Meikle v. Retail, Wholesale & Department Store Union Local 414, 1986 CanLII 1576

[1986] OLRB Rep. April 485

0056-85-U; 0058-85-U; 1270-85-R James Meikle et al, Complainants, v. Retail, Wholesale & Department Store Union Local 414 and the Great Atlantic and Pacific Tea Company of Canada Limited, Respondents, v. Edward Jenner and John Yuill, Intervener #1, v. Dominion Stores Limited, Intervener #2; Tom Hinton, Complainant, v. Retail, Wholesale & Department Store Union and Don Collins, Respondent, v. A Group of Employees at the Toronto Area Great Atlantic & Pacific Company Limited Warehouses, Intervener; James Meikie and Tom Hinton and a Group of Employees, Applicant, v. Great Atlantic and Pacific Tea Company Limited and Retail, Wholesale & Department Store Union, Local 414, Respondents, v. Dominion Stores Limited/Willett Foods Limited, Intervener

BEFORE: S. A. Ta con, Vice-Chairman, and Board Members W. A. Correll and P. J. O 'Keeffe.

APPEARANCES: James Fyshe, James Meikle and Tom Hinton for the applicant/complainants; Paul Cavalluzzo and Don Collins for the respondent RWDSU Local 414; Derek L. Rogers and T. A. Zakrzewski for the respondent Atlantic and Pacific Tea Co.; R. C. Filion and Charles R. Robertson for the intervener Dominion Stores Limited; L. N. Gottheil and Edward Jenner for the intervener group of employees of Atlantic & Pacific Company Ltd.

DECISION OF THE BOARD; April 30, 1986

I

1. The Board hereby directs that the above application/complaints be and the same are hereby consolidated.

2. This is a complaint alleging violation of section 68 and an application pursuant to section 63 of the Ontario Labour Relations Act as a result of the purchase by the respondent Great Atlantic and Pacific Tea Company Limited (hereinafter referred to as "A & P") of the "warehouse operation" of the intervener Dominion Stores (hereinafter referred to "Dominion"). It was not disputed that the transaction by which A & P acquired the warehouse operation (and, in addition, some ninety-two Dominion Stores) constituted a "sale" within the meaning of section 63 of the Act. The parties did disagree, however, as to the legal impact of that transaction on the Dominion warehouse employees. It should also be noted here that the employees at both Dominion and A & P are represented by Local 414, Retail Wholesale & Department Store Union (RWDSU).

3. Six witnesses testified. The Board has assessed their testimony according to the usual criteria, including the consistency of their evidence, the firmness of their memory, their ability to resist the influence of interest to modify their recollections, their capacity to express clearly their recollections, their demeanour while testifying and what appears to the Board to be reasonably probable when the circumstances and the testimony of the witnesses are considered.

4. The Board has some specific comments about the credibility of the witnesses. There was relatively little conflict in the testimony of the various witnesses. Moreover, the Board was impressed with the candour of the witnesses generally. J. Meikle, for example, is regarded as sincere in his recounting of the events to the best of his recollection. It must be emphasized, though, that Meikie was not in attendance at the meetings between the RWDSU officials and representatives of A & P concerning the proposed sale. The testimony of those who did attend was unshaken on cross-examination and the Board has no hesitation in accepting that testimony. Nor could Meikie, when compared with D. Whilsmith, be considered to have particular expertise with respect to the feasibility of A & P servicing an expanded retail chain without the Dominion warehouse operation. And, Collie (another witness called by the complainant) indicated his opinions on that issue were in the context of direct shipments from manufacturers, not supply by wholesalers. Having weighed and assessed the testimony, in the context of the foregoing, the Board makes the following findings of fact.

II

5. In the 1970's, Dominion was acknowledged as the leading retail grocery chain, with over three hundred stores. At its height, the bargaining units at Dominion (stores and warehouse) represented by the RWDSU totalled over 8,000 employees. By the end of that decade, however, Dominion's position began eroding, a slippage which continued into the 1980's. Several examples are illustrative: all but one of the Quebec outlets were sold to Provigo; in Ontario, approximately 48 Dominion stores were closed and then operated as franchises under the name "Mr. Grocer", while other stores were simply closed or sold to competitors. The number of Dominion stores remaining by 1984 was less than half of the 1970's peak figure.

6. As noted, this complaint concerns the Dominion "warehouse" employees. The Metropolitan Toronto warehousing operation for Dominion consisted of a large, modern facility at the West Mall (which included a freezer facility previously located on Steeles Avenue) and a produce facility at Rogers Road. This operation, too, suffered from the general decline in Dominion's fortunes. By 1985, layoffs reduced the worker complement to only one shift of roughly 350 employees. Not unexpectedly, these employees all had considerable seniority with Dominion. It should also be noted at this point that the warehouse included an in-house trucking operation with some forty drivers.

7. The most recent round of negotiations between Dominion and the union resulted in the ratification of a collective agreement in November 1984 with respect to the warehouse (and a separate collective agreement covering the stores' employees at about the same time). During these negotiations, the Dominion owners (C. Black and M. Black) intimated they might well divest themselves of the retail chain. Newspaper articles reflected the uncertainty surrounding Dominion's future, an uncertainty shared by the union officials and Dominion employees. That concern grew throughout 1984 amidst rumours of possible purchase of the Dominion enterprise; Labatt's, Molsons and Miracle Mart were mentioned as possible buyers.

8. In early February, 1985, D.J.M. Brown, acting for A & P, telephoned J. Hayes, solicitor for the union, informed him that A & P was about to announce a potential partial acquisition of Dominion enterprises and requested a meeting with union officials as soon as possible. An initial introductory meeting was arranged for February 6th. Attending were Brown, two senior officers with A & P (U.S.A.), Hayes and D. Collins (Canadian Director, RWDS U). Brown advised the union that his client intended to purchase some 93 Dominion stores (the final figure was 92) and possibly the warehouse operation, if suitable arrangements could be worked out. The company wished to learn the union's response to the proposed transaction. The first meeting was relatively brief; the second meeting, however, was arranged for February 13th.

9. As at February 13th meeting, Brown and the senior A & P officials (U.S.A.) were present for A & P; Collins, Hayes and R. Higson (Local Director of Local 414 appointed by Collins, in effect as the "international representative") represented the union. Meetings were also held on February 20th and 22nd with similar, if not always identical representation of the company and union. Rather than set out each meeting as discrete events, it is appropriate to recount the discussions at the meetings taken together.

10. Both the stores and the warehouse operation were discussed. With respect to the stores, A & P indicated a willingness to retain the employees associated with each store purchased (including those on leave or laid-off) but not to recognize the seniority of employees generally, i.e., not to permit "bumping" of more senior employees between stores. As to the warehouse, the union's position that the Dominion collective agreement should operate concurrently with the A & P warehouse collective agreement was flatly rejected by A & P. In the company's view, while the stores purchased would continue to operate with a separate corporate identity (i.e., New Dominion Inc.), the warehouse would be an integrated operation servicing both A & P and "New Dominion" stores, and hence, the A & P collective agreement should cover the entire operation.

11. In all but one respect, the company's position was outlined in a memo from Brown to the union, dated February 20, 1985. That is, A & P could: (a) not purchase the warehouse operation but, rather, expand their existing facilities and work forces to accommodate the new stores; (b) purchase the warehouse operation but run an integrated operation in the context of the A & P warehouse collective agreement and with preference to the existing A & P work force. It should be noted here for clarity that a third possible option surfaced at about this time, that is, that A & P would purchase the warehouse but close the facility for some indefinite period of time. The February 20th memo also referred to the possible dovetailing of the seniority lists of Dominion and A & P employees after a period of twelve months. Brown testified this dovetailing proposal was initiated by himself alone and at once repudiated by his clients who insisted throughout that A & P employees would not be displaced as a result of the acquisition. It was not disputed that the seniority of the Dominion warehouse employees far outweighed that of their A & P counterparts and, thus, any dovetailing would have displaced virtually all of the A & P employees, at least from their current positions and shifts. The union agreed to meet with the store and warehouse bargaining units once an official document from A & P with respect to their intentions was received.

