[1993] OLRB REP. APRIL 309
0072-92-U Local 527, Office and Professional Employees International Union, Complainant v. The Board of Education for the City of Hamilton, Respondent
BEFORE: R. 0. MacDowell, Alternate Chair, and Board Members J. A. Ronson and D. A. Patterson.
APPEARANCES: David P. Jacobs, Lynda Cook and Ana Misiti for the applicant; Mark Zega, Deborah Russon, Keith Rielly, Robert Stewart and Margaret Cunningham for the respondent.
DECISION OF THE BOARD; April 21,1993
I
- This is a complaint under section 91 of the Labour Relations Act. The union alleges that the employer has failed to bargain in good faith with respect to the renewal of the parties' last collective agreement. Section 15 of the Act reads as follows:
15.The parties shall meet within fifteen days from the giving of the notice [to bargain] or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.
Other sections of the Act were mentioned on the complaint form, but were not pressed in argument, and therefore will not be referred to further.
The union contends that the Board of Education ("the Board") breached its statutory duty to bargain in good faith when its elected trustees failed to approve a proposed settlement that had been put before them for ratification. The union claims that it was unlawful for the trustees to refuse to ratify a settlement which had been deemed acceptable by the employer's own negotiators only five weeks before.
The employer replies that the settlement was always tentative and was expressly (and intentionally) made subject to ratification by the elected trustees; moreover, between the time the tentative settlement was concluded and the time it came before the trustees for consideration, there were major changes in provincial funding arrangements. The employer concedes that the decision not to ratify was unusual but, in the employer's submission, the change in the Board's financial situation justified a reconsideration of the position earlier taken by its negotiating team. The employer maintains that it was and remains prepared to enter into a collective agreement with the union; however, both parties are now obliged to recognize new economic realities which had not crystallized when the original deal was struck.
It will be convenient to sketch in some general background, then turn to the events which prompted the Board to reject the tentative settlement. In order to assess the Board's motivation, it is necessary to understand the financial and political framework in which it operates. Legalities aside, much of the union's frustration in this case stems from the Board's failure to respond in accordance with the union's expectations, and, as will be seen, the union's expectations were not the only ones jolted by the events of late 1991 and early 1992.
II
The Board of Education for the City of Hamilton is responsible for the City's elementary and secondary school system. The Board has some 4,000 employees, many of whom are unionized. The unionized employees are subdivided into 10 bargaining units which are represented by a number of different trade unions.
The largest bargaining units are composed of teachers, who are represented for collective bargaining purposes by the teachers' federations designated under the School Boards and Teachers Collective Negotiations Act. The teachers' salary and benefits reflect not only their professional status, but also the cohesion and bargaining power of their unions. Teachers' strikes are not uncommon in Ontario, nor unknown to this employer.
The OPEIU represents a small bargaining unit of 82 clerical and secretarial employees. The workers in the OPEIU bargaining unit are primarily women and are among the lowest paid of the Board's employees. The OPEIU and the Board have had a long and generally amicable collective bargaining relationship, which stretches over many years and a number of collective agreements.
The Board of Education is controlled by a body of elected trustees who have a responsibility under the Education Act to supervise the local education system. There are now 19 trustees who are elected every two years from defined geographic constituencies. The last election was in November 1991, when there was a substantial change in the Board's membership, with the election of 5 new trustees. The election occurred in the midst of collective bargaining with the Board's various unions, and it was the "new" Board which decided in January-February 1992 that the bargaining parameters had changed.
The Board derives its funds from two main sources: provincial grants channelled through the Ministry of Education, and property taxes levied on municipal taxpayers. Provincial grants ordinarily make up about one-third of the overall budget and are calculated in accordance with a complex formula administered by the Ministry of Education. The total budget (including capital items) is now around $280,000,000. Salaries make up about 80% of the operating budget. Teachers' salaries make up the largest component of the salary item.
The Board of Education has the responsibility to budget and provide for its own spending; however, in recent years, that has become increasingly difficult. Shifting provincial priorities (e.g. full funding of Roman Catholic schools), changes in the funding formula, budget constraints, and the erosion of the municipal tax base have all affected the pool of funds available to the Board, as well as the Board's ability to predict the resources that will be available. The complexities of the budgeting process need not be explored here. It suffices to say that the Board must plan its expenditures on the basis of past trends, and such undertakings as it is able to extract from provincial politicians or administrators. And if the situation turns out to be other than what was anticipated, the Board is faced with the painful task of cutting expenditures or raising taxes. The Board does not operate in the private sector, but it is not immune from economic forces.
