[1994] OLRB Rep. February 186
3111-91-U; 3112-91-U Canadian Textile and Chemical Union, Applicant v. The Peel County Restaurant, Responding Party
BEFORE: M. A. Nairn, Vice-Chair, and Board Members J. A. Ronson and E. G. Theobald.
APPEARANCES: Nelson Roland and Laurell Ritchie for the applicant; Barbara G. Humphrey and Rick Vesely for the responding party.
DECISION OF M. A. NAIRN, VICE CHAIR AND BOARD MEMBER J. A. RONSON, February 14, 1994
Board File No. 3111-91-U is a complaint filed under then section 93 of the Labour Relations Act (the "Act"). Board File No. 3112-91-U is an unfair labour practice complaint alleging that the responding party (the "employer" or the "restaurant") violated sections 3, 15, 64, 66, 67, 70, and 75 of the then Act. Both files deal with events that occurred in 1991 and are subject to the provisions of the Act as they existed prior to its amendment in January, 1993.
The parties referred to the employer as "The Peel County Restaurant" although the legal or corporate entity remained unclear. The restaurant is part of a broader holding known as the Bristol Group, which includes two large hotels, and which is owned by Mr. David Dennis.
The applicant (the "union") has held bargaining rights for the employees of the restaurant since 1987. Prior to that the employees were represented by another trade union for most of the restaurant's fifteen year history. The events giving rise to these complaints concern conduct surrounding the negotiations for the third collective agreement between these parties over a period in 1991. The restaurant closed on October 25, 1991.
The union asserts that the employer bargained in bad faith and engaged in an unlawful lockout. The lockout was unlawful, it was asserted, because the employer's motive in locking out was to seek to avoid its lawful obligations under the Labour Relations Act and the Employment Standards Act (the "E.S.A."). The restaurant was closed following the implementation of a timely lockout. The union asserts that the employer has thereby been able to avoid making payments to employees in respect of notice, payments that would otherwise be required by the E.S.A., and has avoided entering into a collective agreement. The employer argues that at the time of closure, there was no agreement between the parties and that essentially, the union miscalculated the seriousness of the employer's position in negotiations, ultimately leading to the closure.
Although the hearing took some days and was spread over a lengthy period, many of the facts were not in dispute (although characterizations of those facts may be). A number of documents exchanged during the negotiations and various pieces of correspondence were placed in evidence. A considerable amount of the evidence concerning the details of the negotiations and discussions between the parties is ultimately of limited assistance in our determination and will not be referred to.
The relevant facts may be summarized as follows. In late April, 1991 the union gave notice to bargain for the renewal of the collective agreement. The existing agreement was to expire at the end of June, 1991. Bargaining commenced and the parties agreed to deal with non-monetary issues first. At that time Mr. Marc Hamber, the Food and Beverage Director for both the restaurant and the Bristol Place Hotel (part of the "Group") was the spokesperson for the employer. He acted primarily as an operations manager for the restaurant dealing with day to day issues including labour relations. Mr. Louis Reindara, the Manager of the restaurant was present for some of those early discussions.
Ms. Laurell Ritchie, the Executive Vice-President of the union, was its spokesperson. The union's negotiating committee also included representatives from the bargaining unit.
There were four meetings to discuss non-monetary issues and Exhibits 2-12 set out the progress of those negotiations between May 28 and July 29, 1991. As might be expected, certain matters were resolved and others remained outstanding. Although monetary issues had not yet been discussed, there was an indication from Mr. Hamber to the union in early September to expect demands for concessions given the financial state of the restaurant. Following the July 29th meeting, the union applied for conciliation.
The restaurant had been losing money for some time, but in 1990 and into 1991 those losses were increasing. In earlier sets of negotiations the employer had raised a need for concessions but the parties had negotiated compromises. Renovations completed in 1989 did little to attract new business. There were fewer customers in the restaurant, the restaurant began to close on Sundays, available hours had been reduced, numerous positions and classifications were eliminated, and employees (both within and outside the bargaining unit) had lost hours or had been laid-off. Other cost-containment measures had also been implemented. According to Mr. Dennis, the restaurant's losses in 1990 were (approximately) $262,000.00, and by August 1991, the year's losses had increased to over $500,000.00.
