United Steelworkers of America v. Placer Dome Inc., 1991 CanLII 6090

[1991] OLRB Rep. March 357

2227-90-FC United Steelworkers of America, Applicant v. Placer Dome Inc., Respondent

BEFORE: R. O. MacDowell, Alternate Chair, and Board Members W. A. Correll and B. L. Armstrong.

APPEARANCES: Brian Shell for the applicant; Bruce Binning and Mark Contini for the respondent; David Hunter and David Miller for the Band Council.

DECISION OF THE BOARD; March 26, 1991

I

1. This is an application under section 40a of the Labour Relations Act. That section reads, in part, as follows:

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

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

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

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

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

(d) any other reason the Board considers relevant.

(3) Where a direction is given under subsection (2), the first collective agreement between the parties shall be settled by a board of arbitration unless within seven days of the giving of the direction the parties notify the Board that they have agreed that the Board arbitrate the settlement.

The union contends that bargaining for a first collective agreement with the respondent has been unsuccessful for reasons that warrant a direction that the dispute be resolved by arbitration.

2. This application was filed on November 23, 1990, and was originally scheduled to come on for hearing before the Board on December 18, 1990; however, the parties agreed to waive the time limits in section 40a and adjourn the matter, without prejudice, so that they could make further efforts to settle their collective bargaining differences without litigation or third party intervention. Those bargaining efforts were unsuccessful, and the case continued on February 18, 1990.

3. At the opening of the hearing on February 18, certain Indian Bands sought standing to intervene and make representations in opposition to the union's arbitration request. Counsel for those Bands indicated that he had learned of the proceeding only a few days before, and that if standing were granted, he would be requesting an adjournment to take instructions and prepare submissions. Since several Indian Bands were involved, counsel was unable to say how long this consultation process would require.

4. Counsel conceded that he did not directly represent any employee in the bargaining unit, nor had any native worker authorized him to speak on his/her behalf; however, counsel contended that there was a "Band interest" in this proceeding, because some of the company's employees were native Indians, and the Bands had a 1987 agreement ("the Dona Lake Agreement") with the employer concerning employment opportunities for native Indians. Counsel contended that the Dona Lake Agreement should take precedence over any collective bargaining process mandated by the Labour Relations Act, any collective agreement which might be negotiated by the applicant union on the employees' behalf, and any term or condition of employment which an arbitrator might determine pursuant to section 40a(4) of the Act. In counsel's submission, the possibility that a collective agreement might affect the implementation of the Dona Lake Agreement gave the Bands standing to intervene.

5. The nature of the "Indian employment interest" established by the Dona Lake Agreement will be examined in more detail below. At this stage it is sufficient to note that the Board dismissed the Bands' request for standing to intervene, without prejudice to their right (if any), to make submissions to an arbitrator should the Board decide that that is the way the collective bargaining dispute should be settled.

6. It is evident from the language of section 40a that the Indian Bands are not a "party" within the meaning of section 40a itself. They are not an employer or trade union. They do not participate in the bilateral bargaining or statutory conciliation process which must precede a section 40a application, and which usually results in a collective agreement without recourse to section 40a. They do not participate in the selection or payment of the arbitrators should that process be engaged. They will not be either parties to, or bound by any collective agreement which results from arbitration, should that be the manner in which a first agreement is settled, just as they would not have been bound if the union and employer had settled the agreement between themselves. But most important, the access to arbitration inquiry undertaken by the Board under section 40a(2) will not produce any collective agreement and will neither prescribe nor affect the terms or conditions of employment of any native worker. All that the Board will decide is whether the collective agreement will be settled by arbitration, or by further bilateral negotiations between the union and the employer; and, in the meantime, if a direction to arbitration is made, section 40a(15) will preserve the status quo (compare section 79 of the Act). Thus, even if the Indian Bands have some derivative interest based upon an agreement with the company respecting work opportunities for native employees, our acceptance or rejection of the union's arbitration request would not affect that interest.

7. For completeness we should note that counsel for the Federal Crown was present in the hearing room "on a watching brief', and was invited to address the Board. He indicated that he did not seek to intervene or make submissions. Similarly, a solicitor for the Native Affairs Secretariat of the Ministry of the Attorney General was present and invited to make representations. He supported the Bands' request for standing, but did not otherwise seek to intervene.

II

8. In accordance with Practice Notes 18 and 19, both parties filed extensive documentary material in support of their respective positions, together with written representations on the application of section 40a. This documentary material consisted, for the most part, of bargaining proposals and related correspondence which, it was said, would illuminate the bargaining process in the months preceding this application. On the agreement of the parties, the Board also received the respondent's minutes of some of the bargaining sessions, however, the parties agreed that these minutes would be filed "only to give the Board a sense of the exchange which took place, and not for their accuracy or completeness". Neither party sought to call oral evidence about what was said or done at the bargaining table, or about the practical or tactical considerations behind the various bargaining positions which were taken from time to time. The parties agreed that neither of them would "assert or request that the Board draw any adverse inference from the failure of any party to call viva voce evidence about any matters in this application", and, of course, all of the bargaining after November 23, 1990, was covered by their "without prejudice" stipulation. The parties were content that the Board make its own judgements about the quality and content of the bargaining, based solely on the written material before it.

