Retail, Wholesale and Department Store Union, AFL:CIO:CLC: v. Peacock Lumber Limited, 1990 CanLII 5834

[1990] OLRB Rep. May 584

3006-89-FC Retail, Wholesale and Department Store Union, AFL:CIO:CLC:, Applicant v. Peacock Lumber Limited, Respondent

BEFORE: Judith McCormack, Vice-Chair, and Board Members R. M. Sloan and K. Davies.

APPEARANCES: Robert McKay and Dan Garvey for the applicant; Vincent P. Johnston, Terry Vail and Vince Portincasa for the respondent.

DECISION OF THE BOARD; May 25, 1990

1. This is an application for a direction that a first contract be settled by arbitration. On April 2, 1990, the Board issued the following decision:

We direct the settlement of the parties' first contract by arbitration. Our rea­sons will follow.

We now provide our reasons.

I The Facts

2. The respondent is a wholesale and retail lumber and hardware company which sells building supplies. Although levels of employees fluctuate, it appears that there are approximately nineteen employees in the bargaining unit at the present time. The applicant was certified as the bargaining agent for those employees on October 4, 1989. Neither the respondent nor anyone on its behalf attended the certification hearing.

3. Dan Garvey, a business agent for the applicant, was assigned to service the unit, and he accordingly gave notice to bargain on October 26, 1989. In the same letter containing the notice to bargain, he also requested a list of bargaining unit employees for negotiating purposes showing their seniority, classifications and wage rates. There was no response to the notice to bargain and as a result, Mr. Garvey telephoned the respondent's owner, J. Clair Peacock, on a number of occa­sions to arrange dates for negotiating meetings. Each time he was told that Mr. Peacock was out or on vacation. Although he left a number of messages, his calls were not returned. Eventually, Terry Vail called him on November 27th and advised him that he would be representing the respondent in negotiations. Mr. Vail was first hired by the respondent in December of 1988 as a shipper/receiver. Subsequently he became a retail salesperson and he now handles a variety of office duties, including some hiring. Prior to these events he had no experience in labour relations or collective bargaining.

4. Mr. Vail also told Mr. Garvey that some employees did not wish to reveal the informa­tion he had requested, and that the respondent would not provide it unless the applicant produced a signed authorization from each employee. Mr. Garvey's view was that the applicant was entitled to this information in its capacity as the certified bargaining agent, and he therefore sent Mr. Vail excerpts from the Labour Relations Act and a reference to DeVilbiss (Canada) Limited, [1976] OLRB Rep. Mar. 49. Mr. Vail did not look into this case, and although he reviewed the excerpts from the Act, he was not convinced that the respondent was required to furnish the information requested. He made it clear to Mr. Garvey that the respondent continued to insist upon written authorizations from all employees, and that he would not even discuss dates for negotiating meet­ings until such authorizations were obtained. In fact, Mr. Vail told the Board that the respondent wasn't prepared to bargain unless this issue was resolved first.

5. Mr. Garvey then applied for conciliation. When the respondent was notified of his request, Mr. Peacock objected to the appointment of a conciliation officer. In a letter to the Assis­tant Deputy Minister of Labour on December 1st, 1989, he reiterated the respondent's position that written authorizations were required for the information requested, and that they would com­mence the bargaining process, including arranging a date for an initial meeting, after receiving such authorizations. A conciliation officer was appointed on December 11, 1989 and a conciliation meeting was scheduled for January 15, 1990. On December 14th, at the suggestion of the concilia­tion officer, Mr. Garvey sent Mr. Vail a set of proposals for a collective agreement which he hoped would expedite matters at conciliation. He did not include the applicant's wage and benefit propos­als, but told Mr. Vail that he would do so later when he got the wage information from the respon­dent.