The roots of the current dispute can be traced to early 1991 when the Board produced its 1991-92 "pro-forma" budget. According to trustee Bob Stewart, this budget was constructed with considerable care, and was based on assumptions that seemed realistic at the time. Mr. Stewart was familiar with the budgeting process, and is currently Chair of the Board's Salary Committee. As Chair of the Salary Committee, he is heavily involved in salary negotiations with unionized staff. Coincidentally, Mr. Stewart is himself a union member and is also a local official of the United Steelworkers of America.
Mr. Stewart explained that in early 1991 when the pro-forma budget was developed, the trustees were comfortable with the premises upon which it was based. A new Provincial Government had been elected only three months before, on a platform that promised "full funding" for public education. There had been an undertaking to address the shortcomings of the past; and, similar assurances had been given by the locally-elected members of the Legislature, who were now part of the Government. Based on these undertakings, previous grant levels, and current trends, the Board projected that Provincial grants for 1992 would increase by at least 7%.
The pro-forma budget was the definitive document for planning and decision-making throughout 1991 - even though by mid-year some trustees began to worry that its assumptions were unduly optimistic. The pro-forma budget generated the "guidelines" for the salary negotiations that were to take place in late 1991 and early 1992. That guideline contemplated a maximum wage increase of about 4.5%, which was in line with the increase the Provincial Government seemed prepared to offer to public servants, and was considered "affordable" on the basis of anticipated revenue.
Some trustees thought the 4.5% guideline would be unacceptable to the teachers' federations, which might strike for better pay. Other trustees thought the guideline was too generous given the impact of the recession on public finances and the local tax base. However, 4.5% remained the employer's "negotiating mandate" for the bargaining which took place in the Fall of 1991. That bargaining involved the major teachers' federations, the OPEIU, and, a little later, the custodial/service group represented by CUPE.
The OPEIU collective agreement expired on August 31, 1991. The union presented its proposed amendments at a meeting with the trustees and their negotiating committee on September 18, 1991. The parties met for bargaining purposes on October 10, October 18, and November 14, 1991.
The union's chief negotiator was Linda Cooke. Ms. Cooke is a full-time staff representative for the OPEIU, and before that, had been an employee of the Hamilton Board of Education for about twenty years. The Board's spokesperson was Debbie Russon, its Manager of Collective Bargaining Services. Ms. Cooke and Ms. Russon had a good personal and professional relationship.
Ms. Russon reports to the Salary Committee which, as noted, is chaired by trustee Bob Stewart. The Salary Committee is responsible for overseeing salary administration and coordinating collective bargaining with the Board's various unions. The Salary Committee reports to the full Board, which retains the ultimate authority to ratify or reject proposals vetted by the Salary Committee. The Chair of the Hamilton Board of Education is Barbara Cunningham, who is also a member of the Salary Committee.
Bargaining with the OPEIU initially went quite smoothly, and the parties were able to resolve the language issues with relative ease. But wages remained a stumbling block.
On November 14, 1991 Ms. Cooke suggested that the parties suspend bargaining until the employer had settled with the teachers' federations. It was evident to Ms. Cooke that (as she put it) the "tail was not going to wag the dog". She saw no tactical value in applying for conciliation at that stage (a necessary step before the union could consider a lawful strike), because the teachers' settlements would significantly impact upon the employer's costs and set the framework within which the smaller unions would negotiate. It seemed sensible to await the outcome of the teacher negotiations because, in the past, the Board had been inclined to apply the teachers' pattern to the smaller bargaining groups.
The Board members were content with this proposal, and negotiations were suspended pending resolution of the teachers' disputes. It was anticipated that the teachers' bargaining would be completed in late 1991 or early 1992.
Throughout 1991, the Provincial economy continued, to deteriorate, and by the Fall of 1991, that deterioration was becoming painfully apparent. The effect on the Board of Education is reflected in the Minutes of its "Budget Review Committee", which began struggling to match expenditure commitments with increasingly problematic revenue projections, while holding tax increases to 6%. It was not an easy task.
It was clear that the local economy was ailing, and that the commercial tax base was being eroded. Revenue was going to be lower than anticipated but lay-offs and higher local unemployment made it much more difficult for ratepayers to absorb tax increases. And, with an anticipated deficit of nine billion dollars or more, the Province was unlikely to provide much assistance. Accordingly, the Budget Committee concluded that in order to hold tax increases to 6%, it would be necessary to reduce planned expenditures by at least twelve million dollars. These revisions and cuts were deemed necessary to bring revenues and expenditures into line even though, at that time, the Board still anticipated a 7% increase in Provincial grants for 1992.
At this point, the Budget Committee had not yet begun to focus on salaries. It was looking for cut-backs in other areas of expenditure. From Ms. Cunningham's perspective, the projected 4.5% "allowable" increase had begun to look increasingly problematic in light of the Board's escalating financial concerns; however, her view represented a minority on the Salary Committee. The majority of the Salary Committee was not inclined, at that stage, to review its negotiating "mandate" or return to the full Board for further instructions.
