Ontario Labour Relations Board

[1987] OLRB Rep. April 623

2162-86-U; 2280-86-U; 3052-86-U United Steelworkers of America, Complainant v. Trim Trends Canada Limited, Respondent

BEFORE: Robert J. Herman, Vice-Chair, and Board Members G. 0. Shamanski and B. L. Arm­strong.

APPEARANCES: Keith Oleksiuk for the complainant; Robert E. Salisbury, Donald D. Bush and B. Fitzgerald for the respondent.

DECISION OF THE BOARD; April 30, 1987

1. After the commencement of the hearing into these matters, the complainant requested leave to withdraw its complaint in Board File No. 2280-86-U. Having regard to the stage at which the request was made, that matter is hereby dismissed.

2. The other two proceedings each allege that the respondent Trim Trends Canada Lim­ited violated the "freeze" provisions contained within section 79 of the Labour Relations Act. Those matters are hereby consolidated.

3. The parties agreed on all the facts to be presented to the Board and accordingly, no viva voce evidence was heard.

4. Some time in 1982, the wage incentive program in effect at the respondent's plant at Dundalk (i.e. the bargaining unit in question) was terminated by the respondent, both because it believed the program was not working and given its economic situation at the time. On September 1, 1982, the respondent decided not to implement an annual wage increase. On September 1, 1983, recognizing that no wage increase had been awarded to employees the previous year, the respon­dent implemented a 40¢ per hour increase to all employees. The following year, on September 1, 1984, the respondent awarded a 25¢ per hour increase to all employees. On September 1,1985, the respondent awarded a further 25¢ per hour increase to all employees.

5. On September 6, 1985, the complainant filed an application for certification to represent the employees of the respondent, and the freeze provisions contained within section 79(2) of the Act thereby became effective. On November 15, 1985, subsequent to the onset of the freeze, it was announced that the respondent had been sold to Harvard Industries, Inc. Harvard owned numerous other manufacturing facilities, all in the United States, including plants in Deckerville and Snover, Michigan, which produce similar products to those at the respondent's plant at Dun­dalk. Management personnel of the parent company regularly met with employees of the various subsidiary plants, and as part of that process, in July of 1986 representatives of Harvard met with the employees of the respondent at Dundalk.

6. Part of these talks with the respondent's employees included discussion of the employ­ees' wages. At that time Harvard advised employees that because of the freeze provisions con­tained within section 79 of the Act, it had to consider how to handle any wage increases. After the July meetings, Harvard embarked on a "consultative program" to rationalize the operations of the three plants performing similar work.

7. In a letter, to the Registrar of the Ontario Labour Relations Board dated August 22,

1986, Donald Bush, the Vice-president of Harvard Industries Inc., wrote in part as follows:

"I wish to respectfully notify you that due to business conditions, it is necessary to make certain changes in the wages and working conditions at our Trim Trends plant in Dundalk, Canada.

Over the years, September 1st has customarily been the time for Trim Trends to make company wide adjustments in its wages and working conditions. This year, in order to conform with Har­vard Industries fiscal year, adjustments are being made October 1st. Because of this change in timing, we have sent a notice (see attached) to all hourly employees at each of our plants -including Dundalk.

While our Canadian Counsel has familiarized us with paragraph 79 of the Ontario Labour Rela­tions Act, we are of the opinion that business necessity dictates that we take the actions outlined in the attached memo, and that we are not in violation of the spirit of the act [sic].

This action is not being taken with the purpose in mind, to in any way place the union in a disad­vantageous position. Rather, the adjustments being made are for the sole legitimate business purpose of improving our competitive position in the marketplace."

Employees at the respondent's plant were notified of the proposed changes in a notice posted on August 22nd, 1986, which read as follows:

TO: All Hourly Employees - Dundalk

FROM: Syd Coe

RE: Hourly Wage Adjustments

In past years, throughout Trim Trends, we adjusted our hourly wage rates as of September 1 each year. This year, in order to conform with Harvard Industries accounting fiscal year, our hourly rates, and those of other Trim Trends Plants will be adjusted as of October 1.

