United Food and Commercial Workers International Union, Local 175 v. Pizza Pizza Limited, 1993 CanLII 8027

[1993] OLRB REP. APRIL 373

3269-92-U United Food and Commercial Workers International Union, Local 175, Applicant v. Pizza Pizza Limited ("PPL"); Franchise Owners Toronto Limited ("FOTL"); 958424 Ontario Inc., carrying on business as Rapco Management Ser­vices ("Rapco"); 930571 Ontario Inc., carrying on business as Boss Technical Ser­vices ("Boss"); 3C Complete Communications Consulting Inc. ("3C"); Willow Telecommuting Systems Canada Inc. and Willow Telecommunications Corpora­tion (collectively "Willow"), Responding Parties

BEFORE: G. T. Surdykowski, Vice-Chair, and Board Members F. B. Reaume and P. V. Grasso.

APPEARANCES: David A. McKee, Michael A. Church, Harry Sutton, and Ms. Carol Van Hel Voort for the applicant; Mark Crestohi and Daniel Vukovich for Pizza Pizza; Charles E. Humphrey and Maryann Crnelcovic for Franchise Owners Toronto Limited; Walter Thornton and Gary Rap­koski for Rapco Management Services and Boss Technical Services; M. E. Geiger and Mehran Manoochehri for 3C Complete Communications Consulting Inc.; Catherine Osborne for Willow Telecommunications Corporation.

DECISION OF G. T. SURDYKOWSKI, VICE-CHAIR, AND BOARD MEMBER P. V. GRASSO; April 28, 1993

1. This is an application under section 91 of the Labour Relations Act in which the applicant trade union alleges that the responding parties have violated section 73.1 of the Act.

2. The responding parties raised several preliminary matters. The parties agreed that the Board should first deal with the responding parties' motion to dismiss this application on the basis that section 73.1 of the Act is not applicable to the situation herein, and that the application should therefore be dismissed.

3. By majority decision dated March 8, 1993 (Board Member Reaume dissenting), the Board found that section 73.1 of the Act does apply and that this application should therefore pro­ceed. The responding parties' motion to dismiss in that respect was therefore denied.

4. The majority's reasons follow.

5. For purposes of the motion, the parties' agreed to the facts material to this threshold issue as follows:

(a) A collective agreement between the applicant and Pizza Pizza Lim­ited ("PPL") expired on February 28, 1992.

(b) Notice to bargain was given by the applicant to PPL in a timely man­ner on November 4, 1991.

(c) The applicant conducted a strike vote on May 5, 1992. All those who voted indicated they were in favour of a strike.

(d) The applicant was in a legal strike position in late May, 1992 (a "No Board Report" having been issued on April 29, 1992).

(e) A strike began on October 5, 1992.

(f) Together with other amendments to the Labour Relations Act, sec­tion 73.1 was proclaimed in force on January 1, 1993.

(g) People were engaged to perform the struck work prior to January 1, 1993, and continued to do so after January 1, 1993.

(h) On February 8, 1993, the applicant gave written notice that it is on strike.

In addition, we note that the legislation proposing amendments to the Act, including section 73.1, was tabled on June 4, 1992. Though not proclaimed enforce until January 1, 1993, the amending legislation was passed on November 5, 1992.

6. Section 73.1 of the Act did not exist, in any legislated form, prior to the amendments

which came into force on January 1, 1993. It provides that:

73.1- (1) In this section,

"employer" means the employer whose employees are locked out or are on strike and includes an employers' organization or person acting on behalf of either of them; ("employeur")

"person" includes,

(a) a person who exercises managerial functions or is employed in a confiden­tial capacity in matters relating to labour relations, and

(b) an independent contractor; ("personne")

"place of operations in respect of which the strike or lock-out is taking place" includes any place where employees in the bargaining unit who are on strike or who are locked-out would ordinarily perform their work. ("lieu d'exploitation à l'égard duquel la grève ou le lock-out a lieu")

(2) This section applies during any lock-out of employees by an employer or during a lawful strike that is authorized in the following way:

1. A strike vote was taken after the notice of desire to bargain was given or bargaining had begun, whichever occurred first.

