Ontario Nurses' Association v. George St. L. McCall Chronic Care Wing of the Queensway General Hospital, 1991 CanLII 6062

[1991] OLRB Rep. May 619

0332-90-U Ontario Nurses' Association, Complainant, v. George St. L. McCall Chronic Care Wing of the Queensway General Hospital, Respondent

BEFORE: G. T. Surdykowski, Vice-Chair, and Board Members J. A. Ronson and H. Peacock.

APPEARANCES: D. Nicholson, E. Gaudet, R. Ahee for the complainant; R. J. Charney, R. N. Nero, G. Peppiatt, M. M. Bouillon for the respondent.

DECISION OF G. T. SURDYKOWSKI, VICE-CHAIR, AND BOARD MEMBER H. PEACOCK;

May 14, 1991

1. This is a complaint to the Board, under section 89 of the Labour Relations Act, in which the complainant trade union alleges that the respondent employer has acted in a manner contrary to the "freeze" provisions of section 13 of the Hospital Labour Disputes Arbitration Act (the "HLDAA") and section 79 of the Labour Relations Act (the "LRA"), and also contrary to section 66 of the LRA.

2. By decision dated January 23, 1991 (reported at [1991] OLRB Rep. Jan. 18) the Board disposed of the respondent's challenges to the Board's jurisdiction to deal with this complaint.

3. In the course of the proceeding, there was some suggestion that the complainant had not set out the respondent's name quite correctly (for example, the evidence suggest that the words "Chronic Care" no longer appear in its name). However, there is insufficient information before the Board in that respect to cause us to amend the respondent's name.

4. The respondent is a chronic care facility operated by Extendicare Hospital Management and Development Ltd., a wholly owned subsidiary of Extendicare Health Services Inc., on behalf of the Oueensway General Hospital. It provides care for people whose medical condition has stabi­lized but who require on-going treatment or attention. Some 85 per cent of its patients are over the age of 75.

5. On September 8 and October 31, 1989 respectively, the complainant trade union was certified as the exclusive bargaining agent for two bargaining units of employees of the respondent: one consisting of full-time registered and graduate nurses employed in a nursing capacity and another consisting of part-time (employed for not more than 24 hours per week) registered and graduate nurses employed in a nursing capacity, save and except Head Nurses and those above the rank of Head Nurse (hereinafter "members of the bargaining units"). Since then, the parties have set about bargaining for a first collective agreement pursuant to the provisions of the HLDAA.

6. The complainant alleges that the respondent has wrongfully refused to pay a wage increase which it asserts the members of the bargaining units as aforesaid reasonably expected and were entitled to.

7. The respondent began its operations in November, 1984. At the outset, the respondent established the wage rate it would pay to its registered and graduate nurses by reviewing the "ONA agreement" in effect at the time and the wages being paid to registered and graduate nurses by a number of hospitals, including the Queensway General Hospital. This so called "ONA agree­ment" is the central collective agreement negotiated between the Ontario Nurses Association and a number of hospitals which participate in a centralized bargaining process. In order to be competi­tive with other hospitals and in order to compensate the nurses for the somewhat lesser benefits that they were going to receive, the respondent determined that it would pay its registered and graduate nurses a wage rate equivalent to the then ONA rate plus five cents per hour ("ONA plus 5"). In addition, the respondent established a joint employee- management committee.

8. During subsequent years prior to certification as aforesaid, this employee-management committee met regularly throughout the year and with increasing frequency in the months immedi­ately preceding April 1 of each year, that being the date fixed for changes to the compensation package received by its registered and graduate nurses.

9. The evidence discloses that the employee- management committee discussed a broad range of operations and employment issues. It certainly did not restrict itself to discussing wages and benefits.

10. With respect to wages and benefits, it developed that each year the nurses, through their representatives on the committee, would request wage increases in excess of the increase which would have maintained their wages at ONA plus 5, together with certain improvements tn benefits. Each year prior to certification, the respondent awarded a wage increase which main­tained the nurses wage rates at ONA plus 5 effective, and if necessary retroactive to, April 1 of each year. There was no similar apparent pattern to the adjustments made to the benefits received by the nurses.

