Mechanical Contractors Association of Ontario v. United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local 552, 1986 CanLII 1512

[1986] OLRB Rep. June 768

0259-85-M Mechanical Contractors Association of Ontario, Applicant, v. United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local 552, Respondent

BEFORE: R. 0. MacDowell, Vice-Chairman, and Board Members I. M. Stamp and K. Rogers.

APPEARANCES: G. Grossman and R. HaIler for the applicant; A. M. Minsky, Q.C. and J. Boyle for the respondent.

DECISION OF THE BOARD; June 4, 1986

I

1. This is an application under section 124 of the Labour Relations Act.

2. Having regard to the representations of the parties, the style of cause in this matter is hereby amended to delete the Mechanical Contractors Association Windsor ("MCAW") as the party-applicant, and substitute, in its place, the Mechanical Contractors Association of Ontario ("MCAO"). MCAO is the statutory collective bargaining agent for a number of Ontario contractors, including those unionized members of MCAW who initially launched this application. The respondent Local 552 is the Local of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada ("UA") with territorial juris­diction in the Windsor area. Tradesmen who are members of Local 552 and work in the construc­tion industry are ordinarily employed by members of MCAW. The "Pipe Trades Council", men­tioned later in this decision, is the designated collective bargaining agent for all UA members working in the industrial, commercial and institutional (ICI) sector of the construction industry. Every two years MCAO and the Pipe Trades Council negotiate a provincial collective agreement in accordance with the province-wide collective bargaining scheme prescribed by statute. The por­tion of that provincial collective agreement directly relevant to this case is the Zone 4 (Windsor) Appendix, which reads as follows:

APPENDIX 4

ZONE 4 WINDSOR - LOCAL UNION 552

Article 101 HIRING

101.1 The Contractor agrees to give preference in employment to members of Local 552 and in recognition that the Union is the sole agent for supplying employees the employer shall oversee that no employee commences work in the jurisdiction of the Union unless such employee has a referral slip from the Union Office.

101.2 Windsor and Chatham shall be recognized as the base of operations and also as the point of referral to the job site. It is agreed that on work performed in Kent County, that Chatham based members of Local 552 shall be given preference in hiring. When Chatham based members are fully employed, preference for further employment shall be given to Windsor based mem­bers. The reverse shall apply for work in Essex County. REFER TO SCHEDULES "I" & "I" FOR TRAVEL AND/OR BOARD ALLOWANCE. The Union recognizes the right of the Employer to select the foreman of his choice from the membership of Local 5S2. If all appren­tices are employed in the Kent County Area, the Employer shall have the right to use an apprentice presently in his employ, for Essex County, providing the overall ratio of S to 1 is not exceeded in that Company.

101.3 It is also agreed that if the work involved requires the services of a tested, certified welder, for less than a full week's work, and there is no welder available from that area, that is cur­rently holding a valid certificate for that Contractor, then that Contractor shall have the right to use a welder currently in his employ who holds such a certificate.

It is also agreed that once a project is supplied with men, that there shall be no "bumping" unless the work force has been withdrawn.

The reverse shall apply for work in Essex County.

101.4 It is agreed by the Contractor and the Union that only journeymen and apprentice mem­bers of the U.A. in good standing shall be employed on work under the jurisdiction of Local

101.5 A contractor, who within three regular working days of a request to the Union, does not obtain the number of qualified members, he shall have the privilege of hiring other members of the U.A., providing they obtain work referral slips from the Union Office.

101.6 In instances when work of the Jurisdiction of Local 552 has been let to out of town con­tractors, such contractors must become a party to and comply with the provisions of this Agree­ment. The Contractor shall be allowed to send one U.A. Member for his respective trade as supervision, any additional employees will be supplied from the Union Office.

101.7 A member or members shall not be loaned or borrowed from one shop to another, and members shall not be exchanged between shops for any purpose.

101.8 A Contractor shall have the right to review the list of unemployed journeymen and apprentices at the time of hiring.

[emphasis added]

For the purposes of completeness it may be useful to reproduce the "management rights" clause

found at Article 10 of the "master" portion of the agreement:

ARTICLE 10- MANAGEMENT RIGHTS

10.1 The Council agrees that it is the exclusive right of each Contractor covered by this Agreement.

10.2 To manage its business in all respects in accordance with its commitments and responsibili­ties, including but not limited to the right to manage the jobs, locate, extend, curtail, or cease operations; to determine the number of men required, to determine the kinds of and locations of machines, tools, equipment and materials to be used and the schedules of production to be met, and to maintain order, discipline and efficiency.

10.3 To hire, discharge, promote, assign or reassign, demote, lay-off, or discipline employees for just cause.

10.4 To introduce new methods and facilities or to change existing methods and facilities.

10.5 It is agreed that all the above rights shall not be exercised in a manner inconsistent with express provisions of this Agreement, and shall be subject to the provisions of the Grievance Procedures.

II

3. The instant case arises because in April 1985, Local 552 decided to unilaterally alter the hiring system then in existence in the Windsor area. The details of that system and the changes to it are set out more fully below. At this stage, it suffices to say that for many years the local contrac­tors were permitted to select and employ ("name hire") without restriction, any available union member. By and large, the union did not interfere with this selection process, so long as the per­sons hired were union members in good standing. Referral slips were issued as a matter of routine. After April 1985, however, the union introduced a so-called "50/50 hiring system". Under this scheme, the employers' crews were to be composed, in equal proportion, of members name-hired by the employer, and employees selected by the union from its out-of-work list on the basis of the length of time those members had been unemployed. From the union's point of view, this results in a more equitable distribution of available work opportunities; but, of course, from the employers' perspective, there is now a significant restriction on their ability to hire whomever they want.

4. After the parties' opening statements, counsel for the applicant indicated that he intended to lead certain evidence of past practice and negotiating history which, it was said, would assist the Board in determining the intention of the parties when the language of the Zone 4 (Windsor) Appendix was chosen. He argued that the language of Article 1 of the Appendix is ambiguous, both on its face and in its application to the actions which the union has recently taken to alter the established hiring system. In his submission, there was, at the every least, a "latent ambiguity" which would become apparent when the Board considered the evidence as a whole. Finally, the applicant argued that Local 552 was estopped from unilaterally changing the hiring sys­tem which it had accepted and administered for years. The respondent resisted the introduction of any extrinsic evidence. The Board made the following oral ruling which is hereby reduced to writ­ing and confirmed:

We have considered the submissions of the parties and certain of the authori­ties to which we were referred. We have also had the opportunity to consider the language of the collective agreement, and, in particular, Articles 101.1 and 101.8. There is language in the former clause which might arguably sup­port the union's position that what is contemplated or permitted is what might be termed a "pure hiring hall list system" in which the union reserves the right to determine who will be dispatched on an employer's request -even though it is not disputed that for a number of years the practice of the parties has been the very antithesis of this kind of hiring hall system. On the other hand, the language of Article 101.8 does appear consistent with a prac­tice of "name hire" which is the employer's proposed interpretation. We need not address these competing interpretations at this stage. It suffices to say that whether or not we would find that there is a patent ambiguity in the language of the agreement, the applicant seeks to introduce extrinsic evi­dence to establish that, at the very least, there is a latent ambiguity. In the alternative, the applicant seeks to establish that the trade union is estopped from resiling from the established and accepted procedure by which an employer fills his employee complement. In our view, the applicant is enti­tled to lead such evidence on either of these latter grounds. We will there­fore receive the applicant's evidence, reserving as to the weight (if any) which should be assigned to it.

