[1987] OLRB Rep. July 990
1692-85-U John Daniell, Complainant v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Respondent
BEFORE: Ian Springate, Vice-Chair.
APPEARANCES: John Daniell, Frank Kidson and Carl F. Smith for the applicant; Harold F. Caley and Albert Marinelli for the respondent.
DECISION OF THE BOARD; July 2, 1987
At the commencement of the hearing into this matter, the complainant agreed with counsel for the respondent that the proper respondent was the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, and not, as originally listed in the style of cause, Albert Marinelli and Bruno Teichmann. The style of cause in the complaint has been amended accordingly.
This is a complaint in which it is alleged that the respondent breached its obligations under section 68 of the Labour Relations Act by implementing a pension plan over the objections of most of the employees who would be covered by the plan. The respondent does not dispute that a majority of employees opposed the introduction of the pension plan. It contends, however, that notwithstanding this fact, the implementation of the pension plan did not violate section 68. Section 68 provides as follows:
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.
The complainant is a truck driver employed in the construction industry by Ontario Hydro. Ontario Hydro and certain other construction employers belong to the Electrical Power Systems Construction Association ("EPSCA"), which engages in collective bargaining on their behalf. The bargaining rights with respect to truck drivers and warehousemen employed by members of EPSCA are held by the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. The International does not, however, bargain directly with EPSCA. Rather, negotiations are conducted through a council of international unions known as the Allied Construction Trades Council. Collective agreements negotiated between EPSCA and the Allied Construction Trades Council consist of a master portion and a series of appendices, one of which relates exclusively to members of the Teamsters Union.
The practice has been for collective agreements entered into by EPSCA and the Allied Construction Trades Council to be ratified by the Council itself and not by individual employees covered by the collective agreement. The Labour Relations Act does not require ratification votes among employees, and the complainant does not allege that the failure to conduct such votes is unlawful. The fact that collective agreements entered into by the Allied Construction Trades Council are not ratified by employees, however, does help explain how a negotiated pension plan could be implemented over the objection of most of the employees covered by it.
The objection of employees to a pension plan is easily understood in the context of the construction industry. In negotiations, employers are generally concerned with the total hourly rate for employee wages and benefits. When money is set aside for health, welfare and pension plans, it generally results in a corresponding reduction in the hourly wage rate. The pension plan referred to in this decision was described to employees as being totally funded by employer contributions. While in a technical sense that is true, it is easy to understand the complainant's view that the funds in question actually come from himself and other employees.
The complainant has been employed by Ontario Hydro since 1973. He is 57 years of age. No direct evidence was led as to the complainant's financial situation, although Mr. Marinelli, a witness called by the union, described him as a person who knows how to handle his money. During the hearing, the complainant made reference to several aspects of the pension plan which he felt were wanting. The complainant acknowledged, however, that throughout the events leading up to the filing of the complaint as well as in the instant proceedings, his goal has not been to improve the pension plan but rather to get rid of it. It is his contention that if money must be set aside for employee retirement purposes, the money should be paid into a registered retirement savings plan under the control of each employee. The complainant acknowledges that under such a scheme some employees, the foolish ones in his view, might simply withdraw the money and spend it.
Although a number of union officials favoured the introduction of a pension plan, two individuals were primary responsible for the actual introduction of a plan. They were Albert Marinelli, the Central Region Director of the Canadian Conference of Teamsters and a representative of the International Union, and Bruno Teichmann, the president of Teamsters Local Union No. 230. Although the bargaining rights for truck drivers and warehousemen employed by members of EPSCA are held by the international union, the direct employees of Ontario Hydro belong to Local 230. Mr. Marinelli and Mr. Teichmann both testified that they believed it to be in the best interests of employees that they be covered by a pension plan rather than risk many of them reaching retirement age without any form of security other than the standard government payments. They also testified that they expected employee opposition to the introduction of a pension plan, but felt that employees would in time recognize the benefits of having a plan. Both Mr. Marinelli and Mr. Teichmann had prior experience in the introduction of a pension plan over employee opposition. Mr. Teichmann when a pension plan was introduced to cover ready-mix employees belonging to Local 230, Mr. Marinelli when a plan was introduced to cover employees engaged in the freight industry. Mr. Marinelli testified that when he initially proposed the idea of a pension plan for freight industry employees, he was booed off the floor of a union meeting, although the plan in question has since become accepted by employees.
