[1988] OLRB Rep. May 516
0489-87-U Rodney Pickles, Raymond Miller, Albert Johnson, Andre Orosz, Giussepe Grasso, Complainants v. United Brotherhood of Carpenters and Joiners of America, Local 785, Respondent
BEFORE: Nimal V. Dissanayake, Vice-Chair.
APPEARANCES: T. J. Billo, Rod Pickles, Ray Miller and Bert Johnson for the complainants; J. J. Nyman, K. Ball and S. Koehler for the respondent.
DECISION OF THE BOARD; May 13, 1988
This is a complaint under section 68 of the Labour Relations Act. The complaint relates to a settlement reached between the respondent, Galtcam Construction Inc. (hereinafter "Galtcam") and Thomas Construction (Galt) Limited (hereinafter "Thomas") in resolution of a number of proceedings filed before the Ontario Labour Relations Board. These minutes of settlement dated August 26, 1986, provided inter alia, that Galtcam will pay a total amount of $21,069.06 to the union. The complainants contend that under the said minutes of settlement, the amount of $8,072.49 was recovered and allocated as remittances on behalf of the five complainants' health and welfare and pension benefits under the collective agreement, and that having recovered these monies the union appropriated the same to the general fund of the local union. It is the complainants' position that the failure to credit this amount in favour of their benefit accounts constituted conduct that is arbitrary, discriminatory and in bad faith in contravention of section 68.
Alternatively, the complainants submit that, if no allocation of benefits was provided for in the minutes of settlement, the union acted contrary to section 68 by failing to do so. They claim that the union's conduct was motivated by a desire to punish the complainants for accepting employment with Galtcam, which was a non-union company.
On behalf of the complainants, Mr. Rodney Pickles (who had filed the complaint on behalf of all the complainants) and Mr. William Meyer, Junior (President of Galtcam) testified. Mr. Karl Ball (Business Representative of the union) and Mr. Michael Church (a practicing labour lawyer) testified. Based on all of the evidence before me I make the following findings of fact.
The complainants were members of the union at all relevant times. The union had a collective bargaining relationship with Thomas from the mid-1960's and Thomas was bound by the Carpenters Provincial Collective agreement. Sometime in December, 1985 Mr. Ball became suspicious that Galtcam may be a related company to Thomas. Soon after, Mr. Pickles disclosed to Ball that Thomas was winding down its activities in February, 1986, and that a new company called Galtcam was starting up to operate on a non-union basis. Ball told Pickles that in his view Galtcam would be bound by the union's collective agreement. Ball made inquiries, and monitored the activities of Galtcam through January - February, 1986. He also instructed the union's lawyers to conduct corporate searches on Galtcam and on Thomas in order to ascertain any link between the two.
Sometime in January, 1986 Pickles inquired from Ball whether he had any positions as superintendent available. He stated that because of a bad knee he was unable to work with tools. Ball replied that he did not have such a position at that time. In February, Pickles informed Ball that since the union could not offer him a superintendent position, he had accepted employment as general superintendent with Galtcam, which he assured was a non-union company. At the time he did not indicate his terms of employment with Galtcam.
In February, 1986, Ball asked Pickles to sign a certificate of membership in order to apply for certification for Galtcam. Pickles flatly refused. Through those events both Pickles and Miller were elected officers of the union executive, Pickles as Conductor and Miller as Trustee. In March, Ball found out that all five complainants were employed with Galtcam.
In April the union filed section 1(4) and section 63 applications with the Board against Thomas and Galtcam. In addition a grievance was referred to the Board under section 124 of the Act. These proceedings were scheduled for hearing on May 29, 1986. In preparation for the hearing, on May 26th Ball met with four of the complainants, including Pickles and Miller. Ball concluded from their attitude that they were very content with their employment at Galtcam and wished that the union would refrain from taking any action against Galtcam. One of the complainants (it was not Pickles or Miller, but the evidence is not clear who disclosed) informed Ball that they had entered into individual employment contracts with Galtcam. Again the evidence is not clear if all five signed these contracts. There is evidence that at least Pickles and Miller did, but Ball testified that he thought all five did.
