Local 2693, IWA-Canada v. Atway Transport Inc., 1991 CanLII 6041

[1991] OLRB Rep. April 425

1188-90-FC Local 2693, IWA-Canada, Applicant v. Atway Transport Inc., Respondent

BEFORE: G. T. Surdykowski, Vice-Chair, and Board Members G. 0. Shamanski and K. Davies.

APPEARANCES: W. Dubinsky and W. Mcintyre for the applicant; Y. Fricot and R. York for the respondent.

DECISION OF THE BOARD; April 2, 1991

I The Application

1By decision dated November 16, 1990, the Board dismissed this application, under sec­tion 40a of the Labour Relations Act, for a direction that a first collective agreement between the parties be settled by arbitration. The Board's reasons for dismissing the application, and for several evidentiary rulings given in the course of the hearing now follow.

2In applying for a direction as aforesaid, the applicant trade union alleged that the respondent had taken an uncompromising bargaining position or positions without reasonable jus­tification and had failed to make reasonable efforts to conclude a collective agreement, contrary to clauses (b) and (c) of subsection 40a(2) respectively.

3When the application came on for hearing on August 22, 1990, the respondent requested an adjournment of the hearing scheduled for the following day. Upon hearing the repre­sentations of the parties, the Board denied that request for oral reasons given at the time (which are essentially the same reasons for which an adjournment request was denied in Teledyne indus­tries Canada Limited, [1986] OLRB Rep. Oct. 1441 at paragraph 3).

II Evidentiary Rulings

4The Board was also called upon to make a number of other evidentiary rulings in the course of the hearing. The more significant ones bear repeating.

5First, this application is but one of many matters involving these parties which were before the Board at the time of the hearing herein, or had previously been before it. Some of those other matters had, at the time of the hearing herein, been disposed of, either on agreement of the parties or by decision of the Board. Others remained outstanding. The applicant's statement of fact contained references to various of these other proceedings. The respondent objected to the appli­cant's attempt to adduce evidence in that respect. Upon hearing the representations of the parties, the Board ruled that it would admit evidence of the dates on which the various applications or complaints referred to in the applicant's statement of fact were made, the general nature of the application or complaint, when and how they were disposed of, and any Board decisions with respect thereto. The Board ruled that it would not hear any other evidence with respect to the allegations made in any of these other applications or complaints which had not been particularized in this application, whether these had been disposed of by the Board, withdrawn, settled or were still outstanding. It would not, in our view, have been appropriate to either relitigate matters which have been disposed of by the Board, or to dissect the parties' conduct with respect to matters which had been settled or withdrawn. Further, the mere fact that allegations had been made, or were being contemplated, in other proceedings could have had no probative value in this proceed­ing. Finally, we were not satisfied that these other proceedings were relevant to our consideration of the issues raised by the pleadings in this application to more than the limited extent of establish­ing the background to it. It would not have been appropriate for us to hear evidence with respect to matters which were neither relevant to this application nor otherwise properly before us. Paren­thetically, we observe that the documents which were placed in evidence before the Board in accordance with our ruling turned out to have little or no probative value.

6Second, the applicant sought to lead evidence which it asserted would show that the respondent had refused to recognize the applicant's bargaining authority. Upon objection by the respondent, the Board ruled such evidence to be inadmissible because it was not relevant to the application as pleaded. Clause 40a(2)(a) specifically provides that where the process of collective bargaining has been unsuccessful because of the refusal of the employer to recognize the bargain­ing authority of the trade union, the Board shall direct a settlement by arbitration of a first collec­tive agreement between the parties. Board Practice Note No. 18 specifies that an applicant for direction that a first collective agreement be settled by arbitration must provide, inter alia, at sub­section 1(j):

"a detailed statement of the material facts, acts and omissions on which the applicant intends to rely, including the time when and the place where the acts or omissions referred to occurred and the name(s) of the person(s) who engaged in the specified conduct".

In doing so in this application, the applicant specifically pleaded that the respondent had taken uncompromising bargaining positions without reasonable justification and that it had failed to make reasonable efforts to conclude a collective agreement; a clear reference to clauses 40a(2)(b) and (c). There is no indication anywhere in the applicant's material that it intended to assert that the respondent had refused to recognize its bargaining authority. Accordingly, that was not a mat­ter which had been properly placed in issue between the parties, and was not a part. of the case the respondent could reasonably have been expected to prepare to meet. Practice Note No.. 18 requires both parties to fully particularize the respective positions and to list and provide copies 'of all documents on which they intend to rely. Its purpose is to avoid the delay often attendant upon surprises sprung by one party on another, to define the matters in issue between the parties and so provide a basis for settlement or, if no settlement can be reached, to provide the basis for an expe­ditious hearing of the application. Having pleaded the basis upon which it has made an application under section 40a, an applicant cannot, in the absence of some cogent reason for allowing it to do so, be allowed to depart from its pleadings. In this case, the applicant offered no such cogent rea­son or Other explanation.

