United Steelworkers of America v. Ivaco Rolling Mills, 1987 CanLII 3245

United Steelworkers of America v. Ivaco Rolling Mills

[1987] OLRB Rep. April 511

1932-86-M United Steelworkers of America, Applicant v. Ivaco Rolling Mills, Division of Ivaco Inc., Respondent

BEFORE: Judith McCormack, Vice-Chair, and Board Members G. 0. Shamanski and R. Monta­gue.

APPEARANCES: Brian Shell, Paula Turtle and Ronald Pageau for the applicant; G. G. Smith, J. Neysmith, B. Roddick and W. Dewar for the respondent.

DECISION OF THE BOARD; April 10, 1987

1. This is an application under section 106(2) of the Labour Relations Act by the applicant union for a determination of whether four individuals are "employees" within the meaning of that Act. The respondent employer alleges that they are excluded from the bargaining unit by virtue of section 1(3)(b) because they exercise managerial functions. The applicant disputes this claim. The respondent has asked us to dismiss the application without an examination of the merits on the basis of certain considerations stemming from the history of this matter between the parties.

2. In June of 1986, the union in this case applied for certification for a tag-end bargaining unit of quality control inspectors and mill recorders employed by the respondent. This same union also holds bargaining rights for a larger unit of production employees at the plant. On the day appointed for the hearing of the certification application, the parties met with a Board Officer in accordance with the Board's usual practice, and agreed upon a description of the appropriate bar­gaining unit. The parties also identified a total of 19 employees said by the union to fall within the bargaining unit. The employer took the position that all 19 employees were excluded from the unit either because they exercised managerial functions (the quality control inspectors) or because they did not share a community of interest with other employees in the unit (the mill recorders). Both parties were aware by the end of the day that the union had submitted membership cards for 15 employees and that certification was likely to occur at some point.

3. Because of the dispute with respect to the status of these employees in this bargaining unit, the parties waived their right to a hearing on that day and the Board appointed a Board Offi­cer to inquire into and report back to the Board on the dispute. (See Ivaco Inc., Board File 0620-86-R, unreported June 26, 1986.)

4. The Board Officer set up a series of meetings between the parties on July 22nd, 23rd, August 12th, 13th, 19th and 20th for the purpose of conducting examinations of the duties and responsibilities of the employees in question and inquiring into the community of interest dispute. On July 22nd the parties met, and rather than commencing the examinations, they attempted to negotiate a settlement of their differences. Negotiations continued on July 23rd and a number of proposals were exchanged by the parties. One of those proposals contained a condition that the union refrain from subsequently applying under section 106(2) for a determination with respect to the four individuals who are the subject of the instant application. The union refused to agree to this stipulation. By the end of the day on July 23rd, we concluded that the parties had staked out some common ground and were close to an agreement. On July 24th, Brian Shell, the union s counsel, called the company on behalf of the union and discussed an agreement with John Neys­mith, the employer's manager of personnel and industrial relations. That day Mr. Shell sent a let­ter to Mr. Neysmith setting out the terms of an agreement which Mr. Neysmith signed and returned. The following is an excerpt from that agreement.

The terms of settlement between us are as follows:

1. The company and the union agree to waive any further hearing or examination before the Board as directed by the Board in its decision dated July 3, 1986 and hereby jointly request the Board to proceed with the Application for Certification.

2. The company shall delete from Schedule A" the names of

3. R. Ravary

4. M. Bernique

5. J.P. Jalbert

6. V. Lambert

7. The four persons named in the preceding paragraph are deleted on the basis of the company's position that they are not "employees" within the meaning of the Act but that they are persons who "exercise managerial functions" within the meaning of sec­tion 1(3)(b) of the Act. For purposes of the count, the union consents to the exclusion of the four persons named in the preceding paragraph.

8. The union agrees that the four persons listed as "Mill Records" on Schedule "A" should be deleted and the union agrees that the four "Mill Recorders" have a com­munity of interest with the "office and clerical" employees of the company.