I am please to announce the following changes:

1. The Trim Trends profit sharing plan is being eliminated, and in its place an employee incentive plan is being implemented. This plan is being installed on a plant by plant basis and Dundalk will be next. The plan should be com­pleted before year end.

2. All hourly wage rates are to be increased .28 effective October 1.

3. For those job classifications not covered by the plan, an additional .41 wage adjustment to become effective upon implementation of the incentive plan.

While these adjustments are in keeping with Harvard's plans for Trim Trends, we must all be aware of the competitive nature of our business and the need to maintain the highest quality and continue to improve our productivity."

8. As can be seen, the company proposed to grant an annual wage increase, but because of the fiscal year of the parent Harvard and in an attempt by Harvard to rationalize the terms and conditions at the respondent's plant with those plants in Michigan performing similar work, Harvard and the respondent proposed that the annual increase take effect October 1,1986 rather than September 1, 1986 which would have been the customary date of increase. The company further proposed the elimination of the existing profit sharing plan, and the implementation in incremental fashion of an incentive plan which would cover some of the bargaining unit employees; the grant­ing of a wage increase of 28¢ to all employees (as of October 1, rather than September 1, 1986); and the giving of an additional 41¢ per hour to those employees in the bargaining unit not covered by the incentive plan. A further change to be implemented as of October 1, 1986 was to stagger and lower the starting rates for certain categories of new employees in the bargaining unit.

9. On September 24, 1986, the complainant was certified by the Board to represent the employees covered by the above noted changes. On September 25, 1986, the union wrote to coun­sel for the respondent indicating its concern with the changes in wages and working conditions at the respondent's plant and noting that such changes would be a clear and direct violation of section 79(2) of the Act.

10. On October 1, 1986, the changes as announced by the company on August 22, 1986 were implemented. The profit sharing plan was terminated, the phased implementation of the incentive plan began, all employees received a 28~ per hour increase, certain employees received an additional 41g an hour while the others became participants in the incentive plan, and the start­ing rates for certain categories of employees were lowered. On October 3, 1986, the union served notice to bargain on the respondent. At that point, the freeze imposed by section 79(2) was replaced by the freeze contemplated by section 79(1). The Board was advised at the hearing that the parties have been actively negotiating and are currently in the midst of such endeavours.

11. Based on these facts, the complainant submits the respondent has breached the provi­sions of section 79 of the Act. Section 79 reads as follows:

(1) Where notice has been given under section 14 or section 53 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,

(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and,

(i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or

(ii) fourteen days have elapsed after the Minister has released to the parties a notice that he does not consider it advisable to appoint a

conciliation board,

as the case may be; or

(b) until the right of the trade union to represent the employees has been terminated,

whichever occurs first.

(2) Where a trade union has applied for certification and notice thereof from the Board has been received by the employer, the employer shall not, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privi­lege or duty of the employer or the employees until,

(a) the trade union has given notice under section 14, in which case subsection (1) applies; or

(b) the application for certification by the trade union is dismissed or termi­nated by the Board or withdrawn by the trade union.

12. The complainant submits the freeze provisions were violated in five respects by the res­pondent. First, in the past all wage increases, when awarded, were awarded as of September 1 of the year, but the respondent unilaterally changed the implementation date to October 1st for the 1986 calendar year. Second, when wage increases were awarded, they were always on a uniform "across-the-board" basis, with all employees receiving identical increases. The respondent how­ever has differentiated amongst classes of employees, by giving some participation rights in the incentive plan, and giving others a 41~z increase in lieu of such participation. Third, the pre-existing profit sharing plan was terminated by the respondent. Fourth, an incentive plan was implemented by the respondent, and on a basis which differentiated amongst employees. The complainant sug­gests the respondent breached the freeze provisions in this respect both by its decision to imple­ment an incentive plan, and in its further decision to offer participation in that plan only to certain employees. Even if the Board were to find no violation in the implementation of an incentive plan (presumably based on the fact an incentive plan had been in place up to 1982) the complainant argues a freeze violation in the respondent's decision to implement a plan only for certain catego­ries of employees. The plan previously in place had applied across-the-board to all employees. Fifth, the starting rates for certain categories of employees had been lowered.

