[1992] OLRB Rep. March 377
1567-91-FC Carpenters and Allied Workers Local 27 United Brotherhood of Carpenters and Joiners of America, Applicant v. Romatt Custom Woodwork Inc., Respondent
BEFORE: M. A. Nairn, Vice-Chair, and Board Members W. A. Correll and J. Kurchak.
APPEARANCES: N. L. Jesin , R. Balkissoon and C. Mannella for the applicant; Robert W. Cosman and M. DeMonte for the respondent.
DECISION OF THE BOARD; March 24, 1992
By decision dated December 5, 1991 we directed the arbitration of the first collective agreement between these parties. We now provide our reasons for that direction.
This application was filed on August 2, 1991. Hearings were held on September 16, October 16, and December 2, 1991. Prior to commencing the hearings the parties agreed to waive the time limits contained in section 41 [formerly section 40a] of the Labour Relations Act (the "Act").
We note that during the course of the hearing the respondent attempted to introduce evidence of an amended negotiating position made after the application date herein. We ruled that for the reasons expressed in Great Lakes Community Credit Union Ltd. [1991] OLRB Rep. June 758 and adopted in Wendy's Restaurants [1991] OLRB Rep. Oct. 1241 we were not prepared to hear evidence of matters occurring after the application date.
We do not intend to review all of the evidence heard over the course of the hearing but
simply to highlight the chronology of events and those matters which led us to our conclusion to direct the arbitration of the first collective agreement.
Following its certification on August 9,1990 the applicant filed notice to bargain on August 23, 1990. Negotiations commenced on September 25, 1990 at which time the union tabled its proposals. The next negotiating session was held October 24, 1990 when the company tabled its proposals in response. The parties were agreed that from October 24, 1990 to the date of the filing of this application on August 2, 1991 the respondent did not change any of its proposals from those put forward on October 24, 1990. The applicant applied for conciliation in February, 1991 and on April 23, 1991 the parties met in conciliation. They met again on May 24, 1991 with the conciliation officer although nothing was accomplished.
It was the position of the respondent that negotiations stalled because of the intransigent position taken by the applicant in proposing a union shop union security provision as a condition precedent to negotiating other issues. It was the further position of the respondent that as a result, negotiations did not run their course, the parties have not tested their positions through a negotiating process and the process could not be said to be unsuccessful. It was the applicant's position that while it had tabled a union shop proposal and that while it was the major stumbling block in the negotiations, the applicant was at all times prepared to continue negotiations, however in the face of the conduct of the respondent, negotiations could not and did not proceed.
With respect to whether the process of collective bargaining had been unsuccessful, we were satisfied that as of the date of application the parties had clearly become entrenched in their positions, most particularly with respect to the union security provision and that negotiations were at an impasse. Between the period September 25, 1990 through to August 2, 1991 the parties had negotiated on five separate occasions with the assistance of a conciliation officer for two of those meetings and had achieved little, if any, agreement.
The difficulty between the parties was the applicant's proposal for a union shop, that is, a union security provision to be included in the collective agreement stipulating that once hired by the respondent and having completed their probationary period, an employee would be required to become and remain a member of the applicant. On October 24th the respondent proposed a "Rand Formula" type union security provision (also excluding probationary employees from its ambit).
There was no dispute between the parties that the union security issue was at an impasse at the time that this application was filed and that the issue was joined early in the negotiations. The respondent was aware almost from the outset that the applicant considered it to be an issue of fundamental importance for it. The applicant was of the view that in the face of the respondent's conduct during the applicant's organizing campaign and certification that it required additional security. On November 21 the applicant made clear that it was prepared to concede wages in exchange for union security protection.
It was the respondent's position both in negotiations and before the panel that it was not prepared to agree to a provision that it perceived as removing the freedom of choice from its employees with respect to their decision to join or not join a trade union. On November 21, 1990 in negotiations Mr. DeMonte, the principal officer and guiding mind of the respondent expressed to the applicant his fear that customers might be reluctant to deal with the company in the face of a union shop provision. The respondent manufactures cabinet doors for use in the residential construction industry. The union responded by advising the respondent of a number of collective agreements to which it was a party and which included such a provision. The applicant further indicated its willingness to make changes in other areas in exchange for union security. At the hearing, the applicant's Business Representative testified that the applicant was party to approximately 35 industrial shop collective agreements, all of which contained a union shop provision.
