Ontario Nurses' Association v. Central Park Lodges, A Division of Trizec Equities Limited, 1988 CanLII 3695

3471-86-U Ontario Nurses' Association, Complainant v. Central Park Lodges, A Division of Trizec Equities Limited, Respondent

BEFORE: R. O. MacDowell, Alternate Chair, and Board Members D. G. Wozniak and J. Sarra.

APPEARANCES: Shalom Schachter, Jan Kainer, Marsha Sosiak, Florence Stanley, Eleanor Hol­royd and Marie Morrison for the complainant; C. G. Riggs, C. L. Kay-Aggio, J. B. Rohrer and Kevin Roxby for the respondent.

DECISION OF R. O. MACDOWELL, ALTERNATE CHAIR, AND BOARD MEMBER D. G. WOZNIAK; May 19,1988

1. The reply to this complaint indicates that the correct name of the respondent is "Cen­tral Park Lodges, A Division of Trizec Equities Limited". The name of the respondent in the style of cause is amended accordingly.

I

2. The respondent employer operates a retirement lodge in London, Ontario. On Febru­ary 27, 1987 the employer notified two full-time and four part-time registered nurses that they would be laid off. They were given four weeks notice. Their last day of work was March 27, 1987. Since these six employees were the only registered nurses working at the lodge, the layoff effec­tively eliminated the full-time and part-time bargaining units represented by the complainant union

("ONA").

3. ONA challenges the legality of the employer's actions on a variety of grounds. ONA asserts that the employer has breached its duty to bargain in good faith, because it did not notify the union in advance, and did not bargain about the decision to lay off the registered nurses work­ing at the London Lodge. The union further asserts that the layoff is an unfair labour practice, motivated in whole or in part by the fact that the nurses in London have opted to join ONA and engage in collective bargaining. ONA maintains that the layoff also constitutes an unlawful lock­out. Finally, ONA argues that the employer has contravened the "statutory freeze" of employ­ment conditions which must be maintained during the bargaining process. ONA relies upon sec­tions 3, 15, 64, 66, 70, 72, 75, 76 and 79 of the Labour Relations Act, as well as sections 11 and 13 of the Hospital Labour Disputes Arbitration Act, should that statute be found to apply.

II

4. Central Park Lodges is a division of Trizec Equities Limited, which, in turn, is a corpo­rate conglomerate engaged in a variety of business activities (including ownership of the Yorkdale Shopping Centre in Metropolitan Toronto). Central Park Lodges is itself divided into three sepa­rate sections: a Nursing Home Division, a Retirement Lodge Division, and a Home-care Division. There are 13 retirement lodges in the Retirement Lodge Division. Twelve lodges are located in Ontario and one is located in Quebec. In the Nursing Home Division, there are 3 nursing homes in Ontario and (it appears) one in the United States.

5. Central Park's nursing homes provide accommodation for senior citizens whose physical or mental state requires a significant degree of professional care and treatment. Persons are admit­ted to a nursing home only after an assessment by their doctors (often with the assistance of other health care professionals). All nursing homes must be licensed and receive funding from either the Ministry of Health or the Ministry of Community and Social Services. The per diem rate charged to the residents is fixed by government regulation. Approximately 55% of that rate is paid by OHIP. Licencing regulations govern the number, skill-mix and professional qualifications of staff, the resident/staff ratio, room size, lighting, number of residents per room, the mix of rooms (i.e. ward service, private or semi-private), room temperature, food temperature, water temperature, room size, bed size, bed location, performance requirements of the nurse-call system, location of the nurse-call system, etc. There is no right to strike. In the event of a collective bargaining impasse, the Hospital Labour Disputes Arbitration Act ("HLDA") requires that the dispute be submitted to arbitration.

6. According to Kevin Roxby, Vice-President of the Retirement Lodge Division, the pur­pose of the respondent's retirement lodges is to provide residential accommodation, shared facili­ties, and recreational programs for older persons who do not require the kind of care provided in a nursing home, but, by the same token, do not want the responsibility or inconvenience of main­taining their own homes. Unlike a nursing home, there are no licencing requirements or regulation by the Ministry of Health or any other government agency. In particular, there is no requirement for certain minimum hours of nursing care per resident, nor is there any regulation of the staff complement. Residents have keys and come and go as they please.

7. The Central Park retirement lodges are entirely "market driven"; that is, they provide a service to the market that the residents are willing to pay for. Typically there are larger rooms, higher quality furnishings, lighting which approximates a residential rather than an institutional setting, better food, and different educational or recreational programs because of the nature of the clientele. Subject to collective bargaining obligations, wages, staff-mix, and employment condi­tions remain the responsibility of the employer. The respondent's retirement lodges have never been regarded as "hospitals" under HLDA either by the Ministry of Health, the Ministry of Labour, or any other government agency. Indeed, some years ago there was a strike at the respon­dent's Windsor retirement lodge.

III

8. On April 30, 1984 ONA was certified to represent full-time and part-time bargaining units of registered nurses working at the employer's London lodge. These two bargaining units have always been very small. At the time of the events giving rise to this dispute, there were two full-time nurses and 3-4 part-time nurses. The other 38 employees at the lodge are represented by the Service Employees International Union ("SEIU").

9. There are several hundred employees in the employer's 13 retirement lodges. Quite a number of those employees are also represented by the SEIU. As of February 27, 1987, there were 70 registered nurses working in the 13 lodges; however, only the 5-6 nurses at the London lodge were unionized. In the employer's Nursing Home Division there are both ONA and SEIU bargain­ing units.