11. The respondent did not award a wage increase which would have kept the members of the bargaining units at a wage rate of ONA plus 5 effective April 1, 1990. It took the position, both at the time and before the Board in this proceeding, that doing so was both not required and would constitute a breach of sections 13 and 79 of the HLDAA and LRA respectively. The respondent argued that the annual wage increase previously paid to members of the bargaining units was a product of the negotiating process engaged in through the vehicle of the employee-management committee, which process could not continue after certification. The respondent argued that the members of the bargaining units were well aware of this negotiation process and that the annual wage increases they received were a product of it.

12. As we pointed out in paragraphs 9 and 10 of our January 23, 1991 decision herein, sec­tion 13 of the HLDAA and 79 of the LRA operate together to prohibit an employer to which the HLDAA applies (which the respondent is) from altering working conditions (which include all terms and conditions of employment, including wages) in the circumstances set out therein. These are what are commonly known as "freeze" provisions. The purpose of these provisions is to pro­vide a fixed and stable point of departure for collective bargaining, and to thereby facilitate the collective bargaining process, by maintaining the terms and conditions of employment for bargain­ing unit employees in the pattern which existed at the time the freeze provisions came into effect. This ensures a fixed basis for negotiations and precludes any unilateral alteration to the status quo which might give one party an unfair advantage in bargaining or for propaganda purposes.

13. Although the "freeze" label has stuck, it is a bit of a misnomer. Sections 13 and 79 of the HLDAA and the LRA respectively do not necessarily contemplate a static situation. As the Board's jurisprudence demonstrates, it is the pattern that existed prior to the onset of the freeze and the reasonable expectations of employees which are preserved, not merely the terms and con­ditions of employment in effect at the point in time that the freeze provisions come into effect. As such, section 13 of the HLDAA and section 79 of the LRA are strict liability provisions in the sense that an employer's actions need not be necessarily improperly motivated for it to be in breach of them (see Beaver Electronics Ltd. [1974] OLRB Rep. Mar. 120, The Wellesley Hospital [1976] OLRB Rep. July 364, Kodak Canada Ltd. [1977] OLRB Rep. Aug. 517).

14. The Board has interpreted the freeze provisions in a manner which recognizes an employer's right to continue to manage its operations in accordance with a pattern which has been established prior to the freeze being triggered. This "business as before" approach was articulated and applied in Spar Aerospace Products Limited [1978] OLRB Rep. Sept. 859. As subsequent cases demonstrate, it is not always easy to apply this test. Nor does applying it always lead to an obvious result. In that respect, for example, the Board has found that the freeze provisions do not prohibit first time events (see Grey Owen Sound Joint Homes for the Aged [1983] OLRB Rep. Apr. 522 where lay-offs occurred for the first time during the freeze; Corporation of the Town of Petrolia [1981] OLRB Rep. Mar. 261 where work was contracted out for the first time during the freeze). To clarify the business as before approach, and to accommodate first time events, the Board developed the "reasonable expectations" test. Although reasonable expectations language had appeared in prior decisions, the first complete articulation of the reasonable expectations test is found in Simpsons Limited [1985] OLRB Rep. Apr. 594, where, at paragraphs 32 and 33 the Board explained that:

15. Reasonable expectations language has appeared in a number of decisions dealing with the freeze section. See, for example, Corporation of the Town of Petrolia, supra; Scarborough Cen­tenary Hospital, supra; Oshawa General Hospital, York-Finch Hospital, supra; St. Mary's Hospital, [1979] OLRB Rep. Aug. 795 (Decision omitted from [1979] OLRB Rep. March); AES Data Limited [1979] OLRB Rep. May 368. In the latter case, for example, the Board found that the employer was entitled to re-assign job functions since the employees could not reasonably expect to continue performing their jobs in exactly the same way despite changes in the mode of production and market conditions. Thus, in the Board's view, the reasonable expectations of employees as the appropriate measure of the employees' privileges which are protected by the freeze is a common thread running through the earlier decisions. In the instance case, the Board is expressly articulating the test.

16. The reasonable expectations approach clearly incorporates the practice of the employer in managing the operation. The standard is an objective one: what would a reasonable employee expect to constitute his or her privileges (or, benefits, to use a term often found in the jurispru­dence) in the specific circumstances of that employer. The reasonable expectations test, though, must not be unduly narrow or mechanical given that some types of management decision (e.g., contracting out, workforce reorganization) would not be expected to occur everyday. Thus, where a pattern of contracting out is found, it is sensible to infer that an employee would rea­sonable expect such an occurrence during the freeze. The Board in Simpsons, [1985] OLRB Rep. 469] although the cleaning was contracted out before the company itself took over that operation, did not conclude there was such a pattern.

