[1991] OLRB Rep. November 1291
3046-90-U Labourers' International Union of North America, Local 1059, Complainant v. London Salvage and Trading Company Limited and Wayne Kummer, Respondents
BEFORE: Judith McCormack, Vice-Chair, and Board Members W. N. Fraser and E. G. Theobald.
APPEARANCES: Mark Lewis and T. DaCosta for the complainant; John W. T. Judson, Terry Kuminer and Wayne Kuininer for the respondents.
DECISION OF THE BOARD; November 18, 1991
This is a complaint alleging that the respondents have violated sections 50, 64, 66, 70 and 80 of the Labour Relations Act by frustrating the grievance and arbitration procedure in the context of a sequence of events involving two grievances.
The complainant union and the respondent company are parties to a first collective agreement effective August 1st, 1989 to July 31st, 1991. The company is a small salvage operation connected to the construction industry employing approximately thirty to forty people and the respondent Wayne Kummer is its co-owner and vice-president. Terry Kummer, who is not named as a respondent, is also a co-owner of the company and vice-president of its financial affairs. A third brother, Larry Kummer, also participated to some extent in the events described below.
The complaint alleges that following the execution of the parties' first collective agreement, the respondents contracted out a truck driver position. This became the subject of a grievance (the "MacKenzie grievance") and ultimately an arbitration award, in which Arbitrator Joyce declared the truck driver to be an employee as of December 8, 1989, unless the parties came to another agreement. The award was issued on May 16, 1990, but to date, there has been no other agreement. In the meantime, the respondents have not treated the truck driver as an employee in the bargaining unit. Counsel for the respondents told the Board that this was because the parties were still negotiating in accordance with the award. He explained the apparent lack of negotiations to date as an error on the part of his own office. In March of 1991, the union referred this grievance back to the arbitrator for implementation.
In October of 1990, the respondents discharged another truck driver. This matter was also grieved and referred to arbitration under section 45 of the Labour Relations Act (the "first Winegarden grievance"). On November 2nd, 1990, the parties met with a grievance settlement officer and reached a settlement which provided for Mr. Winegarden's reinstatement upon receipt of a medical report to the effect that he was fit to continue his truck driving duties. On November 7th and November 30th, the union provided the respondents with medical reports. However, the respondents disputed the sufficiency of the medical reports and declined to reinstate the grievor.
The union referred the matter to arbitration for implementation in accordance with the terms of the minutes of settlement. By an award dated December 31, 1990, Arbitrator Brian Keller found that the medical report dated November 30th, 1990 fulfilled the conditions set out in the settlement and ordered the grievor reinstated.
However, the grievor was not called back to work, and on January 24th, 1990 the company advised the union's lawyers that Mr. Winegarden was laid off indefinitely. The reason for this lay-off was that the company had notified its insurer of a number of accidents in which Mr. Wine-garden had been involved dating back to November of 1989, and the insurance company had advised the respondents that it would have to limit its coverage whenever Mr. Winegarden was driving. The respondents asserted that as a result, Mr. Winegarden could not be employed as a driver, and in the company's opinion there were no alternative jobs for him. The union then filed a grievance ("the second Winegarden grievance") concerning this lay-off, without prejudice to its right to bring the instant complaint.
At the outset of the hearing, the respondents moved to have the Board defer to arbitration with respect to the matters contained in the complaint. Among other things, counsel for the respondents argued that both grievances were on their way to (or back to) arbitration and referred us to Valdi Inc., [1980] OLRB Rep. Aug. 1254. In response, counsel for the complainant argued that the problem was more systemic than that which could be addressed by individual arbitrators, and that an arbitrator might well have no jurisdiction to deal with the union's allegation in the second Winegarden grievance that the respondents took steps to defeat the grievance and arbitration process by reporting hitherto unreported accidents to its insurers. In addition, an arbitrator might be unable to provide an effective remedy in this second grievance, which might be restricted to the question of whether there was other work available or not, the fact of the insurers limiting coverage not being in dispute. Counsel for the complainant also asserted that no chair had been selected for the second Winegarden grievance because the company's nominee was declining to agree to one as a result of this complaint, an assertion that was disputed by counsel for the respondents. The parties agreed that the lay off issue could not be referred back to Mr. Keller.
