James N. KraIl v. United Brotherhood of Carpenters and Joiners of America Local 785, 1993 CanLII 7816

[1993] OLRB Rep. January 39

3472-91-U James N. KraIl, Complainant v. United Brotherhood of Carpenters and Joiners of America Local 785, Respondent

BEFORE: Janice Johnston, Vice-Chair.

APPEARANCES: James Krall, Sandra Krall and Don Krall for the applicant; Norman L. Jesin and Karl Ball for the respondent.

DECISION OF THE BOARD; January 25, 1993

1. The Board by decision dated August 19, 1992 found the respondent (the "union" or “Local 785") to be in violation of section 70 [formerly section 69] of the Labour Relations Act (the "Act"). The Board found that the actions of the union requiring the complainant, Mr. Krall, to sign an apprenticeship contract thereby negating his journeyman status were contrary to the Act. As a result of the union's conduct, Mr. Krall's membership with the union was suspended and the union no longer referred him to work assignments.

2. The appropriate remedy was not addressed by the parties therefore the Board referred this matter to the parties and remained seized. The applicant notified the Board that the parties had been unable to reach agreement and a hearing was scheduled to deal with this issue.

3. The facts of this case are set out in the Board's earlier decision and it is not necessary to repeat them all. The facts relevant to an assessment of damages are as follows. Mr. Krall was laid off from a work assignment in February, 1991 and he immediately went down to the union hall and signed his name to the out-of-work list. Mr. Krall applied for and received unemployment insur­ance after this lay-off. On June 3, 1991 the union offered him a job referral as a sixth term appren­tice. Mr. Krall refused this referral as he feared it would jeopardize the position that he had taken, namely that he was no longer an apprentice but was a journeyman. Mr. Krall attended at a law­yer's office the next day. Over a period of time the lawyer, Mr. Coleman, wrote several letters on his behalf, one of which was to the Ministry of Labour. By letter dated July 30, 1991 the Ministry of Labour responded in part, as follows:

The Labour Relations Act provides a legislative framework for collective agreements in the con­struction industry and also has a number of sections (568 and 569) dealing with the rights of Union members working under a collective agreement or being referred to work under a collec­tive agreement. The Labour Relations Act is enforced by application to the Ontario Labour Relations Board. The board publishes its decisions under the name of Ontario Labour Relations Board Reports. When I practiced personally before the board, I found a text Ontario Labour Relations Board Practice by Sack and Mitchell to be quite useful. The test is widely available in both legal and labour relations libraries. The Labour Relations Board may be contacted by let­ter at:

400 University Avenue

4th Floor

Toronto, Ontario

M7A 1T7

or by phone at 326-7500

I trust the foregoing is satisfactory.

4. Mr. Krall met with his lawyer within a week of this letter. At this time Mr. Coleman told him to pursue the matter on his own. Mr. Krall got married in August, 1991 and in late Sep­tember, 1991 the union notified Mr. Krall that he was to attend school at Mohawk College in Octo­ber. Mr. Krall refused to go and was suspended from the union on November 1, 1991. Mr. Krall contacted the Board in 1991 and was sent information outlining his rights. Mr. Krall worked for a two week period between Christmas and New Years and filed the complaint before me on January 23, 1992.

5. The parties agreed at the outset of the hearing on damages that prior to hearing detailed evidence concerning the actual damages owed by the union to Mr. Krall, it was appropriate for the Board to deal with two matters in a preliminary fashion. First of all, the union argued that Mr. Krall should have accepted the referral as an apprentice in June, 1991 and that his failure to do so meant that he had not properly mitigated his damages. Secondly, the union argued that Mr. Krall delayed unreasonably in filing his complaint and that the Board should take this delay into account in assessing damages.

6. In assessing the damages which flow from a breach of the Act the Board seeks to put the complainant in the same position he would have been had the breach not occurred. Any dam­ages ordered are compensatory in nature, they are not punitive.