12. The discussions between the union and A & P, however, did result in several positive guarantees by A & P with respect to Dominion warehouse employees who would be retained by A & P following the sale. With respect to the pension plan, A & P agreed to maintain the more favourable Dominion plan for those Dominion employees. Moreover, A & P consented to a preferential hiring practice accorded to former Dominion employees, even those on layoff without recall rights at the time of the formal sale. The union persuaded A & P, which utilized a common carrier for its own trucking, to retain the Dominion fleet operation (about 40 jobs were involved). It should be noted that, had A & P ultimately decided not to retain the trucking operation, the company had also agreed to permit the drivers to bump into warehouse positions on the basis of seniority (compared with other Dominion warehouse employees). The company ultimately agreed, as well, to recognize Dominion seniority with respect to benefits, including vacations, but not otherwise (see paragraph 13 infra).

13. That document, in the form of a memo from Brown dated February 27, 1985, was received, along with another memo of the same date dealing with the legal aspects. It is appropriate to set out both memos in full at this juncture:

February 27, 1985 (memo #1)

This memorandum is to assist you with the meeting of your members employed in the Dominion Stores warehouse operation scheduled for next Sunday.

As you know, A & P is purchasing 93 retail stores from Dominion Stores Limited. A letter of intent has been executed and the purchase agreement is scheduled to be signed on or before the middle of March.

The 93 retail stores, of course, will require warehousing support and A & P have been analysing how this support ought to be given.

From the studies carried out by A & P personnel, it is clear that the operation of two separate warehousing operations would be inefficient and does not make business sense. Accordingly, one way or the other, the warehousing operation for the 93 Dominion Stores and the operations for the A & P stores must be operated as an integrated business. From a labour relations point of view, it is impossible for this to occur with two operating collective agreements. This fact has often been recognized by the Ontario Labour Relations Board and it is something that the A & P operating personnel are most acutely aware of.

As I mentioned to you at our meeting as well, A & P is concerned that there be no undue affect on its existing operations or employees. Accordingly, it has concluded that the only way in which it can operate the warehousing function is:

1. that only the Local 414 - A & P collective agreement operate; and

2. protecting the seniority rights of the A & P employees.

The A & P management are examining a number of ways in which this result can be achieved. As I mentioned to you on Friday, one such method would be to conduct all operations out of its present facilities using wholesalers and direct shipments from suppliers to offset the additional volume that would result from the addition of 93 stores.

This approach would continue until a new warehouse facility could be obtained either by building a new warehouse or converting the Dominion facility at the West Mall into an A & P warehouse.

The legal consequences of this would be either that no sale of a business would occur or even if it did and the Dominion employees were intermingled, since the members would be less than 25% of the existing Dominion workforce, (about 50 additional employees) the Labour Board would exercise its authority pursuant to 63(6)(a) and declare the Dominion Store (WilleEts) agreement to be no longer operative.

The net effect of this approach would be that all but 50 or 60 of the present jobs held by employees under the Dominion collective agreement would be lost. This is something that A & P would prefer not to happen because of the adverse affect it will have on jobs now being filled by employees who have been employed by Dominion for some considerable time. On the other hand, we know we cannot integrate the operations without a single contract.

Following a day long session reviewing the entire matter, the A & P management have decided that they could continue the West Mall facility and affect a changeover to the A & P system without closing it down although this would result in some substantial inefficiencies and they are prepared to do so if the Dominion warehouse employees would agree that the A & P warehouse contract took the place of the Dominion warehouse contract for all of the warehousing facilities.

If that is agreed to by your members then A & P will develop plans to continue to operate the West Mall warehousing operation rather than close it down.

Also, the A & P management have stated that they will take your advice and see if it can purchase the fleet from Dominion even though it has no experience in managing a fleet. The effect of this of course would be to preserve approximately 40 jobs that would otherwise disappear.

As well, to ensure that the Dominion warehouse employees would not have to give up the pension benefits to which they would be entitled, A & P would red circle those pension benefits and maintain them at the same level as under the existing Dominion agreement. A similar approach would be taken with regard to recall rights.

As to seniority, A & P would recognize the length of service and seniority of the Dominion warehouse employees for all purposes except to the extent that it might interfere with the seniority rights of A & P personnel. That is, A & P would recognize length of service for purposes of payment of wages and other benefits.

A & P would also agree to extend a hiring preference (subject to any rights A & P employees have) to all former Dominion employees for its warehouse operations.

While there can be no guarantees as to employment, the A & P personnel advise that they would expect the combined operation to require approximately 250 Dominion warehouse employees since the trucking operation would be continued, and it is hoped that the combined expansion of both the Dominion and A & P stores in the future would follow the path of A & P in the past, which will create future jobs. Thus, while the former Dominion warehouse employees' seniority at A & P would follow the existing A & P employees, it is hoped that the foreseeable future will be a period of additional employment, not reduced employment.

Accordingly, we would hope that the present warehouse employees would view this as a most fair and reasonable proposal, and would see it to be one in their best interest to accept.

On the other hand, if it is not accepted, then A & P will be back where we were in our discussions last week; namely, seeking to reach the goal of a single warehouse operation using the existing A & P warehouse as a base supplemented by wholesalers and direct deliveries.

February 27, 1985 (memo #2)

I am attaching a copy of the agreement to be entered into by Local 414 with regard to the basic Ontario bargaining units. A similar agreement will be entered into in each of the northern bargaining units.

As we discussed, the change being made is not a change in the terms of the collective agreement; rather, it is recognizing the redefinition of the bargaining unit in the same terms as would the Ontario Labour Relations Board without incurring the expense that would be associated with that proceeding.

The agreement of purchase and sale is expected to be signed on or before the 15th of March and the transaction is conditional upon the bargaining units being redefined so that they only embrace the stores being purchased.

Upon the signing of the purchase agreement, A & P will implement management control over the operation of the Dominion Stores being purchased. The agreement also contemplates that at the same time by execution of the attached agreement and those relating to northern Ontario bargaining units will be redefined. Upon that happening, offers of employment in the form of Exhibit "C" will be made available to all of the employees at the stores being purchased. The employees in the stores purchased will continue to receive the same benefits and terms of employment. The only difference is that they will not be able to transfer to stores not purchased by A & P and similarly, persons not employed in those stores will not be able to transfer into the stores covered by the purchase agreement.

Operationally, A & P will operate these stores as "Dominion Stores" using the "Dominion" logo. It intends to employ many of the same management people at least up to the level of district manager. As a result, there will be very little impact in terms of operations for your members employed in the stores being purchased by A & P.

It is hoped by A & P personnel that rather than being in a decline, that the new Dominion Store operation which it will conduct will experience the same sort of growth as has the A & P chain of stores.

Following your meetings which I understand will be informational meetings on Sunday, March 10th we will arrange for execution of the attached agreement and the similar agreements to be entered into in relation to the northern bargaining units.

14. A summary at this point of Brown's discussions with A & P concerning the eventual proposal is necessary. Blake, Cassels and Graydon was retained in late January by A & P; Brown was to deal with the labour relations aspects, a corporate partner with the commercial side. A letter of intent, dated February 7, 1985, was signed between A & P and Dominion; this relatively brief document was expressly made not legally binding. The letter of intent had referred to A & P as a "successor" employer in respect of Dominion stores and warehouses. Once the letter of intent was signed, however, that document had served its purpose. The clauses therein did not appear in later, legally binding agreements. The corporate counsel commenced negotiation of the definitive agreement while Brown initiated contact with the union, as noted.