5. The parties' witnesses were testifying about events which dated back to the early 1970's, and not surprisingly, their recollections were sometimes imperfect, imprecise, or even contradicto­ry. In assessing the witnesses' credibility and the weight to be accorded to their testimony, we have taken into account such factors as their demeanour, the clarity and consistency of their evidence when compared with that of others and such documentary evidence as may be available, their per­formance under cross-examination, and their apparent ability to resist the influence of self-interest or self-justification when answering difficult questions. It will be convenient to examine the "name­-hire" practice in a little more detail, then sketch in the additional events in approximate chrono­logical order.

III

6. As we have already noted, for most of the last 15 years, the employer-members of MCAW have had an entirely free hand to hire whomever they wanted so long as the prospective employee was a member in good standing of Local 552. Employers learned of prospective employ­ees in a variety of ways. Sometimes unemployed members would solicit work directly, when they learned that a particular contractor was starting a new job. Sometimes existing employees told their friends of upcoming work opportunities. Sometimes the contractor made the initial contact, based upon information received from his existing employees. Sometimes the contractor would call the union hall to find out who was on the union's "out-of-work list", then call the members he knew and invite them to come to work for him. Sometimes the union would select and dispatch unemployed members - although this was relatively uncommon. Once a member was selected, he either obtained a referral slip from the hiring hall or the employer notified the hiring hall and the referral slip was sent by mail.

7. Since Local 552 has only 275-300 members who are active construction tradesmen, and a few major contractors dominate the local Windsor market, many of the local tradesmen and company officials knew one another because they had worked together before. This made it much easier for the companies to assemble their crews and helps explain why a pure "name-hire" system was both workable and desirable from the employers' point of view. The employers could mini­mize their risks and guarantee labour productivity by hiring only tradesmen with a proven record. However, under a pure name-hire system, newcomers, or persons perceived as a "problem" (rightly or wrongly) might not be hired at all - whatever their qualifications - and as long as the local market was sluggish, they could remain unemployed for extensive periods of time. In con­trast, under the 50/50 system introduced by the union in 1985, these members would have a better chance of being hired and would be able to remain on the job so long as their work was satisfacto­ry. To put the matter colloquially, the 50/50 system allows some of the lesser known or less desira­ble members to "get their foot in the door".

8. In the late 1960's, the local market was buoyant and Local 552 members had no difficulty finding work. There was full employment - even of those workers who would not be the major contractors' first choice. This favourable situation was reversed in the early 1970's when the Local began to face a serious unemployment problem. The majority of its members remained fully employed, but there was a significant minority who were finding very little work at all. To meet this problem, Local 552 decided to limit the employers' ability to "name-hire". The union intro­duced a new formula requiring the employers to take one or more individuals from the top of the out-of-work list for every person name-hired.

9. At this late date it is difficult to be certain about the mechanics of the new system or how long it remained in effect. The minutes of certain union meetings and the recollection of union witnesses suggest that it was endorsed by the union membership in the spring of 1972, and formally rescinded in the spring of 1974. However, there may not have been consistent application or com­pliance. Indeed, according to Don Bradey, who was president of Local 552 from 1972 to 1975, the new scheme was unpopular with both the contractors and the majority of members who had no dif­ficulty finding steady employment. Bradey testified that the list system was eventually scrapped because it wasn't working, and by March 1974, was no longer necessary. Jean Paul Garant con­firmed that the introduction of the list system was controversial and it was dropped in March 1974 because it was unpopular and was not being applied.

10. In 1972-73, Richard Hailer, current president of MCAW, was an employee of a firm called Holleck-Volmer where he was responsible for hiring. Haller testified that he had heard com­plaints from other contractors about hiring restrictions and a "50/50" system but, at the time, his own company was phasing down, and he never encountered any difficulties. John Volmer testified that he too had heard complaints from other contractors, and conceded in cross-examination that the union was attempting to introduce a system which restricted the companies' right to hire who­mever they wished. When a contractor called the union hall for a list of the unemployed members from which it used to be able to "pick and choose", the union would only supply a few names. As Volmer put it, "we were being frustrated .they were restricting our hiring practices". Whatever the longevity, coverage or effectiveness of the list system, it was obviously an irritant and a direct challenge to the employers' previously unfettered ability to hire the tradesmen of their choice. It was a problem which the members of MCAW decided to raise at the bargaining table.

11. In the bargaining for the 1975-77 collective agreement, MCAW proposed the following new clause:

A contractor shall have the right to review the list of unemployed journeymen and apprentices at the time of hiring. The contractor shall have the right to choose the employee of his choice.

[emphasis added]

As Mr. Haller explained: "The union was trying to restrict our hiring practices and we came up with a clause which would avoid it". But the proposal was not acceptable to the union. Local 552 was unwilling to concede or create a contractual right to name-hire. Jerry Boyle, who was at the bargaining table for the union, testified that the union negotiators had made it clear that they would not agree to an employer right to "name-hire" and they were reserving their right to reintro­duce restrictions if they considered it necessary. Boyle was sure that "everyone understood that". But, ten years later, he could not recall any specific discussions. Neither could John Volmer. In any event, by that time the list system had been rescinded. MCAW decided not to press the issue. The parties agreed to the first line of the companies' proposed clause, which now appears as Arti­cle 101.8 in the Zone 4 Appendix. The second line, formalizing the right to "name hire", was drop­ped. After 1975, there were no more local negotiations dealing with local hiring practices, although hiring practices were occasionally the subject of bargaining at the provincial level.

12. In 1978, the Legislature fundamentally altered the structure of collective bargaining in the construction industry, by introducing a system of province-wide bargaining, by trade, through employer and employee bargaining agencies designated by the Minister of Labour. For practical purposes, the designated employee bargaining agency is a provincial council of local unions within a particular trade (electricians, carpenters, sheet metal workers, plumbers, etc.), and the desig­nated employer bargaining agency is a provincial employer association representing employers which have bargaining relationships with those local unions. Under the new system, for the pur­poses of collective bargaining, the employers' rights are vested in the designated employer bargain­ing agency, and the rights of employees and local unions are likewise vested in the designated employee bargaining agency. Every two years the employee and employer bargaining agencies meet to conclude a new provincial agreement. The day-to-day relationships between the employer and his employees, the administration of the provincial collective agreement, and the application of that agreement to the circumstances of individual cases, are all left for resolution at the local 1evel. But there can be no local bargaining, collective agreement or other arrangement affecting employees, other than the provincial agreement, and any such agreement or arrangement is null and void (see section 146 of the Act). After 1978, neither MCAW nor Local 552 had the indepen­dent right to bargain about or change the terms of the Windsor Appendix, including those gov­erning local hiring practices. Collective bargaining was the exclusive prerogative of MCAO.

13. Since acquiring provincial bargaining responsibilities in 1978, MCAO has attempted to establish uniform contract language applicable to all employers and tradesmen in Ontario. Its objective is to gradually eliminate local anomalies, and, where possible, replace the local append­ices with standard clauses in the "master" portion of the collective agreement. There have been frequent efforts to establish uniform hiring practices. In the first round of provincial bargaining in 1978, MCAO proposed a standard clause providing for "open hiring" - that is, total employer dis­cretion as to which union member it would hire. This was what MCAW had tried to achieve. In 1982, MCAO proposed a "50/50" system as part of a total package to improve productivity. In 1984, the most recent round of bargaining, MCAO again proposed an "open hiring" system.

14. Had MCAO's 1982 proposal been incorporated in the collective agreement there would now be a clear contractual foundation for the system that Local 552 has brought into effect in Windsor. By the same token, if MCAO had been able to achieve its 1978 or 1984 bargaining objec­tive, there would be a clear contractual foundation for the hiring practices of the Windsor contrac­tors. But MCAO did not achieve its goal of a uniform provincial system of open hiring, so what remained in the agreement were the various local area appendices. Some of these have precise and express language dealing with name hiring. For example, Thunder Bay and London both have a scheme which approximates a "50/50" formula. Other local areas, including Windsor, do not have such specific contract language.