7. The common law doctrine of mitigation of damages was articulated in Cockburn v. Trusts & Guarantee Co. (1917) 1917 CanLII 10 (SCC), 37 DLR 701 at p. 702 as follows:

The principle upon which the appeal ought to be decided is expounded at length in the judg­ment of Lord Haldane, in British Westinghouse Electric Co.s'. Underground Electric Railways Co., [1912] A.C. 673, at pp. 689 and 690. After stating the general principle that when a con­tract is broken the injured party is entitled generally to receive such a sum by way of damages, as will, so far as possible, put him in the same position as if the contract had been performed--the damages being limited to those that are the natural and direct consequences of the breach--his Lordship proceeded as follows:­

"But this first principle is qualified by a second, which imposes on the plaintiff the duty of taking all reasonable steps to mitigate the loss ... "... this second principle does not impose on the plaintiff an obligation to take any step which a reasonable and prudent man would not ordinarily take in the course of his business."

This doctrine has also been applied in arbitration decisions (See, Re Ottawa West End Villa Ltd. and Ontario Nurses Association, 1977 CanLII 2897 (ON LA), 15 LAC (2d) 417 and Re Dominion Stores Ltd., and Retail Whole­sale and Department Store Union, Local 414, 1978 CanLII 3461 (ON LA), 18 L.A.C. (2d) 377) and by the courts in wrongful dismissal actions (see, Mifsud v. MacMillan Bathurst Inc., 1989 CanLII 260 (ON CA), 70 O.R. (2d) 701 and Laakso v. Valspar Inc., 32 CCEL 72). In dealing with whether a refusal to accept an alternative position offered by the employer constituted a failure to make reasonable mitigation efforts, the court in Mifsud, supra, said:

The fact that the transfer to a new position may constitute in law a constructive dismissal does not eliminate the obligation of the employee to look at the new position offered and evaluate it as a means of mitigating damages. in all cases, comparison should be made to the contractual entitlement of the employer to give reasonable notice and leave the employee in his current position while a search is made for alternative employment. Where the salary offered is the same, where the working conditions are not substantially different or the work demeaning, and where the personal relationships involved are not acrimonious (as in this case) it is reasonable to expect the employee to accept the position offered in mitigation of damages during a reasonable notice period, or until he finds acceptable employment elsewhere.

It must be kept in mind, of course, that there are many situations where the facts would substan­tiate a constructive dismissal but where it would be patently unreasonable to expect an employee to accept continuing employment with the same employer in mitigation of his dam­ages.

8. The Board in Jacmorr Manufacturing Limited, [1987] OLRB Rep. Aug. 1086 while acknowledging that the duty to mitigate has some application, also noted that it must be adapted to proceedings pursuant to the Act.

Mitigation - in general

11. In fashioning a remedy under section 89 [now 91] of the Act, the Board has historically been disposed to borrow from the common law of contract and apply a principle analogous to "miti­gation", to reduce the compensation payable to an aggrieved party whose damages have been "artificially" inflated because he has not taken reasonable steps to reduce them. In the case of an employee unlawfully discharged, this usually implies some obligation to seek alternative employment. in Little Brothers (Weston) Limited, [1975] OLRB Rep. Jan. 83, the Board put it this way:

