Spar Professional and Allied Technical Employees Association v. Spar Aerospace Limited, 1991 CanLII 6094

[1991] OLRB Rep. March 399

2778-89-U Spar Professional and Allied Technical Employees Association, Com­plainant v. Spar Aerospace Limited, Respondent

BEFORE: K. G. O'Neil, Vice-Chair, and Board Members J. A. Ronson and E. G. Theobald.

APPEARANCES: Maurice Green and Hermine Borduas for the applicant; Brian Burkett, John Ste­wardson, Lynne Ivanovich for the respondent.

DECISION OF K. G. O'NEIL, VICE-CHAIR AND BOARD MEMBER E. G. THEOBALD: March 27, 1991

1. This is a complaint under section 89 of the Labour Relations Act alleging breaches of section 64, 70, and 79(1). At the hearing the union complainant clarified that it was pursuing the matter only in relation to section 79(1), the "freeze provisions". Therefore the complaint is hereby dismissed in regards to sections 64 and 70.

2. The company (sometimes referred to below as "Spar") is involved in the aerospace industry; the division covered by this dispute makes remote manipulator systems, better known as "the Arm". The parties to this dispute have a collective bargaining relationship that is 12 years old. There have been four sets of negotiations prior to the current round, commencing in 1978, 1982, 1985 and 1987. The employer has never paid maturity and promotional increases during the statu­tory freeze. The issue to be decided is whether this fact represents "business as usual" or whether its most recent manifestation is a breach of the freeze provisions in the Act. The union (sometimes referred to below as "SPATBA" or the "Association") argues that the freeze in the Act extends the terms of the collective agreement which they say are clear on their face requiring the payment of such increases. The employer takes the position that to pay these increases would be a departure from business as usual given its well established practice during other freeze periods.

3. The evidence in this matter was not substantially in dispute although the parties' charac­terization of it differs greatly. Mr. John Stewardson, Director of Personnel and Employee Rela­tions, and Mr. Eric Quittner, past President and now a member of SPATEA's executive, both of whom have been heavily involved in negotiations throughout the relationship between the parties, gave that evidence. It will be summarized as necessary below.

4. Section 79(1) provides as follows:

79.-(1) Where notice has been given under section 14 or section 53 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees, and no trade union shall, except with the consent of the employer, alter any term or condition of employment or any right, privilege or duty of the employer, the trade union or the employees,

(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and,

(i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or

(ii) fourteen days have elapsed after the Minister has released to the parties a notice that he does not consider it advisable to appoint a conciliation hoard,

as the case may be; or

(b) until the right of the trade union to represent the employees has been ter­minated,

whichever occurs first.

5. The relevant collective agreement excerpts are appended to this decision as Appendix "A" due to their length. It contains language from the agreement covering the Metropolitan Toronto bargaining unit which is agreed to be identical to the relevant language in the collective agreement covering the Shirley's Bay bargaining unit, the other group involved in the complaint. The terms will be described in the body of the decision which follows.

6. On December 15, 1989, the company wrote the following letter to SPATEA's Presi­dent:

This is to confirm to you that following the expiry of the collective agreements between Spar Aerospace Limited and the Spar Professional and Allied Technical Employees Association on December 31, 1989, no salary increases will be processed for employees in the bargaining units in Toronto, and Shirley's Bay until renewal of the collective agreements are concluded. This is in accordance with the company's position and practice and all prior negotiations with SPATEA.

7. The most recently expired collective agreement, like its predecessors, has a fairly unusual salary system. The salaries are set according to a grid in the collective agreement. How­ever, it is not the common type of salary grid on which people are placed and then progressed from year to year. This grid is composed of a starting rate and control points. On hiring a salary rate is set which can be no lower than the minimum rate for the classification but may well be higher. The collective agreement then provides for various increases. These include general increases to the grid and performance, maturity and promotion increases which are based on individual characteris­tics. This complaint relates only to maturity and promotion increases. Specific calendar dates are set out for the payment of the general increases and the determination of performance increases. Maturity increases are linked to the date of entry into the bargaining unit and promotion increases to the date of promotion. On hiring, new employees are given a collective agreement and told that they will be appraised ten to twelve weeks after hiring and normally after six months. The details of when increases are allowed is not explained but they are given a copy of the collective agree­ment.

8. The collective agreement provides a formula for each kind of salary increase. In order to determine what the individual receives, one performs the calculations according to the formula and then compares the result with the salary scale and the appropriate control point. An amount over the control point is forfeited, partially or completely, depending on its category. The control points are derived from data from the Pay Research Bureau and are described by the parties as their attempt to tie salaries at Spar to the outside world, to ensure that fully performing employees at Spar are paid at or above a figure comparable to 75 percent of their professional equivalents.

9. The company's position given in evidence was that at the date of the expiry of the col­lective agreement the salary scales are extinguished and that once the salary scales are extinguished, the salary administration scheme cannot be carried out. Historically, the parties have dealt with salary between expiry and the conclusion of a renewal agreement by complete retroac­tivity to the expiry date of the previous collective agreement for monetary matters, including the disputed maturity and promotion increases. The union does not disagree that that is how the com­pany has dealt with these matters; rather it disputes the significance of this fact. It says that it has objected on an ongoing basis to the practice of not paying increases during the freeze period and therefore this practice cannot be considered part of business as usual. As well, the union points out that Spar has made no similar proposal for retroactivity in the current set of negotiations.