10. Following its certification, ONA gave notice to bargain. There followed a pattern of protracted negotiations stretching over 2-1/2 years. There were 28 meetings in all: 21 in respect of the agreement covering the two full-time employees, and an additional 7 meetings in respect of the part-time bargaining unit. A conciliation officer was appointed in August 1985. No "No Board" report was ever issued, and accordingly, the parties have never been in a position to lawfully strike or lock out.

11. ONA's initial stance at the bargaining table was a demand for parity with nurses work­ing in hospitals or nursing homes. That position was rejected by the employer. The employer main­tained that its enterprise was not a nursing home or hospital, nor were the employees performing the same functions. The lodge was operating in an unregulated competitive market where the most appropriate bargaining benchmarks were the SEIU agreements at the London lodge itself. For the same reason, the employer resisted demands which would limit its ability to subcontract bargain­ing-unit work, inhibit the re-organization of staff, or prevent the transfer of functions ordinarily performed by nurses to other managerial or non-managerial employees. Its rationale was the same: it was involved in a competitive commercial activity and needed flexibility to develop its business and respond to the needs of the marketplace, which ultimately determined the staff requirements. Its revenues were derived solely from residents' fees. It had no government funding. There was no legal obligation or regulation requiring it to maintain any particular mix of staff or distribution of work functions (except in respect of a few duties which could only be performed by a doctor or reg­istered nurse). The employer indicated that there were no plans for layoffs, and had been no lay­offs in the past, but neither could there be any work guarantees. Eventually the parties reached agreements more or less along the lines of those already negotiated with the SEIU.

12. On September 23,1986 the parties concluded and executed a "full-time" memorandum of settlement finally resolving all matters in dispute between them. On behalf of the employer, that agreement was signed (inter alia) by Kevin Roxby, Vice-President of the Retirement Division, and Joseph Rohrer, the employer's Director of Labour Relations. The memorandum of settlement is in the Ministry of Labour's standard form which includes the following preamble:

"The undersigned representatives of both the company and the union agree to the following basis of settlement of all matters in dispute as witnessed by the undersigned Conciliation Officer of the Ministry of Labour and agree to recommend its acceptance unanimously to their princi­pals for ratification."

No further negotiations were contemplated, nor did any actually take place.

13. On October 7,1987 an ONA representative wrote to the employer to advise that the nurses had ratified the memorandum of agreement on September 24th (i.e. approximately two weeks earlier). The terms of the agreement were implemented, and retroactive wages and benefits were paid. On December 10, 1986 Patricia Davey, secretary of the Local Union, advised the employer of its officers, and the members of the Grievance, Nursing, and Health and Safety Com­mittees. Those committees included both full-time and part-time nurses.

14. On February 2nd and February 10th, 1987 there was an exchange of letters respecting typographical errors and other minor corrections to the text. According to Marsha Sosiak, there were also two telephone discussions with Rohrer to finalize the wording of the full-time agreement. She could not recall when they occurred. Those communications did not involve any further "ne­gotiations". As far as the parties were concerned, the "deal" had been finalized, and all that was left was to "tidy up" the language.

15. Meanwhile the negotiations for the part-time agreement were ongoing. On January 28, 1987 the parties reached and signed a written settlement, recorded in the same Ministry of Labour format as is set out above. On behalf of the employer, the agreement was signed, inter alia, by J. B. Rohrer, the Director of Labour Relations. No further negotiations were contemplated nor did any take place.

16. By letter dated February 18, 1987, a representative of ONA notified the employer that

the nurses had ratified the part-time agreement as of February 11th. Once again the employer pro­ceeded to implement its terms. Barbara Holroyd, an ONA representative who had participated in the bargaining, testified that as far as she knew both the full-time and part-time agreements had been implemented. Ms. Holroyd testified that, as far as she was concerned, implementation implies employer ratification. In her view, there were binding agreements for both the full-time and part-time bargaining units.

17. Sometime in the week of February 23-27, Marsha Sosiak, another ONA representative, telephoned Rohrer, in Toronto, to clarify the status of the two agreements. According to Sosiak, Rohrer said that the full-time agreement had certainly been ratified and that he would check on the part-time agreement. Sosiak asked for a reply in writing. On Monday, March 2, 1987, Rohrer wrote a letter (received by ONA on March 6th) confirming that the employer had indeed ratified both agreements and, in the case of the part-time agreement was proceeding to process retroactive payments to the employees in accordance with its terms. Kevin Roxby testified that as far as the employer was concerned, the full-time agreement was ratified on September 23rd when he signed it. No other authority was required.

IV

18. It is important to recognize that we are dealing here with two full-time and three or four part-time nurses, occupying a single classification at one of 13 of the respondent's retirement lodges. There are 12 other lodges, 65 other nurses employed in the Retirement Division, and hun­dreds of other employees - many of whom are represented by the SEIU. In framing its defence, the employer urges the Board to take into account the larger business context.

19. Since 1986 the employer has been considering how best to exploit the market opportu­nity of an aging populace who are basically healthy, but may not want the responsibility of main­taining their own homes. These individuals need only incidental medical care and do not want to live in the regulated institutional setting of a nursing home. Indeed, because they do not require medical supervision or treatment, they might not even qualify for admission.