15. In the week preceding the February 27th memo, Brown reviewed the transaction options with senior A & P officers (U.S.A.) in a day long session in Montvale, New Jersey. Initially, A & P did not wish to integrate the Dominion warehouse operation, i.e., either that

operation would not be purchased or, if bought, would be closed for an indefinite period. As a consequence of the lengthy discussions with Brown, A & P reached the proposition to be put to the union. That is, the company would purchase the warehouse, including the trucking fleet, on the basis that the operations would be expeditiously integrated with the A & P warehouses under the A & P collective agreement. There had been a brief consideration of running a combined operation with two collective agreements (i.e., the A & P and the Dominion warehouse contracts). This was soon discarded as an impractical option. An early mention of dovetailing of seniority was also repudiated by A & P (see paragraph 11 supra). The signing of the definitive agreement covering the commercial transaction was postponed until after the union accepted the company's "labour relations" offer and those documents were executed.

16. Collins, Canadian Director RWDSU, testified that there was no doubt in his mind that, unless the union accepted the company's proposition on integration, A & P would either not purchase the warehouse operation or acquire but close the facilities. He stated that accepting the A & P offer on integration was the only means to preserve approximately 250 jobs, including the transport employees. That is, if A & P did not purchase the warehouse operation, what remained of the Dominion retail operation would not require the West Mall/ Rogers Road facilities. The Toronto warehouse operations would be closed and the remaining Dominion stores serviced out of the Kitchener (Willett) warehouse (as, in fact, is presently the case). [It should be noted that both Collie and Meikle conceded that the Dominion warehouse would close if that operation was not purchased by A & P.] Of course, if the warehouse was purchased but closed by A & P, those jobs would be lost too. Collins also testified that, in his considerable experience with A & P over the years, relations had not always been pleasant, but "when A & P says something, they normally follow through on their commitments", that "I have never found them (A & P) to make idle threats".

17. Collins stated that he accepted the information provided by Brown, as A & P's solicitor, as accurate. Brown testified that he was certain, both that A & P would not purchase and operate the warehouse unless its offer to the union was accepted, and, further, that Dominion would proceed with the sale of the stores in any event. Indeed, Brown stated that A & P was committed to its initial position of not operating the warehouse at all, that it was he who dissuaded them from that stance during the discussions in Montvale (see paragraph 15). Collins' assessment, also in the context of his lengthy experience with retail grocery chains, was that the A & P option of just purchasing the Dominion stores and servicing through wholesalers and direct shipments from manufacturers was a viable mode of operating. Finally, Collins testified that he felt there was no conflict of interest between Dominion and A & P employees simply based on the fact that the union (Local 414) represented the warehouse employees at both locations. All the information known to the union, in Collins' view, indicated that Dominion's future in the retail grocery business was bleak and that the A & P offer was the only route to salvage the 250 Dominion jobs.

18. It is useful to here also summarize the advice given to Collins by Hayes, as solicitor, in respect of the A & P offer. As to the veracity of Brown's statements concerning the A & P proposition, Hayes accepted Brown's word, given his knowledge of the man over a considerable number of years. To quote Hayes, "if Brown gave his word, it was good", "Brown was the soul of candour throughout (the discussions)." Hayes communicated these views to Collins. Hayes also indicated that everyone was aware of the "drift" by Dominion, that the Dominion empire was heading downhill and, in his view, the A & P offer looked like the best option and the best deal that could be struck in the circumstances. Hayes readily agreed during cross-examination that it made sense for A & P to buy the warehouse operation but that A & P would only do so, if from their perspective, "everything fell into place". Further, Hayes advised Collins that, in his opinion, a vote need not be held on the company offer, that Collins had the authority to decide on the offer as he saw fit (see paragraph 21 infra).

19. Hayes also offered advice at the March 3rd membership meeting (see para. 20, 21 infra). There were statements from the floor that the union should go to the Board claiming successor status under the Act. Hayes replied that the discussion of the successor rights provisions in the Ontario Labour Relations Board assumed that, regardless of whether the union agreed to the company's proposal, the transaction would take place. Hayes stated that that situation would not occur, that A & P would only purchase and operate the warehouse if the company was satisfied the labour relations aspect was in order. Indeed, at the hearing, Hayes commented that he would personally have preferred a dovetailing of the seniority list, notwithstanding the resulting dislocation of A & P employees, but "that option just wasn't open".

20. On receipt of the February 27th memo, Collins called a meeting of the Dominion warehouse bargaining unit for Sunday, March 3rd at the Skyline Hotel. Collins testified that, while the bargaining unit chairman (or vice-chairman) would call regular unit meetings, the union itself would convene special meetings as appropriate. Approximately 500 workers attended, including persons employed part-time and on layoff. The February 27th memo outlining the A & P proposal was read out. Collins stated that while the union was not happy with the proposal, this would save jobs and was the best deal possible. Collins stressed that the refusal of the A & P offer would result in the loss of the warehouse jobs. Individuals were permitted to ask questions from the floor. Not surprisingly, many workers expressed their anger and frustration at their situation. In Hayes' words, the meeting was "not a happy affair". Topics raised included: wages; unfavourable job assignments; especially for older workers; retirement, etc. The statement by Barrett (the unit chairman) "you have put a gun to our heads and expect us to pull the trigger" probably captures the tenor of the meeting. Nonetheless, the meeting continued until all questions were answered. Further, Hayes indicated that, if there were individual special circumstances, that could be pursued with the company. The meeting itself lasted over three hours. The head table remained afterward to continue discussion with some employees, particularly about more technical matters.

21. The question of putting the decision on the A & P proposition to a vote was raised at the meeting. Hayes had given his legal opinion to Collins that a vote was not required in the circumstances. Collins testified that, although ballots boxes were available, he decided during the meeting against holding a vote for fear that, in the heat of the meeting, the proposition would be turned down. In Collins' words, there would "then be 250 employees unemployed who didn't have to be unemployed". Rather, Collins stated to the workers present that, unless there was some new information raised at the meeting, the union would accept the A & P offer. At the Board hearing, Collins testified that, in his opinion, involvement by the unit negotiating committee and ratification by the bargaining unit, as provided in the constitution and by-laws, was not required in the circumstances. That is' the A & P offer was not a normal collective bargaining situation where the union could negotiate with the leverage of a strike sanction.

22. A similar meeting with employees from the Dominion stores bargaining unit was held on Sunday, March 10th. Then, on March 11, 1985, the agreements with A & P were executed.

23. On March 15, 1985, a further meeting was held between the union executive (including Hayes as solicitor) and the Dominion warehouse unit committee. The committee sought to persuade the union to obtain a second legal opinion and to appeal the decision to accept the A & P offer. The union declined. A number of other questions were raised, particularly concerning the fears of the older workers for the future. Hayes responded to concerns that older workers would be given difficult jobs and "weeded" out by stating that, if individuals felt strongly about this, he felt confident there could be an agreement with A & P 50 that a job would not be offered to those individuals and, thus, the options of severance pay or layoff from Dominion would remain available. Hayes did raise the matter with Brown and received a positive response. However, as Hayes stated he anticipated, no workers made such a request. That is, both he and Collins felt that "when push came to shove", the individuals would prefer the jobs.

24. Hayes met with the A & P warehouse unit on March 23rd to explain the A & P transaction; about 80 to 100 workers attended.

25. A number of Dominion warehouse employees, unhappy with the A & P deal, did seek a second legal opinion from Iler, Campbell. A written opinion was received dated March 20, 1985. Two of the individuals initially involved in this process then changed their minds. Barrett and Callaghan (an experienced negotiator in the unit), through a posted notice, formally disassociated themselves from this dissident group and recommended against proceeding before the Board.

