Ontario Public Service Employees Union v. Juvenile Detention (Niagara) Inc., 1987 CanLII 2988

Ontario Public Service Employees Union v. Juvenile Detention (Niagara) Inc.

[1987] OLRB Rep. January 66

2082-86-FC Ontario Public Service Employees Union, Applicant, v. Juvenile Detention (Niagara) Inc., Respondent

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

APPEARANCES: G. Richards, G. Rodger, J. Osczypko and K. Weir for the applicant; P. Young, D. Francis and W. Charron for the respondent.

DECISION OF THE BOARD; January 12,1987

I

1. This is an application under section 40a of the Labour Relations Act which came into force on May 26, 1986. The relevant provisions of section 40a are as follows:

40a.-(1) Where the parties are unable to effect a first collective agreement and the Minister has released a notice that it is not considered advisable to appoint a conciliation board or the Minister has released the report of a conciliation board, either party may apply to the Board to direct the settlement of a first collective agreement by arbitration.

(2) The Board shall consider and make its decision on an application under subsection (1) within thirty days of receiving the application and it shall direct the settlement of a first collective agreement by arbitration where, irrespective of whether section 15 has been contravened, it appears to the Board that the process of collective bargaining has been unsuccessful because of,

(a) the refusal of the employer to recognize the bargaining authority of the trade union;

(b) the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification;

(c) the failure of the respondent to make reasonable or expeditious efforts to conclude a collective agreement; or

(d) any other reason the Board considers relevant.

The applicant union relies upon subsection 40a(a)(b) and subsection 40a(2)(d). The union contends that the process of collective bargaining has been unsuccessful, in part, because of the uncompromising nature of the bargaining positions adopted by the respondent, on wages and other issues, without reasonable justification. More fundamentally, the union claims that the collective bargaining process has been confined, inhibited, and ultimately stifled by the constraints imposed upon it by the Ministry of Community and Social Services, which supervises and funds the respon­dent's activities. The union asserts that those institutional constraints on the bargaining process warrant an exercise of the Board's discretion under section 40(a)(2)(d).

2. A hearing in this matter was held in Toronto on November 12, 1986. At that hearing, the Board heard extensive submissions on the course of the bargaining and the rationale for the positions which the parties took. On November 14, 1986, the Board, by telegram, advised the parties of its decision that the application should be dismissed, indicating that its reasons therefore would follow. Those reasons are set out below. For ease of exposition we shall occasionally refer to the applicant as "the union", the respondent as "the employer", and the Ministry of Community and Social Services as "Comsoc". The facts are not substantially in dispute.

3. The respondent is a non-profit corporation which came into existence in 1979. It is operated under the direction of a volunteer Board of Directors, drawn from the surrounding community and composed of citizens interested in community service work. William Charron is an example. He has been a social work administrator in the Niagara region for fourteen years, was a founding board member of the respondent, and has been on its personnel committee for four years.

4. As its name suggests, the respondent's primary responsibility is to operate a home for the detention of juveniles, placed in its custody by the Courts under the provisions of the Young Offenders Act. These juveniles are kept in a residential setting and are either engaged in activities in the home, or go to school. The respondent is responsible for developing a program of observation and care which includes reporting requirements and specific goals and objectives likely to enhance the rehabilitation process.

5. The respondent's "clients" are drawn primarily from the Regional Municipality of Niag­ara, but may include other children if local facilities are not available. Apparently children can be moved from one institution to another as needs require. The respondent's home has the capacity to accommodate ten children, but the actual number varies from time to time depending upon the disposition of the Courts and the number of "open custody cases" in the system at any particular time.

6. The respondent is one of a number of similar facilities in southwestern Ontario. Some of these homes are operated by community - based non-profit organizations such as the respondent. Others are operated for private profit. Still others (such as the Arrell Home in Hamilton or the Syl Apps Home in Oakville) are operated directly by Comsoc and staffed by civil servants.

7. The employees of the respondent and of the homes run for profit, have been considered to be bound by the Labour Relations Act - even though they perform an important public service with which Comsoc is intimately concerned, and which, in many respects parallels or supports ser­vices offered directly by the Crown. These employees have full collective bargaining rights, includ­ing the right to strike. In contrast, the employees in the homes operated directly by Comsoc are covered by the Crown Employees Collective Bargaining Act. They have no right to strike. Their terms and conditions of employment are determined by compulsory interest arbitration. The pro­grams or degree of security may vary from home to home, but the evidence before us does not demonstrate any fundamental difference, for labour relations purposes, between employees in the private, community, or government-run facilities. Indeed, it might be argued that in a more open setting, the employees have greater responsibility because they have to deal directly with beha­vioral difficulties.

