Canadian Union of Public Employees Local 54 v. The Town of Ajax, 1987 CanLII 3084

Ontario Labour Relations Board

[1987] OLRB Rep. September 1117

2533-86-M Canadian Union of Public Employees Local 54, Applicant v. The Town of Ajax, Respondent

BEFORE: S.A. Tacon, Vice-Chair, and Board Members D. A. MacDonald and B. L. Armstrong.

DECISION OF THE BOARD; September 10, 1987

1By letter dated February 17, 1987, a Board Officer was appointed pursuant to an appli­cation under section 106(2) of the Labour Relations Act in which the applicant is seeking a deter­mination as to whether Adam Mazer is an employee within the meaning of the Act.

2The Board Officer conducted the usual examination. Representing the applicant were: Jim Woodward, M. Cibbo, Sean Dillon, Gina Stewart; for the respondent, R. J. Hawkshaw, R. Parisotto, G. Kirkbride and D. J. Low.

3The applicant asserted that Mazer, classified as Systems Manager, should not be excluded from the bargaining unit by virtue of section 1(3)(b) of the Act. The respondent takes the position that Mazer should be excluded pursuant to section 1(3)(b) and, in this regard, filed sub­missions dated April 22, 1987, with the Board within the time prescribed for making such repre­sentations. The applicant did not make any written submissions.

4It is useful at this juncture to refer to a rather lengthy passage from St. Joseph's Hospital (unreported) Board File No. 1867-84-M, dated June 4, 1986:

2. Section 1(3)(b) excludes from collective bargaining persons who in the opinion of the Board exercise managerial functions. The purpose of the section is to ensure that persons who are within a bargaining unit do not find themselves faced with a conflict of interest as between their responsibilities and obligations as managerial personnel, and their responsibilities as trade union members or employees in the bargaining unit. Collective bargaining, by its very nature, requires an arm's length relationship between the "two sides" whose interests and objectives are often divergent. Section 1(3)(b) ensures that neither the trade union, nor its members will have "di­vided loyalties". This purpose has been succinctly stated by the British Columbia Labour Rela­tions Board in Corporation of the District of Burnaby [1974] 1 CLRBR at page 3:

The explanation for this management exemption is not hard to find. The point of the statute is to foster collective bargaining between employers and unions. True bargain­ing requires an arm's length relationship between the two sides, each of which is organized in a manner which will best achieve its interests. For the more efficient operation of the enterprise, the employer establishes a hierarchy in which some peo­ple at the top have the authority to direct the efforts of those nearer the bottom. To achieve counter-vailing power to that of the employer, employees organize them­selves into unions in which the bargaining power of allis shared and exercised in the way the majority directs. Somewhere in between these competing groups are those in management - on the one hand an employee equally dependent on the enterprise for his livelihood, but on the other hand wielding substantial power over the working life of those employees under him. The British Columbia Legislature, following the path of all other labour legislation in North America, has decided that in the tug of these two competing forces, management must be assigned to the side of the employer.

The rationale for that decision is obvious as far as the employer is concerned. It wants

to have the undivided loyalty of its senior people who are responsible for seeing that the work gets done and the terms of the collective agreement are adhered to. Their decisions can have important effects on the economic lives of employees, e.g., indi­viduals who may be disciplined for "cause" or passed over for promotion on the grounds of their "ability". The employer does not want management's identification in the activities of the employees union.

More subtly, but equally as important, the exclusion of management from bargaining units is designed for the protection of employee organizations as well. An historic and still current problem in securing effective representation for employees in the face of employer power is the effort of some employers to sponsor and dominate weak and dependent unions. The logical agent for the effort is management personnel. One way this happens is if members of management use their authority in the work place to interfere with the choice of a representative by their employees. However, the same result could happen quite innocently. A great many members of management are pro­moted from the ranks of employees. Those with the talents and seniority for that pro­motion are also the very people who will likely rise in union ranks as well. In the absence of legal controls, the leadership of a union could all be drawn from the senior management with whom they are supposed to be bargaining. If an arm's length rela­tionship between employer and union is to be preserved for the benefit of employees, the law has directed that a person must leave the bargaining unit when he is promoted to a position where he exercises management functions over it.

3. The Labour Relations Act does not contain a definition of the term "managerial function", nor are there any specified criteria to guide the Board in reaching its opinion. The task of devel­oping such criteria has fallen to the Board itself, and in recognition of the fact that the exercise of managerial functions can assume different forms in different work settings, the Board has, over the years, evolved various general approaches to assist it in its inquiry. In the case of so called "first line" managerial employees, the important question is the extent to which they make decisions which affect the economic lives of their fellow employees thereby raising a potential conflict of interest with them. Thus, the right to hire, fire, promote, demote, grant wage increases or discipline employees are all manifestations of managerial authority, and the exercise of such authority is incompatible with participation in trade union activities as an ordi­nary member of the bargaining unit. In the case of more senior managerial personnel whose decision-making may have a less direct or immediate impact on bargaining unit employees, the Board has focused on the degree of independent decision-making authority over important aspects of the employer's business. It is evident that persons making significant executive or business decisions should be considered a part of the "management team" even though they do not exercise the kind of direct authority over employees which is characteristic of a first line foreman.

