Windsor Printing Pressman and Assistants' Union, Local 274 v. Sumner Press Ltd., 1991 CanLII 6021

[1991] OLRB Rep. October 1207

1686-89-U Windsor Printing Pressman and Assistants' Union, Local 274, Complainant v. Sumner Press Ltd., Respondent

BEFORE: R. O. MacDowell, Alternate Chair, and Board Members G. O. Shamanski and B. L. Armstrong.

APPEARANCES: Dana Randall, Gladys MacPherson, Don Oliver and Mark Spencer for the complainant; Angela Rae and Kai Friis for the respondent.

DECISION OF R. O. MacDOWELL, ALTERNATE CHAIR, AND BOARD MEMBER G. O. SHAMANSKI; October 18, 1991

I

1. This is a complaint under section 89 of the Labour Relations Act alleging that the respondent company has contravened sections 3, 15, 64, 66, 70 and 71a of the Act. The union contends that the company has engaged in a pattern of collective bargaining designed not to achieve a collective agreement on its own terms (which the union concedes is lawful)~ but rather to avoid a collective agreement altogether, and to eliminate the union presence from the workplace. The union argues that the company has improperly demanded wage concessions~ resisted a strike, and engaged in what the union describes as "surface bargaining"~ lacking any real intention to conclude a collective agreement. In the union's submission, the company's purported concerns about its financial position are a mere pretext for an illegal scheme to "break the union".

2. The company concedes that it has engaged in hard bargaining in pursuit of its economic self-interest, and has demanded a collective agreement on more favourable terms. The company maintains, however, that the concessions to which the union objects are part of a lawful strategy to reverse serious financial losses and improve the long-run profitability of the business. In the company's submission, it is not illegal to demand concessions, even though the union may regard them as a distasteful retreat from the status quo; nor are such concessions any more inherently illegitimate than those which trade unions routinely demand from employers in every round of negotiations, including the one currently under review. The company points out that a "concession" is a matter of perspective, and that collective bargaining is a "two-way street". In the company's submission, the status quo is a reference point for bargaining, not a legal entitlement.

3. This matter was litigated over some seventeen days, and by the end of the hearings (which probably consumed more time than the parties spent at the bargaining table) the Board had a fairly complete picture of the course of bargaining, including the parties' positions taken from time to time, the parties' strategies and miscalculations, and the union's mounting frustration at the company's plea that it had lost a lot of money and that the road to financial recovery required cost-cutting measures and enhanced productivity. By the end of the hearing, the Board had before it voluminous and varied testimony about incidents which, while sometimes lacking in clarity or context, were said by the union to point to the company's illegal intentions, and by the company to point to the union's inability to match its bargaining objectives to economic and collective bargaining realities.

4. We do not think that any useful purpose would be served by reviewing all of those details here. It will be sufficient to set out a general overview of the evolution of the parties' dispute. Before doing that, however, it may be appropriate to briefly state the statutory framework within which the parties' rights must be determined. The most important provisions are sections 15 and 64 of the Labour Relations Act which read as follows:

15. The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

16. 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.

II

5. The law in Ontario establishes free collective bargaining as a preferred method for determining terms and conditions of employment. It requires an employer to genuinely recognize a trade union as the employees' bargaining agent, and engage in a sincere effort to reach a collective agreement. But the law does not prescribe the contents of that agreement or require the bargaining parties to make any particular concessions; nor is there unlawful interference merely because a trade union may be obliged to conclude a collective agreement on terms less generous than those it proposes, or those embodied in a previous contract. The employer's liability does not depend upon the union's appetite for compromise, or on its own, and the law does not protect either party from the loss of face or other consequences flowing from its own miscalculations.

6. Collective bargaining law involves an important balance: legal pressure to engage in negotiations and conclude agreements determining the terms of employment, but freedom from legal prescription as to what those terms will be. The Labour Relations Act specifies a few minimum requirements to which all collective agreements must conform, but apart from that, the parties are free to fashion their own terms of agreement. Even in the critical and contentious areas of "union security" and arbitrability the Legislature has moved cautiously, amending the statute (twice) to prescribe a compulsory checkoff as a statutory minimum, and make it clear that restrictions on arbitrability such as mandatory time limits or specific penalties should be expressly spelled out in the parties' agreement (see sections 43, 44(6) and 44(9) of the Act). Indeed, not only does the statute say nothing about the key economic provisions of the agreement (wages, benefits, hours of work, premium pay, and so on) neither does it specify particular grievance procedures, recognition of seniority, "just cause" protection, or a schedule of management rights - all of which are important parts of the bargain which can usually be found in most collective agreements in some form or other (and, in some cases, have been the subject of explicit legislative prescription in other collective bargaining statutes). On all of these important issues, the Act remains totally silent; and the Board has no mandate under section 15 to impose terms, or set what, in its view, is an appropriate wage rate, an acceptable level of profit, or suitable work rules (even assuming there were "objective" criteria for doing so in a private sector context). In this regard, we observe that a system of free collective bargaining differs significantly, not only from a regime of individual bargaining, but also from modified bargaining models (in the hospital sector, for example), where the parties have no right to resort to economic sanctions, and the terms of agreement are ultimately imposed on the bargaining parties by someone else. (First contract situations are a hybrid: free collective bargaining coupled with conditional access to interest arbitration for the first round of bargaining - see section 40a of the Act).

7. These considerations are not new to the Board or to its analysis of the duty to bargain in good faith. In Radio Shack, [1979] OLRB Rep. Dec. 1220 the Board observed:

66. ... The duty to recognize a trade union and to bargain in good faith does not require an employer to enter into any collective agreement proposed by a union. It is apparent from the structure and history of the legislation that the Legislature has assumed that the parties are best able to fashion the details of their relationship. The assumed strength of this approach is that labour and management are more likely to accept an employment relationship which they themselves create than one that is imposed on them. So too, their agreement is likely to be more accommodative of the economic and social demands that each faces. Accordingly, both parties are entitled to bargain hard for the agreement that they believe to be acceptable. This is so even if one of the parties has an overwhelming strength at the bargaining table and is able to achieve most or all of its needs. The exercise of such raw bargaining power in good faith does not offend the bargaining duty imposed by this Act. See York Regional Board of Health (1978), 1978 CanLII 3478 (ON LA), 18 L.A.C. (2d) 255 at page 263 (Adams).

67. Thus, from an employee viewpoint the right to engage in collective bargaining is not a right to achieve the terms of employment employees may wish. It is simply an opportunity to combine together to try and achieve their needs with the possibility that economic realities will dictate quite a different result in any particular situation. This perspective of the bargaining duty was explained by the Board in CCH Canadian Limited t19741 OLRB Rep. June 375 at page 381 in the following way:

"There was no evidence to suggest that the company's position on these items was other than "hard bargaining". There is no requirement that a company must make concessions or agree to a particular agenda of discussions. The parties met often and bargained hard. Because the union might have to accept an agreement "tailored to the company's measurements", to use a modified version of Mr. Peacock's own chosen words, is no reason to conclude that the company was bargaining in bad faith. (See Regina ex. rel. Hearn v. Norfolk General Hospital 1957 CanLII 515 (ON MAGCT), [1957] 119 C.C.C. 290 (Ont. Mag. Ct.). There was no evidence to suggest that the company was unprepared to sign an agreement; but of course it wanted an agreement on its own terms. Collective bargaining is redolent of self interest and without evidence to suggest that the company's terms were so unreasonable as to suggest that, in reality, it wanted no agreement and no trade union, the Board is unprepared to grant the application."