10. A freeze provision complaint relating to salary increases was filed prior to the first col­lective agreement. SPATBA was successful in that complaint, as set out in the Board's decision, SPAR Aerospace Products Limited, [1978] OLRB Rep. Sept. 859. A freeze provision complaint similar to the current one, but which also applied to the increases applicable to the scale itself, was filed in 1985. The parties' positions at that time were analogous to their positions before the Board on the complaint before us. The employer took the position that there would be no salary increases until the renewal of the collective agreement and the union took the position that the employees were entitled to salary increases according to the collective agreement during the freeze period. That complaint was settled with the union's withdrawal of the complaint at a time when the parties had reached agreement on the renewal of the collective agreement.

11. Mr Quittner explained the lack of objection to the company's non-payment of salaries increases during the freeze period in 1982. He said that set of negotiations was early on in the par­ties' history. It was not their expectation at that time that negotiations would take as long as they have each round. The issue was not elevated to a point of principle until it became a matter of con­cern in practice. Over time, as negotiations became protracted it became a sore point and the mat­ter was challenged.

12. It is an agreed fact that no grievances have ever been filed over the company's failure to pay these increases during the freeze periods. Mr. Quittner testified that the reason that the union had not filed any grievances during the freeze period following upon the expiry of the 1985-86 agreement concerning the company's non-payment of maturity and promotion increases was that there was a prolonged strike by the Canadian Autoworkers Union (CAW) who represent a bar­gaining unit at SPAR. Mr. Quittner was concerned that grieving at that point in time would have led to an escalation and an inability to reach a negotiated settlement without a lock-out. The union wished to be as non-confrontational as possible without conceding its position on this point. The company emphasizes that the CAW's strike went from October 10, 1986 to February 1987; the col­lective agreement in issue expired on December 31, 1986, five or six weeks before the strike ended. Negotiations continued until September 16, 1987.

13. During the 1987 set of negotiations, which resulted in the most recently expired collec­tive agreement, the employer tabled a variety of proposals aimed at clarifying the problem that had resulted in the 1985 complaint. Some of these were agreed to by the union and some were not. Specifically, the language relating to the salary grids as well as the heading of the last salary grid was amended to include end dates. When the union refused to agree to its positions on maturity and promotion increases, which would have provided that they only occurred during the term of the collective agreement, the company withdrew them without prejudice to maintaining its position on the matter, being that the previous collective agreement language supported its non-payment of salary increases during the freeze. In particular, the following language proposed by Spar was not agreed to by SPATEA:

43.0 Salary Increases

It is understood and agreed that the salary changes set out herein and the methodol­ogy described for their determination will operate for the period from the date of rati­fication to December 31, 1989. No changes to salaries will be made subsequent to December 31, 1989 as a result of the operation of this agreement. Without limiting the generality of the foregoing, it is agreed that this includes general performance, maturity and promotion increases all of which will cease on or before December 31, 1989 as provided herein.

14. In the 1987 negotiations, the company had also proposed the following wording about maturity increases:

The Maturity Increase shall be applied six (6) months from the employee's entry into the bar­gaining unit and subsequently each twelve (12) months of service thereafter during the period up to December 31, 1989 adjusted by any periods of lay-off or approved leave of absence as pro­vided in clauses 29.3 and 29.4 hereof.

SPATFA agreed to this clause once Spar agreed to delete the underlined words. Mr. Quittner believed that the basis of its refusal to agree to the underlined language was the fact that it would have conflicted with the deletion of the proposed Article 43.0 set out above, and weakened SPA-TEA's position.

15. Since the agreement to insert end dates described above, the union has not taken the position that increases to the grids themselves were payable during the freeze period. However, it has continued to hold the view that maturity and promotion increases were payable. The union made no counter proposals on these issues because it held the view that the existing language of the collective agreement supported the position that these increases were payable. As well, he was of the view that such a proposal would not properly belong to the old or the new collective agree­ment but would be in a grey zone between the two. Therefore he did not see it as appropriately a proposal for the new collective agreement.

16. Throughout the bargaining history between these parties, each party has been aware of the other's position on the question of increases during the freeze period. The witnesses acknowl­edged that the other party had never abandoned its position on the matter when it was addressed in negotiations. Explaining the company's withdrawal of its proposals on promotion and maturity increases in the most recent round of bargaining, Mr. Stewardson said that it did not seem prudent to take a strike on that matter although the company had made it very clear that it did not think it had to pay the increases even on the unamended language. Part of the reason for advancing the language changes was that Mr. Stewardson felt that the language in the expired collective agree­ment might not be perfectly clear to the "naive reader".

17. The company also took the position that the insertion of the dates ended all the other increases, including promotion and maturity increases. Equally, clearly, however, the Association disagreed with this. The company's view was that the recently expired agreement did not result in any increases after expiry. Mr. Stewardson cannot recall how explicitly the company put the posi­tion that the end date in Article 42.6 ended all increases of any kind during the freeze provisions. However, he was clear that it was part of the company's objective in proposing the changes referred to above. The company referred to them as "boundary conditions" at the bargaining table, meaning all of the proposals which referred to the term of the agreement. They included in particular the end dates added to Article 42.6 which relates to the last salary grid in the most recently expired collective agreement and 42.8 which relates to the performance increases, as well as the salary tables themselves. The discussion between the parties about the boundary conditions

took a total of more than ten hours of time at the bargaining table, spread over the course of vari­ous meetings.