2. The strike vote was conducted in accordance with subsections 74(4) to (6).

3. At least 60 percent of those voting authorized the strike.

(3) For the purposes of this section and section 73.2, a bargaining unit is considered to he,

(a) locked out if any employees in the bargaining unit are locked out; and

(b) on strike if any employees in the bargaining unit are on strike and the union has given the employer notice in writing that the bargaining unit is on strike.

(4) The employer shall not use the services of an employee in the bargaining unit that is on strike or is locked out.

(5) The employer shall not use a person described in paragraph 1 at any place of operations operated by the employer to perform the work described in paragraph 2 or 3:

1. A person, whether the person is paid or not, who is hired or engaged by the employer after the earlier of the date on which the notice of desire to bargain is given and the date on which bargaining begins.

2. The work of an employee in the bargaining unit that is on strike or is locked out.

3. The work ordinarily done by a person who is performing the work of an employee described in paragraph 2.

(6) The employer shall not use any of the following persons to perform the work described in paragraph 2 or 3 of subsection (5) at a place of operations in respect of which the strike or lock-out is taking place:

1. An employee or other person, whether paid or not, who ordinarily works at another of the employer's places of operations, other than a person who exercises managerial functions.

2. A person who exercises managerial functions, whether paid or not, who ordinarily works at a place of operations other than a place of operations in respect of which the strike or lock-out is taking place.

3. An employee or other person, whether paid or not, who is transferred to a place of operations in respect of which the strike or lock-out is taking place, if he or she was transferred after the earlier of the date on which the notice of desire to bargain is given and the date on which bargaining begins.

4. A person, whether paid or not, other than an employee of the employer or a person described in subsection 1(3).

5. A person, whether paid or not, who is employed, engaged or supplied to the employer by another person or employer.

(7) The employer shall not require an employee who works at a place of operations in respect of which the strike or lock-out is taking place to perform any work of an employee in the bargain­ing unit that is on strike or is locked out without the agreement of the employee.

(8) No employer shall,

(a) refuse to employ or continue to employ a person;

(b) threaten to dismiss a person or otherwise threaten a person;

(c) discriminate against a person in regard to employment or a term or condition of employment; or

(d) intimidate or coerce or impose a pecuniary or other penalty on a person,

because of the person's refusal to perform any or all the work of an employee in the bargaining unit that is on strike or is locked out.

(9) On an application or a complaint relating to this section, the burden of proof that an employer did not act contrary to this section lies upon the employer.

7. The question before the Board was whether this provision applies in the circumstances set out in paragraph 5, above.

8. The responding parties submitted that whether or not what are commonly called "re­placement workers" can be used by an employer to perform the work of striking employees depends on whether the conditions in section 73.1 are satisfied. In other words, there are strikes to which section 73.1 applies and others to which section 73.1 does not apply. The responding parties argued that section 73.1 focuses on events, and that in this case the material events took place prior to January 1, 1993 when section 73.1 came into force. The responding parties observed that because the strike vote was taken before the amending legislation was even introduced, the persons who voted could not have been aware that a possible consequence of a vote in favour of a strike was what is asserted by the applicant herein; namely, that the responding employers have been prohibited from using replacement workers since January 1, 1993. The responding employers submitted that section 73.1 has substantially changed the relative positions of the parties by confer­ring a benefit on trade unions (by improving their relative collective bargaining position) to the detriment of employers (by impairing their relative collective bargaining position), relative to their respective collective bargaining positions prior to January 1, 1993, in that an employer's ability to continue to operate its business during a lawful strike which is a strike within the meaning of sec­tion 73.1 has been severely limited. The responding employers submitted that applying section 73.1 to the circumstances herein would interfere with the collective bargaining continuum between the parties and retrospectively alter the collective bargaining balance. They argued that it would be inappropriate to change the "rules of the game" in the middle of it to the prejudice of one side; namely, the employers. The responding employers argued that section 73.1 is not retroactive, and that to apply section 73.1 as requested by the applicant would be to apply the prohibition against replacement workers retrospectively because the effect of doing so would be to attach new prejudi­cial consequences to past events. They submitted that there is nothing in the amending legislation or otherwise which operates to rebut the presumption against retrospectivity, in contrast to section 64.2 of the Act for example, and that that presumption therefore applies. For these reasons, the responding parties submitted that section 73.1 does not apply to the circumstances in this applica­tion.