In Canada Trustco Mortgage Company, [1984] OLRB Rep. Oct. 1356, the Board had this to say:

30. We have juxtaposed these various passages, because, in our view, it is important to reiterate both the substance of the bargaining duty, as well as its limitations. In recent years the Board has been scrupulous to protect the framework of collective bargaining: the independence of the union, the integrity of its role as the employees' exclusive bargaining agent, and the right to information necessary for it to properly perform its statutory role. But the Board has been equally clear that it will not act as interest arbitrator, or prescribe the precise contents of the parties' collective agreement - even in the face of an "egregious" breach of the duty to bargain in good faith (see Radio Shack, supra). The content of the agreement is for the parties to determine, in accordance with their own perceived needs and relative bargaining strengths. The legislation enables employees to combine together to bargain collectively and compels the employer to recognize their bargaining agent. It further provides a framework within which there can be an exploration of the parties' differences and a sincere effort to reach some accommodation. Despite the adversarial aspects of collective bargaining, there are substantial areas of mutual interest between employers and employees which informed discussion may reveal. But the statute does not require any particular concessions, nor does it stipulate the content of a collective agreement, or even that a collective agreement always must be the necessary outcome of the parties' bargaining.

31. One cannot quarrel with the proposition that the "duty to bargain in good faith" must encompass an obligation to engage in informed and rational discussion, and in exceptional circumstances an employer's position at the bargaining table may be so patently unreasonable or devoid of apparent business justification as to evidence a desire to avoid any collective agreement altogether. So may an unexplained retreat from a previous agreed position, or the untimely insertion of new issues into the bargaining process. However, the Board must be careful that in adjudicating disputes and giving a reasoned elaboration for its decisions, it does not impose its own model of decision-making as the normative standard for the collective bargaining process. Collective bargaining is not simply a matter of presenting proofs and reasoned arguments in an effort to achieve a favourable outcome, nor is that outcome necessarily arrived at, or explained, by a logical development from given and accepted premises. It is a process in which reason plays a part - but not the only part. There may be a range of potential outcomes or solutions and the ultimate result may have more to do with economic strength than abstract logic. In particular collective bargaining situations there simply may not be any commonly accepted principles or criteria and, in consequence, no objective basis for distinguishing a "claim of right" from a "naked demand". Reason and self-interest are inextricably intertwined. Ultimately the parties may reach agreement only because of a realistic appraisal of the value of their objectives in relation to their ability to obtain them, including the costs they are able to inflict on one another. It may have little to do with what some outsider might consider a "fair" settlement, or a just allocation of rewards to capital and labour.

32. Rational discussion is an important aspect of the bargaining process. So is power. Persuasion is an effective tactic to gain one's bargaining objectives. So is economic pressure. Whether that system actually results in a "just wage" or "distributive justice", we leave for others to debate. Collective bargaining permits that outcome, but it does not compel it. (For an interesting analysis of the impact of collective bargaining see: What Unions Do by R. B. Freeman & J. L. Medoff, Basic Books, New York, 1984.)

33. The facts of this case provide a graphic illustration of the absence of shared principle, and the predominance of bargaining power as a means of settling the parties' collective bargaining differences. The union seeks to limit the exercise of managerial authority and achieve for its supporters, terms and conditions of employment not only more generous than the employer is willing to pay, but also more generous than the employer is currently paying to hundreds of other employees in identical circumstances. The employer seeks to maintain its managerial prerogatives and provide levels of remuneration consistent with its own assessment of its needs, its own organizational imperatives, and its own perception of the dictates of the market place. There is no obvious way of reconciling these competing interests, nor is there any reservoir of principle to which one can resort to provide the "right answer". No amount of rational discussion or reasoned elaboration will necessarily produce an accommodation. Nor can there always be such accommodation in our system of free collective bargaining which ultimately rests, as it must, on the right of parties to resort to economic sanctions in pursuit of their own self-interest as they define it. Under our statute their only obligation is to endeavour to conclude a collective agreement and if that is the true intent, neither the content nor the consequences of that agreement are of any concern to the Board.

34. This is not to say that collective bargaining must always be a "zero sum game", or that there cannot be substantial areas of mutual accommodation and joint decision-making. But our statute mandates collective bargaining, not co-determination. Co-determination, or co-partnership may be the result of collective bargaining, but it is not an outcome required by law. Nor was the duty to bargain in good faith designed to redress an imbalance of bargaining power. A party whose bargaining strength allows it to virtually dictate the terms of the agreement does not thereby bargain in good faith, and that proposition is applicable whether it is the union or the employer which "has the upper hand".

8. These passages all highlight the essential issue in this case: was the company merely pressing its superior bargaining power in order to achieve a collective agreement on its own terms; or does its conduct evidence a desire not to conclude any collective agreement at all. We prefer this statement of the issue to one invoking the term "anti-union animus" as the union did in argument. Whatever utility that concept may have in traditional unfair labour practice cases, it loses both precision and analytical power in a bargaining context where any resistance to union proposals can be characterized, loosely, as "anti-union", and any lost strike will probably undermine the union's credibility and effectiveness. The fact is that employers are entitled to rely on their bargaining power to contain union initiatives which increase the cost of doing business, or regulate the way in which work is assigned, just as a trade union is entitled to use its bargaining power to raise employee wages, control the introduction of technological change, limit the ways in which the employer can allocate work, or require the employer to hire only from the ranks of unemployed union members. And, of course, many employers would probably prefer not to have to deal with a union and may be candid enough to say so. In that sense, those employers may be labelled "anti-union". The question, though, is whether such anti-union attitudes produce conduct proscribed by law.

III

9. With this background, then, we return to an overview of the facts. In making these findings, we have taken into account the relative credibility of the witnesses, based upon such factors as: their demeanour when giving evidence; the clarity, consistency, and overall plausibility of that evidence when compared with that of other witnesses, and subjected to the test of cross-examination; the witnesses' ability to distinguish fact from suspicion or belief, and resist the tug of self-interest when framing their answers; and what appears to the Board to be most plausible in all the circumstances. In the case of the union witnesses, it was particularly important to differentiate between what they actually heard or saw, and what they believed to be the respondent's intentions. It is also important to recognize that the parties came to the bargaining table, and later gave evidence about the bargaining, from very different perspectives, and had quite different expectations about their "entitlements". Finally, because for a considerable period of time, the bargaining and the litigation proceeded, in tandem, the distinction became increasingly blurred. We will have something to say about that below.

