[1986] OLRB Rep. July 1005
0836-86-FC United Brotherhood of Carpenters and Joiners of America, Local Union 1030, Applicant, v. Nepean Roof Truss Limited, Respondent
BEFORE: Judge R. S. Abella, Chairman and Board Members I. Stamp and P. Grasso.
APPEARANCES: Frank Manoni for the applicant; Russell Zinn, Claude Ouellette and Hubert Steenbakkers for the respondent.
DECISION OF THE BOARD; July 24, 1986
1This is an application for a direction that a first collective agreement be settled by arbitration pursuant to section 40a of the Labour Relations Act. The respondent called no evidence.
2The Board certified the applicant union as bargaining agent for a group of 14 of the respondent's employees on November 5, 1984. Two petitions opposing the certification were also before the Board panel hearing the certification. On October 9, a day before the posting of the application for certification, 4 employees were laid off, all of whom were union members. Two of these employees had more seniority than the originator of one of the petitions. This latter petition, filed on October 12, was rejected by the Board which concluded "... it is more likely or probable that the employees who signed the petition did so in order to avoid a reaction from the respondent for supporting the union rather than to voluntarily express opposition to the union". The second petition, filed on October 15, was rejected since there was no evidence presented concerning its origination or circulation. (Nepean Roof Truss Limited, File No. 1629-84-R. Unreported).
3On October 9, 1984, the union filed a complaint with the Board alleging violations of sections 64, 66 and 70 of the Act arising out of the termination without notice of the 4 union members. (File No. 1864-84-U). The employees were Gilles Berthiaume, Elie Belok, Peter Simmons and Paul Simmons. On November 6, 1984, the union filed an additional complaint alleging violations of sections 64, 66 and 70 arising out of the termination of union member Clinton Perron (File No. 2146-84-U). In a consolidated hearing on April 22 and 23, 1985, the Board sustained the first complaint and ordered that the employees be reinstated forthwith. Despite attempts to settle the issue of compensation, as of July 16, 1986, the hearing date of this application, the parties have been unable to resolve this matter. The complaint dealing with Clinton Perron was dismissed.
4The first bargaining session between the parties took place on November 21, 1984. The union's initial bargaining proposal was that Nepean Roof Truss Limited be subject to the same terms and conditions as those contained in a collective agreement between the Local and Capital Roof Truss. Frank Manoni, the union negotiator for the Local, was of the view that since he understood that Hubert Steenbakkers was a principal in both companies, since both companies were involved in the same kind of work, and since Steenbakkers negotiated on behalf of both companies, the contracts should be similar. The union also proposed a pay increase of $2.00 per hour.
5The company's position in this first bargaining session was that it was inappropriate to have similar contracts, that the contract was not working out at Capital Roof Truss, and that the wages of the employees at Nepean should be reduced by 50~ per hour. The company also rejected a "job security" or seniority rights clause, and proposed that the union steward be jointly selected by the union and the company. This latter proposal was subsequently dropped by the company.
6The union's response was to apply for conciliation on November 26, 1984. On November 28, 1984 it filed a complaint with the Board alleging violations of sections 79 and 15 based on the company's proposal to reduce wages and on its implementation 3 days later of this reduction (File No. 2413-84-U). These complaints have since been dismissed by another panel of the Board but reasons for their dismissal have not yet been issued.
7The parties met with the conciliation officer on January 3, July 16 and October 3, 1985. In addition, the parties met and exchanged proposals on May 6, August 20 and September 20, 1985. As a result of the conciliation meetings, the union was prepared to modify substantially its proposals and accept the current wages, provided the term of the contract was for 1 year and provided there was "job security" at least for the 3 remaining union members in the bargaining unit. The company refused to grant "job security", increased wages, or benefits. A "no board" report was issued on October 11, 1985.
8On May 27, 1985, the union filed another complaint alleging violations of sections 15 and 79 based on the company granting an increase of wages to the majority of the employees in the bargaining unit. This matter was heard by the Board on November 5, 6 and 7, 1985. At the instigation of the chairman of that panel, the parties again exchanged proposals. These discussions proved unsuccessful, but in the course of the hearings, Manoni gave evidence that if the company would agree to the minimum seniority protection for Paul and Peter Simmons and to a one year term, he would agree to the company's proposed agreement. This agreement provided for no increase in wages or benefits. The company refused. The union's complaint was dismissed by that panel of the Board on July 14, 1986. Reasons are not yet available.
9On December 13, 1985, an application was made to terminate the union's bargaining rights (File No. 2450-85-R). The application was heard by yet another panel of the Board on March 6, 1986 and was dismissed on July 11, 1986, with reasons to follow at a later date.