On October 24, 1991, Keith Riley, the Board's Director of Education, wrote to his superintendents and principals to emphasize the developing budget problems and solicit their support for economic restraint. His letter begins:
In the current economy, Boards in the Province, are entering an increasingly difficult fiscal environment. As you are aware, we are witnessing national and local economic problems that will have significant implications with respect to our traditional manner of delivering program and services to our educational community.
My purpose in writing to you at this time is to bring you up to date on some recent Provincial and local activities on this subject and to solicit system-wide co-operation to develop a process to help resolve our current and future fiscal difficulties.
Developments at the provincial level were having an impact in Hamilton and compounding the local financial difficulties.
Mr. Riley pointed out that on October 1 the Treasurer of Ontario had announced a "mid-year spending adjustment plan". The Treasurer had observed that the Province was facing a substantial revenue shortfall, and that there was going to be a "rigorous and comprehensive, policy and program expenditure review" designed to "realize cost savings". On October 15, the Minister of Education advised the Chairs of the Provincial Boards of Education that the Government remained committed to the "reform" of education finance; however, there would have to be more "cost effective" ways of allocating resources. On October 17, 1991 an Assistant Deputy Minister advised, less ambiguously, that restraint at all levels was critical and that Government support in the future might be limited to 3-4% per annum. As Premier Rae had put it in a speech in June 1991 (which Mr. Riley also quoted): "... The party is over. There is no more gravy...".
These messages from Provincial officials were consistently pessimistic, and, one presumes, that they were intended to temper expectations, and pave the way for serious restraint. The announcements reinforced the concerns the Board was already addressing. In his letter to his subordinates, Mr. Riley summarized the situation this way:
Earlier this year, Senior Management presented the 1992 Proforma Budget to the Board. This document was a projection of expenditures and revenues based upon our 1991 operations, historical trends, an inflation factor and management assumptions of future events. That budget portrayed an expenditure increase of $24 million for a total of $290 million resulting in an increase to the average taxpayer of 13.8%. After due consideration, the Board adopted a resolution that the budget be amended to reflect a target increase of 6% to the average taxpayer. The initial implication of this resolution means that we must begin a process to reduce our preliminary estimates for 1992 by $12 million.
In response to the initiatives at the provincial and local levels, I am soliciting, through your respective Superintendents, your co-operation in addressing our fiscal challenges for 1991 and
Effective immediately, I am asking for your support for a Voluntary Restraint Program. Wherever possible, it will be to our mutual advantage to curtail as many expenditures as possible to December 31. These savings should produce a surplus which can be applied to the proposed $12 million operating reduction in 1992.
The process was to begin immediately.
This is the position in which the "new" Board found itself by December 1991. We say "new" because, as we have already noted, there was an election in mid-November 1991 which resulted in the return of five new members. According to Bob Stewart, it was a difficult time for the incumbent trustees, who had to campaign and conduct Board business at the same time.
Despite the worsening economic situation and the impending election, the Board's negotiators continued to bargain with the teachers' groups within the framework of the 4.5% mandate" which had been set earlier that year. Indeed, although the Board was anxious to negotiate salary increases of less than 4.5%, a Provincially-appointed fact-finder recommended somewhat greater salary increases for secondary school teachers. Once that fact finder's report was made public, it was not at all clear that teacher salary increases could be kept below 4.5%, for if the Board pressed a position less generous than the fact-finder's recommendation, there could well be a strike with one or more of the teachers' unions. And that would effectively shut down the local school system. The Board's desire for economic restraint, was being challenged by the realities of bargaining power.
The details of the teachers' negotiations need not be reviewed here. We need only note that the teachers' unions had both the numbers and the bargaining power to vigorously press their claims, and by early December, tentative settlements had been reached with the main teacher groups (elementary, secondary and Francophone). But like the later OPEIU settlement, these tentative settlements were made subject to ratification by the new Board, and its members were not at all convinced that ratification was appropriate. According to Mr. Stewart who was closely involved in the secondary school negotiations with OSSTF, he "took a lot of flack" for the OSSTF settlement because it involved increases beyond what a number of trustees thought the Board could afford to pay. Nevertheless, the OSSTF/AEFO settlement was ratified by the trustees in mid-December 1991.
Shortly after the OSSTF tentative settlement, the Board's negotiators concluded a similar settlement with the elementary school teachers. Like the earlier OSSTF agreement, the elementary package envisaged increases of about 4½% in the first year and 3.6% in the second year of the agreement's operation. The elementary settlement was scheduled to come before the Board for ratification on January 16, 1992.