9. The case proceeded on this basis, and in view of the parties' agreements, counsel were able to substantially shorten what might otherwise have been a long and complicated hearing. On the other hand, the Board has been left to assess the intrinsic "reasonableness" of the parties' bargaining positions having regard only to the itemized positions themselves, and the stage of bargaining that the parties had reached when this application was filed. We have not found that to be an easy task where, as here, the union chose to abandon the bargaining table for the Board before there had been detailed discussion on economic issues (see infra paragraphs 18-21), and the two and a half months of bargaining between November 23 and February 18 is not before us.

III

10. The respondent is a mining company. In the mid-1980's it decided to develop a gold mine on a property near Pickle Lake in the District of Kenora. That mine is located in the vicinity of but not on lands reserved to several Indian Bands. For this reason, among others, the local Indian communities were keenly interested in the respondent's proposed development.

11. In order to facilitate the timely development of the mine, it was necessary for the company to respond to concerns which had been raised by local Indian Bands under the Environmental Protection Act. An assessment under that Act would have resulted in significant delay and cost, even if the project were eventually permitted to proceed. To avoid those consequences, the company engaged in a process of negotiation with local groups which culminated in the Dona Lake Agreement.

12. The parties to the Dona Lake Agreement are: Dome Exploration (Canada) Limited, the Osnaburgh Indian Band, the Windigo Tribal Council, the Government of Canada as represented by the Minister of Indian Affairs and Northern Development, and the Government of Ontario as represented by the Minister of Northern Development and Mines, and the Attorney General. Among the terms of the Dona Lake Agreement are a variety of employment guarantees and training opportunities for native workers. At the time this agreement was concluded, of course, the work force had yet to be assembled.

13. In consideration of these guarantees (among other things) the Bands agreed to withdraw their request to have the project "designated" for assessment under the Environmental Protection Act. With that hurdle overcome, the project proceeded. By the end of 1989, the mine employed approximately seventy-two workers, of whom about eighteen were native Indians.

14. On November 3, 1989, the United Steelworkers of America applied for certification as the bargaining agent for a bargaining unit of the company's employees described as follows:

"all employees of Placer Dome Inc. at its Dona Lake Mine in the Township of Pickle Lake, save and except forepersons, persons above the rank of foreperson, office, clerical, technical and sales staff, and students employed during the school vacation period".

In order to obtain certification the union had to demonstrate that it enjoyed the membership support of a majority of the workers in the bargaining unit. That is what the union did. On November 27, 1989 the Board found that more than fifty-five per cent of the employees in the bargaining unit were union members and certified the union as the employees' bargaining agent.

15. The respondent employer did not oppose this application for certification or demand a hearing. No employee sought to intervene or file a statement in opposition. The Indian Bands did not intervene either. In this respect, then, this certification application was no different from hundreds of others which come before the Board each year, as groups of employees develop an interest in collective bargaining, and decide, by a majority, to designate a trade union to represent them.

16. Following certification, the union gave notice to bargain and both parties began the process of negotiating a first collective agreement. The details of that process are set out in the indexed binders filed with the parties' pleadings, and need not be reviewed here. It suffices to say that the bargaining involved a number of meetings over many months and, in the result, made very little progress.

17. It is obvious from the record that at various times one party or the other took positions that contributed to the ultimate impasse; however, chief among these was the union's continuing refusal to deal with any monetary issues until all contract language matters had been settled. Sooner or later collective bargaining always involves concessions and "tradeoffs", but the union was unwilling to give the company an early opportunity to "buy off' union demands which would limit the company's discretion to organize and direct the work force. The company responded that all elements of the collective agreement had a "cost", and that, accordingly, no complete replies could be prepared until the company was fully apprised of the union's economic demands.

18. However common this bargaining strategy may be, and whatever its utility in first agreement situations, the result in this case was that prior to November 1990 there was little fruitful discussion on important issues, and even less agreement. The union did not table a full monetary proposal until the end of October 1990 - eleven months after the union's certification, and only a few weeks before the instant application; moreover, until the union revealed its wage position, there was little productive bargaining on "economic" matters. And without the pressure of an imminent strike or lock-out, neither party was forced to seriously order its priorities, and decide which objectives should be advanced or abandoned in this their first round of bargaining. Both parties were able to keep a few "traders" on the table, to be given up later in return for movement somewhere else.

19. The bargaining was also hampered by the geographic isolation of the worksite, communications difficulties between the union representative in Thunder Bay and the employer representatives in Vancouver, weather problems, and a willingness by bargainers on both sides to cancel or postpone meetings to accommodate the others' schedules. No doubt a spirit of cooperation is an important ingredient facilitating the bargaining process, but, in this case, it seems to have led to more negotiations Fax to Fax than face to face. If the minutes of the meetings submitted accurately record the amount of time actually spent in face to face bargaining, the evidence for the period prior to October 1990 is: not very much. There was little movement or dynamism to the bargaining process until the end of November 1990 when the company retained its present counsel.

20. By early November 1990, very little had actually been agreed upon, but the parties had finally exchanged fairly complete positions on all matters in dispute. The union complains that, at this point, the company failed to "walk it through" a particularly important proposal presented on November 14. In the union's submission, the company's untimely departure to catch an airplane is indicative of its attitude throughout the bargaining process, and falls within the ambit of section 40a(2)(c) of the Act.

21. We do not agree. On the day in question, the company indicated that it was prepared to respond to the union's initial impressions and answer any immediate questions. The company also indicated that it would consider any written inquiries made by the union between November 14 and November 26 - 28 which had already been set aside to continue the bargaining. The short meeting on November 14 cannot be considered in isolation from the three days already scheduled to continue negotiations. Those dates were cancelled at the instance of the union, because the union chose instead to file this application.

