[1990] OLRB Rep. May 564
2229-89-FC United Food and Commercial Workers International Union, Local 1000A, Applicant v. Hillview Farms Limited, Respondent
BEFORE: M. A. Nairn, Vice-Chair, and Board Members M. Rozenberg and D. A. Patterson.
APPEARANCES: Roman E. Stoykewych and Kevin Corporan for the applicant; William McNaughton and R. Pascoe for the respondent.
DECISION OF THE BOARD; May 10, 1990
I
[ 1 ]. Having regard to the parties' agreement, the panel directs, pursuant to section 40a of the Labour Relations Act (the "Act") that the first collective agreement between them be arbitrated. The parties referred the matter to the Board for arbitration. The parties further agreed to waive all applicable time limits contained in section 40a.
[ 2 ]. The parties were able to agree to a considerable number of matters to be contained in their collective agreement. In dealing with the remaining issues in dispute the panel received both viva voce evidence and documentary material from the parties and heard their submissions.
[ 3 ]. The collective agreement is to be comprised of our award on those issues in dispute and those items the parties have agreed to. Those agreed to items were filed as Schedule A in Tab 1 of the applicant's brief and were amended or added to by agreement of the parties prior to the completion of the hearing as follows.
[ 4 ]. The parties amended Article 16.01 to read as follows:
16.01 After an employee has c9mpleted his probationary period, the Company agrees to pay the premium for benefits as set out in Schedule B.
Schedule B was provided to the panel and it is agreed by the parties that it forms part of the collective agreement.
[ 5 ]. Letter of Understanding No. 4 is agreed to between the parties.
[ 6 ]. The parties provided to the panel their agreement that the collective agreement shall
terminate nineteen months from the date of our award. Having regard to that agreement, Article
26.01 of the Collective Agreement shall read:
26.01 The terms of this Agreement shall be binding upon the parties hereto from May 10, 1990 through December 9,1991 and thereafter from year to year unless either party gives to the other party written notice for renewal, cancellation or modification. Such notice must be given not earlier than ninety (90) days and not later than thirty (30) days prior to the expiration of this Agreement.
[ 7 ]. Also agreed to by the parties in the course of the hearing was paragraph 5.0 of Schedule A which reads as follows:
5.0 Heavy Machinery supervisor, when appointed - 25~fhr. premium over the applicable heavy machinery rate.
II
[ 8 ]. The panel has reviewed and considered the material contained in the parties' briefs, the evidence taken at the hearing, and the parties' submissions. In the interest of expediting the release of this award, we do not intend to set out the background of this dispute except as it may be instructive of our award for these parties. The following quote from Egan Visual Inc., OLRB Rep. Dec. 1687 summarizes our approach:
3.... The Board would, however, adopt the language set forth in Burlington Northern Air Freight (Canada) Ltd., [1986] OLRB Rep. Oct. 1327. In that case the Board indicated that it had adopted a somewhat similar approach to the reasoning of the British Columbia Labour Relations Board in London Drugs Ltd., [1974] Can. LRBR 140 at page 147. The Board agrees that applications under section 40a of the Act with respect to a first contract arbitration by the Board should not be used to achieve major breakthroughs in collective bargaining, but rather, the Board would try to settle the terms of a collective agreement which reflect a fairly general consensus as to what should be the contents of a collective agreement having regard to the particular circumstances of each collective bargaining situation. The Board also agrees that the terms of the collective agreement should be sufficiently attractive to the employees who are in the bargaining unit defined in the collective agreement that they would give serious consideration before deciding to terminate the bargaining rights of the applicant.
[ 9 ]. The employer is in the business of preparing and packaging soils and organic fertilizers and screening and packaging decorative aggregates. The company sells its products to garden centres, department stores, hardware chains, etc. which retail to the home and industrial horticultural market. The Union was certified to represent a bargaining unit of employees of the employer on March 3, 1989.
III
[ 10 ]. The articles in dispute are as follows:
- Article 12.07 (c), (e), and (g) - Article 17.03 - the issue is the amount of shift premium payable - Schedule A - Wages - paragraphs 1, 2, 3, 4.