18. Mr. Quittner does not recall Mr. Stewardson's ever saying that the salary scales disap­peared at the expiry of the collective agreement. He was of the view that if such a position had been explicitly taken that he would not have agreed to include the end date wording, "to Decem­ber 31, 1989", in Article 42.6. Had Mr. Stewardson said that the scales did not increase after the expiry of the collective agreement he would not have disagreed.

19. As to the company's understanding of the union's position after agreeing to the end dates, but not agreeing to the specific language about maturity and promotion increases, Mr. Ste­wardson said that the Association never advanced the position specifically that the maturity and promotion increases should continue. Rather, he said they disagreed with the language the com­pany advanced and his sense was that they wanted their options open on all four types of increases.

20. For the first time in this round of negotiations no one has been promoted during the freeze. (This fact was not complained of in the complaint before us.) Everyone who has been rec­ommended and approved for promotion has been informed of that fact, but the promotions them­selves have not been implemented. As in previous rounds, no promotion increases have been paid either. In the most recent round of negotiations, the company did not make any specific proposal limiting the dates of promotion increases. Mr. Stewardson explained that promotion was in the company's control; by avoiding promoting people, they would not have to pay promotion increases.

Argument

21. The Association took the position that the rights of the Association as explained in the plain language of the collective agreement are frozen by section 79 of the Act. Counsel asked us to find that this was the content of business as usual and the reasonable expectations of an employee. Putting itself in the shoes of "average talented engineering or technical employees", the Associa­tion argues that their expectations are to be found in the wording of the collective agreement; there is no evidence that the average employee has information from the company that there will be no increases until negotiations are concluded. Mr. Green argues that once the end dates were inserted into Articles 42.6 and 42.8 the average employee would know that the scales are not to be increased during the freeze period and that performance increases will not be paid. However, it is argued that when employees turn to Article 43.2 and read the word "shall" that they would expect an increase six months from entry into the bargaining unit and yearly thereafter. It is mandatory language. It is argued that the same goes for promotions. They are in the discretion of the com­pany but if they are given, the increases are to follow in the percentage amounts provided in Arti­cle 43.3 of the collective agreement.

22. As to the company's evidence on past practice, the Association says that there is no latent or patent ambiguity in Articles 43.2 or 43.3. There is no language which would imply they were not supposed to take place after the collective agreement expires. Mr. Green argues that given the company's acknowledgement that it knew that the union was not giving up its position as to the meaning of the collective agreement there could be no clear representation on which the company relied to its detriment as there would have been no basis for the reliance. Therefore there can be no estoppel. In any event union counsel submits that the expectation of employees cannot be affected by the company's estoppel argument.

23. Referring to the proposals not agreed to in the 1987 round of negotiations, Mr. Green says that the fact that SPATBA rejected the wording of the proposed Article 43 makes it clear that the union was saying that promotion and maturity increases should be paid. The same goes for SPATEA's refusal to agree to the underlined part of the language set out above in the proposed Article 43.2. The union does not see this as a question of filling in ambiguities in the collective agreement. It sees it as a clear attempt by he employer to escape paying promotion and maturity increases after the expiry of the collective agreement, when the language which would have allowed this was rejected.

24. Furthermore, the Association argues that what happened in negotiations nullifies the prior history of the practice between the parties. If the Board finds that the conduct in 1982 and 1984 could have led the company into detrimental reliance, which the union has asked us not to, the negotiations in 1985 are very clear. There could be no reliance at that point on the union's inac­tion as the complaint was brought. In the next round the company ended up without the exact lan­guage it wanted and it was willing to take a chance on its interpretation of the language. The Asso­ciation logically was relying on its interpretation of the language for maturity and promotion increases because it did not agree to insert end dates for those categories of increases. There was no complaint in 1982 because the union was relatively new. The union says there is no evidence of any statement, action or inaction which would have led the company to rely on the union's failure to complain at that time or at a later date, for example, at the expiry of the 1982-1984 collective agreement. There is no evidence that the reason the company did not pay the increases was some­thing the Association did or did not do. What was clear was that in 1985 the Association came to the Board. Grievances were not filed but the equivalent or better action was taken. Although the union eventually withdrew the 1985 complaint, it did not give up its position or make any represen­tation to that effect, and Mr. Stewardson was not under any illusion about that. Nor did the com­pany make any parallel representation. Counsel suggests that if either side had pressed it there might have been no settlement. The union argues that the fact that the company was under no mis­apprehension as to the union's position was evidenced by its proposals in the next round. If it had thought that the Association had given up its position it would not have proposed the explicit lan­guage it did.

25. The union referred to an unreported arbitration award Letter Carriers v. Canada Post Corporation concerning the D. Nicholas grievance (July 6,1989, M. G. Picher) on the question of estoppel as applied to statements made at the bargaining table. He asked us to adopt the view that estoppel cannot be based on mere factual assertions at the bargaining table. In counsel's view the evidence is simply insufficient to give rise to estoppel by silence or a mixture of practice and repre­sentation by inaction at negotiations.