22. The union points to a number of bargaining positions which were singled out as either

particular irritants in the bargaining process, or indicative of a dilatory and destructive bargaining stance on the respondent's part. However, having considered the matters to which we were referred, both individually and in combination, it is not at all obvious to us that they either meet the test of section 40a(2)(b) or (c), or that they are the reason that collective bargaining was ultimately unsuccessful. We do not think an employer is obliged to justify why it will not accede to the union s position, merely that it has a reasonable justification for its own; nor should the Board confuse its role under 40a(2) with that of an interest arbitrator under section 40a. A bargaining position may have a "reasonable justification" whether or not an arbitrator would ultimately accept it for inclusion in a collective agreement; moreover, an employer makes a pretty good beginning when it can show that its proposal is within the range accepted in broadly similar circumstances (i.e. in bargaining which has been "successful"). The Board must also consider the dynamics of bargaining, the stage that bargaining had reached, and the intrinsic importance of any issue(s) said to be the "sticking point(s)", before concluding that bargaining has been unsuccessful, and that the reason for failure falls within the ambit of 40a(2)(a)-(c).

23. We do not think it is necessary to review the various positions of which the union complains. Section 40a requires the Board to carefully scrutinize any bargaining process which extends, unsuccessfully, as long as this one has, and, at the very least, casts an onus of explanation on any respondent insisting on something unusual; moreover, the abstract invocation of "management rights" may not be sufficient justification for intransigence on matters not obviously central to an employer's ability to run the business efficiently. Where, as here, the bargaining process has taken so many months with so little agreement, the Board is entitled to take a forensic approach, and carefully examine the positions that the parties have taken as well as the way they have gone about the business of bargaining. Having said that however, if it were necessary to make any final determination on these issues in this case, it is not at all clear to us that the circumstances, evolution, and stage of the bargaining establish the prerequisites for a section 40a direction - especially since it appears that the bargaining after November made considerable progress once all of the issues were on the table. Indeed, were it not for the "Dona Lake issue" the Board might not have been inclined to make a section 40a direction at all.

24. But the Dona Lake Agreement was raised early in the bargaining process, its relationship to the collective agreement was never satisfactorily resolved, and as time went on, this uncertainty became a serious impediment to progress at the bargaining table. The company was reluctant to take any bargaining position which either was, or might be seen to be inconsistent with the Dona Lake Agreement; while the union's frustration mounted at what it considered to be a refusal to recognize its right to bargain on behalf of a significant number of employees in the bargaining unit. The union sought to negotiate positive benefits and grievance procedures for the employees it represents, including native workers. The company raised the spectre of conflict and misunderstanding if the union were drawn into an established framework where only band leaders and governments were consulted about native employment interests. The union was as jealous of its legal prerogatives as the employer was of its management rights, and just as the employer did not welcome the prospect of having its decisions reviewed by an arbitrator, the union did not welcome the possibility of other parties intruding in the employer-employee or collective bargaining relationship. Nor was this a groundless fear, as the requested intervention in this proceeding amply demonstrates. And from the union's perspective, it was not at all clear that the rather general provisions and "consultation" process in the Dona Lake Agreement compared favourably with the familiar, specific, and enforceable employee protections contained in a typical collective agreement. On the contrary, if native workers were limited to the "benefits" in the Dona Lake Agreement, the union feared that they might be left with only a limited right to challenge management decisions that adversely affected them.

25. In order to appreciate the potential for friction with the Dona Lake Agreement, it may be useful to briefly review some of its terms and their possible impact on employees in the bargaining unit represented by the union. We will not attempt to review the Agreement in its totality, but will focus only on a few examples.

IV

26. As we have already mentioned, the Dona Lake Agreement is a multi-party arrangement intended to promote local community development and employment opportunities for native workers. Among its core provisions is a hiring target of thirty native employees, together with related undertakings in respect of training and apprenticeship. The Agreement contemplates special work schedules and leaves of absence to allow native employees to participate in traditional economic activities (hunting, trapping, fishing, and ricing). But these arrangements are neither clear "rights" nor guarantees. They are privileges to be extended, withheld or qualified by the company, in consultation with a committee consisting of representatives of the company, the Indian Bands, and the two governments. The individual worker and his/her union (not being parties to the Dona Lake Agreement) have no direct role, or immediate right of redress should there be a dispute about such entitlements.

27. The Dona Lake Agreement contemplates the possibility of a "labour pool whose membership exceeds the number of jobs filled by it... such jobs to be filled through reasonable and flexible scheduling...". Although merely a possibility, this kind of communal work-sharing scheme, if implemented, would obviously bear upon the work opportunities of existing bargaining unit employees, if only to share the jobs on an equitable basis. And as before, the implementation of such scheme depends upon the initiative and consent of the company and the other parties to the Dona Lake Agreement, not the trade union and the workers directly involved.

28. The notion of "management rights", and the possibility of employee discharges are recognized in these terms:

"It is understood that, subject to reasonable grievance procedures to ensure that decisions On workplace discipline and termination of employment operate fairly, Dome retains reasonable management rights to discipline or dismiss employees who are not performing efficiently and competently in their employment position".