10Manoni's position was that he wanted "job security" or seniority rights at least for the union members who had been previously fired because the company had made it clear that they would not accept a seniority provision in lay-offs, terminations or promotions as a general principle for all employees. During the May 6 meeting, the company argued strongly that they wanted to hire and fire whomever they wished. Claude Ouellette, on behalf of the company, told Manoni that if he could find someone who could work for $5.00 per hour and do the same work as someone now getting $8.00 or $10.00 per hour, he wanted to be able to lay-off the $8.00 per hour employee and hire someone for $5.00 per hour. Because the Simmons brothers were earning these higher wages and because they had already been terminated for union activity, Manoni said he was anxious to protect their seniority rights. Moreover, Manoni testified that the status quo in the company prior to the union's certification had been to conduct lay-offs in accordance with seniority. What he said he was therefore seeking to include in the collective agreement was merely a preservation of the status quo.
11After the meeting with the conciliation officer on July 16, 1985, Manoni requested a written proposal from the company. The company's written proposal was given to the union on September 20, 1985. Rather than a "job security" or seniority rights clause, the company suggested a "merit provision". The merit clause proposed by the company stated:
ARTICLE 11
MERIT
11.01 The Company and the Union agree that in all cases involving vacancies, promotions, transfers, layoffs, recalls, terminations, wages and vacation scheduling, employees shall be considered on the basis of merit, including among other things, their skill, ability, qualifications, job duties, performance, record, potential and experience. The Company shall determine the relative merit as between employees in a given case and take action accordingly. In the case where two or more employees are determined by the Company to be of equal merit, the Company shall take action in accordance with the length of service of the employees.
11.02 Each new employee shall successfully complete a period of probation of ninety days.
11.03 The Company shall lay off employees in accordance with the requirements of the Employment Standards Act.
In addition, the company proposed that the term of the agreement be for a period of 3 years.
12The union's counter-proposal stated in part:
As a sign of good faith, the Union will accept any of the present employees as members with minimum initiation fee of one ($1.00) Dollar and the Company will lay-off, call back, promote, transfer with preference by order of seniority of service within the bargaining unit Paul Simmons and Peter 5immons notwithstanding their participation to the proceedings of said certification. (Note: If the Company wishes, may delete "Paul Simmons and Peter Simmons" above and replace it with "any employee".)
[emphasis added]
It also proposed a one year term.
13In replying to this counter-proposal as to seniority, the company agreed in writing "not to discriminate against Peter Simmons or Paul Simmons because of their union activity". The union rejected this on the grounds that it gave the union no more than was already protected by the provisions of the Labour Relations Act. In turn, it proposed that "the company shall maintain the status quo established prior to October, 1984 in relation to the laying off and re-hiring of Paul Simmons and Peter Simmons". The company refused on the grounds that offering protective seniority rights only to some employees would discriminate against other members of the bargaining unit. It gave no reason for refusing to offer this protection to all employees.
14Since the time when discussions were conducted during the bad faith bargaining and freeze violation hearings before the Board on November 5, 6 and 7, 1985, there have been no further negotiations. Manoni stated that he felt there was nothing further he could do but await what he hoped would be a finding from the Board that the company had bargained in bad faith and a direction to the company to return to the bargaining table. In his view, there was no point in attempting further negotiations pending the Board's ruling since the company had taken a firm stand on the two outstanding issues - the term of the agreement and what Manoni referred to as "job security" or protective seniority. By the time negotiations had broken off in November, 1985, the parties had been able to agree on most substantive provisions. The union had made substantial economic concessions to the company on terms less favourable than those found in the Capital Roof Truss collective agreement.
15Section 40a of the Labour Relations Act introduces a unique facilitative tool into the traditional bargaining process in Ontario. In its central provisions, it states:
s.40a (1) Where the parties are unable to effect a first collective agreement and the Minister has released a notice that it is not considered advisable to appoint a conciliation board or the Minister has released the report of a conciliation board, either party may apply to the Board to direct the settlement of a first collective agreement by arbitration.
(2) The Board shall consider and make its decision on an application under subsection (1) within thirty days of receiving the application and it shall direct the settlement of a first collective agreement by arbitration where, irrespective of whether section 15 has been contravened, it appears to the Board that the process of collective bargaining has been unsuccessful because of,
(a) the refusal of the employer to recognize the bargaining authority of the trade union;
(b) the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification;
(c) the failure of the respondent to make reasonable or expeditious efforts to conclude a collective agreement; or
(d) any other reason the Board considers relevant. (emphasis added)
16It is clear from these provisions that the legislature has acknowledged the significance to the collective bargaining relationship of the first contract, and has given statutory recognition to the potential difficulties that may be encountered in achieving it. This remedy does not supplant the primacy of the free bargaining process; rather, it recognizes that the negotiation of the first agreement may sometimes be thwarted by unjustified intransigence. Although this is remedial legislation and should be given a liberal construction and interpretation, the scheme of section 40a does not envision the automatically imposed settlement of a first collective agreement in all cases where the parties are unable to negotiate one. What it provides is access to this remedy where certain conditions precedent have been met. These conditions are enumerated in subsections (a) - (d) of section 40a(2).