Meanwhile, since the teachers' collective bargaining pattern had now emerged, the Board returned to the bargaining table with the OPEIU. The parties' representatives met on January 16 and concluded a Memorandum of Settlement that provided for a 4.3% increase in the first year of the agreement's operation, and a 3.6% increase in the second year. Mr. Stewart signed on behalf of the Salary Committee, which undertook to recommend ratification to the full Board. The Memorandum of Settlement reads, in part, as follows:
The parties agree that the terms of this Memorandum shall constitute full settlement of all matters in dispute.
The undersigned representatives agree to recommend acceptance of this Memorandum of Agreement to their respective principals.
The "principals" referred to in paragraph 2, are the union membership and the full board, both of which had to vote their approval of the proposed settlement.
Ms. Cooke testified that the parties were pleased to have concluded their negotiations, but the final meeting was somewhat rushed. Debbie Russon was quite anxious to have the document finalized that day and urged Ms. Cooke to stay late if necessary. Ms. Russon told Ms. Cooke that she did not want to postpone execution of the document until after "Bob Rae's speech" - by which Ms. Russon meant an address by the Premier which was expected within a few days and was widely rumoured to contain more bad news. Mr. Stewart was called in, on short notice, to execute the Memorandum on behalf of the Salary Committee.
Mr. Stewart was also anxious to get the OPEIU settlement concluded on January 16, SO that the matter could be put before the Board as quickly as possible. He too mentioned the Premier's speech, and asked Ms. Cooke how long it would take for the OPEIU members to ratify the settlement. He urged Ms. Cooke to do what she could to expedite the process and, like Ms. Russon, suggested that it was desirable to have the "deal cleaned up" before Premier Rae's address. Ms. Cooke replied that the ratification process could not be completed for several weeks.
Ms. Cooke understood from the comments of Mr. Stewart and Ms. Russon that if they did not finalize the settlement that day, but rather waited until after the speech, there might be changes proposed. She conceded that by January 16 she knew that the Premier~ s remarks might produce collective bargaining difficulties. However, she did not think that the OPEIU settlement could be affected nor was she aware of any controversy about the elementary teachers' settlement which was to be considered by the Board that evening. In her mind, once the Board's negotiators concluded a settlement and undertook to recommend ratification, there would be no changes proposed, even if the Premier's speech did contain more bad news.
Ms. Cooke testified that, in her experience, the Board has routinely ratified any settlement recommended by the Salary Committee. In her view, ratification by the trustees was "a mere formality" or a "rubber stamp" which had always occurred in the past. Once the teachers had settled, the OPEIU tagged along, and the concurrence of the full Board was pro-forma - a foregone conclusion. Ms. Cooke testified that she did not then realize that the teachers' settlement itself was being questioned.
That evening, the Board considered the elementary school teachers' settlement which was in the same range as the earlier (OSSTF) teacher settlement. As before, the Salary Committee recommended ratification. This time, though, the full Board balked.
Mr. Stewart and Ms. Cunningham both described an acrimonious meeting in which the trustees were seriously divided. Some, like Mr. Stewart, urged ratification because the settlement followed the OSSTF pattern, the contents of the Premier's announcement were still speculative (although no one expected good news) and the rejection of the elementary settlement would likely lead to a strike, involving 1,600 teachers and 30,000 students. Other trustees either wanted to delay consideration of the settlement until after the Premier's announcement (which was expected in a few days), or felt that the settlement was simply "too rich" given the Board's developing financial problems. But no one wanted a strike.
A motion to reject ratification of the elementary teachers' settlement was "lost" on a tie vote. Efforts to postpone consideration were likewise defeated. The Board was deadlocked, and the debate became so heated that it was considered desirable to call a recess. Finally, after the recess, the elementary settlement was considered again and this time it narrowly passed - with seven of the nineteen trustees abstaining. It is evident that the elementary settlement did not enjoy the support of a majority of the trustees, but neither were they prepared to risk the political and collective bargaining consequences of rejecting it.
The text of the Premier's speech was released five days later, on January 21, 1993. Its contents were gloomy, but the message was clear. The broad public sector was going to face severe Provincial constraints. The Province was going to significantly reduce the funding of public agencies. Those agencies could now expect only a 1% increase in grants for 1992, with perhaps a further 2% in each of the following years. The hints and warnings of the previous few months were now a harsh reality.
For the Hamilton Board of Education, the announced reduction in Provincial grants was a change from the projected 7% increase to an increase of a mere 1%. This represented a reduction in funding of about $7,000,000, which, on then current projections, would result in an overall budget deficit of approximately $20,000,000 (i.e. $7,000,000 in addition to the approximately $12,000,000 deficit which had been projected a couple of months before). And there were only seven weeks left to get the Board's revised budget to the City of Hamilton. Since the Board had already had real difficulties identifying where $12,000,000 could be cut from its expenditure commitments, it was not at all apparent where these further millions could be found, nor how the Board could avoid a massive tax increase.