13. Counsel for the respondent argues that the purpose of section 79 of the Act is to pre­serve the status quo between parties, to ensure that a union has some sense of security when embarking upon negotiations with an employer. The respondent notes the parties are now five ses­sions into the negotiating process, and accordingly, the Board ought not to be concerned that the complainant might not feel secure in its position as representative of the employees. No part of the purpose of section 79 was to punish the party which might have breached that section, rather its purpose is to restore parties to their prior positions. In counsel's submissions, in order to consider whether section 79 has been breached, the Board must ask itself whether the bargaining relation­ship between the parties has been disrupted by the unilateral actions of the employer. If the Board is satisfied such disruption has occurred, the Board then, and only then, should find a breach of section 79 and order the remedy necessary to repair the disrupted relationship. The remedy should not punish the employer, nor should it attempt to second guess the amount, for example, of the wage increases the employer might have awarded had it conducted itself in accord with section 79.

14. In counsel's view, the question the Board must ask itself in the circumstances was what could the employees of the respondent have expected, in the fall of 1986, given that the respondent had been purchased by Harvard which had its own fiscal year and its own historic relationship with employees at other plants. At worst, counsel submitted the respondent had committed a technical violation of the Act, not motivated by any attempt to undercut the union, nor had its actions been taken in knowledge that they might be in breach of the Act. Further, there was no disruption to the bargaining relationship between the parties. In such circumstances, should the Board be satis­fied section 79 had been breached by the respondent (which counsel denied), the Board should only issue declaratory relief, and decline to issue any other remedial orders.

15. Finally, counsel for both parties made extensive submissions as to the appropriate reme­dial orders, if any, that the Board ought to grant in the circumstances. Both counsel agreed it would not be inappropriate, should the Board find a breach of section 79 in the circumstances, to first afford the parties an opportunity to attempt to negotiate remedial relief.

16. A recent discussion of section 79 of the Act and its applicability can be found in Simpsons Limited, [19851 OLRB Rep. April 594, where the Board wrote as follows:

'23. That section 79 is intended to maintain the status quo, to provide a period of stability while the parties are establishing their collective bargaining relationship or renewing that relationship by negotiating another collective agreement, is a sentiment often affirmed by the Board. The classic exposition of the parameters imposed on employer conduct during the freeze is the busi­ness as before formula in Spar Aerospace, supra. That formula has been referred to in virtually every case which since has considered section 79. The cases also confirm that section 79 is a strict liability provision in that anti-union animus is not a relevant factor.

24. The interpretation of section 79 in the context of particular fact situations, however, has sel­dom proven simple or straightforward. The Board in Simpson, supra, referred to a passage in Sunnycrest Nursing Home Limited, [1982] OLRB Rep. Feb. 261 which it is appropriate to repeat here:

The freeze provisions give rise to difficult problems of interpretation for if treated as a total prohibition on any employer actions taken in the ordinary course of business which impinged upon the employment relationship, the freeze would effectively para­lyze the employer's operations during the bargaining process; while, if the pre-exist­ing but now frozen entrepreneurial rights are given too broad an interpretation, they would render the section meaningless.

25. And, as stated in Grey Owen Sound, supra, at paragraph 22:

The Board, in Spar Aerospace Products Limited, [19781 OLRB Rep. Sept. 859, artic­ulated a business as before rule during the freeze period. In essence, the Board decided that the legislative intent of the freeze was to maintain the prior pattern of the employment relationship in its entirety. (See paragraph 19 of the decision). One problem in a first agreement situation is that the parties are in transition from a situa­tion of unrestricted management's rights to one in which collective bargaining will result in some shift in the balance of power as between employer and employees. It is often very difficult in such situations to ascertain what the pattern of the employment relationship was.