7Third, in the course of his cross-examination of Wilf McIntyre, the applicant's only wit­ness, counsel for the respondent sought to have the witness use certain documents, which had not been listed in its Schedule F (list of documents upon which the respondent intended to rely) filed by the respondent, as an "aid to memory". Counsel stated that he was not seeking to have the doc­uments themselves entered as evidence before the Board. The applicant objected, arguing that the documents could not be used because they had not been listed by the respondent as required by Practice Note No. 18.

8The Board ruled that the documents could be put to the witness to try to refresh his memory. Earlier in his cross-examination, McIntyre had testified that he had reviewed the docu­ments in question both at the time they were received by the respondent, and subsequently in con­junction with his own notes to prepare himself to testify in this proceeding. It had already become evident that McIntyre had little reliable independent recollection of what had transpired in collec­tive bargaining between the parties. Throughout his testimony, both in examination in chief and in cross-examination, McIntyre relied heavily upon his notes and other materials to refresh his mem­ory in that respect. The respondent sought to test McIntyre's evidence by putting to him docu­ments which he had already admitted he had used to prepare himself for the hearing. In the cir­cumstances, and having regard to the purpose for which the respondent sought to use them, we were satisfied that the documents in question could be used by the respondent in its cross-examina­tion of the witness, notwithstanding that they were not listed in the respondent's materials as docu­ments upon which it intended to rely.

9Fourth, at the hearing on October 12, 1990, the respondent sought to place into evi­dence a document identified as "Proposed Amendments by Atway Transport Inc." dated May 23, 1990. Although that document, and three others (listed as numbers five, six and seven in its Sched­ule F) as documents upon which the respondent intended to rely in this proceeding, it quickly became apparent that all four were documents which had been passed (at a meeting on May 23, 1990) from one party to the other through the conciliation officer appointed by the Minister to assist the parties in their collective bargaining. The parties were not in each others presence when any of these four documents were given to or received from the conciliation officer.

10Section 111(2) of the Labour Relations Act provides that:

(2) No information or material furnished to or received by a conciliation officer or a mediator,

(a) under this Act; or

(b) in the course of any endeavour that a conciliation officer may make under the direction of the Minister to effect a collective agreement after the Min­ister,

(i) has released the report of a conciliation board or a mediator, or

(ii) has informed the parties that he does not consider it advisable to appoint a conciliation board,

shall be disclosed except to the Minister, the Deputy Minister of Labour or the chief conciliation officer of the Ministry of Labour.

Counsel for the respondent referred the Board to Gorman Eckert and Company Limited, [1969] OLRB Rep. Dec. 1135. He argued that as an exclusionary provision, section 111(2) should be nar­rowly construed to make inadmissible "private" but not "non-private" or "public" communica­tions, and that documents with respect to which a conciliator or mediator was a "mere conduit" between the parties should be considered to be non-private communications not caught by the exclusion in section 111(2).

11We did not agree. The appropriate approach to subsection 111(2) was discussed in Shaw-Almex Industries Limited, [1984] OLRB Rep. Jan. 109 (at paragraphs 13 to 17):

13. Read literally, section 111(2) would exclude evidence of face to face bargaining conducted in the presence of a conciliation officer. The Board's decision in Trenton Memorial Hospital expressly left open the questions whether the general principles there considered would require the exclusion of such evidence. That issue arose for consideration in Gorman Eckert and Com­pany Limited, [1969] OLRB Rep. Dec. 1135, which also involved an application for consent to institute prosecution against an employer for its alleged refusal to bargain in good faith. The predecessor of section 111(2) had by then been enacted. The question for determination by the Board was whether it would admit a proposed collective agreement which had been submitted both to the union and to the conciliation officer in the course of the conciliation process. The Board concluded that what is now section 111(2) was intended to protect conversations of a pri­vate nature, but not conversations or matters of a non-private nature occurring in the presence of both parties. The proposed collective agreement, having been directly communicated by the employer to the trade union, was not by reason of its communication also to the conciliation officer a protected communication.

14. The Board reviewed the scope of subsection (2) of section 111 again in CCH Canadian Limited, [1974] OLRB Rep. June 375, where the trade union applicant applied for consent to prosecute the respondent employer for its alleged failure to bargain in good faith. The issue which arose there, and its resolution, are set out in the following passage from the decision in that case:

15. Mr. Cavalluzzo, through his witness Mr. H. Peacock, who was present at most of the negotiation sessions, wanted to adduce evidence of the course of negotiations through both conciliation and mediation. There was a strong implication that this involved the tendering of evidence about what the conciliation officer or mediator said to Mr. Peacock or what he said to the officers and a strict reading of section [111(2)] would preclude any evidence of this kind. However, in Bakery and Confec­tionery Workers' International Union of America, Local 415 and Gorman Eckert and Company Limited, OLRB M.R. December 1969, p.1135, the questions arose as to whether a proposed collective agreement submitted by one party to the other during conciliation (it was submitted to the conciliation officer) was admissible in evidence. After extensively reviewing the case of Building Service Employees' International Union, Local 183 and Trenton Memorial Hospital 64 CLLC ¶16,302 which gave rise to the enactment of sections [111(2), 111(3), 111(4) and 111(5)] the Board ruled that "the purposes of Section 83(2) [now section 111(2)] was intended to protect those conversations of a private nature but that conversations or matters of a non-private nature are not protected by section 83(2) [now section 111(2)]". Accordingly, the pro­posed collective agreement presented to the applicant and to the conciliation officer was found to be non-private nature and properly admissible in evidence.

