International Association of Machinists and Aerospace Workers v. Premark Canada Inc., 1993 CanLII 7846

[1992] OLRB Rep. June 540

3562-92-R International Association of Machinists and Aerospace Workers, Applicant v. Premark Canada Inc., Responding Party

BEFORE: Janice Johnston, Vice-Chair, and Board Members D. G. Wozniak and E. G. Theobald.

APPEARANCES: James Hayes, Dave Ritchie, Dick Foster and Pat Murphy for the applicant; T. W. Sargeant, Paul George Stethem and Donald A. Knox for the responding party.

DECISION OF JANICE JOHNSTON, VICE-CHAIR AND BOARD MEMBER E. G. THEOBALD: June 15, 1993

1. This is an application to combine bargaining units pursuant to section 7 of the Labour Relations Act (the "Act").

2. A hearing was held in this matter on April 28, 1993. The Board heard evidence from two witnesses. Mr. Dave Ritchie, a business agent for the International Association of Machinists and Aerospace Workers (the "Union") and Mr. Donald Knox, Central Canada Sales Manager for Premark Canada Inc. (the "Employer" or "Premark") gave evidence before the Board.

3. Section 7 of the Act reads as follows:

7.-(1) On application by the employer or trade union, the Board may combine two or more bar­gaining units consisting of employees of an employer into a single bargaining unit if the employ­ees in each of the bargaining units are represented by the same trade union.

(2) On an application under subsection (1) that is considered together with an application for certification, the Board may do the following:

1. Combine the bargaining unit to which the certification application relates with one or more existing bargaining units if the certification application is made by the trade union that represents the employees in those existing bargaining units.

2. Combine the bargaining unit to which the certification application relates with other proposed bargaining units if the certification application is made by the trade union applying for certification for the other proposed bargain­ing units.

3. Combine the bargaining unit to which the certification application relates with both existing and proposed bargaining units if the certification applica­tion is made by the trade union that represents the employees in those existing bargaining units and that has applied for certification for the other proposed bargaining units.

(3) The Board may take into account such factors as it considers appropriate and shall consider the extent to which combining the bargaining units,

(a) would facilitate viable and stable collective bargaining;

(b) would reduce fragmentation of bargaining units; or

(c) would cause serious labour relations problems.

(4) In the case of manufacturing operations, the Board shall not combine bargaining units of employees at two or more geographically separate places of operations if the Board considers that a combined bargaining unit is inappropriate because the employer has established that com­bining the units will interfere unduly with,

(a) the employer's ability to continue significantly different methods of opera­tion or production at each of those places; or

(b) the employer's ability to continue to operate those places as viable and independent businesses.

(5) In combining bargaining units, the Board may amend any certificate or any provision of a collective agreement and may make such other orders as it considers appropriate in the circum­stances.

(6) This section does not apply with respect to bargaining units in the construction industry.

4. Premark manufactures, sells and services food preparation equipment, warewash and waste equipment and weight/wrap equipment. This equipment is utilized in commercial kitchens such as are found in restaurants and hospitals. Some examples of the equipment are meat slicers, weigh scales and certain refrigerated units.

5. Premark's main administrative offices and central warehouse are located at 190 Railside Road in North York. The company also has a central service branch located at 50 Mural Street in Richmond Hill. The union has been the bargaining agent for the employees working out of the Richmond Hill location for many years. The bargaining unit consists of approximately 20 individu­als all of whom are employed as and classified as service technicians. The recognition clause of the current collective agreement in force between the parties is as follows:

ARTICLE 2- RECOGNITION

2.01 The Company recognizes and accepts the Union as the sole collective bargaining agency for all its employees at 50 Mural Street, Richmond Hill, save and except Shop Managers, Field Service Supervisors, persons above the rank of Shop Manager or Field Service Supervisors and office and sales staff.

2.02 Agents, salesmen and out-of-town trainees who may be attached to the Company for training purposes shall not be used to displace regular employees in the bargaining unit, but shall be regarded as supernumerary and, as such, excluded from the applica­tion of this agreement.