20. After some market research, a consultant's report, and discussions with senior and local managers, the Retirement Lodge Division decided to implement what was described as a "wellness concept". This involved, insofar as possible, creating a private residential setting, and de-empha­sizing those aspects of the environment which had an institutional or hospital connotation, or involved the symbols of sickness. Some of the changes were cosmetic, such as eliminating nurses' uniforms and changing job titles (for example, "dietary supervisor" to "food and beverage man­ager"). Others were more significant, like refusing new residents who required post-operative care and shifting existing residents whose health had deteriorated into local nursing homes. The general objective was to attract and cater to an aged but healthy population who did not need medical treatment and could afford to pay for quality residential services.

21. Initially, there was no intention of eliminating registered nurses as a class, even though there had been some resistance to change among some of the nurses employed in the division. As late as February 9, 1987 Roxby met with Rohrer and Katharine Kinniburgh, Director of Opera­tions, to explore alternative staffing patterns (including the use of RNs, RNAs and graduate nurs­es) as the "wellness concept" was implemented over the next couple of years. By definition, resi­dents who were "well" would not need professional care. The discussion touched both on the possibility of eventually eliminating registered nurses and RNAs altogether, and on lesser steps such as a realignment of hours and duties. After examining these alternatives, the potential impact of resident loss, the need to hire other qualified staff, and the relationship with the SEIU, it was decided to maintain the status quo. There was no economic reason to do otherwise.

22. Throughout the fall of 1986 and the early winter of 1987, Roxby was optimistic about the performance of his division. The lodge in London was losing money but, overall, the division was profitable. The fiscal year ending October 31, 1986 had been satisfactory, and occupancy for the division was relatively high. In December and January there was a dip in occupancy, but Roxby was not unduly worried because they were traditionally slow months. The wage bill was quite high but so was the occupancy level.

23. On February 20, 1987 Roxby met with the President of Central Park Lodges, the Senior Vice-President of Finance and the Comptroller. His counterpart in the Nursing Home Division was also present. The purpose of the meeting was to discuss the first quarter financial review which the Comptroller had just prepared and would soon be forwarding to the Trizec head office in Calgary.

24. From Roxby's perspective, those figures proved to be alarming. If the trend continued, the Retirement Lodge Division would see operating income for the fiscal year at $800,000 to one million dollars below budget. The respondent would not meet the income and profitability targets expected by its parent corporation.

25. The President told Roxby to "fix it". He did; and, with the benefit of hindsight and actual information (rather than projections) available by the time of these hearings, Roxby was able to testify that without taking the action he did, the division would have been one million dol­lars under budget by August 1987. Ironically, it appears that the financial crunch may have been caused to some degree by the implementation of the "wellness concept", and an outflow of resi­dents from the 13 retirement homes to local nursing homes without a corresponding influx of new healthy residents.

26. Because the shortfall was mounting, Roxby considered it imperative to move quickly. There was little latitude with respect to fixed costs (mortgage payments, utilities, etc.) or in the food budget. He did not think an increase in residents' fees was feasible because there had already been a 5.7% increase in January. A further fee increase might drive away more residents and exac­erbate the situation. Seventy per cent of the operating budget consisted of wages, salaries and benefits. Roxby concentrated in that area.

27. The nature, cost implications and implementation of the "cutbacks" were all explored with the assistance of a computer, so that projections and alternatives could be explored on a screen and produced as "spread sheets" for examination. Roxby concluded that it was necessary to undertake a staff re-organization across the whole retirement lodge network, and in the Nursing Home Division as well - although in the nursing homes there was less flexibility because of the reg­ulations regarding staffing levels. There was also retrenchment in the nursing home operation in the United States.

28. This economising eventually resulted in the layoff of all 70 nurses in the 13 retirement lodges, together with a realignment of functions and a reduction of staff or hours for many other employees in the division. In some cases this could result in an increase of the number of bargain­ing-unit members in a unionized facility because RNAs, aides, guest attendants or other staff who replaced RNs or RNAs would typically all be represented by the SEIU. In London, virtually all functions formerly performed by the registered nurses are now being performed by RNAs, except injections which are administered, as required, by the Residential Services Manager (who is an RN) or a visiting doctor or a V.O.N. visiting nurse. It should be noted, however, that this change is not inconsistent with the "wellness concept" and the direction in which the employer was already heading. Prior to the layoffs, residents who required anything other than a minimal degree of nurs­ing care either had to make their own arrangements with private nursing services or move to a nursing home.

29. On Monday, February 23rd, Roxby went over his plan with Kinniburgh and David Mayh, the Senior Director of Human Resources. Rohrer had not attended the meeting of Febru­ary 20th and was not available to attend the meeting of February 23rd. On February 25th the man­agers of the local lodges were assembled in Toronto to discuss the proposed changes. They were neither comfortable with, nor enthusiastic about the proposals, but could suggest no better alterna­tives. Roxby testified that if the local managers had predicted a serious potential impact on the occupancy rates, he would have scrapped the plan and explored other possibilities for cutting costs. But they did not. There is no doubt that the registered nurses were skilled and valued employees but they were performing functions which did not have to be done by an RN, and their elimination was one way to readily reduce the wage bill in the 13 lodges.

30. According to Roxby, no one thought about the two full-time and four part-time nurses in the London facility until Wednesday, February 25th, when the London manager drew their pres­ence to his attention. The matter arose in the context of a discussion about the implementation of Roxby's plan in light of the existing SEIU agreements in the division. Roxby testified that he really hadn't thought about the two ONA units before, and certainly had not tailored his strategy with them in mind. He did not lay off 70 employees, and juggle the schedule of dozens of other employ­ees, to penalize or undermine the rights of two full-time and 3-4 part-time nurses in London.