26. Section 79(2) freezes the wage rates, other terms and conditions of employment, rights, duties and privileges of the employees and the rights, privileges and duties of employers for the period specified. Most of the freeze cases have arising in the context described by the above quotation from Grey Owen Sound, that is, the transition from unrestricted management rights to a collective bargaining regime, wherein those management rights are limited to a greater or lesser extent. In this context, the cases have discussed on the rights of employer versus the privi­leges of the employees, in other words, the statute freezes employees' privileges and it is the scope given to the employees' privileges which circumscribes the otherwise unlimited reach of employer rights.

27. Before the transition to a collective bargaining relationship, then, the doctrine of manage­ment rights is so broad, so all-embracing that there need be no recourse to employer privileges in the context of section 79(2). Once the transition is complete, however, and the privileges in the context of section 79(2). Once the transition is complete, however, and the freeze arises when the parties are bargaining for a renewal agreement, there may well be found employer privileges. In A. N. Shaw Restorations Ltd., [1978] OLRB Rep. June 479, for example, the Board held that a union had waived certain rights under its collective agreement and could not adopt a different posture during the freeze.

28. The Board could have interpreted section 79 so as to freeze the precise conditions extant at the time the statutory provision was triggered. The Board, though, has consistently rejected that approach as an unreasonable interpretation of the legislation. In the Board's view, such an interpretation would effectively paralyze an employer's operations for the duration of the statu­tory freeze, a period which could be quite lengthy. In effect, the business as before formulation in Spar Aerospace, supra, was the Board's response to too expansive a view of employee privi­leges. To paraphrase Spar Aerospace, the employer's right to manage its operation was main­tained subject to the condition that the operation conform to the pattern established when the freeze was triggered.

29. Business as before is a slippery concept to apply to specific fact situations. The focus of the test is the pattern of operations, the employer's practice. Certainly, where the practice is accu­rately embodied in an employer's policy manual, the application of business as before has been relatively straightforward: J. M. Schneider Inc., [1984] OLRB Rep. Apr. 609. There have been other instances where a practice has been so well entrenched as to be beyond dispute: Spara Aerospace, supra, with respect to annual merit and annual cost of living increases. On the other hand, the increased parking fee cases illustrate the difficulty in looking for a pattern: see Oshawa General Hospital, [1985] OLRB Rep. Jan. 98, and the cases cited therein, including Humber Memorial Hospital, [1979] OLRB Rep. Aug. 764 and Ottawa General Hospital, Sep­tember 1984 unreported, File No. 0965-84-U(B). Does business as before require annual adjust­ments to parking fees, equal increases in fees, regular adjustments, any charge to employees for parking, or, is what is frozen the actual rate in place at the time of the freeze? The cases gener­ally reject the actual rate at the time of the freeze and uphold adjustments to rates. However, the cases reveal the difficulty of looking at a pattern or business as before to measure employ­ees' privileges.

30. The freeze provisions catch two categories of events. There are those changes which can be measured against a pattern (however difficult to define) and the specific history of that employ­er's operation is relevant to assess the impact of the freeze. There are also first time events and it is with respect to that category that the business as before formulation is not always helpful in measuring the scope of employees' privileges. Some first time events have been readily rejected by the Board, where, for example, the employer has instituted parking fees for the first time during the freeze: see Scarborough Centenary Hospital, [1978] OLRB Rep. July 679; St. Joseph's Hospital, September 1984, unreported, File No. 0965-84-U(A). On the other hand, the Board has upheld an employer's right to lay-off employees during the freeze (assuming there is no anti-union animus in the decision): Simpsons, supra; Burlington Carpet Milis, supra; The Winchester Press, supra; Grey Owen Sound, supra; Deacon Brothers, supra; Airline (Malton) Credit Union, supra. This right has been confirmed even where the first instance of layoff occur­red during the freeze (see Grey Owen Sound, supra; The Winchester Press, supra; and where the layoffs had occurred elsewhere in the employer's operation but not at the specific location in question (see Simpson, supra). The respondent in the instant case cited Corporation of the Town of Petrolia, supra, for the proposition that the employer may also contract out work for the first time during the freeze.