6. The vast majority of the work of the service technicians involves the service, repair and maintenance of Premark equipment found in commercial kitchens. They also perform a minimal amount of installation work. The duties of Mr. Ritchie include responsibility for this bargaining unit and he has been associated with it since 1978. Until four years ago he was responsible for col­lective bargaining with Premark on behalf of the union.

7. The Board (differently constituted) by decision dated April 5, 1993 certified the union for a bargaining unit consisting of:

all employees of Premark Canada Inc. at its PMI Food Equipment Group Canada Division in the Regional Municipality of Sudbury and the Counties of Algoma, Sudbury, Cochrane, Temis­kaming, Nipissing, and Parry Sound, save and except shop managers, field service supervisors, persons above the rank of shop manager or field service supervisor and office and sales staff.

For ease of reference, this bargaining unit will be referred to as the northern bargaining unit and the bargaining unit operating out of the Richmond Hill location will be referred to as the southern bargaining unit. The northern unit is made up of three employees. One employee is located in Sault Ste. Marie, one in Sudbury and one in Cochrane. All three are classified as service techni­cians and perform duties identical to their counterparts in the southern bargaining unit. It is these two bargaining units which the union seeks to combine.

8. There are three Premark sales and service branches in Ontario. They are located in Hamilton, Ottawa and Toronto. The service technicians operating out of the Hamilton and Ottawa locations are not included in either of the bargaining units affected by this application.

9. Mr. Randy Taylor, a service manager for Premark, is responsible for the Toronto Branch located in Richmond Hill. In addition to the service technicians included in the southern bargaining unit, Mr. Taylor is also responsible for the service technicians located in the northern unit. He directs the work assignments of all the service employees including the three service tech­nicians in the northern bargaining unit. The three individuals in the northern unit, as well as the employees in the southern unit, report to the Richmond Hill Office and receive their work assign­ments from a dispatcher in the Richmond Hill location. Employees are dispatched by two-way radio, pager or telephone. Employees primarily work out of their homes and vehicles. There has never been any intermingling of employees or movement of employees between the southern bar­gaining unit and the northern bargaining unit.

10. All the employees in the northern bargaining unit and the southern bargaining unit are paid by direct deposit which is administered by the payroll department at the Railside Road loca­tion. Benefits are also centrally administered from Railside Road. The three individuals employed in the northern bargaining unit are paid less than the employees in the southern bargaining unit with equivalent seniority. Employees in the southern bargaining unit with their seniority and skills currently receive the top hourly rate which is $18.90 per hour plus a 75~ per hour premium if they are licensed to work with equipment which utilizes gas. Therefore a technician in the southern bar­gaining unit with a gas licence receives $19.65 an hour. Two of the three employees in northern bargaining unit currently receive $18.25 per hour and the other is paid $18.50 per hour. These rates include the 75'z premium for a gas licence. The employees in the northern bargaining unit received their last increase in January 1993. The collective agreement covering the southern bargaining unit runs from August 11, 1992 to August 10, 1995. The employees receive wage increases in August in each of the three years of the agreement. The top hourly wage rate for service technicians in the southern bargaining unit will increase to $19.52 on August 11, 1993. The employees in the north­ern bargaining unit do not receive the same benefits as the employees in the southern bargaining unit.

11. The reasons behind the union's decision to seek to organize the northern bargaining unit and then make application to the Board to have it combined with the southern bargaining unit were outlined for the Board by Mr. Ritchie. Prior to the enactment of Bill 40 the union did not seek to obtain bargaining rights for the northern unit as it was not economically feasible to have such a small bargaining unit. The union would not normally consider such a small local due to the costs associated with the negotiation and administration of the collective agreement. Therefore although the union would not normally consider such a small bargaining unit, in this case because it felt it may be possible to combine the new northern bargaining unit with the southern bargaining unit, the union decided to organize the three employees located in northern Ontario. If the two bargaining units were not combined, the union also expressed concerns that consistency in the treatment of employees performing the work of a service technician might suffer if there were two separate locals with two separate collective agreements.

