's proposals. The company indicated which items it could agree to and which ones it could not accept. The mediator commented to both parties that it had been a useful start and the parties then separated. It was the union's evidence that the company would be preparing a detailed counter offer and there would be further meetings before economic sanctions would be taken. It was the company's evidence that no useful purpose 'would be served by a further counter offer since there was no indication that the union was prepared to be flexible on any of its proposals, and in particular on the probationary period and union security issues. Mr. Jerry Zeifman and Ms. Stegman were very upset with the lack of progress. Mr. Zeifman testified that he simply advised the mediator that he would consider the company's position and consult with legal counsel. The company expressly denied giving an undertaking to the mediator that it would not resort to economic sanctions until there were further meetings held. It is not disputed that during the face to face meetings between the company and the union, no undertaking was given by the company to prepare another response to the union's position nor was there any undertaking not to resort to economic sanctions until further mediation meetings were held. The mediation meeting ended early in the afternoon.

17. We are satisfied that the company did not give an undertaking not to resort to economic sanctions after August 31, 1984, despite what the union understood to be the situation. No confirmatory telegram was issued by the mediator, as had been done earlier, and furthermore, Mr. Oliveira's notes of the mediation session (see exhibit #38) make no reference to such an undertaking, although the notes do record that the company agreed to prepare a reply to the union's proposals and submit them within two weeks of the mediation meeting.

18. The company negotiating team considered their position over the weekend. Mr. Jerry Zeifman testified that the company felt frustrated, bullied and intimidated by what had occurred. Since the parties were in a legal position to strike or lock-out, the company wanted to control the timing of any work disruption. (Shortly after the union had been certified, the company had noted a marked increase in machinery break-downs, product damage, and much less productivity. As a result, the company's management and office staff worked on the machines during that period in order to maintain production. We note that the union expressly denied any knowledge of a work slow-down or any other improper employee action and there was no evidence before us that the union condoned or had a role in such conduct.) If there was to be a labour dispute, the company would be better able to deal with it if the company determined when the labour dispute would take place. As well, the company felt that a lock­out was necessary in order to force the union to "get serious" in its bargaining position. The lock-out, it was hoped, would demonstrate to the union that the company was not prepared to agree to all of the union's proposals and required some flexibility from the union.

19. The company therefore decided over the Labour Day weekend to implement a lock-out commencing on Tuesday, September 4, 1984. Since the company to maintain production, it had to decide whether its management and on the machines as before, or use a temporary help agency to supply chose to use a temporary help agency to provide it with labour.

20. The company delivered a letter to the union's office on Labour Day, Monday, September 3, 1984. That letter stated:

"September 3, 1984

United Brotherhood of Carpenters and Joiners

290 Lawrence Ave. W.

Toronto, Ontario

M5M 1B3

Attention: Mr. Walter Oliveira,

Business Rep.

Dear Walter:

It is very unfortunate that our bargaining session on Friday August 31, 1984 was not very productive. It is regretful that your full bargaining committee was not present at this very important meeting.

I had requested a meeting with the union for August 21, 1984. This was not possible because Tom Harkness said he would be out of town, however, he gave me his assurance that August 31, would be suitable for him. I had a trip scheduled for Europe for that week which I postponed in order to keep this commitment. I made every effort to accommodate Mr. Harkness and he did not even show up or have the courtesy to call to reschedule the meeting.

We have been trying very hard to be flexible throughout this process but it seems

that you people are not serious about negotiating.

In light of the above and other considerations we will be locking out our employees as of September 4, 1984.

We are however, prepared to meet with you in the future to further negotiate a collective agreement. We trust your intention will be to meet with us and negotiate in a serious and responsible manner.

Yours truly

Jerry Zeifman"

The company also posted a notice to the bargaining unit employees on the door to its premises advising them they had been locked out.