Having regard to the principles set out in Valdi, supra, the Board ruled orally that it would defer to arbitration on the MacKenzie grievance, as it appeared that the implementation problems besetting it could be adequately dealt with within the confines of the grievance and arbitration proceedings currently instituted. However, because we were concerned about the limitations on both the jurisdiction and the remedial power of an arbitrator with respect to the second Winegarden grievance, and because the allegations asserted a pattern of conduct to defeat the efficacy of the grievance and arbitration proceedings in violation of the Labour Relations Act which was unlikely to be directly addressed through arbitration, we determined that we would hear that portion of the complaint that dealt with the Winegarden sequence of events. We then proceeded to hear the parties' evidence and submissions with respect to the merits of that matter.
Mr. Winegarden was hired by the respondent company in March of 1988 to drive a truck for the purpose of picking up and delivering scrap metal. Both Wayne Kummer and Terry Kummer testified that they knew before they hired him that he had been involved in a serious accident and that he did not wish to do long trucking hauls. Wayne Kummer told the Board in crossexamination that Mr. Winegarden had resigned from his previous job because he became disoriented climbing up onto the bigger trucks to secure the loads, and that that was why he was hired to drive the smaller trucks for the company, and when necessary, the tractor trailers.
In November of 1989, Mr. Winegarden was involved in an accident driving a company truck. Wayne Kummer described the accident as "not serious", estimating that damage in the amount of $2,000 was involved. The respondents did not report this accident to their insurers. Wayne Kummer testified that they were under the impression that they were not required to do so if they were not putting in an insurance claim. They did not file such a claim because the amount of their deductible was $2,500.00. However, Terry Kummer also agreed in cross-examination that the fact that reporting the accident would increase their premiums crossed his mind at the time~ although he told the Board it was not the reason the insurers were not notified. After the accident, Mr. Winegarden reiterated that he did not want to drive long hauls or large trucks because he was getting old and because he got disoriented and dizzy climbing up the loads. As a result, he drove only dump trucks thereafter, although once in a while he drove a load-lugger for the purpose of depositing an empty container.
On September 27th, 1990, Mr. Winegarden was involved in another accident in the respondents' yard in which a truck he was driving knocked down part of a chimney. The damage to the truck was approximately $1,000 and was not repaired, as it involved the truck's bumper which had been damaged previously. The chimney was not repaired either, as the respondents were in the process of assessing whether to tear down the building to which it was attached. At the time of this accident, however, a customer mentioned that Mr. Winegarden had backed into an equipment repair truck the previous month, again in the yard. There was no damage to the company's truck on that occasion, and the equipment repair truck operator had repaired any damage to his truck without charging the company. He had not reported the accident to the company, allegedly at Mr. Winegarden's request, and Mr. Winegarden did not report it either. In light of this information, Wayne Kummer decided to give Mr. Winegarden a letter of warning which stated as follows:
September 27, 1990
Jim Winegarden:
After an extensive analysis of your recent job performance we have come to the conclusion that this letter of warning is warranted.
The degree of damage to company equipment and property and third party property due to your accidents and neglect, has lead to this review.
Accidents in question are:
November 1989 Ripped hole in Van Trailer
August 1990 Hit Ranger Heavy Equipment truck. Accident never reported; contradiction in Union Contract Article 11, Subsection 11.2 "Employees shall report immediately in complete detail all accidents including the names and addresses of all witnesses to the accident."