9. The applicant agreed that section 73.1 alters the relative positions of the parties. It also agreed that it is not retroactive legislation. However, the applicant asserted that it is common for rights and relative positions of the parties to be altered by statute. Further, it submitted that a strike is a state of being, or a "status" or "characteristic", as is being a "replacement worker", so that this is not a question of retrospective application at all. In the alternative, the applicant argued that even if it is a matter of retrospective application of the legislation, any new consequences are not prejudicial within the meaning of the authorities because the intent is not to punish for some­thing done in the past but to create new consequences for past events as of the date the provision came into force.

10. A basic rule of statutory interpretation is that, in the absence of a clear legislative intent to the contrary, legislation should not be construed so as to give it a retroactive or retrospective effect. In this context, there is a subtle but clear distinction between "retroactive" and "retrospec­tive" legislation. Unfortunately, as the British Columbia Court of Appeal observed in Martelli v. Martelli, (1981) 130 D.L.R. 3(d) 300, the nomenclature in this area is sometimes confused. Indeed, sometimes the two labels are used interchangeably without regard to the difference between retro­active legislation and retrospective legislation (see, for example, Venne v. Quebec (C.P. T.A.), 1989 CanLII 84 (SCC), [1989] 1 S.C.R. 880 (Supreme Court of Canada), Attorney General of Quebec v. Expropriation Tri­bunal et al, [1986] 1. S.C.R. 732 (Supreme Court of Canada)).

11. In its simplest form, it appears that the distinction between the two is as follows. "Re­troactive" legislation looks back in time and changes the law from what it was during a period prior to its enactment. Generally, legislation is made retroactive in one of two ways: it either specifically states that it shall be deemed to have come into force as of some previous specified date, or it is expressed to be operative with respect to past events as of some previous time. "Retrospective" legislation operates only as of the day it is enacted. However, it looks to past events and attaches new consequences to events or transactions begun or even completed prior to its enactment, in terms of the continuing or subsequent effect of such events or transactions. A statute can be retroactive only, retrospective only, or both retroactive and retrospective.

12. The writings of the noted author Elmer A. Driedger in this area have often been cited with approval by the courts, including the Supreme Court of Canada. In the second edition of his book Construction of Statutes, Driedger offers the following summary (at pages 202 to 203):

13. A retroactive statute is one that changes the law as of a time prior to an enactment.

14. (a) A retrospective statute is one that attaches new consequences to an event that occurred prior to its enactment.

(b) A statute is not retrospective by reason only that it adversely affects an antecedently acquired right.

(c) A statute is not retrospective unless the description of the prior event is the tact-situation that brings about the operation of the statute.

3. The presumption [against retrospectivity] does not apply unless the consequences attaching to the prior event are prejudicial ones, namely, a new penalty, disability or duty.

4. The presumption [against retrospectivity] does not apply if the new prejudicial conse­quences are intended as protection for the public rather than as a punishment for a prior event.

5. As the Supreme Court of Canada recognized in Brosseau v. The Alberta Securities Commission, (1989) 1989 CanLII 121 (SCC), 1 SCR 301 at page 317; 57 D.L.R. (4th) 458, at page 470: "While the presump­tion against retrospective affect is clear, there seems to be a great deal of confusion among the authorities and caselaw as to what constitutes such an effect."