21. When the company commenced the lock-out, an employee who had been in the bargaining unit, but had been promoted to foreman in June of 1984, reported for work as did Martin Kalb, an uncle of the Zeifmans' and Ms. Stegman. Mr. Kalb was an employee in the bargaining unit, but he was permitted to work because he was an uncle of the management of the company. Another employee, Antonio Oliveira, (who is not related to Walter Oliveira) a mechanic, demanded to come to work. The company advised him that bargaining unit employees would not be working until the labour dispute was resolved. Mr. Oliveira then quit his employment with the company. Mr. Oliveira later spoke to his son-in-law who advised him to form a company to do mechanical maintenance work and offer to perform work for the company on a contract basis. Mr. Oliveira was engaged about a week later as a contractor. Mr. Oliveira also began working for persons other than the company, but spent a majority of his working time performing work for the company on a contract basis. A third employee, Ishmael Ali, also asked to work on the day the lock-out started. He was advised that bargaining unit employees would not be permitted to return to work while the labour dispute continued. No other employee in the bargaining unit made a request of the company to return to work.

22. Mr. Walter Oliveira spoke with Mr. Jerry Zeifman on Thesday September 4th. He was quite surprised by the company's actions arid had said to Mr. Zeifman that he thought the company gave an undertaking that there would not be a labour interruption. Mr. Zeifman' s response was that the company was exercising its legal rights. No further negotiating meetings were held with the union prior to the first day of hearing in this matter. Mr. Oliveira did request a meeting with the company, and was initially rebuffed because the hearing in this matter was about to start, but subsequently was advised by counsel for the company that the company would meet with the union.

23. The company has maintained production with the labour supplied through a temporary help agency. The company had used temporary help agencies in the past to supply it with labour. Many of the people who began working at the company after the lock-out commenced continued to work at the company throughout the relevant time period.

24. The union submits that the complaint has three distinct but related elements. It submits that the company's conduct prior to the lock-out was unlawful because the company had failed to bargain in good faith contrary to section 15 of the Labour Relations Act. The lock-out, it further submits, violated several sections of the Act because the company discriminated between union members and persons who were not union members in conducting the lock-out and additionally, the continued use of replacement employees~ who were hired after the lock-out started and worked continuously, was also contrary to the Act because that demonstrated the company's desire not to reach a collective agreement and to operate its business without the union.

25. The company does not dispute the union's characterization of the issues, but submits that there are only two, not three elements to the complaint, the conduct of the parties before the lock-out, and the implementation of the lock-out and operation of the company during the lock-out. Counsel for the company agrees with counsel for the union in asserting that the conduct is related.

26. While it may be helpful to examine independently the various events which occurred and the conduct of the parties during the relevant times, the Board should not focus on each element separately since we are examining, in this complaint, the bargaining process that the parties have followed. One cannot properly analyze the lock-out without considering what had taken place prior to the lock-out, nor can one assess the legality of the bargaining positions of the company without also considering the entire context in which the company's positions developed.

27. Counsel for the union submitted that notwithstanding the timeliness of the lock-out, a lock-out is illegal if it is motivated for reasons that are prohibited by the Labour Relations Act. Counsel for the employer did not disagree with that proposition. Section 1 ( l)(k) of the Labour Relations Act defines lock-out as follows:

"1.-(l) In this Act,

(k) "lock-out" includes the closing of a place of employment, a suspension of work or a refusal by an employer to continue to employ a number of his employees, with a view to compel or induce his employees, ... to refrain from exercising any rights or privileges under this Act or to agree to provisions or changes in provisions respecting terms or conditions of employment or the rights, privileges or duties of the employer, … the trade union, or the employees."

28. We are satisfied that if a lock-out is imposed by an employer "with a view to compel or induce his employees to refrain from exercising any rights ... under this Act", it is illegal even if it is otherwise timely. (See Irving Oil Ltd., 80 CLLC 14,054 (N.B.C.A.).) The Board stated in Westroc Industries Limited, [1981] OLRB Rep. March 381 at 392:

“... a lock-out aimed at dissuading employees from exercising rights under the Act is never lawful and the concept of timeliness simply has no application to such activity."

[emphasis added]

That aim need not be the sole, principal, or predominant one of the lock-out. It is sufficient to establish that a lock-out is unlawful, regardless of timeliness, if unlawful intent forms even a part of the motivation for the lock-out. (See Westinghouse Canada Ltd., [1980] OLRB Rep. April 577 at 600-605, and in particular paragraphs 54-56.) It is clear, therefore, that a determination of whether the lock-out was lawful in this case must rest on our assessment of the company's motive for imposing the lock-out. That assessment, as we said earlier, cannot be carried out in isolation. Regard must be had to all of the conduct of both parties, both before and during the lock-out to ascertain whether the company had an illegal purpose in doing what it did.