A copy of the contract dated March 5, 1986 signed by Pickles was filed in evidence. Inter alia, this contract provided for the following:
It provided for the same wage rate of $17.05 per hour and 10 per cent vacation pay as provided by the Carpenters Provincial Collective Agreement. The vacation pay was to be paid directly to the employee. It expressly stipulated that benefits as per the collective agreement will not be paid.
Pickles was to be responsible for "all costs of fees including dues and benefits" if he wished to be a member of the union.
Pickles agreed "not to participate in anyway with the involvement of an organized labour faction to involve the employer directly".
If the employer was certified the employer will cease operations with no financial obligations to Pickles other than wages and vacation pay due.
Pickles' position was classified as a working general superintendent.
When Ball learned that Pickles and Miller, who at the time were members of the union executive, had signed these contracts he could not believe it and thought it was outrageous. Pickles in his testimony admitted that his signing of the contract in question was contrary to the union's interests and was also in violation of the union's constitution and the oaths he had taken as a union member and as a union officer. Pickles told Ball that he was not concerned about giving up his benefits because he had banked a substantial number of hours of benefits from which he could draw.
Under the union's constitution, Pickles and Miller could have been charged and the penalty could have included expulsion from union membership. Rather than take this drastic step, Ball gave them a choice of either facing charges or resigning from their union offices. They elected to resign, although in their letter of resignation they made it clear that they did not agree with the result. Since Pickles and Miller resigned, no charges were laid against them.
On May 29, 1986 the Ontario Labour Relations Board hearing commenced. Because the complainants showed some reluctance in assisting the union, three of them were issued summonses. They were present at the hearing but after hearing one witness the Board adjourned and recommended that the parties meet with a Labour Relations Officer. However, the Labour Relations Officer's attempts to settle the dispute was not successful. In the meantime, the union filed an application for certification, an unfair labour practice complaint and an application for consent to prosecute. In June, 1986 two further grievances were referred to the Board under section 124 with respect to two other projects the union claimed Galtcam was involved in. The Board scheduled all of the proceedings between the parties to be heard on August 26th and 27th, 1986. Thus by that time there were three section 124 grievances, applications under sections 1(4) and 63, an application for certification, an unfair labour practice complaint and an application for consent to prosecute pending before the Ontario Labour Relations Board.
At the time, Ball estimated that the total damages owing from Galtcam was in the neighborhood of $94,000. The prayer for relief in the section 124 referrals includes:
(1) "an order directing the payment of wages and benefits in accordance with the appropriate wage rates and benefits specified in the collective agreement to and on behalf of any member of Local 785 in your employ" and
(2) "an order directing the payment of damages to Local 785 on behalf of its out of work members".
On August 20, 1986, six days before the scheduled Ontario Labour Relations Board hearing, union counsel, Mr. Michael Church, met with the five complainants in preparation for the hearing. They attended the meeting arranged by Ball, but co-operated only reluctantly. Mr. Church testified that he had to "drag the information out". Church felt that the complainants were satisfied with their employment with Galtcam and were not anxious to see the union pursue the legal action. From their attitude Mr. Church concluded that they would at best be reluctant witnesses.
On August 22nd, settlement discussions commenced between Mr. Church (union counsel) and Mr. Brian Mulroney (counsel for Galtcam). Mr. Mulroney felt that Mr. Ball's claim for $94,000 in damages was outrageous. However, both counsel realized that if the matters proceeded to a hearing it would be very long and expensive and agreed that a settlement is preferable. There were two basic issues in dispute, one relating to bargaining rights of the union and the other the issue of damages.
The company was refusing to agree to a section 1(4) declaration because of its fear that unions representing other trades including the labourers may take advantage of such a declaration. The union and company counsel thus agreed to resolve the bargaining rights issue by entering into a voluntary recognition agreement retroactive to February, 1985 when Galtcam became active.