Mr. Stewart had been in favour of ratifying the teachers' settlements, which he thought were reasonable in relation to those concluded at other school boards. He thought ratification was necessary if a strike was to be averted. Ms. Cunningham had been much more cautious. She had long been concerned about the ongoing financial impact on so large a component of the Board's operating budget. But both testified that the reduction in Provincial grants greatly exacerbated the Board's financial difficulties, and precipitated problems of unprecedented proportion. It was too early to determine the precise ramifications of the reduction in Provincial support, but it was evident that there would have to be severe retrenchment.
These issues were debated at a Board meeting on January 23, where the trustees sought to establish priorities and identify the constituencies that would have to be involved in the proposed austerity program. Each of the Board's sub-committees was asked to consider how restraint would affect its area of concern, since it appeared that there would have to be program cuts and, perhaps, lay-offs. Mr. Stewart concluded, for example, that the negotiating "mandate" would have to be reduced to 1%, for all bargaining groups that had not yet settled. It was also resolved to meet with the Board's senior officials, and all of its trade unions to explore alternatives. According to Ms. Cunningham, it was a period of great stress.
As part of the consultation process, all of the unions were advised of the Board's financial difficulties and invited to assist in their resolution. Ms. Cunningham was hopeful that the teachers' federations with which the Board had recently settled, would be prepared to review those settlements and make concessions - for example, by taking some of their "professional development days" without pay. However, the teachers' federations were not prepared to consider such alternatives. From their perspective, it was the employer's problem to find the money to finance the settlements it had so recently ratified. As far as the teachers were concerned, once the Board had ratified, they had an agreement, and they proposed to hold the employer to it.
Information about the Board's problems was also directed to OPEIU, and there was a meeting in which OPEIU was represented - although this was not a collective bargaining meeting. Accordingly, while OPEIU might not have foreseen that its settlement was in jeopardy, it would have been well aware of the. Board's economic predicament. And, as we have already noted, on January 16, Ms. Russon and Mr. Stewart had both urged OPEIU to conclude negotiations that day and, ratify as soon as possible, because they were worried about the potential impact of the Premier's announcement.
There was also an informal indication that the OPEIU settlement might be in trouble.
The OPEIU settlement was ratified by the union membership on January 30. Shortly thereafter, Ms. Cooke had a conversation with Ms. Russon in which Ms. Cooke asked when the matter would be considered by the Board. Ms. Russon indicated that there might be difficulty getting ratification - although she did not elaborate nor discuss how close the elementary settlement had come to rejection. Ms. Cooke replied that if that happened, the union would have to consider its options.
The doubts expressed by Ms. Russon were consistent with the concerns that she and Mr. Stewart had expressed earlier; and against that background, it is a little difficult to see why Ms. Cooke would be so surprised when the Premier's announcement had the predicted (and perhaps intended) effect. The fact is, whatever Ms. Cooke's experience may have been, there was no guarantee that the newly-elected Board would cede its political authority and simply "rubber stamp" the recommendation of its subcommittee - any more than there was a guarantee that the union membership would ratify the settlement proposed by union officials. Nor is it surprising that when exercising the prerogative reserved to it by the terms of the Memorandum, the Board would consider all of the relevant circumstances, including the Board's financial difficulties and the impact of the Premier's recent announcement.
On February 13 the Salary Committee met to consider the OPEIU Memorandum of Agreement which had been ratified by the union on January 30. The Committee members debated whether to return to the bargaining table in view of the Premier's speech and the economic impact on the Board. Ultimately, the Salary Committee agreed, by a majority vote, to honour its undertaking and recommend ratification - although it was by no means clear that the full Board would ratify in view of the problems with the elementary settlement and the funding cuts announced in the Premier's speech.
The OPEIU settlement came before the full Board on February 20. As promised, the Salary Committee recommended ratification. In fact, Mr. Stewart spoke strongly in favour of ratification (as he had promised to do), pointing out that the OPEIU Memorandum had been signed prior to the Premier's speech, and the bargaining unit consisted of a small group of women at the lower end of the pay scale. In his submission, a failure to ratify could be construed as "beating up on the little guy" regardless of the Board's financial crisis.
Other trustees were concerned about the bleak financial picture, and those who were troubled by the ratification of the elementary teachers' settlement were even more concerned, now that their fears had been realized. It was not at all clear how the Board could cope with the anticipated $20,000,000 deficit and the trustees found themselves on the horns of an ethical dilemma. They did not want to appear to be giving preferential treatment to teachers or discriminating against their lower-paid female employees, but, by the same token, they did not consider it appropriate to extend the teachers' settlement pattern now that the financial parameters had changed. The Board was engaged in ongoing collective bargaining with other employee groups whom the trustees feared would take "the wrong message" from ratification of a 4.5% plus 3.6% settlement when the Premier was calling for restraint and limiting grant increases to 1 and 2%. The trustees too were concerned about the "pattern" - although from a very different perspective than OPEIU. Ironically, having elected to let the teachers' collective bargaining objectives dictate its own goals, OPEIU found itself in difficulty when the trustees concluded that the teachers' settlements were not affordable and should not be perpetuated. Nor was it particularly helpful from OPEIU's perspective that the teachers were unwilling to consider concessions, because that simply meant that there was less bargaining room for the other unions.