12. Mr. Knox on behalf of Premark expressed concern that the company might not be able to manage a profitable organization in northern Ontario if it was forced to compensate the service technicians at the same rate as is paid to the service technicians in its southern Ontario bargaining unit, as Premark cannot charge an equivalent service charge to its northern Ontario customers. Premark charges its customers for service calls on an hourly basis. The service charge rate in the Toronto area is $75.00 per hour. The service charge rate is less in northern Ontario and is $67.00 per hour. The northern Ontario rate is the highest rate the market can bear. Many independent service providers compete with Premark in northern Ontario, therefore to keep its customers, a lower rate must be charged. The service technicians in southern Ontario complete an average of 4.5 service calls per day. Due to the greater geographical distances between calls in northern Ontario the technicians can only complete an average of 2.5 calls per day. As the distances tra­velled in the north are greater, the travel costs are higher and the service vehicles must be replaced more frequently than the vehicles in southern Ontario. The operating costs for the vehicles in northern Ontario are approximately $200.00 more per month than the cost for the vehicles in southern Ontario.

13. Mr. Knox admitted in cross-examination that the company's concern in this application was not that the bargaining units would bargain together but that it might not be possible to negoti­ate a different wage rate in the northern unit. Mr. Knox also expressed concerns with regard to the manner in which certain aspects of the southern Ontario collective agreement would apply in northern Ontario. Stand-by pay and the grievance procedure were examples cited to support this.

14. The employer and the union enjoy a good working relationship. Very few grievances are filed by the union and there appears to be a desire on the part of both sides to work out any problems together.

Argument

15. Counsel on behalf of the union argued that the facts in this case present exactly the type of situation envisioned by the legislature as one in which the Board should find it appropriate to combine bargaining units pursuant to section 7 of Act. In his view, it makes collective bargaining sense to put the the small bargaining unit of three individuals who perform identical work into the larger unit. Counsel took the position that section 7 of the Act is directed to bargaining unit struc­ture and requires the Board to look at and determine what is an acceptable bargaining unit.

16. On the facts of this case, counsel for the union suggested that section 7(2.1) applies as the union filed its application to combine bargaining units with the application for certification of the northern unit. Section 7(3) outlines the factors that the Board shall consider in making the decision whether or not to combine bargaining units.

17. Counsel for the union submitted that the evidence before the Board supported a finding that combining the bargaining unit would facilitate viable and stable collective bargaining and would reduce fragmentation of bargaining units. He argued there was no evidence before us that combining the bargaining units would cause serious labour relations problems. Counsel argued that the evidence supported the conclusion that the employer had business concerns that costs would be increased and its ability to function in northern Ontario would be impacted, but that those con­cerns are irrelevant unless they could be considered to establish serious labour relations problems. Counsel questioned whether the concerns of the employer could be considered to be serious labour relations problems. The application to combine bargaining units looks essentially at adding three individuals to the southern bargaining unit. Counsel queried whether the costs of simply rolling these employees into the unit and bringing their wages and benefits up to the level enjoyed by the other service technicians was sufficient to deter the Board from directing the combination of the bargaining units. In counsel's opinion, the concerns expressed by the company went to the result of combining the two bargaining units and did not go to the issue of collective bargaining structure. Counsel urged the Board to focus on the fact that the Act looks at facilitating the combination of bargaining units and to not confuse collective bargaining structure with the results that people seek to achieve through collective bargaining structure or process.

18. Counsel argued that the combination of the northern and southern bargaining units would result in a more stable collective bargaining structure. In this case the employees in both units performed identical work and report to the same manager in Toronto. If the Board does not combine the bargaining units, in counsel's view we would be doing what section 7 of the Act seeks to avoid.

19. Counsel for the union dismissed the concerns expressed by the employer with regard to issues such as the grievance procedure and standby pay as in his opinion they did not relate to the issue of appropriate bargaining unit structure. Counsel pointed out that simply because there may be difficulties in resolving the results of a combination order does not mean that the combination order should not be made.

20. Counsel on behalf of the employer expressed concerns that as the collective agreement covering the employees in the southern bargaining unit does not expire until 1995, if the Board was to simply roll the northern bargaining unit into the southern bargaining unit, the employer would lose its right to bargain with the employees in the northern bargaining unit. As the collective agree­ment is binding until 1995 the employer would not have an opportunity to bargain until three years hence. Counsel pointed out that the purpose of the Act is to enhance the process of collective bar­gaining in Ontario. If the northern bargaining unit is simply combined with the southern bargaining unit there would be no opportunity to negotiate and therefore the act of consolidation would not be in furtherance of the purposes of the Act. Counsel took the position that it is one thing to com­bine bargaining units where wages and benefits are the same but in this case they are not. Counsel for the employer argued that the Board should conclude that the combination of these two bar­gaining units could lead to serious labour relations problems and decline to issue an order combin­ing them.