17To understand the conceptual underpinnings of the legislation, it is useful to dissect the language of section 40a(2). The Board is directed to impose settlement of a first collective agreement by arbitration where "it appears ... that the process of collective bargaining has been unsuccessful because of ...". The Board is thereby obliged to consider the following factors:
i) "The process of collective bargaining". The use of the word 'process' imports into the deliberation an examination of the interaction between the two parties. It is a truism that the negotiation of any contract involves a considerable range of bargaining positions and tactics. It is a dynamic exchange, with each party relying as extensively as possible on those postures most likely to induce the other side to accept a tolerable result. The Board must therefore be sensitive to this bargaining reality when considering how each party has conducted itself. It is the totality of the process that is under scrutiny, and the Board must be cautious not to examine the complaint in a factual vacuum. The conduct of both parties is therefore relevant, not only for understanding why the process has been unsuccessful, but also for assessing whether it has been unsuccessful for any of the enumerated reasons. This does not intend to suggest that the applicant's conduct will be a bar to the imposed settlement of a first contract, but rather that its conduct is relevant in assessing the reason for the failure of the process.
ii) "The process ... has been unsuccessful because of...". This language makes it clear that section 40a contemplates a cause-and-effect oriented assessment. Unless the applicant can demonstrate that the reason for the unsuccessful process is the employer's refusal to recognize the union's bargaining authority, the respondent's unreasonably uncompromising bargaining proposals, the respondent's dilatory or unreasonable efforts to reach an agreement, or any other reason the Board deems relevant, then notwithstanding the failure to conclude an agreement, the Board is not entitled to direct its imposition. In the infancy of this legislation, it has yet to be determined what other reasons the Board may consider relevant within the meaning of section 40a(2)(d), but logic and the spirit of section 40a suggest that this will involve a case-by-case analysis of whether there is a causal connection between the "reason" in question and the failure of the collective bargaining process.
iii) "Irrespective of whether section 15 has been contravened". Section 15 of the Labour Relations Act imposes the duty to "bargain in good faith and make every reasonable effort to make a collective agreement". The reference to section 15 in this way can only be interpreted as making a distinction between bad faith bargaining and first contract assessments. The Board is not to be bound by whether or not the conduct complained of violates section 15. Given the Board's jurisprudence pursuant to section 15. wherein the Board has held that hard bargaining is not necessarily bargaining in bad faith (T. Eaton Company Limited [1985] OLRB Rep. March 491; Radio Shack [1985] OLRB Rep. Dec. 1789), one is left with the inescapable conclusion that the legislature has intended a different standard to apply in the determination of first contract disputes, a standard peculiar to section 40a adjudications. This does not suggest that contravention of section 15 is irrelevant. A contravention of section 15 may well be a factor to consider in assessing why the process was unsuccessful. But the absence of sufficient facts upon which to find a contravention of section 15 does not preclude the application of section 40a. Hard bargaining may not violate section 15, but rigid bargaining
proposals may, if they fall within subsections (a) - (d) of section 40a(2), justify the imposed settlement of a first collective agreement.
18In the case before us, the applicant asserts that the process of collective bargaining has been unsuccessful because the respondent has violated section 40a(2)(b). The union states that the uncompromising nature of the company's bargaining position with respect to its insistence on a three year term, and its refusal to recognize seniority rights or "job security", was without reasonable justification. This subsection requires that a bargaining position be not only uncompromising, but also that it be adopted without reasonable justification. Moreover, it refers to "any" bargaining position, so that despite the myriad of proposals and counter-proposals exchanged in the course of bargaining, it is conceivable that even a single intractable position, if unreasonably maintained by a respondent during bargaining, may entitle an applicant to access to an imposed settlement if the proposal can be shown to have caused the failure of the process.
19Identifying an uncompromising bargaining position is not a difficult exercise; determining whether it is reasonably justified poses a greater challenge. A bargaining proposal's reasonable justification must be weighed in the context of the current climate of collective bargaining, the particular bargaining process undergone by the parties, the institutional realities from which it derives, and its intrinsic merit. Subsection 40a(2)(b) recognizes that in collective bargaining, uncompromising positions are frequently taken, and are occasionally effective strategies in eliciting compromise. In the economic and political contest that collective bargaining represents, uncompromising postures are part of a well-understood methodology. But where in the negotiation of a first agreement they are unreasonably maintained, and where the process of bargaining has been sacrificed to their rigidity, the Board is mandatorily instructed by section 40a(2) that it "shall direct the settlement of a first collective agreement by arbitration".