16. It must be recognized that neither section [15] nor section [111(2)] can be read to the exclusion of the other. The Board must attempt to accommodate and integrate the purposes of each of these sections and only where there is an irreconcilable differ­ence between them should the Board read the more specific wording of section [111(2)] as overriding the values of section 14. It is believed that the Gorman Eckert decision follows such an admonition. The "private-non-private" distinction breathes meaning into the obligation to bargain in good faith during the conciliation and medi­ation processes while recognizing the fragile function of the conciliator or mediator - a function of integrity of which depends upon the confidentiality of private communica­tions. This confidentiality was outlined by the Board in Canadian Stackpole Ltd. 59 CLLC ¶18, 412 wherein the majority wrote at p.1778:

Although the extent to which an administrative board may rely on official notice has not been clearly defined, it would be preposterous to suppose that the members of this Board, constituted as it is, can fail to take cogni­zance of the fact that most successful conciliators have achieved their suc­cess by the use of manifold techniques among which are those of conferring separately with each of the parties and of meeting only with key principals and of the further fact that conciliators in this jurisdiction have from time to time relied on each of the these last two mentioned methods of breaking down the barriers to the settlement of a dispute. It is common knowledge that skilled conciliators act as a channel of communication between the employer, on the one hand, and a senior official of the trade union, on the other, at time without a single employee even being aware that the concilia­tor is dealing with either of the "principals". It would require clear and unequivocal language in the Act to convince us that is was the intention of the Legislature, in enacting the several provisions of the Act that are included under the heading "Negotiations of Collective Agreements”, to lay down that conciliation officers must desist from resorting to such tech­niques should they in their wisdom in any particular case deem it desirable to do so, except perhaps where the other party to the proceeding consents thereto. Similarly we cannot bring ourselves to believe that the Legislature in enacting the sections referred to, intended to deny to conciliation boards freedom to resort to tested and time-honoured methods of reconciling the parties to an industrial dispute, as they have done so in this jurisdiction time without number in the past.

Accordingly, private communications - communications with the conciliator or media­tor when the parties are not in presence of each other - must have protection of sec­tion [111(2)]. This is so because the mediator or conciliator must be able to discover a party's true "resistance point" [see; Stevens, Strategy and Collective Bargaining Negotiations (1963) p.¹²² and Simkin, Mediation (1973)1 and to do so a party must be assurred [sic] that the confidentiality of such communications is inviolable. However public statements - statements made while the parties are in each others presence - if admissible in evidence do not undermine the integrity of the conciliator's or media­tor's function and hence are not precluded by section [111(2)].

11. Applying these principles to the facts at hand, the Board was prepared to permit Mr. Peacock to give his opinion that at the conclusion of the conciliation and media­tion processes the parties were little closer to reaching an agreement but the Board was not prepared to allow him to elaborate on this opinion if it entailed the descrip­tion of communications he had had with the mediator or conciliator while out of the presence of the company's negotiators. Such communications would be clearly of a private nature.

12. Finally, Mr. Cavalluzzo argued that section [111(2)] should be analogized to the privilege of solicitor and client. In other words, he suggested that section [111(2)] was a privilege of the parties before the Board and therefore could be waived by any one of the parties. The Board rejected this contention. Section [111(2)] is intended to pro­tect the integrity of the conciliator's or mediator's office - it is not a privilege of the parties. If one of the parties could waive the application of section [111(2)] and reveal the communications between it and a conciliator for instance, the effectiveness of this official could be seriously impaired. He may have tempered the comments received from the parties or made projections that were based on his own informed but per­sonal speculation. Such revelations would only undermine the usefulness of such offices.

13. The Board's approach to these questions has always recognized that the primary function of a conciliation officer or mediator is not to act as a postman, courier or telegraph service. He is not the agent of either party for the delivery or receipt of messages to and from the other. The officer has no duty to repeat to one party everything he is told by the other. Indeed, as the above-quoted passages demonstrate, he attempts to have the parties disclose to him things that they do not wish disclosed to the opposite party. Each party is aware that this occurs. This adds to the effectiveness of the officer's private communications are often carefully crafted so as to blur the line between speculation and revelation. Of course, conciliation officers do convey those positions and changes of position which either party wishes conveyed. Even these commu­nications, however, take place within a context of confidential discussion of the nature sought to be protected both by the principles outlined in Trenton Memorial Hospital and the express pro­visions of section 111 of the Act, and are ordinarily inseparable from the context when they occur in the absence of the party from which they originate.