There are no standards of "reasonableness” or "fairness" spelled out in the Dona Lake Agreement, nor is it clear whether or how an aggrieved worker could challenge this management decision. It is arguable, however, that s/he might be able to refer her/his complaint to one or other of the consultative committees provided in the Agreement, and might be obliged to pursue this route if the Dona Lake Agreement superseded a collective agreement. To take a simple example: an employee alleging unjust discharge or improper lay-off might lose the right to speedy independent arbitral review - one of the most common but critical benefits of a collective agreement (and one contemplated by section 45 of the Act) - in favour of a multi-party consultative process with its own dynamic, and in which neither the union nor the worker have a direct right to participate. Such process might not even be "quasi-judicial" or recognize collateral employee interests of the kind which arbitrators must consider following Re Bradley and Ottawa Professional Fire Fighters Assoc. 1967 CanLII 160 (ON CA), [1967] 2 O.R. 311 (C.A.).

29. In addition to work guarantees and preferential hiring practices, the Dona Lake Agreement contemplates a variety of committees struck for particular purposes and involved in both consultation and implementation of the principles set out in the Agreement. The Sub-Agreement on Human Resource Development Needs includes this provision for the resolution of disputes:

Dispute Resolution

14(1) The Dona Lake Working Committee, as established by The Dona Lake Agreement shall, resolve all disputes which concern matters dealt with in this Sub-Agreement and, subject to s.14(2), shall alone have the power to decide whether it has authority over a dispute.

14(2) The Coordinating Management Committee shall, resolve all disputes unresolved within 30 days by or appealed from the Dona Lake Working Committee and shall alone have the power to decide whether it has authority over a dispute.

14(3) The Parties hereto agree that the procedures outlined in this section shall be exhausted before recourse is had to any other decision-making forum.

It is not clear how this procedure might interact with the arbitration procedure required by statute (see section 44(1)) and available to the union if there is a dispute concerning the interpretation, application, administration or alleged violation of the collective agreement.

30. It is important not to overstate the difficulties, or be diverted by hypotheticals and possibilities. Most of the provisions in the Dona Lake Agreement involve access to work opportunities, training programs or other affirmative action initiatives for native workers which are neither obviously or even likely to be in conflict with the process of collective bargaining or the objectives which the union itself has sought to achieve on behalf of native members of the bargaining unit. Indeed, we are inclined to think that if the union and the Indian Bands were to engage in dialogue, they would discover large areas of common interest, and, that, in turn might help resolve some of the company's concerns about being "caught in the middle". In practical terms, there may not be an operating incompatibility between the collective agreement and the Dona Lake arrangements, since the union itself supports "affirmative action". For example, the union has proposed its own "native equity plan" which would be included in the collective agreement and therefore readily enforceable at the instance of an aggrieved employee or the trade union pursuant to sections 44 or 45 of the Labour Relations Act. That native equity plan reads as follows:

Art. XX. Native Employees' Employment Equity Plan

XX.01 The objective of the Native Employees' Employment Equity Plan is to relieve hardship or economic disadvantage among native employees and to assist native employees to achieve equal opportunity in the workplace in accordance with s.13(1) of the Human Rights Code by providing native employees with the benefits described herein.

.02 Where the rights of native employees pursuant to this article conflict with rights of non-native employees under other provisions of this collective agreement, the rights of native employees pursuant to this article shall prevail.

.03 In all cases of vacancy, promotion, transfer, layoff and recall from layoff, native employees shall be entitled to preference if they have the ability and physical fitness to perform the work, notwithstanding their seniority.

.04(a) Upon request of any native employee, the employer shall grant to him/her leaves of absence which total not more than three months in a calendar year, for the purpose of engaging in traditional economic activities.

(b) A native employee shall continue to earn seniority during any leave granted for the purpose of engaging in traditional economic activities which leave shall be for the period set forth in the Dona Lake Native Agreement and the Dona Lake Human Resources Sub-Agreement on the one hand, or for the period set forth in Article XX.04(a) on the other hand, whichever provides the greater benefit to the native employee.

.05 In order to facilitate access to upgrading programs by native employees, the employer agrees to:

1. provide physical facilities and necessary equipment at the minesite which can be used for the viewing of high school upgrading television/video programs, such as the "WAHSA" program; and

2. upon the request of any native employee, schedule him/her to work at such times as will permit such native employees to view high school upgrading television/video programs.

.06 The employer agrees that in disciplining or discharging a native employee, it shall have regard to the social, cultural and economic factors affecting native employee in determining whether it has just cause to discipline or discharge the native employee and in fashioning the appropriate remedy, if any.

Art. XXI. Transportation

.01 The employer shall provide round trip transportation for native employees from Osnaburgh and Pickle Lake to the minesite at the beginning of every shift and from the minesite to Osnaburgh and Pickle Lake at the end of every shift.

In the union's submission, proposals such as this one give concrete contractual expression to the sometimes general or undefined principles in the Dona Lake Agreement, without raising any conflict with that Agreement. However, these proposals do involve an active role for the union in asserting or protecting the rights of the native workers it represents, and because the union believes that those rights are best protected in a collective agreement it is reluctant to defer to the Dona Lake arrangements in which it plays no part. And, of course, from the union's point of view, the question of "who speaks for workers" on employment issues, has been settled by its certification as their bargaining agent.