26. A considerable number of warehouse employees (approximately 191) did decide to proceed with a complaint to the Board that the transaction triggered the successor rights provisions in the Act and that the union, in accepting the A & P offer, contravened the duty of fair representation. Meikle testified on their behalf. In Meikle's opinion, the Dominion contract was the more favourable and either both collective agreements could have continued or the union, along with the unit negotiating committee, should have continued negotiations with A & P to improve the deal. Further, that proposal would require ratification by the membership.

27. Once the sale closed, the Dominion warehouse employees offered positions generally signed their acceptances without prejudice to the Board proceedings. Grievances over job assignment as a result of the transfer of A & P employees into "Dominion" positions were also filed. The union has held those grievances in abeyance pending the outcome of the Board proceedings. Meikle himself was "bumped" to the night shift, but in the same classification and testified as to the personal disruption this occasioned.

28. It is appropriate to briefly review the warehouse operations. Prior to the sale, A & P utilized three facilities to service stores: Etobicoke for the bulk of grocery items; Vickers Road for perishable products; Steeles Avenue for frozen goods. The company acquired in the sale the following Dominion warehouse facilities: the West Mall (850,000 square feet) for grocery items and a freezer section also located in the West Mall; Rogers Road for perishable products. In brief, the company integrated the two operations commencing in September 1985 as follows: the Rogers Road facility was closed and the product transferred to the Vickers Road facility where a second shift was added; product lines were generally shifted from Etobicoke to the West Mall. Some A & P employees transferred to the West Mall facility as the product lines moved. Subsequently, the company more fully integrated the two "work forces" through a "polling" procedure whereby A & P employees could bid on the warehouse jobs (as an integrated operation) in order of seniority, pursuant to the terms of the agreement with the union.

29. It is also useful to set out the factual findings concerning the viability of A & P's option of purchasing only the 90 plus Dominion stores and servicing those stores from existing A & P facilities supplemented by shipments from wholesalers and direct distribution from manufacturers. There was no dispute that the warehouse operations (both the West Mall and Rogers Road facilities) constituted the largest single asset purchased and the Dominion warehouses, especially the West Mall, were modern facilities. Collins testified, however, he had been informed that, even if A & P purchased the warehouse operation, considerable monies would be needed for renovations notwithstanding the "newness" of the West Mall facility. Specifically, Collins was told that the selection system utilized by Dominion had been discarded as inefficient by A & P in their U.S. operations. Brown also testified that A & P's initial preference was not to operate the warehouse and service the expanded A & P chain through its existing warehouse facilities (either increased physically or by adding shifts) supplemented by shipments from wholesalers and directly from manufacturers.

30. The best evidence as to the feasibility of the A & P plan is that of Whilsmith, currently assistant director, warehousing, at A & P. Whilsmith testified that the West Mall operation was inefficient in comparison with the A & P warehouse facilities, that the A & P success was based on rapid store service (often the same day) and flexibility in replacing depleted items. The freezer facility in the West Mall utilized a computer selection machine. That system was removed from Etobicoke two years earlier as inefficient and inflexible. The company did discontinue the computer system at the West Mall and revert to a manual selecting mode. The West Mall grocery facility had operated on a full case handling system. The company also had prior experience with such a system and had discontinued its use. Thus, notwithstanding the "newness~~ of the system at the West Mall,A & P decided to cease that operating format as soon as possible. The lay out of the building is to be fundamentally reorganized to accommodate the A & P manner of servicing stores. The company plans to eventually service the entire chain with respect to grocery items through the West Mall facility alone.

31. In Whilsmith's opinion, the option of servicing the expanded chain of retail stores was entirely feasible without integrating the Dominion warehouse operation. The Steeles Avenue facility was expandable as was the Vickers Road facility (if necessary, through adding a second shift). Whilsmith acknowledged there was no immediate extra physical capacity at Etobicoke, although there were plans developed the year previously for an addition of some 118,000 square feet. In the interim, however, high volume goods could be supplied through direct shipments from manufacturers. Further, more specialized items and the balance of product needed was available through wholesalers, such as, National Grocers). The company had ongoing experience with both vehicles for servicing stores and, in fact, used wholesalers to supply its Quebec operation. As to the economics of such an option, Whilsmith commented that the "in-house" A & P warehouse operation had to compete with the wholesalers regarding cost effectiveness. The company, as noted, did not operate a trucking fleet but utilized one major common carrier (Wilson's Truck Lines) and some smaller carriers; thus, an increased trucking demand could be accommodated too.

32. Several other matters should be briefly noted. There was a dispute as to whether the A & P warehouse bargaining unit should speak for the warehouse operation at the union convention, held subsequent to the closing of the sale, although delegates had been elected from the "old" Dominion warehouse unit early in 1985. The union executive decided to permit the "Dominion" delegates to attend and participate in the convention as a distinct unit. There were also several requests for information directed to Dominion, particularly with respect to the "Mr. Grocer" proceedings and possible liability. During the relevant time period, no information was forthcoming from Dominion. Finally, Barrett (the Dominion warehouse unit chairman) was promoted to a supervisory position by A & P subsequent to the sale. Barrett attended at the convention as an elected delegate after being offered the promotion. Meikie wrote to the union regarding this; the union replied that Meikle could lay charges if he so wished.

III

33. The Board next sets out the submissions of counsel. The Board has not recounted those thorough and able arguments in detail but, rather, provided a highly abbreviated account. Further, given the disposition of the complaints, the Board has not set out arguments concerning remedy, including submissions as to costs, as sought by the complainants.

34. Counsel for the complainants submitted that the memorandum of agreement whereby the union accepted the A & P proposal contravened section 63 of the Act. That is, section 63 stipulates that the successor employer is bound by the collective agreement in force with respect to the vendor's business until the Board declares otherwise, in accordance with that section. Counsel asserted that the parties themselves could not agree to terminate the collective agreement and stressed that this conclusion was supported by the fact that a section 63 application may be brought by "any person". Loeb Inc., [1985] OLRB Rep. May 697 was referred to in support. Further, counsel contended the effect of the parties' agreement was to alter the term of the collective agreement, contrary to section 52(3) of the Act.

With respect to the duty imposed by section 68, counsel made several submissions. Firstly, it was argued the duty was stricter where professional trade union officials and significant labour relations matters (e.g. seniority) were involved; Felix Charles, [1984] OLRB Rep. July 908 and Dufferin Aggregates, [1982] OLRB Rep. Jan. 35 were cited. Secondly, counsel asserted the union was obliged to fully and independently investigate the circumstances surrounding the proposal but had not done so. In effect, counsel argued Collins' conclusion that A & P would not purchase the warehouse operation unless its conditions were accepted and/or that Dominion would sell the stores without the warehouse facilities was unreasonable in the circumstances. Toronto East General Hospital, [1980] OLRB Rep. Apr. 555 and Leonard Murphy, [1977] OLRB Rep. March 146 were cited. It was submitted as well that the union faced a conflict of interest as it represented both bargaining units, could not "balance" the interests of the one unit against the other and should have permitted full consultation with the Dominion employees, including participation by the unit negotiating committee. Indeed, counsel asserted that the conflict of interest was the reason Collins did not stand firm against A & P's offer, conduct a full investigation and discuss dovetailing of seniority lists. K Mart Distribution Centre, [1981] OLRB Rep. Oct. 1421 was referred to in support. With respect to the failure to hold a vote on the A & P proposal, counsel contended that the conflict of interest created an exceptional need for a vote, that the members have a right to express their views, that denial of that right is unacceptable paternalism. In combination~ at least, the denial constituted a breach of section 68.

Finally, in reply with respect to section 52, counsel submitted that A & P really stood in the shoes of Dominion regarding the warehouse and, thus, the Dominion agreement must be considered to have been terminated, as a collective agreement could not continue to exist apart from an extant bargaining unit; referred to in support was Caressant Care, [1984] OLRB Rep. Aug 1060. Counsel also noted G.A. C. Industries Ltd., [1981] OLRB Rep. June 658. As noted, the Board has not set out counsel's submission, including cases cited, as to costs or with respect to the consequences if the Board found the memorandum invalid.