29. Motivation is also a very relevant consideration in determining, in this case, whether the company violated section 15 of the Act. Section 15 of the Act requires, after notice to bargain has been served, the parties to "... bargain in good faith and make every reasonable effort to make a collective agreement". There are two principal components of the duty imposed by section 15 of the Act. These were described by the Board in DeVilbiss (Canada) Limited, [1976] OLRB Rep. March 49 at 63:

“... It is our belief that the duty described in section 14 [now 15] has at least two principle [sic] functions. The duty reinforces the obligation of an employer to recognize the bargaining agent and, beyond this somewhat primitive though important purpose, it can be said that the duty is intended to foster rational, informed discussion thereby minimizing the potential for "unnecessary" industrial conflict."

30. The evidence in this case does not suggest that the company either failed to engage in discussions with the union or refused to recognize the union. The company met with the union, provided the information requested by the union to it, and discussed both the union's proposals and its proposals during their meetings.

31. It is, however, the union's submission that the company engaged in surface bargaining, by making proposals which were designed to avoid a collective agreement. An allegation of "surface bargaining" requires the Board to examine the content of the bargaining rather than just the process. The degree of scrutiny that the Board uses when examining the content of bargaining is dictated by the purpose of section 15 and the Board's interpretation of its role in assessing whether a party's conduct is contrary to section 15 of the Act.

32. The Board in DeVilbiss (Canada) Ltd., supra, discussed the basic principles applicable in reviewing the bargaining conduct of parties at page 61 of that decision:

“… The section imposes an obligation upon both employers and trade unions to enter into serious discussion with the shared intent to enter into a collective bargaining agreement. Once a trade union is certified as the exclusive bargaining agent of employees within an appropriate bargaining unit the employer of those employees must accept that status of the trade union. It cannot enter into negotiations with a view to ridding itself of the trade union. And thus it can be said that the parties are obligated to have at least one common objective - that of entering into a collective agreement and section 14 is intended to convey this obligation. But this is not to say that they will or are obligated to have common objectives with respect to the contents of any collective agreement they might enter into. The legislation is based upon the premise that the parties are best able to fashion the law that is to govern the work place and that the terms of an agreement are most acceptable when the parties who live under them have played the primary roles in their enactment. In short, the legislation is based upon the notion of voluntarism and reflected in the many administrative and judicial pronouncements that neither trade union nor employer is, by virtue of the bargaining duty, obligated to agree to any particular provision or proposal. Therefore, while they must share the common objective to enter a collective agreement, the legislation envisages that they have differences with respect to just what the content of that agreement should be and those differences may force the parties to have recourse to economic sanctions."

[emphasis added]

Those principles were further articulated in Fashion Craft Kitchens, [1979] OLRB Rep. Oct. 967 at 970-71:

"Section 14 [now 15] of The Loboi~r Relations Act requires the parties to meet, to bargain in good faith and to make every reasonable effort to make a collective agreement. The section does not contemplate that the parties must nor that they necessarily shall conclude a collective agreement. The Act is predicated on a realization that a trade union and an employer come to the bargaining table with divergent objectives, each party seeking to maximize its own self-interest. Collective bargaining under the scheme of the Act is grounded in voluntarism, and the trade-offs and compromises which parties are prepared to make are matters to be determined within their own judgment. As long as they negotiate within the law the collective agreement which they ultimately reach, or whether they conclude any collective agreement at all, must ultimately depend upon the ability and economic power which they can bring to bear in bargaining.

While the parties have great latitude to advance their own position and force its acceptance upon their opposite number, they may not lawfully base their conduct on a deliberate intention to see that no collective agreement will be concluded. They must, by virtue of section 14 [now 15] of The Labour Relations Act, have as a common objective the making of a collective agreement: any contrary intention is in breach of the duty to bargain in good faith and make every reasonable attempt to conclude a collective agreement. (DeVilbiss (Canada) Ltd. [1976] OLRB Rep. Mar. 49). However a deliberate intention to frustrate bargaining is not always necessary to establish a breach of section 14 [now 15] of the Act. There are two parts to the section. Firstly there is the duty to meet and bargain in good faith - a requirement that takes account of the parties' motives and intentions. Secondly there is the requirement to make every reasonable effort to make a collective agreement."