17. Many of the cases in the Board's freeze jurisprudence involve the payment, or, more often, the non-payment of wage increases. The Board has consistently found that a failure to pay a wage increase in accordance with a past practice or a promise to do so constitutes a breach of sec­tion 13 of the HLDAA or section 79 of the LRA, as the case may be (see, among others, Scarborough Centenary Hospital [1969] OLRB Rep. Jan. 1049, Spar Aerospace Products Limited, supra, Lennox and Addington County General Hospital [1978] OLRB Rep. Sept. 843, Public Ser­vice Alliance of Canada [1978] OLRB Rep. Sept. 854, St. Mary's Hospital [1979] OLRB Rep. Aug. 795, Town of Meaford [1981] OLRB Rep. Sept. 1202, Homewood Sanitarium of Guelph, Ontario, Ltd. [1982] OLRB Rep. Feb. 230, Sisters of St. Joseph of the Diocese of London (Board File No. 0782-89-U, Nov. 22, 1989, unreported).

18. The respondent argued that the instant case is distinguishable from those which have come before it because of the negotiated basis for the annual wage increases paid to members of the bargaining units prior to certification. The respondent also submitted that, because it is tied to the ONA rate applicable at the time, the complaint constitutes an attempt to raise the point of departure for the collective bargaining process between the parties, and is therefore contrary to the purpose of the freeze provisions.

19. There is no doubt that certification alters the legal regime between an employer and its employees. For one thing, an employer is obliged to bargain collectively with a certified trade union and to make reasonable efforts to make collective agreement with that trade union. Con­comitantly, an employer is prohibited from dealing directly with bargaining unit employees with respect to matters relating to employment. One of the things which makes the application of the freeze provisions difficult is this transition from an individual contract of employment regime to a collective bargaining regime. However, as the pointed out in Spar Aerospace Products Limited, supra (at paragraph 18), the pattern which is preserved by the statutory freeze provisions is the one established by dealings between an employer and its employees, whether individually or as a group. In our view, the mere fact that the respondent has historically paid its nurses wage increases after the matter was raised at the employee-management committee it had unilaterally established does not mean either that no pattern was established, or it is immune to the freeze provisions of the HLDAA and the LRA.

20. In this case, a clear pattern had emerged prior to certification. Effective April 1 of each year, the same day registered and graduate nurses covered by the ONA central agreement received a wage increase, the respondent's nurses were awarded a wage increase which maintained their wages at 5 cents above the rate in the ONA agreement; that is, at ONA plus 5. We are satisfied that while the nurses' representatives on the employee-management committee always asked for more, they did not expect to receive any more or any less than the increase necessary to maintain their wage rate at ONA plus 5. Indeed, the evidence suggests that, unlike benefits, there was little, if any, real discussion on the question of the annual wage increase. It may not have been quite so simple as the nurses' representatives suggesting an increase in excess of ONA plus 5 and the respondent replying that the increase would be to ONA plus 5, but it was close to that. In our view, the members of the bargaining units reasonably expected that they would receive a wage increase effective April 1, 1990 which would have maintained their wages at the rate paid to ONA nurses at the time plus five cents per hour, and that the respondent should have paid them that increase in accordance with its established pattern of doing so.

21. Nor are we persuaded by the respondent's argument that it would be inappropriate to either find that the respondent was in breach of the freeze provisions, or to make the remedial order requested by the complainant in that respect because it would raise the point of departure for collective bargaining. We note that a similar argument was advanced by the respondent in Coca Cola Ltd. [1989] OLRB Rep. May 427. Although the Board in that case dismissed a complaint that the respondent had breached section 79 of the LRA, it was not on the basis of that argument. In any event, the facts in that case make it readily distinguishable from the complaint before us.