IV

10. The company runs a small printing business in Windsor, Ontario. Until relatively recently, that business has concentrated on the production of flyers, brochures, small magazines, and other low volume items for local customers. The company has operated on this basis for some time.

11. The union has had a presence in the business for many years, representing a craft unit of employees who work on the presses and in the plate room. The number of employees in the bargaining unit has declined significantly in the past few years and now numbers a little over a dozen. This represents a small proportion of the company's total work force which has fluctuated between forty and sixty employees in recent years, depending upon the vagaries of the market place, and corporate changes to which we will refer in more detail below. None of these other employees are represented by a trade union.

12. In 1986 Sumner was purchased by Ernie Olde. Mr. Olde is an entrepreneur and discount securities broker with business interests in the United States and Canada. The Olde enterprises employ, in total, about 1,000 workers, the vast majority of whom are in the United States.

13. At the time of the purchase, Sumner was not a particularly healthy business. Its major asset was a tax loss which could be applied against future profits if there were any. However, Mr. Olde's existing businesses generated a significant volume of printed material, and with that assured customer base, an infusion of capital, and a significant restructuring, Mr. Olde hoped to make Sumner a profitable venture. Mr. Olde anticipated that Sumner would serve as the printing arm of the Olde enterprises, and in addition, would develop new customers which also required high volumes of quality printing. But that required a change in market orientation, and a lot of new equipment.

14. At a total cost of about four million dollars, Sumner acquired a sophisticated multi-colour Web press and began to construct an addition to its building to accommodate the new press, related machinery and paper stocks. Among the financing arrangements for this new equipment was a federal government grant. This federal funding was made available on condition that ninety per cent of the output from the new machinery would be exported, and that the equipment purchased would "not be utilized so as to adversely affect other commercial printing operations in Canada". This was consistent with Mr. Olde's own business plan: an expansion into the America market where the productivity of the Web press would give Sumner a competitive advantage despite lower American wage rates. Sumner anticipated new customers and new competitors.

15. It remains to be seen whether Mr. Olde's ideas and investment will eventually make Sumner a profitable operation. In the years immediately following its purchase, the company was plagued by management and production problems at all levels. An early discovery was that the senior management of Sumner had misrepresented the financial health of the business, failed to maintain accurate reports, and either resisted or were incapable of implementing the changes that Mr. Olde thought necessary. That precipitated their departure. There were parallel changes in operations, production and sales personnel, either because they did not perform to the company's expectations, or left to pursue other endeavours. Customers were tardy in their payments, or did not generate sufficient demand to produce a reliable profit. There were also difficulties with paper supplies and suppliers.

16. By contrast, relations with the union were initially quite amicable. In view of the significant changes then on-going or projected, the union agreed to extend the existing collective agreement for a two-year period, with only minor amendments, and the addition of a cost of living clause. In effect, in the last round of bargaining, the parties agreed that, for the time being, they would maintain the collective bargaining status quo. These arrangements were concluded without a strike or third party mediation.

17. Before dealing with the current round of bargaining, it is necessary to say something about Mr. Olde's attitudes and management style. Both were the subject of comment in the present proceedings, and there is little doubt that the collective bargaining atmosphere was influenced by the fact that Sumner had a new owner who was determined to put his own imprint upon the business. And, having taken a risk and invested significant sums, he was also determined to turn a profit.

18. Mr. Olde is an energetic entrepreneur and an unabashed advocate of free enterprise. For Mr. Olde, business is a challenge, and its objective is success; moreover, in his view, profitability depends upon flexibility, productivity, and aggressively seizing the initiative in an increasingly competitive market. Mr. Olde does not play an active role in his various businesses, preferring instead to delegate authority to local management, on the understanding that they will be rewarded if they perform, and removed if they do not. He is solicitous about his money, and has little tolerance for those who waste it.

19. In Mr. Olde's opinion, trade unions are a fact of life that he is obliged to recognize, but they sometimes resist change or inhibit productivity, to the ultimate detriment of both the business and its employees. So long as a company is privately owned and operates in a competitive market, the return on investment and the workers' job security both depend upon its ability to operate profitability; and, in Mr. Olde's view, that requires a realistic accommodation to the needs of the market. Without a profit, there will eventually be no business or jobs.

20. Such views are not particularly novel these days, and they help to explain both Mr. Olde's determination to turn the business around, and the company's efforts to effect the changes it thought were necessary to use the new press efficiently and make inroads in the American market. Among those changes were modifications to the old collective agreement in order to reduce labour costs, and make it easier to schedule the longer production runs which the Web made possible. Other proposed changes would make it easier to move to a multi-shift, continuous operation or avoid dislocation if a number of key, but senior, employees all decided to take their vacation at the same time. From the company's perspective, the old agreement had its roots in a different time and technology. It did not reflect current economic pressures or prospects.

21. From the union's perspective of course, Mr. Olde's views were very troubling, and his efforts to restructure the business represented a distinct departure from the rather congenial, "laissez-faire" relationship with the previous owners. Mr. Olde was portrayed as something of a capitalist mercenary, determined to extract a profit from the business at the expense of its employees if necessary.

22. There is an element of truth in this assessment. Mr. Olde had limited appetite for financial losses, and the company came to believe that changes in the employee compensation package and work rules were a necessary condition for financial recovery - at least in the short run. Concessions were imposed unilaterally on the unorganized majority, and were pressed vigorously at the bargaining table. For its part, the union initially demanded significant improvements and resisted concessions, but ultimately retreated, reluctantly, to an insistence on maintaining the status quo.

23. There is an element of truth in Mr. Olde's view as well because, from time to time unions do resist change as the complainant did here. From the company's perspective, however, changes were imperative; the status quo has never been "in the cards". That was the basis for the 1987-89 collective agreement extension, but it was never the company's position in the current round of bargaining or throughout this litigation. In this round, the company was determined to cut labour costs and improve productivity. Whatever its motive may be, the company has never embraced the status quo, and the use of that term was the source of much misunderstanding and miscalculation. We will return to that theme later.

24. Jeffrey Slopen is among those in whom Mr. Olde has confidence. Mr. Slopen is a partner in a Windsor law firm, and a member of the bars of Ontario and Michigan. But he is much more than the company's solicitor. He is an officer, independent director, and business advisor, who has been involved with Mr. Olde's business endeavours for a number of years. Mr. Slopen arranged for the acquisition of Sumner in 1986, and negotiated the collective agreement extension to which we have referred. In both cases, he acted on his own, within very general parameters set by Mr. Olde. Mr. Slopen was also the company's spokesman in the most recent round of bargaining. As before, he had considerable latitude to pursue what he considered to be in the company's best interests.