31. The problem from the company's point of view is that for commercial reasons it has bound itself to an agreement which at least potentially impinges upon the employment rights of native workers, while at the same time it is obliged by law to bargain with the union its employees have chosen to represent them. This dilemma was raised quite early in the bargaining process and was addressed in a letter to the union dated March 23, 1990:

RE: COLLECTIVE AGREEMENT NEGOTIATIONS AND

DONA LAKE INDIAN AGREEMENT

As we advised during the negotiations for a collective agreement, the Company was awaiting advice from its counsel regarding appropriate procedures and respective responsibilities, regarding the application of the Dona Lake Indian Agreement to the collective bargaining process.

We have now been advised that the difficulty raised by our situation is the potential conflict which could exist between a negotiated collective agreement with different terms from those contained in the Dona Lake Indian Agreement. Neither the Labour Relations Act of Ontario nor the Common Law presently states that the collective agreement is to override the existing Indian Agreement.

Dona Lake is a signatory (along with four (4) other parties), entered into a valid contractual obligation on signing the Indian Agreement, and as such, must continue to do everything it can to honour its commitments to that contract. The Company is unable (nor authorized) to seek to alter the terms of the Dona Lake Indian Agreement when negotiating with the Steelworkers. Similarly, the Steelworkers are not authorized to act as agents of any of the parties to the Dona Lake Indian Agreement.

To this end, Dona Lake must take the position that it is legally and morally bound to ensure that the Indian employees in the bargaining unit continue to be provided with the benefits guaranteed under the Dona Lake Agreement.

The company did not want to be in a position where the Band representatives demanded a course of action under the Dona Lake Agreement inconsistent with the negotiated terms of employment, or the Bands asserted the primacy of the Dona Lake dispute settlement procedures over the arbitration process provided in the employees' collective agreement. The company wanted to avoid competing claims to legitimacy or debates about who must be consulted about, or spoke on behalf of, native employment interests. That prospect prompted the company to demand significant alterations to the recognition clause that the company itself had originally proposed for inclusion in the parties' collective agreement.

32. On March 8, 1990, early in the bargaining, the company proposed a recognition clause framed as follows:

ARTICLE 1.

RECOGNITION

1.01 The Company hereby recognizes the Union as the exclusive representative of employees in the following designated unit, to wit:

All employees of the Company at it's [sic] Dona Lake Mine in the Township of Pickle Lake, save and except forepersons, persons above the rank of foreperson, office, clerical, technical and sales staff and students employed during the school vacation period, all as set forth in the certificate issued by the Ontario Labour Relations Board on November 27, 1989.

Such recognition is accorded for the purposes of collective bargaining with respect to wages, hours and other terms and conditions of employment subject to and in accordance with the provisions of the Ontario Labour Relations Act.

That clause basically mirrors the bargaining unit definition found in the OLRB certificate of November 1989. By taking this bargaining position, the employer was being consistent with both established bargaining practice and section 41 of the Labour Relations Act, which provides that:

41.-(1) Every collective agreement shall be deemed to provide that the trade union that is a party thereto is recognized as the exclusive bargaining agent of the employees in the bargaining unit defined therein.

It is almost universal that in bargaining for a first collective agreement the bargaining parties will simply "pick up", without debate, the terms of the Board's certificate, moreover the Board has found it to be illegal to insist on anything else, or to bargain a recognition issue to impasse. By November 1990, however, the company was insisting upon these additions:

ARTICLE 1.

RECOGNITION

1.01 The Company hereby recognizes the Union as the exclusive representative of employees in the following designated unit, to wit:

All employees of the Company at it's [sic] Dona Lake Mine in the Township of Pickle Lake, save and except forepersons, persons above the rank of foreperson, office, clerical, technical and sales staff and students employed during the school vacation period, all as set forth in the certificate issued by the Ontario Labour Relations Board on November 27, 1989.

Such recognition is accorded for the purposes of collective bargaining with respect to wages, hours and other terms and conditions of employment subject to and in accordance with the provisions of the Ontario Labour Relations Act.

1.02 The Union acknowledges that the Company is bound to an Agreement with the Osnaburgh Indian Band, the Windigo Tribal Council, the Government of Canada and the Government of Ontario, ("the Native Indian Agreement") which requires the Company to provide certain benefits, guarantees and preferences to Native Indians employed by the Company.

1.03 The Company and the Union agree that the Native Indian Agreement shall not form a part of this collective agreement for any purpose. Without restricting the generality of the foregoing, it is understood and agreed that any alleged violation of the terms of the Native Indian Agreement will not be subject to the grievance and arbitration procedures provided for herein.

1.04 The Company and the Union agree that it shall not constitute a violation of this collective agreement for benefits or other preferences not provided for in this Agreement to be accorded to Native Indians employed by the Company in the bargaining unit.

And in January 1991, the document labelled "Final and Last Offer", contains these recognition provisions:

1 .05 The Company and the Union agree that it shall not constitute a violation of this Collective Agreement for benefits or other preferences not provided to all employees in the bargaining unit to be accorded to Native Indians employed by the Company in the bargaining unit pursuant to the terms of the Native Indian Agreement.

1.06 Where the rights of Native Indian employees as defined by the terms of the Native Indian Agreement or as determined by any dispute resolution procedure provided for in the Native Indian Agreement conflict with the terms of this Collective Agreement, it is agreed that the rights of Native Indian employees as defined by the Native Indian Agreement or as determined by any dispute resolution procedure provided for in the Native Indian Agreement shall prevail.

[This document was put before the Board on the agreement of the parties, but, as we have mentioned above, there was no direct evidence on the bargaining in the preceding weeks.]