33. The Board also recognized that the content of bargaining is a matter which is and should be principally left to the parties when it wrote in Radio Shack, 111979] OLRB Rep. Dec. 1220 at 1242-44:

"The duty to recognize a trade union and to bargain in good faith does not require an employer to enter into any collective agreement proposed by a union. It is apparent from the structure and history of the legislation that the Legislature has assumed that the parties are best able to fashion the details of their relationship. The assumed strength of this approach is that labour and management are more likely to accept an employment relationship which they themselves create than one that is imposed on them. So too, their agreement is likely to be more accommodative of the economic and social demands that each faces. 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 as overwhelming strength at that 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. See York Regional Board of Health (1978), 1978 CanLII 3478 (ON LA), 18 L.A.C. (2d) 255 at 263 (Adams).

Thus, from an employee viewpoint the right to engage in collective bargaining is not a right to achieve the terms of employment employees may wish. It is simply an opportunity to combine together to try and achieve their needs with the possibility that economic realities will dictate quite a different result in any particular situation. This perspective of the bargaining duty was explained by the Board in CCH Canadian Limited [1974] OLRB Rep. June 375 at page 381 in the following way:

'There was no evidence to suggest that the company's position on these items was other than 'hard bargaining". There is no requirement that a company must make concessions or agree to a particular agenda of discussions. The parties 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. (see Regina ex. rel. Hearn v. Norfolk General Hospital (1957) 1957 CanLII 515 (ON MAGCT), 119 C.C.C. 290 (Ont. Mag. Ct.). There was 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.'

Of course, difficulties may arise in trying to distinguish those actions of an employer that are properly characterized as hard bargaining' from conduct designed to destroy the union. And first contract bargaining presents the Board with no greater challenge in this respect.

In order to make necessary but sensitive assessments of bargaining conduct the Board must assess the totality of a collective bargaining relationship. For example, the occurrence of flagrant employer unfair labour practices at the same time the parties are engaged in collective bargaining may belie an employer's claim that a negotiating position is merely hard bargaining with a trade union unwilling to accept its lack of negotiating 'clout'. Or patently unreasonable contract proposals lacking any semblance of business justification may suggest an employer's desire to embarrass the union and encourage its abandonment by the employees. The legislation requires the parties to make every reasonable effort to make a collective agreement, a duty which patently unreasonable proposals fly in the face of. 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, diverting their attention from the principal task at hand. This is the sense of the note of caution registered by the British Columbia Labour Relations Board in its touchstone Noranda case, supra at page 160:

'Collective bargaining is not a process carried on in accordance with the Marquess of Queensbury rules, and that is especially the case when a lengthy strike is going on. Archibald Cox has warned of the long-range consequences of too close scrutiny by the

Board of the tactics of negotiators:

'There is also 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. Hammering out a labour agreement requires all the negotiators 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.'

Accordingly, while we interpret s. 6 as requiring adherence to certain fundamental principles of reasonable bargaining procedure, we also consider that this Board must exercise considerable restraint in intervening in negotiations between parties who are committed to reaching a collective agreement."'

34. Surface bargaining, or bargaining without any intention of entering into a collective

agreement was described by the Board in The Daily Times, [1978] OLRB Rep. July 604 at

610:

"'Surface bargaining', is a term which describes a going through the motions, or a preserving of the surface indications of bargaining without the intent of concluding a collective agreement. It constitutes a subtle but effective refusal to recognize the trade union. It is important, in the context of free collective bargaining, however, to draw the distinction between ~surface bargaining' and hard bargaining. The parties to collective bargaining are expected to act in their individual self interest and in so doing are entitled to take firm positions which may be unacceptable to the other side. The Act allows for the use of economic sanctions to resolve these bargaining impasses. Consequently, the mere tendering of a proposal which is unacceptable or even 'predictably unacceptable' is not sufficient, standing alone, to allow the Board to draw an inference of 'surface bargaining'. This inference can only be drawn from the totality of the evidence including, but not restricted to, the adoption of an inflexible position on issues central to the negotiations. It is only when the conduct of the parties on the whole demonstrates that one side has no intention of concluding a collective agreement, notwithstanding its preservation of the outward manifestations of bargaining, that a finding of 'surface' bargaining can be made."