4. The line between "employee" and "management" is often shaded, and while it is helpful to consider the principles articulated by the Board in previous cases, ultimately the determination must turn on the facts of the particular case. There is no litmus test which is universally applic­able and dictates the results in every situation, and in assessing each case, the Board must have due regard to the nature of industry, the nature of the particular business, and individual employer's organizational scheme. There must, of course, be a rational relationship between the number of superiors and subordinates, consultation or "input" should not be confused with decision-making, and neither technical expertise nor the importance of an employee's function can be automatically equated with managerial status. On the other hand, there may be individ­uals whose nominal authority appears to be limited, and who have no formal managerial posi­tion or title, but who nevertheless make recommendations affecting the economic destiny of their fellow employees which are so frequently forthcoming, and consistently followed by supe­riors, that it can be said that, in fact, the effective decision is made by the challenged individual. It is this type of recommendation which the Board has characterized as an "effective recommen­dation" and the inclusion of these persons in the bargaining unit would raise the very kind of conflict of interest which section 1(3)(b) was designed to avoid. Persons making "effective rec­ommendations" of this kind are regarded as part of the "management team", and are excluded from the bargaining unit.

5. In each instance, the Board seeks to determine the nature and extent of the individual's authority as well as the extent to which that authority is actually exercised. It is not sufficient if an individual has only "paper powers" contained in a job description or a "managerial" job title, if managerial functions are not actually exercised. Even the performance of certain co-or­dinating functions may not be determinative. Where numbers of people work at a common enterprise (especially in the white collar - service sector) many persons may be engaged in co-or­dinating activities which are largely routine, carried out within a pre-established framework of rules and policies, and subject to real managerial authority which is actually exercised from above. In addition, persons who perform technical functions or exercise craft skills which have been acquired through years of training and experience, will necessarily have a considerable influence over unskilled employees or less experienced "journeymen" or technicians. These experienced persons will commonly supervise the work of those who are less experienced, and it is part of their normal job function to train and direct such persons and to instill good work hab­its. Often, it is only the most senior or skilled employees who will fully understand the technical requirements of the job and the tools and material required, and accordingly, it is they who will allocate work between themselves and the other employees in order to accomplish the task in a safe and efficient manner. In such circumstances, it is inevitable that they will have a special place on the "team" and will have a role to play in co-ordinating and directing the work of other employees; but this does not mean that they exercise managerial functions in the sense contem­plated by section 1(3)(b) and must therefore be excluded from the ambit of collective bargaining - especially when most of their time is spent performing functions similar to those of other indi­viduals in the bargaining unit and there is little or no evidence of the kind of conflict which sec­tion 1(3)(b) is designed to avoid. The situation of persons who exercise some degree of control over others, but who also perform bargaining unit work was discussed by the Board in Falconbridge Nickel Mines Limited [1966] OLRB Rep. Sept. 379, as follows:

Most of the persons in dispute have more than one function and generally speaking it is the weight or emphasis attached to the different functions which must determine on which side of the management line the persons fall. Senior or skilled employees often have more responsibilities than other rank and file employees and they exercise cer­tain control and direction over the other employees because of their greater experi­ence and skill. It is the Board's difficult task to determine whether the additional responsibilities are managerial functions within the meaning of section 1(3)(b) of the Act or are merely incidental to the prime purpose for which the employee is engaged (i.e., to perform work properly performed by persons within the bargaining unit). If the majority of a person's time is occupied by work similar to that performed by employees within the bargaining unit and such person has no effective control or authority over the employees in the bargaining unit but is merely a conduit carrying orders or instructions from management to the employees, the person cannot be said to exercise managerial functions within the meaning of section 1(3)(b) of the Act. On the other hand, if a person is primarily engaged in supervision and direction of other employees and has effective control over their employment relationship, even though the person occasionally performs work similar to the rank and file employees when an emergency arises or to relieve an employee during occasional periods of absence or even to perform a particularly important job requiring special skill and experience, such occasional work in no way derogates from his prime function as a person employed in a managerial capacity. When assessing a person's duties and responsibili­ties the Board does not look at any one function in isolation but views all functions in their entirety. As stated in the McDougall case above referred to, titles alone are not much assistance in determining what a person's functions really are...

The cases cited above would seem to indicate that while a person may have minor supervisory functions or very limited confidential functions in matters relating to labour relations, if such functions are merely incidental to their main function and are of such a nature that they cannot be said to materially effect the employment relation­ship of the respondent's employees, such persons should not be excluded from collec­tive bargaining by reason of section 1(3)(b) of the Act. Unless a person who regularly performs work similar to persons in a bargaining unit has independent discretionary powers rather than merely incidental reporting functions which are subject to the dis­cretion and authority of higher persons in management, there is no reason to exclude such a person from collective bargaining.