26. The union then referred to the authorities of W.H. Smith Canada Ltd., [1986] OLRB Rep. June 920, Spar Aerospace Products Limited, [1978] OLRB Rep. Sept. 859, Simpsons Limited, [1985] OLRB Rep. April 594 and Scarborough Centenary Hospital, [1978] OLRB Rep. July 679.

27. Counsel underlines that the original Spar decision has not been deviated from by the Board. The Association says that what is frozen is the salary tables and the right to be paid accord­ing to the tables as they existed on December 31, 1989 and the maturity and promotion increases which follow. He says in this respect the grid is not very different than other grids. The rate is increased at periodical intervals and then there is a rate which goes to the end of the agreement and that is what is frozen. He argues that if the company was correct that the scales disappear, no one would be paid according to any scale. He argues that the employees are continued to be paid what they were earning in December 31st according to the scales then in effect. He points to the fact that new employees are offered pay linked to the last salary scale. He says that the memoran­dum of agreement from the last negotiations also contradicts the idea that scales disappear. The retroactivity proposal in that memorandum was worked out off the scales in existence prior to the end of the previous agreement. Over the years the basic salary structure has not been altered; rather there has been a scale with Pay Research Bureau data and percentages and control points. Although the union acknowledges that it may be frustrating to have to do calculations a second time, it argues that this is an insufficient reason to deny the complaint.

28. Mr. Green says the parties have never restricted the right to maturity and promotion increases by plain language. The employer has tried but the union has rejected the attempts. This is strengthened by the fact that in the previous round, Article 42.8 was restricted to limit perfor­mance increases to dates within the life of the collective agreement and not thereafter. Where the parties have addressed the end date in one area but not in another normal contract interpretation should result in the conclusion that it was not intended in the other area, in counsel's submission.

29. Counsel says that Mr. Stewardson's purpose in not wanting to pay these increases is contrary to the purpose of section 79 which is to prevent an employer from gutting the conditions of the collective agreement prior to the ability to strike.

30. Mr. Green asked the Board to remain seized as to the identity of people owed money and quantum if the complaint succeeds.

31. For the company, Mr. Burkett characterized the union's contractual interpretation argument as on the wrong track at the outset, that it would be more properly made before an arbi­trator. Counsel submits that when viewed under the rubric of the three general principles of the Board's jurisprudence as to freeze provisions, the result would be different than the union's argu­ment on the meaning of the collective agreement. These are: (1) business as usual (2) reasonable expectations from Simpsons Limited, supra, and (3) the totality of the employment relationship.

32. Counsel distinguishes W. H. Smith, supra, and the previous Spar Aerospace decision, supra, because they were first collective agreement situations and submits the Board ought not apply them to a renewal situation. He makes the point that even in W. H. Smith there is a refer­ence to Simpsons' Limited, supra, and to A. N. Shaw Restorations Ltd., [1978] OLRB Rep. June 479, in which a union was held to have waived certain rights under its collective agreement and was not allowed to adopt a different posture during the freeze period.

33. Counsel argues that in a renewal situation although one relies fairly heavily on the col­lective agreement it is not to the exclusion of other provisions or rights or privileges that may arise. This is consistent with looking at the totality of the collective agreement. In Simpsons Limited, supra, the Board recognized a distinction between a first collective agreement and a renewal agree­ment and said that in bargaining for a renewal agreement employer privileges may be found.

34. Counsel argues that the back drop to this dispute is critical and makes it a much differ­ent situation than at the time of the first freeze provision complaint by SPATEA. Now mature his­tory between the parties applies to the scales and more importantly to the four fold salary increases. He invites us to look at page 867, paragraph 18, of the previous Spar Aerospace deci­sion, supra, where the Board stated:

What the statutory freeze does is simply maintain the totality of the employment relationship in the pattern existing at the time the freeze becomes effective, whether it be a pattern established by prior dealings on an individual basis or prior dealings on a collective basis, making it the starting point for negotiations.

He refers to Simpsons Limited, supra on the subject of employer privileges as well as Coca-Cola Ltd., [1989] OLRB Rep. May 427.

35. Counsel stresses that this is a twelve year old relationship and the full relationship has been canvassed in evidence. We are referred to Anderson's City Farm Value-Mart, [1987] OLRB Rep. Jan. 1, at paragraph 6 and to Forintek Canada Corp., [1986] OLRB Rep. April 453 at para­graph 40, to support the proposition that the collective agreement may not contain the full prior relationship to be frozen. The evidence as to how the parties have handled maturity and promotion increases in the past is therefore central. If the union's argument succeeds, the employees would get salary increases for the first time ever during a freeze period. He argues that this is inconsistent with the whole purpose of the freeze. In the same vein is the Etobicoke General Hospital, [1986] OLRB Rep. May 614 which states that where there is conflict between the collective agreement and a historic pattern of payment, the historic pattern prevails. It creates a privilege. In Ontario Hydro, [1983] OLRB Rep. Sept. 1536 the Board found that privileges outside the framework of the collective agreement which can be demonstrated to be an accepted part of the employee/employer relationship are also frozen. In A. N. Shaw Restorations Ltd., supra, the Board held that the union had waived certain rights and that the day to day relationship is not nec­essarily to be found in the collective agreement. The prior pattern is to be assessed as the collective agreement within the context of the whole relationship.