Mr. Marinelli took responsibility for negotiating with EPSCA the collective agreement language necessary to ensure employer payments into a pension fund. Mr. Marinelli also investigated the various types of plans that could be utilized. His investigation included discussions with the Teamsters Canadian Pension Plan, which despite its name primarily covered employees in British Columbia. Mr. Marinelli also spent some time dealing with employee concerns related to the introduction of a pension plan. It was Mr. Teichmann, however, as president of Local 230, who had the most contact with employees. He continually sought to justify the idea of a pension plan to employees, and once the terms of a plan were agreed upon, to explain it to them. Mr. Teichmann continued to support the plan even after being presented with a petition in opposition to it signed by a majority of employees covered by the plan. It should be noted that neither Mr. Marinelli nor Mr. Teichmann ignored employee opposition to a pension plan. Given the opposition, they concluded that initial payments into, and accordingly the benefits from, the plan should be quite modest. It was their expectation that once a plan was established and operational, contributions into the plan could be progressively increased, as could the benefits.
Mr. Teichmann's steadfast support for a pension plan is of particular interest given that he is an elected official of Local 230. Although the local's membership is not restricted to employees of Ontario Hydro, the approximately 300 members who are employees of the company presumably make up a significant portion of the local's total membership. In elections held in late 1985, Mr. Teichmann initially appeared to have lost his position as President to Mr. Goreman, a rival candidate. Mr. Goreman, in fact, assumed office. After the counting of certain ballots which had been segregated pending a ruling on whether they should be counted, however, Mr. Teichmann was declared the winner and he resumed office in April, 1986.
The first practical step towards implementing a pension plan occurred in 1982 during negotiations between EPSCA and the Allied Construction Trades Council. Mr. Marinelli proposed, and EPSCA agreed, that employers belonging to EPSCA remit 10 cents per hour for each hour worked by Teamster employees to a pension fund. In that no pension plan had has yet been established, it was also agreed that the money would initially be held in trust. Mr. Marinelli then attended two meetings of employees, one in Toronto and one near Ontario Hydro's Bruce generating station, to explain what had been agreed to. At the meeting in Toronto Mr. Marinelli encountered a great deal of hostility. Mr. Marinelli also had discussions with a number of firms and organizations about having employees of EPSCA companies either covered by a new pension plan, or joining an existing plan. Mr. Marinelli eventually concluded the best approach would be to join the Teamsters Canadian Pension Plan, a decision endorsed on January 26, 1983, by the Teamsters construction council. The pension plan in question is administered by The Wyatt Company, a firm of actuaries and consultants, from its office in Vancouver. Control over the plan is exercised by trustees appointed by both employers and the union. On or about May 16, 1983, Mr. Teichmann was appointed one of the trustees.
The respondent called as a witness Mr. Bruce Rollick, an actuary who is Vice-President of The Wyatt Company and Manager of its Vancouver office. Mr. Rollick testified that the Teamsters Canadian Pension Plan, which was established in 1981, is designed to cover employees of a number of employers. It has a cost separation factor which ensures that one group of employees does not pay for the pensions of another. The plan is structured so as to allow for low initial contributions on behalf of a group of employees, with the understanding that contributions will increase over time. Initially the plan covered only employees in British Columbia. In March, 1982, however, certain brewery workers in Ontario came under the plan and accordingly it was then registered with the Ontario Pension Commission. According to Mr. Rollick, the plan has certain standard provisions, as well as other provisions which can be modified depending on the circumstances of each particular group, including the level of contributions. Mr. Rollick testified that benefits under the plan are structured to ensure that benefits paid to older employees far exceed their contributions. He also testified, however, that younger employees would be better off if they could take an amount equivalent to what is being contributed to the plan on their behalf and invest it in a registered retirement savings plan. Mr. Rollick further acknowledged that the benefits currently payable under the plan are on the whole not very generous. He explained that this is due to the relatively low level of contributions into the plan.