15. It is not disputed that from March of 1974 until at least the spring of 1983, the employer-members of MCAW were able to hire virtually any union member they wished, and the union would routinely issue a confirmatory referral slip. The union maintains that in February 1983, for a period of six to ten weeks, it once again introduced a "50/50" hiring restriction requiring the local contractors to select one individual from the top of the out-of-work list for every tradesmen name-hired. This restriction, it is said, was applied at the "Chrysler Project" which, at the time, was the biggest construction project in the area. However, the evidence of this alleged change of practice is far from satisfactory. We accept the evidence of Jerry Boyle, a union official, that Local 552 intended and attempted to impose some hiring restrictions on the Chrysler Project; but we also accept the evidence of the employer witnesses that the so-called change in practice was never applied to any of them - even on the Chrysler job. They continued to hire as before. Mr. Hailer testified that in early 1983 he heard from other contractors about a "50/50" system, but it never affected him. In summary then, from about March 1974, until April 1985, the MCAW members were able to hire without restriction.

16. On or about April 29, 1985, members and officials of MCAW learned of the unions intention to introduce a new hiring system. Within a day or two they received a document describ­ing that system:

PROPOSED HIRING SYSTEM

"50-50"

Employer has the right to name hire the first man. The second tradesman, regardless of the trade demand, will be hired according to his employment record over the past 12 months.

(This will be made on the basis of hours earned over the past year, as determined by benefit monies received on their behalf)

The employer must include in his name hiring, any foreman he desires to employ, and still main­lain a 50-50 ratio.

A member is responsible to be licensed, and capable of performing his duties in a safe, prod­uctive manner. This does not mean that a welder must have a current ticket, but he must be cap­able of performing the procedures required.

A member is entitled to refuse one job in a calendar year without prejudicing his position on the list.

A contractor who terminates (fires) a member for just cause, will not be required to rehire that person for a six (6) month period.

There was no prior consultation. When MCAW asked Local 552 not to implement the new scheme until they could discuss the matter, Local 552 refused.

17. Mr. Boyle testified that the purpose of the change was to create work opportunities for members who were out of work. He testified that, in his opinion, the contractors were refusing to hire capable workers who were regarded as too old, or "trouble makers", or simply were not known to the prospective employers. In order to meet this problem, the union decided to supply employees and issue referral slips only in accordance with the scheme set out above.

IV

18. Leaving aside for the moment the particular terms of Article 101, it is worth noting that clauses of this nature (but in various forms) are fairly common in the construction industry because of the volatile employment environment and the special relationship between unions, employers and prospective employees. The union is not just the bargaining agent for those employees, but can often regulate access to employment itself. In R M Hardy and Associates Limited and Team­sters, Local Union 213, [1977] 2 Can.L.R.B.R. 357, Professor P.C. Weiler described these unique characteristics of the construction industry:

Most of the workmen in the construction industry are skilled tradesmen, usually having obtained tradesmen's qualification certificates after years of apprenticeship. Each of the distinctive trades has its own craft union, which may have a century-old tradition of representing its members in collective bargaining with the contractors who employ members of that trade. But most building trade unions have another role besides the customary representation of employees in collective bargaining: the hiring hall function. The reason is the highly cyclical nature of employment in the construction industry - stemming both from the rhythm of individual projects and the intermittent and erratic pattern in which major construction investments are brought on stream. In response to that pattern, contractors - whether general or specialty contractors - nor­mally do not maintain a regular work force. They may retain a nucleus of key employees, but the bulk of their workmen are recruited as and when they are needed for a specific project for which the employer has obtained a contract. Where do they get these tradesmen? Through the union which represents that craft. The union office keeps a list of available tradesmen; the con­tractor phones the union office for certain kinds and numbers of workmen; and the crew is then dispatched through the union hiring hall to the job site. In effect, the trade union performs the basic personnel function in the construction industry, by allocating jobs among the members of the work force. Any one tradesman may be employed by a number of contractors in a number of areas in any one year. Besides paying the immediate take-home wages to the tradesmen on the job, the contractor also forwards directly to the union hourly contributions for health and wel­fare, vacation, and pension benefits, and these funds are administered by the union for its mem­hers. And the consequence is that the primary and enduring relationship in construction is between craft unions and tradesmen-members, not between employer and employee.

[emphasis added]

Union security arrangements and the "hiring hall" provide the same job security in the construction industry as seniority does in an industrial context, and to the extent that the union seeks to reserve work opportunities for its members and provide an equitable means of distributing avail­able jobs, there will be an encroachment on an employer's right to hire whomever he pleases. The degree of encroachment, of course, depends upon the particular terms of the collective agreement.

19. In the instant case, there are significant restrictions on the employers' initial selection of those workers whom it wishes to hire. The Windsor Contractors can only employ members of the UA in good standing (Article 101.4), and must give preference in employment to members of Local 552. Moreover, under Article 1.01, the contractors recognize Local 552 as the "sole agent for supplying employees", and they undertake that no employee will commence work in Local 552's territorial jurisdiction unless such employee has first secured a referral slip from the union office. Whatever the practice may have been, it is difficult to reconcile this language with the assertion that employers can select whomever they wish, and the union must automatically issue the neces­sary referral slip validating their selection. If that were the case, it would only be necessary to require all prospective employees to be members of Local 552. There would be no need to consti­tute Local 552 as the sole agent for supplying employees, or to require a referral slip as a precondi­tion for active employment. The words "sole agent" and "supply" signify a clear intention that the union is intended to be the exclusive source of prospective employees.

20. This impression is reinforced by the language of Article 101.5 which gives a contractor the "privilege" of hiring other UA members if within three working days of a request to the union (the sole agent for supplying employees) the contractor does not obtain the required number of qualified members; and such employees still require a referral slip from the Local 552 office. It is a "privilege" because it is a permitted exception to the general obligation, and is still subject to regu­lation by the Local. To prevent contractors or union members from avoiding the union office and the necessity of obtaining a referral slip for each work assignment, Article 101.7 provides that: "members shall not be loaned or borrowed from one shop to another, and members shall not be exchanged between shops for any purpose". Out-of-town contractors must follow the same general regimen, except that they are allowed to send into the local area one UA member as supervision. Any additional employees must be supplied through the union office (Article 101.6).

21. Articles 101.2 and 101.3 deal with the geographic division of work within Local 552's territorial jurisdiction and the permitted employer response where there are particular labour shortages. Those provisions are set out in paragraph 2 above and need not be repeated here. It suffices to say that some of the language used reinforces the impression that Local 552 is intended to be not just the source but also the exclusive supplier of workers in response to an employer's request. The first sentence of Article 101.2 describes Windsor and Chatham as the "point of refer­ral to the job site" and that phrase must be read in light of the fact that it is the union which does the "referring" and provides the necessary referral slip. Article 101.3 provides that once a project is "supplied with men" there shall be no "bumping" unless the work force has been withdrawn, and this phrase should usefully be read together with the words of Article 101.1 which make the union the "sole agent for supplying employees". More significant - if only to underline the point -is the portion of Article 101.2 wherein "the Union recognizes the right of the Employer to select the foreman of his choice from the membership of Local 552". The parties had no difficulty draft­ing language preserving an employer's "freedom of choice" when that was their shared intent. There is no equivalent language governing the employment of ordinary tradesmen, and the lan­guage specifying the employer's right to "name-hire" foremen would be unnecessary if he already had the right to "name-hire" everyone. Indeed, in the last round of unfettered local bargaining, the contractors' efforts to insert such language into the agreement were quite specifically rejected by the union which was not prepared to agree to a proposed amendment to the Local agreement which would entrench the right to "name hire". The union was content that the employer could "select the foreman of his choice from the membership of Local 552", but it was not prepared to agree that the contractor should "have the right to choose the employee of his choice from the list of unemployed members." Apart from questions of estoppel, to which we shall return, we are inclined to accept the union's position which, in our view, reflects the most reasonable interpreta­tion of the language which the parties have used, and we are not disposed to "read in" a contrac­tual term which was expressly proposed and quite clearly rejected.