21. Counsel for the employer argued that there was no community of interest between the employees in the northern bargaining unit and those in the southern bargaining unit and pointed out that there was no interchange of employees between the two bargaining units. Counsel argues that having two bargaining units would not result in undue fragmentation. Counsel referred the Board to the Mississauga Hospital case [1991] OLRB Rep. Dec. 1380 at paragraph 22 where the Board points out that there are four underlying concerns to the issue of undue fragmentation. These concerns are: to avoid a multiplicity of bargaining units and consequent disruption for the

employer; to avoid restricting job opportunities in small bargaining units; to avoid jurisdictional disputes; and to avoid creating the administrative inconvenience to the employer which would result from having to deal with the number of bargaining agents and at different times. Counsel for the employer took the position that none of these concerns were present in the case before us.

22. Counsel on behalf of the employer submitted that in determining whether or not a bar­gaining unit was appropriate the Board has looked at whether or not the proposed unit of employ­ees would be able to carry on a viable and meaningful collective bargaining relationship with the employer. Counsel pointed out that viable is defined in the dictionary as being practical from an economic perspective. Counsel argued that it would not be very practical if the Board combined the two units and allowed the employees in the northern bargaining unit to walk in and get the benefits of the existing collective agreement. If the Board directed the consolidation of the two units, counsel expressed concern that the employer would not have an opportunity to bargain with the union about its concerns. In his opinion, the Board should not insert itself into the bargaining process. In the course of his argument counsel referred the Board to the following cases: Price Club Westminster, [1992] OLRB Rep. Oct. 1098; The Hostess Frito-Lay Co., [1992] OLRB Rep. July 809; Union Carbide Canada Limited, [1992] OLRB Rep. May 645; Canadian National Rail­way Co. et al. 1981 CanLII 2953 (ON HCJDC), [1981] 34 O.R. (2d) 385; Sumnmer Press Ltd., [1991] OLRB Rep. Oct. 1207; and The Corporation of the City of Timmins - Golden Manor Home for the Aged, [1991] OLRB Rep. Jan. 103.

23. In response, counsel for the union took issue with the employer's emphasis on the duty or right to bargain. He disagreed with the assertion that the employees in the northern bargaining unit should not be able to get the benefit of the existing collective agreement. Counsel pointed out that the union would not have looked to organize the employees in northern Ontario if they did not feel that they would be able to combine this new unit with the existing one. He questioned how collective bargaining would be enhanced if the employees in northern Ontario did not have access to collective bargaining at all, which they would not have had if the union had not sought to repre­sent them.

24. Counsel for the union pointed out that section 7 does not stipulate that the terms and conditions of employment have to be identical before bargaining units can be combined. If that was the case, then few applications to combine bargaining units would be successful. Counsel con­cluded his submissions by requesting that the Board combine the two bargaining units and enjoin the employees in the northern bargaining unit in the existing collective agreement.

Decision

25. This is an application to combine bargaining units filed pursuant to section 7(2.1) of the Act. The application to combine the bargaining units was submitted in conjunction with an applica­tion for certification for the northern bargaining unit. The parties were able to agree on all matters pertaining to the application for certification. A certificate was issued for the northern bargaining unit on April 5, 1993. Thus the application before the Board seeks to combine a newly certified bargaining unit for which the parties have not negotiated a collective agreement, with a bargaining unit which has been in existence for many years. As noted, the parties are bound to a collective agreement outlining the terms and conditions of employment for the southern bargaining unit which is to expire on August 11, 1995.

26. Section 7(3) of the Act outlines three factors that the Board shall consider in an applica­tion to combine bargaining units. Section 7(3) directs the Board to look at the extent to which com­bining bargaining units would facilitate viable and stable collective bargaining, would reduce frag­mentation of bargaining units, or would cause serious labour relations problems. The parties focused on these three factors. There was no dispute that section 7(4) of the Act did not apply, based on the facts in this case.