31. Instead of concentrating on business as before, the Board considers it appropriate to assess the privileges of employees which are frozen under the statute and thereby, delimit the other­wise unrestricted rights of the employer, by focussing on the reasonable expectations of employ­ees. The reasonable expectations approach, in the Board's opinion, responds to both categories of events caught by the freeze, integrates the Board's jurisprudence and provides the appro­priate balance between employer's rights and employees' privileges in the context of the legisla­tive provisions.

32. Reasonable expectations language has appeared in a number of decisions dealing with the freeze section. See, for example, Corporation of the Town of Petrolia, supra; Scarborough Cen­tenary Hospital, supra; Oshawa General Hospital, York Finch Hospital, supra; St. Mary's Hospital, [1979] OLRB Rep. Aug. 795 (Decision omitted from [1979] OLRB Rep. March); AES Data Limited, [1979] OLRB Rep. May 368. In the latter case, for example, the Board found that the employer was entitled to re-assign job functions since the employees could not reasonably expect to continue performing their jobs in exactly the same way despite changes in the mode of production and market conditions. Thus, in the Board's view, the reasonable expectations of employees as the appropriate measure of the employees' privileges which are protected by the freeze is a common thread running through the earlier decisions. In the instant case, the Board is expressly articulating the test.

33. The reasonable expectations approach clearly incorporates the practice of the employer in managing the operation. The standard is an objective one; what would a reasonable employee expect to constitute his or her privileges (or, benefits, to use a term often found in the jurispru­dence) in the specific circumstances of that employer. The reasonable expectations test, though, must not be unduly narrow or mechanical given that some types of management decision (e.g., contracting out, workforce reorganization) would not be expected to occur everyday. Thus, where a pattern of contracting out is found, it is sensible to infer that an employee would rea­sonable expect such an occurrence during the freeze. The Board in Simpsons, supra, although the cleaning was contracted out before the company itself took over that operation, did not con­clude there was such a pattern.

34. The reasonable expectations approach also integrates those cases which affirm the right of the employer to implement programmes during the freeze where such programs have been adopted prior to the freeze and communicated (expressly or implicitly) to the employees prior to the onset of the freeze: Le Patro d'Ottawa, [1983] OLRB Rep. Feb. 244. The Board consid­ers that the upholding of the right to contract out during the freeze period in Corporation of the Town of Petrolia, supra, does not establish an unrestricted right of the employer to contract out work during the freeze but, rather, recognizes that the employer in that case had embarked on a programme leading to the contracting out well in advance of the freeze and that the employees would reasonably have been aware of his programme in the circumstances (see par. 20, in par­ticular).

35. Finally, the lay-off cases are consonant with the reasonable expectations approach. Very few, in any, work forces are entirely static; fluctuations in the size of the staff complement and its composition are the norm. Employers are general expected to respond to changing economic conditions through the hiring, termination and attrition of employees. It is in this sense that it is reasonable for employees to expect an employer to respond to a significant downturn in the business with layoffs (or terminations) even where such layoffs are resorted to for the first time during the freeze. The magnitude of the layoffs, of course, must be proportional or relative to the severity of the economic circumstances. Economic justification must be proven where relied on and there must be an absence of anti-union animus. It must also be stressed that, while the expectation of layoffs does not initially depend on the specific history of the employer's opera­tion, there might well be specific evidence with respect to that employer which would negate the otherwise usual reasonable expectation of layoffs in response to an economic downturn.