We heard much evidence regarding the various discussions between the parties as to the expression by the employer and the knowledge or appreciation of the union as to the restaurant's financial condition. There were allegations back and forth that the union had been unwilling to accept financial documentation (proffered by the employer for the purpose of ensuring that the union was aware of its difficult financial state) and the general unhelpfulness to the union of those documents as it understood they would not reflect costs specific to the restaurant (as opposed to the group of operations). The union did not wish to engage an auditor to tell it what it already knew, that is, that the restaurant was suffering. No one disputed that times were tough. The disagreement was one of degree.
Monetary issues were first raised in the negotiations on September 16, 1991. The conciliator was present. Mr. Hamber presented a handwritten set of employer proposals which included a two-year wage freeze, elimination of employer participation in health and welfare, staff meals to be charged at fifty percent, and other proposals which required certain costs to be shifted from the employer to employees, including portions of uniform and laundering costs. There were also proposals for further staffing cuts. Although the parties spent the day in discussions and caucusing, little was accomplished. The union was not willing to agree to the concessions proposed. It made no formal response to the employer's monetary proposals.
At the conclusion of that meeting Mr. Hamber reported to Mr. Vesely, the General Manager of the Park Plaza Hotel with responsibilities including strategic planning and marketing for the restaurant. Mr. Hamber was concerned that the union was not taking the employer's financial position seriously. Mr. Vesely reported to Mr. Dennis who decided to get counsel involved in
an effort to ensure that the employer's message of the need for concessions was clearly communicated to the union.
The parties "no-board report" was dated September 20, 1991. The next negotiating meeting was October 4,1991. A mediator was present for these discussions. Counsel attended with Mr. Hamber on behalf of the employer. Exhibit 15 was provided to the union at that time. It summarized the employer's response to the union's proposals and reiterated the employer's proposals set out on September 16. The mediator, Ms. Ritchie, and counsel for the employer spent the morning in discussions. The union was aware that the employer was seeking concessions in response to its understanding of its financial circumstances, although the union was not convinced that the viability of the restaurant was in jeopardy. At the end of the day, little had been accomplished. Employer counsel advised the union to expect an employer final offer at their next meeting.
The parties were in a legal strike and lockout position as of October 7, 1991. A further meeting had been scheduled for October 29 based on the parties' availability. However, that length of delay was unacceptable to Mr. Dennis and as a result, a meeting was scheduled for October 15. Prior to that meeting the employer sought to prepare a final offer. Counsel was unavailable and other counsel from her firm met with Mr. Vesely and Mr. Hamber to prepare the offer. Mr. Reindaro was also present for discussion concerning Appendix G of the collective agreement.
A final offer document was prepared and was presented to the union on October 15,
It essentially restates the elements of the employer's position of October 4. The union was advised that Appendix G, an item earlier agreed to, had been revised. There are some aspects of the document that may represent typographical errors but which affect substance, and were therefore somewhat unclear. (For example the agreement normally expired on June 30th and the offer made reference to an expiry date of June 10th). The offer contains an introduction setting out an explanation of the employer's position; the particularly relevant portions provide as follows:
As has been indicated to Union representatives at the bargaining table under present circumstances the Restaurant is not financially viable. In order that both the Union and employees are able to make informed decisions about the direction they take in collective bargaining, the following information, the Company believes, is important...
…….Based upon these results, the losses resulting from operating the business substantially exceed those which would be incurred if the property was left idle.
What follows is the collective agreement which the Company is prepared to enter into with the Union. We appreciate that the collective agreement outlined below contains certain elements which may be difficult for the Union and for its membership to accept. However, this agreement reflects what Management believes is realistic given the circumstances of the Restaurant outlined above. It is intended to enhance the possibility of the continued operation of the Restaurant. Even with acceptance of this agreement, it is anticipated that the Restaurant would continue to operate at a loss. The collective agreement would only reduce the size of the loss
That introduction also sets out the dollar losses experienced by the restaurant, invites the union to review the financial information, and outlines the measures already taken to try to reduce costs and increase revenues.
At the conclusion of that short meeting, the union had not agreed to the employer's terms. It countered with a revised wage and benefit proposal. Given time constraints those were the only issues dealt with in the meeting.