35. Counsel for the union reviewed the evidence in detail, with respect to the chronology of events, the information available to Collins at the time and his conduct throughout the relevant period, and the objective likelihood of the A & P purchase of the warehouse facilities except on the terms proposed. Counsel submitted that Collins reasonably and honestly believed the course of conduct followed was the only means to save some 250 jobs for Dominion employees and that the A & P conditions for purchase did not constitute a "bluff". Counsel also extensively reviewed the Board jurisprudence. For example, it was argued that the Board generally accords considerable deference to the union where collective bargaining decisions are involved. Further, counsel asserted the Board has approved both dovetailing and endtailing schemes, depending on the circumstances and, while the standard of Board review is stricter where critical job interests are involved, there is nothing improper in decisions which favour one group over another, provided there is objective justification for the union decision. On these aspects, counsel cited: Dufferin Aggregates, supra; James Mason, [1979] OLRB Rep. Feb. 116; William Geddes, [1984] OLRB Rep. Feb. 233; Hawker Industries Limited, [1976] OLRB Rep. Jan 967; Dufferin Concrete Products, [1983] OLRB Rep. Dec. 2014; Silverwood Dairies, [1982] OLRB Rep. Aug. 1199. Counsel also argued that Collins sought input from the Dominion employees and that the weight of the evidence did not indicate the A & P proposal was a "ruse", referring to Softley Cartage Ltd., [1982] OLRB Rep. May 766 in support. It was contended that, regardless of the union's constitution and bylaws, if the union turns its mind to the interests at stake and makes a considered and reasoned judgement not to hold a vote, that decision does not violate the duty imposed by section 68 of the Act. Again, cases referred to include: Diamond "Z" Association, [1975] OLRB Rep. Oct. 791; K Mart Distribution Centre, supra; Lilo Rail of Canada, [1983] OLRB Rep. Sept. 1496. However, counsel submitted that no vote was required under the constitution, or, that Collins' interpretation of the constitution to that effect was not arbitrary or capricious, and, even if a vote had rejected the A & P offer, Collins had the authority to accept. The T. Eaton Company Limited, [1985] OLRB Rep. Aug. 1309; K Mart supra; The Great Atlantic & Pac~fic Company Limited, [1983] OLRB Rep. Oct. 1654 were cited. With respect to the alleged conflict of interest, it was argued that the conflict could not arise unless the A & P deal was accepted but, more importantly, the union was required to, and did, face up to the "hard" decision. In this regard, counsel referred to Humphrey v. Moore et al, (1963) 375 U.S. 335; Richard M. Brown, "Developments in Labour Law: The 1983-84 Term" (1985) Supreme Court Law Review, Vol 7, p.327.

36. Counsel for A & P submitted that the company faced two problems in considering the purchase of the warehouse facilities, i.e., how to avoid the application of two collective agreements to a single integrated warehouse operation and to ensure that its employees did not suffer as a result of the acquisition. Further, counsel argued the parties could not seek an advance ruling from the Board, citing in support, Daynes Health Care Limited, [1983] OLRB Rep. May 632. To resolve the potential difficulties, counsel asserted A & P properly dealt with the Dominion employees' bargaining agent. Moreover, it was argued that the resolution itself, namely, a change in the scope clauses of the Willett ("Dominion") and A & P collective agreements was within the parties' authority. Frito-Lay Canada Limited, [1978] OLRB Rep. Sept. 831 was cited on this aspect. Counsel contended that term of the Willett ("Dominion") collective agreement had not been altered, just its contents, in part, and, thus, section 63 of the Act was inapplicable. Counsel also stressed that the Board itself encourages the parties to deal directly with each other to resolve these sorts of problems flowing from a sale, citing: Bermay Corporation Limited, [1980] OLRB Rep. Feb. 166; Toronto Star Limited, [1972] OLRB Rep. Dec. 995; Penmarkay Foods Limited, [19841 OLRB Rep. Sept. 1214. For the Board to recognize that the parties are best suited to resolve the difficulties occasioned by a sale but to prohibit such resolutions before the transaction is entered into, counsel contended, would amount to an unsound labour relations policy. Finally, counsel reviewed the evidence regarding the relative expertise and knowledge of the various witnesses with respect to the likelihood of the warehouse transaction occurring except on the terms of the A & P proposal.

37. Counsel for the intervener Dominion Stores Limited indicated support generally for the positions taken by counsel for the union and A & P and, thus, submitted that the complaint should be dismissed. Counsel did stress that the evidence clearly revealed that Dominion would not have continued to operate the warehouse facilities if A & P had not purchased those facilities.

38. Counsel for the intervener group of employees of A & P generally supported the submissions of the union and A & P as well. Counsel characterized the asserted conflict of interest between the A & P and the Dominion workers as a red herring in that, without the purchase of the warehouse operations by A & P, the Dominion workers would have lost their jobs entirely. The "endtailing" of the seniority was not sought by the union nor the A & P employees but was the condition of the sale. Moreover, counsel indicated that the A & P employees were sympathetic to the personal circumstances of the Dominion employees as a result of the sale but that the union had sought to protect the Dominion employees as effectively as possible in the circumstances. Counsel submitted that, even viewed as a conflict of interest, the union could not abdicate its responsibility but had to balance competing interests; the result reached should not readily be interferred with given the difficult circumstances. Cases referred to included: K Mart Distribution Centre, supra; Sofiley Cartage, supra; Dufferin Aggregates, supra. With respect to the section 63 issue, counsel submitted the Board has no jurisdiction to disturb the memorandum regarding the integration of both employee groups and, in the alternative, apart from the duty of fair representation~ the Board should not interfere given that the parties were in the best position to deal with the various responsibilities and interests involved. On this aspect, counsel cited: The Corporation of the City of Kitchener, [1973] OLRB Rep. June 306; Kelly Douglas and Company Limited, [1974] CLRBR 77; Re McCallum Transport Division of Dominion Freightways Co. Ltd., (1970), 1970 CanLII 1627 (ON LA), 21 L.A.C. 94; G & H Steel Service of Canada Ltd., [1964] OLRB Rep. Mar. 670; Re Coulter Manufacturing Ltd., (1972), 1972 CanLII 2067 (ON LA), 1 L.A.C. (2d) 426; Toronto Star Limited, supra.

IV

39. The Board first deals with the section 63 and 52 issues, then the section 68 allegations. The analysis, however, is not amenable to any rigid compartmentalization. It was not disputed that the transaction between Dominion and A & P constituted a sale within the meaning of section 63 of the Act. The issue is whether the memorandum of agreement precludes or avoids the legislative consequences of a sale, namely, to bind a successor employer to the collective agreement of the vendor in respect of the like bargaining unit.

40. It is appropriate to set out the following subsections of section 63 and section 52:

63.-(l) In this section,

(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto and, where an employer sells his business while an application for certification or termination of bargaining rights to which he is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if he were named as the employer in the application.

(6) Notwithstanding subsections (2) and (3), where a business was sold to a person who carries on one or more other businesses and a trade union or council of trade unions is the bargaining agent of the employees in any of the businesses and such person intermingles the employees of one of the businesses with those of another of the businesses, the Board may, upon the application of any person, trade union or council of trade unions concerned,

(a) declare that the person to whom the business was sold is no longer bound by the collective agreement referred to in subsection (2);

(b) determine whether the employees concerned constitute one or more appropriate bargaining units;

(c) declare which trade union, trade unions or council of trade unions, if any, shall be the bargaining agent or agents for the employees in such unit or units; and

(d) amend, to such extent as the Board considers necessary, any certificate issued to any trade union or council of trade unions or any bargaining unit defined in any collective agreement.