22. The only portion of Article 101 which can clearly assist the contractors proposed interpretation is Article 101.8 which allows them to "review the list of unemployed journeymen and apprentices at the time of hiring". However, this language does not obviously mandate a total system of "name hiring" - particularly since it was originally introduced in a form which would have mandated "name-hiring" and that portion of the proposal never gained acceptance by the union. The clause, as framed, is consistent with quite different purposes. It can accommodate the 50/50 system which the union has recently proposed. It can facilitate a perusal of the out-of-work list for the selection of foremen (as is the contractor's right under Article 101.2). It permits the identifica­tion of qualified welders. It allows the contractor to identify the individuals who are likely to be referred to his job so that he can bring to the union's attention any special needs or any particular objections to those individuals. Without, at this point, detailing what those objections might be, it is apparent that the union itself recognizes that the contractor need not accept persons who are unqualified and, for a period of six months (at least) need not rehire a tradesman who was previ­ously discharged. In summary then, when one considers the origin and potential purposes of Arti­cle 101.8, we cannot conclude that it supports the Winclsor contractors' contention that they have an express or implied right to "name hire" their workers. To put the matter another way, we are not persuaded that the scope of legitimate internal union action to adopt "hiring hall rules" is cir­cumscribed by the terms of the collective agreement.

V

23. The question remains whether the union is estopped from altering its internal rules respecting the referral of employees to work and whether the local contractors can insist upon the continuation of a "pure name hire" system even though such system is not provided for in the collective agreement and, some years ago, was specifically rejected.

24. The contractors' position is that even if they have no contractual right to "name hire", the union cannot resile from its longstanding acquiescence in that practice. It must continue to issue referral slips to whomever the contractors select. It cannot change that practice as it has recently done. Counsel points out that such change is not a neutral event from the Windsor contractors' point of view, because it significantly affects the way in which they can assemble their crews with potential effects on employee productivity. In his submission, the purported change in the local hiring practices is tantamount to an amendment to the collective agreement which should properly be the subject of collective bargaining. Counsel further points out that the 50/50 hiring system which the union advocates already exists in other parts of Ontario but, in those locations, it was the subject of negotiation. The contractors argue that the union's longstanding acquiescence in this practice amounts to a representation (upon which the contractors relied) that the practice would continue. Finally, the contractors contend that any alteration of the local hiring arrange­ment is contrary to section 146(2) of the Act. The contractors seek a direction requiring the union to return to the old method of doing things and urge the Board to remain seized in respect of any question of damages. (The contractors have been operating under the new system, under protest, since its inception.)

25. The union contends that the Board has no jurisdiction to elevate an unwritten practice into an enforceable term of the collective agreement, nor can the employers found their claim on such practice. Here, there can be no violation of the collective agreement because the right which the employers assert has never been embodied in the collective agreement. When the Windsor employers attempted to do so, they were rebuffed - as was MCAO on two occasions when it sought to obtain for employers a contractual right to unlimited name-hire. That express repudiation of the employers' position negates any inference that the union would always acquiesce in and facilitate name-hiring regardless of the local unemployment situation or the problems of its unemployed members. In any event, the union has not acquiesced totally. For a period of two years in the 1970's, and for a shorter period more recently, the union did alter its procedure for referring work­ers to available jobs. Indeed, it was this change in the early 1970's which put the employers on notice that they could not count on continued union acquiescence in an open hiring system, and prompted them to seek a contractual foundation for that practice. The fact that the union may have permitted name-hire for considerable periods of time does not amount to an undertaking - let alone a legally enforceable one - that it would always continue to do so. Since there was no local bargaining and no local arrangement inconsistent with the terms of the collective agreement, there can be no breach of section 146(2) of the Act. In the union's submission, so long as there is no actual breach of the collective agreement, the union is entitled to alter its hiring hall rules from time to time to meet changing circumstances, just as the employer is entitled to change the way it runs its business - even though such changes may have an impact on the other party.

26. For the reasons we have already outlined, we do not think that the contract language supports the contractors' asserted right to pick and choose or "name-hire" the members of its work crews, nor is there any express right to require the union to issue referral slips to any persons whom the contractors select. If that right exists, it is not because of the contract language or the process of negotiation, since the employers' efforts to secure it through negotiation were rebuffed. It is based upon some "enforceable" notion that if the union has referred workers or issues referral slips in a particular way for a period of time, it may be legally required to continue to do so. Stripped of its legal labels, the contractors are asserting the acquisition of contractually enforceable rights by a process of accretion. The contractors must be permitted to "name-hire", not because the agreement gives them that right (although they tried unsuccessfully to get it into the collective agreement), but rather because the union has generally been prepared to permit them to do so. On this branch of the applicant's claim, it relies on the equitable principle of estoppel. It argues that there has been a representation by conduct (years of permitted name-hiring) that the union would not alter the way it refers workers even if it had a right to do so, and that the contractors have relied upon that representation to their detriment. The union argues that the requirements of estoppel have not been made out, and that the employers cannot use estoppel as a "sword" or the basis of a claim unsupported by express language in the agreement. Estoppel can only be used as a "shield" or a defence to a claim.

VI

27. We enter into any discussion of estoppel with some trepidation, for as Mr. Justice Reid observed in Re Metropolitan Toronto Civic Employees' Union, Local 43, Canadian Union of Public Employees and Municipality of Metropolitan Toronto et al., (1985) 50 O.R. (2d) 18 at page 625:

Promissory estoppel has proven to be one of the more elusive and difficult recent creations of the common law, notwithstanding its repeated definition by the courts, principally by its modern proponent, Lord Denning. if bar and bench find it difficult to understand and apply, laymen who sit in arbitration proceedings of the type before us can hardly be expected to find it easy. My experience in the Divisional Court has revealed that difficulty is commonly experienced by arbitrators in wrestling with the true meaning of the doctrine and applying it.

Nevertheless, as that is the applicant's alternative submission, it is an issue that we must address.

28. The principle of estoppel, at least in its traditional form, is based upon the equitable notion that a person should not be allowed to insist upon his strict legal rights when he has so con­ducted himself that, having regard to all the circumstances, it would be unjust or unconscionable to allow him to do so. A classic statement of the principle can be found in Combe v. Combe, [1951] All E.R. 767 where Lord Denning observed:

Where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted upon accordingly, then, once the other person has taken him at his word and acted upon it, the one who gave the promise or assurance cannot afterwards be allowed to revert the previous legal relations as if no promise or assurance had been made by him, but must accept their legal relations subject to the qualifications which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word.

[emphasis added]

This passage was cited with approval by the Supreme Court of Canada in John Burrows v. Subsur­face Surveys Ltd., (1968) DLR (2d) 354 (per Ritchie J.):

It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties entered into a course of negotiation which had the effect of lead­ing the other to suppose that the strict rights under the contract would not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended the legal relations created by the contract would be altered as a result of the negotiations.

[emphasis added]

Even more recently, the Supreme Court of Canada in Town of Fort Frances v. Boise Cascade, 1983 CanLII 47 (SCC), 143 D.L.R. (3d) 193 had this to say:

The conditions in which the doctrine of promissory esloppel operates to prevent a party from insisting upon strict legal performance of a contract remain, in some respects, uncertain. It seems clear, however, that the principle which allows a party to raise a promise or representation that was made to him as a defence, is based upon the inequity of allowing the other party to resile from his statement where it has been relied upon to the detriment of the person to whom it was directed.