This dispute must be put in its historical context. The applicant applied for certification on September 29, 1989 for a bargaining unit of employees of the respondent. A certificate issued pursuant to section 8 of the Act on August 9, 1990. Section 8 provides an extraordinary remedy wherein the Board may certify an applicant trade union absent the normal membership requirements when the Board is satisfied that as a result of an employer's conduct in contravening the Act, the true wishes of the employees are not likely to be ascertained, and provided the trade union has membership support adequate for collective bargaining. The respondent admitted violating the Act in the manner it had conducted certain lay-offs. The decision of the Board at that time (reported at [1990] OLRB Rep. Rep. 894) dealt with the unfair labour practice complaint and the certification application to determine, essentially, what were the appropriate remedial consequences. In concluding that it was an appropriate case to apply section 8 of the Act and certify the applicant the Board said the following about the effect of the lay-offs:
The second factor is that as a result of the contravention of the Act the true wishes of the employees are not likely to be ascertained. In this case, in direct response to the fact of the trade union in the workplace, the employer laid off twenty-five percent of the employees in the proposed bargaining unit. There was no advance notice to any of the employees concerning the layoff and notwithstanding that we have found that the respondent planned a lay-off for September 29th in any event, that fact remained unknown to the employees. The lay-off occurred moments prior to the union convening its first general meeting of the employees. There can be no doubt that the effect of such a lay-off would be to send a clear message to employees that the fact of union representation would seriously jeopardize their job security.
Although we have found that the individuals who were laid off were chosen primarily on the basis of seniority or on the basis of their particular skills and not because they were union supporters, that fact may well not have been apparent to the employees. The union's organizing campaign had initially been directed at those employees who were Spanish-speaking. The majority of the employees laid-off fall into this category. In determining whether the true wishes of the employees are not likely to be ascertained we must have regard to the reasonable perceptions of the employees. The timing and extent of the lay-off and the individuals actually laid-off, in this case coming immediately prior to the union's first general meeting and with no prior knowledge to the employees, in our view could only send one message to the employees. In such circumstances a vote would not likely disclose whether the employees wish to be represented by a trade union but rather whether they wished to maintain some job security.
The conclusion reached in the Board's decision in the certification application and unfair labour practice complaint is that the respondent was willing to and did interfere with its employees' ability to freely choose whether or not they wished to be represented by a trade union. It is in that context that the same issue arose in the negotiations in response to the applicant's proposal on union security. It was Mr. DeMonte's position throughout that employees ought to have their freedom of choice and on that basis he maintained his position.
Counsel who had acted for the respondent at the certification and unfair labour practice hearings testified on behalf of the respondent in this application. She was also the spokesperson for the respondent in the negotiations for the first collective agreement. In cross-examination she was asked questions concerning this issue of employee freedom of choice. She acknowledged that the employer's actions at the certification had been in violation of then sections 64 and 66 of the Act and were improperly motivated. She accepted that the Board had found that as a result of that conduct the true wishes of the employees were not likely to be ascertained. On being asked whether this meant that the employee's freedom to choose whether to join a trade union or not had been interfered with she answered that she was unaware as to whether the employees' freedom to choose had actually been interfered with. On that basis she attempted to distinguish the employer's actions at the time of the certification from its position in negotiations. The Act does not rely on evidence of actual interference. It does not validate an employer's attempt to interfere with an employee's ability to freely choose whether to join a trade union or not merely because a particular employee happens to be able to withstand the employer's interference and remain unaffected by it. Nor does it consider whether an employee is so offended by the interference that the employee is moved to support a trade union when they otherwise would not. The point of the legislation is to prohibit improper interference with that expression of choice. In this case the interference at the time of certification consisted of an actual loss of work to twenty-five percent of the bargaining unit in direct response to the respondent's knowledge of the trade union's organizing campaign.