Article 12.07
[ 11 ]. This Article falls under the more general heading of "Article 12 - Seniority" in the collective agreement. Article 12.07 sets out those various circumstances which will result in the termination of both the seniority and the employment of an employee. The parties are agreed with respect to certain of those circumstances set out as Article 12.07 (a), (b), (d), and (f). They remain in dispute with respect to Article 12.07 (c), (e), and (g).
[ 12 ]. Article 12.07 (c) deals with the loss of seniority and employment when an employee is not on the active payroll of the company for a period of time. The parties are in dispute simply with respect to the appropriate time frame. In Article 12.06 the parties appear to have turned their minds to the term "active payroll" and contemplate circumstances of lay-off, sickness or accident. In that clause, the parties are agreed that in such circumstances an employee's seniority will continue to accumulate for a period of time equal to his length of service to a maximum of six months. Article 12.07 (c) will provide an employee with an opportunity to return to employment although absent from the work place due to lay-off, sickness or accident. The parties are agreed that in this round of negotiations they do not wish to provide recall rights to persons who are employed during the peak period and who would normally be considered seasonal employees. The season is generally five months long. The parties have also agreed in the language of Article 12.07 (c) that the employee's length of seniority, if less than the time-frame in dispute, will be the determining time-frame. We note that the parties have not agreed to any short term sick leave plan or a long term disability plan. However, Schedule B to the collective agreement does provide that if an employee becomes totally disabled so as to be unable to engage in any gainful work for, inter alia six months, life insurance will continue without cost to the employee in certain circumstances. Schedule B also provides that all insurance ceases on termination of employment.
[ 13 ]. Therefore, given that this clause creates recall rights and the context provided by Article 12.06 and Schedule B we determine that paragraph (c) of Article 12.07 shall read:
(c) is off the active payroll for a continuous period of nine months or length of seniority, whichever is the lesser;
[ 14 ]. Articles 12.07(c) and (g) each raise the same issue. They define different circumstances wherein an employee is required to provide the employer with a valid reason for their absence. The company has stated that it recognizes that any determination it makes as to whether a reason was "valid" or not would be subject to review by an arbitrator. It asks that the words "acceptable to the employer" be included. The resulting language would in our view be ambiguous. In addition, a likely interpretation of those words would be to provide an employer with a broader discretion in determining whether a reason was valid and substantially insulate its decision from arbitral review. The employer both acknowledges and accepts the potential for a grievance concerning the "validity" of the reason for absence. Given that the effect of applying these paragraphs is the loss of both seniority and employment, the parties are both better served by having their intention stipulated clearly.
[ 15 ]. Therefore paragraphs (e) and (g) of Article 12.07 shall read:
(e) fails to return to work upon the termination of an authorized leave of absence unless a valid reason is given;
(g) is absent from work for two (2) working days or more without providing a valid reason.
Article 17.03
[ 16 ]. The only dispute in Article 17.03 is the amount of premium payable for work performed on the night or afternoon shift. This is a cost issue. The employer is proposing no increase to the current amount of 25 cents per hour. The union is seeking an increase to 35 cents per hour. Having regard to our award with respect to Schedule A we award a premium of 30 cents per hour. For purposes of clarity, this increase is to take effect the date of this award.
Schedule A
[ 17 ]. Schedule A is the wage schedule. There are a number of issues in dispute, including the employer's proposal for a two-tier wage structure, the hourly rates payable, the premium to be paid to the lead hand classification, the premium to be paid to the foreman classification, and retroactivity.
[ 18 ]. The company's wage proposal provides rates for individuals currently employed and lower rates for employees hired after the date of this award. It is the employer's position that such a wage structure would allow the company to hire for peak periods at less expensive rates without reducing the wages of current full time employees. The employer indicated that it meets its seasonal demand with part-time employees and students. Those individuals are not covered by this award as they are excluded from the bargaining unit. To the extent that there may be some cost saving with respect to full-time employees within the bargaining unit, any savings in our view would not outweigh the disadvantages of such a system. Although it may be appropriate to initiate cost saving measures by limiting wage increases, those should, in our view, be shared by all members in the bargaining unit. Introducing this type of pay structure results in two employees performing exactly the same work but receiving different wage rates based solely on an arbitrary date of hire. This is distinguishable from the application of a principle of seniority. It is also inappropriate in our view in the context of section 40a of the Act to award a two-tier wage structure which may appear to penalize those employees hired following the arrival of the union in the work place. Therefore we have not awarded a second level to the wage scale.