8. There is no doubt that the respondent is controlled and supervised by Comsoc which provides all of its funding. The respondent is responsible to, and monitored by a Comsoc Regional Manager, and must comply with detailed regulations under the Child and Family Services Act S.O. 1984, c.55. Although we were told that this Act does not touch directly on the employees' terms and conditions of employment~ a perusal of its provisions indicates that the premises, programs~ and services provided by the employer are all closely regulated. Comsoc has much more than the "power of the purse". Through regulations approved by the Lieutenant Governor in Council, Comsoc also has the power to impose legally binding standards of performance, security, report­ing, and documentation. Any budget surplus of the respondent reverts to the Ministry. Any budget deficit would normally be deducted from the operating budget for the next fiscal year. The respon­dent's fiscal year is the same as that of Comsoc itself: April 1 - March 31. In many respects, the res­pondent resembles an agency of the Crown.

9. For fiscal 1985-86 Comsoc has approved and funded a budget for the respondent which envisages wage increases of no more than four per cent. A similar amount is allocated for fiscal 1986/87, and is anticipated for fiscal 1987-88. Wages make up a little more than seventy-five per cent of the respondent's total budget. The other budget items include: rent, fuel, program funds, food and general supplies. The union agrees that, although the budget is formulated on a line by line basis, no significant sums could be transferred from these items to the salary account, no sig­nificant economies are possible, and even a freeze or reduction in management salaries would not amount to very much. If the union's monetary objectives are to be achieved, Comsoc will have to come up with more money. That is the nub of the union's concern. In the union's submission, the collective bargaining impasse results entirely from Comsoc's unwillingness to fund the program at a level which would permit wages and benefits equivalent to or approaching those already being paid to the civil servants working in government-run juvenile detention homes, and providing equiva­lent services. Comsoc has found a way to deliver the necessary services much more cheaply, (while at the same time maintaining significant control), and without being subject to the strictures of the Crown Employees Collective Bargaining Act ("CECBA"). Under CECBA, the employees are entitled to an impartial adjudication of the merits of their dispute and an arbitrator is entitled to consider any factor which appears to be relevant. S/he is not bound by any predetermined wage target or ceiling. The respondent's employees have no automatic access to arbitration, so that their wage claims, however valid, may be limited by Comsoc's mandatory guidelines.

10. Although Comsoc is not the nominal employer and is not nominally at the bargaining table, there is no doubt that it does play a pivotal - if indirect - role in the negotiations. As pay master, it sets the budgetary constraints within which the respondent must operate; and whether the particular number is three per cent, four per cent, or five per cent, it is Comsoc which, in reality, sets the wage parameters. When faced with union demands beyond that level, the respondent went to Comsoc to see whether the ceiling was firm. The union does not dispute the respondent's efforts in this regard. There is also no question that the respondent would be willing to pay more (and might even match the "public sector" rates paid at other homes) if Comsoc were prepared to underwrite the costs.

11. However, Comsoc's involvement also has another dimension. It is (or believes itself to be) ultimately responsible for the welfare of the juveniles assigned to the respondent's care. Accordingly, Comsoc has made a commitment to work with the respondent to develop a specific "strike plan" for the transfer of the respondent's charges to non-union or public sector facilities in the event of a work stoppage. In the union's submission, Comsoc is prepared to absorb any resulting costs (including the legal costs of negotiation and these proceedings) rather than bend its posi­tion on the respondent's budgetary allocation. Comsoc is portrayed not only as the real paymaster, but also as the potential "strike breaker", with unlimited resources to effectively sterilize the process of collective bargaining. Unlike an ordinary employer, the respondent faces no real "down side risk" even if the ultimate financial outlay exceeds what it would take to settle the dispute, because Comsoc will "pick up the tab". That is why the union asserts that collective bargaining has been conducted in a straight jacket: the nominal employer can only bargain within rigid and exter­nally imposed limits but is effectively immunized from the pressure of a strike by the actions of the government funding agency.

12. We shall return to this theme later. First, it is necessary to briefly describe the course of collective bargaining. In so doing, we will not recite the details of the parties' positions on partic­ular issues. We shall try to give an overview, occasionally illustrated with a few examples.