Another key issue between the parties in the negotiations concerned whether or not foremen could perform bargaining unit work. The union had proposed that bargaining unit work be protected (Article 2.02 and 2.04 of tab 6 of the applicant's brief). In response Article 4.05 was proposed by the respondent which reads, "It is understood that foremen of the company also perform work which is performed by members of the bargaining unit". It was the position of the respondent in negotiations that due to the nature of its operation it was necessary for foremen to perform occasional work of the bargaining unit, for example, the preparation of samples which had to be done quickly and well. The respondent did not anticipate that foremen would be used extensively to perform bargaining unit work in that it would be too expensive. The applicant countered to the respondent's proposed Article 4.05 on November 21, 1990 in an attempt to take into account purposes of instruction, experimenting, or in emergencies when regular employees were not available. The applicant expressed its concern that bargaining unit members not be laid-off as a result of foremen performing bargaining unit work. On November 21, 1990 the respondent indicated it would look at the issue of protecting against lay-offs for the bargaining unit so long as it would not be in a position that employees on lay-off would have to be recalled. At that point the applicant was prepared to withdraw its proposals for protection of bargaining unit work. As of the date of application, however the respondent's original proposed Article 4.05 remained on the table, notwithstanding an expressed intention not to use foremen to perform bargaining unit work as widely as its proposal would allow.
Throughout the negotiations the respondent was experiencing serious financial difficulty. These difficulties were of such a nature that in their negotiation on November 21, 1990 the parties agreed to adjourn pending the outcome of meetings which Mr. DeMonte was having with his bankers on December 10, 1990. The respondent asserted at that time that without additional re-financing and the opportunity to restructure financially, it might not exist after December 10.
It would appear that both parties felt it was incumbent on the other party to make contact following the respondent's meeting with its banker on December 10 in order to continue the negotiating process. The fact is that notwithstanding short unrelated conversations in early 1991 neither side made reference to the negotiations or the outcome of the December 10 financing meeting until after the applicant applied for conciliation on February 14, 1991. It is fair to conclude that on April 23 and May 24, 1991 little, if anything, was accomplished at conciliation.
Much of the respondent's evidence and argument was directed to the position that the trade union had created its own impasse in bargaining by refusing to negotiate any other issues until the union security issue was resolved. While we are satisfied that the union undoubtedly made some strong statements about the importance to it of the union shop security provision we cannot conclude on the evidence that it was otherwise unprepared to negotiate other issues. Even on the evidence of both witnesses for the respondent it is apparent that on November 21, 1990 by which time the union security issue had already been joined, the parties did discuss other proposals. The applicant tabled counter-proposals. Mr. DeMonte testified that on November 21 the parties went over every paragraph and clause of the agreement while acknowledging that the union security proposal was a "sticky point". Those negotiations were side-tracked when the applicant made its suggestion for compromise on wages in exchange for union security. The respondent indicated that it was not able to make any monetary offer in any event and the existence of the anticipated December 10 meeting with the bankers was discussed. We note that notwithstanding the position taken by the respondent on November 21, as of the date of application it continued to operate although it did not secure alternate financing arrangements at the meeting of December 10.
In the circumstances we were satisfied that the applicant had shown that the process of collective bargaining had been unsuccessful because of the uncompromising nature of any bargaining position adopted by the respondent without reasonable justification and the refusal of the employer to recognize the bargaining authority of the trade union (section 41(2)(b) and (a)). There is no doubt that the employer's position on union security was uncompromising. It was prepared to accept only a modified Rand Formula provision (as it would be required to accept by virtue of section 44 [formerly section 43] of the Act). In all the circumstances we were satisfied that uncompromising position was taken without reasonable justification.
The interpretation of "without reasonable justification" in section 41(2)(b) was discussed in Formula Plastics Inc. [1987] OLRB Rep. May 702 as follows:
But was the employer's position taken without reasonable justification? Much depends on our interpretation of "reasonable" in this regard. Obviously the employer in this matter did have reasons for taking this position in the sense that it hoped to achieve a contract provision of benefit to itself. However, in our view, "reasonable" must mean something more than simply a rational relationship between a bargaining position and a party's self-interest. This test is so minimal that it would make the relief provided by section 40a(2)(b) virtually inaccessible, a result which we find inconsistent with the remedial nature of this provision. Reviewing the section as a whole, and having regard to the Board's analysis in Nepean Roof Truss, supra, and Juvenile Detention Centre (Niagara), [1987] OLRB Rep. Jan. 66, we find it difficult to conclude that the legislation was designed to do no more than ensure that parties were looking after their own interests in a logical way.
Rather, in our view, the word "reasonable" imports an objective element into our consideration of the respondent's justification for its position. It is not simply a matter of whether the justification is reasonable from the respondent's point of view, or even from the applicant's. The legislation draws us into an unavoidable assessment of whether a given proposal or position is reasonable in objective terms, a task which to some extent takes the Board into uncharted waters.