22. We note that the respondent's argument in this latter respect would apply to any change in working conditions which could be said to be an "improvement" over those in effect at the out­set of the freeze. That suggestion has (implicitly if not expressly) been rejected by the Board. The Board has consistently found that the failure of an employer to pay a wage increase or otherwise continue with or institute an improved working condition during the statutory freeze, in accor­dance with a pre-existing pattern or a promise to do so, constitutes a breach of the freeze provi­sions. Collective bargaining does not occur in a vacuum. In our view, it is both contemplated by the legislation and appropriate that the basis for collective bargaining be the pattern of the employ­ment relationship, and the resulting reasonable expectations of employees, including any pattern or expectation of wage increases.

23. We therefore find that the respondent breached section 13 of the HLDAA and section

79 of the LRA by failing to pay its registered and graduate nurses in the bargaining units repre­sented by the complainant a wage increase effective April 1, 1990 which would have resulted in

their being paid at a wage rate equivalent to that paid to such nurses under the then ONA central

collective agreement plus five cents per hour (i.e., "ONA plus 5").

22. The complainant also alleged that the respondent wrongly refused to pay the members of the bargaining units a week-end premium rate since April 1, 1990. The evidence reveals that such a week-end premium was discussed in 1989. The respondent refused to implement such a pre­mium in 1989 but indicated it would consider the question in 1990. In the interim, of course, the complainant was certified as the bargaining agent for the nurses to whom such any such premium would have been paid. We are not satisfied either that there was any practice or pattern of paying a week-end premium rate to nurses, or any promise to do so in 1990, such that the nurses could rea­sonably have expected to receive it on either April 1, 1990 or otherwise. The complaint in that respect is therefore dismissed.

23. Finally, the complainant alleges that the respondent conduct constitute a breach of sec­tion 66 of the LRA. Section 66 of the LRA provides that:

24. No employer, employers' organization or person acting on behalf of an employer or an employers' organization,

(a) shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;

(b) shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or

(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to com­pel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

24. The complainant argued that the respondent refused to pay the April 1, 1990 wage increase because, in part, at least, the nurses have exercised their right under the LRA to select the complainant trade union as their collective bargaining representative. In other words, the com­plainant alleged that the respondent intended to penalize the nurses for exercising their rights under the LRA. There is no evidence before the Board which suggests that the respondent's actions were improperly motivated as alleged by the complainant. In our view, the respondent's actions were based on an honest, albeit incorrect, belief that it was not required to pay the April 1, 1990 wage increase. The complaint in that respect is therefore dismissed.

25. In the result, the Board:

(a) declares that the respondent has breached section 13 of the Hospital Labour Disputes Arbitration Act and section 79 of the Labour Rela­tions Act;

(b) orders the respondent to forthwith pay to all members of the bar­gaining units represented by the complainant at a wage rate equiva­lent to that in the ONA central collective agreement effective April 1, 1990 plus five cents per hour, retroactive to April 1, 1990;

(c) all persons entitled to retroactive payments in accordance with the above are entitled to be paid interest thereon, such interest to be cal­culated in accordance with Board Practice Note No. 13.

26. We shall remain seized with this matter for the purpose of dealing with any difficulties encountered in implementing the Board's decision herein for a period of ninety days from the date hereof.

DECISION OF BOARD MEMBER JAMES A. RONSON; May 14, 1991

1. We have been asked by the complainant union to find a practice or pattern whereby the Respondent employer and its nurse employees have surrendered bargaining over the nurses' wages to the Queensway General Hospital and the Ontario Nurses' Association respectively. To make such a finding the evidence should be strong and clear in support. Unfortunately for the union, it is not.

2. The evidence is clear that the employer and its nurses bargained over wages and benefits at all times. There is no evidence to show what might have happened if the nurses were adamant in their demands that benefits be increased no matter the effect on their wages. And at no time did the nurses ever get all that they wanted. To the contrary, the undisputed evidence is that the employer always considered the cost of the total package of demands before telling the nurses what it was willing to do.

3. Now there is in place a collective bargaining regime which can lead to binding arbitra­tion if the parties cannot agree. By setting the minimum wage increase in the new contract accord­ing to the best formula that the nurses were able to obtain previously, I fear that the Board has severely restricted the employer's ability to bargain over the rest of the contract (not to mention the problems it may cause an arbitrator in the future). If bargaining is a "give and take" process, then the employer's ability to "take" has been compromised.

4. I would preserve the normal pattern of collective bargaining by dismissing this complaint.