12. The grievor, however, is not entitled to any other compensation. When an inno­cent party experiences a breach of contract he is immediately shouldered with a duty to take reasonable steps to mitigate his losses. In other words, he must avoid avoid­able losses and the justification for this duty stems from the policy that the purpose of damages in contract is compensation not penalization; (see E. Allan Farnsworth, Legall Remedies for Breach of Contract (1970), 70 Colum. L. Rev. 1,145). The Board has taken a similar stance in exercising its discretion under section 79 [now 891 of the Act to award compensation. It requires a complainant, who has been discharged, to take reasonable steps to mitigate his losses (see Metropolitan Meat Packers Ltd. 62 CLLC 16,230; Murray Bros. Limited [1969] OLRB Rep. Feb. 1,194; and De Carlo Shoe Co. [1965] OLRB Rep. June 224). The policy behind the imposition of this duty parallels that in contract. Section 79 used the word "compensation" and therefore if a duty to mitigate did not accrue to a grievor a monetary award given under section 79 would constitute something more than pure compensation. This is so in that the losses experienced by someone who does not attempt to mitigate are not, in a very real sense, all caused by the employer - a portion of the loss will stem from a grievor fore­going other income producing opportunities. To order an employer to compensate a grievor for this aspect of his losses would be to penalize the employer and section 79 is not designed to accomplish this end. If an individual wants to penalize an employer for a breach of the Act he must seek consent to institute a prosecution under section 90 [now 101] and, if granted, section 85, [now 96] upon the requisite proof, will accomplish the objective.

Similarly, in Ernie's Signs Limited, [1976] OLRB Rep. Aug. 404 the Board commented:

5. The purpose of ordering compensation in a case such as this is not to penalize the respondent but, as far as monetary compensation will allow, to put the grievor in the same position he would have been in if the violation of the Act had not occurred. There is, however, a duty which falls to the grievor and that is the duty to mitigate his loss. The common law doctrine of mitigation has been set out in the Canadian case of Cockburn v. Trusts and Guarantee Co (1917), 1917 CanLII 10 (SCC), 37 D.L.R. 701 at p. 702:

"The principle upon which the appeal ought to be decided is expounded at length in the judgment of Lord Haldane in British Westinghouse Electric Co. v. Underground Electric Railways Co., [1912] A.C. 673, at pp. 683 and 690. After stating the general principle that when a contract is broken the injured party is entitled generally to received such a sum by way of dam­ages, as will, so far as possible, put him in the same position as if the con­tract had been performed - the damages being limited to those that are the natural and direct consequences of the breach - his Lordship proceeded as follows:"

"Their right to their livelihood was a matter of contract, and the body of legal principles so aptly named (until recently) the 'law of master and servant'. 'But this first principle is qualified by a second, which imposes on the plaintiff the duty of taking all rea­sonable steps to mitigate the loss . . . this second principle does not impose on the plaintiff an obligation to take any step which a rea­sonable and prudent man would not ordinarily take in the course of his business."'

12. Each of these cases imports into the interpretation of the Labour Relations Act, certain com­mon law principles "borrowed" from the law of contract; but it must be remembered that the common law position is not entirely analogous to the statutory context under review. At com­mon law, human labour was merely a commodity - an article of commerce like any other. Work­ers could be readily disposed of, whether or not their employer had just cause, upon "reason­able notice" - which for manual workers was not much notice at all. Indeed, it is interesting to note that the Court decisions referred to in Ernie's Signs, supra, either were, or heavily relied upon, cases involving a breach of contract for the sale of goods.

13. This is not to say that the concerns underlying the principle of mitigation are entirely mis­placed or have no application at all in the forum which we must administer. It is simply that one must remember that this is not an action for wrongful dismissal; but rather an effort to enforce statutory rights which rest upon an articulated public policy in favour of the establishment of col­lective bargaining relationships (see the Preamble to the Labour Relations Act). That difference was referred to in P. J. Wailbank Manufacturing Company Ltd., [1980] OLRB Rep. Dec. 1797 at paragraph 4:

The Board has recently reaffirmed its position that a person who has been discharged has an obligation to take reasonable steps to mitigate his loss (see Sutton Place Hotel, [1980] OLRB Rep. Aug. 1250). In dealing with the common law duty to mitigate in the context of unlawful discharge cases, the Board must also keep in mind that, unlike at common law, a successful complaint almost always results in the reinstatement of the discharged employee. It would be shortsighted indeed to ignore the availability of this remedy and the frequency of its use when determining whether someone has taken reasonable steps to mitigate the loss. In other words, in an action for wrongful dismissal at common law, a discharged employee would be claiming an amount equal to his earnings for the period during which the court determines that he should have had notice of his discharge. He would not be entitled to reinstatement, and therefore has no need or interest to keep himself in a position where he can take up his old job again; on the contrary, his interest lies in picking up the pieces and embarking on a new enterprise as soon as possible. Where reinstatement is available as a remedy, and commonly awarded, it would be unrealistic to ignore that the discharged employee has every reason to believe that he may be returning to his old job. The interpretation of his obligation to mitigate must be considered in light of his obvious interest in keeping himself in a position to resume his former employment.

(See also: Beckett Elevator [1986] OLRB Rep. Nov. 1493).

9. The circumstances in this case are somewhat unusual. Normally the duty to mitigate arises in cases before the Board in the context of a termination contrary to the Act. As was Out­lined in the decision dated August 19, 1992, the purpose of the union hiring hall is to ensure work is equitably distributed amongst the union membership. The union is essentially acting as an employment agency and assigns the work opportunities available to its membership. In this case, the actions on the part of the union which led to a finding of a breach of the Act resulted in the denial of employment opportunities to the complainant. As the broker of employment opportuni­ties the union stands between the employer and potential employees. In essence, subject to limited exceptions the union determines who works, just as in the industrial setting, the employer deter­mines who will work based on who it hires and who it fires. Therefore, just as the complainant would have had a duty to mitigate his damages if he had been directly employed and then fired, so does he have this obligation in the context of a hiring hall.

10. Therefore, in the context of this case, in order to mitigate his damages did Mr. Krall have an obligation to accept union referrals as an apprentice? The courts in Mifsud, supra, and Laakso, supra, were clear that each case must turn on its facts and what is reasonable must be assessed in each case. In this case had Mr. Krall accepted the referral as an apprentice he would have received lower wages and would have worked as an apprentice instead of a journeyman, a significant drop in status. In addition, Mr. Krall was afraid to accept a referral as an apprentice as he felt that if he did so it would jeopardize his claim that he was no longer an apprentice but a jour­neyman. Given his treatment by the union, this appears to me to be an entirely reasonable appre­hension. Finally, and perhaps most importantly, the Board has found that the actions of the union in arbitrarily forcing Mr. Krall to become an apprentice was a breach of the Act. In furtherance of this breach they sought to refer him to work assignments as an apprentice. Surely Mr. Krall cannot be expected to go along with a referral when it is the very act of this referral which he alleges is a violation of the Act. Therefore, Mr. Krall's concern and his refusal to accept the job referral as an apprentice was not inappropriate. Mr. Krall was under no obligation to accept the work referral on June 3, 1991 as an apprentice and his refusal to do so cannot be considered as a failure to mitigate his damages. This was the only work referral offered to Mr. Krall, the union made no more efforts to refer him to work after June 3, 1991.

11. The union has also raised concerns with regard to delay in the filing of the complaint. In dealing with the issue of delay the Board wrote in part in The Corporation of the City of Mississauga, [1982] OLRB Rep. Mar. 420:

12. It is by now almost a truism that time is of the essence in labour relation matters. It is univ­ersally recognized that the speedy resolution of outstanding disputes is of real importance in maintaining an amicable labour-management relationship. In this context, it is difficult to accept that the Legislature ever envisaged that an unfair labour practice, once crystallized, could exist indefinitely in a state of suspended animation and be revived to become a basis for litigation years later. A collective bargaining relationship is an ongoing one, and all of the parties to it -- including the employees -- are entitled to expect that claims which are not asserted within a rea­sonable time, or involve matters which have, to all outward appearances, been statisfactorily [sic] settled, will not reemerge later. That expectation is a reasonable one from both a common sense and industrial relations perspective. It is precisely this concern which prompts parties to negotiate time limits for the filing of grievances (as the union and the employer in this case have done) and arbitrators to construct a principle analogous to the doctrine of laches to prevent prosecution of untimely claims. (See Re C.G.E. 3 L.A.C. 980 (Laskin); and Re Oil Chemical and Atomic Workers, Local 9-672 and Dow Chemical of Canada Limited [1966] 18 L.A.C. 51 (Arthurs)).