Later that evening Ms. Ritchie spoke with counsel over the phone and learned that the
union's counter proposal had been rejected and the employer confirmed its position as set out in the final offer. Ms. Ritchie raised with counsel difficulties with Appendix G and also certain problems with Appendix D as it was written. Whether or not other issues were raised is ultimately of little relevance. While there were other issues, it is clear that by the end of the day on October 15, there was no agreement on monetary issues.
On October 16, counsel who had drafted the final offer wrote to the union in an attempt to clarify the employer's position and understanding of Appendices G and D. That letter indicated that the employer was willing to consider language proposed by the union that would reflect what the employer understood to be the parties' intention, that is, the existing scheduling practice.
Also on October 16, the union held a meeting of the employees to discuss the employer's offer, including the letter. The employees took a vote and rejected the offer, instructing the union negotiating committee to seek to set up another meeting with the employer, and to try and clear up those areas of confusion in the document. Although October 29 had been considered by the parties earlier, no further negotiating meetings were scheduled at this point.
At the conclusion of the union meeting, members of the union's negotiating committee met with Mr. Hamber. He wanted to know the results of the vote. Ms. Ritchie discussed some of the union's concerns with the employer's proposals and at a point in their discussion, Mr. Vesely called and decided to attend at the restaurant. There was much debate in the evidence as to how these discussions were to be characterized. Both Mr. Hamber and Mr. Vesely denied that they were in any way engaging in negotiations; that their only concern was the outcome of the vote. The fact is, Ms. Ritchie spoke to them of the difficulty that the employees were having with the idea of concessions and she raised Appendix G and D with them. As Ms. Ritchie put it, a negotiator is not likely to give up an opportunity to try and persuade the other party to move. Although she knew employer counsel was now its spokesperson, she had been dealing with Mr. Hamber and was not unwilling to engage Mr. Vesely in the discussions.
Both Mr. Hamber and Mr. Vesely testified that they were not really paying attention or listening too carefully to Ms. Ritchie's comments. Yet Mr. Hamber did ask her if she thought they were eighty percent of the way there, and Mr. Vesely did indicate he would get back to Ms. Ritchie. Ms. Ritchie asserts that this latter comment was in connection with setting up another meeting. Mr. Vesely disagrees, explaining that he did not know where things would go from there and that he would advise her. The union asserted that Mr. Hamber and Mr. Vesely's behaviour evidenced a willingness on the part of the employer to continue negotiating, and that that reflected on the motive of the employer in its decision to close. We only note at this stage that it is not illegal for a party to indicate that it is willing to keep the lines of communication open. It is required to do so. Whether that results in a change in its position remains to be seen in every case.
Mr. Vesely was unable to reach either counsel or Mr. Dennis that evening. In the morning he spoke with Mr. Dennis who advised him to implement the terms of the final offer. Mr. Vesely prepared and forwarded a letter to the union advising it that the terms of the offer would be implemented effective the following Monday, October 22, 1991.
Following the parties' discussions on October 16 and on learning of the employer's move, the union held a meeting and Ms. Ritchie forwarded a letter dated October 21 to Mr. Vesely. That letter set out the union's understanding of the effects of implementing the employer's proposal. Following some comments on those effects, the letter then sets out the union's position on matters in dispute. It is a counter-proposal which includes, among other things, a proposed reduction in the existing employer health and welfare contributions, certain continued provision of meals, Appendix G as previously agreed or an agreement to re-open discussion of if on certain
terms, and a wage freeze provided the employer be prepared to consider, on a good faith basis, an increase in the second year of the contract. The letter does indicate movement by the union. It does not reflect acceptance of the employer's position or agreement between the parties.
- In response to that letter, the union received a letter from counsel dated October 24, 1991. Of relevance is that it reaffirms the employer's attempt to communicate the seriousness of its economic position through the tabling of the final offer, the union's continuing rejection of that offer, and advises the union that a lockout will commence effective October 25, 1991 at 4:00 p.m.
That letter was received by the union by fax at 5:10 p.m. on October 24, 1991.
In fact the lockout commenced at 11:00 p.m. on October 24, 1991. Mr. Vesely and Mr. Dennis had initially discussed implementing the lockout on October 25 during the day. On reflection they decided that there would be less disruption to the restaurant and customers if the lockout started at the end of a business day. October 24 was preferred as it was a Thursday. By the end of the day on Friday, supplies would have been delivered and would be wasted, and staff would have been advised of, and expecting the weekend scheduling.