27. The factors set out in section 7(3) have long been utilized by the Board pursuant to the exercise of its discretion, contained in section 6(1) of the Act, to determine the unit of employees that is appropriate for collective bargaining in an application for certification. An adjudication on the issue of whether or not it is appropriate to combine bargaining units is in some ways similar to a hearing before the Board to determine the appropriateness of a bargaining unit description in an application for certification.

28. In assessing whether to combine the bargaining units the Board must determine whether to do so would facilitate viable and stable collective bargaining. The employer argues in this case that it would not. Counsel argued that there was no community of interest between the employees in the northern bargaining unit and those in the southern bargaining unit. Community of interest is one factor looked at by the Board in determining whether a particular bargaining unit configuration would facilitate viable and stable collective bargaining, or cause serious labour rela­tions problems. In determining whether employees share a community of interest, the Board has traditionally looked at criteria such as whether the employees in issue possess similar skills and abilities, are employed under similar working conditions, and share common management. The Board also considers the nature of the work performed, the geographic circumstances and the functional coherence and interdependence. (See for example Usarco Limited, [1967] OLRB Rep. Sept. 526 and Coca Cola Ltd., [1989] OLRB Rep. Jan. 1).

29. Based on the evidence before us, we must disagree with the employer's position that no community of interest exists. All the employees in both bargaining units are employed in the same classification, that of service technician, and perform identical duties. The employees in the north­ern bargaining unit report to Mr. Randy Taylor as do the employees in the southern bargaining unit. The work of both groups of employees is dispatched from the same southern Ontario loca­tion. The Board heard no evidence which would indicate that the employees in both units do not share many of the same collective bargaining interests and do not possess similar skills and training (in fact it seems likely that the reverse is true given that they perform identical work). Although the two units are geographically disparate that is due to the nature of the work. The employees in both bargaining units work on their own, operating primarily out of a vehicle. Thus, the "work­place" of service technicians is constantly changing. We heard no evidence that the employees in the southern bargaining unit are functionally interdependent and given the nature of their work it seems unlikely that they would be. The three individuals in the northern bargaining unit obviously work quite independently as well. While there is no doubt that the three individuals in northern Ontario cover more ground than their southern counterparts, the nature of the work is the same. On the facts of this case, we are not dealing with two distinct operations which are geographically separated, but one operation which is spread out over a large area. Therefore, even though work is performed over a very large geographic area this does not detract from the community of interest shared by the service technicians in both units. Although there does not appear to have been an interchange of employees between the two bargaining units, the distances involved could have influenced this decision by the employer. For all of these reasons, it appears to us that the employ­ees in the northern bargaining unit do share a community of interest with the employees in the southern bargaining unit.

30. Before making the decision to combine bargaining units the Board must consider the effect what such an order would have on the employer and the union. If we were to conclude that combining bargaining units would not facilitate viable and stable collective bargaining, or would cause the reverse, the Board has the discretion to refuse to issue the combination order. The employer in this case has raised concerns with regard to the possible effects of a consolidation order. It appears to us that these concerns are to a large extent predicated on the assumption that if the Board combines the bargaining units, the three employees in the northern bargaining unit will automatically be covered by the collective agreement in force between the parties. This is not true. If the two bargaining units are combined there can only be one collective agreement. How­ever, it does not have to be the collective agreement currently in existence. That is one option, but there are other options as well. The parties should not assume that when the Board concludes that it is appropriate to consolidate a new bargaining unit with a long-time bargaining unit, that the employer will be directed to provide all of the existing terms and conditions of employment, which are the result of many years of negotiations, to the employees in the newly certified bargaining unit.

31. The employer in this case is concerned in essence that it will not have an opportunity to bargain collectively with the employees in the northern bargaining unit if they are rolled into the southern bargaining unit and that the employees in the northern bargaining unit will automatically receive the benefits of the long term relationship between the employer and the union as reflected in the collective agreement between the parties. Both of these concerns are valid concerns. How­ever, it appears to us that they are not sufficient to establish that a consolidation order would not facilitate viable and stable collective bargaining. For the reasons already set out we conclude that in the circumstances of this case, combining the two bargaining units would facilitate viable and stable collective bargaining.