13. A perusal of the Board cases reveals that there has not been a machanical [sic] response to the problems arising from delay. In each case, the Board has considered such factors as: The length of the delay and the reasons for it; when the complainant first became aware of the alleged statutory violation; the nature of the remedy claimed and whether it involves retrospec­tive financial libility [sic] or could impact upon the pattern of relationships which has developed since the alleged contravention; and whether the claim is of such nature that fading recollection, the unavailability of witnesses, the deterioration of evidence, or the disposal of records, would hamper a fair hearing of the issues in dispute. Moreover, the Board has recognized that some latitude must be given to parties who are unaware of their statutory rights or, who, through inexperience take some time to properly focus their concerns and file a complaint. But there must be some limit, and in my view unless the circumstances are exceptional or there are over­riding public policy considerations, that limit should be measured in months rather than years.

The Board recently dealt with the issue of delay in Trelford Automobile Limited, (1991) OLRB Rep. Oct. 1225 and stated:

15. We turn next to the delay in filing the complaint. The Board's approach to delay has been explained most frequently in its decisions on requests to dismiss for undue delay in filing com­plaints. The Board has explained on numerous occasions that it does not take a mechanical approach to delay. If the delay is extreme, the complaint may be dismissed. If the complaint proceeds, and is successful, the Board may take any unreasonable delay into account when assessing compensation. See, among others, Hayes Dana Limited, [1968] OLRB Rep. April 1989; Corporation of the City of MississaugA, [1982] OLRB Rep. March 420; Marshall-Globe Canada Ltd., [1982] Jan. 113; George Hinkson, [1987] OLRB Rep. Oct. 1246; Roma Auto Metal Iron Limited, [1969] OLRB Rep. Oct. 885; Decor Wood Specialties Limited, [1974] OLRB Rep. March 136; Ernie's Signs Limited, [1976] OLRB Rep. August 404. Here, there was no request to dismiss but the matter was raised in the context of argument on the quantum of compensation.

16. As the reported cases indicate, the Board has taken into account whether the delay is explained and such matters as lost settlement opportunities, any prejudice to the other party, cessation of union representation and whether the complainant was letting time run in order to increase a claim. It has acknowledged that some time must be allowed to consult and to ascer­tain the strength and weakness of a case. In a unionised context, in Ernie's Signs Limited, supra, the Board accepted that the principle of mitigation extends to the reasonableness of the union's efforts to redress the alleged wrongdoing. In Sonic Transport Systems Limited, [1981] OLRB Rep. Oct. 1483 the standard applied was when would the complaint have been filed if counsel and the client had proceeded with due diligence. Each case turns on its facts.

17. Mr. Krall was made aware of his rights in the beginning of August, 1991. He met with his counsel who explained the contents of the letter from the Ministry of Labour. The only reason put forward by Mr. Krall for his inaction in August was the fact that he was getting married. While this might account for a certain amount of preoccupation on his part, I cannot accept that he did not have the few minutes it would have taken to at least start the process of filing a complaint by contacting the Board and requesting the appropriate forms and information. Mr. Krall did not take this initial step until November, 1991. It then took him until January 23, 1992 to file the complaint. Mr. Krall's attitude was quite cavalier on the issue of delay. It is obvious that he was content to sit back and collect his unemployment insurance benefits and that he did not feel any obligation to ini­tiate his complaint in a timely fashion.