[emphasis added]

The Board made it clear in The Daily Times case that it will be circumspect in finding surface bargaining based solely on the positions taken at the bargaining table. In T. Eaton Co. Limited, [1985] OLRB Rep. March 491, the Board dealt with an allegation of surface bargaining in the following way at paragraph 42:

"These contentions raise the important issue of whether the company is seeking through surface bargaining to frustrate the bargaining process, or whether it is simply engaging in hard bargaining. While we have no doubt that the company would rather not have to deal with the union, on the evidence there is no question in our mind but that the company is in fact prepared to sign collective agreements with the union. The company is seeking, however, to ensure that any such collective agreements contain terms favourable to the company, terms which will retain for management most of the flexibility it currently enjoys and which will not result in any increase in operating costs. The fact that the company has not made any major concessions in bargaining relates directly to the type of agreement management is seeking to negotiate. Section 15 does not, however, preclude a party from taking a firm position in bargaining. This point is made clear in the following excerpt from The Daily Times case, [1978] OLRB Rep. July 604, where the Board noted:

The parties to collective bargaining are expected to act in their individual self interest and in so doing are entitled to take firm positions which may be unacceptable to the other side. The Act allows for the use of economic sanctions to resolve these bargaining impasses.

In the instant case, the company has taken firm positions in an attempt to secure favourable collective agreement terms. The mere fact that it has refused to make concessions acceptable to the union, does not, in our view, result in a conclusion that it is in violation of section 15 of the Act."

35. The Board, in assessing whether bargaining is hard bargaining or surface bargaining, cannot create its own standard of what a fair, just, or good collective agreement between the parties should say and then decide whether a party has engaged in hard bargaining or surface bargaining by assessing how far that party's position is from the Board's standard. The Board's approach to reviewing the content of bargaining must recognize that collective bargaining, within the legal framework of the Labour Relations Act, involves the exercise of power. We believe that the description of the collective bargaining process and the Board's approach to it set out by the Board in Canada Trustco Mortgage Company, 111984] OLRB Rep. Oct. 1356 at 1364 is apt:

"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.

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. Whether that system actually results in a 'just wage' or 'distributive justice's we leave for other to debate. Collective bargaining permits that outcome, but it does not compel it."

[Emphasis added]

(See also Fotomat Canada Ltd., [1980] OLRB Rep. Oct. 1397 at 1421; Goldcraft Printers

Ltd., [1980] OLRB Rep. Apr. 448 at 455-57; Cross Tube Products Inc., [1980] OLRB Rep.

May 669.)

36. In this case, the union made it clear to the company, as early as the third meeting, that it wanted the company to accept the majority of the terms and conditions contained in the Canadian Woodwork Manufacturers Association collective agreement. The union applied for conciliation after the third meeting. The company indicated to the union that it thought conciliation was premature. The union asked for the conciliation officer to release the no-board report at the conclusion of the first and only meeting with the conciliation officer. The company indicated to the union that the no-board report was premature at that stage. We are satisfied that the union advised the company, both prior to and at the conciliation stage of bargaining, that it was inflexible in a number of areas, including probationary period, hours of work, vacation pay, statutory holidays, handling of grievances, and union security and explained the reason for that inflexibility. The company was simply not prepared to accept the union's position. It countered with its own positions on those areas in dispute, and explained to the union the reasons for its positions. The union was not prepared to accept the company's positions. At the conclusion of the mediation meeting, the parties were in a legal position to engage in economic sanctions, and the company chose to do so. We find that the company was upset and frustrated at what had taken place in bargaining up to that time. We are also satisfied that the company was concerned about the timing of any disruption to its operations and wanted to be the one to choose when such a disruption would occur. The evidence of Mr. Jerry Zeifman and Ms. Stegman was that the company was genuinely concerned that even if the employees did not walk off the job, there was a real danger that the employees would engage in a production slow down and that increases in machine breakdown and product damage might occur.