6. The presumption against the retrospective application of legislation is sometimes con­fused with the presumption against the interference with vested rights. These two presumptions are related, but not the same. In Re: Royal Canadian Mounted Police Act [1990] 2 FCR 750; 123 N.R. 120, the Federal Court of Appeal suggested that the difference between the two is that the pre­sumption against the interference with vested rights is invoked only when a statute is reasonably capable of two meanings (that is, it is ambiguous) while the presumption against retrospectivity is a prima facie presumption which applies unless it is rebutted. In other words, because the alteration of existing rights is a frequently intended consequence of legislation, the presumption against the interference with vested rights is used only if the legislative intent is unclear. Or, as the Saskata­chewan Court of Appeal put it in National Trust Co. Ltd. v. Larson et al, (1989) 1989 CanLII 4769 (SK CA), 61 D.L.R. (4th) 270 at page 277:

"Since most statutes interfere with antecedent rights, while few operate retrospectively - one is the norm, the other is the exception - the presumption against non-interference with vested rights is weaker and more readily overcome than is the presumption against retrospectivity: See C6t~' at page 124 [of The Interpretation of Legislation in Canada]."

Further, as the Supreme Court of Canada observed in the course of dealing with an income tax case in Gustavson Drilling Ltd. v. M.N.R. (1975) 1975 CanLII 4 (SCC), 66 D.L.R. (3d) 449 at page 462:

"No one has the vested right to continuance of the law as it stood in the past; in tax law it is imperative that legislation conforms to changing social needs in government policy. The tax payer may plan his financial affairs in reliance in tax laws remaining the same; he takes the risk that the legislation may be changed."

15. The authorities which deal with the question of how newly enacted legislation applies distinguish, for analytical purposes, between "events", and "characteristics" or "status". Of course, a "characteristic" or "status" does not come from nothing. Some "event(s)" must take place before a "characteristic" or "status" can come into existence. Some "events" create a "characteristic" or "status", while others do not. Legislation operates retrospectively if it is triggered by prior events which do not create a characteristic or status. Legislation does not operate retrospectively if it is triggered by a characteristic or status, whether or not some or all of the events which created that characteristic or status occurred before the legislation was enacted. For example, in R v. Inhabitants of St. Mary, White Chapel, (1848) 116 ER. 811, the statute under consideration provided that:

"No woman residing in any parish with her husband at the time of his death shall be removed, nor shall any warrant be granted for her removal, from such parish, for twelve calendar months next after his death, if she so long continue a widow."

A woman had been widowed and a removal order had been made against her before the statute was enacted. The court held that a widow is a widow whenever she becomes one and that the application of the statute to someone who became a widow before the statute was enacted was not a retrospective application. In R v. Levine (1926) 1926 CanLII 255 (MB CA), 46 CCC 342 (Manitoba Court of Appeal), legislation was passed making it unlawful to possess liquor in places where it had previously been lawful to do so. A person was convicted for unlawfully possessing liquor which she had lawfully purchased and possessed in the same premises before as after the legislation in question was enacted. The court held that the possession was unlawful from the day the legislation was enacted and that this did not constitute a retrospective application of the statute. In Ward v. Manitoba Public Insurance Corp., 1974 CanLII 1117 (MB CA), [1975] 2 W.W.R 53 (leave to appeal to the Supreme Court of Canada refused 49 D.L.R. (3d) 638n), an insurance statute provided for premium assessments based on demerit points accrued by an insured. The court held that counting demerit points accrued before the statute was enacted was not a retrospective application. In Re Sanderson and Russell, (1979) 1979 CanLII 2048 (ON CA), 24 O.R. (2d) 429 (Ontario Court of Appeal), the court held that provisions in the Family Law Reform Act, (1978) which expanded the definition of "spouse" for support purposes applied in circumstances in which two persons had cohabited for the requisite period prior to enactment, but who had separated and ceased cohabiting some ten months before the legislation came into force. The court held that being a "spouse" was a status, whenever achieved, and that the application of the legislation to those facts was not retrospective. (See also, National Trust Co. v. Larsen, supra).