The trustees voted not to ratify the settlement. The trustees voted to refer the matter back to the Salary Committee for further negotiation.
Following the meeting of February 20, Ms. Russon called Ms. Cooke to advise her what had happened and to report that the trustees had referred the settlement back for further negotiations. Both parties seem to have contemplated the possibility of further bargaining, but neither of them took any steps to initiate further meetings. Ms. Cooke testified that the union did not foreclose such negotiations but, after consulting the membership, she concluded that any offer less than the settlement would be unacceptable and would require the union to apply for conciliation (the first step on a path that could lead to a strike). The CUPE bargaining unit was, by that time, facing similar choices and eventually did decide to go on strike. However, OPEIU did not want to do that, so it decided first to threaten, and later to launch, this unfair labour practice proceeding.
In the weeks immediately following the rejection of the OPEIU settlement, the Board continued to struggle with its budgetary problems and the anticipated effect of the Premier's announced cut-backs. The Board knew that the consequences would be significant, but it still did not know precisely what they were. According to Ms. Cunningham, the Ministry of Education's "arithmetic" does not always accord with that of the Board; moreover, the deepening economic problems in the local community seemed to warrant reclassification as a "less affluent Board". That, in turn, could mean access to remedial funding arrangements that might modify the impact of the Premier's announcement. It was a period of considerable uncertainty and anxiety.
The complaint was filed with the Board on April 7, 1992. It contains this request for relief:
The complainant seeks ... a declaration that the respondent was bound by the collective agreement as set out in the Memorandum of Agreement agreed on between the parties and dated January 16, 1992 [and] a mandatory order and direction that the respondent ratify, execute and enter into the collective agreement as set out in the Memorandum of Agreement agreed on between the parties and dated January 16, 1992.
As far as Ms. Cooke was concerned, they had a "deal" on January 16, and she was not prepared to consider anything else.
- Once this complaint was filed, there were no further negotiations. In July, the Board wrote to the union indicating its desire to return to the bargaining table. Paragraph 33 of the Board's reply reads:
The respondent states it has verbally advised the union on a number of occasions of its willingness to continue negotiations and consider proposals which may conclude a collective agreement. The respondent states that the union was formally advised by letter dated July 3, 1992 that it was prepared to continue to negotiate a renewal of the collective agreement.
However, no bargaining took place. Both parties were apparently content to await this tribunal's decision on the unfair labour practice complaint. The Board's offer to return to the bargaining table elicited no response from OPEIU, which was proceeding with this complaint and taking the position that it "already had a deal".
III
With this review of the evidence, we return to the legal issue before us: whether the Board has "failed to bargain in good faith and make every reasonable effort to make a collective agreement". In answering that question, we think it is useful to consider two separate time frames: the period preceding the Board's rejection of the proposed OPEIU settlement on February 20, 1993; and the period between February 20, 1993 and the filing of this complaint early in April.
We might begin by observing that it is not uncommon for parties to conduct their bargaining in accordance with "pattern settlements" achieved elsewhere. But the Act does not require that they do so, nor is either party automatically obliged to accede to terms negotiated by another group of employees. Notionally at least, each bargaining unit is separate, and the parties are entitled to negotiate a separate collective agreement which reflects their particular interests and bargaining power. The "pattern" is simply part of the context, which includes (but may be overridden by) the particular features of the parties' collective bargaining relationship. A strategically-placed group of employees may do quite a bit better than the perceived norm, while a group with less bargaining power may do less well.
As a practical matter, though, pattern bargaining is relatively common both between employers, and within the context of an employer's own organization, because the bargaining achievements of others shape expectations, influence goals, and, within the employer's own organization, effect what it is willing or able to pay. There may even be a tacit understanding, as there was here, that the deal struck by the "main players" would represent the outer limit for less significant groups or would substantially influence what they would obtain. In the instant case, the teachers' settlements had been an important consideration in previous years, so it is not surprising that the Board and OPEIU were both content to suspend bargaining until the teachers' pattern emerged.