14. Accordingly, we do not accept the argument that testimony concerning one party's private conversations with a conciliation officer or mediator should be accepted in evidence as prima facie proof of what must have taken place between the mediator or conciliation officer and the opposite party. Apart from the doubtful logic and, in the case of statements by the mediator, the hearsay dangers involved in that approach, its adoption would completely undermine the confidentiality of such private conversations. One party's revelations would force the other party to reveal his version of what he said to the mediator. Both parties would then clamor for permission to call the mediator to resolve the inevitable inconsistencies. Even on a question (if relevant) of the party's mental state, any inference that might be drawn from the party's version of his conversations with the mediator is no more trustworthy than his direct statement of what he was thinking at the time, since the other participant in the alleged conversation is not a com­pellable witness. Reference to the conversation, therefore, adds nothing but further adverse pressure on the confidentiality, and thence the efficacy, of the conciliation process.

15. We have reviewed the reported decisions in The Ottawa Journal case, supra. Only one pas­sage suggests that the Board there entertained any evidence of discussions which occurred between a "mediator" and one party in the absence of the other. That appears at paragraph 38 of the Board's first decision at [1977] OLRB Rep. June 309, at p.318:

16. The parties then met with Ray Illing, a Ministry of Labour mediator. The meet­ings commenced on April 1st, and continued through the weekend. On Saturday, The Journal, through the mediator, presented a proposal in respect of the Joint Council. The proposal dealt with a number of proposals relating to the terms and conditions of employment of the pressmen, stereotypers, and mailers, and also a proposal referring to a "damage and good conduct clause and orderly return to work clause". At the mediator's request, The Journat provided a clarification of this latter matter on the next day. This clarification referred to specified damage to vehicles, property, and newspapers, and the reservation of the right to claim damages resulting from the union boycotts. On that same day, The Journal presented, through the mediator, its proposal for the Guild contract. Then, on Tuesday, April 5th, The Journal presented its proposal for the Ottawa Typographical Union contract. These two proposals also contained a proposal concerning damage, good conduct, and orderly return to work. The Unions apparently regarded the first two proposals as being bargainable, but regarded the proposal for the Ottawa Typographical Union as being completely unac­ceptable, primarily because, in addition to not-giving any concession on jurisdiction, it provided no job guarantees at all.

[emphasis added]

It is not clear how these facts were established in evidence. They might have been agreed facts. If they were, their admission would not have offended the principles established in the Board decisions reviewed in this decision. While we do not know from the Ottawa Journal decision how the parties established the facts recited in the passage quoted above, we do know there is no discussion of their admissibility of section 111 of the Act or of the underlying principles reviewed in the Board's previous jurisprudence. Any intended departure from that jurispru­dence would, we believe, have been the subject of express comment by the Board. We do not, therefore, take that case as confirming or announcing a policy inconsistent with that jurispru­dence.

18. In the result, we adopt the approach taken by the Board in CCH Canadian Limited, supra. We will not entertain evidence from either party as to what was discussed between its represen­tative and a conciliator or mediator in the absence of the other party where, as here, the other party objects to the introduction of that evidence. We will give no weight to any evidence of that sort which may have been received up to this point.

19. Evidence of direct communications between the parties is not, of course, affected by this rul­ing. That is the answer to any concern that the Board's approach hinders enforcement of the duty to bargain in good faith. The course of negotiations can be charted by evidence of direct communications undertaken from time to time to confirm or obtain confirmation of changes in position. Each party, therefore, has the means to ensure that the confidentiality of the concilia­tion process is not used as a cloak for bad faith bargaining.

(See also Aristocraft Vinyl Inc. [1985] OLRB Rep. June 799, Cofo Forming and Construction Limited, [1987] OLRB Rep. Oct. 1213, Dell Equipment, [1989] OLRB Rep. Jan. 19).

12In our view, the words of subsection 111(2) are clear. No material or information fur­nished to or received by a conciliation officer or mediator in the discharge of his/her duties under the Labour Relations Act may be disclosed except as provided in the section itself. Unlike subsec­tions 111(1) and (6), subsection 111(2) gives the Board no discretion in that respect. There are no exceptions made for any kinds of "materials" or for things which are of a "non-private" nature, however that term might be defined.

13The issue is one of admissibility, not relevance. Subsection 111(2) is designed to protect the integrity of the conciliation/mediation process. It creates a kind of labour relations black hole from which no light is allowed to escape. The purpose of section 111(2) would be frustrated by any­thing less than a complete protection from outside scrutiny of any material or information fur­nished to or received by a conciliator or mediator in the course of his/her duties. Accordingly, nothing which passes through a conciliator or mediator without also being passed directly to the other party can be disclosed to the Board. It follows that no such information or material can be admitted into evidence before the Board.