31. Rohrer, the Director of Labour Relations, did not learn of the financial difficulties or the action plan until February 26th. The unions were advised and meetings convened on Friday, February 27th. Both ONA and the nurses it represents were notified of the layoff to take effect four weeks later.

32. With this outline of the facts, we turn to the provisions of the Labour Relations Act upon which the complainant relies.

V

Sections 3, 64, 66, 70, 72, 75 and 76 of the Act

33. Sections 64, 66 and 70 appear in that portion of the Act which the Legislature has enti­tled "unfair labour practices". Their purpose is fairly obvious. Freedom of association and collec­tive bargaining are fundamental concepts in our system of labour relations. Those rights would be rather hollow without effective remedies for their infringement. That is the purpose of the unfair labour practice sections of the Act. The "lockout" restrictions (sections 72, 75 and 76) play a simi­lar role, but focus more narrowly on a particular kind of employer conduct: the suspension or elim­ination of work opportunities, with a view to forcing employees to give up statutory rights or agree to particular terms and conditions of employment. (See Harry Woods Transport Ltd., [19761 OLRB Rep. July 341 and Rondar Services Ltd., [1977] OLRB Rep. Oct. 655.)

34. In applying sections 64, 66 and 70 to a termination of employees, the Board must deter­mine whether the reasons given for that termination are the only reasons, and whether they are tainted, in any way, by either anti-union considerations, or a desire to undermine or deprive employees of their statutory rights. The improper motive need not be the only or even the domt­nant one. It is sufficient if it was in the mind of the employer and one of the grounds for the action taken (see R. v. Bushnell Communications Ltd. et al (1973), 1973 CanLII 475 (ON HCJ), 1 OR. (2d) 442 (H.C.J.), affirmed at 4 OR. (2d) 288 (H.C.A.); and Westinghouse Canada Ltd., [1980] OLRB Rep. April 577, affd by the Ontario Divisional Court at 80 CLLC ¶14,062). The appearance of a legitimate economic or other reason for the action taken will not necessarily exonerate an employer if it can be established that there also existed an illegitimate reason. Accordingly, it is imperative to carefully scrutinize all of the circumstances of the case, in order to ascertain not only what the employer did and its impact upon employees, but also why the employer chose that action at that time. In the case of an alleged lockout, the question is whether the denial of work opportunities is being used illegiti­mately as an instrument to exact concessions from the employees.

35. In the instant case there is no doubt about the impact of the employer's decision to reor­ganize its business: two full-time and 3-4 part-time nurses' positions were eliminated at the London lodge. That, in turn, amounts to an elimination of the two ONA bargaining units and the replace­ment of registered nurses by RNAs, other employees represented by the SEIU, or, in the case of certain functions, members of management, visiting physicians, or private nurses hired by the resi­dents, privately, on an as-needed basis. From the point of view of the nurses in London, the results were traumatic. For the first time in years, they faced the spectre of unemployment.

36. However, we do not think that the situation at the London lodge can be viewed in isola­tion. The staff reduction in London was but a small part of a much broader process of reorganiza­tion, extending across the whole Nursing Lodge Division, and, to a lesser extent, into the Nursing Home Division. That reorganization was prompted by a desire to cut costs as quickly and effi­ciently as possible, and the documentary evidence filed with the Board supports the employer's view of the need to take immediate affirmative action. There is no evidence that such action was aimed at undermining ONA's bargaining rights in London; and it is highly improbable that Roxby would eliminate 70 nursing positions in 13 lodges, and alter the duties or hours of work of dozens and dozens of other employees, in order to camouflage an anti-union attack on 5 or 6 nurses in the London lodge. Indeed, Roxby testified that in exploring alternative cost-cutting measures, he never even thought about the 5-6 organized nurses in London. Their presence only came to his attention on February 25th, at the meeting with the local lodge managers. We accept his evidence on this point.

37. Likewise the evidence does not establish that the termination of the 5-6 London nurses was a device to induce them to give up rights or agree to particular terms of employment; nor was that decision undertaken in response to a bargaining position taken by those nurses. The reorgani­zation plan was an irrevocable decision undertaken to correct perceived imbalances in the system as a whole. Its impact on the 5-6 ONA members in London was merely incidental; and, in their case, had the employer wanted to precipitate a lockout, it could easily have done so, legally, by merely refusing to agree to the union's proposals and requesting a "No Board" report. Since the London lodge was losing money in any event, that would have been the more likely response if the employer's concerns were as narrowly focused as the union now suggests. Once again, it seems highly unlikely that the employer would make significant changes in the work distribution and employee complement in 13 lodges and 3 nursing homes in order to exact concessions from a small group of full-time and part-time nurses in London. And, in fact, no such concessions were ever sought.

38. We do not think Roxby's decision was motivated in whole or in part by anti-union con­siderations, nor do we think that the elements of a lockout have been made out.

VI

Section 15 (Duty to Bargain in Good Faith), Section 79 (The Freeze)

39. Before considering the application of sections 15 and 79 to the facts at hand, it may be useful to briefly examine their content.