Employees at the restaurant were notified of the lockout during the evening of October 24 by Mr. Hamber. A notice had been prepared by Mr. Vesely. That notice had also been sent by Mr. Vesely to counsel, it appears, at 2:53 p.m. on October 24. There was no explanation why counsel's letter gave different advice to the union.
Mr. Hamber was approached by members of the union's executive during the evening of October 24. They were surprised by the lockout. Mr. Hamber advised them that Mr. Dennis was pushing to get a collective agreement signed. The local President wanted to know if the lockout could be postponed until Ms. Ritchie, who was then in Vancouver at a conference, returned, and indicated that the union needed time to consult with the bargaining unit. Another member told Mr. Hamber that they wished to meet to work out the discrepancies in the final offer. These individuals gave Mr. Hamber the impression that the union would sign the collective agreement if they were able to meet and the employer clarified certain matters. The lockout took effect 11:00 p.m. October 24, 1991.
Mr. Vesely and Mr. Dennis met as usual on the morning of October 25, 1991. Mr. Vesely advised Mr. Dennis that the staff wanted to continue to negotiate and were hoping to set up a meeting. This information seems to have tipped the balance. After some discussion Mr. Dennis concluded that he would close the business and he instructed Mr. Vesely to contact counsel and implement whatever steps were necessary to effect that decision.
Ms. Ritchie was notified of the lockout early on October 25. Counsel's letter was read to her and she spoke to a member of the union committee. On calling Mr. Hamber early that morning she knew that the employees had been advised of the earlier time for the lockout. Upon attempting to assess the extent of their dispute, Mr. Hamber directed Ms. Ritchie to Mr. Vesely. It was not clear whether Mr. Hamber was aware of the closure decision at this point. Ms. Ritchie spoke with Mr. Vesely from Vancouver that day concerning the lockout. He did not advise her of the closure. She was advised of the closure later that day upon trying to set up a meeting with the mediator, who had been advised of the closure by counsel.
On Ms. Ritchie's immediate return, the bargaining unit met and agreed to the final offer document and the employer was so advised by letter dated October 27. That letter also asks the employer to advise the union as to whether or not that decision altered the employer's notice of closure. Mr. Dennis responded to that question in the negative, stating that the decision was final and was a result of "the continuing uncertainty (arising out of the unsuccessful attempts to negotiate a Collective Agreement compatible with the needs of the business) that persisted throughout September and October". On November 12, 1991 the union forwarded to the employer the October 15 final offer document and the letter of October 16 signed by the union's negotiating committee. Mr. Vesely responded that there was no one with the capacity to sign any proposed agreement because the restaurant had ceased to exist.
Appendix G was a subject of considerable evidence and debate. At times the evidence amounted to no more than a continuation of the parties' efforts at trying to convince the other of the correctness of the asserting party's position. It is a scheduling provision. We accept that in a restaurant operation, where part of the compensation package relies on gratuities, scheduling is an issue of considerable concern to employees. The parties had had difficulties with the existing language and had spent some effort in their earlier negotiations to effect language agreeable to both. Mr. Hamber agreed and Exhibit 15 confirms, that the parties had agreed to language for Appendix G as was asserted by the union.
However, in preparing the final offer, counsel was of the view that it did not reflect what the parties' intended, and was concerned about its possible ambiguity in the event of a dispute. Suffice to say that at that stage of the negotiations, the employer would have probably been well-advised to leave it alone. Mr. Hamber and Mr. Reindaro were present when negotiating the language. They were present to advise counsel. The Appendix was re-drafted and in evidence, counsel involved did agree that elements of the clause were different. While counsel or the employer may be of the view that the changes were inconsequential, the union did not agree. One obvious effect of including a newly drafted Appendix G in the final offer document was to jeopardize the union's view of the sincerity with which the employer was negotiating.
However, there is no basis for a conclusion that by rewriting Appendix G the employer was seeking to avoid its bargaining obligations. At worst it may represent a realization by the employer that it had agreed to something that it had not intended. Alternatively, it may be a case of counsel thrown in at the last minute, probably without full information as to the bargaining or the parties' history, and attempting to forestall future problems, while inadvertently creating current ones. What is clear from the evidence is that Ms. Ritchie and counsel each understood the parties' intention to be something different. While not enhancing bargaining, in the circumstances we are not persuaded that it was unlawful for one of the parties to revisit an earlier agreed to provision, prior to a collective agreement being reached.
