[1987] OLRB Rep. June 937
2660-86-M Canadian Union of Public Employees, Applicant V. The Town of Whit-by, Respondent
BEFORE: R. 0. MacDowell, Alternate Chair, and Board Members W. H. Wightman and B. L. Armstrong.
APPEARANCES: Jim Woodward for the applicant; Heather J. Laing and William Wallace for the respondent.
DECISION OF THE BOARD; June 26, 1987
I
- This is an application under section 106(2) of the Labour Relations Act. A question has arisen between the parties about the "employee status" of Mark Collins whom the employer describes as the "yard foreman". The employer asserts that Mr. Collins' functions fall within the parameters of section 1(3)(b) of the Labour Relations Act. The union asserts the contrary. Section 1(3)(b) reads as follows:
Subject to section 90, for the purposes of this Act, no person shall be deemed to be an employee,
(b) who, in the opinion of the Board, exercises managerial functions or is employed in a confidential capacity in matters relating to labour relations.
Section 1(3)(b) has been in the Act in its present form since 1957 when the emphasized words were added in order to clarify the Board's jurisdiction following the decision of the Supreme Court in Re Canadian General Electric Company Limited and Ontario Labour Relations Board [1956] O.W.N. 439, 56 CLLC ¶15,271 (reversed by the Ontario Court of Appeal at [1957] O.W.N. 277, 57 CLLC ¶15,318). If, in the opinion of the Board, a disputed individual exercises "managerial functions" or is employed in a confidential capacity in matters relating to labour relations, he is not entitled to associate for collective bargaining purposes or engage in collective bargaining under the Act, and is denied any rights, privileges or benefits prescribed in the collective agreement between the applicant and the respondent.
In accordance with the Board's usual practice in these matters, the Board appointed an Officer to inquire into the duties and responsibilities of the disputed individual. Pursuant to that appointment, the Board Officer convened a meeting of the parties on the premises of the employer. At that meeting both parties were represented by counsel and were afforded a full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence which, they asserted, might bear upon the issues before the Board. At the completion of this examination the parties were asked if they had any further evidence or witnesses that they wished to call, and each party indicated that it did not. The evidence adduced was transcribed and reproduced, verbatim, in the Officer's report which was circulated to the parties for comment. Accompanying the report was a notice extending the parties the opportunity to make representations as to the accuracy of the report or the conclusions that, in their submission, the Board should reach in view of its contents. Those representations were received at a Board hearing scheduled for that purpose.
II
We do not think that it is necessary to reproduce here the details of the witnesses' testimony, nor refer to the many cases in which the Board has dealt with the application of section 1(3)(b) of the Act (see generally, J. Sack, Q.C. and C.M. Mitchell, Ontario Labour Relations Board Law and Practice, 1985 (Butterworths) at pp. 79-103). It suffices to say that on the first branch of section 1(3)(b), what the Board is trying to assess is the degree and exercise of authority over other employees which would affect their economic position or job security, since the exercise of such authority, to any significant extent, would be incompatible with participation in the bargaining unit. The Board's approach to this part of section 1(3)(b) was elaborated in The Corporation of the City of Thunder Bay, [1981] OLRB Rep. Aug. 1121 in a long passage to which we might usefully refer:
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 11974] 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 all is 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 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.
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.
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.
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 l(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 11966] 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 affect 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 l(3)(b).)
- 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.
- 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 1(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.
There is no assertion by the employer that Mr. Collins is employed in a confidential capacity in matters relating to labour relations.
- In refining the general approach outlined in cases such as Corporation of the City of Thunder Bay the Board has been mindful that the "effective recommendation test" mentioned in paragraph 4, must be applied with some care. As the Canada Labour Relations Board observed in British Columbia Telephone Company and Federation of Telephone Workers of British Columbia et al, 76 CLLC ¶16,015 at page 467:
In the past, certain Labour Relations Boards [meaning Ontario] have accepted that the existence of a power to "effectively recommend" hirings, dismissals or disciplinary action was an index of the performance of management functions almost as important as the actual making of such decisions. This raised many problems, not the least of which was the instant multiplication of the number of managers. Another one was, of course, the determination of how "effective" recommendations have to be and how often before it can reasonably be inferred that there truly exists a power to recommend effectively.