There was, however, no undertaking to provide secretarial employees with salary increases identical to those granted to teachers, and that was not in fact what happened. It was recognized that OPEIU was obliged to negotiate its own settlement terms as it eventually did. The teachers' pattern was significant, but not controlling; moreover, its influence appears to be rooted in notions of "equal treatment" rather than economic considerations, an assessment of the secretaries' relative contribution to the organization, or a sober evaluation of their bargaining power. There is no functional relationship between the two groups which dictates that their salary increments should be the same, nor does the employer's "ability to pay" raise the same practical (as opposed to tactical) considerations. The fact is, the two bargaining groups are quite different - with different skills, different training, different duties, different working conditions, different work pattern (vacations, etc.), different bargaining agents, and different governing collective bargaining legislation. There is no obvious reason why the OPEIU settlement should be equal to, or limited to, that reached with the Board's teachers.
Nevertheless, the parties' negotiators reached a tentative agreement on the basis of their shared assumption that the teachers' settlement was significant. The question then becomes whether the employer was entitled to later reject that settlement when, in its opinion, the economic climate had changed.
There are quite a few OLRB cases which deal with the issue of "resiling" from positions agreed upon before, but they do not provide an unequivocal answer. Sometimes a party has been able to withdraw from its previous position, and sometimes it has not, depending upon the reasons for the purported change of heart, and whether the Board could conclude that the earlier position was a sham, or the later one a device to avoid entering into a collective agreement. A change of position occasioned by the interplay of bargaining power or changing economic circumstances will not, in itself, be unlawful. (See: The Grey Owen Sound Health Unit, [1979] OLRB Rep. Aug. 751; Wilson Automotive (Belleville) Ltd., [1980] OLRB Rep. July 1136; Canton East Fairest Township, [1988] OLRB Rep. Sept. 866; Municipality of Casimir, Jennings and Appleby, [1978] OLRB Rep. June 507; Saville Food Products Inc., [1986] OLRB Rep. Apr. 552; and Spartan of Canada Ltd., [1985] OLRB Rep. Sept. 1420.) Each case turns on its own particular facts.
In the instant case, it is important to note that the January 16 settlement expressly contemplates that it will be subject to ratification. Prima facie, the terms of that settlement mean what they say. The deal is provisional; and, OPEIU seems to have taken it for granted that its members retained a veto, and were entitled to reject the settlement if, for some reason or other, they found it wanting. It seems to be acknowledged that that is a political process in which the OPEIU membership had a free hand to disregard the recommendation of their negotiating team. There is nothing to suggest that the Board ever gave up a reciprocal right to reject, and there was no representation from its negotiating committee to this effect. Obviously, the Board, too, is a "political body" with responsibilities to its electorate and its own view of the employer's interests - especially in the wake of an election, and in light of the employer's escalating economic difficulties.
The Board is not a private sector enterprise, where the authority of the negotiating agent may be much more closely fused with that of the "principal". The relationship between the full Board and its sub-committee is different, and, quite frankly, whatever the past practice might have been, it was unwise for OPEIU to treat the full Board as a mere "rubber stamp", or a proforma process of automatic approval - especially when, as early as January 16, the Board's negotiators were worried about the shifting economic circumstances, and warned Ms. Cooke that the Premier's speech would impact upon bargaining. We do not suggest that an elected body has an entirely free hand to resile from its agreements or float with the political winds; however, it is entitled to exercise its own judgement in accordance with the negotiated terms of settlement. There was no agreement to ratify, but merely an undertaking on the part of the employer's representatives, to recommend ratification. Those parts of the settlement would be meaningless if it were not contemplated that the Board had an option to reject.
This is not a case in which there was a sudden, unexplained change of heart, nor was the Board's decision to reopen bargaining just a matter of "politics" or shifting alliances among the Board's members. The situation really was different in February from what it had been before; and that new reality was underlined by the Premier's grim message of January 21, which confirmed and heightened concerns that were already emerging.
In our opinion, the circumstances faced by the Board on February 20 had shifted sufficiently and generated sufficient economic uncertainty, to warrant reconsideration of the Board's earlier collective bargaining stance, without breaching its statutory obligation to "bargain in good faith and make every reasonable effort to make a collective agreement". There was no failure to recognize or intent to undermine the union (as there was, for example, in Wilson Automotive). Nor was the Board's decision a pretence or subterfuge. It did not seize on the Premier's speech as a device to avoid a collective agreement with OPEIU. The change in circumstances was real and compelling.
In the broader public sector, the Provincial Government funding agency is always a "ghost at the bargaining table" which influences, to a greater or lesser degree, what subordinate bodies are willing or able to pay (see for example: St. Joseph's Hospital, 76 CLLC ¶16,026). But in this case, the "ghost" had rattled its chains and begun to speak. And the message was clear: the earlier warnings were warranted, the economic situation was serious, and the Province intended to impose severe financial restraints upon itself and its dependencies. Agencies receiving transfer payments were expected to do the same; and in light of the Board's existing financial woes, we find that it was entitled to rethink its financial commitments, including those associated with collective bargaining.
