[1993] OLRB Rep. December 1265
2338-93-M International Association of Machinists and Aerospace Workers, Local Lodge 2792, Applicant v. DDM Plastics Inc., Responding Party
BEFORE: M. Kaye Joachim, Vice-Chair, and Board Members R. M. Sloan and E. G. Theobald.
APPEARANCES: Mark Lewis, James Nugent and Victor Comeau for the applicant; Arthur P. Tarasuk, J. P. Barry, H. Koyle and K. Yasu for the responding party.
DECISION OF THE BOARD; December 14, 1993
- At the conclusion of the hearing on November 30, 1993 the Board issued the following decision:
This is a reference by the Minister of Labour pursuant to section 109 of the Labour Relations Act.
The following questions were referred to the Board:
Does a collective agreement exist between the parties and, if so, what are its effective dates?
Having reviewed the facts and having heard the parties' submissions, the Board makes the following determinations:
i) There is a collective agreement in effect between the parties.
ii) The term of the collective agreement is from August 1, 1993 to July 31, 1996, as set in the memorandum of settlement signed by the parties on July 23, 1993.
The Board will provide written reasons, to follow.
- We now provide our written reasons.
Facts
The parties were previously bound by a collective agreement with a term covering the period March 11, 1991 to July 31, 1993 inclusive.
By letter dated May 10, 1993 the union served written notice of its desire to bargain with a view to renew the agreement then in operation, with modifications.
The employer was served notice of the composition of the union Contract Negotiating Committee.
The parties, represented by their respective Negotiating Committees, met in direct negotiations, exchanged proposals and modified their respective positions on the following dates:
May21 and 28, June 9, 17, 18, 29; and July 1,7,8,9, 14,15,16,20 and 21, 1993.
From time to time in the course of the said direct negotiations, the parties "signed off' agreed upon amendments that were to be incorporated in the renewed collective agreement.
On July 21, 1993 the parties agreed in principle to effectively recommend to their respective principals, agreed upon terms that would form the basis of a collective agreement. This agreement was reached without the benefit of conciliation. The union did not specify that "notice of ratification" had to be provided to the employer in any particular form in order for ratification to be achieved. At the conclusion of the negotiations, the union did however, advise the employer that notification or ratification would be provided to Harley Koyle orally by Jim Nugent and other members of the Negotiating Committee who were also executive officers of the Local Executive. It was further agreed that the said terms would be incorporated into a memorandum of settlement which the union indicated it intended to present and use at a ratification meeting. Furthermore, the union notified the employer that a ratification meeting would be held on July 25, 1993, and that the union Negotiating Committee would be recommending acceptance of the terms of the memorandum of settlement.
The parties reduced to writing a memorandum of settlement which was signed by their respective representatives on July 23, 1993.
On or about July 26, 1993 the appropriate representatives of the employer were notified by inter alia the President of Local 2792, and members of the Negotiating Committee who were also officers of the Local Executive, that the memorandum of settlement had been ratified by a vote of one hundred and nineteen ballots in favour to seventy-five ballots opposed; furthermore, over the next few days, the representatives of the employer were advised on several occasions by several members of the Local Executive who are on the union negotiating committee~ that ratification of the settlement by the membership had been achieved at the ratification meeting on July 25, 1993.
After being so advised by the union, the employer contacted all existing customers and in particular, those customers where the supply contracts were up for renewal and advised them that ratification had been achieved on a three year collective agreement. Furthermore, the employer advised some prospective customers with whom it was negotiating supply contracts that the employer had achieved ratification of a three year collective agreement.
On July 28, 1993 particulars of the ratification vote were reported in the Tillsonburg News under the headline, "Workers Ratify Contract". The article contained the following: "It's a good contract", said Youngberg, who recommended ratification to union members."
As a result of certain dissatisfaction with some of the terms of the memorandum of settlement by some members of the bargaining unit, the employer's Negotiating Committee called a meeting with the members of the union Negotiating Committee, on July 29, 1993.
At the meeting of July 29, 1993 the union Negotiating Committee confirmed to the employer's representatives that ratification had been obtained at the ratification meeting on July 25, 1993 but that some employees were requesting a "special meeting" pursuant to the terms of the union's Constitution, whereat the said employees intended to request a second ratification vote regarding the terms of the said memorandum of settlement. By letter dated August 6, 1993 the employer confirmed its position that notification had already been attained.