In other words, in determining an individual's status, one cannot look at a portion of his duties in isolation. If the functions of an allegedly "managerial" character occupy only a minor part of his time, it is unlikely that he will be excluded from the ambit of collective bargaining unless those functions involve a decisive impact on his fellow employees. (For example, a unilateral decision to fire an employee would be highly significant, even if the exercise of such power is infrequent; while incidental supervisory responsibilities do not raise the kind of conflict of inter­est underlying section 1(3)(b)).

6. It should always be remembered, however, that The Labour Relations Act is intended to extend collective bargaining rights to employees, and it is incumbent upon any party seeking to exclude employees from the scheme of the Act, to come forward with affirmative evidence that they exercise managerial functions. (See: Ajax and Pickering General Hospital, [1970] OLRB Rep. Feb. 1283 at paragraph 11; and Bakery and Confectionery Workers International Union v. Salmi, 1966 CanLII 84 (SCC), 56 DLR (2d) 193.) Furthermore, (and in addition to the usual rule that "he who asserts must prove"), a party seeking to alter a status quo which has been settled and embodied in a series of collective agreements, must be able to provide a firm evidentiary foundation for its new position.

7. We can summarize these general approaches then, as follows:

(1) A party seeking to exclude an individual from the ambit of a remedial stat­ute designed to extend benefits to employees, must be prepared to demon­strate that the disputed individual is not an employee.

(4) Modern forms of corporate organization, improved means of communica­tion, and the development of sophisticated institutionalized personnel poli­cies, have all significantly diminished the role (and perhaps need for) the "traditional foreman", so that he is no longer the king-pin he once was. This process has several effects - all of which are evident if one surveys the dozens of reported and unreported cases recently decided under section l(3)(b). First, co-ordinating or supervisory functions which in the past were often associated with "real" managerial authority, may not be sufficient standing alone, to exclude one from collective bargaining. Second, it is much easier, in practice, to maintain an existing managerial exclusion, than to justify the creation of a new level of management. Finally, again from a practical point of view, if the new purported "manager" has only a small number of subordinates, his managerial status is unlikely to be affirmed unless, as between them, there is very clear evidence, that the duties exer­cised are of such character that they clearly demonstrate the mischief to which section 1(3)(b) is directed. The fewer the number of subordinates, the stronger the need for demonstrative evidence of managerial status -especially if the next level of management is in close proximity and seems to be closely involved in the ultimate decision making.

(5) The acceptance of the "effective recommendation test" mentioned above, means that it is not necessary to show that the disputed individual performs his role independently of higher levels of management. But it is necessary to show that his recommendations are really effective, so that, in practice, and to a substantial degree, he becomes the effective decision maker in respect of matters impacting upon his fellow employees. From an evidenti­ary standpoint, it will be useful and often necessary to provide concrete examples of this kind of decision, and it will also frequently be necessary to hear from the person who actually made the decisions in order to show that the recommendations of the disputed individual were indeed decisive. In too many cases, in recent years, this evidence has either not been available at all, or when examined closely, amounts to no more than a "participatory decision-making style". Whatever value the latter may have in improving employee performance or ensuring adherence to corporate goals, it does not necessarily mean that managerial authority has percolated downwards.

5With this background, the Board turns to the instant case. In the circumstances, the Board sees no need for a detailed review of the testimony and the documents filed in evidence. In the Board's view, Mazer should be excluded from the bargaining unit by virtue of section 1(3)(b) of the Act. Mazer's responsibilities with respect to the computer systems make him part of the management team. While he does not have formal control over employees in the bargaining unit on a daily basis in the sense that he is their department head, it is clear that he possesses considera­ble authority over those persons with respect to the computer systems. For example, with regard to those computer systems and their introduction, he trains employees, assigns work, monitors their performance and establishes the criteria for job evaluation. On one occasion during his brief period in the position, his recommendation as to hiring a specific individual was followed. Further, the introduction of the various computer systems has an impact on the numbers of employees needed to perform specific duties. Mazer's authority was increased during his months in the posi­tion to ensure he had the "clout" to implement and develop the various computer systems. Mazer also effectively hires temporary employees as needed with respect to the computer systems and ter­minates those persons if they are not performing at the required level. As well, he is intimately involved with the respondent's budgetary process throughout its stages of development, including costings of collective bargaining proposals, and regularly attends management meetings. Mazer's access to the computer and all of the information contained in the systems therein is more com­plete than that of any of the respondent's other staff.

6In short, the Board is satisfied that the conflicts which section 1(3)(b) is intended to avoid would be present if Mazer was not excluded from the bargaining unit. Accordingly, the Board finds that Mazer, classified as Systems Manager, is not an "employee" within the meaning of the Act. Given the Board's finding, the Board need not deal further with the other matters raised in the respondent's letter of April 22, 1987.