The damages issue was more difficult. The parties started with the company admitting no liability and the union claiming $94,000. Finally, Mr. Mulroney suggested a payment of $10,000. However, Mr. Ball would not settle for less than $94,000. Mr. Church testified that Mr. Ball was being very difficult. While he was urging Mr. Mulroney to increase his offer, Mr. Church was also attempting to get Mr. Ball to lower his expectations. Finally, Ball came down to $75,000, from there to $60,000 and finally agreed that he will settle for $25,000. Mr. Church testified that Mr. Mulroney was also interested in settling the matters and that he was looking for a means to justify a payment from Galtcam which would be acceptable to Mr. Ball. Since the company had already offered to pay $10,000 in damages, Mr. Church pointed out to Mr. Mulroney that if Galtcam had paid benefits to the employees it would have cost approximately $15,000 and that Mulroney should use that fact to convince his client that an additional payment of $15,000 (which will bring the total to $25,000) is appropriate. Mulroney got back to Church and informed him that his client's liability for benefits would have been only $11,069.06 and not $15,000. Mr. Church managed with difficulty to get Mr. Ball to agree to settle for $21,069.06 by advising that it is not worth embarking on a lengthy hearing for the sake of a few thousand dollars.
Once the amount was agreed upon in principle, Mulroney inquired from Church if the union would agree to have the company pay the $11,069.06 in benefits directly to the employees. Mr. Church testified that Mr. Ball not only refused, but that Mr. Mulroney's request almost upset the settlement. When the union refused, the company counsel inquired if the union would guarantee that at least some money will be directly credited to the employees' benefit accounts. Ball again refused. Mr. Church testified that he told Mr. Mulroney very specifically that the union wants the total amount of $21,069.06 in damages and that Ball is not willing to make any allocations out of that amount. Mr. Church further told Mr. Mulroney that if the company so wished, it can pay the union the sum agreed upon and on top of that pay an additional amount on behalf of employees' benefits.
On the eve of the hearing date, agreement in principle was reached. Mr. Church prepared the minutes of settlement. Mulroney had indicated that the company could not pay the whole amount immediately. Thus Mr. Church decided to defer payment of $10,000 to be payable in four instalments of $2,500 each. The balance of $11,069.06 was required to be paid immediately. $11,069.06 was the amount company counsel had admitted as the amount owed by Galtcam representing unpaid benefits. The final minutes of settlement were executed at the Labour Relations Board on August 26, 1986, just prior to the scheduled hearing. The evidence is that Galtcam has complied with the terms of the minutes of settlement and that the total amount recovered by the union was credited to its general account.
The union readily concedes that during the settlement discussions the complainants were never consulted. The union's position is that it was the union's grievance, it had its carriage and it was free to settle it as it wished particularly since none of the complainants had requested the filing of grievances or shown any interest in benefit payments until after the settlement was executed.
After the execution of the minutes of settlement on August 26, 1986, Pickles requested and received from Ball a copy of the minutes. There was no discussion about its content at that time. However, later that month, Pickles called Ball and inquired if benefits would be credited to employee accounts. Ball replied that there will not be any payments on behalf of employees and that all monies recovered were damages for Local 785. Subsequently in October, Pickles again brought the subject up with Ball and stated that the money would be credited to the employee benefit accounts. Ball discussed the situation with Pickles. He explained that no monies will be allocated to the employees' benefit plans and pointed out that the employees had signed away their benefits. However, Ball undertook to raise Pickles' concerns with the union's executive after the last payment from Galtcam is received on December 29, 1986, to see if the executive will recommend to the membership that the benefit accounts of employees be credited. At an executive meeting in November, 1986, Ball informed the executive of Pickles' request and of his undertaking to raise it after December. Ball testified that to his surprise a motion was made and seconded immediately that no money will be allocated to the employee benefit accounts. The executive was of the view that since the complainants had already signed individual contracts giving up any right to benefits; since they did not file grievances, and since they had refused to assist in certifying Galtcam, there was no way the union would allocate nearly half of the total money recovered, on behalf of the complainants' benefits.
Ball informed Pickles about the motion passed by the executive. Pickles requested a copy of the minutes of the executive meeting in question. Ball produced a copy and allowed him to read it, but informed him that if he wished to have a copy, he should request in writing. Pickles never did make a written request. Under the union's by-laws, a decision of the executive can be appealed to the general membership and from there to the General President of the International Union in Washington D.C. None of the complainants made use of these appeals. Pickles testified that it was useless to appeal because he did not know that an executive's decision has ever been overturned in appeal. Rather than pursue the appeal procedures, Pickles retained counsel and filed the present complaint on behalf of the five complainants.