II

13. On February 1, 1985, the union was certified as the bargaining agent for a "full-time" and a "part-time" bargaining unit - each consisting of approximately eight employees. On April 10, 1985, the union served notice to bargain. On October 9, 1985, almost six months later, the parties began negotiations.

14. There is no explanation why the parties took so long to get bargaining underway, and no allegation that the respondent was delaying things or refusing to recognize the union's bargaining authority. There were five meetings prior to February 14, 1986, when the union requested the appointment of a conciliation officer. On March 3 and March 4, 1986, the parties met again, and on March 11, the Minister issued a "no Board" report. On or about March 27, 1986, the union was in a position to call a strike. There was a strike vote, but no strike was called. On April 3, 1986, the parties met with a mediator. On at least three occasions thereafter the employer initiated further mediation sessions in an effort to resolve the dispute. The employer was anxious to conclude a col­lective agreement.

15. This application was filed on October 20, 1986. In the mediation sessions of November 6 and November 10, 1986, a number of outstanding issues were resolved. The union concedes that a number of other issues could probably have been resolved before the hearing but, as its negotia­tor put it, "we ran out of time".

16. As of the date of the hearing the parties were still at odds on quite a number of wage and non-wage issues. In respect of the latter, we are constrained to conclude that the disagreement results, at least in part, from the union's failure to fully explore the employer's proposals, a failure to realistically weigh the likelihood of achieving "Cadillac language" in a first collective agreement, and the assumption that the employer, without assured means, would routinely agree to positions that have been established for government operated homes. The employees directly employed by Comsoc are part of a bargaining unit of some sixty thousand civil servants whose employment conditions are established by an arbitration process undertaken in light of the special characteristics of this large civil service bargaining unit. While equity or fairness might suggest that the respondent's employees should be dealt with and paid in the same manner as their civil service counterparts that is not necessarily a realistic collective bargaining stance. The fact is, that even if the respondent's employees are performing similar tasks, they have not been paid at the same level as the civil servants working in Comsoc's juvenile detention centres, nor should they have reason­ably expected to automatically receive equivalent remuneration.

III

17. It was obvious to us that, at the time of the hearing, there were still a number of issues in dispute separating the parties and complicating the bargaining process which could not, by any definition, be considered critical or strike issues. For example, the parties were apart on the number of days a job vacancy should be posted; on whether a medical certificate should be provided after three days or three consecutive days of absence; on whether relevant tests could be used for determining the qualifications of applicants for vacant positions (the union's proposal) or for the purpose of assisting the employer in determining an employee's qualifications (the employer pro­posal). Maternity/adoption leave remained in dispute because, having acknowledged both, the employer sought to retain some discretion about granting extensions. The employer had always acknowledged the Employment Standards Act minimums, and had gone beyond those in its pro­posal. Because the work force was predominantly male, and no one had ever actually taken mater­nity leave, the employer saw no reason to agree to a more generous entitlement in a first agree­ment. The union explained that its proposed clause was a standard OPSEU provision dictated by its "women's caucus" from which it could not retreat. In a number of instances the union sought specific language to avoid any possibility of arbitral deference to management rights - a position which is entirely understandable, and indicates an appreciation of current arbitral trends but would have involved contract language quite different from what one ordinarily finds in most collective agreements. In several instances - including reporting pay and extra car insurance - we have con­cluded that the union may not have fully considered the consequences of its own position, or the precise economic impact of its proposals on the employer. In the case of extra car insurance it appears to us that what the union regards as a nominal item may, in fact, involve a significant cost per employee.

18. We need not multiply the examples. On these benefit or non-wage items (which nevertheless form an important part of the employment and collective bargaining relationship), we find that there was considerable room for further discussion, clarification and compromise. Much was accomplished between the filing of this application and the hearing date, and the union frankly acknowledged that more might have been accomplished if there had been more time. As late as the hearing itself, the representatives of the union or the employer occasionally interjected: "look, that's not really a problem, we think we can work that one out, there may be some misunderstanding here and let's move on to the real issues." There was obviously room for further negotiations, there were in fact further negotiations, and because of this hearing, the Board was thrust into the middle of it.