6. On January 15, 1990, the parties met in conciliation. Mr. Vail and Vince Portincasa, another office employee, represented the respondent, and Mr. Garvey and Jim Kehoe, a bargain­ing unit employee, represented the applicant. On that day quite a number of basic non-monetary items were agreed upon by the parties, including a purpose clause, a recognition clause, a number of union security provisions, a grievance procedure, a management rights clause, certain seniority provisions, a no strikes/no lockouts clause, and so forth. Sometime during that day, the applicant gave the respondent its wage and benefit proposals. At the end of the day, the respondent pro­duced a list of employees with their dates of employment and hourly rates listed. Since there were six different wage rates but no classifications listed, the applicant asked for their classifications. The respondent then orally provided what Mr. Vail described as their "job functions" which Mr. Garvey wrote down next to each employee's name. There are six of these categories including stick operator, driver, labourer, forklift, shipper/receiver, and mill helper. Mr. Garvey testified that these were described as classifications by the respondent, and that Mr. Vail agreed to provide him with a "clean" copy of the list with these classifications on it at the next meeting.

7. A second conciliation meeting was scheduled for January 26th. Initially, the parties were able to agree on some of the outstanding items. By the end of the day, however, the respon­dent had announced what it described as its final positions on a number of matters in dispute, and indicated that it was not prepared to move from those positions. The meeting broke up. Mr. Gar­vey subsequently sent a summary of the items agreed upon by the parties to the respondent and applied for a no-board report. On February 6th, the Deputy Minister issued a no-board report. The parties were then approached to see if they wished to avail themselves of mediation. The applicant indicated interest; the respondent declined. On March 6th, the applicant initiated these proceedings.

8. We now turn to a more detailed review of negotiations. Mr. Vail had considerable diffi­culty remembering what had happened in the bargaining sessions. His testimony was vague and he told the Board that he had not taken as many notes as in hindsight he wished he had, no doubt because of his inexperience which he candidly admitted. This approach resulted in some problems during the proceedings. The applicant pointed out that while the respondent filed material indicat­ing that it agreed with the applicant's description of the clauses that had been settled during bar­gaining, the language for some of those clauses included in the respondent's proposed collective agreement was different from that of the applicant's. When asked to c][arify this point, Mr. Vail advised variously that he could not remember what had been agreed to, that he thought that two obviously different clauses meant the same thing, and/or that perhaps Mr. Peacock or Mr. Portin­casa had changed the language when they filed the respondent's material while Mr. Vail was on vacation. In light of Mr. Vail's vagueness and difficulty in remembering events, where his evidence conflicted with Mr. Garvey's we have preferred the evidence of Mr. Ciarvey. However, for the most part the facts were not in dispute. The following are some of the outstanding bargaining items relevant to the issues before us.

Wages

9. On January 15th, Mr. Garvey initially proposed wage increases of $2.00 in each year of the collective agreement for each employee from his or her present wage rate. He indicated to the respondent, however, that he usually proposed increases of $2.00 or $2.50 an hour as a blanket proposition, that the applicant didn't expect to get this and that nothing was hard and fast. It was, he said, a place to start. He also told Mr. Vail and Mr. Portincasa not to be afraid of the numbers, the months or the classification spaces listed on his proposal, that the classifications were negotia­ble and that that was why he had left them blank.

10. On January 26th, the respondent proposed one wage rate described as the rate for "lab­ourers" starting at $7.95 an hour and changing to $10.50 an hour after three months. This was the lowest rate the respondent was already paying to employees. There were to be no increases at that time and any subsequent increases were to be granted at the respondent's discretion. The respon­dent was not willing to have any classifications in the collective agreement other than that of "lab­ourers". Mr. Vail testified that this position was final and that the respondent was not prepared to move from it. He told the Board that this rate was better than a local unionized competitor was paying, and that that was the reason for the respondent's proposal. It was not suggested that the respondent could not afford to pay more; in fact, Mr. Vail testified that the respondent was in the habit of granting unilateral increases to employees of four to five per cent in June or July of each year. Although he was initially a little unclear on this point, he eventually confirmed in re-exami­nation that the respondent would continue to pay a summer increase. However, Mr. Vail admitted that he did not advise the applicant of this, and it was apparent from his testimony that the respon­dent was not prepared to negotiate such an increase with the applicant or include it in the collective agreement. In addition, the respondent was not willing to change its position on the issue of put­ting classifications into the collective agreement.