September 27, 1990 Hit Chimney of London Salvage & Trading Co. Ltd. building Yours truly,
W. Kummer.
ii. On September 28th, Mr. Winegarden was involved in another accident in which he broke the mirror and signal light on his truck and dented the front end. At that time, Mr. Winegarden again said that he got dizzy and, Wayne Kummer alleges, said that he had blackouts. After discussing the matter, Wayne, Terry, and Larry Kummer decided to terminate Mr. Winegarden's employment. The termination letter read as follows:
September 28, 1990
Jim Winegarden:
The occurrence of another accident today, backing your truck into another employee's truck, as well as the three accidents cited in the letter dated September 27, 1990 have left us with no other alternative than to terminate your employment with London Salvage & Trading Co. Ltd. effective immediately.
Pick up of your final cheque and record of employment may be done anytime after Tuesday October 2, 1990 and when all company clothing has been returned.
Both Wayne and Terry Kummer assert that in addition to the reason set out in the letter, Mr. Winegarden was also fired because he was not insurable and because of his dizziness and alleged blackouts. Terry Kummer described a conversation he had with the company's insurance broker in which he put a hypothetical question to the broker to the following effect; if the company had an employee who had had a number of accidents which the company had not reported, and had dizzy spells, what would be the effect on the company's liability if the employee had a serious accident? The broker's advice was to report the accidents, or else the company might become liable for non-disclosure. He referred Terry Kummer to the general conditions in the company's insurance policy which include a term with respect to misrepresentation. The gist of this provision is that if the insured omits to disclose any increase in risk which is likely to materially influence a reasonable insurer, this may avoid the contract at the option of the insurer. There was some conflict in the evidence as to whether this conversation with the insurance broker occurred before or after Mr. Winegarden's termination, which we will examine in greater detail below.
In any event, the decision to terminate Mr. Winegarden was made on September 28th. Wayne Kummer testified that he told the dispatcher not to send Mr. Winegarden out on the road that afternoon, although Terry Kummer acknowledged that he had in fact been assigned to drive out of the yard. It appears that Mr. Winegarden was actually notified of his termination on October 1st, the following Monday. Sometime shortly after he was terminated, the respondents reported all four accidents to their insurers.
The union then filed a grievance on Mr. Winegarden's behalf. This was the first discharge grievance which had been lodged against the company since the union was certified. The grievance was referred to arbitration under section 45 of the Labour Relations Act and a Grievance Settlement Officer meeting was arranged for November 2nd. The day before the meeting, Wayne Kummer obtained a letter from the insurance broker to the effect that the insurance company did not wish to insure any vehicle Mr. Winegarden continued to drive. It was agreed as a fact that the union was aware of this letter. The parties then entered into minutes of settlement to the effect that Mr. Winegarden would be reinstated to his former position upon receipt of a medical report from Mr. Winegarden's doctor that he was fit to continue his truck driving duties. His record would show a three day suspension, but no compensation would be paid until the day of his reinstatement.
The respondents sought to lead evidence of discussions between the parties and the Grievance Settlement Officer at the meeting which led to the settlement. More particularly, counsel wished to introduce testimony as to why the respondents had agreed to the settlement for the purposes of deflecting any allegation of bad faith on the part of the company. The Board ruled orally that it would not accept that evidence for the same policy reasons it excludes evidence relating to discussions during the grievance procedure and discussions with Labour Relations Officers. Those reasons include the importance of finality in the grievance process, the harmful impact of failing to treat settlement discussions as confidential, the critical role of the Labour Relations Officer (and by extension, the Grievance Settlement Officer), the latitude he or she requires to mediate a settlement and the restrictions in the use of extrinsic evidence generally in interpreting written documents. (See, for example, Crown Electric, [1978] OLRB Rep. Apr. 344; Luine Masonry Ltd., [1990] OLRB Rep. Aug. 860 and Lorne's Electric, [1990] OLRB Rep. Sept. 935). However, in the course of hearing submissions in this regard, counsel for the respondents described in general terms the evidence he wished to lead, and as a result, we are in a position to say that it would not have affected our final decision in any event.