[ 19 ]. In response to the employer's proposal for a two-tier wage scale the union proposed the introduction of a probationary wage rate. Both proposals were addressed to three (although not the same three) of the six job classifications. In a decision dated April 24, 1990 we advised the parties that we would not adopt a two-tier structure and sought their further submissions with respect to the implementation of a probationary wage rate for all classifications. The parties have agreed to a probationary period in Article 12.02. We were not told whether this was a pre-existing term of employment. However we are of the view that it would not be appropriate to implement a probationary wage rate for only certain job classifications. Therefore we have awarded a probationary wage gnd in paragraph 2.0 of Schedule A. We note that Article 12.02 establishes a probationary period of 45 days actually worked during any twelve consecutive months. Our award at paragraph 2.0 of Schedule A is intended to adopt that time frame noting that it is in reference to days worked from date of hire.
[ 20 ]. Although we have some evidence with respect to the job functions in the various classifications, we have no evidence with respect to the basis for the particular differentials in wages. In assessing appropriate hourly rates, we note that with the exception of the heavy machinery/truck classification the last wage increase received by these employees was in mid-1987. The parties are agreed that there are no directly relevant comparisons of either unionized or non-unionized employers. The union did provide us with evidence of two collective agreements in the vicinity of the employer where the packaging and distribution functions may be similar. The union also provided us with statistical information of Ontario average wage rates in the manufacturing sector. We note that the average hourly rates referred to by the union include overtime. Therefore the actual hourly rates would be lower than they appear for a forty-hour work week. We note as well that the union's wage request is still somewhat lower than the average hourly rates in those manufacturing areas most comparable to this employer. The union does however acknowledge that the employer is in some financial difficulty.
[ 21 ]. We heard evidence from Mr. A. Pascoe, the Vice-President of Hillview Farms and received recent financial statements for the company. It is operating at a loss. However, the evidence with respect to the employer's inability to pay is less than conclusive. The company was sold in March 1988 to Nu-Gro Corporation, a holding company of which Mr. Pascoe is President. At the time of purchase Hillview Farms had been losing money for some years and Mr. Pascoe acknowledged that it is an ongoing feature of the company to operate at a loss. The witness stated that the company was unable to increase the price of its products in order to remain competitive yet agreed that in the area that it services, there are no direct competitors. Evidence of a decline in price for products over the last five years was with respect to their retail price, not the wholesale market. Mr. Pascoe agreed with union counsel that even if a wage iticrease of twenty percent were awarded in the first year of this collective agreement, it would represent less than a one percent increase in the total cost of production. This is not a labour intensive operation. He also agreed that in setting budgets and pricing he operates with a margin of some three to four percent. Mr. Pascoe expects the company to operate at a loss this year but testified that he has forecast less of a loss than in previous years.
[ 22 ]. We have not placed any weight on the comparisons provided by the employer with respect to the two non-unionized companies in which Nu-Gro Corporation has either an interest or a relationship. Apart from the evidence referred to as to the effect of the union's proposal on costs, we were not provided with evidence of the number of hours annually worked by employees in the various classifications in order to accurately calculate the impact on total production costs. In determining the wage schedule in this case, we have taken into account the employer's fiscal year, its concerns regarding retroactivity, the union's acknowledgement that the employer is in financial difficulty, the fact that there has been (with limited exception) no wage increase since mid-1987, the seasonal nature of at least some of the workforce, the nature of the 'work performed, the expiry date of the collective agreement, and the fact that this first collective agreement is being arbitrated pursuant to section 40a of the Act. We have also reviewed the Consumer Price Index for Ontario for the period in question.