36. Mr. Burkett stressed that the employer is not saying that it could not succeed on the contractual analysis. He argued that the collective agreement starts earlier than the document which is called the collective agreement and is composed of a memorandum of agreement and rati­fication. In every set of negotiations, the issues as to salary increases have been dealt with during the freeze period by retroactivity at the end of it. It is clear from the memorandum of agreement which was the basis of the most recent collective agreement that retroactivity was a major compo­nent of the collective agreement as defined in the Labour Relations Act. On this basis he says that we should find that even if it is correct just to look at the collective agreement we should find that the issues of salary increases are all dealt with retroactively and that is the pattern to be frozen. Every succeeding collective agreement has started the day after the expiry of the proceeding agree­ment. He asks us to decide as in Coca-Cola Ltd,, supra, that timing is the question. These parties have spoken to timing repeatedly. On the employer's analysis, the union has accepted no salary increases during bargaining from the 1981-1982 collective agreement to the present. Counsel asserts that the level of inactivity from the union in this regard is telling and should be determina­tive. There are also no grievances in ten years and no proposals in the face of a clear consistent general approach from the company. Furthermore in 1987 there was an array of clarifying propos­als under the general heading of boundary conditions. Again there are no counter proposals and no complaints. The only exception to the acquiescence of the union is the 1985 complaint. What the parties agreed to was consistent with past practice. It was implemented by retroactivity in accordance with the new rules on maturity and promotion increases agreed to at the table. The employer says that the union could have gotten a declaration from the Board but did not ask for it. There were negotiations over ten months in 1987 with no complaints nor grievances. The pattern is to deal with salary increases retroactively. Mr. Burkett argues that the union is asking the Board to depart from a well established relationship on the issue of salary increases.

37. Furthermore, he argues that the 1987 negotiations do not extinguish the prior pattern. It is not a watershed, but further clarification of the totality of the bargaining relationship. The union accepted two of the company's proposals on boundary conditions. Counsel also asked us to reject as unimportant the union's remarks about the CAW strike as for eight of the ten months of negotiations there was no CAW strike.

38. As to reasonable expectations Mr. Burkett makes four points. (i) the overriding past practice is that the employees have never received the disputed increases during the freeze. How would they expect them? (ii) the December 15th letter was an announcement that history would repeat itself. (iii) employees probably do not establish their expectations on the basis of collective agreements but if so they would find end dates this time when they read it. (iv) new hires do not get salary increases during bargaining. (v) There have been no grievances; expectations would have worked their way into filing of grievances if they were so strong.

39. In reply as to A. N. Shaw Restorations Ltd., supra, Mr. Green distinguishes it factually. He says that the past history of union inaction in that case in the face of breaches of the agreement gave rise to a practice which could be frozen as it would have been unreasonable to suggest that the employment relationship was otherwise. By contrast Mr. Green argues that SPATEA had taken no position in bargaining that could leave the employer in doubt about what its position was con­cerning the relevant issues. Mr. Green characterizes the prior pattern as one of dispute between the parties with no real resolution. Mr. Green submits that the company should not gain by its prior improper conduct if it was aware that the Association did not condone it.

40. Mr. Green also distinguishes Anderson's City Farm, supra, on the basis that it dealt with an employer's right rather than the obligation to pay merit and promotion increases during the collective agreement as in our case.

Decision

41. The purpose of the freeze provisions was set out succinctly in A. N. Shaw Restorations Ltd., supra, at paragraph 9 as follows:

It has long been held by this Board that the purpose of the Section 70(1) [now 79(1)] freeze, which maintains the status quo in respect of 'wages or any other term or condition of employ­ment or any right, privilege or duty" is to facilitate the bargaining process by providing a fixed point of departure and a period of tranquillity and stability in which to commence and hopefully conclude negotiations for a collective agreement.... The task which confronts the Board in these matters, therefore, is to determine the component elements of the status quo as of the date the statutory freeze took effect and to assess the change or alteration which is complained of against this fixed point of departure.

42. In other decisions the Board has articulated the tests for applying this purpose to partic­ular facts as determining what is "business as usual", or the "reasonable expectations of the employees" or the "totality of the employment relationship". See Simpsons' Limited, supra, among others. As is clear from all the authorities on the subject, however, it is easier to state the tests for what is frozen than to apply them to the facts of any given collective bargaining relation­ship.

43. The key to resolving the dispute before us is the determination of the proper frame of reference for the application of the above tests. What period of time should be used to measure "business as before", or the "reasonable expectations of employees", or "the totality of the employment relationship"?