25. In May 1989 the union submitted its proposals for a new collective agreement. These included: a one year term of operation; an immediate seven per cent wage increase with additional adjustments for plate room employees; a thirty-five-hour work week, with the Web and five colour press operating on a four-day week, from Monday to Thursday; additional vacation, medical, holiday, and overtime entitlements; and a demand that when the presses were idle, maintenance work should be scheduled instead of employee layoffs. Some union witnesses testified that they knew the company was losing money but believed that they were entitled to a significant wage increase because their wages had fallen behind those of local competitors. The evidence does not support that belief, and when cross-examined, the employees conceded that none of the local examples they cited had a Web press. The company saw its competition as being in the United States to which the company was obliged to export the output from the Web. Whatever may have been true in the past, from the company's perspective, the local print shops were no longer the appropriate reference point.

26. We need not decide whether the company's proposed comparisons were more valid or persuasive than those underlying the union's demands, nor does it matter whether the company's position is characterized as generous or stingy. The point is, that in this round of bargaining the parties had very different expectations and objectives.

27. The company was quite surprised by the union's opening position. From its point of view, these demands represented an increase in labour costs at a time when the company was experiencing serious dislocation and financial difficulties. In fiscal 1989, the company lost almost one million dollars, and~ as it turned out, despite reductions in staff and vigorous cost cutting measures, the company also registered a loss in fiscal 1990. Undoubtedly, some of the more recent losses can be attributed to the ongoing strike, but whatever their origin, the circumstances were not promising for employees expecting wage increases. And because the measures imposed upon the non-union employees did significantly reduce the company's costs, the company expected equivalent sacrifices from bargaining unit employees.

28. The company's position at the bargaining table was influenced not only by these financial losses, but also by what it considered to be productivity problems and inadequate control over the production process. Some of its difficulties involved inventory controls, quality assurance, obtaining satisfactory paper supplies, and weeding out customers who did not promptly pay their bills. Others involved the existing work rules, and incidents which, though minor in themselves, pointed towards a need for more authority to assign, schedule or reallocate work responsibilities. These factors shaped both the company's bargaining positions and its inclination to stick to them. The company was not dealing with symbolism or "management rights" in the abstract. It wanted concrete changes in the way in which work was paid for, scheduled, and assigned.

29. Shortly after the commencement of bargaining, the pressmen refused to do certain maintenance work which they had routinely done in the past, claiming that such work was not part of their job. A repair crew had to be brought in, at considerable expense, from Toronto. On another occasion, a press crew shut down their machines at the end of a run, but before the end of their shift, and went for a drink at a local hotel. The company was annoyed by the explanation that, in accordance with established custom and practice, it was the press crew that decided when the machines would run and when they would not. The company was also disturbed by the press crew's reluctance to fill in the time or do routine maintenance or clean up when their machines were not busy. An overtime boycott (although illegal) interfered with the operation of the presses, but the company found that there was really not very much that they could do about it.

30. These events merely reinforced the company's view that it was necessary to more forcefully define and assert management's right to run the business. This, together with reducing labour costs, became a key issue in collective bargaining.

31. Jeffrey Slopen was the company's spokesman at the bargaining table, and the chief architect of its bargaining strategy. Despite union assertions to the contrary, we find that Mr. Olde did not play an active role, and that Kai Friis, the general manager, served only in an advisory capacity. Mr. Slopen drafted the company's initial response to the union s demands without specific consultation with or approval by either Olde or Friis, and throughout the subsequent negotiations, it was Mr. Slopen who decided what position would be taken and when. As we have already mentioned, Mr. Slopen had been involved with the company since its acquisition, he was overseeing the renovations and building extension, and he was responsible for many of the financial and legal arrangements underlining the purchase of the Web press and proposed business expansion. Mr. Slopen had settled the previous agreement without serious difficulty and without reference to Mr. Olde; and in the current round of bargaining, his only instructions were to get the best deal he could. Despite the union's assertion that Mr. Olde was "pulling the strings" in the background, we find that Mr. Slopen had the authority to sign an agreement on his own, and that he actually sought to keep Mr. Olde out of the bargaining process because he thought Mr. Olde's volatile personality might inflame the situation and inhibit settlement. On the other hand (as quickly became apparent), Mr. Slopen needed no encouragement to take a tough bargaining position~ and was well aware of the fact that economic pressure was an important part of collective bargaining.

32. The company's first bargaining position was sent to the union in early June and involved significant concessions. The company proposed a three-year agreement with a seven and a half per cent wage cut for employees earning more than $10.00 per hour (non-union employees were not earning that much). In addition, the company proposed a forty-hour work week, more modest and uniform overtime premiums based on time and a half rather than double time rates, and more control over the scheduling of vacations, starting times, shift changes and shift scheduling. In the company's submission, these changes were designed to reduce labour costs and make it easier to move to a multi-shift continuous operation, which, in turn, would facilitate the most profitable use of the Web technology in which the company had so heavily invested.

33. The union regarded these proposals as an odious retreat which was totally unacceptable. The union contends that these concessions, while later modified in magnitude and composition, were "tailored for rejection" and represent a position which no self-respecting trade union could be expected to accept. In the union's submission, these proposals were so predictably offensive that they betray an intention to derail bargaining and avoid a collective agreement on any reasonable terms.

34. The opening rounds of bargaining were neither prolonged nor productive, as the company sought to establish the financial basis for its proposals and the union repeatedly refused to examine the company's financial statements or explore the consequences of the company's purported losses. Indeed, it was not until some months after this litigation began that the union finally agreed to examine the company's books. Those books, it should be noted, are audited by a large and reputable firm of accountants in accordance with standard accounting principles; moreover, these financial statements are not only required by ordinary business practice, but were demanded by the company's lenders - particularly a chartered bank. Those lenders have more than an passing interest in both the accuracy of the books, and the company's ability to turn a profit.

35. The financial statements substantiate the company's plea that it has been experiencing serious financial losses.

36. Why did the union refuse for so long to examine the company's books, so that it could assess for itself, the strength of the company's purported need for concessions? Various reasons were advanced. It was said that the company had "cooked the books" so that the financial statements did not accurately reflect its true financial position. It was said that losses were irrelevant because they merely created valuable tax write-offs which could be used in the future, or transferred somehow to the benefit of other Olde companies. Union witnesses painted a picture of financial manipulation and misrepresentation. Don Oliver, giving evidence months into the bargaining testified that, in his opinion, the company was intentionally running at a loss, so that it did not matter what the books revealed. Mr. Oliver is the local union president and its chief spokesman at the bargaining table.

37. All of these assertions were contradicted by the evidence and were formally withdrawn after the union and its accountants had examined the company's books. The losses were real. The company had not "cooked the books". Those losses could not be transferred to other Olde businesses. There was a genuine need to address business problems, costs and productivity.

38. But the union's dogged refusal, for months, to even consider those financial statements did much to diminish its credibility in the eyes of the company which considered this behaviour both irresponsible and incomprehensible. It was a refusal to recognize what the company considered essential economic realities, and did much to sour the bargaining relationship. Nor was the company impressed by the incidents of sabotage and damage to its machinery that came to light after the employees went on strike. In short, leaving aside the company's "real motive", there was little agreement on the basic parameters for bargaining, let alone the basis for a collective agreement; and despite its earlier retreat, when the 1990 financial statements became available, the union was still raising questions (which the company again answered) about their accuracy. As late as the completion of the testimony in this case, and despite all of the evidence to the contrary, the union still seemed to be operating on the belief that the company's losses were not genuine.