The union argued that the employer's conduct was illegal because the lockout was being used to damage and punish the union and the members of the bargaining unit; that the lockout was being used for a purpose not contemplated by the Act. The lockout was unlawful, it asserted, because it was done with a view to compel or induce employees or the union from exercising their rights under the Act. The union relies on Burlington Northern Air Freight (Canada) Ltd., [19861 O.L.R.B. Rep. Dec. 1628 and the cases cited at paragraphs 117-119 therein.
The union asks, in what sense can the employer be said to be carrying out its legal right to lockout when the restaurant closed before the union had a chance to respond to the lockout? It argues that the purpose of the lockout could not therefore be to bring finality to the bargaining because of the practical impossibility of the union being able to respond. The lockout must have been intended for some other purpose - to punish employees by depriving them of benefits under the E.S.A. and also depriving them of a collective agreement that could have continued pursuant to successorship provisions.
The employer argued that it had attempted to make it clear to the union that the business required concessions in order to remain viable and that the union, failing to appreciate the seriousness of the employer's position, attempted to negotiate for more. The union could not expect the final offer to continue to be available, particularly after the closure, and it was only after the closure that the union purported to agree to the terms of the employer's offer.
The employer acknowledged that its position in bargaining was hard, but necessary in the context of the losses being suffered. It relies on Sumner Press, [1991] O.L.R.B. Rep. Oct. 1207 for the proposition that it is not the Board's role to protect either party from a miscalculation in the bargaining.
We turn first to the allegation that the employer bargained in bad faith. There was little dispute concerning the generally applicable principles and we refer to the summary of the law set out in Sumner Press, supra, at paragraphs 4-8 inclusive, and the discussion of "surface" versus "hard" bargaining in Aristokraft Vinyl Inc., infra, at paragraphs 29-35 inclusive. There is nothing in the employer's conduct before the closure of the restaurant to suggest that it was not willing to enter into a collective agreement, albeit on terms that it sought. It provided the union with the opportunity to review its financial position. A reasonable business justification existed for the employer's position in the face of mounting and considerable losses. Those portions of the final offer document referred to in paragraph 15 can only reasonably be interpreted as advising the union that the restaurant was in serious risk of closing. The changes to Appendix G, while complicating the negotiations, do not evidence an intention to avoid the employer's responsibilities, and counsel invited a response from the union.
The union asserted that the employer had failed in its bargaining responsibilities by its lack of clarity in the final offer document, the changes to Appendix G, and because there were a number of individuals purporting to speak on behalf of the employer, resulting in confusion if not advertent attempts to derail bargaining.
The evidence does not support that conclusion. We have already discussed the difficulties arising from Appendix G. Having regard to Mr. Hamber's and Mr. Vesely's conduct on October 16, we are satisfied that the employer was prepared to entertain the union's concerns provided it was in the context of the union indicating its willingness to accept the employer's monetary position. Throughout this period, had the union had real concerns about who was speaking for the employer it knew that counsel remained spokesperson.
Throughout this period the parties were in a legal strike or lockout position and even assuming that the employer understood that the union was unlikely to engage in a strike, that would not alleviate all its uncertainty concerning the negotiations. Mr. Dennis testified that throughout this period he was anxious that the negotiations be concluded as quickly as possible in order to provide some certainty in helping to stem the losses that the restaurant was experiencing. Bringing counsel in to present a final offer at a point where there had been one meeting to discuss monetary issues, implementing the terms of that offer following its rejection, and deciding to lockout the employees in the face of a further counter-proposal from the union are actions consistent with a conclusion that the employer was pressing for the conclusion of negotiations that had been underway for some six months, in the face of continuing losses.