33. The record does not disclose any response to the union's proposals respecting native workers. Those proposals were described in argument before us, merely as "unacceptable" without further elaboration or explanation. But the explanation is obvious (and no other was suggested in evidence). The company felt obliged to take the position that the terms and conditions for native workers - potentially some forty per cent of the bargaining unit - had already been determined by the Dona Lake Agreement or would be prescribed by that Agreement in accordance with the consultative process or dispute settlement mechanisms defined therein. There was a group of bargaining unit employees "carved out" by Dona Lake whose employment rights had already been (at least partially) defined; and the company was not prepared to consider any deviation from Dona Lake, even if the union proposal was more advantageous to native workers, and even if Dona Lake alone might leave them with fewer protections in some areas than non-native workers. In the circumstances, it is difficult to resist the union's characterization of the situation: the company could not or would not bargain with the employees' bargaining agent about these matters because they had already been settled by a previous arrangement with the Indian Bands and governments. That, the union contends, is a refusal to recognize the bargaining authority of the union within the meaning of section 40a(2)(a) of the Labour Relations Act. In order to avoid an allegation that it has broken faith with the spokesmen for the native communities, the company has refused to recognize the comprehensive role which the union is entitled to play as the workers' designated representative under the Labour Relations Act.

34. The union submits that this is also an appropriate case for an exercise of the Board's discretion under section 40a(2)(d). The union points to this observation in Juvenile Detention (Niagara) Inc., [1987] OLRB Rep. Jan. 66:

"Indeed, on its face, section 40a(2)(d) could be construed as a rather extraordinary invitation from the Legislature to "break the log jam" even when the respondent's conduct does not amount to bad faith bargaining, or otherwise does not fit squarely into items (a) -

The union submits that, in the instant case, there is a "ghost at the bargaining table", impeding the negotiations and preventing a serious consideration of its bargaining proposals. The union contends that however laudable the objectives of the Dona Lake Agreement may be, the company has used it to confine, inhibit, and ultimately frustrate the bargaining process provided under the Labour Relations Act. The company cannot recognize the union's bargaining authority in respect of native workers because it has already settled their rights, and undertaken to recognize someone else.

35. The employer replies that the Dona Lake Agreement represents a desirable balance of commercial and social objectives (hence the government signatories) which the company is entitled to promote and protect in its collective bargaining with the applicant union.

V

36. This case raises, in a novel context, both the employer's obligation to recognize the employees' bargaining agent, and the extent of its duty to bargain about their terms and conditions of employment, when, for understandable commercial reasons, the employer seeks to maintain the situation as it was before the employees brought the union on the scene. It involves an unusual interplay of legal, commercial, community and collective bargaining interests; and, accordingly, it may be useful to briefly outline the scheme of collective bargaining law established by the Labour Relations Act.

VI

37. The nature and social utility of collective bargaining have been succinctly summarized by Professor Weiler, in a short passage to which we might usefully refer:

"To its proponents, collective bargaining is a mode of employee representation which serves two vital social functions. It secures for workers a measure of protection from the employer and the vicissitudes of the labour market -- protection from substandard wages and benefits and from arbitrary and unfair treatment on the job. In addition, such protection is secured through a process which affords workers themselves a considerable measure of participation in the entire endeavour -- in their initial choice of a union, the election of their union officers, the formation of their bargaining agenda, the decision about whether to accept a contractual proposal or to go on strike, and the settlement or arbitration of grievances during the life of the contract. From the point of view of employers, while labour law does reconstruct the background market by enabling workers to pool their bargaining resources so as to exert greater leverage vis-a-vis the firm, the law does not dictate from the outside across-the-board substantive solutions to workplace problems. Instead, the parties in each individual relationship are directed to sit down together to devise their own voluntary responses to their particular concerns, through measures which can be specially tailored to their individual needs and priorities, and which they can revise or discard as their situation changes".

In Professor Weiler's view, collective bargaining gives workers a form of "empowerment" and a measure of industrial democracy:

"Collective bargaining is not simply an instrument for pursuing external ends, whether these be mundane monetary gains or the erection of a private rule of law to protect the dignity of the worker in the face of managerial authority. Rather, collective bargaining is intrinsically valuable as an experience in self-government. It is the mode in which employees participate in setting the terms and conditions of employment, rather than simply accepting what their employer chooses to give them (which, if the employer happens to be benevolent, may be just as generous compensation, just as restrained supervision). If one believes, as I do, that self-determination and self-discipline are inherently worthwhile, indeed, that they are a mark of a truly human community, then it is difficult to see how the law can be neutral about whether that type of economic democracy is to emerge at the workplace".

38. Collective bargaining is a process which the law of Ontario not only permits, but encourages. The Preamble to the Labour Relations Act provides:

WHEREAS it is in the public interest of the Province of Ontario to further harmonious relations between employers and employees by encouraging the practice and procedure of collective bargaining between employers and trade unions as the freely designated representatives of employees.

Section 3 of the Act guarantees that:

3. Every person is free to join a trade union of his own choice and to participate in its lawful activities.

Sections 64, 66 and 70 protect workers who seek to engage in collective bargaining, and prohibit employer interference with their right to do so. For example, section 66(b) of the Act provides:

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

(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;

An employer is not entitled to insist in a contract of employment, or as a condition of employment, that workers forego their statutory rights; and, a fortiori, it is not entitled to do so merely to preserve a commercial advantage or maintain consistency with some pre-existing arrangements with third parties.