14In our respectful view, what has sometimes been described as the "private" versus "non-private" distinction is perhaps more aptly described as a distinction between communications which pass directly between the parties and those which pass through a conciliator/mediator. In order to determine whether a communication in the conciliation/mediation process was a "private" one” the Board would have to examine both the communication and the circumstances in which it was made and subsequently received. This would subject the conciliation/mediation process to the very scrutiny which subsection 111(2) is specifically designed to avoid. A conciliator or mediator may be told something when s/he receives a document or other material, or may "comment" on it when s/he "delivers" it to the other party. Because this could affect the meaning to be given to the material or put the subsequent actions of either party into perspective, the Board could again be in the position of examining the circumstances or, in the alternative, giving no weight to the material. Consequently, the appropriate distinction is between communications, whether oral or written, which pass directly between the parties, and communications, oral or written, which pass through a conciliator/mediator. The former require no scrutiny of the conciliation/mediation process per se and do not fall within the subsection 111(2) exclusion. Consequently, they may be disclosed and evidence with respect to them is admissible before the Board. The latter fall squarely within the subsection 111(2) exclusion and are therefore not admissible.

15The dilemma in which the respondent found itself could easily have been avoided. It could have, either at the time, or subsequent to May 23 (and July 9), 1990 have delivered the docu­ments in question directly to the applicant, with or without an indication that it wished to confirm that it made the proposals therein, or that it intended to rely upon them in the future if necessary.

16The Board therefore ruled that the four documents upon which the respondent sought to rely were not admissible as evidence before the Board.

17The respondent then sought leave of the Board to introduce and rely upon documents which it asserted had been handed directly by its representatives to representatives of the applicant on May 23, 1990, which documents it had not included on the list of documents upon which it intended to rely which it had filed as Schedule F to its reply. The applicant opposed the respon­dent's request.

18Clauses (g), (h) and (i), in section 5 of Board Practice Note No. 18 with respect to applications for a direction that a first collective agreement be settled by arbitration provide that a respondent's reply must include:

(g) a detailed statement,

(i) identifying the statements in the application with which the respondent agrees,

(ii) identifying the statements in the application with which the respondent dis­agrees~ and setting out the material facts, acts and omissions which consti­tute the respondent's version of the matters alleged in the statements with which the respondent disagrees, and

(iii) setting out all other material facts, acts and omissions on which the respon­dent intends to rely, including the time when and the place where the acts and omissions referred to occurred and the name(s) of the person(s) who engaged in the specified conduct;

(h) a list of all documents on which the respondent intends to rely;

(i) a copy of all documents in the respondent's possession on which it intends to rely;

19The applicant's statement of fact includes the following assertions:

28. At the meeting held on May 23, 1990 from 11:00 a.m. to the evening hours, the par­ties were only able to agree upon the additional items of: two minor portions of the grievance procedure; minor agreements on co-operation to reduce the risk of employ­ment injury and to abide by the Ontario Occupational Health and Safety Act; to per­mit the company to pose [sic] notices on bulletin boards; to have a letter of under­standing that the Union would hold the company harmless concerning Union dues; and bereavement leave.

29. At this meeting the Union had submitted its fourth complete proposal to the respon­dent. The respondent walked out of the meeting and refused to reply to the fourth proposal. The Union was advised by the conciliation officer that no further meetings would be scheduled.

In its statement of fact, delivered and accordance with clause 5(g) of Practice Note No. 18, the respondent expressly agreed with, inter alia, the applicant's assertions in its paragraph 28. The respondent went on to plead, at paragraphs 31 to 33 of its statement (Schedule B), that:

31. Following the Union's Application for Conciliation, a meeting with the Conciliation Officer was scheduled for May 23, 1990. The Company's monetary proposal was also put to the Union prior to this meeting but was not discussed during the course thereof. (See Exhibit #15 of Application)

32. On May 23, 1990, an [sic] joint meeting was initially held with the Conciliation Offi­cer. As a result of the Union insistence that all offers be in writing the Company left the meeting and prepared and presented through the Conciliation Officer several pro­posed amendments. (See Exhibit #4 attached)

33. Approximately three hours later the Union's response was received. It did not, to the Company, in any way indicate either flexibility or a willingness to deal with any of the issues then being discussed. As a result, the Company advised the Conciliator that it saw no point in continuing further. (See Exhibit #5 attached)

20In our view, it should have been evident to the respondent that what had transpired between the parties on May 23, 1990 might be of some significance, both as part of the overall col­lective bargaining between the parties and in itself, in this application. The respondent also knew, or ought to have known, of subsection 111(2) of the Act and that it was at least possible that the documents which it itself had pleaded had passed between the parties only through the conciliator, would not be admissible as evidence in this proceeding (i.e. the documents which the Board ruled inadmissible in paragraphs 9 to 16 above).

21The respondent offered no cogent explanation for failing to list and produce those docu­ments which it sought leave to put forward. Implicit in its submissions is that is didn't think it would need them. The respondent submitted that the Board should exercise its discretion as requested on the basis of "fairness" in the sense that the Board ought to do what it can to ensure that there is sufficient evidence before it to allow the Board to come to an informed decision in this application. The respondent submitted that if the Board refused to grant leave the purpose of the hearing would effectively be frustrated. The respondent did concede that it would be able to prove its case without the documents in question, but said that it would take it longer to do so.