36. The reasonable expectations approach also distinguishes between layoffs and contracting out. Where there was a pattern of contracting out, of course, there would be no violation of sec­tion 79 where work was contracted out during the freeze. However, in the Board's opinion, while an employee would reasonable expect a layoff where there was no demand, i.e., where there was an economic downturn, an employee would not reasonably expect that the work would continue to be performed for the benefit of the employer's operation but through con­tracting out. This is not to say that the employer does not have the right to contract out work during non-freeze periods, except as limited by a collective agreement. During the freeze, how­ever, and unless there is a practice of contracting out, the employer's right to contract out is lim­ited by the employees' privilege of performing the work if the work is to be performed for the benefit of the employer's operation. Contracting out is merely one of the ways an employer might otherwise increase productivity or efficiency which is caught by the freeze; reducing wag­es, instituting parking fees, ignoring its policy manual are other means of achieving such goals which are proscribed by the statutory provision."

37. What would the reasonable expectations of the employees in the bargaining unit have been at the time the freeze took effect, with the filing of the application for certification on Sep­tember 6, 1985. At that point, they had always enjoyed a profit-sharing plan, when wage increases were granted they had always been granted as of September 1 of the calendar year, and all the employees had always been treated uniformly, in the sense they received identical wage increases and all the employees participated in the profit-sharing plan, or the incentive plan when it was in place prior to 1982. Although the respondent announced its intended changes over a month before the date of implementation, those announcements occurred after the commencement of the freeze. Indeed, the freeze was already in place at the time of the sale of the respondent to Harvard.

38. Although the parent company may have had sound business reasons for wanting to rationalize its newly acquired Ontario operation with its existing plants in Michigan and other parts of the United States, section 79 sets the parameters within which it remained free to run the busi­ness as it chose. The onset of the freeze imposes on an employer an obligation to conduct its busi­ness as it has in the past, in accord with the reasonable expectations of employees, or alternatively, to seek the consent of its bargaining partner, the union, before departing from that pattern. While business justification may provide a defence to allegations of anti-union animus (which are neither made in the instant proceeding, nor relevant to a finding under section 79 of the Act), it cannot sanction a breach of section 79.

39. All prior wage increases had been effective from September 1. The employees had rea­sonably come to expect (and it therefore became an employee privilege) that if a wage increase was granted by the respondent, it would be effective as of September 1st of the year. Accordingly, we find the respondent breached the Act in not implementing the October wage increases as of September 1, 1986.

40. Prior to the onset of the freeze, employees in the bargaining unit had always been treated uniformly by the respondent (except, of course, that wage rates varied). Whatever wage increases were awarded were given across the board. The profit sharing plan had applied to all employees, and when an incentive plan had been effective it was equally applicable to all employ­ees. When the freeze period began, on September 6, 1985, several months before the sale to Har­vard and almost a year before Harvard announced its proposed changes to the wages and benefits of the employees, there was no reason employees ought reasonably to have expected they would not continue to be treated uniformly by their employer. Neither was there reason for employees to expect that the profit sharing plan they had always enjoyed would be terminated. From past expe­rience, in 1982, even during difficult economic times when no wage increase was given, the profit sharing plan remained untouched. How then should employees expect termination of this plan in times when all of them received substantial wage increases?

41. Accordingly, we also find that the respondent breached section 79 in the cancellation of the profit sharing plan.

42. With respect to the implementation of an incentive plan, there had been an incentive plan in place until some time in 1982, at which point the respondent had terminated it. If the ques­tion before us were whether employees might reasonably expect, given the previous plan, that an incentive plan might reappear in the work place, we might not find the implementation on October 1, 1986 to be a violation of section 79. However, in the circumstances, we do find the implementa­tion of the incentive plan to have breached section 79. As noted earlier, employees have always been treated uniformly by the respondent, including their common participation in the profit shar­ing plan and their common participation in the incentive plan that existed until 1982. During the freeze period, the respondent announced and implemented an incentive plan available only to a portion of the bargaining unit. In our view, there was no reason employees could reasonably have anticipated that, absent consent of the union, they were to be treated selectively and differentially, either with respect to the amount of wage increases or with respect to participation in an incentive plan. Accordingly, because the incentive plan implemented by the respondent applied only to cer­tain categories of employees in the bargaining unit, we find that the implementation of that plan violated section 79.