The employer was subsequently notified that a "special meeting" of the membership, pursuant to the union Constitution, was scheduled for August 7, 1993 at which time the question of whether a new vote was in order was to be debated and the terms and the status of the memorandum of settlement were to be explained to the membership again. When contacted by the employer, Mr. Nugent reconfirmed the results of the ratification vote held on July 25,1993 and stated that he and the Committee intended to so reconfirm the results of the said ratification vote at the meeting scheduled for August 7, 1993.
On or about August 9, 1993 representatives of the employer were notified that as a result of the said "special meeting", the union intended to hold a second ratification vote on or about August 12, 1993.
Upon being advised by the union that the union intended to hold a second ratification vote, the employer immediately went on record and reminded the union that ratification had been obtained effective July 25, 1993 and served notice on the union that the employer would not recognize the said second ratification vote.
The second ratification vote was held on August 12, 1993 at which time the members of the bargaining unit were given the opportunity to vote to accept or reject the same memorandum of settlement that had been signed by the parties on July 23, 1993.
Immediately after the taking of the representation vote, the results of the vote were announced to the representatives of the employer by the Business Representative, Mr. Jim Nugent, and the Local President, Brett Youngberg. The results of the second ratification vote were as follows:
Total ballots cast: 379 Ballots cast to reject: 223 Ballots cast to accept: 155 Spoiled ballots: 1
At this time Mr. Nugent advised the representatives of the employer that the union would be making a "Request for Appointment of Conciliation Officer". Mr. Nugent and the members of the executive did not at any time prior to the "vote" of August 12, 1993, advise any representatives of the employer that ratification by the membership had not been achieved at the ratification meeting of July 25, last. In response to the notification of the vote results, the union was notified by the employer that ratification of the settlement had been attained on July 25, 1993 and that conciliation was therefore not necessary. The employer also undertook to advise the union of the employer's position regarding the union's intention to "Request for Appointment of Conciliation Officer".
On August 13, 1993 the union was advised that since the employer did not recognize the second ratification vote held on August 12, 1993, the employer intended to oppose the "Request for Appointment of Conciliation Officer" and to implement the terms of the settlement forthwith.
On August 13, 1993 the employer posted a notice to the members of the bargaining unit that the terms of the memorandum of Settlement would be implemented forthwith with all increases effective as of August 1, 1993, the first day of the current collective agreement.
The employer has implemented the terms of a memorandum of settlement effective August 13, 1993. The union and the employer met on or about October 7, 1993 and confirmed the details of the Pension Plan to be implemented pursuant to the terms of the memorandum of settlement. At all times during said meeting the employer's conduct was consistent with the existence of a ratified memorandum of settlement and the union did not take any position indicating that it objected to the continued implementation of the memorandum of settlement. Furthermore, the union has processed policy grievances regarding the interpretation, application, and administration of new provisions established pursuant to the memorandum of settlement as implemented by the employer effective August 1, 1993.
The Decision
- The Act defines a collective agreement as follows:
1.- (1) In this Act,
"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.
The union acknowledged that the parties have a signed memorandum of settlement and that the sole issue before the Board is whether there has been sufficient "formal ratification" to elevate the minutes of settlement to the status of a collective agreement.
The union did not dispute the fact that ratification had occurred on July 25, 1993. Rather, the union asserted that since it had not notified the employer in writing of the ratification of July 25, 1993, the Board should conclude that the process was not completed and that the memorandum of settlement had not been elevated to the status of a collective agreement.
The union submitted that the Board jurisprudence is unclear on the issue of whether written evidence of ratification is required. The union referred to a line of cases which suggested that the parties must signify their ratification of the memorandum of settlement in writing. (Civil Service Association of Ontario, [1971] OLRB Rep. Sept. 596, Galdino Berdwsco, [1977] OLRB Rep. Nov. 774.)
The Board rejects this argument for two reasons. First, the Board prefers the approach set out in Graphic Centre (Ontario) Inc., [1976] OLRB Rep. May 221, that written evidence of ratification is not required:
In a number of cases the Board has been faced with situations where the parties have signed a memorandum of settlement subsequent to which confusion has arisen as to whether ratification has occurred. In certain of these situations the Board has responded to the extrinsic evidence and drawn the inference that ratification has occurred without there being signed evidence of this fact. (See Versa Services Limited case [1972] OLRB Rep. Apr. 306, Service Employees Union Local 210 case supra, Field-Price Limited case [1973] OLRB Rep. Oct. 543). In other similar situations however the Board has stated that the parties must signify their ratification of the memorandum in writing (see Marsiand Engineering Limited case supra, Civil Service Association of Ontario case [1971] OLRB Rep. Sept. 596) in order for there to be a collective agreement within the meaning of the Act. Although each case must be considered within its own circumstances a signed memorandum of settlement coupled with compelling evidence of ratification must be considered by the Board as evidence of a collective agreement within the meaning of the Act. Whereas a Memorandum of Understanding subject to ratification is not a collective agreement (see John Inglis Co. Ltd. case [1974] 1 Can. LRBR 481 (BC)), evidence which clearly establishes that ratification has occurred elevates the memorandum to the status of a collective agreement within the meaning of the Act. Ratification satisfies the condition precedent thereby giving rise to what is then an unconditional agreement in writing (i.e. signed by the parties) on all outstanding matters. Although signed evidence of ratification is perhaps the most satisfactory evidence in this regard, the Board cannot ignore other evidence which supports the singular inference that ratification has occurred.