Section 68 of the Act is as follows:
A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.
All of the evidence indicates that the union did not intend to allocate any part of the $21,069.06 on behalf of employee benefits. On the face of the minutes of settlement there is no such allocation and paragraph 4 clearly states that "Galtcam agrees to pay damages to the union in the amount of $21,069.06 in accordance with the following payment schedule". The only person who was directly involved in negotiating the settlement who testified was Mr. Church. His evidence is uncontradicted that the employer counsel raised the issue of allocating benefits and that Mr. Ball was very adamant in refusing that Mr. Church testified that he conveyed Mr. Ball's position categorically to Mr. Mulroney and suggested that the company may if it so wished pay employee benefits in addition to the $21,069.06 payable to the union. In view of the clear evidence of Mr. Church and Mr. Ball, I reject the evidence of Mr. Myer Jr. that Mr. Bali assured him that he saw no problem in paying employee benefits out of the settlement amount.
The section 124 referrals indicate that the union did claim benefits as part of its prayer for relief. It is also true that the amount of $11,069.06 initially payable by Galtcam was based on Galtcam's liability for benefit payments. However, the evidence is uncontradicted that during settlement discussions, Galtcam's liability for benefit payments was simply used as a tool in convincing Galtcam to increase its offer of payment in damages. The evidence establishes that the union at no time intended to recover benefit payments on behalf of the complainants. The fact that the union did not request and did not receive remittance sheets setting out employees' work hours as is the practice when claiming benefits is a further indication that the money was not received as benefit payments on behalf of employees.
It follows therefore, that if the complaint is to be upheld I must find that the union acted in a manner that is arbitrary, discriminatory or in bad faith in executing minutes of settlement without recovering the benefits payments on behalf of the complainants. The complainants contend that the process of settlement adopted by the union was also arbitrary in that it signed off the complainants' right to benefit payments without any consultation with or notification to the complainants.
Other than Mr. Miller and Mr. Pickles, there is no evidence that any of the other complainants had shown any interest in their benefit payments at any time prior to the filing of the present complaint. Miller and Pickles for the first time showed an interest in recovering benefit payments after the settlement and been executed. They were aware that the benefits claim flows directly from the collective agreement and that their entitlement depends on Galtcam being bound by the collective agreement. Yet they were not willing to assist the trade union in its attempt to bind the employer to the collective agreement. They had entered into an individual "yellow-dog" type of contract agreeing "not to participate in anyway under the involvement of an organized labour faction to involve the employer directly". They indicated to the union by their conduct that they were quite content with their terms of employment with Galtcam which did not include benefits, and were content with Galtcam's promise to include benefits in the future if the company was profitable. They were both members of the union executive and therefore familiar with their rights under the collective agreement. Yet at no time did they file a grievance claiming benefits. Pickles testified that he did not file a grievance because he "assumed" that the union was seeking his benefits on his behalf. Counsel for the complainants suggested that the union had failed in its duty by not advising the complainants to file a grievance. I find that it was not reasonable for Mr. Pickles to have assumed that the union would be grieving to recover benefits on behalf of an employee who by his words and conduct had clearly indicated a total lack of interest in benefits. Mr. Pickles did not claim that Mr. Ball or any other union official said or did anything which caused him to make that assumption. In the circumstances, I also find that it was not unreasonable for the union not to have advised the complainants that they should file grievances.
The union and Galtcam were engaged in a series of complicated proceedings before the Ontario Labour Relations Board. The union believed it was owed $94,000 in damages and Galtcam was admitting no liability for damages. The two counsel made a determined effort to avoid litigation which it was apparent would be lengthy and very expensive. With difficulty~ they managed to convince their clients to settle. From the union's perspective, it did not get all that it felt was owing to it from Galtcam. Indeed, the ultimate amount recovered ($21,069.06) represents approximately 1/5th of the original claim. The issue is whether the failure to recover benefits on behalf of the complainants was arbitrary, discriminatory or in bad faith within the meaning of section 68 of the Act.