40. Section 15 obliges the employer to bargain in good faith and make every reasonable effort to make a collective agreement. As part of that bargaining obligation, the employer is required to provide information necessary for the union to make informed decisions on outstand­ing bargaining issues. In appropriate circumstances, an employer's obligation will extend to the unsolicited disclosure of certain kinds of business information critical to both the union and the job interests of the employees it represents. In Westinghouse Canada Ltd., [1980] OLRB Rep. April 577, application for judicial review dismissed [1980] CLLC ¶14,062 (Div. Ct.), the Board put it this way:

Similarly can there be any doubt that an employer is under a section 14 [now s. 15] obligation to reveal to the union on his own initiative those decisions already made which may have a major impact on the bargaining unit. Without this information a trade union is effectively put in the dark. The union cannot realistically assess its priorities or formulate a meaningful bargaining response to matters of fundamental importance to the employees it represents. Failure to inform in these circumstances may properly be characterized as an attempt to secure the agreement of a trade union for a fixed term on the basis of a misrepresentation in respect of matters which could fundamentally alter the content of the bargain.

41. On the other hand, the Board has been hesitant to extend that obligation to "plans" or other "possibilities" which have not crystallized into concrete decisions. In Consolidated Bathurst Packaging Ltd., [1983] OLRB Rep. Sept. 1411 the Board reasoned:

On the other hand, plans and decisions to close a plant can effectively extinguish a bargaining unit and the relevance of the usual terms of a collective agreement. In this context, where a decision to close is announced "on the heels" of the signing of a collective agreement, the timing of such a significant event may raise a rebuttable presumption that the decision-making was suffi­ciently ripe during bargaining to have required disclosure or that it was intentionally delayed until the completion of bargaining. It can be persuasively argued that the more fundamental the decision on the workplace~ the less likely this Board should be willing to accept fine distinctions in timing between "proposals" and "decisions" at face value and particularly when strong confi­rmatory evidence that the decision-making was not manipulated is lacking. This approach is sen­sitive to the positive incentive not to disclose now built into our system, and the potential for manipulation. Indeed, a strong argument can be made that the de facto decision doctrine should be expanded to include "highly probable decisions" or "effective recommendations" when so fundamental an issue as a plant closing is at stake. Having regard to the facts in each case, the failure to disclose such matters may also be tantamount to a misrepresentation. We might also point out that there are decisions taken because of costs which realty ought not to be made until the underlying problem is discussed with the union to see if adjustment can be made and the decision avoided. However, for the reasons discussed above, we are not willing to adopt the Ozark Trailers test of "thinking seriously" for unsolicited disclosures as urged upon us by the complainant. The failure to reveal such "possibilities" as a general matter is not tantamount to a misrepresentation and therefore lacks the bad faith rationale developed in Westinghouse justify­ing unsolicited disclosure. The purpose of such information would be investigative and to facili­tate the rational discussion purpose of the bargaining duty. Accordingly, the purpose of the information and the difficulties detailed above with unsolicited disclosure militate against any substantial expansion of the unsolicited disclosure obligation as elaborated to date. The interests of employees are real but the Board is not ignoring these interests by requiring a questioning approach to disclosure as a general matter. The position urged upon us by the complainant has too much potential for "greater heat than light" at the bargaining table. There is already enough uncertainty over precisely how significant and what nature a decision must be to trigger the unsolicited disclosure duty. Unsolicited disclosure must be understood to be exceptional and

centred essentially on a bad faith rationale.

It remains for the Board to determine in each case whether a particular business initiative is of such character as would require disclosure under the Westinghouse test and whether it has progressed beyond the point of plan or contingency to the stage of decision and implementation. If such deci­sion has effectively been made, and it is probable that it will be implemented during the currency of a proposed collective agreement, then the duty to bargain in good faith requires its disclosure.

42. Section 79, the so-called "statutory freeze" preserves the status quo of the employment relationship while the process of bargaining is ongoing, until either the right to strike accrues, or the parties conclude a collective agreement. The employer is obliged to maintain "business as usual"; that is, to carry on business in accordance with its own past practice and its employees' rea­sonable expectations. Any deviation from that pattern requires the consent of the employees' bar­gaining agent, or must be postponed until the freeze is dissolved either by the accrual of the right to strike/lockout, or the signing of a collective agreement (in which case that document governs the parties' rights). For our purposes, it is important to note that the section 79 "freeze" and the bar­gaining duty are coterminous: both are triggered by the notice to bargain, and both terminate upon the conclusion of a collective agreement.

43. We have no difficulty in concluding that the staff reorganization undertaken by the employer falls within the parameters of Westinghouse and Consolidated Bathurst. Roxby's decision involved a major staff reorganization in the Retirement Lodge Division, effectively eliminated the ONA bargaining units, and entirely negated two and a half years of collective bargaining. Further­more, it is conceded by the employer that if the "freeze" was still in effect, the unanticipated lay­offs would constitute a breach (see Simpsons Ltd., [1985] OLRB Rep. March 469 and April 594). The question, though, is when the decision was made, and when (if at all) the freeze and bargain­ing duty were terminated by the conclusion of a collective agreement.

44. The only evidence before the Board concerning the timing of the employer's decision comes from Kevin Roxby, the effective decision-maker. Roxby testified that he had given consid­eration to the possibility of staff changes in conjunction with the eventual full implementation of the "wellness concept", but no decision had been taken in that regard because of resistance by his own subordinates and the perceived difficulties involved in changing the staff mix. As late as Feb­ruary 10th there was no decision or plan to eliminate nurses or otherwise reorganize staff in the retirement division. The catalyst for change was the quarterly financial review discussed for the first time on February 20, 1987, and the company President's injunction to take immediate steps to cut costs and bring the division budget into line with the financial targets set by Trizec, the parent company.