52.-(3) A collective agreement shall not be terminated by the parties before it ceases to operate in accordance with its provisions or this Act without the consent of the Board on the joint application of the parties.

(5) Nothing in this section prevents the revision by mutual consent of the parties at any time of any provision of a collective agreement other than a provision relating to its term of operation.

41. The Board begins its analysis with the following passage from Frito-Lay, supra:

42. A certificate issued by the Board initially defines the scope of the bargaining rights acquired by a trade union, imposing a corresponding obligation upon an employer to bargain to the extent of these bargaining rights. This obligation, however, does not preclude the parties in bargaining from agreeing to some alteration of the bargaining unit established by the Board. Since bargaining units found to be appropriate by the Board are themselves often the product of an agreement of the parties, it would be somewhat inconsistent for the Board to treat its bargaining unit descriptions as being immune from alteration by subsequent agreement of the parties. The Board's bargaining unit descriptions are not carved in stone, and the parties may alter them by agreement, provided that there is no breach of the duty to bargain in good faith or the duty of fair representation.

43. The Board has expressly recognized that, once a collective agreement is made, the source of bargaining rights shift from the certificate to the agreement itself. As the Board stated in Gilbarco Canada Ltd., [1971] OLRB Rep. Mar. 155, "in effect the collective agreement supplants the rights contained in the certificate and the Board's certificate is spent once the collective agreement is signed". This means that where employees, originally included in the Board's certificate, are subsequently excluded from the scope of the collective agreement, the bargaining agent cannot be said to have retained any bargaining rights in respect of these employees. See Graphic Centre (Ontario) Inc., [1977] OLRB Rep. June 379.

44. Without repeating in detail the factual findings, what transpired in the instant case was the purported alteration, on agreement of A & P and the union, of the scope provision in the A & P collective agreement so as to include within the bargaining unit the warehouse facilities purchased from Dominion, as of the moment the commercial transaction was finalized. The Board regards it as implicit that, as of the moment the scope clause in the A & P collective agreement was expanded, there was intended a corresponding reduction in the scope clause of the Dominion agreement. The Board notes in passing that the stores acquired by A & P were treated in like manner.

45. The Board affirms the right of the parties to a collective bargaining relationship to alter or amend their collective agreement, on consent, except as to the duration of that agreement, pursuant to sections 52(3) and 52(5) of the Act: Frito-Lay, supra and the cases cited therein; United Forming Ltd., [1969] OLRB Rep. Jan. 1073; Viking Pump Co. of Canada Ltd., 54 CLLC 17,084; Re McCallum Transport, supra; G & H Steel, supra and the cases cited therein. Amendments may concern substantive provisions, such as, seniority, as in Re McCallum Transport, supra, or the scope of the bargaining unit itself, as in Frito-Lay, supra (see also, Toronto Star, supra). It is almost trite to reiterate that a collective agreement is the parties' own document; the parties, subject to very few statutory proscriptions and obligations, must be free to amend that document to respond to changing circumstances.

46. The Board would add that parties should be encouraged to respond to changing circumstances through such consensual amendments. The sale of a business, in particular, may have far-reaching implications for the employees and their bargaining agent. The Board does not provide advance rulings as to the labour relations effects of commercial transactions: Daynes Health Care, supra. Moreover, even where the "successor rights" provisions of the statute are found to apply, where the vendor's collective agreement binds the purchaser and the Board does not exercise its authority to terminate those bargaining rights, the parties must still confront the actual impact of the sale, at the latest in bargaining for a renewal of the "vendor's" collective agreement at the appropriate time. That is, section 63 creates some permanence to bargaining rights regardless of changes in ownership; section 63 does not, and cannot, preserve the context in which the collective agreement existed prior to the sale. The parties' resolution of these matters should not lightly be interfered with by the Board.

47. In the instant situation, it is true that the consequences of the purported amendment to the scope clause were far more dramatic than what might usually be expected from that sort of alteration, i.e., the inclusion or exclusion of a single employee classification. In this case, some 250 employees, cutting across a wide range of job classifications, ostensibly now fell under the A & P collective agreement. The implicit contraction in the Dominion scope clause would be equally dramatic, of course.

48. Counsel for the union argued that the Dominion warehouse collective agreement remained extant for the remainder of its term and the union bargaining rights continued in respect of any new Dominion warehouse operations which fell within the geographic scope of those bargaining rights. If the Dominion scope clause is regarded as contracted to the extent the A & P collective agreement scope clause is expanded, on a technical reading of section 63(2), the "Dominion" collective agreement binds A & P; it is just that there are no employees to which the agreement applies. The Board also notes in this regard that the simultaneous contraction and expansion of the Dominion and A & P collective agreements, respectively, as at the moment of sale, is likely only possible where the same local represents both employee bargaining units or where the prospective purchaser reaches agreement on such alterations with the union representing the vendor's employees and the different union (or different local of the same union) representing its own employees and those alterations are to take effect conditional on, but at the moment of, the sale.

49. Even if the amendment is within the parties' authority, there is a significant limitation on the union, a limitation noted in the passage quoted from Frito-Lay, supra, (at para. 5) namely:

"The Board's bargaining unit descriptions are not carved in stone, and the parties may alter them by agreement, provided there is no breach of the duty to bargain in good faith or the duty of fair representation.

(emphasis added)

The section 68 duty is examined infra.

48. The Board need not determine the precise limits on the parties' authority to amend their collective agreement in accordance with section 52(5) of the Act. For the purposes of this case, the Board is prepared to assume, without deciding, that the contraction in the Dominion unit that was implicit in the expansion of the A & P unit was beyond the parties' authority because of the consequent practical impact on the Dominion collective agreement, namely, the "emptying" of the Dominion bargaining unit. On this basis, what the parties' purported to accomplish was the transfer of the Dominion employees to the A & P bargaining unit or, in effect, to make applicable all the terms of the A & P contract (including the special provisions regarding pension entitlement for "Dominion" employees, etc.). In the Board's view, there is nothing contrary to the Act in regarding the parties' arrangement from this latter perspective up to the point of the expiry date of the Dominion collective agreement. That is, the arrangement had the legal result of rewriting the Dominion collective agreement so as to replicate the A & P contract (including the special clauses, as noted) but the expiry date of June 21, 1986 for the Dominion contract remained unchanged because of the effect of section 52(3). As it was not disputed that intermingling of employees has occurred as of September 1985, the Board hereby exercises its authority pursuant to section 63(6) to declare that A & P is no longer bound by the Dominion collective agreement, albeit the agreement "rewritten" as noted. The A & P collective agreement is binding on the warehouse employees, including

the "former" Dominion employees, as set out in its scope clause. Local 414, RWDSU continues as the bargaining agent.

49. In the alternative, the Board is prepared to make the foregoing declarations on the basis of intermingling, pursuant to section 63(6) of the Act, as at the date the sale occurred. Applications under section 63(6) generally date from the actual intermingling and the Board has indicated the collective agreement likely operates unless and until terminated by the Board pursuant to section 63(6): Bermay Corp. Ltd., supra; Silverwood Dairies, [1980] OLRB Rep. Oct. 1526. In Bermay, supra, the Board considered that a declaration under (then) section 55(6)(a) could only be prospective in effect, although that point was not conclusively determined in that decision. Those comments were made in the context of an application where the employer resisted the union's bargaining rights and in recognition of the industrial relations stability provided by the operation of what was then section 55(2) of the Act (now section 63(2)). However, the Board does not necessarily regard its authority as so limited given that section 63(6) operates expressly by its terms notwithstanding subsections (2) and (3) of section 63. It may well be that the circumstances in which the Board would make a declaration as of the date of sale are quite uncommon. The "sale" cases have generally arisen in a context in which a purchaser is resisting the bargaining rights held by a trade union vis-a-vis the vendor's business. In the instant case, the parties' arrangement preserved those bargaining rights in a document which sought to address rationally the exigencies of an integrated operation. That document is subject to the duty of fair representation in respect to the "Dominion" employees. Further, in the instant case, the parties agreed in writing prior to the sale that the warehouse would be run on an integrated basis and the workforces intermingled as soon as operationally feasible. And, importantly, the parties' agreement was implemented as intended. The Board regards these relatively unique circumstances as providing sound labour relations reasons for making its declarations under section 63(6) effective, in the alternative, as of the date of sale in the present case.