20The first uncompromising position about which the union complained was the company's insistence on a 3 year term. Although there was no evidence before us on what the exact terms of the collective agreement between Local 1030 and Capital Roof Truss were, Manoni testified that they were more economically advantageous than the substantial concessions he was prepared to accept for Nepean employees in the interests of getting a first agreement. It would have been irresponsible of him, he argues, to accept an inferior proposal for 3 years not only because of the disadvantages to Nepean employees, but also because it placed in jeopardy the interests of the Capital Roof Truss employees whose contract was due to expire during the next year and on whose behalf he would be negotiating a renewal with Steenbakkers. There was no evidence, on the other hand, to justify the reasonableness of the company's insistence on a three year term.
21In requesting and insisting on seniority right'; or "job security" for at least the original union members in the bargaining unit, each of whom had previously experienced unlawful terminations for union activity at the hands of the company, Manoni said he was merely seeking to enforce minimum protection. His counter-proposal makes it clear that he would have been prepared to accept seniority rights for all employees, but in the face of the company's persistent refusal to grant it, felt constrained to settle for a proposal that restricted these rights to previously terminated employees.
22The company's view that the individualization of seniority rights was unacceptable as unfair to other bargaining unit employees is understandable. There was no justification given, however, for refusing to grant seniority rights or "job security" to all bargaining unit employees. Given that the status quo prior to certification with respect to terminations, lay-offs or promotions had been to acknowledge seniority of service, it is not clear why the company would insist on its omission from the collective agreement. In today's labour relations climate, and given the significance to the labour movement of this basic principle, the company ought to have known that the union could not readily accept a broad merit clause in the absence of a seniority rights provision. The protection of seniority rights is such a fundamental part of the scheme of modern collective bargaining outside the construction industry, that the company's refusal to grant it as a general principle, with or without a merit component, could only be interpreted in this case as an unwillingness to engage in a serious attempt to effect an agreement.
23The company argues that since the union did not conduct a strike vote, the company is therefore entitled to maintain its own firm bargaining positions. A strike vote may bolster the union's resolve and inspire compromise in the company, but where the legislation is silent on the need for such a vote as a condition precedent to imposed first agreements, it is superfluous to inject this mechanism as yet another hurdle in the bargaining process leading to first contracts. In the absence of a statutory caveat restricting the bargaining capacity of a certified union, there is no need to impute an automatic obligation on the part of that union to conduct a strike vote whenever negotiations have broken down in a first contract situation. In a protracted and frustrating series of negotiations preceding first agreements, it may well be that the resulting malaise and dissipated confidence among employees make the taking of a strike vote counter-productive for the union. The union's bargaining authority must be recognized and presumed, and the company is obliged to acknowledge this reality and conduct itself accordingly, whether or not a strike vote has been taken.
24The company additionally argues that the Board should take into consideration the dismissal of the bad faith bargaining complaints as evidence of the company's good faith. Section 40a(2) directs the Board to analyze first contract bargaining processes "irrespective of whether section 15 has been contravened". As stated in paragraph 17 of this decision, section 15 is specifically distinguished from first contract determinations, making it clear that the test to be applied under section 40a(2) is a different one from that developed in the bad faith bargaining jurisprudence. The company is therefore not entitled to rely on these dismissals as prima facie proof that they have not caused the failure of the bargaining process within the meaning of subsections (a) - (d) of section 40a(2).
25Finally, the company argues that the union has made no serious attempt to reopen bargaining since October or November of 1985. It is difficult to see what further efforts the union could have made in the circumstances. Having been categorically informed by the company that it would not recede either from the 3 year term or the merit clause, both of which were understandably unacceptable, and the union having compromised on almost all other major matters, it is not surprising that it determined that further negotiations would be futile without a finding by the Board that the company had bargained in bad faith and should return to the bargaining table. It is now almost two years since the union was certified, and during that time, the union has made reasonable efforts to conclude an agreement. This does not suggest that a union is absolved from the duty to continue bargaining attempts whenever it has instituted proceedings before the Board under section 89, but where the bargaining realities make such attempts obviously meaningless, it ought not to be penalized for invoking the Board's jurisdiction in this way or for recognizing the futility of the exercise.
26In all of the circumstances, we are satisfied that the process of collective bargaining has been unsuccessful because of the uncompromising nature of the respondent's bargaining position with respect to the term of the agreement, and particularly with respect to its refusal to accept a seniority rights clause, both without reasonable justification. Therefore, the Board directs the settlement of a first collective agreement by arbitration.