Premium for lead hand and foreman classifications
[ 23 ]. The company is proposing a forty-five cent per hour premium for lead hands and a seventy cent per hour premium for foremen. These appear to be the current rates. The union is proposing a premium of $1.25 for both classifications. Individuals in these classifications are permanently assigned.
[ 24 ]. We asked the parties to provide us with evidence as to how these individuals were scheduled and the nature of the work they performed. It would appear that historically a differential in the premium has been recognized. On afternoon or night shifts the employer seems to acknowledge a higher degree of responsibility resting on the bargaining unit employee who would supervise a line but also have certain overall responsibility in the absence of management employees. The employer compares this to employees on the day shift who supervise a line but who have no other responsibility in that managerial employees are present. However, the exercise of these responsibilities does not appear to be consistent with the job title. The evidence established that it is the foremen who have been working on the day shift and Mr. Pascce testified that on that shift they would perform the same work as the lead hand. He also agreed that he would "not be surprised" if it were the lead hands who were performing the "foreman" role on the afternoon shift. It appears that the employer is about to introduce a night shift as well.
[ 25 ]. Consequently, the individuals in these two classifications by performing the same work are entitled to receive the same pay. The question of whether certain individuals are entitled to a higher premium by virtue of a greater responsibility on the afternoon or night shift is a different question in the circumstances of this work place at the present time. It may be that the parties, having entered into a collective bargaining relationship, will review the operation of the work place and see fit to clarify that issue. To that extent, our award does not address the question of an appropriate level of compensation for individuals exercising greater or different responsibility by virtue of working on an afternoon or night shift.
[ 26 ]. We have awarded a retroactive increase to wages to the extent set out in the wage schedule following.
[ 27 ]. Therefore having regard to the above we make the following award with respect to Schedule A:
1.0 Hour Wage Rate for Regular Employees
Effective:
Dec. 1-89 May 10-90 Dec. 1-90 May 1-91
(a) Line Work 8.95 9.25 9.55 9.75
(b) Light Machinery 9.20 9.50 9.80 10.00
(c) Automatic Machine Operator 9.65 9.95 10.25 10.45
(d) Warehouseman 9.65 9.95 10.25 10.45
(e) Heavy Machinery,
Highway Truck Driver 10.55 10.85 11.15 11.35
(f) Maintenance 10.90 11.20 11.50 11.70
2.0 Hour Wage Rate for Probationary Employees
Effective:
May 10-90 Dec. 1-90 May 1-91
(a) Line Work 7.50 7.80 8.00
(b) Light Machinery 8.50 8.80 9.00
(c) Automatic Machine Operator 8.95 9.25 9.45
(d) Warehouseman 8.95 9.25 9.45
(e) Heavy Machinery, Highway Truck Driver 9.85 9.25 9.45
(f) Maintenance
3.0 Lead hands, when appointed - 75¢/hr. premium over line worker rate.
4.0 Foremen, when appointed - 75¢/hr. premium of line worker rate.
[ 28 ]. The retroactive amount in paragraph 1.0 of Schedule A is to be calculated based on hours paid and is payable to employees who were employed, on or since December 1, 1989 and who are employed on the date of this award.
[ 29 ]. Should there be any employee who has been hired at a rate higher than that provided for in paragraph 2.0 of Schedule A and who has not yet worked their first 45 days in accordance with Article 12.02 they are to be red-circled at their current rate until they have actually worked their first 45 days, at which time they are to be paid in accordance with paragraph 1.0 of Schedule A.
[ 30 ]. We direct that the collective agreement contain the items agreed to as 'referred to earlier and our award with respect to the items in dispute. Should the parties have, any dispute with respect to the preparation of the actual 'document we will remain seized in order to ensure that the collective agreement is prepared by the parties forthwith. The collective agreement takes effect from the date of our award (subject to the retroactive order made with respect to wages).
[ 31 ]. It was apparent to the panel that during the course of dealing with this application the parties were able to identify and review various issues in the work place relevant to their collective bargaining relationship. Some factors may well remain to be considered in greater depth. We encourage the parties to build those avenues of communication and to develop their relationship in anticipation of their negotiations for the renewal of their first collective agreement.