37. The union submitted that the company's refusal to accept the union's demand for a compulsory membership union security clause was evidence of bargaining in bad faith because the company did not provide a business justification for its refusal. The company was prepared to agree to a union security clause requiring it to deduct and remit union dues and initiation fees from all employees in the bargaining unit.

38. Mr. Jerry Zeifman candidly testified in cross-examination that he had no business justification for refusing the union's demand for a compulsory membership form of union security. He said that it was a matter of principle with him. He felt that any person, including employees, should be free to join or not join groups without coercion. We would observe that union security in the form of compulsory union membership was not the central issue in dispute at the conciliation and mediation stage of the bargaining, but was one of several items that were unresolved. Indeed, in examination-in-chief, Mr. Harkness listed the principal issues in dispute, and union security was not initially on that list, but became part of that list only after further questioning from his counsel.

39. Counsel for the union relied on the decision of the Canada Labour Relations Board in Austin Airways Ltd. (1984), 4 Can. L.R.B.R. (NS) 343 for the proposition that an employer's refusal to accept a union's demand on union security in the absence of business justification is contrary to the Labour Relations Act. In that case, Austin Airways had previously entered into a collective agreement which contained a compulsory dues deduction clause. During the second round of negotiations, it was attempting to change that clause to a voluntary check-off clause. The Canada Labour Relations Board at page 354-55 of the decision wrote:

“In the absence of minimum standards of union security in the Code and, if one starts from the assumption that everything contained in a collective agreement is negotiable, what is there then in this case that could cause Austin's conduct to be considered to have crossed that almost undefinable line into the realm of bad faith bargaining? The answer lies in the total absence of justifiable business reasons for its present stance.

Throughout the proceedings the employer showed no negative effects on its business considerations should the previous provisions of art. 20 requiring it to deduct and remit dues to the union be continued. It conceded that there had been no adverse effects during the two year term of the previous agreement and there was no evidence of employee complaint or discontent with the automatic check off provisions. In fact, Mr. Deluce admitted that Austin's stance was purely a matter of principle and a belief of the officers of Austin that dues deductions be voluntary.

Austin denied that its conduct was responsible for the strike. It implied that its compromise position on August 30, 1983 proved its flexibility on the question of union dues deduction and remittance. It reminded the Board that it was CALEA that had called the strike on that single issue after maintaining a rigid posture throughout. It is rather obvious though, from the contents of the employer's bulletin to the employees on August 11, 1983, some eleven days before the strike that it intended to push the union into the position where it had to accept voluntary deduction or strike. Just as obvious, the employer was prepared to take a strike on that issue.

In such circumstances a trade union is in a 'Catch 22' position. To agree to 'authorized' voluntary dues deduction requires union members to make an open declaration of union loyalty to their employer, not only once, but on every occasion a new contract is negotiated. That can dissaude employees from supporting the union and could eventually lead to the erosion of its membership in the bargaining unit. It also provides the employer with an ongoing gauge of the union's strength. To resist the concept of voluntary dues deduction a union's only option is to resort to economic sanctions as CALEA did in this case. Either way the union's membership is exposed.

Where an employer deliberately manipulates such an impasse, as we are convinced that Austin did, it must should a heavy onus to support its actions with plausible and justifiable business reasons.

In this case, taking into account all of the circumstances and, in the absence of any, let alone justifiable business reasons for its conduct, the Board can only conclude that Austin was continuing its resistance to the presence of CALEA as a carry over from the first round of negotiations when it had to, in Mr. Deluce's own words, 'concede the issue under duress'. The employer was obviously engaging in predetermined tactics designed to undermine the union and divide the employees. By so doing it interfered with the union's exclusive representation of the employees in the bargaining unit."

40. The situation described in the Austin Airways case is not analagous to the matter that is before us. The company's refusal to agree to the union's proposal, and the company's proposal, would not disclose membership support for the union, nor would it "undermine the union or divide the employees". The Board in The Daily Times case, supra, dismissed a complaint alleging a violation of section 15, in which a major element of the complaint was the company's insistence on a voluntary revocable check-off while the union was demanding compulsory membership. The Board in that case stated page 610:

"Section 36(a) of the Act provides that on written request of the trade union there shall be included in the collective agreement a clause providing for voluntary revocable check-off. An offer of the form of union security provided for in Section 36(a) of the Act cannot be in violation of the Act."