44. What is novel about the facts of this case is that the issue exists with regard to events that took place only during freeze periods. None of the above authorities deals with a similar set of facts. Perhaps the closest is Etobicoke General Hospital, [1986] OLRB Rep. May 614, which dealt with a situation in which the employees concerned had been hired during the freeze, and the only pattern to their employment relationship as individuals had occurred during the freeze, which was a particularly long one. The Board there said that one should look to the practice during the subsis­tence of the collective agreement as well as after its expiry. This is the case which is the source of the statement relied on by the employer that where there is a conflict between the collective agree­ment and an historic pattern, the pattern prevails. The facts involved a situation in which the com­plaining employees had been paid more generously than the collective agreement provided from the beginning of their employment relationship, and others had been similarly paid during the cur­rency of the collective agreement. The employer reverted to the strict terms of the collective agree­ment. The employees were found to have a privilege of being paid according to the practice, and thus the employer was not permitted to change its practice during the freeze. What is different about the facts of Etobicoke General Hospital when compared to the facts of the case before us is that the practice was the same both during and after the expiry of the collective agreement and therefore the issue of whether prior freeze periods were an appropriate frame of reference did not arise. In the facts before us the practice was different during the currency of the collective agree­ments than after their expiry. Therefore, the question is squarely raised as to whether the previous freeze periods are frozen along with, or instead of, the practice during the life of the collective agreement. Similarly A.N. Shaw, supra, was a situation in which the union tried to enforce a term of the collective agreement for the first time during the freeze, having failed to do so during the currency of the collective agreement. The employer's practice had not varied between the life of the collective agreement and the freeze periods.

45. Section 79(1) starts with the wording "Where notice has been given under section 14 or section 53 and no collective agreement is in operation..." We are directed to the point in time at which the collective agreement ceases to be in operation - its date of expiry. Many of the Board's decisions concerning the application of the freeze provisions speak of determining what the employment relationship contains as of the expiry of the agreement. See, for example, A. N. Shaw, supra, at paragraph 15. The analysis in that case suggests that an appropriate approach is to ask whether the claim could have successfully been asserted at the expiry of the collective agree­ment. It is inherent in the scheme of the Act that the freeze period, after the first collective agree­ment has been concluded, is intended to preserve the employment relationship as it is changed from time to time, either by collective bargaining or by changes in practice that are not regulated by the collective agreement but which are sufficiently established to be terms and conditions of employment, or rights, privileges or duties of either party. When the matter relates to rates of wages, a subject dealt with by the collective agreement, and ordinarily bargained about in each round, it is most consistent with the scheme of the Act to start the inquiry with the most recent set of terms and conditions between the parties. This respects the Act's rhythm of freeze period, nego­tiations and subsequent collective agreements, which bears the potential for change in each new round. See also Sunnybrook Foods Limited, supra, at paragraph 11.

46. There really is no issue of contractual interpretation during the currency of the collec­tive agreement. It is common ground that the practice during the term of the collective agreement was to pay maturity and promotion increases as set out in the collective agreement. Promotion increases were paid when promotions were given and maturity increases were paid six months from entry into the bargaining unit and annually thereafter. There was no evidence to suggest that there was any deviation from that pattern except during the freeze periods. This is not a case like A. N. Shaw, supra, where the union was not enforcing a term of the collective agreement during its cur­rency in the face of an employer practice to the contrary. In the absence of the practice during the freeze period, then, it would be clear what was frozen, and the complaint should be upheld.

47. Should the frame of reference for the application of the freeze provisions include the practice during the previous freeze periods? Do the freeze provisions capture the practice during the interregnum between collective agreements? It is clear that the general rule in a collective bar­gaining relationship is intended to be governance by the terms of a collective agreement. On a gen­eral theoretical level, then, the correctness of defining the totality of the employment relationship, the reasonable expectations of employees, or business as usual solely according to the practice dur­ing the periods of exception to the rule, when there is no collective agreement in operation, when that differs from the practice during the life of the collective agreement, is not immediately obvi­ous.

48. More specifically, the Board has made it very clear that expiry dates in a collective agreement do not indicate that what is frozen is a blank page because all the terms have expired. Normally, what is frozen is what existed prior to the expiry. See for example the following excerpt from Molson's Brewery (Ontario) Limited, Toronto, [1977] OLRB Rep. Aug. 526 at paragraphs 7 and 8:

As the Board noted in the Kodak case, supra, what appears to be contemplated by section 70(1) [now 79(1)] is a total freeze of all the legal incidents of the collective bargaining relation­ship between the parties until such time as either a new collective agreement is negotiated or the parties become entitled to resort to economic sanctions. Such an approach, in turn, means that the operation of the various provisions of the collective agreement is extended until such time as the force of section 70(1) is spent.

8. That the legislature contemplated a continuation of the collective bargaining relationship dur­ing a section 70(1) freeze is, we feel, strongly indicated by section 70(3) [now 79(3)]. This sub­section stipulates that where notice to bargain has been given under section 45 and no collective agreement is in operation, any difference between the parties as to whether or not subsection (I) was complied with may be referred to arbitration "as if the collective agreement was still in operation". It is worth noting in this regard that boards of arbitration have taken the position that because of sections 70(1) and 70(3) grievances filed during a freeze period following the expiring of a collective agreement can be brought forward to arbitration for determination as if they had been filed during the life of the agreement itself. [See Berlet Electronics Ltd. 1968 CanLII 1205 (ON LA), 19 LAC. 152 (Weatherill), David Barry Co. Ltd. 1968 CanLII 1195 (ON LA), 19 LAC. 157 (O'Shea) and Truck Crane Service Ltd. 1973 CanLII 2053 (ON LA), 4 LAC. (2d) 250 (O'Shea)].