29. In these and other cases, the courts have required positive advertent conduct on the part of the party against whom the estoppel is raised. There must be a "promise", "assurance", "undertaking", "course of negotiation", or "statement" which was intended to affect the legal relations of the contracting parties. However, labour arbitrators have not been quite so rigid. A leading text on labour arbitration still enumerates the elements of estoppel as: "a representation by words or conduct, which may include silence, intended to be relied on by the party to which it is directed, some reliance in the form of some action or inaction, and detriment resulting therefrom" (Brown & Beatty, Canadian Labour Arbitration 2nd ed. (1984) at pp. 82-83); but, in practice, labour arbitrators have been more inclined than the courts to find an estoppel in order to preserve the existing pattern of the employer-employee relationship. In Re City of Penticton and C. U.P.E., Local 808 (1978), 1978 CanLII 3523 (BC LA), 18 L.A.C. (2d) 307 (Weiler), the British Columbia Labour Relations Board explained:

That brings us to the problem of estoppel, another legal concept of the same genre. In its classic form, the application and the attractiveness of the notion of estoppel is quite easy to appreciate. One party enjoys a legal right under a contract. The party says that it is not going to enforce that right on a particular occasion. The other party relies on that representation and acts according­ly. Then the first party changes its mind and decides that it does want to enforce its strict legal rights; but only after its counterpart has irretrievably committed itself. The equitable doctrine of estoppel is designed to prevent such an unfair tactic. In the words of a noted Canadian arbitra­tor, Dean Arthurs, "to use a common metaphor, you are not allowed to let someone go out on a limb so that you can saw him off': see Re City of Toronto and Civic Employees Union, Local 43 (1967), 1967 CanLII 1066 (ON LA), 18 L.A.C. 273 at p. 280. Unquestionably, that policy is apropos in the administration of collective agreements. There has been some debate in the Courts about whether labour arbitra­tors could be trusted to use the remedy in order to relieve against the dictates of the collective agreement. (Cf Re Hospital Com'n, Sarnia General Hospital and London District Building Service Workers' Union Local 220, S.E.I.U. (1972), 1972 CanLII 742 (ON HCJDC), 30 D.L.R. (3d) 660, [1973] 1 O.R. 240,73 C.L.L.C. para. 14,157, p.21 (Ont. Div. Ct.); and Ben Ginter, supra. That issue is thoroughly canvassed by the arbitrator in Re Edwards of Canada, Unit of General Signal of Canada Ltd. and 1J.S.W., Local 7466 (1974), 1974 CanLII 2279 (ON LA), 6 L.A.C. (2d) 137 (Adams).) Thus, at the outset, this Board wants to make it crystal clear that arbitrators in this Province definitely do have the remedial authority under the Labour Code to apply the equitable doctrine of estoppel in order to provide a final, binding, and sensible settlement of grievances under a collective agreement.

[A] restricted view of the notion of estoppel is not consistent with the trend in the arbitration cases. By and large, Canadian arbitrators have assumed that the parties to a collective bargain­ing relationship have a broader obligation to each other; in effect, an affirmative duty to alert the other side that its practice under the collective agreement, its interpretation of particular contract provisions, is incorrect and unacceptable: see, for example, Re Globelite Batteries Ltd. and U.E.W., LocalSl4 (1964), 1964 CanLII 1007 (ON LA), 15 L.A.C. 11 (Reville); Re Jamaica Mfg. (Canada) Ltd. and Int'l Moulders Union (1966), 1966 CanLII 870 (ON LA), 18 L.A.C. 13 (Christie): Re L. W. Mfg., Ltd. and Int'l Union, U.A. W. (1967), 1967 CanLII 1012 (ON LA), 18 L.A.C. 294m (O'Shea), and Re Globe & Mail and Toronto Newspaper Guild, Local 87 (1974), 1974 CanLII 2370 (ON LA), 6 L.A.C. (2d) 70 (Brown). The general arbitral position was put succinctly in the recent decision in Re Ottawa-Cornwall Broadcasting Ltd. (CJOH-TV) and National Assoc. of Broadcast Employees & Technicians (1977), 1977 CanLII 2863 (ON LA), 15 L.A.C. (2d) 64 (Fraser) at p.70:

Can estoppel arise from such inaction? The earliest helpful statement of the principle of estoppel is found in the judgment of Denning, L.J., in Combe v. Combe, [1951] 1 All E.R. 767...

That statement clearly contemplates a positive act by way of words or conduct, cou­pled with an intent to affect legal relationships. However, the doctrine has been modi­fied in its application to recent industrial relations situations, to allow its application where the union has in some way agreed to a practice resulting from an interpretation by the company which is at variance with the requirements of the collective agree­ment. An examination of the cases cited by Brown and Beatty in Canadian Labour Arbitration, at p.50, and referred to this board, indicates a number of occasions where arbitrators have accepted the application of the doctrine of estoppel under such circumstances, but there is a common thread running through those cases which is absent in the present case.

In each, there is an indication of some action taken, or right foregone, or verbal rep­resentation or agreement made by the union, which can be taken as evidence that it knows of the practice and is either not objecting to it, or has in fact agreed to it. In each, the union is at least knowingly, and in some cases, helpfully, allowing the com­pany to crawl out on the Arthurian limb to retrieve the shield that blunts the saw.

30. In recognition of the unique characteristics of a continuing collective bargaining relationship, labour arbitrators have been inclined to take an expansive view of the doctrine of estop­pel, and to accept a rather broad notion of estoppel by conduct. But until a decision by Professor D. M. Beatty, in 1981, they were not inclined to give binding contractual effect to benefits or advantages not provided for in the collective agreement. (See the analysis of the cases undertaken by Professor Schiff in Re Monarch Fine Foods and Milk and Bread Drivers, Local 647 (1985), 1985 CanLII 5336 (ON LA), 18 L.A.C. (3d) 257.) The decision in CN/CP changed all that. (See: Re CN/CP Telecommunicationsand Canadian Telecommunications Union (1981), 1981 CanLII 4518 (ON LA), 4 L.A. C. (3d) 205 (Beatty), and Re CNR Co. et al. v. Beatty et al. (1981), 1981 CanLII 2953 (ON HCJDC), 34 OR. (2d) 385.)

31. In CN/CP, the employer had for many years gratuitously paid wages to certain employ­ees more generous than those required by the terms of successive collective agreements. The arbi­trator found that the employer had followed a course of conduct which had reasonably induced the union to believe that the entitlement of the employees concerned would be governed by the com­pany's longstanding practice rather than the strict language of the agreement. He concluded that it would be inequitable to allow the employer to insist on the letter of the agreement as the limit of its obligation - even though it appears that the employer's practice was based upon a mistake, there was no express undertaking, promise or assurance of the kind that the courts have frequently found necessary, and no intention on the employer's part to affect the parties' legal relations. And what was the change of position or detrimental reliance resulting from the longstanding payment of a gratuitous benefit? How could the mistaken payment of a benefit be construed as a detriment? The arbitrator's answer was this: the union had lost, for the duration of the agreement, the oppor­tunity to negotiate a change in the terms of the agreement to embody the practice in express con­tract language. The union's vice-president had testified that had he known of the employer's inten­tion to effect the change, or even that the employer was reserving its right to do so, he would have insisted on a clause in the agreement precluding the employer from carrying out its plan. In the arbitrator's opinion, this loss of a bargaining opportunity was sufficient detrimental reliance to found an estoppel and compel continuance of the status quo, even though it is by no means clear that the union could have ever secured that right in the agreement had it been raised at the bar­gaining table.