50. Section 68 of the Act reads:

51. A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.

52. The Board has elaborated on the duty imposed by section 68 in a number of cases. Some have arisen in the context of a decision by the union not to proceed to arbitration of an individual's grievance, others in the context of negotiations. While this complaint may be regarded as in the latter category, broadly speaking, there are several unique aspects which require specific comment. Both the A & P employees and the Dominion employees are represented by the same local of the same union: ef. Silverwood Dairies, supra, where the two groups were represented by different unions and Softley Cartage, supra, where there were two locals of the same international. While The Great Atlantic & Pacific case, supra, did concern a local representing two groups of employees for whom bargaining rights had been obtained at different times, the circumstances are not analogous. Here, the union held bargaining rights for the A & P employees and the Dominion employees for a considerable length of time. Both collective bargaining relationships had developed independently through successive contract renewals. Another unusual feature is the manner in which the Dominion employees came to be covered by the A & P collective agreement. The Board does not intend to repeat the earlier analysis but merely to emphasize the unique context in which the duty of fair representation must be reviewed.

53. In the Board's view, the starting point must be the A & P proposal, the offer to purchase and to operate the warehouse under certain conditions. The section 68 duty clearly requires that a union in such circumstances put its mind to the issues, including the bona fides of the offer. In that sense, there must be an investigation. However, what is consonant with a reasonable investigation will depend upon the particular circumstances of each case. In the instant situation, the Board is satisfied that appropriate consideration was given to the bona fides of the offer. Collins relied on his knowledge of A & P's behaviour from their bargaining relationship, on advice from union counsel and on his lengthy experience in the retail grocery industry. Collins concluded that A & P was not "bluffing" and, were the A & P proposal rejected, that company would either not acquire the warehouse facilities or acquire but close the operation. While Collins need not be "correct" in his assessment in order to fulfill the duty of fair representation, the Board would stress that, in its opinion, that assessment was, in fact, correct. Based on all the evidence, the Board considers that the A & P offer was not bluff. Moreover, the weight of the evidence supports a conclusion that A & P could have serviced the enlarged retail chain (i.e., including the Dominion stores purchased) though its existing facilities supplemented by direct shipments from manufacturers and deliveries from wholesalers (see paragraphs 28-31). Moreover, the A & P proposal had to be weighed in the context of the decline in Dominion's fortunes in the 1980's. The Dominion bargaining units (including the stores) were shrinking. And, all witnesses agreed that, if the warehouse operation was not purchased by A & P, Dominion would not require the warehouse facilities to service the relatively few Dominion stores remaining.

54. Counsel for the complainants asserted there should have been an "independent" investigation by the union, that there were other potential purchasers interested in the Dominion empire, that the future of Dominion was not entirely bleak given an aggressive strategy outlined by Dominion/Willett in December 1984. With respect, these propositions were not realistic alternatives in February 1985 when the union was confronted with the offer. Collins' conclusion that the A & P offer represented the only means of saving some 250 jobs was not unreasonable and did not violate section 68.

55. The Board also must review the process culminating in the acceptance of the A & P proposal. As noted in the factual findings, the union held a series of discussions with the company and then presented the proposal to the membership for discussion. The union is more than the "agent" or "delegate" of the employees in the bargaining units. It is the representative of those employees and entitled to act in its own right: The T. Eaton Co., supra; K Mart, supra; Softley Cartage, supra. A union is not required to seek approval of each proposal as it arises, although failure to communicate or consult may well generate needless litigation: The Great Atlantic & Pacific Company, supra; Sofiley Cartage, supra. Moreover, the union must be given a considerable latitude in setting strategies and making decisions that will best advance the interests of employees, notwithstanding the expectations of those workers: Lilo Rail, supra; Diamond "Z" Association, supra. There is little doubt that the membership meeting at the Skyline was traumatic and emotional for the workers (see paragraph 20). The union, however, permitted full discussion, attempted to answer each question and continued the meeting until all concerns were raised. Apart from the anger and anguish felt by the employees, though, no cogent information was forthcoming to dissuade the union from formally accepting the offer.

56. Counsel for the complainants emphasized the failure of the union to conduct a vote on the A & P offer at the meeting. Quite simply, such a vote is not required: The T. Eaton Co., supra. Nor, had a vote been held would the result automatically had been binding on the union: K Mart, supra. Those cases referred to set out the rationale for those positions which need not be restated here. What is important to note, however, is that Collins decided not to hold the vote on the advice of counsel that a vote was not required by law and because he feared that, in the heat of the moment, the workers might vote against the proposal. In Collins' view, if the vote was negative and the union abided by that result, there would "then be 250 employees unemployed who didn't have to be unemployed". It might well have been politically safer for the union to hold a vote on the assumption that, "when push came to shove", the workers would have approved the proposal to save their jobs. On the other hand, the vote would not have assisted the union in learning the workers' views for those had been expressed at length during the meeting. Nor could the union have "hidden" behind the vote. That is, the union could not abdicate its responsibility as bargaining agent to make a "hard" decision by raising the "will of the majority" as a defence. Thus, a vote would not have aided the union in making its determination and could well have made that decision more difficult politically.

57. It is appropriate at this point to briefly comment on the assertion that the unit negotiating committee should have been involved in the "negotiations" with A & P and the result subject to ratification. To paraphrase the comment in The T. Eaton Co., supra, the reality of the matter was that these were not normal negotiations. In this instance, A & P was not required to bargain with the union in respect of the Dominion warehouse operations prior to a sale and, of course, A & P was under no obligation to purchase. A & P could simply walk away if the "deal" was not to their liking, subject to the unfair labour practice sections of the Act. The Board does not find a contravention of section 68 in the manner in which the union negotiated", in the broad sense of that term, with A & P with respect to the proposal.

58. With respect to the terms of the A & P proposal, the Board makes several observations. Firstly, the A & P collective agreement cannot be characterized as inferior to the Dominion agreement. In some respects, some Dominion employees who were offered positions by A & P benefited from the change, i.e., wages, vacations, safety shoes, long-term disability, shift premium, COLA. This issue, however, is not really relevant. As might be expected, each collective agreement included provisions which were more or less advantageous to various categories of employees. Secondly, the bargain struck between the parties represents a delicate balance of trade-offs; the Board should accord a bargaining agent considerable latitude, a "wide range of reasonableness" in balancing the various competing interests: Dufferin Aggregates, supra; Dufferin Concrete, supra. In this regard, it should be stressed that the union, with very little room to manoeuvre within the framework of the A & P proposal, did succeed in improving some terms, with respect to pensions, for example. The union is not required to engage in "brinkmanship" to seek to improve an offer in order to satisfy the duty of fair representation. Indeed, for the reasons given earlier, for the union to have done so in this instance would likely have been ill-advised.

59. Counsel for the complainants asserted the union faced a conflict of interest because it represented both the A & P and Dominion bargaining units. The Board does not agree. The union was confronted with the decision as to whether to accept the A & P offer. The Board has found that the union reached its determination by considering the relevant factors from the viewpoint of the Dominion employees, e.g., the consequences of refusing the offer, the firmness of A & P's assertion the deal hinged on the labour relations conditions, etc. The union concluded the A & P proposal represented the "best possible deal". In the Board's opinion, that assessment was eminently reasonable and not contrary to section 68.