39. The Act envisages the formation of trade unions as the vehicle through which employees, acting together, can advance or protect their interests, and a trade union can be "certified" as the employees' bargaining agent when the majority of those employees demonstrate that this is their wish. Similarly, a union may lose its agency status if a majority of employees indicate that they no longer wish to be represented, or wish to be represented by someone else. However, as long as the union is entitled to represent the employees in a bargaining unit, it must do so in a manner that is neither arbitrary, discrimatory, or in bad faith (see section 68); and, more important for present purposes, the employer is compelled to recognize the union and must refrain from bargaining with anyone else. Section 67 of the Act reads as follows:

67.-(1) No employer, employers' organization or person acting on behalf of an employer or an employers' organization shall, so long as a trade union continues to be entitled to represent the employees in a bargaining unit, bargaining with or enter into a collective agreement with any person or another trade union or a council of trade unions on behalf of or purporting, designed or intended to be binding upon the employees in the bargaining unit or any of them.

40. Once the trade union has been certified, the union and employer are obliged to meet and bargain in good faith, and make every reasonable effort to make a collective agreement (section 15). That process involves considerable latitude and flexibility, as is suggested by the definition of "collective agreement" itself (see section 1(1)(e) of the Act); however, subject to section 40a of the Act, to which we will return later, certification does not, in itself, prescribe the terms of the collective agreement, or even guarantee that there will be one. As Professor Weiler has noted:

“……Certification does give the trade union a license to bargain for the unit. It imposes a corresponding obligation on the employer to sit down at the table with the union and make a sincere effort to reach agreement about terms and conditions of employment. But the law does not, as it cannot, tell the employer that it must settle the contract on the union's terms, any more than the employer can oblige the union to agree to the employer's terms. A system of free collective bargaining means that the law, through its agencies such as the labour board, has no right to evaluate the proposals made by either side or to tell them what concessions they must make. If the parties are truly free to agree, they must also be legally entitled to disagree. The assumption of our system is that when they do reach such an impasse, an economic test of strength must take place to break the logjam. It is the strike that determines which side will find it more painful to disagree, which party will be forced to make the major moves toward compromise".

The right to strike also enjoys legal protection, and is an important inducement to compromise. (See generally: P. Weiler; Reconcilable Differences, Carswell 1980 pp. 49-56.)

41. Although the Act does not generally stipulate the content of the collective agreement, there are two important exceptions. We have already noted one of them. Section 41 of the Act requires the employer to recognize, in the agreement, the continuing status of the union as the employees' exclusive bargaining agent. In addition, section 44(1) of the Act prescribes the way in which employer-employee disputes must be resolved during the life of that collective agreement:

44.-(1) Every collective agreement shall provide for the final and finding settlement by arbitration, without stoppage of work, of all differences between the parties arising from the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable.

(2) If a collective agreement does not contain such a provision as is mentioned in subsection (1), it shall be deemed to contain the following provision:

Where a difference arises between the parties relating to the interpretation, application or administration of this agreement, including any question as to whether a matter is arbitrable, or where an allegation is made that this agreement has been violated, either of the parties may, after exhausting any grievance procedure established by this agreement, notify the other party in writing of its desire to submit the difference or allegation to arbitration and the notice shall contain the name of the first party's appointee to an arbitration board. The recipient of the notice shall within five days inform the other party of the name of its appointee to the arbitration board. The two appointees so selected shall, within five days of the appointment of the second of them, appoint a third person who shall be the chairman. If the recipient of the notice fails to appoint an arbitrator, or if the two appointees fail to agree upon a chairman within the time limited, the appointment shall be made by the Minister of Labour for Ontario upon the request of either party. The arbitration board shall hear and determine the difference or allegation and shall issue a decision and the decision is final and binding upon the parties and upon any employee or employer affected by it. The decision of a majority is the decision of the arbitration board, but if there is not majority the decision of the chairman governs.

(3) If, in the opinion of the Board, any part of the arbitration provision, including the method of appointment of the arbitrator or arbitration board, is inadequate, or if the provision set out in subsection (2) is alleged by either party to be unsuitable, the Board may, on the request of either party, modify the provision so long as it conforms with subsection (1), but, until so modified, the arbitration provision in the collective agreement or in subsection (2), as the case may be, applies.

The parties cannot "contract out" of this mandatory dispute settlement process, nor even reserve a right to strike/lock-out about matters not covered by the collective agreement.

42. With these exceptions however, the law does not, by and large, prescribe the actual terms of the collective agreement. But it does oblige the employer to recognize the trade union; it does require the employer to bargain about the terms and conditions of employment, and it does prohibit the employer from bargaining with anyone else, including individual employees. And once the collective agreement is entered into, it is that document which governs - not some notional individual contract of employment, whatever its origin. In Syndicat Catholique des Employes de Magasin v Paquef Ltee 59 CLLC ¶15409, Judson J. observed:

"The Union is, by virtue of its incorporation under the Professional Syndicates' Act and its certification under the Labour Relations Act, the representative of all the employees in the unit for the purpose of negotiating the labour agreement. There is no room left for private negotiation between employer and employee. Certainly to the extent of the matters covered by the collective agreement, freedom of contract between master and individual servant is abrogated. The collective agreement tells the employer on what terms he must in the future conduct his master and servant relations. When this collective agreement was made, it then became the duty of the employer to modify his contracts of employment in accordance with its terms so far as the inclusion of those terms is authorized by the governing statutes. The terms of employment are defined for all employees, and whether or not they are members of the Union, they are identical for all.