45. In this regard, we are satisfied that Roxby was a candid and credible witness. His ver­sion of events is also supported by the financial documents filed with the Board. There is no evi­dence to contradict or qualify Roxby's testimony, and it is to his credit that he was forthcoming about the discussions with his staff early in February. While one cannot ignore the fact that the decision was taken around the time the negotiations with ONA were coming to a conclusion, nei­ther can one ignore the fact that (in our view) the reorganization decision was entirely unrelated to that bargaining process. It was a response to a systemic problem (real or perceived), not a reaction to the collective bargaining situation of the S or 6 nurses in London. Unlike the situation in Westinghouse or Consolidated Bathurst, we cannot conclude that the employer was intentionally "keeping the union in the dark" or withholding information, known to be relevant, until the collec­tive agreement was executed. We accept Roxby's submission that he did not even consider the situ­ation in London until February 25th when the local manager drew his attention to the two ONA units in the London facility. Having regard to the totality of the evidence, we find that the decision to reorganize the staff complement and working hours within the Retirement Lodge Division was taken on February 23, 1987 and finalized on February 25, 1987, and that there was no consider­ation given to the situation of the ONA units in London.

46. Were there collective agreements in place when this decision was made, or were the bargaining duty and the freeze still operative? That determination requires a brief consideration of the status of a memorandum of settlement and the requirement of ratification. In Graphic Centre, [1976] OLRB Rep. May 221, the Board discussed those matters as follows:

The parties to collective bargaining do not normally execute a formal document until some time after the bargaining process has been completed. The process is one wherein the agreement of the parties is reduced to a memorandum of settlement subject to ratification by the respective principals which is then followed by the drafting and execution of the formal document. It would not be sound industrial relations policy to require as a condition of entering into a collective agreement the execution of the formal document thereby precipitating an often prolonged extension of the open period. The parties, however, must know, with a high degree of certainty and predictability, precisely when they have entered into a collective agreement so as they may properly assume their respective duties and responsibilities and conduct themselves in a manner consistent with the existence of a subsisting collective agreement. It should be added that cer­tainty in this regard minimizes the amount of "litigation" which might otherwise come before the Board.

The Board has long held that a collective agreement need not be a single formally executed doc­ument but may by proper reference incorporate any number of other documents.... The Board has consistently held, however, that implicit in the statutory definition of "an agreement in writ­ing" is the requirement for Signatures which evidence the agreement of the parties and the con­clusion of the bargaining process.... The Board in accord with the statutory definition requires signed evidence of the agreement of the parties and in the absence of such evidence cannot find that the bargaining process has ended and that a collective agreement exists. This is not to say, however, that the signatures must appear on the formal document but rather that there must be a signed document which sets out the agreement of the parties and which, it stipulated, has been ratified thereby completing the bargaining process....

In a number of cases the Board has been faced with situations where the parties have signed a memorandum of settlement subsequent to which confusion has arisen as to whether ratification has occurred. In certain of these situations the Board has responded to the extrinsic evidence and drawn the inference that ratification has occurred without there being signed evidence of this fact.... In other similar situations however the Board has stated that the parties must signify their ratification of the memorandum in writing ... in order for there to be a collective agree­ment within the meaning of the Act. Although each case must be considered within its own cir­cumstances a signed memorandum of settlement coupled with compelling evidence of ratifica­tion must be considered by the Board as evidence of a collective agreement within the meaning of the Act. Whereas a Memorandum of Understanding subject to ratification is not a collective agreement ... evidence which clearly establishes that ratification has occurred elevates the mem­orandum to the status of a collective agreement within the meaning of the Act. Ratification satisfies the condition precedent thereby giving rise to what is then an unconditional agreement in writing (i.e. signed by the parties) on all outstanding matters. Although signed evidence of ratification is perhaps the most satisfactory evidence in this regard, the Board cannot ignore other evidence which supports the singular inference that ratification has occurred. It should be added that if the Board were to require signed evidence of ratification in all cases it would be denying the parties use of the equitable doctrine of estoppel in those situations where there is evidence of ratification, other than signed notification which has been relied upon by one or the other of the parties.

Ratification, then, is essentially a question of fact determined on the basis of the evidence before the Board in particular cases.

47. In the private sector though, ratification is not really a "two-way street" - despite the terms of the Ministry of Labour document. Where a private sector employer sends a senior official to the bargaining table, the union is entitled to assume that such official has the authority to bar­gain and conclude a memorandum of agreement on behalf of the employer, and further that only the most extraordinary circumstances would warrant the employer's representative returning to the bargaining table with the message that the agreement had been repudiated by "his principals". In the private sector, unions expect, and are entitled to expect, that when a senior company official endorses a settlement, that agreement will be honoured by the employer and implemented in accordance with its terms as soon as the employees have signified their acceptance. In practice, the relationship between the employees and their statutory bargaining agent is quite different from the relationship between the employer and those of its officials designated to conduct bargaining on its behalf. (The situation might well be different where an employer retains a professional negotiator, or in the case of school boards, municipalities, or other entities where significant decisions may have to be ratified by some elected governing body.)

48. That difference was highlighted in this case by the evidence of Kevin Roxby who indi­cated that, as far as he was concerned, the proposed agreement was accepted by the company when he signed it. No further "ratification" was really required. Indeed, apart from present diffi­culties, we think that the union would have been understandably concerned if, having negotiated and signed a memorandum of settlement, the employer had subsequently rejected it. Certainly, in the present case, no such rejection was contemplated or in fact occurred. The union anticipated that once its members ratified the bargain, the employer would proceed to implement it - as the employer in fact did.