60. However, even if the decision had been based on a balancing of interests between the A & P and Dominion employees, the Board would not have concluded there had been a violation of the duty of fair representation. In this regard, it is appropriate to refer to several excerpts from Dufferin Aggregates, supra:

61. The fact, however, that a union may be required in bargaining to make a hard decision that has a serious economic impact on individuals, up to and including the loss of their jobs, cannot of itself make that decision unlawful. That kind of decision is, moreover, not unusual. In making collective agreements it is practically impossible for unions to avoid making decisions that benefit one class of employees at the expense of another. For example when a union opts for more wages rather than better pension provisions it benefits its younger members rather than the older ones. Trade-offs of that kind are the everyday stuff of collective bargaining.

62. Under the Labour Relations Act such decisions are lawful so long as they are not arbitrary, discriminatory or in bad faith within the meaning of section 68 of the Act. In the knowledge that unions are commonly required to make hard decisions affecting their members, those words have been deliberately chosen by the Legislature to avoid undue interference in the internal affairs of trade unions. The Board's powers of review over union actions under the section go only to matters of representation, when the quality of representation falls below the limited threefold standard set out in section 68. The issue in these proceedings, therefore, is whether the union's decision to re-open the contract and effectively allow junior employees to be laid off was arbitrary, discriminatory or in bad faith.

63. There is nothing inherently unlawful in a union making a decision that favours a group of employees over another. From the earliest decisions interpreting section 68 of the Act the Board has recognized the need for unions to have the latitude to make decisions that may favour certain employees at the expense of others. As the Board put it in Ford Motor Co. of Canada Ltd., [19731 OLRB Rep. Oct. 519, in applying what was then section 60 of the Act, (at pp. 525-26):

In practical terms the relationship between members of the bargaining unit and the trade union is one of majority control. The relationship is not strictly one of contract between employee members of the union and the union, but rather the relationship is such that the system created more closely resembles the Legislative process than a contractual relationship; see Cox, Rights Under a 6'ollective Agreement, 69 Harv. L. Rev. 601 (1956).

Section 60 of The Labour Relations Act seeks to ensure that individual's rights are not abused by the majority of the bargaining unit; it is an attempt to achieve a balance between the individual interests and the majority interest by recognizing that the exclusive bargaining agent has a duty to consider all the separate interests in the performance of its obligations. The duty has been described as the duty of fair representation. The emphasis is on fairness - it is a duty to act fairly in the interests of all members of the bargaining unit, minority factions, as well as majority factions, individual employees, as well as the collective group, members as well as non-members, craft employees as well as industrial employees. It is not a duty which makes the union the guarantor or insurer for every situation in which an individual employee is aggrieved or adversely affected; rather, the statute attempts to have the union consider the position of all groups and to weigh the competing interests of minorities, individuals and other like groups in arriving at its decision.

32. The first full judicial elaboration of the issue of a union resolving competing approaches to seniority arose in the decision of the Supreme Court of the United States in Ford Motor Company v. Huffinan (1953) 31 L.R.R.M. 2548. The case involved the negotiation of a clause in a collective agreement which would enable returning military veterans to use their military service prior to employment as credit towards their seniority. The authority of the union to negotiate such a proviso was challenged by union members who had worked longer than the veterans, but would accumulate less seniority under the new arrangement. The court held that "[a] wide range of reasonableness must be allowed" the bargaining representative (at

2551):

Any authority to negotiate derives its principal strength from a delegation to the negotiators of a discretion to make such concessions and accept such advantages as, in the light of all relevant considerations, they believe will best serve the interests of the parties represented ... Inevitable differences arise in the manner and degree to which the terms of any negotiated agreement affect individual employees and classes of employees. The mere existence of such differences does not make them invalid. The complete satisfaction of all who are represented is hardly to be expected. A wide range of reasonableness must be allowed a statutory bargaining representative in serving the unit it represents, subject always to complete good faith and honesty of purpose in the exercise of its discretion.

The Court went on to conclude that in agreeing to give seniority credit for military service the union had not breached the duty of fair representation.

37. The Board must obviously use great care in assessing what is and what is not objective justification for a union's decision, particularly a decision relating to choices as to the allocation of goods in conditions of scarcity. In my view it would be clearly inappropriate for the Board to substitute its own view for the union's by simply asking itself whether it would have acted differently. To do that is to substitute one subjective standard for another, and not to consider the issue of objective justification. The appropriate standard to be adopted by this Board is not unlike that expressed by the Court in the judicial review of the decisions of arbitrators: the Board should ask not whether the decision is right or wrong or whether it agrees with it - rather it should ask whether it is a decision that could reasonably be made in all of the circumstances, even if the Board might itself be inclined to disagree with it. Used in this sense "reasonable" must mean by the rational application of relevant factors, after considering and balancing all legitimate interests and without regard to extraneous factors.

38. Thus, if the union's decision had been based on the aforementioned balancing of interests, what the union would have been balancing was A & P's insistence on protecting its employees from dislocation because of the company's acquisition against the prospect of greater job security for the Dominion employees in the A & P organization than in the faltering Dominion empire. To be sure, the Dominion employees might well experience some disruption through bumping to less attractive shifts or positions. But the assessment that such dislocation would be preferable to the loss of a job entirely was not unreasonable. Indeed, the accuracy of that conclusion is borne out by the failure of any Dominion employees to follow up on Hayes' offer to ensure, if possible, an A & P offer was not made to those employees preferring the layoff or severance pay options from Dominion. Moreover, given the relative seniority of the two groups, it was quite understandable from a labour relations perspective that A & P would insist on protection for its employees if it agreed to operate the Dominion warehouse facilities. It must be remembered that A & P initially preferred not to acquire and/or integrate the warehouse operation. Having been persuaded to do so, A & P's insistence on endtailing is not surprising. The Board has approved of endtailing in Silverwood Dairies, supra. In fact, the prospect of greater job opportunities notwithstanding the endtailing noted in that case is applicable here: see also The Great Atlantic & Pacific Company, supra. Thus, even on this view of the issues, the Board would not find a violate of the duty of fair representation. The Board would emphasize, though, that dovetaling of seniority lists, as Hayes stated, 'lust wasn't an option".

39. The Board intends to briefly comment on several other concerns raised by the complainants. The union determined that the "Dominion" delegates, elected prior to the sale, could attend the membership convention as a distinct unit. With respect to the propriety of Barrett attending the convention and accepting a promotion to a position outside the bargaining unit, the union replied to Meikle that charges could be brought under the union constitution if he (Meilde) so wished. The Board regards these matters as outside the scope of section 68. The complainants also raised the question of the "polling" procedure utilized by A & P to integrate the warehouse workforces. The evidence indicated that the union filed grievances on behalf of the Dominion employees displaced from their "old" shifts and/or classifications. The grievances were held in abeyance pending the outcome of these proceedings. In the Board's opinion, at this point, with respect to these grievances, the union has not contravened the duty of fair representation.

40. In conclusion, the Board would comment that the emotional response of the Dominion employees to the events surrounding the sale is understandable. Given their considerable seniority with Dominion, it is not likely those workers ever seriously envisioned a threat to their job security at Dominion or the prospect of being "bumped" from their preferred shifts. Nonetheless, the Board has found that the union represented their interests as well as could be expected in difficult circumstances. That representation certainly satisfies the duty imposed by section 68 of the Act. The Board has recounted its factual findings in some detail in order to clarify the sequence of events for those not privy to the various meetings, for example. The Board hopes that this may be of some assistance in resolving the frustration and anger of the Dominion workers and facilitating the integration of the workers in the warehouse operation.

41. For the reasons noted, the section 68 complaint is hereby dismissed. Further, the Board declares that A & P is not bound by the Dominion collective agreement as of September 1985 or, in the alternative, as of the date of the sale. That is, the A & P collective agreement is binding on the warehouse employees, including the Dominion employees covered by the A & P scope clause, and Local 414, RWDSU is the bargaining agent.