18. In dealing with the effects that delay may have on compensation the Board in Decor Wood Specialities Limited, [1974] March. 136 stated:

. . . .In such circumstances where delay can be attributed to one party to a Board proceeding, it seems obvious to us that the other party should not be prejudiced. The Board does not pretend to set a fixed guideline with respect to what is a reasonable time for an aggrieved to initiate pro­ceedings after an alleged violation of the Act. For example, it is the Board's opinion that a com­plaint should not be launched frivolously and without consideration of a reasonable chance for success....

Therefore, on the facts of this case, is Mr. Krall entitled to full compensation or is the delay in fil­ing the complaint unreasonable?

14. It is not appropriate that the union should bear what could be significant costs caused by the complainant's delay in this case. In taking so long to bring forward his complaint the complain­ant has failed to act reasonably to mitigate his damages. He has no reasons for the delay from early August to mid-January other than that he was getting married in August and worked for a couple of weeks in late December to early January. It seems appropriate in the circumstances to reduce whatever damages Mr. Krall might be entitled to as a result of this delay. Although it is difficult to assess how long it would take a reasonable person to prepare and file a complaint, it appears to me that Mr. Krall should have been in a position to file his complaint earlier than he did so, had he acted with due diligence. He did not act diligently, in fact he took no action from August until November, and the filing of the complaint was therefore unreasonably delayed. After having con­sidered this matter carefully I would conclude that Mr. Krall unreasonably delayed the filing of this complaint by approximately three months. This delay constitutes a failure to mitigate his damages. At this point it is not clear what the damages owed by the union to Mr. Krall are and it is not yet clear what the effect of this delay will be. The Board has not heard any evidence which would enable me to specifically quantify the damages. However, by way of guidance to the parties, I would reiterate that Mr. Krall is entitled to be placed in the position he would have been in had the breach of the Act not occurred, no more and no less.

15. This matter is scheduled to continue on February 1, 1993, if necessary. I therefore direct the parties to meet prior to this date with a view to reaching an agreement on the damages. The union is hereby directed to provide Mr. Krall the opportunity to review the union's records to determine what job referrals he would have been entitled to, as a journeyman, from February 1991 when he initially put his name on the union's out-of-work list, to the date his name was reinstated to the out-of-work list pursuant to the first decision in this case. The Board at this point has heard no evidence concerning the work which was available nor have I heard how many journeymen were on the out-of-work list at any given time. Obviously these are relevant factors in any quantifi­cation of Mr. Krall's damages. While it may be difficult to determine for certain what referrals Mr. Krall would have obtained, it appears to me that if both parties act in a reasonable fashion it should be possible to reconstruct Mr. Krall's job history and to arrive at an appropriate figure to compensate Mr. Krall. If this is not possible, perhaps the parties can agree on another method for approximating Mr. Krall's damages. How his delay in filing the complaint will impact on the quan­tum of damages he is otherwise entitled to, is not clear.

16. If the parties are unable to agree on the quantum of damages I will remain seized of this issue and they should come to the hearing on February 1,1993 prepared to call evidence and argue this point. However, I would urge them to make every effort to reach agreement and to put their differences behind them.

17. Counsel for the union argues that as the union is not Mr. Krall's employer the damages that they owe Mr. Krall are not lost wages. He argued that the union is simply paying damages as a result of the violation of the Act. Counsel argued therefore that all of Mr. Krall's earnings, includ­ing his unemployment insurance benefits should be set off against the union's damages. The union owes as yet unquantified damages to Mr. Krall but if the parties agree on the appropriate amount, or the Board determines the issue, it is not for the Board to determine the applicability of the Unemployment Insurance Regulations to this situation. Whether or not Mr. Krall is required to repay the unemployment insurance commission is not an issue I need decide (even if I had the jurisdiction to do so) and I decline to make any directions on this point.

18. Unless the parties advise the Registrar to the contrary, this matter will continue on Monday, February 1, 1993, in the Board Room, 6th Floor, 400 University Avenue, Toronto, Ontario, commencing at 9:30 a.m. If the parties agree that the assistance of a Labour Relations Officer might be helpful they should contact the Board's Manager of Field Services.