39. By contrast, all of the company positions were consistent with the "interest" it defined to the Board: cutting costs, improving productivity and returning the firm to a profitable operation. It did not matter very much how those savings were achieved; and in this sense the company did not have a firm "bottom line" or a fixed list of positions from which it would not deviate. It responded to the union's initial demand with wage concessions, because the union had proposed significant wage increases, and because concessions of this kind were easily identified, calculated, and implemented. In the earlier rounds of bargaining, the company modified its wage position, slightly, as a "signal" to the union of a willingness to move in this area (there was no response), but it generally concentrated on wage - related items because they were most easily referable to direct financial savings. But the company would have been equally content with a package that included wage differentials for new hires or relief from the rigid "manning" requirements in the old collective agreement. A settlement incorporating those concessions would facilitate cost savings without such drastic cuts to the base rates of existing employees, but the union had little appetite for alternatives along these lines. Indeed, the union asserts that when these matters were raised the company was merely shifting position in order to avoid a collective agreement, and that in the case of proposed changes to the "manning" schedule the issue was simply too important an item to a printing trades union for the company to raise it in the latter stages of bargaining.

40. On June 30, 1989 the old agreement expired. On August 15th, 1989 the Minister of Labour advised the parties that he did not consider it desirable to appoint a conciliation board. On August 28th, the union took a strike vote. By early September the employees were in a lawful position to strike.

41. With the expiry of the statutory freeze (see section 79 of the Act), the company was entitled to unilaterally implement changes in the employees' terms and conditions of employment. But there was no immediate strike, and for the time being, the employees were paid on the same basis as before. Mr. Slopen testified that, at that point, he was still confident that an agreement could be negotiated in the next few weeks without a work stoppage, and he was reluctant to precipitate a strike or generate employee ill will by imposing wage cuts even though he was legally entitled to do so. Nor did he think it appropriate at that stage to unilaterally impose the company's other proposals, because those items were still the subject of bargaining, and he did not think that the ultimate settlement would necessarily mirror the company's current bargaining position. Mr. Slopen still expected that a timely inspection of the company's financial statements would temper the union's position, and the company was not particular about how the concessions were structured, so long as the result was a reduction in labour costs.

42. The company showed no such reluctance with respect to its other employees - that is the majority of its work force who were not represented by a trade union or were part of the management team. During the period that the union was at the bargaining table, there have been layoffs, staff reductions, unilateral changes in compensation, the elimination of senior managers who were not performing to Mr. Olde's or Mr. Slopen's expectations, vigorous efforts to weed out unreliable accounts and attract new customers, and some experimentation with the employee complement to achieve the optimum mix of brokers, sales staff, estimators and so on.

43. Ironically, one of the casualties was Kai Friis, the general manager who joined the company in March of 1989, and accompanied Jeffrey Slopen at the bargaining table. Mr. Friis was ultimately discharged in August 1990, for reasons which may yet be subject to litigation elsewhere and are not here relevant.

44. Mr. Friis was called as a witness by both parties to this proceeding, but, on balance we do not think that his evidence makes the case for either one or significantly contributes to the general picture. In particular, we attach little weight to the "new details", and opinions he was disposed to reveal when he was called as a "surprise witness" (by the union) to give evidence a second time - after his discharge and while he was contemplating his own litigation against the company. We attach no weight at all to his submission that, in his opinion, the company was not prepared to sign any collective agreement - even one involving significant concessions. Mr. Friis' testimony is simply too self-serving on this point to be accorded much weight, and in cross-examination he indicated that he really did not know what Mr. Slopen would have done if the union had shown a willingness to make the significant concessions which the company was seeking. We also note that Mr. Friis testified that his former testimony was the truth, he had no new facts to add, and that in framing his earlier answers he had been careful not to implicate anyone. When asked about his own prospective wrongful dismissal action, Mr. Friis was totally evasive and equivocal. There was no admission of perjury or other startling revelation which the union had earlier asserted when it sought to call Mr. Friis "in reply to himself'. On the contrary, the "new evidence" added little to what had earlier been said, other than to demonstrate enough bending in the direction of his own personal interest to raise doubts about the reliability of his testimony in general. We prefer the evidence of Mr. Slopen wherever it is in conflict with that of Mr. Friis.

45. On or about September 1, 1989, Mr. Olde called a meeting of employees and gave a long and somewhat rambling address outlining his concerns about the company's losses and his hopes for the future. This address touched upon a variety of topics including the course of bargaining, and was accompanied by a document (exhibit 4) entitled "Employment Policies" which outlined a number of changes which the employer proposed to make effective the following week. These changes included a forty-hour work week, time and a half for overtime in excess of forty hours and double time for Sundays and holidays, the elimination of a cost of living increase, and a vague limitation on the existing vacation policy. In effect, the company was unilaterally implementing some of the terms which it had sought to achieve at the bargaining table - as it was entitled to do at the expiry of the statutory freeze. However, this document contains the following express caveat:

The foregoing shall be effective until such time as the company and the union enter into a new collective agreement.

There is nothing new here except for the reference to "profit-sharing" which in fact was never later pursued.

46. About a week later, the company issued a "policy manual" (Exhibit 5) which was given to some bargaining unit employees upon their request but which is expressly labelled: "FOR NON-BARGAINING PERSONNEL ONLY ... DRAFT COPY ONLY". With the exception of "profit-sharing" which was described in evidence as an item the employer hoped to generalize to all employees if the union was interested, these conditions were not offered to the bargaining unit employees in exchange for, or instead of those offered to the union, nor was there any bargaining directly with the employees. The new terms in Exhibit 4 were applicable to bargaining unit employees and encompassed some of the items for which the company had pressed at the bargaining table and mentioned a profit-sharing plan which would be implemented some time in the future, but these terms, unilaterally imposed, were not the broader concessions which the company expected to incorporate into a collective agreement. They were an interim measure which expressly anticipated the continuation of the bargaining.

47. The employees did not welcome any of these changes. They had earlier speculated that the "non-bargaining unit policy" might signal the terms that would be available to them if they abandoned the union, and they expected these terms to be more favourable than those offered to the union. But in the result, they did not find them to be at all desirable and the evidence did not bear out their speculation. Thus, while the policy manual was the focus of considerable attention in the course of this litigation, it has never been a formal offer to the trade union, or the bargaining unit employees, and there is not the slightest indication that the union would ever be content to settle an agreement on those terms. It bears little resemblance to the previous collective agreement, contains few guarantees with respect to wages, working conditions, work rules or job security and includes no enforceable guarantees or protections against unilateral employer action. That is why the employees did not find it attractive.