Section 43 of the Act, which provides for compulsory dues deduction was introduced into the Act in 1980 and replaced section 36. We note that the company's preparedness to agree to a clause permitting the deduction of initiation fees as well as regular monthly union dues is more than the minimum required by section 43 of the Act.

41. The absence of business justification may cause the Board to make an inferential finding that an employer's position on any particular issue, including union security, is intended to undermine the union or ensure that no collective agreement will be reached. (See Canada Trustco Mortgage Company, supra, at 1364 where the Board stated:

... 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.")

However, a candid and credible explanation for refusing to agree to a compulsory membership form of union security because it is a matter of individual principle does not give rise to a finding of bargaining in bad faith in this case. We accept Mr. Zeifman's explanation and find that his position on that issue was not intended to either undermine the union or avoid a collective agreement. Furthermore, we are satisfied that the union security clause at issue in this case was neither the only, nor even the principal issue remaining in dispute.

42. The company's decision to attempt to operate its business by hiring temporary replacements to work during the lock-out, if not improperly motivated, is permitted by the Labour Relations Act, subject, of course, to section 71a of the Act. (See Westroc Industries Limited, [1981] OLRB Rep. March 381 at 395.) There is no allegation in this case that the company retained the services of a professional strike breaker or that any person connected with this dispute acted as a professional strike breaker. The union submitted that the persons working for the company were actually the company's employees and not the employees of the temporary help agency. It is unnecessary for us to resolve that issue. We are prepared to assume that the persons supplied to the company by the temporary help agency were employees of the company. However, we are satisfied that they were hired as temporary employees. That was the direct evidence of the company, unshaken on cross-examination, and not contradicted by any other evidence. The mere fact that an employee who is hired on a temporary basis continues to work for more than a short period of time does not mean that the employee is permanently employed. More importantly, the fact that such an employee is working at a job that comes within the bargaining unit cannot be used by the employer as a reason to refuse to permit a locked-out employee, who has abandoned the economic conflict, to return to his former job. See Westroc Industries, supra, where the Board stated paragraph 27:

"Lastly, regardless of the outcome of these negotiations, we are satisfied that individual employees locked out and replaced by temporary employees continue to have important job security rights under the general unfair labour practice provisions of the statute. After the imposition of a lockout for some considerable duration and without a collective agreement materializing, affected employees may wish to abandon the conflict and return to work despite the apparent continuing resistance of the bargaining agent. The employer's response to such a situation would be closely scrutinized under section 58, inter alia, of the Act."

43. We are concerned about two aspects of the company's conduct during the lock-out. Mr. Kalb, an uncle of the Zeifmans and Ms. Stegman and a bargaining unit employee, was permitted to work during the lock-out. For the purposes of this decision, we are prepared to assume that Mr. Kalb was opposed to the union and that the majority of the other employees in the bargaining unit supported it. However, we are satisfied that the company was not discriminating between Mr. Kalb and the other employees represented by the union by reason of union membership or the exercise of rights under the Act by those employees and that the only reason Mr. Kalb was permitted to continue working for the company during the lock­out was due to his being an uncle of the company's management. We are also concerned about the company's refusal to permit Mr. Ali to work after the lock-out started while shortly thereafter engaging Mr. Oliveira to perform work for it on a contract basis. There was no evidence to suggest that the refusal to permit Mr. Ali to work was based in whole or in part on Mr. Ali's union affiliation, if any, or the exercise by him of rights under the Labour Relations Act. The company's refusal to permit him to work was understandable since the lock-out had just started. This was not comparable to the situation described in Westroc, supra, where the Board indicated it would "closely scrutinize" an employer's refusal to permit an employee who had been locked-out for a considerable period of time and who wished to abandon the economic conflict to return to work.