5. As it is possible to see from this excerpt, the parties agreed that a total of eight persons would be deleted from the list of employees; four mill recorders and four named employees in paragraph two, who are also the subject of the instant application. However, different wording is used with respect to these two groups of employees. The union agrees in paragraph four both that the mill recorders should be deleted from the list and that they have a community of interest with office and clerical employees. The parties had previously agreed that office and clerical employees would be excluded from the bargaining unit on the basis that they did not share a community of interest with other bargaining unit employees. With respect to the four named individuals, it is argued that the union agrees only to the exclusion of these people "for the purposes of the count", and that no rationale for the union's agreement is set out.

6. Mr. Neysmith specifically noted this qualifying phrase when the agreement was sent to him as he was concerned that it might mean that the four named employees could be the subject of an application under section 106(2) at some point in the future. He therefore sought legal advice and was advised that his concerns were unfounded, following which he signed the document. He did not speak to Mr. Shell to clarify this point; neither did Mr. Shell specifically bring it to his attention.

7. On the basis of their agreement, the Board issued a decision on August 27, 1986, certif­ying the union as the bargaining agent for the remaining quality control inspectors (see Ivaco Inc., Board File 0620-86-R, unreported, August 27, 1986, hereafter called the "Mitchnick panel deci­sion"). Paragraph two of that decision reads as follows:

The parties have now agreed that:

R. Ravery Quality Control Inspector

M. BerniqueQuality Control Inspector

J. P. JalbertQuality Control Inspector

V. LambertQuality Control Inspector

exercise managerial functions within the meaning of section 1(3)(b) of the Labour Relations Act and are not "employees" for the purposes of the Act, and that

Douglas Brown Mill Recorder

Daniel JalbertMill Recorder

Bernard LevacMill Recorder

Claude PortelanceMill Recorder

have a community of interest with the office and clerical employees and are thus excluded from this bargaining unit.

8. Mr. Shell told the Board that this decision was in error. The union had not agreed that the four named individuals were exercising managerial functions and were thus excluded from the bargaining unit. Rather, the company had taken this position and the union had agreed only that these four would be excluded for the purposes of the count. The union's intention was to try and settle the still outstanding dispute regarding these individuals in the collective bargaining process. If the parties were unable to settle the matter in their negotiations for a contract, the union intended to apply to the Board under section 106(2) for a determination. The Board was told that no request for reconsideration was filed because the error escaped Mr. Shell's attention at that time.

9. The parties subsequently attempted to settle this matter in their contract negotiations without success and on October 7, 1986 the union filed the instant application under 106(2) of the Act.

10. On the basis of these facts, Mr. Smith argued for the employer that we should construe the agreement to mean the parties had agreed that the four individuals in question were excluded because they exercised managerial functions. According to Mr. Smith, the words "for the purposes of the count" were meaningless because both parties knew that the union was in a position to be certified regardless of the composition of the unit. In his view, the Board's decision of August 27, 1986 correctly reflected the parties' agreement. In light of that decision, Mr. Smith argued, the sta­tus of these individuals had been established by the Board and they cannot now be the subject of an application under 106(2).

11. Counsel for the union acknowledged that the Board's jurisprudence establishes that the Board will restrict an application under section 106(2) during the first set of negotiations following an agreement under certain circumstances. However, he argues that the line of authority only applies where there has been an agreement with respect to employee status which, he asserts, was not the case here.

12. Mr. Shell drew a distinction between agreeing upon the list of employees for the pur­poses of the count, and agreeing that certain individuals are excluded from the bargaining unit because they exercise managerial functions. As he alleges that the agreement in this case reflected only the former proposition, the Board should not decline to entertain an application for an exami­nation of normal scope under section 106(2).

13. The Board's attention was drawn to the fact that this was not a case where the union was attempting to gerrymander the bargaining unit by agreeing that certain employees were excluded so that it could obtain a certificate which would otherwise have been beyond its reach. Rather, counsel alleges that the employer was abusing the Board's procedures to stall the advent of collective bargaining by agreeing on a description of the bargaining unit and then claiming that all employees within that description should be excluded. It was in an effort to address this situation, counsel argues, that the union made the agreement that it did.