48. Profit-sharing was not an item which the company had raised at the bargaining table either, because it reasoned, (correctly as it turned out), that since there had been no profits, only losses, the union was likely to regard such proposal as an empty gesture. During the course of this litigation, however, company witnesses were repeatedly pressed to explain why they were offering alleged advantages to non-bargaining unit employees that they appeared to be unwilling to offer to the union. Mr. Slopen indicated that profit-sharing was an Olde idea which had really never entered the calculation for bargaining unit employees and the reference to it was one of several errors which appeared in the documents issued at that time; however, when in the course of conducting its case before the Board the union indicated an apparent interest in profit-sharing, the company promptly extended the offer to negotiate about that. It was just as promptly rejected. As in the case of the policy manual, there was never any interest in the matter or effort by the union to raise this issue at the bargaining table. It was mentioned only in the context of this case, in an effort to show that the company was bargaining with individual workers, or offering them favourable terms to abandon the union. It was not.

49. On September 11th, on the eve of the strike, Mr. Oliver appeared on the company's premises during working hours, and held a "study session" with the employees. Mr. Oliver arrived without notice and was accompanied by both a solicitor and a reporter from a local newspaper. The company was disturbed about the unexpected work stoppage and the presence of the reporter.

50. During the course of this study session (or shortly thereafter) Mr. Oliver called Mr. Slopen to inquire about whether the policy manual was an offer to the union. Mr. Oliver had asked Mr. Friis about that, but Friis had, in turn, directed the inquiry to Mr. Slopen who was the company's spokesman. Mr. Slopen replied that the "non-bargaining unit" policy manual, as its cover indicates, is not directed to the trade union and that the terms and conditions of employment for bargaining unit employees would be established through the process of collective bargaining. It was Mr. Slopen who decided what the company's position would be; and we mention this incident only because that has been the company's position throughout, while the union has claimed that Mr. Olde has been in the background orchestrating the company's positions. He has not; and for significant periods of time, he was out of the country attending to his various business interests. Nor did Mr. Slopen need any instruction or direction about the concessions he thought were necessary and attainable.

51. From the expiry of the statutory freeze in August 1989 up to the commencement of the strike in mid-September, the company invited employees to continue to work and told them that, if they did so, their wage rates would be maintained: that is, insofar as wages were concerned, the company would maintain the status quo for existing bargaining unit members pending negotiation of the new collective agreement. The company maintained that position even after they went on strike. But this was never an offer to maintain the status quo in its entirety, and the company did not do so. As time passed, the company unilaterally implemented a number of changes in the standard hours of work, overtime premiums and vacation scheduling, and hired new employees at rates lower than those paid to former members of the bargaining unit (a position the union had rejected). Existing bargaining unit employees maintained their previous wage rates, but new hires did not necessarily get the rate stipulated in the old agreement. The company also stopped applying the "manning" rules in the former collective agreement. Those rules had specified the number of employees that had to be assigned to each machine, and limited the employer's ability to allocate, schedule, or re-assign workers in the manner it considered most efficient. In the company's opinion, these work rules were never necessary nor welcome, and this opinion was strengthened during the strike when it discovered that it was able to operate its equipment with fewer or different employees than those stipulated in the collective agreement, and said by the union to be absolutely essential.

52. It was this discovery which later prompted the company to suggest that its position on wage concessions might be modified if the union were prepared to agree to revise established work rules. The union refused. Counsel told the Board that for a craft union in the printing industry, those work rules were a critical part of the agreement from which the union was unwilling to depart. The company's proposal was characterized as a serious threat to the employees' job security, and an effort to derail bargaining by raising issues that had not previously been central to the employer's bargaining position. Mr. Slopen testified that he thought that was what bargaining was all about: innovative efforts to reach accommodation, and the exploration of new ways to meet the parties' concerns. Mr. Slopen testified that relief from restrictive work rules was a cost-saving measure that would allow the company to moderate its demand for wage concessions; however, when the union refused to negotiate along these lines, the company maintained its formula for reducing costs through direct wage concessions.

53. The union's efforts to preserve the status quo, and debates about what that meant, had other ramifications as the bargaining process and the litigation became increasingly intertwined. As we have already mentioned, the company has never been prepared to maintain the status quo on wages and benefits, and while its proposals for change have been diverse, none of them can be considered minor. It has been somewhat flexible about the mix of concessions, but has never retreated from its ultimate objective; moreover, the union's step by step retreat from its initial wage demand to the alleged "status quo" wage position was never accorded the significance that the union attributed to it. From the company's perspective, much of the union's "movement" was entirely illusory or inconsequential, since it was measured from an artificial and unrealistic plateau. From the starting point of a significant increase in wages and benefits, the union had given itself lots of room for "movement" without ever getting close to a position that the company considered "in the ball park", and Mr. Slopen testified that he was not inclined to "bargain with himself'.

54. In the company's frame of reference, the status quo was different from the union's opening positions but was not, by itself, the basis for agreement. The company had agreed in 1987 to maintain the status quo, and had still lost almost a million dollars. The company wanted to cut costs - not maintain the status quo. And, as it turned out, "status quo wages" was not something which even the union ultimately accepted unequivocally.

55. In the union's opening statement at the commencement of this case, counsel indicated that the union would be prepared to accept status quo wages, and much later, in argument, he contended that in the absence of bad faith bargaining, the parties would have achieved a collective agreement on that basis together, perhaps, with minor concessions in other areas. But this "status quo wage" position had never been put to or pursued with the company in the months preceding the filing of this complaint, and when the union did eventually submit that position, it was linked to a one-year term of operation (which the company did not want) and little significant change in other areas. Despite counsel's opening statement, the union's official position at the beginning of the case was a demand for a significant wage increase, and it was not until months later that this demand was modified, and then only for the first year. Meanwhile, the company continued to maintain that it had already extended the agreement during the last round of bargaining and had subsequently experienced significant financial losses. The company wanted reductions~ not the status quo, and, as it turned out, the union wanted wage increases beyond the first year.

56. In cross-examination, counsel for the union sought to explore with individual members of the company's bargaining team (or, in Mr. Olde's case, the owner) items which might form the basis of a collective agreement. These questions were arguably relevant to the union's plea that the company was not interested in any agreement on any terms at all, and on that theory, the union was entitled to test the employer's willingness to settle, and to try to establish through cross-examination that there was really no position which the company was prepared to seriously consider. But there are problems with this process - particularly if these items had not been raised, or raised in the same form at the bargaining table, or the union's actual bargaining posture was not the same as it was portrayed before the Board. Another problem lies in the "polycentric" nature of bargaining, the ambiguity inherent in the parties' bargaining positions, and the fact that different members of the management team are being asked to speculate about the possible basis for settlement in the highly artificial arena of a Board hearing. Mr. Friis, for example, was asked a number of "what if" questions, and counsel at one stage prefaced his reference to the union's "official position" with the comment "assume that's gone". Mr. Olde was not even at the bargaining table, and his testimony demonstrated that, far from pulling the strings in the background, he had little appreciation of the issues or the debates, because he had delegated responsibility for the bargaining to Mr. Slopen. Thus, while the union is entitled to proceed in this way, litigation is not a reliable substitute for bargaining, and the evidence adduced is not a helpful indication of the settlement point - especially if the union is not prepared to make the concessions hinted at in cross-examination. (The "profit-sharing" debate is an example of this.)