As noted earlier, the union then submitted two medical reports to the company and both were rejected. Subsequently, the union referred the matter to arbitration under the terms of the minutes of settlement, which provided for this method of enforcement, and Mr. Keller heard the matter on December 19th. On that date, the company attempted to introduce another letter, this time from the insurance company itself. This one, solicited by Terry Kummer, states that the insurance company was limiting coverage on the policy when Mr. Winegarden was driving, that it declined to provide physical damage coverage on any vehicle he drove, and that a premium surcharge was required. The arbitrator refused to admit this letter into evidence and an award reinstating Mr. Winegarden issued on December 3 1st.
Subsequently, Wayne Kummer told Mr. Winegarden that he should not report for work, and the company notified the union's lawyers that Mr. Winegarden had been indefinitely laid off. The company asserted that Mr. Winegarden was nominally reinstated in the sense that he subsequently received payment for a small period of time which preceded the lay off. The evidence indicated that the decision to lay Mr. Winegarden off was made by Wayne and Terry Kummer, who testified that the basis of the decision was the November 1st and December 19th letters from the insurance broker and insurance company respectively. Wayne Kummer testified that at least one of the respondents' customers required $1,000,000 of liability insurance on the part of the respondents' vehicles. He also said that in any event, he would not put a driver on the road with only $250,000 coverage, this being the limitation imposed by the insurance company. Terry Kummer testified that the respondents had no hesitations about Mr. Winegarden's work otherwise, and said that he was a good, conscientious worker who had been good for the company. He told the Board that he had been prepared to take Mr. Winegarden back in January to alternative employment that is, not as a truck driver. We note, however, that the layoff letter which is dated January 24th states that Mr. Winegarden is laid off because in the company's opinion, there are no other jobs covered by the collective agreement which he can be given.
Section 64 of the Labour Relations Act provides as follows:
No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence.
We turn first to the reasons for Mr. Winegarden's initial discharge. In our view, it is apparent that those reasons did not include anti-union animus. There was no evidence that Mr. Winegarden was particularly active in the complainant union, that he was singled out for special treatment by the respondents, or that his discharge followed closely upon some attempt to assert rights under the Act. Indeed, there were none of the other indicia present from which the Board may sometimes infer unlawful motives of this nature. Having reviewed the evidence in detail, we are satisfied that Mr. Winegarden's employment was not initially terminated in violation of the Act.
We do have some concerns about the respondents' conduct subsequently, including the reporting of Mr. Winegarden's previous accidents, the failure to reinstate Mr. Winegarden pursuant to the settlement and the decision to lay him off. Those concerns are centered not on any specific discriminatory intent towards Mr. Winegarden personally, but on the difficulty the respondents appeared to have in accepting certain fundamental aspects of their new collective bargaining regime.
The sequence of events before us illustrates this problem. The first step in that sequence which is alleged to be wrongful is the belated reporting of Mr. Winegarden's accidents to the insurers. The motivation for this step is critical, since the consequences which flowed from it are relied upon by the respondents to defend their subsequent conduct. In this regard, the complainant alleges that the respondents reported the accidents to frustrate the grievance and arbitration process. The respondents, on the other hand, assert that insurance difficulties were in fact the reason for Mr. Winegarden's discharge rather than an afterthought, and that they reported his earlier accidents because they only discovered at that time that they had an obligation to do so. In grappling with the issue of why the respondents reported the accidents, the parties spent considerable time addressing when the accidents were reported, with the implication that this shed light on the respondents' motivation.