49. In the instant case the full-time memorandum of settlement was signed by both parties on September 23, 1986. The settlement was the culmination of months and months of negotiations. Both parties considered it to be a final and complete resolution of all matters in dispute between them. No further negotiations were contemplated, and the settlement was ratified by the trade union the following day. Ratification was confirmed by letter dated October 7, 1987. Roxby tes­tified that the agreement was ratified, from the company point of view, when he signed it. The terms of the agreement were implemented. Subsequent correspondence was concerned solely with typographical or other minor errors in the text. In a telephone conversation some time in the week of February 23rd, Rohrer confirmed that the agreement had indeed been ratified some time before.

50. We are satisfied that the full-time agreement was in place at the time of Roxby's deci­sion to reorganize the staff complement in the Retirement Division, and that, accordingly, there was no breach of either section 15 or section 79 of the Labour Relations Act. When the decision was taken, the full-time agreement was in place, and both the "freeze" and the "bargaining duty" had expired.

51. The situation concerning the part-time bargaining unit is more problematic - probably because no one was paying much attention to the position of three or four part-time nurses at the London lodge, and, as we have already mentioned, ratification of their collective agreement was, from the employer's point of view, a "pro forma" exercise. Their memorandum of settlement was executed on January 28th and ratified by the nurses on February 11, 1987. The employer was advised of that ratification about a week later by letter dated February 18, 1987. In the week of February 23rd, Ms. Sosiak inquired about the status of the part-time agreement and was advised, in writing, by letter dated March 2nd, that it too had been ratified. The employer implemented the agreement as it had undertaken to do, paying such retroactive pay or other benefits as might be required - all without protest from ONA. In fact, no layoff of part-time employees actually occurred until the end of March, well after, on anyone's criteria, the employer had accepted the settlement that had already been signed and ratified by ONA.

52. The critical question is whether Roxby's decision was taken before or after the conclu­sion of a collective agreement for the part-time nurses' unit in London. Having carefully consid­ered the evidence, we are satisfied that the collective-bargaining process was finalized, and a collec­tive agreement had been concluded prior to the decision to reorganize the staffing requirements in the Retirement Lodge Division. The employer's letter of March 2nd is dated after the announce­ment of the layoffs but that date is not definitive because, as the union's own letters indicate, ratifi­cation may well occur prior to formal notification that it has taken place. While the union (and the Board) may legitimately question such documentation, which might be no more than an ex post facto rationalization, here we are satisfied that the employer had indeed accepted and bound itself to observe the terms of the part-time nurses' agreement prior to the decision to reconsider the role of registered nurses in the employer's organization. We find that the critical decisions were not taken during the currency of either the statutory "freeze" or the statutory bargaining duty. We find therefore that there has been no breach of either section 15 or 79 of the Labour Relations Act.

VII

53. The union's final argument concerns the potential application of section 10 of the Hospital Labour Disputes Arbitration Act which reads, in part, as follows:

1O.-(1) Where, during the bargaining under this Act or during the proceedings before the board of arbitration, the parties agree on all the matters to be included in a collective agreement, they shall put them in writing and shall execute the document, and thereupon it constitutes a collec­tive agreement under the Labour Relations Act.

The union argues that the retirement lodge in London is a "hospital" within the meaning of the HLDA and that therefore section 10 applies to the bargaining process. Section 10, the union main­tains, does not contemplate an agreement "subject to ratification" and that therefore, notwith­standing the purported ratification by both parties, there has never been a collective agreement between them. Counsel submits that the formalities necessary to constitute a collective agreement have not been undertaken and that therefore there is none - despite, we might note, the under­standing of both the company and union officials who gave evidence.

54. Assuming, without finding, that HLDA applies to the respondent's London operation, we are not inclined to read section 10 in the linear way urged upon us by the union. Not only is the union's interpretation at variance with the almost universal practice of negotiating parties (includ­ing those here) but we do not think that it is compelled by the language itself. The section involves three elements: the agreement of the parties on all matters in dispute, a written document setting out the agreed terms, and "execution", that is, the signatures of the bargainers confirming that to which they have agreed. All of those elements are satisfied here, and to the extent that they have made their agreement contingent upon ratification, that condition has also been fulfilled. We are satisfied therefore that the parties had a collective agreement upon ratification as they had antici­pated and that no further steps were necessary. Accordingly, even if section 10 of HLDA applies, there has been no breach of the freeze or the bargaining duty.

VIII

55. For the foregoing reasons, this complaint is dismissed.

DECISION OF BOARD MEMBER JANIS SARRA; May 19, 1988

1. I dissent from the majority on one key finding. I believe the employer violated the sec­tion 15 requirement to bargain in good faith by failing to inform the union during negotiations of a decision to lay off all members of both bargaining units. The crux of the case is stated by the majority at paragraph 43 when it writes: "Roxby's decision involved a major staff reorganization in the Retirement Lodge Division, effectively eliminated the ONA bargaining units, and entirely negated two and a half years of collective bargaining." In light of the devastating impact this deci­sion had upon the bargaining units, it is essential for the Board to examine the employer's ratio­nale for the timing of this decision in the context of the bargaining history.