16. The application of newly enacted legislation to an existing characteristic or status is not a question of retrospectivity at all. It is merely a prospective application to an existing situation. Only legislation which looks to and attaches new consequences to previous events raises a retrospectivity issue. Of the three types of legislative enactments identified by Driedger, supra, only one attracts the presumption against retrospectivity:

(a) Legislation which attaches beneficial consequences to prior events does not attract the presumption;

b) Legislation which attaches prejudicial consequences to prior events does attract the presumption;

(c) Legislation which imposes a penalty on a party described by refer­ence to prior events, but which penalty is not a consequence of such events, does not attract the presumption.

(See Elmer A. Driedger, "Statutes: Retroactive Retrospective Reflections" (1978) 56 Canadian Bar Review 264 at page 271).

17. We note that in North Shore Taxi (1966) Ltd. (decision dated January 29, 1993, unreported), the British Columbia Labour Relations Board dealt with a provision in the British Colum­bia Labour Relations Code proclaimed in force on January 18, 1993 which prohibits the use of replacement workers during a strike in that Province. The British Columbia Board noted that the material events (that is, the notice to bargain, active collective bargaining, a strike, and the hiring of replacement workers) all occurred prior to proclamation, and concluded that the provision is event driven and that neither the provision nor the statute as a whole supported an application to events which occurred prior to proclamation. The B.C. Board concluded that the presumption against retrospectivity applied. In disposing of the matter, the B.C. Board focused on the act of hiring of the replacement workers and concluded that replacement workers hired prior to procla­mation could continue to be used by the employer, but that the hiring of replacement workers on or after the date of proclamation was prohibited by the legislation.

18. The British Columbia statutory provision is not the same as section 73.1 of the Ontario Labour Relations Act. In any event, to the extent that it is applicable to the application herein, the majority was not persuaded by the reasoning of the British Columbia Board and we respectfully declined to follow it. Instead, we were persuaded by the arguments of the applicant.

19. First, we note that not all the material events in this case occurred prior to January 1, 1993. Employees in a bargaining unit .are not considered to be on strike for the purposes of section 73.1 of the Act until the trade union which represents them has given their employer "notice in writing that the bargaining unit is on strike" (section 73.1(3)(b)). In this case that written notice was not given until February 8, 1993.

20. Second, unlike section 64.2 of the Act, section 73.1 is not retroactive legislation. Nor is the issue herein one of retrospectivity. A "strike" is a state of being. Being on "strike" describes the behaviour or status of employees who have stopped or slowed down their work in order to put pressure on their employer to accede to their collective bargaining demands. A "replacement worker" is a kind of employee; namely, one hired to replace and perform the work of a striking employee. Section 73.1 of the Labour Relations Act operates to make the use of replacement workers during a strike as defined by that provision unlawful. Prior to January 1, 1993, an employer could use replacement workers in any strike, including the kind of strike to which section 73.1 now applies. Now it cannot. It does not matter when a strike becomes a "strike" within the meaning of section 73.1, or when the requisite events in that respect occurred. Nor does it matter when "replacement" workers are hired. After January 1, 1993, whenever there is a strike within the meaning of section 73.1, an employer cannot use replacement workers (except as specifically permitted - see section 73.2 of the Act).

21. In the alternative, even if applying section 73.1 to the facts herein did constitute a retrospective application of that provision, section 73.1 does not attach "prejudicial consequences", in the sense of the Driedger analysis, to events which occurred prior to January 1, 1993. As Driedger points out, legislation which imposes a penalty on a party described by past events, as opposed to imposing a new or additional penalty as a consequence of past events, does not attract the presumption against retrospectivity. The distinction is a rather subtle one but comes down to this: legislation which imposes a prejudicial consequence (one kind of which is a penalty) for past conduct or events attracts the presumption; legislation which imposes a prejudicial consequence for present conduct with roots in past events does not attract the presumption.