32. CN/CP broke new ground. To adopt the medieval metaphor so often used in these cases, the arbitrator had permitted the union to use estoppel as a 'sword': the foundation of an enforceable legal claim to benefits beyond those provided in the agreement, despite the absence of any express promise or undertaking, nothing in the agreement to which the union could refer to support its position, and no obvious intention to alter the parties' legal relationship. There was no reference to the statements in Combe v. Combe, supra, that estoppel does not create new causes of action where none existed before, nor was there any reference to the comment of the Ontario Court of Appeal in Gilbert Steel Ltd. v. University Construction Ltd. (1976), 1976 CanLII 672 (ON CA), 12 O.R. (2d) 19 to the effect that: "Estoppel can never be used as a sword but only as a shield. A plaintiff cannot sound his claim in estoppel." The sword/shield distinction did not trouble the Divisional Court either. Gilbert Steel was not mentioned. Nor was the arbitrator or the Court troubled by the fact that they were sanctioning a new, unwritten, but enforceable term of the collective agreement despite the statutory requirement that the collective agreement be in writing. ln summary, then, at least in Ontario, a party's rights under a collective agreement consist of its written terms in addition to, or as modified by, such unwritten practices as may, in the opinion of an arbitrator, support this broader notion of estoppel. The negotiated terms of the agreement are no longer determinative.

33. We do not think that any useful purpose would be served by our attempt to analyse the sword/shield distinction, for despite Gilbert Steel, the recent High Court decisions are as difficult to reconcile as Reid, J. suggests. In Re Tudale Exploration Limited and Bruce et al. (1978), 1978 CanLII 1471 (ON HCJ), 20 O.R. (2d) 593 (Div.Ct.), Grange, J. commented that "The sword/shield maxim has been heavily criticiz­ed. . . and I must confess to difficulty in seeing the logic of the distinction and it does not appear to be universally applied". In M.L. Baxter Equipment Ltd. et al. v. Geac (Canada) Ltd. (1982), 1982 CanLII 1743 (ON HCJ), 36 O.R. (2d) 150, Rutherford, J. commented that "the next limitation is that the doctrine can be used only as a defence and not for the purpose of asserting a claim. Recently, however, great doubt has been cast on this requirement". Yet, each of these cases could be resolved along traditional estop­pel lines, without reference to "swords" and "shields"., and in Parker v. Constitution Insurance Co. of Canada (1983), 1983 CanLII 1689 (ON HCJ), 43 O.R. (2d) 545, Mahoney, J. asserted: "It is trite law that estoppel can be used only as a sword and not as a shield", citing Gilbert Steel as authority. None of them involved collective agreements or labour law principles.

34. Of more interest are the comments of Reid J. in the Municipality of Metropolitan Toronto case, supra about the extent to which the arbitral use of estoppel has received judicial approval:

To the extent that arbitrator's [sic] use of the doctrine [of estoppel] has come before this court its application has been confined to one type of case only. That is where a course of conduct has been followed by an employer which is at odds with the agreement that has led the union not to seek to have the agreement amended to accord with the conduct.

Since it was the union which was asserting estoppel in Municipality of Metropolitan Toronto, and it is the employers that are doing so here, it may be useful for present purposes, to rephrase Reid J.'s comments juxtaposing the parties:

To the extent that arbitrator's [sic] use of the doctrine lot estoppel] has come before this court, its application has been confined to one type of case only. That is where a course of conduct has been followed by a [trade union] which is at odds with the agreement but has led the [employer] not to seek to have the agreement amended to accord with the conduct.

If one accepts Reid J's statement as defining the judicially approved ambit of estoppel in collective agreement situations, it is apparent that it cannot apply in the instant case. Here, the union's con­duct is not "at odds" with the agreement, but rather in accordance with its terms, and both MCAW and MCAO have tried to seek contractual amendments to entrench the employers' right to name-hire.

VII

35. There is little doubt that the decision in CN/CP, supra, has significantly broadened the potential availability of estoppel as a basis for asserting a claim that cannot be supported on the basis of the language of the collective agreement alone. In a proper case, conduct (apparently even based upon a mistake) can amount to a representation, and detrimental reliance can be founded upon a loss of opportunity to negotiate an amendment. But the question, as always, is whether the particular circumstances demonstrate a "proper case" for the application of estoppel, and arbitra­tors have been far from unanimous even on facts similar to those before arbitrator Beatty in

CN/CP.

36. We should note first of all that the decision in CN/CP has been heavily criticized on both legal and policy grounds. In Re Monarch Foods, supra, Professor Schiff argued that CN/CP does not properly interpret the law, approves the enforcement of amendments to the collective agreement which were neither negotiated nor reduced to writing, and ignores the necessity of intent to alter legal relations. He argues that estoppel could not arise out of an error because error can never embody intent. Other arbitrators have also been apprehensive about a written agreement becoming encrusted with informal understandings which do not merely assist in its interpreta­tion but add to or qualify the rights or obligations of the parties. Any retreat from the writing which the statute requires, generates uncertainty, friction, and litigation.

37. In Re Elan Tool and Dye Ltd. and U.A.W. Local 127 (1985), 1985 CanLII 5464 (ON LA), 18 L.A.C. (3d) 17 (Weatherill), for example, the company had a practice of permitting employees to stop working before the end of their scheduled shift if their daily production quota had been met. The company changed certain aspects of that practice and the union grieved. The arbitrator denied that he had the broad equitable jurisdiction to invoke estoppel as a "sword" and commented:

It is one thing to be prevented, in certain circumstances, from relying on terms of a collective agreement because it is unjust to do so; it is quite another to assert that because of the conduct of one party and because of the others reliance on it, the terms of the collective agreement have been changed, or a new term created.

The arbitrator insisted that no representation intending to effect legal relations had been made by the mere fact of a past practice of exercising management rights in a particular way; otherwise, all company practices might regularly become part of the collective agreement.

38. This decision, it might be noted, is entirely consistent with one made ten years earlier by Arbitrator G.W. Adams in Re Fisher Controls Co. of Canada Ltd. and United Autoworkers, Local 636 (1977), 1977 CanLII 2950 (ON LA), 16 L.A.C. (2d) 299. There, the union protested the employer's action in eliminating a ten minute rest period which had previously been allowed to employees working a four-hour overtime shift. The collective agreement was silent on the subject of such breaks, and the Board rejected the claim which was based "on a gratuitous promise.. existing entirely outside of and unrelated to the collective agreement". The decisions in Elan Tool and Fisher Control are also consistent with the views of Professor Harry Arthurs in the City of Toronto which is mentioned in City of Penticton, supra, and cited with approval by the Alberta Court of Appeal in Re Smokey River Coal Ltd. and USW Local 7621 et al., (1985) D.L. R. (4th) 742.

39. In Smokey River Coal the employer had a practice of paying small amounts of overtime in circumstances neither required nor contemplated by the collective agreement. When the employer discontinued the practice the union grieved, relying successfully on the principle of estoppel. The Court of Appeal disagreed. At pages 745.746 of the reasons Mr. Justice Stephenson had this to say:

But, the creation of positive obligations is not the office of promissory estoppel. The function of promissory estoppel is not to make gratuitous promises binding in all respects. The effect of promissory estoppel was the subject of consideration by the Supreme Court of Canada in Canadian Superior Oil Ltd. et al. v. Paddon-Hughes Development Co. Ltd. et al. (1970), 1970 CanLII 3 (SCC), 12 D.L.R. (3d) 247 at p. 252, 11970] S.C.R. 932 at p. 938, 74 W.W.R. 356 sub nom. Canadian Superior Oil Ltd. et al. v. Hambly et al., where Martland J. says;

"This principle [promissory estoppel] assumes the existence of a legal relationship between the parties when the representation is made. It applies where a party to a contract represents to the other party that the former will not enforce his strict legal rights under it."