(emphasis in original)
On the facts set out above, it is clear that the parties signed a memorandum of settlement which was subsequently ratified by the applicant on July 25, 1993. The fact that the ratification was not confirmed in writing is not determinative.
The second reason that the absence of written notice is not determinative in this case is that the parties had specifically agreed that notice of ratification would be communicated orally by specified union representatives to specified company representatives. Notification of the ratification was given orally by the designated union representatives to the appropriate company representatives.
The union further argued that the employer had not proved that it had relied to its detriment on the union's oral notification of the results of the July 25 ratification vote, and therefore the union was not estopped from asserting there was no collective agreement. The union relied on the last sentence of paragraph thirteen of the Graphic Centre case, supra for that proposition:
It should be added that if the Board were to require signed evidence of ratification in all cases it would be denying the parties use of the equitable doctrine of estoppel in those situations where there is evidence of ratification, other than signed notification which has been relied upon by one or the other of the parties. (See Garden Lily Laundry Limited case [1970] OLRB Rep. May 240).
The Board rejects this argument. Having reviewed the jurisprudence set out in paragraph thirteen of the Graphic Centre case, the Board concludes that the Board's approach of permitting compelling evidence of ratification is not dependent on the doctrine of equitable estoppel. Estoppel is simply a further argument that parties may assert in attempting to prove the existence of a collective agreement. Parties do not have to prove detrimental reliance before they can assert that a memorandum of settlement which has been ratified has been elevated to the status of a collective agreement.
The Board adopts the following passage from the Graphic Centre case as accurately summarizing the underlying rationale for requiring compelling evidence of ratification:
The collective agreement is the cornerstone of our labour relations system. It evidences the existence of bargaining rights and other than during a stipulated period serves as a bar to either the termination or transfer of these rights. It evidences a bargain struck between the parties as to terms and conditions of employment for a term specific and requires that any dispute as to its interpretation, application or administration be resolved by binding arbitration. Its existence or lack thereof can be determinative of the legality of illegality of certain activities engaged in by an employer, a trade union or by employees. The Board in lending an interpretation to section 1(1)(e) has been influenced by both the realities of the collective bargaining process and by the practical need for consistent and easily understood criteria. The parties to collective bargaining do not normally execute a formal document until some time after the bargaining process has been completed. The process is one wherein the agreement of the parties is reduced to a memorandum of settlement subject to ratification by the respective principals which is then followed by the drafting and execution of the formal document. It would not be sound industrial relations policy to require as a condition of entering into a collective agreement the execution of the formal document thereby precipitating an often prolonged extension of the open period. The parties, however, must know, with a high degree of certainty and predictability, precisely when they have entered into a collective agreement so as they may properly assume their respective duties and responsibilities and conduct themselves in a manner consistent with the existence of a subsisting collective agreement. It should be added that certainty in this regard minimizes the amount of "litigation" which might otherwise come before the Board.
In our view this case demonstrates that permitting compelling evidence of ratification (other than written evidence) enhances the parties ability to know with certainty and predictability precisely when they have entered into a collective agreement. On the other hand, requiring evidence of detrimental reliance would only increase uncertainty and hence, litigation between the parties.
The union further argued that the unilateral implementation of the collective agreement is not evidence of the existence of a collective agreement. The employer asserted that the union's failure to object to the implementation of the agreement is significant. Further, the employer noted that the union had processed policy grievances regarding the interpretation, application and administration of new provisions established pursuant to the memorandum of settlement. In light of the Board's conclusion that the ratification on July 25, 1993 elevated the minutes of settlement to the status of a collective agreement, the Board does not need to address these alternative arguments.
In summary, for the above reasons, the Board responds to the questions referred by the Minister as follows:
(a) there is a collective agreement in effective between the parties;
(b) the term of the collective agreement is from August 1, 1993 to July 31,
1996, as set out in the memorandum of settlement signed by the parties on
July 23, 1993.