22The applicant submitted that the purpose of Practice Note No. 18 is to facilitate a fair and expeditious hearing. It suggested that both the respondent and the applicant had planned to present their respective cases in a certain way and that what the respondent was really asking the Board to do was to permit it to restructure its case. The applicant submitted that the applicant knew or ought to have known that they would be stuck with the results of decisions regarding their approach to the case.

23In the circumstances, we saw nothing unfair to the respondent about applying the rules set out in Practice Note No. 18 to it. The respondent gave no cogent reason to not do so. There is no reason why the respondent could not have produced copies of the documents in question, as required by Practice Note No. 18. Indeed, the respondent had made a conscious decision that the documents that it sought leave to adduce were unnecessary to its case. This decision was based on the assumption that it would be able to rely upon certain other documents, which assumption, as a result of the Board's ruling as aforesaid, turned out to be incorrect. The fact that a party may have misjudged its situation is not, in our view, a sufficient reason to relieve it from its disclosure obliga­tions. We were also satisfied that the applicant was entitled to prepare its case on the basis of the materials filed and that it would have been unfair and prejudicial to the applicant to allow the respondent to depart from the case as it disclosed in its pleadings and materials in the absence of a cogent reason to do so.

24The fact that the result might be that the state of the evidence before the Board is some­what less than satisfactory was not, in our view, a reason to grant the respondent's request either. The nature of proceedings before the Board is such that the Board must rely on the parties to put their respective cases forward. Unfortunately, this sometimes results in the Board being left with a less than completely satisfactory evidentiary basis for its considerations. Nevertheless, in every case, including this one, the Board must make its decision on the basis of the evidence properly before it. In the result, we dismissed the respondent's request for leave to adduce into evidence the documents which the respondent had not listed and produced in accordance with Board Practice Note No. 18.

III The Merits of the Application

25Although Fred Miron, President of the applicant at all material times, was, both on the face of the application and the evidence, the applicant's chief negotiator and its "directing mind" during the collective bargaining between the parties, Wilf McIntyre, the applicant's first Vice-President at all material times, was the sole witness to testify on its behalf. Upon hearing the appli­cant's evidence, the respondent advised the Board that it had no evidence which it wished to call. The application was then argued on the basis of the evidence led by the applicant.

26Miron's absence from the proceedings turned out to be conspicuous. The applicant made no attempt to explain why Miron did not participate in this proceeding, either as a witness or otherwise. The Board was left with only such facts as were not in dispute and McIntyre's testi­mony.

27While there is no doubting McIntyre's sincerity, his testimony was wholly unsatisfactory as an evidentiary basis for this application. McIntyre displayed an almost complete inability to recall the material events independent of notes he had made contemporaneously with those events, and which notes he admitted were incomplete. He was unable to satisfactorily explain the appli­cant's approach to or position in bargaining, or to identify the differences between the positions of the parties. Having observed him as a witness and heard his testimony, we were satisfied that any recollection he professed to have independent of his notes was not reliable. In that respect, McIn­tyre's recollection was remarkably better when he was questioned by the applicant's representative than when he was cross-examined by the respondent. Under cross-examination, McIntyre was eva­sive, argumentative and generally not responsive to the questions asked of him. As a result, he only grudgingly agreed to things which were or should have been obvious to him from his own notes and repeatedly lapsed into a refrain to the effect that the respondent had "walked out" or refused to bargain, rather than answer the question asked of him. We therefore gave no weight to the testimony which he gave independent of documents which are before the Board or his notes. Further, we were not prepared to give as much weight as we might otherwise have to evidence he gave based on his notes because those notes were, by his own admission, incomplete.

28What the evidence before the Board did reveal was that the respondent is based in Thunder Bay and is engaged in the transportation of raw forest products by truck to saw mills and pulp and paper mills in north western Ontario. On July 8, 1990, the "IWA-Canada" was certified by the Board (differently constituted) as the exclusive bargaining agent for all employees of the respondent employed as truck or transport drivers at and out of the District of Thunder Bay, save and except foremen and persons above the rank of foremen. Although the applicant herein styled itself as "Local 2693, IWA-Canada", there was no suggestion that it does not hold the bargaining rights obtained by "IWA-Canada", or that it was otherwise not entitled to bring this application.

29By letter dated January 15, 1990, the applicant gave the respondent the requisite notice to bargain, in accordance with section 14 of the Labour Relations Act. Pursuant thereto the parties met on February 8, 1990. At that meeting the applicant presented its collective agreement with Canadian Pacific Forest Products Limited as the basis for collective bargaining and requested information with respect to the then current wages and benefits being received by bargaining unit employees. Before receiving that information some three weeks later, the applicant sent a collec­tive bargaining proposal to the respondent. There were extensive negotiations between the parties on March 12 and 15, 1990 at the conclusion of which the parties agreed to meet again on May 23, 1990. However, the applicant was not satisfied with the progress of the negotiations and, on April 12, 1990, applied for conciliation. On May 23, 1990 the parties exchanged proposals through a con­ciliation officer appointed by the Minister. By letter dated June 6, 1990, the parties were advised that the Minister had decided not to appoint a Board of Conciliation. On July 9, 1990, the parties met with a mediator. On July 30, 1990, the applicant filed this application.