To put at its highest, the complainants' claim amounts to this, that having initially claimed benefits on their behalf in the grievances, they waived them in the settlement without consultation with the complainants. In my view, in the absence of evidence that the union was motivated by bad faith or discriminatory considerations, the mere fact that it waived a legitimate claim of an employee as part of a settlement of a broader dispute does not necessarily contravene section 68. The union was seeking to bind Galtcam to its collective agreement and was facing a complex series of legal proceedings. It accepted counsel's advice that a settlement is preferable to a long and expensive legal proceeding which may or may not end in its favour. It decided that what is more important is to establish its bargaining rights for the future. With much hesitation it decided to give up a substantial portion of its monetary claim for past violations, and it decided also not to pursue benefits on behalf of employees who had indicated a disinterest in those benefits by their conduct.
A trade union is entitled to take into account considerations beyond the immediate interests of an individual employee in deciding whether to settle a grievance, even if it is a grievance filed by the individual. It must be free to weigh the claim of the individual employee and the larger interest of the bargaining unit as a whole and its own institutional interests. (See, Leonard Murphy, [1977] OLRB Rep. Mar. 146). In the case at hand the union's conduct can be assessed in two ways. It may be said that the union gave up the five complainants' claim to $8,072.49 in benefit payments in settling a complex series of legal proceedings. Or one may say that the union failed to pay the employees' claim out of the $21,069.06 it recovered. Viewed either way, the union's conduct cannot be said to be arbitrary, discriminatory or in bad faith. Through its settlement, the union secured its bargaining rights and ensured that the employer will comply with the collective agreement in the future. In so doing, it gave up not only the employees' benefit claims but also approximately $73,000 of its damage claim for past violations. While it did not recover all the money owing by the company as a result of its past violations, the settlement benefited the bargaining unit as a whole. Indeed, the evidence was that the complainants themselves benefited from the settlement in that from the effective date of the voluntary recognition the employer made benefit contributions on their behalf. In all of the circumstances, the union's conduct in executing the settlement does not constitute a violation of section 68. This is more so when considering the fact that the complainants had indicated no desire up to the time the settlement was reached that they had interest in receiving benefit payments and that the grievances were filed by the union on its own initiative.
The union recovered only a small proportion of its total monetary claim. Did it act unlawfully when all of the monies so recovered was credited to the union's general fund for the benefit of the bargaining unit as a whole? I think not. It is simply not reasonable to interpret the duty of fair representation as requiring the union to allocate nearly half of the total amount recovered on behalf of the five complainants who had showed no interest in securing their benefit payments and had expressly waived their rights to benefits in individual employment contracts.
Counsel for the complainants suggested that the union's failure to consult with the complainants during settlement discussions was indicative of bad faith. However, at the time there was no reason for the union to believe that the complainants were interested in their benefits. They had not made any such indication and on the contrary had conducted themselves in such a manner as would indicate that they are not concerned about benefits. They had not filed grievances and had shown no interest in subjecting Galtcam to the collective agreement. In these circumstances, the union did not act in bad faith when it settled the grievances that it had filed on its own initiative without seeking input from the complainants.
The evidence does not indicate any malice or bad faith on the part of Mr. Ball towards the complainants. Despite the fact that the complainants had clearly acted against the interest of the union, the union did not set out to persecute them. Thus, for instance, despite the fact that the complainants were employed illegally by Galtcam (without being referred by the hiring hall), in the settlement the union recognized them as employees in the bargaining unit. Pickles and Miller could have been charged under the by-laws and possibly expelled from the union. This would have had the drastic result of effectively depriving the complainants of employment in the unionized sector. However, the union permitted them to resign from their union offices with no other penalty. There was no evidence of any hostile conduct or statements by union officials towards the complainants. There is no basis for concluding that a desire to punish the complainants for working non-union formed a consideration in the union's decision to enter into the minutes of settlement as it did. While the complainants' signing of "yellow-dog" type contracts and accepting non-union employment did influence the union's decision by indicating a disinterest in benefits, I am satisfied that there was no malicious motivation on the part of the union. In summary, it is my conclusion from all of the evidence that the union believed in good faith that it was advisable to settle the disputes and that the settlement it reached was in the best interest of the union and of the bargaining unit as a whole. In the circumstances there was no contravention of section 68 of the Labour Relations Act.
Accordingly, this complaint is hereby dismissed.