The doctrine may afford a defence against the enforcement of otherwise enforceable rights; it cannot create a cause of action": per Buckley I. in Beesly v. Hallowood Estates Ltd., [19601 2 All E.R. 314 at p. 324, quoted by Spencer Bower and Turner, Estoppel by Representation, 3rd ed. (1977), at p.388. Gratuitous promises or assurances cannot be turned into positive, binding, obligations.

Much of the argument before us was directed towards the question of whether the doctrine could be employed only as a "shield" rather than a "sword", or only invoked by a defendant. I do not find the sword-shield distinction helpful here, not is the doctrine's availability to be decided by the happenstance of who sues whom. Nevertheless, when the doctrine of promissory estoppel is applicable. "It only prevents a party from insisting on his strict legal right : Combe v. Combe, [1951] 1 All ER. 767 at p. 769. So an employer might be precluded from relying on the terms of an agreement where he had given an assurance that he would not do so. What is necessary to raise promissory estoppel is described by the Privy Council in Ajayi v. R. T. Briscoe (Nigeria) Ltd., [1964]1 W.L.R. 1236 AT P. 1328, quoting Bowen L.J.:

"...if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those perons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before."

The arbitrator here said that the union was induced to believe that the hours of work and wages stipulated under the collective agreement would not be strictly observed. The practice, however, does not appear inconsistent with any provision of the agreement relating to hours of work and wages. What was done was not in contravention of any of the terms of the agreement, but rather in the exercise of them. The employer could seek, or, in some cases, require, additional time, but it had to pay overtime rates. The practice appears to have been in compliance with those terms of the agreement.

At the root this is a bald attempt to turn a policy or practice into a term of a contract when the parties never bargained that it be such.

The Court agreed with the comments of Dr. Hickling that CN/CP "runs counter to a line of both traditional and arbitral authority which has refused to give effect to a claim based directly on prom­issory estoppel" (see: "Labouring with Promissory Estoppel: A Well-Worked Doctrine Working Well", (1985) 17 UBCL Rev. 183); and after referring to Municipality of Metropolitan Toronto, supra, the Court, went on:

Moreover, the essence of the doctrine of promissory estoppel is that it is inequitable for the promisor to stand on his rights. The subject is discussed by Spencer Bower and Turner, cite above, at s. 352. It is only "inequitable for a promisor to stand on his strict legal rights where the promisee has altered his position in reliance on the promise". I am unable to see how the union or its employees were induced to alter their positions in reliance on the promise. The promise was to pay three-quarters of an hour for half an hour of work. What the arbitrator fastens upon is the fact that the union did not raise the practice in subsequent negotiations ". . . its reliance upon the practice caused it not to seek formulization of the practice in the collective agree­ment". There is simply no evidence that the union failed to raise the subject at negotiations in reliance on anything the company had promised. I agree with Professor Arthurs in Re Civic Employees Union, Local 43 and City of Toronto (1967), 1967 CanLII 1066 (ON LA), 18 L.A.C. 273 at p. 280 where he says of this kind of claim that the union has incurred neither risk nor detriment; there must be evi­dence that the union surrendered some claim or made a concession in reliance on the policy or that it would have tried to incorporate the promise into the agreement. To the same effect are authorities cited by Hickling, above, at pp. 206-7, and the Ontario Divisional Court decision in Metropolitan Toronto Civic Employees' Union, Local 43 v. Toronto. The arbitrator here erred in making the finding of inducement or "change of position" without evidence to support that conclusion.

40. Many arbitrators (despite CN/CP) have been equally reluctant to abridge management rights by estoppel unless a clear promise can be found, and conduct, no matter how consistent or how long continued has not been enough. The classic case is Re Rothmans Pall Mall Canada and Bakery Workers' International Union (1983), 1983 CanLII 4876 (ON LA), 12 L.A.C. (3d) 329 (Picher). There the employer had a longstanding practice of replacing workers temporarily absent. Because of changes in product demand, it altered this practice, replacing workers only where it felt they were necessary. The union grieved, but the arbitrator concluded:

The evidence does not establish either a verbal representation made by the company during bargaining or silent acquiescence to some representation made by the union... The most that can be said is that before and during negotiations that practice continued as a longstanding exer­cise of the company's discretion which because of favourable production requirements, had always operated to the benefit of the employees. When sales and production figures became less favourable, the company altered its practice... a practice maintained in good times is not a prom­ise that the same practice will be maintained in less prosperous time.

The arbitrator likened the practice to a Christmas turkey and was reluctant to say that because a practice had continued for years it must of necessity be retained or became a legally enforceable requirement.

41. A similar result was reached in Re Victoria Colonist (1985), 1984 CanLII 5172 (BC LA), 17 L.A.C. (3d) 284 (Hope) where the employer had continued the salary of employees who took leave to serve on the negoti­ating team even though the collective agreement did not require it. When the employer sought to end these salary payments, the union grieved. The arbitrator found no evidence of a representation but merely "forbearance" in the ex gratia payment. Likewise, in Re Western Pulp Inc. and Pulp, Paper and Woodworkers of Canada Local 3 (1984), 1984 CanLII 5255 (BC LA), 17 L.A.C. 3rd 228 (McIntyre), the Board made the same distinction as Arbitrator Weatherill in Re Elan Tool and Dye Limited, supra, distin­guishing between the use of past practice as a guide to interpretation where there is ambiguity and the use of past practice to establish an estoppel or amend the collective agreement. The Board held that where estoppel is claimed there should be clear evidence that the grievor party refrained from bargaining on the issue because of reliance on the past practice. In The Queen in Right of Canada, Treasury Board, Little and Bell v. Canadian Air Traffic Controllers Association (1984), 1984 CanLII 5393 (FCA), 1 FC 1081 a 15 year practice was insufficient to persuade the Federal Court of Appeal of that.

42. In Re Brewers' Warehousing Co. Ltd. and United Workers' Provincial Board (1985), 1985 CanLII 5451 (ON LA), 21 L.A.C. (3d) 327 (Brunner) the arbitrator refused to direct the employer to reinstate a longstanding practice of permitting employees to punch out early which the employer had suspended for eco­nomic reasons. He concluded that the practice was a mere "indulgence" and not a representation "at odds" or "inconsistent" with any of the express terms of the agreement. While it was not nec­essary to consider the other elements of estoppel, the arbitrator was moved to write:

Because of this conclusion I do not find it necessary to deal with the other submissions that were made by counsel and in particular I need not address the contention that there was no evidence of "detrimental reliance". Nor is it strictly speaking necessary for me to comment on the prelim­inary objection that the grievance does not raise a difference between the parties arising from the interpretation, application, administration or alleged violation of the agreement and hence is not arbitrable. However, in this respect, the words of Mr. Justice Stevenson in Re Smoky River Coal Ltd. and U.S. W., Local 7621, supra, that the creation of positive obligations is not the office of promissory estoppel and the statement that gratuitous promises or assurances cannot be turned into a positive binding obligation or into a term of the contract when the parties never bargained for such, are most apposite and do tend to indicate that the grievance as framed may well not raise a difference between the parties which is arbitrable under s.45 of the Labour Rela­tions Act.

By contrast, in Re Domglas Inc. and United Glass and Ceramic Workers, Local 203 (1983), 1983 CanLII 4907 (ON LA), 9 L.A.C. (3d) 125 (Kennedy), another experienced arbitrator held that the employer must continue its longstanding practice of paid lunch breaks even though the terms of the agreement did not require it. CN/CP was applied uncritically and, on the assumption (which the dissenting board member called pure "conjecture") that had the employer prior to negotiations alerted the union of its intention to alter its practice, the issue would have been on the union's "shopping list" of bargaining items. Again, as in CN/CP itself, there was no indication that the union would have been successful in pressing this claim. Domglas is representative of a number of similar decisions.