30We find it unnecessary to recount in detail what happened at the individual bargaining sessions. It is evident that the applicant came to the bargaining table determined to obtain what it considers to be, in effect, its standard collective agreement. The structure and content of the appli­cant's proposals in that respect, and even the applicant's evidence at the hearing of this application made that readily apparent.

31Subsections 40a(1) and (2) of the Labour Relations Act provide that:

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

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

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

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

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

(d) any other reason the Board considers relevant.

Since Nepean Roof Truss Limited, [1986] OLRB Rep. July 1005, the seminal decision dealing with the first contract provisions in the Act, the Board has consistently acknowledged that section 40a is remedial legislation which should be liberally construed, but also that it is not intended to supplant the primacy of free collective bargaining or to provide automatic access to arbitration in all cases where the parties are unable to negotiate a first collective agreement. The provisions of section 40a are statutory recognition of the importance of and difficulties which may be encountered in situa­tions where a first collective agreement is being negotiated. Since there would be no application under section 40a if a first collective agreement was achieved, the mere lack of one does not, by itself, mean that the process of collective bargaining has been unsuccessful or, if it has been unsuc­cessful, that it is appropriate that a first collective agreement between the parties be settled by arbitration. Further, as the Board's decisions in Teledyne Industries Canada Limited, supra and Juvenile Detention (Niagara) Inc., [1987] OLRB Rep. Jan. 66 illustrate, an application under sec­tion 40a may be premature. However, and as the Board's jurisprudence also amply illustrates, there is no absolute minimum point prior to which an application cannot be successfully made. What that minimum point is in any given case will depend on the circumstances of that case.

32As its preamble suggests, the Labour Relations Act is designed to encourage collective bargaining between employers and trade unions representing their employees. The Act contem­plates that certification (or voluntary recognition) of a trade union will initiate a collective bargain­ing process which will lead to a collective agreement between the employer and the trade union, which regulates the terms and conditions of employment of the bargaining unit employees. On occasion, the process does not result in a collective agreement. The Act does not require that an employer be happy that its employees are represented by a trade union. Nor does it guarantee that a collective agreement will ultimately be achieved after a successful application for certification. However, the Act does (in section 15) require an employer to bargain in good faith and make every reasonable effort to make a collective agreement with a trade union which has been certified as the exclusive bargaining agent for its employees. Section 40a is intended to provide a remedy where the process of collective bargaining in a first collective agreement has been unsuccessful for any of the reasons set out in subsection 40a(2).

33In argument, the applicant referred to the Board's decisions in Nepean Roof Trust, supra, Formula Plastics Inc., [1987] OLRB Rep. May 702, Crane Canada Inc., [1988] OLRB Rep. Jan. 13, MacMillan Blodel Buildings Material Limited, [1990] OLRB Rep. Jan. 58 and Peacock Lumber Limited, [1990] OLRB Rep. May 584.

34We agreed with the approach to section 40a taken in those cases. We did not agree that a direction under subsection 40a(2) was justified in this case. This was not a case in which, for example, the evidence indicated that the respondent had uncompromisingly insisted on a "no improvements" collective agreement or that anything in a collective agreement between the parties provide bargaining unit employees with less than the status quo. Moreover, we were not satisfied that the respondent's positions were either unreasonable or so rigid as to be the cause of the break­down in the negotiations between the parties. On the contrary, it seemed to us that it was the applicant's intransigence, including its insistence upon a recognition clause which it could not law­fully bargain to impasse, and its refusal to budge from its "standard collective agreement" or to pay any real attention to the respondent's proposals and explanations, which led to the breakdown between the parties.

35The applicant neither asked nor cared about the manner in which the respondent struc­tured its operations. Even though the applicant must have known something of the respondent's structure from prior litigation between the parties (such as the complaint dealt with in Atway Transport Inc. [1989] OLRB Rep. June 540, for example), its proposals reflect no acknowledge­ment or concern in that respect.

36For example, the applicant's proposed "recognition-jurisdiction" clause, upon which it steadfastly insisted from the outset reads as follows:

ARTICLE III - RECOGNITION-JURISDICTION

3.01(a) The Company recognizes the Union as the sole collective bargaining agency for all of its employees who are engaged in woods operations on the limits, and on the work sites, of the Company. For the purposes of this article, Company employees shall be all those employed in the job classifications set out in the wage schedule attached to and forming a part of this Agree­ment, including those who are employed on job classifications which may be established and become part of the attached wage schedule during the term of this Agreement.

3:01(b) The employees of contractors engaged by the Company on the limits and work sites of the Company shall be considered employees within the terms of this Agreement; save and except the employees of contractors and/or the contractors who are engaged to perform occa­sional special services not commonly performed by employees covered by the terms of this Agreement, employees of contractors where such contractors are engaged for the purpose of erecting structures and where such a contractor is bound by an Agreement with a union or unions affiliated with a central labour body covering such work.