44. The evidence established that Mr. Oliveira did actually resign from his employment with the company. The idea of Mr. Oliveira forming his own company and offering to perform work for the respondent company on a contract basis came from his son-in-law, not from anyone connected with the company's management. The company's management did not initiate the arrangement with Mr. Oliveira but simply entered into the contracting arrangement with him after he had ended his employment relationship with the company. Mr. Oliveira's quitting of employment was not conditional on the contracting arrangement being agreed to by the company.

45. The company did not, by permitting Mr. Kalb to continue working and by entering into the contracting arrangement with Mr. Oliveira initiate a selective lock-out among its employees represented by the union prior to the commencement of the lock-out. We find that the company did not have any discriminatory intent by contracting with Mr. Oliveira to perform work for the company during the lock-out. In our opinion, the contracting arrangement with Mr. Oliveira did not violate the Act because in addition to the absence of discriminatory intent, Mr. Oliveira's resignation from his employment was unconditional and was not suggested or instigated by the company and further the company played no part whatever in initiating the contracting arrangement with Mr. Oliveira but simply agreed to enter into that relationship after Mr. Oliveira had quit his employment with the company.

46. Furthermore, there was no evidence that any other employee in the bargaining unit sought to abandon the economic conflict and return to his or her former job in the bargaining unit. If that had been the case, the Board, in applying the principles enunciated earlier by the Board in the Westroc Industries Limited case, would have required the company to affirmatively establish that the refusal to permit an employee who had been locked out to return to work had nothing whatever to do with the fact that another person, hired after the lock-out commenced, was doing that employee's job and also had nothing to do with the locked out employee's exercise of rights under the Labour Relations Act. (See section 89(5) of the Act). We are satisfied that similar rights afforded to employees on strike by section 73 of the Act exist in relation to employees that have been locked-out by virtue of sections 66 and 70 of the Act, with the added protection that, more than six months after the lock-out commenced, a locked-out employee can displace an employee hired to do the work of the locked-out employee. This is not to say that an employer can lock-out employees and then suggest that some or all of them return to work by attempting to bargain with the employees directly. The employees' bargaining agent continues to hold bargaining rights for the employees in the bargaining unit and any attempt by their employer to circumvent the employees' bargaining agent in order to bargain with employees directly might well violate sections 64 and 67 of the Act.

47. Counsel for the union asked the Board carefully examine the conduct of the company in this case. He refers us to the following statement in the Westroc Industries Limited, supra at 395:

"As the definition of lockout reveals, this labour relations concept involves employer conduct that may be based on a proper or improper purpose. Which purpose is in fact the case must be determined on a careful review of all the evidence. In many earlier decisions we have said that first agreement situations are to be subjected to detailed scrutiny by this Board and a lockout with replacements will particularly merit such an approach in a first agreement context."

We subscribe to the approach enunciated by the Board in that case. We have subjected the conduct of the company to detailed scrutiny in this case. In our view, the company bargained with the union in an attempt to reach an agreement satisfactory to it. It was troubled by the union's bargaining posture which it viewed as intransigent and was concerned about not being in control of the timing of a work disruption. The company met with the union. It discussed its proposals and the reasons for them and listened to the union's arguments. It asked the union to postpone conciliation and made it clear to the union that it thought that the no-board report was premature. The union's stance in bargaining was aggressive. It moved to the conciliation and the no-board stage of bargaining to get the company to move off its position. We are satisfied that the company, when it locked out its bargaining unit employees, attempted to do to the union what the union was trying to do to the company. The union did not expect that to happen. While the lock-out was unexpected, it was not, in our view, illegal.

48. While it is unfortunate that the negotiations between the parties in this matter broke down, the collective bargaining system under the Labour Relations Act gives the parties to collective bargaining negotiations the freedom to choose whether to agree on the terms of a collective agreement or face the consequences of a strike or lock-out. Economic sanctions can be invoked by either an employer or a trade union under the Labour Relations Act in a timely fashion to achieve their legal goals in collective bargaining. We are not persuaded that the company failed to bargain in good faith and make every reasonable effort to reach a collective agreement and we are satisfied that the company's only motivation for imposing the lock-out and using temporary employees to continue operations was to force the union to modify its proposals so that a collective agreement, acceptable to the company, would be reached.

49. For these reasons, this complaint is hereby dismissed.