Also see Kodak Canada Ltd., supra. and Sunnybrook Foods Limited, [1985] OLRB Rep. Feb. 337, for situations in which language purporting to confine payments to the term of an expired col­lective agreement did not remove the affected terms from the reach of the freeze provisions. This well established jurisprudence is sufficient to dispose of the employer's position, articulated in evi­dence, that the salary scales cease to exist and that one cannot carry out the salary administration scheme without the salary scales. The jurisprudence also counters the idea that the role of the freeze provisions is markedly different in regards to salary increases prior to the first collective agreement as compared to the periods between collective agreements. Although W.H. Smith, supra, which held that the employer's previous practice of paying annual increases was frozen, involved a freeze prior to the first collective agreement, similar results have pertained in the renewal situation. See Forintek Canada Corp., supra, at paragraph 40 as well as Sunnybrook Foods Limited, supra.

49. Does the practice of the employer in this case during the freeze periods have sufficient weight to define a pattern that should be frozen which is different from the one that is agreed to pertain during the currency of the collective agreement? Do the facts of this case establish an employer privilege of not paying wage increases during the freeze, as argued by the employer? The practice of the employer was consistent during past freezes, as to salary increases: none of any kind have been paid. The evidence also shows that there was much other activity around this issue.

50. In the freeze period prior to the first collective agreement, the employer's failure to pay increases was successfully challenged with a freeze provision complaint. In the second freeze period, the practice was not challenged, and retroactivity covered the issue. In the third freeze period, there was a second freeze provision complaint, which was settled at a time when the issue had become moot, because the collective agreement, which included full retroactivity, had been settled. In the fourth freeze period, the parties turned their minds to the employer's proposals on the subject. The practice during that freeze was not otherwise addressed by the union; no griev­ance or freeze provision complaint was filed. The union now agrees that the employees are not entitled to general scale increases during the freeze because of the specificity of the dates inserted in the most recent round of bargaining. The employer's proposals which would have inserted simi­lar language into the promotion and maturity increase provisions of the collective agreement were not agreed to by the union. At the very latest, by the time of the 1985 freeze provisions complaint, the employer was aware that the union did not agree with its interpretation of the collective agree­ment during the freeze periods. That the parties did not agree on the general issue of pay increases during the freeze was evident from before the first collective agreement was concluded. As the matter was not characterized as one for the application of estoppel by the employer in argument, we need not comment on the union's arguments on estoppel.

51. If one tries to capture the totality of the employment relationship during the earlier freeze periods, the common threads are failure to pay increases and failure to agree on whether that was appropriate. Formal objection to the practice occurred in the first and third freeze peri­ods, and the union's position was demonstrated to the employer, and changed as to scale increases, at the bargaining table in the most recent round of bargaining. Is this sufficient to create an employer privilege of not paying maturity and promotion increases during the freeze period in con­trast to the application of the collective agreement during its term? We do not think this is the case. Firstly, the practice was clearly challenged in 1985. We do not think that the fact that the union did not pursue the matter when the issue was moot can be held against it. It is not usually considered desirable for labour relations to pursue issues in theory that have been resolved in prac­tice. Secondly, and more importantly, at the next opportunity, the bargaining table in 1987, the parties changed the terms and conditions of employment to be frozen at the expiry of the resulting collective agreement. Had there been any doubt to whether the Association accepted the compa­ny's interpretation of these provisions before then, there was none after this point. The only prac­tice under the new terms was during the currency of the new collective agreement. For the current freeze period, even if we consider the issue independently of the agreed practice during the cur­rency of the collective agreement, we are of the view that the provisions of articles 43.2 and 43.3 are clear. The payment of the increases is linked to the date of the employee's entry into the bar­gaining unit in the case of maturity increases and to the date of promotion in regards to promotion increases. They are not linked to the specific dates in the salary scales or in Article 42.8 relating to performance increases.

52. The employer underlined that if the Board upheld the complaint, employees would be receiving increases during the freeze period for the first time, and thus such a decision could not be said to be consistent with the reasonable expectations of employees. As the Board said in Coca-Cola Ltd., supra, the reasonable expectations of employees has an objective component. Otherwise, an individual's peculiar expectations could dictate the result in any freeze complaint. What is reasonable in an objective sense obviously depends on what approach one uses. And equally obviously, reasonable people may differ. For example, an employee who had been hired during the life of the last collective agreement would be quite reasonable in thinking that maturity and performance increases would be paid at the intervals set out in the collective agreement. Another employee, fully informed as to the history of this collective bargaining relationship, whose attention had been drawn to the reasons for the lack of a promotion or maturity increase during one of the past freezes for which she was aware she was otherwise eligible, might have an entirely different but equally reasonable expectation.

53. The same is true for the other tests in the Board's jurisprudence business as usual and the totality of the employment relationship. If one includes past freeze periods in the frame of ref­erence, as evidenced by the able argument of both counsel in this case, one can describe the facts in a way that fits into the wording of the section, on either side of the argument. In this regard, the employer argued that the totality of the employment relationship includes the practice during the freeze periods, and that as stated in Etobicoke General Hospital, supra, where practice is at odds with the collective agreement, the practice should prevail. As noted above, however, that case dealt with a practice during the life of the collective agreement. There is no authority of which we were made aware for the proposition that a practice during previous freeze periods should override the practice under the provisions of the collective agreement during its currency. In the factual cir­cumstances of this case, such an approach does not fit well with the purpose of the freeze provi­sions, which is to provide a fixed point of departure for each successive set of negotiations. In any event, the practice during past freeze periods could not be said to be an "accepted part of the employment relationship" as the only round of bargaining in which the union did not assert the contrary in some form was the 1982 round.