We have little doubt that the appearance of the revised Appendix G created a setback in the negotiations. We also have little doubt that the unwillingness of the union to accept the employer's monetary proposals generated frustration in the employer's camp. However, those are the ebbs and flows of negotiations. It may be that Mr. Dennis did not fully appreciate the union's concerns regarding the final offer document. He was more focused on getting agreement on the
monetary concessions. At no time prior to the closure did the union indicate that it was willing to accept those terms. He had had them implemented to indicate his seriousness and had instructed that the employees be locked out. In response to the lockout, he was informed that the employees wanted to continue to negotiate. Mr. Dennis may be someone who hears only what he wants to hear. That may well have interfered with the quality or completeness of information that Mr. Dennis was receiving about the state of the negotiations and the various responsibilities for that progress or lack thereof. We are not persuaded however that that amounts to the employer having bargained in bad faith. It is inappropriate to speculate in hindsight as to what might have happened if one or other of the parties had responded differently through the course of the negotiations.
In order for the union to successfully assert that the employer has bargained in bad faith by refusing to execute a collective agreement on the terms set out in its offer of October 15 and counsel's letter of October 16, one must conclude that the offer remained on the table, available for the union's acceptance. The union argued that at the first opportunity following notice of the lockout, the union agreed to the terms of the offer. We note that the union also had notice of the closure at the point at which it purported to accept the employer's offer.
We are not persuaded that we ought to draw the conclusion that the employer is required to execute the terms of its earlier offer. The union rejected the offer by its vote on October 16. Following the implementation of its terms, the union made a counter-proposal, and arguably rejected the offer again. The employer then decided to lockout the employees. Even if the offer could be said to have remained in the face of those intervening events (noting an acknowledgement by Mr. Dennis in evidence that had the union agreed to those terms prior to the closure, there would likely be a collective agreement), after the closure, the union has little if any reason to assume that the offer remains. After a closure (and there was no reason to doubt the finality of this decision) there is little point in an employer bargaining terms and conditions applicable to active employment in the abstract, even ones that it had sought prior to the closure. There was every reason to conclude that the offer had been extinguished. In this regard we accept the reasoning in The Toronto Jewellery Manufacturer's Association, [1979] O.L.R.B. Rep. July 719, (at paragraphs 5-12) and the decision in Pine Ridge District Health Unit, cited therein. We note too that this case is quite distinguishable from Saville Food Products, Inc., [1986] OLRB Rep. April 552, relied on by the union.
We find therefore that the employer's conduct did not constitute a failure to meet its obligations under section 15 of the Act to bargain in good faith and make every reasonable effort to effect a collective agreement.
Does the decision to lockout and the decision to close on the heels of that lockout, suggest it was motivated by an unlawful purpose? In Aristokraft Vinyl Inc., [1985] O.L.R.B. Rep. June 799 the Board stated:
We are satisfied that if a lock-out is imposed by an employer "with a view to compel or induce his employees to refrain from exercising any rights ... under this Act", it is illegal even if it is otherwise timely. (See Irving Oil Ltd., 80 CLLC 14,054 (N.B.C.A.).) The Board stated in Westroc Industries Limited, [1981] OLRB Rep. March 381 at 392:
..... a lock-out aimed at dissuading employees from exercising rights under the Act is never lawful and the concept of timeliness simply has no application to such activity."
[emphasis added]
That aim need not be the sole, principal, or predominant one of the lock-out. It is sufficient to establish that a lock-out is unlawful, regardless of timeliness, if unlawful intent forms even a part of the motivation for the lock-out. (See Westinghouse Canada Ltd., [1980] OLRB Rep. April 577 at 600-605, and in particular paragraphs 54-56). It is clear, therefore, that a determination of whether the lock-out was lawful in this case must rest on our assessment of the company's motive for imposing the lock-out. That assessment, as we said earlier, cannot be carried out in isolation. Regard must be had to all of the conduct of both parties, both before and during the lock-out to ascertain whether the company had an illegal purpose in doing what it did.
The union relies on the errors and lack of clarity in the offer of October 15 to argue that it was never intended as a final offer. It refers to the ongoing discussions between the parties, the confusion surrounding the two different times provided for the lockout to commence, and the fact that there was no practical opportunity for the union to respond to the lockout prior to the decision to close, to argue that the employer never intended the lockout for the purpose of inducing the union to agree to the employer's terms. It argued that the employer locked out the employees only in order to take advantage of the change in its obligations under the E.S.A. and to avoid being bound to a collective agreement.