Nor has the Board put much weight on job titles, or even job descriptions, in the absence of affirmative evidence that the decision-making authority mentioned in such job descriptions has actually been exercised by the disputed individual. Too often, in the Board's experience, persons with "managerial sounding" job titles, or job descriptions turn out not to exercise much managerial authority at all; and, of course, it is. the exercise of managerial functions which triggers the application of section 1(3)(b). (In this regard, see, for example, Oakwood Park Lodge, [1982] OLRB Rep. Jan. 84.) Finally, the Board has been alert to the possibility that if section 1(3)(b) were construed too liberally, an employer could seriously erode the bargaining unit simply by "sprinkling" managerial functions around and purportedly subdividing the managerial role. The managerial structure and division of authority put before the Board in a particular case, must be viewed realistically and from a collective bargaining perspective. Thus, in Caledon Hydro Electric Commission, [1979] OLRB Rep. Oct. 924 at 929, the Board commented:
There is no magic number which defines the appropriate ratio of managerial to non-managerial employees, or as counsel occasionally put it: "the ratio of chiefs to Indians"). The managerial structure is largely determined by the industry and the nature of the work. However, if the bargaining unit is very small, or largely self-directed, a heavy onus lies upon any party asserting an additional managerial exclusion - especially when such managerial function has no historical basis and there is no apparent change in the employer's organization or the work requirements which would justify the creation of a new level of management.
In a collective bargaining context small work groups do not need or necessarily have a "manager" within the meaning of section 1(3)(b), nor do the supervisory, coordinating, or minor admonitory functions performed by "lead hands" or "team leaders" generate the mischief to which section 1(3)(b) was directed.
The Board recognizes of course that business organizations and managerial structures can change over time. The employee configuration established on certification is not immutable, and the fact that a disputed person may have been in the bargaining unit at one time is not necessarily determinative of his present status. Jobs evolve. Functions which attract the concern to which section 1(3)(b) is directed may, in practice, be added to or deleted from an employee's regular duties even if there is no formal change in his job title or description; and this, in turn, may warrant an application under section 106(2). We merely reiterate that since "managerial" authority is a matter of degree, it is only concrete experience which will definitively indicate where the appropriate line should be drawn; and if the alleged "manager" has only a few subordinates, the Board must carefully scrutinize the situation for evidence of independent decision-making authority of the kind which establishes the labour relations concerns underlying section 1(3)(b). In the absence of such concrete evidence, the Board may not be inclined to find in favour of an additional exclusion - especially when a new application can be made if the situation changes, and the mischief envisaged by section 1(3)(b) actually materializes.
The difficulty in the present case is not in stating the indicia which, if present, would suggest that someone should be excluded from the bargaining unit either on a "managerial" or confidential/labour relations" basis. The problem here is to unravel the testimony and determine whether the duties of the disputed individual actually brings him within those parameters. Here we encounter a problem (unfortunately, not unique in this case): at the time of the Officer's inquiry, Mr. Collins had only been the "yard foreman" for a short period of time. In fact, given the seasonal nature of the marina where Mr. Collins works, he had, at best, only a brief period in which to demonstrate any managerial authority he may have, or exercise any of the managerial functions contemplated by section 1(3)(b). Accordingly, this application may well be premature. Nevertheless, the Board must form an opinion and make a decision based upon the evidence before it.