14. Mr. Shell submitted that there is nothing in the Act which would prevent such an agree­ment and that there is nothing untoward or noxious about it. He analogized the situation to the Board's policy set out in Robin Hood Multifoods, [1985] OLRB Rep. July 1159 to the effect that final rather than interim certificates will be issued where the contours of the bargaining unit are not in dispute even where the status of certain individuals is contested. As the Board noted in that case, the outstanding dispute may either be settled in collective bargaining or may be referred to

the Board subsequently under section 106(2). This, it is argued, is similar to the procedure the union adopted in this matter. In his view, possible abuses of such a procedure including gerryman­dering or sweetheart agreements could be adequately dealt with under other sections of the Act.

15. Section 106(2) of the Act provides as follows:

If, in the course of bargaining for a collective agreement or during the period of operation of a collective agreement, a question arises as to whether a person is an employee or as to whether a person is a guard, the question may be referred to the Board and the decision of the Board thereon is final and conclusive for all purposes.

16. The Board has delineated certain restrictions which may apply in considering an appli­cation under this section. In Westmount Hospital, [1980] OLRB Rep. Oct. 1572, the Board noted that it will not permit an application to be brought during the first set of negotiations following an agreement upon an employee's status except where changes in the employee's duties and responsi­bilities are alleged:

Where parties have by virtue of their collective agreement or other form of agreement settled upon the employment status of a person, the Board at one time refused to let either party at any time withdraw unilaterally from that agreement by means of an application under section 95(2) of the Act. (See, for example, Belleville General Hospital, [1975] OLRB Rep. June 487.) The basis for this policy is that a party having entered into an agreement on the status of a particular person, cannot, in the absence of a material change in duties and responsibilities, come before the Board and claim that a 'question" exists as to the status of that person. More recently, the Board has liberalized this policy so as to permit an application to be brought during negotiations for the renewal of a collective agreement, after the collective agreement has expired. Parties therefore are no longer bound indefinitely to the terms of an initial agreement. The Board will not however, permit an application (other than one relating to changes in the duties and respon­sibilities) to be brought during the first set of negotiations following agreement upon the status of the person in question (Collingwood General Marine Hospital, [1975] OLRB Rep. Jan. 18).

It was common ground that there has been no change in the duties and responsibilities of the four individuals who are the subject of this application since the agreement was reached.

17. Much of the parties' agreement centered around the interpretation of the July 24 agree­ment. However, in determining whether that agreement was an agreement on employee status such as to trigger the application of the Westmount Hospital policy, we need look no further than the Mitchnick panel decision. The parties' agreement on the employee status of these four people is recited on the face of that decision, and we are not prepared to go behind it. If the applicant wished to maintain that the decision was in error, that assertion should have been raised by way of an application for reconsideration directed to the Mitchnick panel.

18. Moreover, even assuming, without finding, that the nature of the agreement was as the union asserts, we are not convinced that such an agreement can form the basis of a certification decision under the Labour Relations Act. We have set out our views in this regard at some length below as the parties may find them useful in ordering their affairs.

19. The Board has long recognized that certification applications in particular must be processed expeditiously. (See, for example, Canada Dry Bottling Company (Kingston) Limited, [1978] OLRB Rep. Nov. 976.) The courts have also acknowledged this element of urgency in Nick Masney Hotels Ltd., 70 CLLC, ¶14,020 (Ont. C.A.) at page 101:

The Ontario Labour Relations Board deals in certification matters with fluid situations which cannot be judged by the more leisurely standard that operate in the prosecution of a claim for damages for a tort or for a breach of contract where the situation is fairly well frozen when the tort or the breach of contract has occurred. Expedition is important to a union, to employees and to an employer since the certification is merely the first step in an often laborious collective bargaining process....