[emphasis added]

Laskin C.J.C. expressed the same view in Mcgavin Toastmaster Limited v. Ainscough et al, (1976) 1 S.C.R. 719:

"The reality is, and has been for many years now throughout Canada, that individual relationships as between employer and employee have meaning only at the hiring stage and even then there are qualifications which arise by reason of union security clauses in collective agreements. The common law as it applies to individual employment contracts is no longer relevant to employer-employee relations governed by a collective agreement which, as the one involved here, deals with discharge, termination of employment, severance pay and a host of other matters that have been negotiated between union and company as the principal parties thereto. To quote again from the reasons of Judson J. in the Paquet case, at p. 214:

If the relation between employee and union were that of mandator and mandatory, the result would be that a collective agreement would be the equivalent of a bundle of individual contracts between employer and employee negotiated by the union as agent for the employees. This seems to me to be a complete misapprehension of the nature of the juridical relation involved in the collective agreement. The union contracts not as agent or mandatory but as an independent contracting party and the contract it makes with the employer binds the employer to regulate his master and servant relations according to the agreed terms".

In a collective bargaining regime, it is the collective agreement which defines and limits employee rights.

43. We have sketched in this statutory background in order to underline the dilemma which the company faced at the bargaining table. So long as it could unilaterally dictafe the terms and conditions of employment, prospective workers had to "take it or leave it" and the company could

specify in advance precisely what the workers' employment rights would be; moreover, it could also change those rights, unilaterally, in accordance with any commercial or other concerns which it chose to act upon. The employer was able to impose employment conditions consistent with its undertakings under the Dona Lake Agreement, and employees were obliged to either accept those conditions or seek work elsewhere. However, once the employees had opted for collective bargaining, the employer was obliged to take into account a new reality - one in which it might be required to modify its employees' terms and conditions of employment in accordance with their demands or priorities as expressed through their trade union.

44. Therein lies the root of the employer's predicament: it had undertaken to conduct its employee relations in a particular way, including reference to various outside interests, but following certification it was required to take into account the collective demands of its employees and their bargaining agent - neither of whom are recognized under the Dona Lake Agreement. And, quite apart from the "legality" of the Dona Lake Agreement, or its "primacy" over the terms of the collective agreement, both the local community and the trade union had legitimate interests which they sought to assert, together with a measure of economic power to back their demands. Of course, it is neither necessary or inevitable that the community interests reflected in the Dona Lake Agreement will clash with the collective bargaining interests of the employees and their trade union, but from the employer's perspective it is now caught in the middle and may be subjected to economic pressures, whichever way it moves.

45. The Board is aware of the barriers and inequities which native Indians have faced in the employment sphere, and the fact that traditional union values (the importance accorded to "seniority" for example) may hinder, or be seen to clash, with the advancement of minority employment interests. That is why this union in this collective agreement, acknowledges the primacy of native rights (see proposed Article XX.02 above), and is probably demanding a greater priority for native employment interests over commercial concerns than the Dona Lake Agreement does. Indeed, as the Board observed at the hearing, both the employee and community organizations are, from their own perspective and by their own means, attempting to advance the interests of native workers. Conflict is by no means inevitable, but accommodations may be difficult to reach when collective bargaining involves a bilateral process in which there is no direct input from the local Indian community, and the multilateral arrangements embodied in the Dona Lake Agreement have no place for the trade union which the employees have selected to represent them.

46. However, our focus is collective bargaining, and the legal principles we are obliged to apply are those in the Labour Relations Act. From that perspective, the crux of this case involves a matter of recognition, and it is not without significance that the key elements remaining in dispute and the major impediments to further collective bargaining are the limitations in the employer's proposed recognition clause. The company's bargaining stance and rigid adherence to this position effectively forecloses any meaningful bargaining about the employment conditions of workers who make up a significant portion of the bargaining unit. The company cannot or will not consider such proposals, on their merits, lest it be said that it is reneging on previous undertakings or rejecting the terms and/or dispute settlement procedures in the Dona Lake Agreement in favour of those proposed by the employees' bargaining agent or prescribed by statute. In our view, this bargaining stance amounts to a refusal to recognize the union's bargaining authority within the meaning of section 40a(2)(a) of the Act. This is, in essence, a form of recognition dispute which, in our legislative scheme, cannot be the subject of mandatory collective bargaining or resolved through resort to strike action.

47. In addition, it is our view that the array of third party, community, and government interests evident in this case so overshadows, burdens, and impedes the bilateral bargaining pro-

cess envisaged by the Labour Relations Act that it constitutes the kind of circumstance which would warrant the exercise of our discretion under section 40a(2)(d). These externalities put the collective bargaining process in a strait-jacket and mire the bargaining parties in a web of conflicting claims from which they are unlikely to be able to extricate themselves through any of the normal collective bargaining processes, including the use of economic sanctions. In our view, this is not a case of the kind described by Professor Weiler above, where resort to raw bargaining power either should, or is likely to, result in successful collective bargaining and a sensible compromise. In these unique circumstances, the bargaining process has been frustrated, and it is appropriate for the Board to step in to "break the log jam

48. For these reasons, the application is granted, and the Board directs the settlement of a first contract by arbitration.

49. The attention of the parties is directed to section 40a(3) of the Act.