57. In his evidence before the Board, Mr. Olde indicated that he might be prepared to agree to "status quo wages", but he also said that this was only "part of the package", possibly linked with profit-sharing, and for a period which was unspecified. Nevertheless, in view of these developments at the Board (and in particular the way in which the union had framed its questions to Mr. Olde), the company indicated that it would consider a concrete union proposal along these lines. The company anticipated that it would, at the very least, receive a new trade union offer framed in terms of "status quo wages" which, if linked to a longer term agreement, would be much closer to what the company considered to be an appropriate settlement point than the union had previously advanced.

58. But that is not the position that the union took. Instead, in its next offer, the union demanded a two per cent wage increase in the first year retroactive to the expiry of the old agreement, and the union was not initially amenable to any extended term. It was not until some months later, on February 16th, 1990 that the union proposed status quo wages for the first year. In that meeting (attended by the union's solicitor who took notes) the company reiterated its various concerns, stressed its financial losses and need for a three year agreement and indicated its willingness to look at various provisions of the agreement provided there were some wage concessions. Mr. Slopen said "I need at least a one per cent take back". The union did not agree.

59. It will be seen, therefore, that despite its posture before the Board, the union did not agree to wage concessions and did not adopt a "status quo wage" position of the kind which might have induced a collective agreement even though it had indicated its willingness to do so. And its "status quo" was clearly only for the first year of the agreement. By August 1990, after much skirmishing about what Mr. Olde "really meant", and the significance of the company's losses for bargaining, the union was proposing a three-year agreement, with status quo wages for the first year (which had by then expired), a three per cent increase in the second year and a five per cent increase in the third year. By the end of this litigation, many months later, and despite more debate about work rules and the purported acceptability of "status quo wages", the union was still demanding a three per cent increase in the second year of the agreement and a five per cent increase in the third. Meanwhile, the company was prepared to consider "0-0-3" in conjunction with certain changes in other areas and indicated that it was willing to move further if there were concessions on work rules. In summary, the status quo of the old agreement - even on wages - has not been the position of either the union or the company, and the status quo of the old agreement has not been the basis upon which the company has actually operated its business since early September 1989. But debates about what was said or done at the Board, or what was meant or intended, did much to muddy the waters and deflect the parties from the process of bargaining.

60. The Board heard quite a lot of evidence about employer actions which, the union concedes, appear innocent (albeit obdurate) when viewed in isolation, however, the union argues that, when viewed cumulatively, these actions point to the conclusion that the company was really trying to avoid a collective agreement. Among them was the company's decision not to immediately implement wage cuts at the expiry of the statutory freeze, but rather to maintain wage rates for bargaining unit employees while the negotiation process was on-going. The company adhered to that decision even after the employees went on strike, so that employees who decided not to go on strike or later deserted the picket line maintained the base rates that they had earned before. At the same time, the company was seeking wage concessions at the bargaining table.

61. The union contends that this was offering the employees a "Hobson's choice": stick with the company and maintain the status quo wage rates, or support the strike and face concessions. The union submits that the employer was offering better terms to the deserters, than it was prepared to offer to those who continued to support the strike.

62. There are several difficulties with this submission. In the first place, it suggests that in order to avoid an unfair labour practice allegation, an employer should unilaterally implement its last offer, immediately upon the expiry of the statutory freeze, lest it later be said that its demand for concessions is illegitimate. That is hardly a proposition likely to foster amicable collective bargaining. Obviously, the Board must carefully scrutinize situations where it is said that an employer, pleading poverty, seems to be prepared to pay more to employees who choose to remain at work than it would take to settle the strike, but abandoning the strike is not the same as abandoning the union, and those who remain at work will always be better off, in the short run, than those who go on strike. We might also note that section 73 of the Act specifically contemplates that "the deserters" have a right to reinstatement without discrimination by reason of their exercising the right to strike, on "such terms as the employer and employee may agree upon" - in this case, the wages that they had earned before. We do not think we should readily conclude that it was illegal for the employer to pay some of its workers what they were earning before, but it would be satisfactory if it paid them less.

63. More fundamentally, however, the union's argument ignores the other elements of the company's position, depreciates the real value which the union itself puts upon non-wage items and ignores the real costs to the company associated with the old collective agreement terms. Not only has the company, in fact, unilaterally imposed lower premium rates and new hires are paid lower base rates, but, in addition, the company is now entirely free from the scheduling, assignment, and work rules in the prior agreement. When these items are factored into the equation, the status quo on wages looks much less attractive - or so the union must have calculated when it called the strike initially and later refused to negotiate about work rules or staffing schedules, and so the employees must have believed when they continued to support the strike.

64. It is quite misleading to suggest that the employer is offering the employees a "better deal" than it is prepared to offer to the union, when there is no indication whatsoever that the union would ever be inclined to incorporate that status quo - the prevailing reality - into a collective agreement. In fact, all indications are that the union is not prepared to agree to an extended wage freeze with major concessions in other areas including work rules, while the company is prepared to moderate its demand for wage cuts, in return for more flexibility of the kind it now enjoys without the work rules, scheduling restrictions, and premium payments set out in the old collective agreement. The union sets up a false dichotomy: abandon the union and maintain the status quo; or stick with the union and face concessions. In either case, the company is demanding that its employees make concessions, and if it has the bargaining power it will be able to obtain them. The actual status quo prevailing today is not the old collective agreement, it is not a better deal designed to wean employees away from the union, and it is not an arrangement which the union wants to embody in a collective agreement. It is sophistry to suggest that the company is offering more to the employees if they abandon the union. It is not. What it is saying is that cost-cutting is essential, and if wage cuts are to be moderated or avoided, cost savings must be achieved elsewhere.

65. It is appropriate to reiterate what the right to strike is about. Strikers are faced with the option of agreeing to the company's last offer - however mediocre - or pressing for something better; and if they choose the latter course, they face wage losses which may never be fully recovered. Similarly, if the company resists the union's demands, it faces the threat of disruption and economic losses which may well exceed the cost of agreeing to the union's position or some more moderate variation. In both cases it is the threat of economic loss and the ability to inflict or sustain it, that prompts the parties to settle, and determines the ultimate settlement point. The fact is, collective bargaining is sometimes a contest of economic power, only partially moderated by polite manners, statistics, and various degrees of responsiveness to public opinion, moral principle or a "sense of responsibility''. The importance—and legitimacy—of bargaining power cannot be minimized; moreover, the Board must recognize that its own processes may be used by a party for tactical purposes or to impose cost on the other side. Of course, if an employer is offering more to employees than it is prepared to offer the union, or while pleading economic hardship is prepared to spend more than it would cost to settle the agreement, there might well be grounds to suspect its motives - although even here one must be careful because goals must be assessed against "the long run" and both parties have objectives or principles (following the "pattern" or avoiding bad precedents, for example) to which it is difficult to attach an economic value. But those are not the facts of this case.