We do not say that the Board was entitled to refuse to bargain. On the contrary. It was obliged to bargain with the union, inter alia, about the new economic parameters, and inform itself about those matters so it could bargain meaningfully. (See: C.I.L. [1976] OLRB Rep. May 199). But it was also entitled to reconsider its previous bargaining position, and assess whether, given the change in funding, the teachers' bargaining pattern should be extended to the rest of its employees -including those represented by OPEIU.
There was no breach of section 15 in the period to and including February 20, 1991.
The problem in the period after February 20, 1991, is that the Board did not bargain at all, and neither did the OPEIU. Were it not for OPEIU's inaction, and its decision to rely upon litigation rather than negotiation, we might well have concluded that the Board had breached its statutory duty by failing to return to the bargaining table. The Board may not have been obliged to follow the teachers' pattern, or its own earlier bargaining position, but it was required to address OPEIU's concerns, on their merits. And having rejected a settlement which its negotiators had concluded and recommended, the Board was required to explain why OPEIU's bargaining objectives could not be accommodated within the revised budget.
For the fact is, OPEIU has some good arguments to make, quite apart from the teachers' settlement or the Board's economic woes.
OPEIU represents a relatively small group of relatively lower-paid female employees who deserve the Board's consideration on that basis alone; moreover, the actual cost of the OPEIU settlement that the Board rejected - some $84,000 - is a minuscule part of its total budget (about 3 one-hundreds of 1%). In relation to the twenty million dollar deficit about which the Board was concerned in the relevant period, the proposed OPEIU settlement would represent less than one half of 1%. The financial impact on the Board's operation is negligible, and since the teachers' pattern or percentages cannot (so it says) now be the measure of comparison, its economic rationale must be based on the actual cost, of this settlement, in relation to the cost of other things upon which it spends money. Even the Premier's speech contemplates restrictions on overall expenditure, not restrictions on wages per se, and certainly not limits on the wages of lower paid workers, while continuing to spend on other items.
To put the matter another way: since the Board was concerned about the tax burden for the Hamilton taxpayer, the evidence before us is that the OPEIU settlement would cost that taxpayer about 42~ a year, and for the workers involved, would generate a wage increase of about $18.00 per year - not a princely sum, as Mr. Stewart pointed out in his evidence. If the issue is one of cost, not pattern or percentages, OPEIU can also remind the trustees (and the citizens who elected them) that, for all their talk of restraint, and concern about extending the teachers' pattern, the trustees nevertheless proceeded with their own planned salary increase of 4.3%, which is the amount they maintain cannot feasibly be given to their secretaries. OPEIU argues that it is sheer hypocrisy for politicians to urge restraint while exhibiting none when their own personal interests are at stake. And having reviewed the Board's financial statements - particularly now that the grant situation has been clarified - there appears to be much more room to bargain than might have been thought in the crisis weeks immediately after February 20.
However, the place to raise these arguments is at the bargaining table or in the public forum.
No doubt, the Board would not have been legally required to settle at 4.3%, or at any other amount; nor is this tribunal entitled to dictate what the appropriate settlement would be. In the system of collective bargaining as currently structured, the Labour Relations Board does not dictate wages, and either party is entitled to mix reason with power in pursuit of its own bargaining objectives - as the teachers' federations quite clearly did. The threatened strike or lock-out (or the ability to sustain one) are an important catalyst for compromise which cannot be ignored, and clearly were not ignored by the trustees when they reluctantly ratified the elementary settlement. (See generally Canada Trustco Mortgage Company, [1984] OLRB Rep. Oct. 1356 at para. 30-34; and Sumner Press Ltd., [1991] OLRB Rep. Oct. 1207 at paras. 5-8.) Persuasion and power are both elements of the bargaining equation which may or may not produce a result that an outsider would consider "fair".
The problem, though, is that the Board has not had the opportunity to make those choices or weigh those risks. Its offer to return to the bargaining table was rejected, and was met with the assertion, through these proceedings, that the parties already had an agreement which was legally binding and from which the Board could not deviate. Both parties were content to suspend bargaining pending the resolution of this litigation. Both parties were content to await this tribunal's decision about whether they had an agreement. And neither pressed the Labour Relations Board to proceed on a peremptory basis.
Accordingly, while the mutual duty to bargain continued past February 20, 1992, we cannot conclude that the Board breached its duty to bargain in the period between February 20, 1992 and the filing of this complaint; and we are unable to assess the quality of bargaining thereafter because none occurred. Thus, even if we were disposed to consider the parties' behaviour after the complaint was filed, we would not conclude that there has been any statutory violation. Or if there has, it is a mutual one for which no remedy would flow, other than a direction to return to the bargaining table and comply with section 15 of the Act.
For the foregoing reasons, this complaint is dismissed; however, as noted, the parties must now go back to the bargaining table and bargain in good faith as they are required to do by law.