43. With respect to lowering the starting rates of certain categories of employees, again we can see nothing that ought to have led employees to reasonably anticipate starting rates might be lowered for a certain classification, and accordingly we find that this action also constituted a

breach of section 79. Even if we assume the employer had sound business reasons for selectively lowering starting rates (of which we had no evidence) it cannot change rights of employees during the freeze period to be able to enjoy the privileges frozen at the onset of the freeze. There was no history, prior to that onset, of this respondent ever having lowered starting wage rates for certain classifications of employees.

23. We have concluded the respondent has breached section 79 in part on the basis that it sought, for the first time, to selectively treat certain categories of employees, whereas in the past it had never done so nor had employees any reasonable expectation that it might begin to do so. It follows from this analysis, that the respondent also breached section 79 in allowing only some employees participation in the incentive plan, while granting non-participants an additional 410 per hour. What the employer was not free to do, and which it attempted to do with sweeping changes to the entire method of calculations of wages and terms and conditions of employment, was to treat employees other than on the uniform basis it had always treated them in the past.

24. The respondent argued there was no disruption to the bargaining relationship and accordingly no violation of section 79. Without commenting on whether an applicant must prove such disruption, we find significant disruption in the circumstances at hand. It will be recalled that the freeze took effect before the sale of the respondent to the parent Harvard. Further, at the time Harvard implemented all the changes, the applicant had already been certified and was entitled to represent employees. The intent of the freeze, after the applicant acquired bargaining rights (as noted in the quote from Simpsons Limited, supra), was to provide a period of stability while the parties established their collective bargaining relationship, and to define the parameters under which the transition from unfettered management discretion to co-operative collective bargaining would take place. Quite apart from the intention of the respondent in implementing the changes it did, the effect on employees and on the union would have been obvious. The bargaining authority of the union and its ability to effectively represent employees and to have their support as it embarked upon its first collective bargaining endeavour for them, would have been severely under­cut by the respondent's actions in cancelling a profit sharing plan, lowering the starting rates for employees, selectively treating employees when it had never done so in the past, and changing the annual increase date by delaying it one month. In the face of such actions it is praiseworthy that the parties were still able to sit down and begin to negotiate. Their ability and willingness to do so cannot, however, change the disruption to the bargaining relationship and the undercutting of the union's strength and authority occasioned by the unilaterally imposed actions of the respondent.

25. With respect to the particular remedial orders that ought to issue, the parties are cur­rently engaged in negotiations and both parties felt it not inappropriate, should a breach be found, to first afford them an opportunity to attempt to work out any remedial relief. Accordingly, we will defer our consideration of the appropriate remedial relief to afford the parties an opportunity to resolve the matter. We remain seized with respect to remedial relief, including the question of whether a posting is warranted.

26. By way of guidance to the parties in this respect, should the Board ultimately deal with this matter we will be guided by the principle that the parties ought to be placed in the position they would have been had section 79 not been breached. In concrete terms, the respondent made the decision it could afford to give increases, as of October 1, 1986 of 28~ per employee to all employees, together with participation in an incentive plan or 410 per hour for those not participat­ing. At the same time, the respondent would have taken into account in reaching those figures the potential costs of the incentive plan, and the potential savings due to the cancellation of the profit sharing plan and the lowering of certain starting rates. Before the Board will be able to decide the appropriate remedial relief, it would have to quantify the costs incurred or anticipated with respect to factors such as these.