This is so, in part, because reasonableness is a relative concept; what is reasonable depends largely, if not entirely, upon the context in which such an examination is to be made. In considering section 40a(2)(b), such a context will include both the general landscape of labour relations and the specific labour relationship between the parties. In many cases such an assessment will also require the weighing and balancing of the opposing interests of the parties which they seek to pursue by way of their negotiating positions.
Moreover, while the Board has had occasion to scrutinize negotiations in the past, notably in the course of determining bad faith bargaining complaints, the nature of our inquiry under section 40a is significantly different. The jurisprudence developed under section 15 reflects a conscious intention to avoid reviewing the fairness or reasonableness of negotiating proposals as an exercise in itself (see for example, Canada Trustco, [1984] OLRB Rep. Oct. 1356). Rather, the Board's interest on a section 15 inquiry centers on whether a manifestly unreasonable proposal indicates the presence of bad faith on the part of a party, or a failure to make every reasonable effort to make a collective agreement. To the extent that section 40a requires us to examine the intrinsic reasonableness of a negotiating position, it represents a departure from the jurisprudence which has revolved under section 15.
The variety and social authority of the competing interests involved, together with the complex dynamics of the collective bargaining process make this task a difficult one. It requires a delicate assessment of the many differing factors which may be operating in and upon a given labour relationship, an assessment which must be approached form a perspective closely attuned to the practices and climate of labour relations at any particular point in time. Indeed, it is fair to say that this is a provision which will require the Board to draw heavily on its own expertise in labour relations.
The respondent argued that its position on the union security proposal was a principled one. Yet its actions and position do not substantiate that view on an objective basis. Inherent in the respondent's position is the view that the trade union could not or was not putting forward proposals which the employees themselves endorsed. The trade union is the bargaining agent of the employees. Arguably the nature of any union security protection (and the employee's then expression of choice) is primarily a matter between the trade union and the employees in the bargaining unit that it represents, and may be of less concern to an employer. In assessing the employer's justification we note that no counter proposal was offered by the respondent which might more directly go to this issue of choice (for example, a "grandfathering" provision for current employees). Nor was any employer interest identified as requiring recognition or protection in the context of this proposal except a vague and unsubstantiated fear that customers might be reluctant to deal with the respondent as a union shop. In response, the applicant was able to show the respondent that in its experience a union shop provision was by no means unusual or uncommon in collective agreements in industrial shops catering to the construction industry. The respondent's position on the performance of bargaining unit work by foremen also remained outstanding. In the face of no apparent financial or other impact on it, the respondent was prepared to run the risk of prolonging the negotiations, engaging in expensive litigation, and jeopardizing its very existence. The respondent did not attempt to test or seek to capitalize on the applicant's apparent willingness to negotiate other issues in exchange for security. This position was being maintained by an employer who had been willing to interfere with employees' freedom of choice at the time of organizing. That would not automatically or necessarily speak to its subsequent conduct. However, it is not surprising that the applicant took a stronger position on this issue following its experience in the organizing and certification process, in light of the respondent's position on the issue of foremen doing bargaining unit work, and in light of its experience elsewhere in the industry. We note that no justification was provided by the respondent for maintaining its original (and uncompromising) position on the issue of foremen doing bargaining unit work. We were satisfied that the process of collective bargaining had been unsuccessful because of the bargaining positions adopted by the respondent with respect to these two issues (union security and foremen doing bargaining unit work) and that they were taken without reasonable justification.
Having regard to those same circumstances we were also satisfied that underlying the respondent's position in bargaining was a refusal to recognize the bargaining authority of the trade union. The issues leading to the impasse in bargaining go to the security of the bargaining agent and the integrity of the bargaining unit. While Mr. DeMonte may in a sense sincerely feel he cannot agree to a union shop provision we are of the view that this position results from his failure or inability to accept the trade union's presence in his workplace. He was prepared to run the substantial risk of losing his business rather than negotiate this issue with the applicant. Union security provisions will not create "recognition" issues in every negotiation. However, in the context of the respondent's conduct during the organizing campaign and its stated position in negotiations we were persuaded that the process of collective bargaining had been unsuccessful because of the refusal of the employer to recognize the bargaining authority of the trade union.
For those reasons we directed the arbitration of the first collective agreement between the parties.