Christmas Bonus

11. Mr. Vail confirmed that the employer also regularly paid employees what Mr. Garvey described as a Christmas bonus. This was most recently paid in December of 1989 as a result, the parties agreed at the hearing, of section 79 of the Labour Relations Act which freezes working con­ditions. The applicant wished to have this payment of one week's salary incorporated into the col­lective agreement. Mr. Vail characterized this payment as an "appreciation payment" and told the applicant that it was available to employees while they were non-union. Now employees would only have what the union could negotiate in the collective agreement. At different times in his tes­timony, Mr. Vail seemed to suggest both that the respondent would not be paying the Christmas bonus because of the cost of other clauses to which it had agreed, and that it would be paid as usual. In any event, there was no question that the respondent was not prepared to put it in the collective agreement, and when Mr. Garvey suggested that they discuss the matter, Mr. Vail told him it was not a topic for discussion. Mr. Vail informed the Board that the respondent was not in the habit of excluding any employees from this payment, whether they were union or non-union. However, he also testified that the respondent was not prepared to move from its position that the appreciation payment was not a subject for negotiations.

The Bargaining Unit

12. The respondent proposed that three employees on the list it had given to the applicant be excluded from the bargaining unit because they did not want to be part of the union. Mr. Vail also told Mr. Garvey that they considered one of these employees to be a maintenance supervisor, and thus excluded because he exercised managerial functions. This employee is described on the respondent's list as a "mill helper". The applicant opposed this proposal on the basis that the respondent was attempting to alter the bargaining unit.

Benefits

13. The applicant initially proposed a package of nine benefits, including the Christmas bonus. Subsequently, Mr. Garvey withdrew four of these items, with the effect that the union's position amounted to small improvements in the status quo, together with a dental plan. Some of the items withdrawn were predictable; for example, a request for employer-paid OHIP became redundant as a result of legislation. Mr. Vail agreed that Mr. Garvey was willing to discuss the ben­efit plans further. The respondent's position was that its present group plans should continue with­out any changes, and that it was not willing to provide a dental plan for bargaining unit employees. Again Mr. Vail indicated to Mr. Garvey that the respondent was not prepared to move on this position.

Vacations

14. The respondent and the applicant were able to agree on much of the language in the vacation clause, although because of the conflict in what the respondent acknowledged had been agreed upon previously and the material it subsequently filed, it was a little unclear how much of the clause remained in dispute. There was no question that the parties were still at odds on the method of payment and entitlement. The applicant wanted vacation entitlement to be based on the length of an employee's service, with vacation pay calculated on the basis of the corresponding number of weeks' salary. The respondent took the position that vacation entitlement should be based on an employee's job function, and vacation pay was to be in the amounts and form set out in the Employment Standards Act.

II Decision

15. The respondent's primary argument opposing this application was that the parties had only had two bargaining sessions and that negotiations had not broken down; in other words, the application was premature. According to counsel, the fact that the respondent had a four or five per cent wage increase in its pocket" indicated that there was potential for further bargaining. (Mr. Johnston was not retained until the second day of the hearing, and as a result, did not have the benefit of hearing the union's evidence.) The respondent's views were reflected in Mr. Vail's testimony when he told the Board that he felt negotiations had come to an abrupt end and that there were other items that could have been discussed in an additional negotiating meeting. How­ever, in cross-examination he was unable to point to any items which he felt would benefit from further discussion, except perhaps an additional holiday proposed iby the union and one of the union security provisions. And although in his view negotiations seem to break down quickly on the issue of wages and benefits, he confirmed that the respondent was not prepared to change his position on these items.

16. The applicant, on the other hand, was of the view that once the respondent indicated it was not prepared to negotiate further on key issues such as wages and benefits, it was obvious the parties had reached an impasse. As a result there was no point in continuing to go through the motions of bargaining when in reality the parties were deadlocked. ][n the applicant's opinion the bargaining issues had been fully discussed, and the respondent was simply not prepared to con­clude a collective agreement.

17. Section 40 provides in part as follows:

40a.-(1) Where the parties are unable to effect a first collective agreement and the Minister has released a notice that it is not considered advisable to appoint a conciliation board or the Minis­ter has released the report on a conciliation board, either party may apply to the Board to direct the settlement of a first collective agreement by arbitration.