The evidence of Wayne and Terry Kummer in this regard was both vague and conflicting. At one point in his testimony, Terry Kummer said that he had not spoken to the insurance broker until after Mr. Winegarden's termination. On the other hand, Wayne Kummer testified that the termination was based on Terry Kummer's conversation with the broker. Neither the warning letter nor the discharge letter contains any reference to insurance, which tends to reinforce the former's evidence in this regard, particularly in light of the fact that the respondents took pains to raise the insurance issue as a separate ground in subsequent correspondence. In any event, it seems clear from the evidence that the actual reporting of the four accidents did not take place until after the decision to terminate Mr. Winegarden. We also note that even in the initial conversation with the broker, his advice was simply to report the unreported accidents, not, for example, to terminate Mr. Winegarden's services. Looking at the evidence as a whole, we conclude that the issue of insurance arose subsequent to the respondents' decision to discharge Mr. Winegarden.
If the respondents did not raise the insurance issue until after the termination decision, what was it that prompted their enquiries and the reporting of the accidents at that point? We find it unlikely that the respondents had no previous inkling of the requirement to report accidents whether or not they were making an insurance claim, as they allege. While this assertion has some initial plausibility, it is difficult to reconcile with Terry Kummer's acknowledgement that he was aware that reporting the accidents at the time they happened would have increased the company's premiums, with his position in the company and with his experience and familiarity with insurance matters arising out of his handling of this area for the company for a number of years. In fact, the evidence before us is more consistent with the conclusion that the respondents simply ignored this term of the insurance contract until it suited their purposes for other reasons to report the accidents.
The respondents also claim that Mr. Winegarden's dizzy spells triggered their concerns about insurance at this point in time. However, the respondents had been aware of Mr. Winegarden's dizzy spells from the time he was hired. We do not find the suggestion by Wayne Kummer that Mr. Winegarden had told him on September 28th that he was also having blackouts to be credible for a number of reasons, not the least of which is that there appears to have been no mention of this until after the first medical certificate had been submitted in November, when it was apparent the company was trying to change the doctor's view about Mr. Winegarden's fitness to drive. In addition, we find it difficult to believe that the respondents would have sent him out on the road in a company truck to drive again on the afternoon of September 28th, as they apparently did, if Mr. Winegarden had informed them he was having blackouts that morning.
In other words, both of the reasons asserted for reporting the accidents are subject to serious flaws. At the same time, it is apparent from the evidence before us that the respondents were also having some concerns about the sustainability of the discharge. Indeed, it seems clear that the respondents raised the insurance issue as a means of bolstering their position in the grievance and arbitration procedure hoping, apparently, to use the insurance company's restrictions as a shield to avoid Mr. Winegarden's reinstatement. In this regard, both Wayne and Terry Kummer's testimony indicates that they were under the impression that if Mr. Winegarden was subject to insurance restrictions, they would be able to insulate themselves from the grievance and arbitration process. For example, Terry Kummer acknowledged in cross-examination that the respondents did not intend to take Mr. Kummer back to work by the time the medical reports were submitted, regardless of what those reports said. He evidently believed that the insurance problems allowed the respondents to ignore the subsequent settlement they had entered into. It is difficult to avoid the conclusion that this is precisely why the respondents reported Mr. Winegarden's accidents.
This conclusion is reinforced by the respondents' conduct. They did not, of course, reinstate Mr. Winegarden pursuant to the settlement, even though the second medical report satisfied its terms. (The parties agreed that we could accept as fact Mr. Keller's findings with respect to the two medical reports submitted.) Similarly, when Mr. Keller ordered Mr. Winegarden's reinstatement, they took steps to circumvent the effect of his award by immediately laying him off for reasons which predated both the settlement and the award. At every stage, they sought to rely on the insurance problems which they had generated by reporting the accidents. Looking at the evidence as a whole, we conclude that they reported the accidents with the idea of sheltering themselves from the grievance and arbitration procedure.