In those cases where the Board has concluded that a closure represented a violation of the Act, the Board has conducted its usual assessment of whether or not legitimate business reasons existed for the closure and whether any other conduct might reflect on the employer's motive. So, in Academy of Medicine, [1977] OLRB Rep. Dec. 783, a lengthy and extensive history of anti-union conduct on the part of the employer was seen to reflect on the employer's motive in the ultimate closure of its operation and the Board concluded in those circumstances that there had been a violation of the Act. That case recognized that the Act "does not permit an employer to insulate itself from the prohibitions against anti-union conduct by simply discontinuing operations" (paragraph 37).
At paragraph 39 of that same decision, the Board stated that employees "do not run the risk that their employer will discontinue operations simply because it is unwilling to operate with a union". The evidence in this case does not lead to a conclusion that this employer was unwilling to operate with a union. It had so operated for approximately thirteen years. Its historical relationship with this union was described by both sides as "civilized".
Can it be said that the employer implemented this lockout in an attempt to dissuade employees from exercising rights under the Act or to avoid signing a collective agreement? The facts here are readily distinguishable from those, for example, in Academy of Medicine, supra, Humpty Dumpty Foods Limited, [1977] OLRB Rep. July 401; Westinghouse Canada Limited, [1980] OLRB Rep. April 577, or Burlington Northern Air Freight, supra. This employer was not unwilling to enter into a collective agreement. It did want an agreement on its terms and those terms had been rejected by the union more than once. The employer was facing mounting financial losses. It had bargained in good faith. We note that the cases that the union relied on in support of its argument that this lockout was unlawful involve conduct and findings that the employer had violated section 15 of the Act as well, and reflected conduct on the part of the employer throughout the bargaining process from which the Board was able to draw inferences with respect to the employer's anti-union motive.
While there was inaccurate communication to the union concerning the time of the commencement of the lockout, the local representatives and the employees learned of the correct time on October 24 prior to its commencement. The only real factual matter that the union can point to in support of its position is the speed with which the decision to close follows upon the implementation of the lockout.
If the closure decision had come, for example, forty-eight or seventy-two hours after the lockout commenced, could the union argue that the lockout was unlawful? Even on its own argument, the union would have had the time to respond to the lockout and had the opportunity to accept the employer's offer. One can only speculate of course as to whether or not the union would have been prepared to accept the employer's offer as a result of the lockout being implemented.
It cannot be said that Mr. Hamber, in speaking with employees on October 24, gave any indication that the employer was prepared to postpone any further action until Ms. Ritchie returned and the parties had met again. We heard no evidence from the local representatives and Mr. Hamber's evidence did not support such a conclusion.
What did occur between the implementation of the lockout and the following morning was that information was received by Mr. Dennis to the effect that the union wished to continue to meet with the employer for purposes of negotiations. Mr. Dennis responded to that information. He was fed up. The costs of maintaining the restaurant (something that everyone seemed to acknowledge had been a kind of "pet project" to Mr. Dennis) had outstripped the benefits. The restaurant was losing over $50,000.00 dollars a month. The union had continued to reject the employer's monetary proposals. Even assuming that the parties were closer to reaching an agreement than Mr. Dennis understood, we are unable to conclude that the employer's conduct was motivated by an anti-union animus or to avoid a collective agreement or to unlawfully dissuade employees from exercising their rights under the Labour Relations Act so as to conclude that the lockout was unlawful.
We are also not persuaded that the fact of closing a business during a lockout, which may result in different consequences under other legislation regarding the employer's obligations on closure, makes the decision to lockout improper under the Labour Relations Act, even assuming one is aware of those consequences at the time of the decision. We note that the parties did not put in evidence or argue the specifics of any provisions of the E.S.A. or its effects on employees' entitlement under that Act following the closure. The rationale for that legislation to disentitle employees to payments in respect of notice in circumstances such as exist in this case is not readily apparent. However, the union must be taken to be aware of those potential risks and decide whether to let the negotiations progress to a stage where that becomes a possible outcome.
For the above reasons, these complaints are dismissed.
DECISION OF BOARD MEMBER E. G. THEOBALD; February 14, 1994
I agree with the conclusions of fact and law by my colleagues. However, I feel compelled to add that not only is any rationale for disentitling employees to payments in respect of notice under the Employment Standards Act not apparent in these circumstances, it is an inappropriate invitation to employers to act so as to effect this disentitlement - in circumstances where the closure occurs because of financial difficulties that are not attributable to the employees.