(2) The Board shall consider and make its decision on an application under subsection (1) within thirty days of receiving the application and it shall direct the settlement of a first collective agreement by arbitration where, irrespective of whether section 15 has been contravened, it appears to the Board that the process of collective bargaining has been unsuccessful because of,

(a) the refusal of the employer to recognize the bargaining authority of the trade union;

(b) the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification;

(c) the failure of the respondent to make reasonable or expeditious efforts to conclude a collective agreement; or

(d) any other reason the Board considers relevant.

18. In Nepean Roof Truss Limited, [1986] OLRB Rep. July 1005, the Board described sec­tion 40a as a "unique facilitative tool", which reflects the Legislature's acknowledgement of the significance of a first collective agreement. It does not, however, supplant the primacy of the col­lective bargaining process and although the section should be given a liberal construction, it was not intended to provide automatic access to arbitration in all cases where parties cannot agree. Instead there must be a causal connection between one of the conditions set out in section 40a(2) and the unsuccessful negotiations (Nepean, supra). The simple fact that there is no collective agreement does not necessarily mean bargaining has been unsuccessful (Teledyne Industries Canada Ltd., [1986] OLRB Rep. Oct. 1441 and Juvenile Detention Centre (Niagara) Inc., [1981]

OLRB Rep. Jan. 66). However, as a matter of common sense, that fact will be useful in the Board's determination of this issue.

19. In this case, we do have some concerns about the length of the bargaining process. Two negotiating sessions is an unusually short course of bargaining, and we do not wish to intervene in the process prematurely. On the other hand, the form of negotiations varies considerably from case to case and the Board has noted previously that there is no minimum number of bargaining sessions required (Teledyne, supra). Rather, the issue is whether negotiations have been unsuccess­ful. Here the parties were able to arrive at agreement on a number of basic items quite rapidly. Similarly, those items remaining in dispute crystallized in very short order. By the end of the sec­ond day, it was apparent that the respondent's position had already hardened on a number of key items. Having carefully reviewed the outstanding items between the parties, we concluded that despite the length of the bargaining process, the parties were indeed at an impasse. It may well have been that additional bargaining sessions could have cleaned up several minor matters. How­ever, we agree with Mr. Vail's assessment that the bargaining broke down over wages and benefits, and on those items, while the applicant continued to indicate flexibility, the respondent made it clear that it was not prepared to move. This was reinforced by the respondent's rejection of media­tion. In our view, the short duration of negotiations was a symptom of the underlying conflicts between the parties, rather than an indication that more potential for bargaining remained. The fact that the respondent was willing to pay a summer increase does not suggest to us that there was potential for further bargaining, when Mr. Vail testified that the respondent was not willing to move from its "no-increase" position and that any increases would be paid unilaterally.

20. We have considered the possibility that the respondent was characterizing its positions as final as a bargaining ploy or as a result of inexperience, while still remaining willing to bargain. Labour negotiations are often carried out in a specialized code in which variations in the parties' positions are expressed obliquely, and the subtext is as important as what is actually said. In this case, however, there appeared to be no misunderstanding; Mr. Vail indicated quite bluntly to Mr. Garvey that the respondent was not prepared to move on items such as the wages, benefits and Christmas bonus, and confirmed in his testimony that this was in fact the case. In these circum­stances, it is difficult to say that an additional meeting would have had a significant impact on the situation.

21. The Board has noted in the past that a party is not required to continue negotiating if it is evident that such negotiations will be fruitless (Nepean, supra). In the overall context of this set of negotiations, it is unrealistic to suggest that the parties should return to the table to address, for example, an additional holiday, when it is evident that bargaining had come to a halt on wages and benefits.