54. Mr. Burkett also argued that the company's position was supportable on the definition

of collective agreement contained in the Act, which is as follows:

l.-(1) In this Act,

(e) "collective agreement" means an agreement in writing between an employer or an employers' organization, on the one hand, and a trade union that, or a council of trade unions that, represents employees of the employer or employees of members of the employers' organization, on the other hand containing provisions respecting terms or conditions of employ­ment or the rights, privileges or duties of the employer, the employers organization, the trade union or the employees, and includes a provincial agreement;

Counsel argues that the collective agreement thus defined includes the memorandum of settlement which was entered into evidence. As noted above, it includes full retroactivity back to the date of the expiry of the previous collective agreement. Theoretically then, even during the currency of the collective agreement, the parties dealt with maturity and promotional increases by retroactivity and not by paying them prior to the conclusion of the renewal collective agreement. In considering this argument we observe there is a certain amount of legal fiction in both retroactivity provisions and in the freeze provisions. A retroactivity provision acts as if the present state of affairs existed in the past. The freeze provisions are intended to direct parties to act as if the terms and conditions of employment which expired with the collective agreement had not expired. But neither fiction changes the reality that the interregnum is not the currency of either the expired or the renewal collective agreement. The parties are in partially suspended animation awaiting the settlement of the disputed terms and conditions of employment. Mr. Burkett may be correct that at the moment of signing the document put into evidence as the collective agreement between the parties, which does not contain the retroactivity language of the memorandum of settlement, the collective agree­ment as broadly defined in the Act also included the memorandum of settlement. Certainly for enforceability that ought to be correct. However, this does not really assist in the resolution of this dispute because prior to the signing of the memorandum of settlement, it was s. 79(1) and the terms and conditions of employment as of the date of the expiry of the previous collective agree­ment, and not the still to be signed memorandum of agreement, which governed the relationship between the parties. The same is true of the current freeze period. The fact that the employer had not, at the time of the hearing, proposed any retroactivity demonstrates that it does not feel it is bound in bargaining by the retroactivity provisions of past settlements. It would be directly at odds with the whole purpose of periodic renegotiation of collective agreements to bind either party dur­ing negotiations by its positions in previous rounds of bargaining. It is our view that giving effect to this portion of the company's argument would be to hold parties bound by their retroactive treat­ment of a prior freeze period when faced with the next one. This would not likely be a welcome concept to either party if applied more generally than to the peculiar facts of this case, and is not one the Board adopts.

55. In the result the complaint is upheld. The Board finds that the employer violated sec­tion 79(1) of the Act by failing to pay promotion and maturity increases during the freeze period according to the provisions of the expired collective agreement. The Board will remain seized if the parties are unable to agree on compensation and to deal with any difficulties in implementation.

DECISION OF BOARD MEMBER JAMES A. RONSON; March 27, 1991

1. This is an application by the union for a contractual interpretation that certain terms of a collective agreement extend beyond the expiry date of the agreement. The result is that the status quo in the terms and conditions of the employment relationship between employer and employees will change during the "freeze period" of bargaining. By the decision of my colleagues the Board grants to the union that which it was unable to obtain during 10 years of collective bargaining with the employer.

2. The parties have developed an intricate and sophisticated system for the review of the salaries of its scientists, engineers and technical personnel. At fixed dates every six months during the term of the collective agreement the salaries of the workers are reviewed and upgraded accord­ing to this intricate performance evaluation system. The contract has now expired and the parties are bargaining for a new agreement. Six months of bargaining have gone by and the union now asks the Board to order the employer to make the normal six month salary increase as found in the expired contract.

3. The onus is on the union to show why the Board should find that salary increases are part of the terms and conditions that are frozen in place during the bargaining freeze. According to the well-established criteria laid down by the Board, the union must show:

(a) a reasonable expectation by the employees that they will receive a salary increase; or

(b) a promise by the employer to make the salary increase; or

(c) a pattern of previous salary increases during the bargaining.

4. Applying the evidence to the criteria, seriatim:

(a) Reasonable expectation of employees

The employees have never received such salary increases in the past. The employer has always denied the union's request for such increases. Previous contract settlements have provided for retro-ac­tive pay increases. All the evidence counters the notion that the employees could reasonably expect the employer to continue mak­ing salary increases after the end of the contract.

(b) Promise to pay by the employer

The evidence is that the employer has always taken the position that salary increases do not out-live the contract. During the last round of bargaining the contract language was tightened to make it even clearer that the employer had no intention of granting such increases.

(c) A pattern of previous salarv increases Go back to (a) and (b)

5. Simply put, the union has failed to meet the onus set by previous cases of the Board and I would dismiss this application.

6. There is one further element of this case that requires comment. Under the guise of determining the terms and conditions of employment during the freeze period, the Board has assumed the mantle of a board of arbitration and interpreted the terms of the collective agreement. It has ignored past practice and the collective bargaining pattern which evolved between the parties over some 10 years. It has given the union that which it wanted but could not obtain in bargaining. I can only hope that it has not sent the present lengthy round of negotiations and the mature bar­gaining relationship between the parties back to year no. 1, square no. 1.

[Appendix omitted: Editor]