Duty to Inform

2. Part of the bargaining obligation under section 15 is the duty of the employer to provide the information necessary for the union to make informed decisions in bargaining, particularly where the information has a major impact on the bargaining unit. To cite the Board in Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577:

Similarly can there be any doubt that an employer is under a section 14 Inow section 15) obliga­tion to reveal to the union on his own initiative those decisions already made which may have a major impact on the bargaining unit. Without this information a trade union is effectively put in the dark. The union cannot realistically assess its priorities or formulate a meaningful bargaining response to matters of fundamental importance to the employees it represents. Failure to inform in these circumstances may properly be characterized as an attempt to secure the agreement of a trade union for a fixed term on the basis of a misrepresentation in respect of matters which could fundamentally alter the content of bargaining.

3. The policy considerations outlined in Westinghouse are now well established by this Board and are relevant to this case. If the employer made the decision to lay off prior to the con­clusion of collective bargaining, it had an obligation to reveal to the union this decision so that the union could make informed decisions about bargaining priorities. This is particularly crucial in a first contract situation where the union has to make bargaining decisions to help establish basic standards of protection for its membership. I accept the majority's characterization of Central Park Lodge as a market-driven operation in both its nursing home and retirement lodge divisions. Given the growing demand for health and support services for the elderly and the lack of government reg­ulation in parts of the sector, Central Park Lodge's decision to move to the "wellness concept" was an appealing option available to the company to increase profits. However, the study and planning that went into that decision is telling in assessing when and why the decision to lay off all the nurses was made.

4. All the evidence in this case confirms that the employer thought its retirement lodge division might be less profitable in 1987; that was the rationale for its actions. Roxby, vice-presi­dent of the retirement lodge division, testified that the company only just discovered a profitability problem in February 1987 and that it took swift, drastic measures to eliminate the budget variance by laying off the nurses. His oral evidence was inconsistent with records tabled by the respondent which showed there were not substantial changes in the month-to-month records. These records also illustrated that there are rigorous reporting and accountability procedures, so the respondent was very much aware of the monthly financial situation. The retirement lodge division experienced a financially healthy period just preceding the lay-offs with profits over $3 million in 1986 and net revenue over expenses of $8 million plus. The budget variance cited by the respondent was a vari­ance from the budget projections, which by the respondent's evidence are based on fairly ambi­tious profit targets. These are a far cry from any operating losses, and the respondent in all its evi­dence was very careful to characterize this as only a budget variance, not an operating loss. If the respondent had faced financial difficulties to the extent that profit was eliminated, then it might be perceived as a financial crisis, but the evidence does not show any such crisis or any need for imme­diate and swift action. It is only Roxby's one statement in all the evidence that he needed to take swift action which appears to have tipped the scales in the majority's decision. I find the better evi­dence is the documented records of the respondent.

Timing of the Decision

5. The lay-off of all the members of both units, coming one week after ratification of the outstanding collective agreement, necessitates that the Board carefully scrutinize the employer's action. There is no dispute that bargaining for this first contract had been difficult and protracted with 28 bargaining sessions. Wage parity and lay-off protections were two of the most discussed items during the negotiations. The panel heard a great deal of evidence by both parties on lay-off discussions. What appears to be common ground in the evidence is the employer's testimony that he told the nurses that in light of Central Park Lodge having no history of lay-offs, the ONA was too persistent in its push for lay-off protection. The negotiator for the union, Eleanor Holroyd, tes­tified that based upon these discussions with the employer, she finally made the decision to with­draw bargaining demands for lay-off protection. It is either a matter of great coincidence or careful timing that the employer's "swift" decision to lay off came immediately on the heels of settling the contract. In addition, it is unlikely that the employer, when making the decision, did not think of the ONA bargaining unit in London after 28 negotiating sessions, many of which had discussed lay­off protections. The majority seems persuaded that the employer did not think of the ONA and that this somehow relieves them of their bargaining obligations.

6. In Consolidated Bathurst Packaging Ltd., [1983] OLRB Rep. Sept. 1411, the Board clar­ified how such cases can be approached:

On the other hand, plans and decisions to close a plant can effectively extinguish a bargaining unit and the relevance of the usual terms of a collective agreement. In this context, where a deci­sion to close is announced "on the heels" of the signing of a collective agreement, the timing of such a significant event may raise a rebuttable presumption that the decision making was suffi­ciently ripe during the bargaining to have required disclosure or that it was intentionally delayed until the completion of bargaining.

[emphasis added]

As in Consolidated Bathurst, the respondent's decision, which had a devastating impact on the bar­gaining unit, is announced on the heels of concluding a collective agreement. This raises a rebutta­ble presumption that the decision was "sufficiently ripe during bargaining" to require disclosure. In this case the balance of evidence does not rebut that presumption. A number of factors in combi­nation, including the fact that the union had identified lay-off protections as a bargaining priority, the lack of written documentation to substantiate the employer's "need for drastic action", docu­mentation that would support the view that the respondent was fully informed of its financial posi­tion throughout the relevant time, the absence of any study or information indicating alternatives to the lay-off were considered, the lack of any financial crisis and the timing of the lay-offs, all lead me to conclude that the decision-making took place before, not after the completion of bargaining. Thus, I can only conclude that the employer kept the union "in the dark" and thus violated the section 15 duty to inform.

7. Finally, I would note that I do concur with the majority finding that the collective agree­ments were ratified and thus there was no violation of the freeze provisions. I also concur that there was no necessity for purposes of this decision to decide whether or not the retirement lodge falls under the HLDA and given the extensive evidence on nursing, medication and health care practices of this home, it is better left to a case where it needs to be answered.