22. We do observe that the applicant moved rather quickly from one stage of bargaining to the next. However, at the time the applicant applied for conciliation, the respondent was refusing to set dates for bargaining until the applicant provided authorizations from employees for the wage data. There was no reason why at least the non-monetary issues could not have been addressed at that point, regardless of this dispute, and of course, the applicant's view that it was entitled to this information is confirmed in the Board's jurisprudence. (See, for example, DeVilbiss (Canada) Limited, [1976] OLRB Rep. Mar. 49; Radio Shack, [1979] OLRB Rep. Dec. 1220 (jud. rev. denied, in Re Tandy Electronics Ltd., and United Steelworkers of America et al. (1980), 1980 CanLII 1738 (ON HCJ), 30 O.R. (2d) 29, 80 CLLC 14,017 (Ont. Div. Ct.), leave to appeal to Ontario Court of Appeal refused March 10, 1980); Globe Spring & Cushion Co. Ltd., [1982] OLRB Rep. Sept. 1303; Northwest Merchants Ltd., [1983] OLRB Rep. July 1138, 83 CLLC 16,055; Consolidated Bathurst Packaging Ltd., [1983] OLRB Rep. Sept. 1411; The Windsor Star, [1983] OLRB Rep. Dec. 2147; The Ontario Cancer Treatment and Research Foundation (Thunder Bay Clinic), [1985] OLRB Rep. May 705; Forintek Canada Corp., 11986] OLRB Rep. Apr. 453; and Co-Fo Concrete Forming Con­struction Limited, [1987] OLRB Rep. Sept. 1213.) As a result, it is not difficult to understand why the applicant was impatient to move events along. It was also evident from Mr. Garvey's testimony that he felt that the conciliation officer might play a useful role in resolving the authorization dis­pute.

23. It is not so unusual for a party to apply for a no-board report after two sessions of con­ciliation; it is simply that there is usually some bargaining preceding conciliation. In this case, how­ever, by the end of the second conciliation meeting, negotiations had already jelled to the point where a meaningful assessment could be made about the futility of continuing. As a result, we do not think it can be said that either the no-board application or this application were made prema­turely. In the circumstances before us, the applicant was entitled to attempt to bring matters to a head in an expeditious way. We do not find that the applicant was essentially attempting to by-pass negotiations so as to bring this application. Rather, Mr. Garvey's testimony was consistent both with a commitment to bargaining on the one hand, and an unwillingness to waste time or to be led down the garden path on the other. As a result, we concluded that the process of bargaining was unsuccessful.

24. We now turn to the reasons for that lack of success. The applicant argued that the respondent's initial refusal to provide the wage data represented a failure to recognize the union's bargaining authority under section 40a(2). In addition, Mr. McKay was of the view that the respondent's proposals to remove three people from the bargaining unit amounted to an attempt to press an alteration in the bargaining unit to an impasse.

25. Addressing the last point first, we note that the respondent agreed to a bargaining unit description in the collective agreement reflecting the certificate issued to the applicant, and no pro­posals were made to amend that description. In addition, it was not clear that the proposal to take three people out of the bargaining unit was either considered to be or described as a final position by the respondent. In these circumstances, we do not find that the respondent's position amounted to an attempt to alter the bargaining unit which was pressed to an impasse in a manner which has been considered bad faith bargaining. There may be situations where discussions to remove certain people from the bargaining unit will constitute an attempt to alter the unit, despite the fact that no changes are proposed to the description, but this was not such a case. It was also apparent that the respondent had a change of heart with respect to the wage data, and as a result, we do not intend to make much of the initial refusal in itself.

26. However, both the proposal to take three people out of the bargaining unit because they did not wish to be in the union and the initial refusal to provide negotiating data reflect a gen­eral approach taken by the respondent which is more problematic. (We should add that we are somewhat skeptical of the respondent's characterization of one employee as a "maintenance super­visor" when several hours later Mr. Vail and Mr. Portincasa described him to the applicant as hav­ing the job function of a "mill helper"). These proposals, together with the respondent's positions on wages and benefits and the Christmas bonus, seem to indicate some difficulty in accepting the role of the union on the part of the respondent. Essentially, the respondent's proposals on the key monetary items amounted to either no change, or a reduction in the status quo. In the context of this case, these proposals suggest that the respondent wished to make it clear to the employees that the applicant had obtained no tangible benefits for them, and had even caused a reduction in those benefits. Our concern in this regard is strengthened by the respondent's apparent willingness to continue both the Christmas bonus (although as mentioned earlier, Mr. Vail's testimony was con­flicting on this point) and the annual summer wage increase, despite its flat refusal to negotiate these items into the collective agreement. It is difficult to avoid the conclusion in these circum­stances that the respondent was attempting to communicate to employees that the union had obtained for them nothing more than the respondent was already providing.