19. Money was a problem and remained so. The union was determined to close or narrow the gap between what is currently being paid to civil servants in government run homes and the employees in this government funded and controlled facility. The employer, on the other hand, was faced with the reality of its budget limit and, having approached Comsoc (without success) to raise the ceiling, it felt compelled to formulate its position in terms of the funds available. But this does not mean that the employer's position was inflexible, even though it was working within a specific mandate. The departure of certain senior employees at the "high end" of the proposed salary grid made funds available which the employer was quite willing to distribute elsewhere - partic­ularly to part-time workers who it agreed might be underpaid. (The parties were in dispute about whether part-timers performed basically the same job as full-timers, but as of the date of the hear­ing had not fully explored this difference. The union conceded that there may have been some mis­understandings and there was reason for further clarification.) Similarly, the employer proposed that limiting retroactive wage payments to persons no longer working for the respondent would permit a more generous payment to those still in its employ, and by limiting the benefit entitle­ments of part-time workers (something that is not at all unusual in industry), there would be more for full-time workers. The respondent's final wage proposal involves a wage increase in the neigh­bourhood of four per cent for full-time workers and (because of the re-distribution mentioned above) a wage increase in the neighbourhood of thirty per cent for part-time workers. These increases are not out of line with what is currently being negotiated, nor is the treatment of part-time workers proposed by the employer much different from that which has prevailed, for years, in its own organization and in many industrial contexts. It may be that part-time workers should be treated on the basis of parity and equivalence, but that has not been and is not now the case; nor (unless the respondent were treated as a Crown Agency) - is it obvious that the result of sincere bargaining on the respondent's part should inevitably result in a salary or benefit package approaching or modelled on that currently prevailing for the huge civil service bargaining unit.

20. In this case, we cannot conclude that the process of collective bargaining has been unsuccessful because of one or more of the enumerated parts of section 40a(2). Indeed, it is too early to say that it has been unsuccessful at all. The employer has recognized the union, and has made considerable, and, in our view, reasonable efforts to conclude a collective agreement. The employer has not engaged in unfair labour practices, nor taken a rigid stance at the bargaining table designed to show employees that they cannot benefit from collective bargaining. The employer has tried, insofar as its budget permits, to accommodate the union's concerns. It has not resisted a degree of joint decision making or "codetermination" which is the inevitable concomitant of the collective bargaining process. It has not, by and large, opposed most of the standard language which one usually finds in collective agreements. It has not made elaborate claims for unfettered management rights which, if accepted, would make the agreement meaningless or sig­nificantly restrict an impartial arbitral review of its decisions. Where it has pressed hard to retain its prerogatives (on scheduling, for example) there were good business reasons for doing so, and it was still prepared to consult the employees' representatives. Its bargaining stance has not been punctuated by rigid assertions of "principle" or "prerogative", unconnected with its actual market context or business needs. Indeed, it appears to us that the respondent is prepared to agree to a fairly standard first contract.

21. The respondent maintains (and we accept) that it has not resisted the process of collective bargaining or its consequences, or engaged in delaying tactics or equivocation designed to undermine the solidarity of the bargaining unit. At this stage it has not even asserted its superior bargaining power as justification for its bargaining stance. In fact, the real balance of bargaining power remains unclear. Despite the union's assertions of impotence, it is not evident that a strike would have no impact. Even if Comsoc were to intervene, it is not obvious that children could be readily uprooted and transferred to different facilities without generating some dislocation and additional costs - costs which Comsoc might wish to avoid by reconsidering the respondent's bud­get allocation. And if Comsoc was prepared to play an active role as strike-breaker, and absorb costs which in other contexts might prompt a settlement or might even exceed the costs of a settle­ment, that might very well highlight the union's argument under section 40a(2)(d). Moreover, sec­tion 40a neither requires, nor rules out, resort to a strike or lockout - the traditional levers in a col­lective bargaining process which recognizes the realities of economic power and is designed to elicit compromise, concessions and accommodation. A work stoppage may well be a relevant factor, just as the union's inability to mobilize effective pressure may be relevant - especially where it results from the employer's previous misconduct or the employer's intransigent and unreasonable bargain­ing stance. If there has been a collective bargaining break-down, the Board must carefully scruti­nize the conduct and attitudes of both bargaining parties, to discern whether the impasse, while not amounting to bad faith bargaining, fits within section 40a(2)(a)-(c), or involves circumstances which would warrant an exercise of the Board's discretion under section 40a (2)(d). Indeed on its face, section 40a (2)(d) could be construed as a rather extraordinary invitation from the Legislature to "break the log-jam" even when the respondent's conduct does not amount to bad faith bargain­ing, or otherwise does not fit squarely into items (a)-(c).

22. However, we are simply not at that point yet, and therefore decline to speculate further. As things now stand, we cannot say that collective bargaining has been "unsuccessful" because the parties are not yet at impasse and, in our view, could profit from further discussions.

23. For the foregoing reasons, this application is dismissed.