If all the respondents had done was to attempt to strengthen their case for the purposes of the grievance and arbitration procedure, there might be some question as to whether their conduct, regardless of its labour relations desirability, was a breach of the Act. And in fact it is clear that the respondents were hoping that the insurance restrictions would strengthen their position, first with the union during the grievance procedure and then at arbitration when they tried to introduce the insurance company's letter into evidence. However, the evidence indicates that they went further than that. As noted earlier, the respondents seemed to be under the impression that the insurance problems that resulted from reporting the accidents would place their decision beyond the reach of the grievance and arbitration procedure. Consistent with that impression, they flatly ignored their own settlement. When Mr. Keller directed Mr. Winegarden's reinstatement, they took steps to circumvent the effect of his award by immediately laying him off for reasons which predated both the settlement and the award. We do not find it necessary to decide whether the respondents in fact reinstated Mr. Winegarden when they paid him for a short period of time but told him not to report for work. Whether or not this constitutes reinstatement, there is no question that the effect of the layoff was to essentially nullify the arbitration award. In these circumstances, the form of what the respondents did is less important than its substance.
In other words, the respondents' conduct went beyond simply attempting to improve their position in the grievance and arbitration procedure, and demonstrated an unacceptable disregard for the procedure itself. Although we have no doubt that a lack of familiarity with the grievance and arbitration system played a role in the respondents' difficulties, it is also clear that they were determined to resist any result of that process which was at odds with their original decision. There is a critical distinction between this type of conduct and a party who is merely buttressing its position to persuade another party or an arbitrator of its merits. Whether or not after the fact conduct will be admissible or persuasive at arbitration, a party acting in the latter manner is still operating within a context where mutual agreement or an arbitrator will have the final word on the matter. This is quite different from a party who attempts to arrange its affairs and conduct itself so as to render the process essentially meaningless.
It is not sufficient to assert, as the respondents did, that they reported the accidents because they had a contractual obligation to do so, and that thereafter their conduct was governed by the insurance restrictions. In the first place, we have found as a fact that they reported the accidents for the purpose of insulating themselves from the grievance and arbitration, and not because of their contractual obligation. As a result, they are not entitled to rely on the fruits of their initial actions as a justification for their subsequent conduct. Moreover, the Board does not normally speculate on whether the same consequences might have been obtained had the respondents been properly motivated, and we decline to do so here. In any event, such an exercise if it was useful at all would be relevant to remedy, rather than to whether a violation had occurred by reason of the respondents' conduct.
Secondly, we are not convinced that the respondents' hands were as tied by the insurance restrictions as they maintain. It was clear that they made little or no attempt to investigate coverage with other insurance companies or in other markets, precisely because they wish to use the restrictions to resist Mr. Winegarden's reinstatement. In these circumstances, even if we take the insurance problems at face value, they do not adequately explain the respondents' subsequent conduct.
Section 50 of the Labour Relations Act provides that the collective agreement between the parties is binding on the respondents. There was no dispute that that collective agreement contains grievance and arbitration provisions. A conflict resolution process of this nature is so fundamental to a collective bargaining regime in Ontario that if a collective agreement fails to provide for it, arbitration provisions are deemed into the contract by virtue of section 44 of the Labour Relations Act. Indeed, it is fair to say that an enforceable collective agreement is the centrepiece of the scheme of collective bargaining contemplated by the Act. Without a mechanism like the grievance and arbitration process, a union would have no effective way to administer the provisions of its contract. This proposition is given added emphasis in a context where mid-term strikes are banned by virtue of section 72, and where it is generally accepted that the alternative dispute resolution system provided by the grievance and arbitration procedure is the quid pro quo for that ban. As a result, it is essential that such a process be meaningful and effective. Against this backdrop, we find that the respondents' conduct violated section 64 by interfering with the complainant's administration of the collective agreement. Given our finding in this regard, it is not necessary for us to determine whether the respondents violated the other sections of the Act pleaded.
The parties did not address the appropriate remedies in any great length, and having regard to the circumstances before us, we find that it could be useful to give them an opportunity to attempt to settle this issue first. As a result, we appoint a Board officer to assist them in this regard. We remain seized should the parties be unable to resolve any differences in this regard.