32. The employer has taken the position that fragmentations is not an issue in this case. While we agree that fragmentation is not at issue in the same sense as it was in cases such as Kidd Creek Mines Ltd., [1984] OLRB Rep. Mar. 481 and Stratford General Hospital, [1976] OLRB Rep. Sept. 459, nevertheless the statute requires us to consider whether in combining bargaining units, fragmentation will be reduced. Although the northern bargaining unit is an appropriate bar­gaining unit, it appears to us that the larger bargaining unit makes more labour relations sense. If two separate bargaining units are retained, the union's concerns with regard to consistency in the terms and conditions of employment of individuals performing the same work could be borne out. In addition, clearly the job opportunities of the three individuals in the northern bargaining unit would be restricted and there could be a potential for jurisdictional disputes. If the two bargaining units are combined it will obviously reduce fragmentation.

33. The final factor to be considered by the Board in this case is whether combining the two units would cause serious labour relations problems. The employer has expressed concerns that combining the bargaining units would do so. Once again it appears to us that the concerns expressed by the employer relate more to the apprehension that it will not have an opportunity to bargain with the employees in the northern bargaining unit if the Board issues a combination order. Clearly the legislation provides that the Board is to consider whether combining bargaining units would cause serious labour relations problems and if we conclude that a combination order would do so, we may decline to combine the bargaining units. The serious labour relations prob­lems referred to in section 7(3)(c) must flow from the act of consolidation and must be considered by the Board before it concludes that it is appropriate to issue an order combining bargaining units. In the case before us the employer's concerns flow from the assumption that the Board will direct that the employees in the new combined bargaining unit will receive all of the rights enjoyed by the employees currently in the southern bargaining unit who are covered by the collective agreement. While the change in bargaining unit structure which results from a combination of bar­gaining units could cause serious labour relations problems which would cause the Board to con­clude that a consolidation order is not appropriate, the evidence before us in this case does not support such a finding.

34. The union in this case seeks a consolidation order. It also seeks a direction from the Board that the three individuals in the northern bargaining unit are to be rolled into the southern bargaining unit and that their employment will henceforth be governed by the terms and conditions of the collective agreement in existence covering employees in the southern bargaining unit.

35. After having carefully reviewed the evidence before us and the submissions of the par­ties, we conclude that it is appropriate to consolidate the two bargaining units in this case. There­fore, the Board declares that the two bargaining units in issue here are combined.

36. We decline to order that the collective agreement in existence between the parties will automatically apply to the employees formerly in the northern bargaining unit. Although section 7(5) gives the Board the authority to "amend any provision of a collective agreement" or to "make such other orders as it considers appropriate in the circumstances" we do not feel that it is appro­priate to make any further remedial orders at this point. The employer has expressed concerns with the Board inserting itself into the collective bargaining process and the resultant loss on the part of the employer and the union of the opportunity to bargain the terms and conditions of employment for the employees formerly in the northern bargaining unit. We too have concerns and feel that it is appropriate to provide the parties with an opportunity to resolve the results of the Board's consolidation order without further Board involvement. We therefore refer this matter back to the parties to provide them with the opportunity to resolve if possible, the manner in which the three employees from the northern bargaining unit are to be dealt with under the new bargain­ing unit structure. We will remain seized with regard to any further remedial relief.

DECISION OF BOARD MEMBER D. G. WOZNIAK:

1. I dissent.

2. A consolidation order should only be issued where it would facilitate viable and stable collective bargaining and would not cause serious labour relations problems. The northern bargain­ing unit employees do not share a community of interest with the employees in the southern bar­gaining unit. The wages and benefits paid reflect the different contexts of each unit. This lack of a sufficient community of interest will give rise to a constant source of serious labour relations prob­lems both in the present and the future.

3. It is one thing to say that the parties can bargain about any potential problems arising from the consolidation order, and if unsuccessful are able to return to the Board for assistance and direction in resolving any outstanding issues. However, that is not the case for any subsequent negotiations where the Board is not an available forum for disagreements. Given the continued lack of a sufficient community of interest, ongoing serious labour relations problems will ensue.