In January, 1984, a meeting of employees was held in Ajax at which time Mr. Teichmann explained the outline of the pension plan as it would apply to employees of EPSCA companies. In April of that year a pamphlet explaining the terms of the plan in some detail was distributed to employees. Following the distribution of the pamphlet, the complainant organized a petition in opposition to the plan. The petition, which was signed by approximately ninety per cent of the employees covered by the plan, was forwarded to Mr. Teichmann. Mr. Teichmann responded by organizing two further meetings of employees, one on March 31, 1985, in Toronto, the other on April 1, 1985, at Underwood. Mr. Marinelli and Mr. Teichmann attended both meetings. Mr. Rollick attended the Toronto meeting, while Mr. Martin Brown of The Wyatt Company's Toronto office attended the meeting in Underhill. The Toronto meeting lasted in excess of three hours. Most of the time was taken up with Mr. Rollick explaining the pension plan and answering questions from employees, including questions related to registered retirement savings plans. At one point during the meeting Mr. Marinelli acknowledged that had employees been given an opportunity to vote on the pension plan, they likely would have voted against it.
In January, 1986, during the period when Mr. Goreman served as president of Local 230, two meetings were held of employees at which those present voted in favour of withdrawing from the pension plan. No actual results flowed from the vote, presumably due to the fact that bargaining rights are held by the International Union and not by Local 230.
Although contributions to the pension plan were originally calculated on the basis of ten cents for every hour worked, the amount involved was increased to twenty cents in 1983, thirty cents in 1984 and forty-five cents in 1985. In consequence of the increased level of funding there have also been improvements to certain benefits under the plan.
The complainant contends that the implementation and continuation of the pension plan over the wishes of employees is a violation of section 68. He requests that the Board order that the plan be revoked and that funds held by the plan be placed in individual registered retirement savings plans. It is the complainant's contention that the plan was introduced simply to allow the union to gain control over money held in the pension fund. There is nothing in the evidence which supports this contention. Further, nothing in the evidence suggests that Mr. Marinelli or Mr. Teichmann were motivated by ill will. They acted in what they believed to be the best interests of employees. They did so openly without trying to mislead anyone. Accordingly, the real question in these proceedings is whether it was open to Mr. Marinelli and Mr. Teichmann, and through them the union, to introduce the pension plan and negotiate employer contributions to the plan over the objections of a majority of employees.
The respondent trade union is the legal bargaining agent of the employees. Its status, however, is quite different from that of an agent in a commercial context. In particular, it is not required to implement the views of a majority of employees as though they were its principals. Rather, it negotiates and enters into collective agreements as an independent contracting party. See: Syndicat Catholique v. Cie Paquet Ltee (1959) 1959 CanLII 51 (SCC), 18 D.L.R. (2d) 346 (S.C.C.). The union is entitled to take into account its own institutional concerns as well as what it believes to be in the best interests of employees in the bargaining unit. See: K-Mart Distribution Centre, [1981] OLRB Rep. Oct. 1421, and The T. Eaton Company Limited, [1985] OLRB Rep. Aug. 1309. In my view, the prohibition against arbitrary conduct in section 68 requires that a union take into account the views of employees. Once it has done so, however, the union is entitled, in light of other relevant considerations, to adopt a course of action other than that favoured by most employees. Although in the instant case certain employees, including possibly the complainant, could obtain a higher personal return on money now being contributed to the pension fund on their behalf, other employees closer to retirement stand to benefit from the plan. In addition, it is reasonable to assume that many younger employees would not, in fact, invest the money for their retirement years if they had immediate access to it. Given these considerations, it was reasonable for the respondent to conclude that the long-run interests of bargaining unit employees as a whole would benefit from the introduction of a pension plan, and that one should be implemented even over the objection of the employees themselves. The decision was not prompted by bad faith or a discriminatory intent or made in an arbitrary fashion. Accordingly, no breach of section 68 has been made out.
The Board orally dismissed this complaint at the conclusion of the hearing. That ruling is hereby affirmed.