III
As we have already mentioned, Mark Collins is the "yard foreman" of the Town marina. He reports to Bill Smith the marina manager. The marina provides services to the boating public including haulage, storage and launching facilities. It is most active during, and immediately preceding and following the boating season (i.e. from March to about the end of November). There are five seasonal yard workers who are employed during this period, together with a couple of part-time student clerks who work from mid-May to September and a part-time secretary who works from the end of November to March. During the winter the secretary only works for a few hours per week. Mr. Collins has no one under his supervision. He occupies his time with "paperwork" and miscellaneous manual duties.
During the boating season, Mr. Collins has continual contact with the marina's customers and maintains records of their needs or work requirements. He keeps a "launch book" indicating what boats have to be launched or hauled. From this record, he makes up a schedule of duties, which is followed by the yard workers. He has the authority to reorganize or reassign those duties is the work flow requires; however, if there is any problem such as a customer's failure to appear it the appointed time, Collins consults with Bill Smith. Collins said that he was "in charge" on the two days per week that Smith was not on the premises. There are also periods when some of the employees are working entirely on their own. Collins and Smith are "on call" in case of difficulties. Collins has never been called.
Collins has no authority over the employees' wages and no input or impact on them. He has never disciplined anyone nor has he been told that he has the power to discharge employees. He said that he could point out to employees what they were doing wrong, and could issue a verbal reprimand followed by consultation with Smith. A written reprimand or any more onerous penalty would require consultation with Smith prior to its imposition. Collins could not do it on his own.
Mr. Collins has reviewed employment applications and been asked his opinion on prospective employees; however he has never hired anyone independently nor is it clear that his input is qualitatively different from what it was before his purported elevation to the position of "yard foreman". It is Mr. Smith who does the 3-month appraisal of employees, and although the matter is discussed with Collins, Collins conceded that Mr. Smith also monitors the employees' performance independently. There is no other evaluation of employees in which Mr. Collins is involved.
Mr. Smith makes any final decision on layoffs or transfers - which, in any event, are largely governed by the marina's fluctuating business. When there is no work to do at all, Mr. Collins tells the employees that they should go home.
Mr. Collins fills out the employees' time sheets. He did not know whether his signature was necessary to authorize payment. Any problems with the employees' pay cheques would be taken up with Mr. Smith. Mr. Collins indicated that when the marina was busy, he could authorize overtime but anything unusual such as a 12-hour shift had to be approved by Mr. Smith. Mr. Collins said that he was not really familiar with the terms of the collective agreement. He said that Mr. Smith was responsible for dealing with problems concerning its interpretation, application or administration. Mr. Collins does not attend any meetings of management other than his daily contact with Mr. Smith his superior. Nor does he have any real budgetary responsibilities or control over expenditures.
The only real indication in the evidence of the potential mischief underlying section 1(3)(b) concerns the layoff of an individual whom Collins concluded was not working out well. However, even here, he said that "I referred to Mr. Smith to lay this person off which he did after that" and "we laid him off because he was not suitable". Thus, once again, Collins was merely a conduit of information to Smith and it is difficult to conclude just how much independent authority Collins really has.
There is no evidence about Smith's other duties around the marina or the amount of time spent by Smith in joint decision-making with Collins. We do know that Collins and Smith consult daily on issues as they arise. We also know that, if the employer's position is accepted, there will be one "manager" for every 3 part-time, student or temporary employees. While this Board has no right to dictate an employer's managerial structure or business organization, that is certainly an unusual situation - bearing in mind that the determination under section 1(3)(b) involves both a qualitative and quantitative assessment, and that, ultimately, the onus rests upon the party seeking exclusion to establish the basis for it.
Having regard to the totality of the evidence, the Board cannot conclude that Mr. Collins exercises managerial functions within the meaning of section 1(3)(b) of the Act. It appears to us that such managerial authority (from a collective bargaining perspective) as there is is still exercised by Mr. Smith. It may be that this situation will change if Mr. Collins' job evolves. However, as things now stand, the Board is of the opinion that he is an employee within the meaning of the Labour Relations Act.