27. To the extent that these positions reflect an unwillingness on the part of the respondent to reconcile itself to a collective bargaining regime, we think that they amount to a refusal to recog­nize the union's bargaining authority. We say this despite the fact that the respondent was eventu­ally prepared to sit down and negotiate over a significant number of standard collective agreement provisions. The respondent's key proposals were likely to have the effect of undermining the union's authority and credibility with employees, and the fact that it was willing to agree on a num­ber of other standard provisions does not redeem its conduct in these circumstances.

28. We also find the respondent's wage proposals to be both uncompromising, and without reasonable justification. There was no dispute that the respondent was not prepared to move on its wage proposals, and thus we have little difficulty in concluding that it was uncompromising. How­ever, under section 40a(2)(a) a party's position must lack reasonable justification as well. Our con­cern about the respondent's negotiating stance in this regard is two-fold. Firstly, the refusal to put any classifications in the collective agreement except the lowest one of labourer does not seem well-grounded when by the respondent's own admission, it was paying at least six different wage rates tied to what it described as "job functions". We understand the concern expressed by Mr. Vail that too many classifications would be restrictive in a small operation. However, Mr. Garvey indicated in negotiations that the applicant was prepared to negotiate the number and nature of classifications. A blanket refusal to have any more than one classification in the collective agree­ment, and the lowest extant classification at that, goes beyond the concerns expressed by Mr. Vail. To the extent that this proposal would amount to a reduction in wages for some employees, we also find this case analogous to that of MacMillan Bloedel Building Materials Limited, [1990] OLRB Rep. Jan. 58.

29. There was some suggestion by Mr. Vail that the respondent was prepared to continue to keep on paying the different wage rates, but not willing to incorporate them into the collective agreement. It was not clear whether this was communicated to the applicant in negotiations. But even if this was so, again it raises the question of why the respondent adamantly refused to incor­porate these rates into the collective agreement if it was prepared to keep on paying them.

30. Secondly, we find it difficult to understand why the respondent would be prepared to grant employees a four or five per cent annual increase in June or July, but insist that there be no increase whatsoever in March. As noted earlier, it was not even suggested that the respondent's position on wages was a matter of economic necessity, and no other rationale was provided. In addition, the respondent's unwillingness to incorporate even the summer increase into the collec­tive agreement or to discuss any increase at all with the union was unreasonable in the circum­stances before us. No justification was offered for this disparity in the respondent's approach, either at negotiations or in the proceedings before us. Under these circumstances, we concluded the respondent's refusal to move on its wage position amounted to an uncompromising bargaining position adopted without reasonable justification.

31. Counsel for the respondent argued that the respondent should not be penalized for Mr. Vail's admitted inexperience, and that parties should not have to hire lawyers to negotiate for them. It may be that at least part of the problem in this case was as a result of inexperience. How­ever, no antipathetic animus is required under section 40a (Crane Canada Inc., [1988] OLRB Rep. Jan. 13). Indeed, in Formula Plastics Inc., [1987] OLRB Rep. May 702 the Board observed that section 40a is not a penalty for egregious conduct, but a special mechanism which may apply even where the respondent's conduct stems from inexperience:

32. We note particularly that the provisions of 40a(2)(b) are not necessarily predicated on any egregious conduct on the part of an employer. There is no requirement of bad faith or anti-union animus (although these factors may be relevant) and a direction to settle a first contract by arbitration is not a penalty visited upon an employer. Rather, section 40a as a whole repre­sents the identification of a series of situations in which the Legislature has determined that a malfunctioning labour relationship requires a special mechanism to repair or strengthen it.

Indeed, it may well be that some of the provisions of section 4~la will apply even where the respondent's conduct stems from ignorance, inexperience or ineptitude.

And while we do not suggest that parties must require their representatives to have any particular qualifications, it is also true that if they send inexperienced or ill-prepared negotiators to the table, they may have to live with the consequences (see Crane Canada, supra, and Co-Fo, supra).

32. In this case Mr. Peacock is himself a lawyer, although not one familiar with labour law, according to Mr. Vail. If Mr. Peacock chose to have Mr. Vail conduct negotiations on the respon­dent's behalf, we are not prepared to say that a situation which otherwise fits within section 40a should be exempted from the reach of that section as a result of Mr. Vail's inexperience.

33. For all these reasons, we directed the settlement of the parties' first contract by arbitration.