66. Similar observations can be made about the company's decision shortly before the strike, to promote into management positions persons who were previously members of the bargaining unit. The union contends that, in conjunction with new hiring, this indicates a desire to undermine the bargaining unit. The evidence demonstrates, however, that the two employees in question did in fact assume a broader range responsibilities including managerial functions, serious weaknesses in line management had been evident for some time, and the promotions had been discussed long before they were implemented. The company delayed implementation of these promotions until after the expiry of the statutory freeze because it was clearly creating a new managerial structure and it wanted to avoid unfair labour practice allegations. The union witnesses concede that, apart from timing, there is nothing suspicious about these promotions. They are also consistent with the company's efforts to establish more effective "line management" with tighter control of the production process. Managers hired "off the street" had proven singularly ineffective, and it was natural for the company to turn to skilled tradesmen who were familiar with the work processes. In the circumstances, there is nothing sinister in that.

67. The hiring efforts about which the union complains began long before the strike, were necessary to replace workers who had been fired, and were consistent with the company's long run objective to recruit crews for, and implement, a multi-shift operation. One of the company's objectives was to keep the Web press in more continuous operation with a work schedule that did not generate so much overtime or payment at premium rates. And, of course, it is lawful for the company to try to continue to operate during a strike. There is no evidence that the company has employed professional strike breakers.

68. The evidence establishes that, at least in the early stages of the dispute, there was some talk among the employees about "decertifying" the trade union and some speculation about their prospects of dealing with the company on their own. But we cannot conclude that these notions originated with the company, and when they were raised, the company properly told employees that they would have to seek their own independent legal advice. We do not put much weight on the telephone conversations with Mr. Friis, that the union secretly taped, or the comments attributed to him when he was inviting employees to stay at work rather than go on strike. Mr. Friis' comments where ambiguous, must be viewed in a context which includes earlier discussions on the plant floor and a phone call which was not taped, and reflect Mr. Friis' inclination (evident in his testimony) to tell people what they wanted to hear.

69. Nor are we inclined to attach much significance to a document issued a couple of weeks after the strike began, indicating that the employees had been terminated. It is clear that it was only the employees' benefits which were actually being terminated, and the company quickly issued a correction notice to that effect, together with a press release. The unemployment insurance records issued contemporaneously with the initial notice, quite clearly indicate that the employees are going on strike, and we are satisfied that the notice was simply a mistake. It is fairly common for the union or employees to pick up the cost of benefits while employees are on strike, and that is what happened here. The press release was necessary because of union allegations to the press that the company was acting illegally.

70. However, the secret taping, the making of transcripts of bargaining, the filing of this complaint the day before an important mediation session, and the presence of the union's solicitors at the bargaining table all suggest that almost from the outset, the union's focus shifted from the bargaining table to litigation, and making its case before the Board. That was also evident in the way it conducted its case, bargaining through the Board, and making concessions (for example, agreeing to look at the company's books) in accordance with its current assessment of how well it was doing in making its case. According to Mr. Slopen, real progress was being made until the union received a favourable arbitration award, at which point the union's appetite for bargaining suddenly cooled; and for several months when the union hoped that Mr. Friis - something of a surprise witness - would give damaging evidence, the union refused to meet at all, despite the company's several requests. The Board became the forum for raising new positions and cross-examination the means of exploring them. In the circumstances, it is difficult to resist the conclusion (urged upon us by the company) that the Board's processes became a substitute for bargaining and compromise. It is not unusual for a weak union to use litigation as a lever, to inflict costs upon an employer or induce concessions which would not otherwise be forthcoming. However, in the circumstances, we are mindful of the warning raised by Professor Cox many years ago:

"There is also the danger that the regulation of collective bargaining procedures may cause negotiators to bargain with a view toward making the strongest record for NLRB scrutiny. The report of the Truitt negotiations bears ample evidence of the jockeying of lawyers. Hammering out a labour agreement requires all the negotiator's skill and attention. To divert them from the main task by putting a value on building up or defeating an unfair labour practice case, diminishes the likelihood that the negotiations will be successful".

[emphasis added]

71. Having considered the totality of the evidence, we are satisfied that the company's conduct and bargaining posture do not contravene the Act. The company bargained hard, but we cannot say that its position at the bargaining table was "so unreasonable or devoid of apparent business justification as to evidence a desire to avoid any collective agreement altogether" to borrow the words of the Board in Canada Trustco, supra. The company's losses were real, and, for a business of this size, significant. The company was determined to reverse its financial fortunes through a variety of means including extracting concessions from its employees. In the case of the non-union employees, these changes were implemented unilaterally; and in the case of the bargaining unit employees, they were pressed at the bargaining table. An employer is entitled to demand concessions or changes to the prevailing terms of agreement - even significant ones - without thereby acting illegally, and whether it achieves those objectives or not will depend upon its bargaining power. It does not matter whether this Board thinks the company is being fair, wise, grasping or bloody-minded, or whether in our view, the union is being reasonable or unrealistic. The Board's role under section 15 is not that of interest arbitrator, prescribing the terms that in our opinion are most appropriate to the parties' situation, and designating "illegal" those positions which deviate from that opinion. To put the matter another way: the Board is not concerned about the particular content or fairness of the bargaining, so long as the parties really are prepared to sign a collective agreement.

72. In the instant case, we are satisfied that this company is prepared to sign a collective agreement provided that it contains economic concessions and cost-saving measures which, in the result, the union considers unacceptable. That bargaining stance is not a breach of section 15 of the Act, and while the ultimate bargain or the union's bargaining strategy may result in a reduction in the union's prestige and prerogatives, we do not think that there has been a breach of section 64. We repeat: in our opinion the employer's sole motivation and bargaining objective was to achieve an agreement with substantial concessions - not to eliminate the trade union.

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

DECISION OF BOARD MEMBER B. L. ARMSTRONG; October 18, 1991

1. It is my opinion from a review of the totality of evidence, that the employer had no intention of reaching an agreement with the trade union. From the outset it was determined to frustrate, and eventually destroy the union.

2. The obligation to bargain under section 15 of the Ontario Labour Relations Act is clear, and states:

15. The parties shall meet within fifteen days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

3. There is a clear obligation on both parties, the employer and the trade union, to enter into serious discussions with the intent of entering into a collective agreement. It was difficult in my review of the evidence for the trade union to determine who was in charge: Mr. Olde, the owner or his agent Mr. Slopen. Non-union employees were offered status quo along with profit sharing. On the other hand the bargaining unit employees were asked to take a reduction in wages of 71/2%, a reduction in overtime pay with an addition in the working hours. The bargaining unit employees were called the night before the legal strike was to commences were encouraged to come into work, and were told they would continue to receive status quo wages. Some of the bargaining unit members were promoted from the unit of management positions. These actions taken together eroded and frustrated members of the trade union. They had to make a choice of accepting a reduction in wages or to continue in their support of their union by taking a reduction of 71/2%. Clearly that is a case of bad faith bargaining and a deliberate attempt on the part of the employer to rid itself of this bargaining agent.