20. Sections 6 and 7 of the Labour Relations Act establish the Board's primary tasks in a certification application. Among other things, the Board must determine the appropriate bargain­ing unit, must ascertain the number of employees in that unit as of the application date, and must determine the number of those employees who were members of the union. To accommodate those tasks in an expeditious manner, the Board has established a number of routine procedures in certification applications (other than those affecting the construction industry) to assist the parties in either settling their cases or narrowing the issues in dispute. In the normal course of events, the parties are required to file certain material in advance of the day of hearing, including, in the case of the employer, lists of employees employed as of the application date. A number of issues will then be canvassed with the parties, either by the Board or by a Board Officer, to clarify the parties' positions and attempt to settle some or all of the issues in dispute. The proper name of the employ­er, the composition of the bargaining unit, the list of employees in the bargaining unit, and the "count" (the assessment of the number of union members in relation to the total number of employees in the bargaining unit) are typical of the matters reviewed with the parties in this man­ner.

21. This review will usually take place in a very specific order to avoid the possibility of ger­rymandering by one or more parties to the proceedings. As the Board described in Santa Maria Foods, [1981] OLRB Rep. Nov. 1618:

7. The Board's Rules and the certification hearing are ordered precisely to avoid the mischief of either party gerrymandering the employee list or the structure of the bargaining unit in such a way as to avoid or favour certification, as the case may be. Pursuant to Form 3 [now Form 4] of the Board's Regulations an employer is required to provide to the Board, not later than the ter­minal date, complete lists of employees in the bargaining unit proposed by the union on the date of application. The late filing of lists or amendment of lists filed can be only by leave of the Board pursuant to its discretion under section 58 [now section 83] of the Rules of Procedure.

8. At the outset of the hearing the Board will generally allow the employer to amend the lists filed to reflect any new information not previously available or to correct any error. During the hearing the Board does not announce the count of employees or any union membership until the description of the bargaining unit is settled. Similarly it does not announce the membership count until the count of employees in the unit is determined, subject, of course, to such outstanding challenges to the list as may have been made to that point in the hearing. These are rules well known to the parties and articulated in the Board's jurisprudence. (See, Gwell Investments Ltd., [1971] OLRB Rep. Oct. 675; The Corporation of the Township of Kingston, [1975] OLRB Rep. Apr. 370; Inter City Food Services Inc., [1976] OLRB Rep. July 388; Greater Windsor Investments Ltd. Windsor Nursing Home, [19761 OLRB Rep. Sept. 515. Without these general rules certification hearings would be endless meandering without map or compass, each turn in the journey being dictated by changing perceptions of the parties as to what best serves their own interest. That is why, absent extraordinary circumstances, the Board does not entertain submissions on the structure of bargaining unit or list of employees in the unit after the point in the hearing when the count has been given.

[emphasis added]

22. When the parties examine the list of employees, they will do so with a number of con­siderations in mind. In the first place, a number of individuals who might normally be described as "employees" in the generic sense are not deemed to be employees by virtue of section 1(3) of the Labour Relations Act. Commonly, a party will allege that an individual is excluded from the bar­gaining unit because he or she exercises managerial functions or is employed in a confidential capacity with reference to section 1(3)(b).

23. Other considerations include several guidelines developed by the Board to ascertain the

jumber of employees in the bargaining unit at the time the application was made. The fluid nature of labour relations means that employees may be continuously coming and going as a result of hir­ing, firing, layoffs, leaves of absence and so forth. There is no indication in the Act of the method or criteria to be used by the Board in addressing these circumstances, and as a result, the Board I ias developed a number of rules of thumb in order to pinpoint in a consistent and predictable man­iier the number of employees in a given bargaining unit. (See Ampliphone Canada Limited, [1967] OLRB Rep. Dec. 840 and London District Crippled Children's Treatment Centre, [1980] OLRB Rep. April 461.)

24. A typical example of these rules is the succinctly described "30-30" rule which the Board uses in determining whether an employee who is absent on the day of the application will be included in the assessment of the total number of employees in the bargaining unit. Another is the '7-week rule" which the Board uses to assist in determining whether employees will be considered fall-time or part-time.