43. Finally, we should make brief mention of Re Ottawa General Hospital and Ontario Nurses' Association, Local 83 (1985), 1985 CanLII 5361 (ON LA), 18 L.A.C. (3d) 208 (Roach). In that case, there had been a practice of paying holiday pay at a level more generous than the collective agreement required, and- the union had attempted at the bargaining table to entrench that practice in the collective agreement. It had been unsuccessful. When the employer later reverted to the terms of the agree­ment and the union grieved, the arbitrator held that no estoppel could be made out because there was no detrimental reliance. In particular, there was no "inaction" as a result of the representation:

Again, I would like to emphasize that the association, having negotiated the holiday pay issue during the bargaining session, which resulted in the present agreement, cannot now claim that it acted to its detriment by reason of the conduct of the hospital in respect of payment of holidays. The fact that it was unsuccessful in bringing about a change during the negotiations, is not rele­vant. What is relevant is that the association cannot claim that it failed to act by reason of the hospital's conduct, and this is a decisive factor since one of the essential elements to prove estoppel is missing.

Because the union had actually raised the matter in bargaining, it could not claim that it had lost the opportunity to do so, and the arbitrator held that the CN/CP rationale had no application.

44. We have referred at such length to this arbitral jurisprudence, because these cases typically involved collective agreements with a management rights clause giving the employer the exclusive authority to run the business except as expressly restricted by the collective agreement (like Article 10 in the agreement before us), and there was usually a further provision (like Article 18.6 in the master portion of the current agreement) to the effect that the arbitrator may not "make any decision inconsistent with the provisions of [the agreement] nor alter, modify or amend any part of the agreement". Not only did the labour statutes require collective agreements to be in writing, but, to the extent that the parties' intention could be gleaned from the language they used, there was no intention to vest in an arbitrator the power to rewrite the bargain or create obliga­tions to which the parties had not mutually agreed. Nevertheless, courts and many arbitrators have been prepared to invoke the doctrine of estoppel both to limit the exercise of these management rights, and impose upon employers obligations beyond those contained in the collective agree­ment. What is interesting in the instant case is that by making the union the "sole agent for supply­ing employees" without limitation on how those workers are to be supplied, the employers have recognized a "union right" of the same general nature as the employer's right to run its business. Just as these employer practices initiated and maintained in the exercise of their management rights could, by means of estoppel, become transformed into a binding obligation to maintain prac­tices unsupported by the language of the agreement, it is arguable that the union's exercise of its rights might yield the same result. For years the union was prepared to acquiescence in and facili­tate the employer's desire to name-hire, and, the employers argue that the union now has a legal obligation to continue to do so.

45. We shall consider the potential interplay of the employers' "reserved right" to hire and the union's exclusive right to "refer" in the last paragraph of this decision. First, it is necessary to determine whether the circumstances of this case would be sufficient to establish an estoppel, which obligates the union to continue to issue referral slips validating the employers' desired prac­tice of name-hiring their employees.

VIII

46. There has never been any express promise, assurance or undertaking that the union would abandon its role, recognized in the agreement, as the "sole agent for supplying employees", nor has there been any express promise that, in all circumstances, the union will routinely ratify (by the issuance of a referral slip) any employer decision to select any employee. Whatever inferences might be drawn from the union's acquiescence in a system of name-hire were surely dispelled by its express repudiation of that practice between 1973 and 1975. The union's refusal to permit unlimited "name-hire" for a period of perhaps two years and its refusal to agree to a contract term to that effect, demonstrates that, whatever indulgence or forbearance it was prepared to extend from time to time, it was not intended to modify the legal relations between the parties. Indeed, the employers were on notice that the practice of name-hire would not be accepted indefinitely and without question by the union. The employers themselves were under no illusion about this. That is why they tried to modify the collective agreement to give contractual force to a scheme which they knew, or ought to have known, might be altered by the union when it considered it appro­priate to do so. They were unsuccessful.

47. This is not a case in which a party, relying on an established practice, has lost the oppor­tunity to negotiate contract language to give that practice contractual force. The Windsor contrac­tors did have the opportunity to change the contract language to meet their expectations. Later, on their behalf, MCAO also tried to introduce language in the provincial collective agreement to insti­tutionalize the "open hiring" system which the Windsor contractors now claim they are entitled to on the basis of estoppel. MCAO was equally unsuccessful. In short, what the Windsor contractors urge the Board to do is modify the terms of their collective agreement and establish, by estoppel, a term which neither they, nor their statutory bargaining agent, were able to secure through the process of collective bargaining.

48. What of other forms of detrimental reliance? We are prepared to assume (in the absence of evidence) that the loss of an employer's ability to hand-pick his crews (either independently or from the union's list of unemployed workers) may have some impact on the employees' productivity, but it is interesting to note that there is no concrete evidence in this regard, even though, by the time the hearing was completed the "50/50 system" had been in place for approxi­mately six months. The employers, quite understandably were concerned about their inability to pick and choose among the available union members, but it has not been established that the requirement to take a qualified tradesman from the out-of-work list for every tradesman name-hired has actually resulted in any loss to the employers. More important, however, we are not per­suaded that there was an unequivocal representation by conduct that the union would always acquiesce in name-hiring; there was a clear representation that it would not do so, there was no loss of opportunity to bargain about the issue locally or provincially, and if the Windsor contractors have failed to press their case more strongly at the bargaining table, it is not because of any assur­ance from the union. If the members of MCAW relied upon the existing practice it was not reason­able for them to do so, having been clearly put on notice that the union did not intend it to affect the legal relations between them. This case does not fit the rationale of CNICP nor the re-state­ment of the doctrine by Reid J. in Municipality of Meiropolitan Toronto, supra. There is no union conduct here that is "at odds" with the agreement, and the employers have neither been induced to refrain, nor have they refrained from seeking to secure a contractual provision mandating "open hiring".

49. For these reasons, we do not find that the elements of an estoppel have been made out and decline to direct that the union continue to ratify a practice which is not supported nor required by the language of the collective agreement. [n our view, having clearly put the employers on notice that they could not rely upon a continuation of their unfettered right to namehire and having resisted the employers' claim to embody that iight in the terms of the collective agreement (both locally, and later, at the provincial level) the union cannot be estopped from introducing hir­ing practices which, in its view, accommodate its members' need for a fair opportunity to compete for available jobs.

50. Does this decision mean that the Windsor employers must hire anyone whom the union refers? Not necessarily. The fact that the union (in accordance with the agreement) has been given the exclusive right to refer workers, does not mean that the employer is obligated to employ those workers if they do not meet its requirements; and, in assessing the required standards of performance, an employer is entitled to take into account how these very same workers have performed in the past. The referral rights that have been vested in the union pursuant to Article 101 of the Windsor Appendix, must be balanced against the right to hire found in Article 10 of the master portion of the agreement; and it could never have been intended that the employers were required to hire or retain persons who were incompetent or unable to demonstrate their ability to perform the tasks required of them. As the Board noted in Ontario Hydro, [1983] OLRB Rep. Jan. 99, and [1984] OLRB Rep. Feb. 299, even in a union-run referral system, there is no obligation on an employer to hire an unsuitable employee. If through past experience with an employee an employer has formed the reasonable impression that he will be unable to perform his assigned tasks in a satisfactory manner, the employer may well be justified in refusing to hire him. The extent of that employee's redress (if any) will depend upon the language of the collective agreement and the circumstances of the particular case, so it is inappropriate for this Board to speculate. It suffices to say that the employers' concern about productivity can, with appropriate justification, be addressed pursuant the collective agreement, and in this respect, the union's right to refer work­ers to available jobs is tempered by the employers' right to reject persons who are unsuitable. This puts in the hands of the employers the ability to avoid any actual detriment resulting from any unreasonable exercise of the union's right to refer.

51. For the foregoing reasons, this grievance is dismissed.