3:02 Supervisory personnel, which includes contractors whose employees are considered to be employees under this Agreement, shall not perform work which would normally be a function of an employee in the job classifications covered by this Agreement, except when instructing employees and in cases of emergency which involves physical danger to employees or danger to property.

This clause, which is rather interesting in its own right, reflects neither the bargaining rights granted to the applicant by the Board nor the respondent's operations. The applicant does not hold any bargaining rights with respect to the respondent for persons other than employees of the respondent employed as truck and transport drivers at and out of the District of Thunder Bay. To the extent that the applicant's proposal covered persons for whom the applicant does not hold bar­gaining rights, as on the evidence it did, it is an attempt to extend the applicant's bargaining rights. While a trade union may ask for such an extension, it has long been settled that such a demand cannot be pressed to the point of impasse (see, for example, United Brotherhood of Carpenters and Joiners, [1978] OLRB Rep. Aug. 776). Further, the respondent has no "woods operations". It is engaged exclusively in a transportation business.

37The applicant's explanation that this expanded recognition clause was necessary in order to provide bargaining unit employees with the requisite job security is without merit. A rec­ognition clause defines a bargaining unit. A job security clause protects the jobs of employees who fit within the definition of the bargaining unit in a recognition clause. Examples of job security clauses are "no sub-contracting of bargaining unit work" and "no bargaining unit work to be done by management personnel" clauses commonly found in collective agreements in Ontario. Although there may be some job security elements to job security clauses, recognition and job security clauses are not at all the same thing.

38Similarly, the applicant's proposals with respect to a grievance procedure and wages reflect a complete indifference to the respondent's structure. Prior to filing the requisite Schedule D (the proposed collective agreement it is prepared to execute) in this application, the applicant had proposed a grievance procedure which involved taking matters up with a "Division Manager", a "Woods Manager" and a "Vice-President, Woodlands" which the applicant acknowledged the respondent has none of, and then, when the respondent indicated it would not agree to it, no griev­ance procedure at all, including resiling from the agreement reached between the parties with respect to several other clauses in the grievance procedure article. With respect to wages, the applicant insisted throughout that wages be paid on the basis of an hourly rate, even though it acknowledged that the respondent has always paid its employees on a "trip rate" or piecework basis (except for float and sand truck drivers, self-loaders, and haul truck drivers engaged in mis­cellaneous hauling or activities other than hauling), and even though its own proposals with respect to "bereavement pay" and "jury duty/subpoenaed witness allowance" made reference to piece workers (and which latter two proposals also refer to employees engaged in woods operations which the respondent has none of). The applicant also acknowledged that it has no objection in principle to employees it represents being paid on a piece work basis.

39In both its evidence and its representations, the applicant repeatedly accused the respondent of "walking out" of negotiations and "refusing to bargain". In particular, the applicant criticized the respondent's reluctance to bargain upon monetary matters. There was no cogent evi­dence before the Board which suggests that the respondent either "walked out" or otherwise refused to bargain in the manner suggested by the applicant. On the contrary, the evidence demon­strated that it was the applicant which was deaf to the respondent's explanations and entreaties, and was so intransigent in its position that bargaining did not proceed as it might have. In negotia­tions, the applicant refused to acknowledge that there was a significant difference in the monetary impact on the respondent between a bargaining unit described in the terms demanded by the appli­cant (see paragraph 32, above) and the bargaining unit described in accordance with the certificate issued to the applicant by the Board, which the respondent was quite prepared to agree was the bargaining unit covered by the collective agreement. Not until the hearing herein did the applicant, through McIntyre, grudgingly acknowledged that it was reasonable for the respondent to want to have an idea of the number of employees in the bargaining unit before dealing with monetary mat­ters. The applicant was unable to offer any reasonable explanation of its insistence upon the expanded recognition clause it proposed. McIntyre kept repeating that this is the standard clause in the applicant's collective agreements and that the applicant felt this would give bargaining unit employees the requisite job security. We have already noted that a union is not entitled to insist upon a recognition clause, whether "standard" or otherwise, which has the effect of expanding its bargaining rights.

40The existence of "management" rights clause was another major stumbling block in the negotiations between the parties. Although such provisions do not exist in every collective agree­ment in Ontario, they are quite common. The applicant insisted that it acknowledged the respon­dent's right to manage its affairs and that no management right's clause was necessary. It pointed out that, if necessary, the respondent could rely on the residual rights theory of management rights that there is so much arbitral jurisprudence about. In our view, it was not at all unreasonable for the respondent to seek a clause which clarified its management rights, rather than having to rely upon the uncertainties of the arbitral jurisprudence. Certainly, the fact that other collective agree­ments to which the applicant is a party do not have such a provision, which the applicant asserted is the case, was no reason for the applicant to dismiss the respondent's proposal out of hand.

41In the result, we were not satisfied that the process of collective bargaining between the parties had been unsuccessful for the reasons set out in subsection 40a(2) of the Labour Relations Act and we therefore dismiss the application.