25. However, although all of these factors may be considered by the parties in reviewing the list of employees, and ultimately by the Board if any disputes which arise cannot be settled, there are major differences in the nature and impact of these various criteria. An employee who fills outside the 30-30 rule may not be included in the total number of employees for the purposes of the count. Such an individual may still be an employee under the Act and may be subsequently included in the bargaining unit depending on the circumstances of the case.

26. In contrast, an employee who is excluded from the bargaining unit because she or he exercises managerial functions is not simply excluded for the purposes of the "count". For such an exclusion to occur, there must be either evidence before the Board or an agreement by the parties as a matter of fact that the person exercises managerial functions. If the Board finds, either on the basis of the parties' agreement or on the evidence, that an employee is excluded from the bargaining unit for this reason, that person is no longer considered to be an employee with respect to certain aspects of the Labour Relations Act. This is not necessarily a permanent state of affairs. Cir­cumstances in the workplace may change, or the impact of an agreement may expire after a certain period, and the Board has established certain rules which balance the recognition of these facts with the need for some stability in labour relations. (See Westmount Hospital, supra).

27. In practical terms, the Board is usually (although not always) prepared to accept the agreement of the parties that as a matter of fact, an individual exercises managerial functions. In doing so, however, the Board does not surrender its mandate to ascertain the number of employ­ees in the bargaining unit. Rather, in the interests of common sense and the viability of the certifi­cation process, the Board simply recognizes the futility and disruption which would be caused by holding hearings into uncontested facts.

28~. However, the agreements of fact upon which the Board may base a decision are exactly that. The Board cannot accept an agreement by the parties that an employee will be excluded from the count for no particular reason relating to the employee's status or the Board's rules of thumb. There must be facts before the Board justifying such an exclusion, even if those facts are framed in rather summary terms, such as where the parties agree that an individual exercises managerial functions. Parenthetically, we note that it is of first importance that such agreements are not entered into lightly or insincerely, since the impact may be to deprive an individual of the right to participate in collective bargaining.

29. In this case, the applicant alleges that the respondent took the position that the four named individuals were excluded by virtue of exercising managerial functions. The applicant, it is argued, agreed only that the four were excluded for the purposes of the count. There is no allega­tion that the disputed employees were caught by one of the Board's rules of thumb which would exclude them from the bargaining unit for the purposes of the count but otherwise leave their employee status intact. The only reason submitted for the applicant's agreement was entirely unre­lated to the status of these individuals; that is, that the agreement was a defensive strategy in the face of alleged abuse of the Board's procedures by the employer. If indeed the agreement was as the union asserts, it is not one that can provide the basis of a determination by the Board of the total number of employees in the bargaining unit, a determination which in some form is critical to the disposition of an application for certification. To accept such an agreement would represent an abdication by the Board of its responsibilities under section 7 of the Act. In effect, the parties would be making the assessment of the number of employees, rather than simply agreeing on facts which might form the basis of the Board's assessment.

30. Moreover, allowing such agreements as the basis for determinations in certification applications might well open the door to gerrymandering by the parties. The Board is not unaware that some jockeying for position exists now in the certification process (see Maple Lynn Foods Limited, [1984] OLRB Rep. Dec. 1749). However, the Board's procedures have been crafted to minimize this phenomenon to the extent possible. While we have no doubt that the applicant was not attempting to gerrymander the unit in this case, there would be little to prevent such attempts by other parties in other matters if we were to contemplate the applicant's interpretation of the agreement as a basis for a certification decision by the Board.

31. Even assuming, without finding, that the employer was abusing the Board's procedures, the applicant's approach is not a solution to such a problem. The Board is sensitive to the possibil­ity that its procedures may be used for ulterior motives and the appropriate course of conduct would have been to raise these concerns before the panel hearing the certification application.

32. At this point, however, the Mitchnick panel decision recites an agreement by the parties which would attract the consequences described in Westmount Hospital, supra. Under the circum­stances, we are not prepared to entertain this application on its merits. The application is dis­missed.