22. We are unable to see how applying section 73.1 in this case would constitute a penalty. The Labour Relations Act is not a penal statute and section 73.1 is not a penalty provision. Nor does section 73.1 attach any other kind of prejudicial consequences to events or behaviour which occurred prior to January 1, 1993. The "prejudicial consequences" of section 73.1, insofar as there are any, relate to current events or conduct which are (in this case) partly rooted in past events. This does not attract the presumption against retrospectivity.

23. Section 73.1 imposes no penalty and attaches no other prejudicial consequences to events or behaviour of an employer prior to January 1, 1993. Whether or not an employer employed replacement workers prior to January 1, 1993, or indeed since then but prior to a strike becoming a "strike" within the meaning of section 73.1, is irrelevant. Section 73.1 merely prohibits the use, or continued use, of replacement workers after the date when the preconditions of section 73.1 are satisfied. To the extent that section 73.1 may be triggered by events or conduct which occurred prior to January 1, 1993, these are entirely within the control of the trade union and the employer's conduct until that time is irrelevant. In other words, if a trade union conducts an appro­priate strike vote which is supported by the requisite number of voting employees, and the trade union gives the appropriate notice that the bargaining unit is on strike, section 73.1 operates to restrict employer conduct or behaviour by prohibiting the use or continued of replacement work­ers. In the result, the presumption against retrospectivity does not apply.

24. Even if this is a question of retrospectivity and has the prejudicial effect asserted by the responding employers such that the presumption against retrospectivity does apply, the clear pur­pose and intent of section 73.1 is precisely what the responding employers complain about; that is, to alter the collective bargaining balance by making it unlawful for employers to use replacement workers during strikes within the meaning of section 73.1 except as permitted by section 73.2, effective January 1, 1993. This clear legislative intent operates to rebut the presumption against retrospectivity. Applied to this case, this means that the employer(s) of the bargaining unit employees on strike herein would not be entitled to hire or continue to use replacement workers after February 8, 1993 - if the other preconditions of section 73.1 have been satisfied, something which remains to be determined.

25. Finally, we find ourselves constrained to ask ourselves this question: If section 73.1 is repealed in the future, will an employer (either one of the responding parties herein or otherwise) accede to a trade union's argument that the prohibition against replacement workers in section 73.1 continue to apply to an existing "strike" within the meaning of that provision? We seriously doubt it.

26. In the result, the majority of the Board was satisfied that section 73.1 of the Labour Relations Act can apply to the circumstances herein and ruled that this application should proceed as aforesaid.

27. We wish to make it clear that all that the Board has decided in this case on March 8, 1993 was that section 73.1 of the Act does apply. The Board decided nothing with respect to any other issues, preliminary or otherwise, raised in this application, including whether the strike herein is a "strike" within the meaning of section 73.1.

DECISION OF BOARD MEMBER F. B. REAUME; April 28, 1993

1. With respect to my colleagues, I must dissent from their decision.

2. The compelling argument in this case is the impact on the bargaining process which was virtually completed early in 1992, several months before the new legislation was enacted. Indeed all facts of the bargaining process - negotiations, conciliation and even strike action - were com­pleted in advance of the new legislation.

3. It is patently unreasonable and prejudicial to retrospectively alter the bargaining positions after they have been effectively put in place. I am in total agreement with the British Colum­bia North Shore Taxi decision (see paragraph 16 of the decision) in this matter.

4. I cannot accept that the Legislature intended to alter the collective bargaining balance in those instances where strike actions took place before the enactment of the legislation. I submit that this Legislature did not intend this result or they would have clearly made it retroactive as they did in other sections of the new legislation. It is not the function of this Board to second guess the Legislature on these matters.

5. For the above reasons, I would have dismissed the application.