FMG Timberjack Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers International Union, 1995 CanLII 10042

[1995] OLRB Rep. February 115

3720-93-R FMG Timberjack Inc., Applicant v. Glass, Molders, Pottery, Plastics & Allied Workers International Union, Responding Party

BEFORE: Roman Stoykewych, Vice-Chair, and Board Members W. A. Correll and H. Peacock.

APPEARANCES: Carl Peterson and others for the applicant; Joanne McMahon and others for the responding party

DECISION OF THE BOARD; February 28, 1995

1. This is a combination application in which the parties request an order pursuant to the provisions of subsection 7(5) of the Labour Relations Act.

2. In a decision dated April 18, 1994, the Board granted the employer's request for a direction combining the "parts" and "manufacturing" bargaining units at its Woodstock, Ontario facility. However, despite the parties' joint request at the hearing held that day that the Board fur­ther determine the nature of the resulting seniority list, the panel hearing the matter declined to make any further remedial direction in this respect until the parties had the opportunity to resolve that issue through the normal processes of collective bargaining.

3. It appears that notwithstanding their further efforts to effect an agreement on the seniority question, that matter remains outstanding. In correspondence directed to the Registrar, the Board was advised by the parties that they had engaged in further negotiations that resulted in the conclusion of a single collective agreement covering employees formerly belonging to both bar­gaining units, and resolving all outstanding issues between them with the exception of the seniority question and a closely related issue regarding the applicability of a job classification in the collec­tive agreement. In the same correspondence, the parties renewed their joint request that the Board exercise its discretion pursuant to section 7(5) of the Act to make directions so as to resolve those issues. Accordingly, in order to determine the nature of the relief, if any, that should issue, a fur­ther hearing was held on October 21, 1994 to hear the parties' submissions on that matter.

4. Section 7 of the Act provides as follows:

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

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

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

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

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

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

(a) would facilitate viable and stable collective bargaining;

(b) would reduce fragmentation of bargaining units; or

(c) would cause serious labour relations problems.

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

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

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

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

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

The Nature of the Dispute

5. Throughout these proceedings and during bargaining, it has been the thrust of the appli­cant employer's position that a "dovetailing" of the two seniority lists is appropriate. Under this proposal, all the employees involved in the combination of the units would have their seniority cal­culated on the basis of their date of hire with the company. The trade union, although rejecting the dovetailing procedure, nevertheless has declined to advance a single position. Instead, it merely advanced for consideration the diametrically opposed interests of the employees in the formerly separate bargaining units. In order to appreciate the nature both of the dispute and of the positions taken by the parties, it is useful to review the facts underlying the differences between them.

6. The applicant employer operates a facility in Woodstock, Ontario for the development, manufacture and distribution of machines and service parts related to the forestry industry. Until the events giving rise to this application, the employer engaged in both manufacturing and parts distribution/warehousing undertakings, employing some 365 and 14 persons, respectively. The parts unit remained distinct from the remainder of the employer's operations, and although housed in the same facility, they were physically separated by a wall. Both the employees in the manufac­turing and parts aspects of its operations were represented by the same local of the responding party trade union. However, bargaining occurred along separate lines resulting in separate, but similar, collective agreements. In early 1994 the employer engaged in a reorganization of its opera­tions that included a substantial reduction of the parts warehousing function and the organizational integration of the remaining parts function with the manufacturing processes. It is unnecessary to review the details of that reorganization. For the present purposes, the significant event in this pro­cess was the integration of the remaining parts function (now consisting of four employees) and the manufacturing operation.

7. Immediately prior to the reorganization, approximately 37 of the 365 employees in the manufacturing operations were classified as "material handlers" under the terms of the manufac­turing collective agreement, and were variously engaged in the receiving, picking and placement of parts for the purposes of manufacture. It is important to note that the material handler classifica­tion is essentially an omnibus one that, during a previous round of bargaining, was incorporated into the collective agreement by virtue of the amalgamation of several related classifications. We take it to be the parties' clear intention for that classification to encompass a wide variety of analo­gous functions. Moreover, the material handler position has been and remains a preferred assign­ment in the manufacturing unit, as is reflected by the fact that substantial seniority is required to achieve incumbency in that position.

8. The work of the parts employees prior to the reorganization shared numerous charac­teristics with the work of a number of the material handlers in the manufacturing unit, although it differed in a number of discernible respects. Thus, the work of the parts employees entailed receiv­ing, picking and placement functions, but was for the most part related to shipping. However, as a result of the reorganization, the work of the former parts employees and of a significant number of the material handlers has become essentially the same and now involves the loading and unloading of product, the movement of materials either by hand or by means of basic material handling equipment, and the counting, sorting, packing, and unpacking of parts, finished and semi-finished goods. Aside from the different destinations to which the parts are shipped, and the differing responsibilities with respect to record keeping that are involved, the employees now perform the same basic functions, for the most part working side by side. Especially when it is considered that, with a minimal process of familiarization, employees performing the parts positions and the mate­rial handler positions are functionally interchangeable, we are satisfied that any remaining distinc­tions between the two positions are insignificant for purposes of classification.

9. As noted above, at the hearing in April, 1994, the Board directed that the two units be combined, but declined to make any direction at that time with respect to the seniority issue. Both collective agreements had expired as of March 31, 1994, and in the ensuing negotiations, although the contentious seniority issues were not resolved, it was agreed that all the employees of the employer would be covered by the terms of the manufacturing facility collective agreement. Shortly thereafter, the parties concluded a new collective agreement, covering all of the employ­ees, but subject, of course, to the resolution of the seniority issues.

10. The parameters of the remaining dispute may be summarized as follows. It has been the employer's position throughout this process that the seniority lists of the two units ought to be merged on a basis that gives equal credit for service with the employer, that the employees for­merly under the "Parts" collective agreement would retain their positions, but that given the vir­tual identity of function to persons performing work under the "material handler" classification as set out in the manufacturing collective agreement, they would be classified as such under the new collective agreement.

11. By contrast, given the disparate interests of the members of the formerly separate bar­gaining units now compelled to bargain as one, the situation of the trade union was a particularly complex one. Indeed, the prospect of joint bargaining appears to have sharpened some of the long­standing hostilities between the two groups, no doubt contributing to the rather intractable posi­tions forwarded by them. The former manufacturing unit, which was by far the larger of the two units, sought that the four positions currently held by "parts" employees be declared vacancies, that the resulting vacancies be filled through the normal procedures under the collective agreement (in which seniority is an important component), and that the former parts employees were to be credited with no seniority. Given the current layoff situation, it is important to note, the effect of this proposal would be to place all of the parts employees on the lay-off list. By contrast, the for­mer Parts unit sought what is in effect a seniority enclave for their work. Under their proposal, they would retain their separate classifications from the Parts collective agreement with full senior­ity, and although they would be otherwise subject to the terms of the manufacturing collective agreement, employees from the manufacturing unit would not be permitted to "bump" into jobs in those classifications.

12. It appears that the trade union was unable to mediate a common position between the two groups and, of course, resort to democratic processes was not a viable method of protecting the interests of parts employees given the disparity in size between the units. Instead, both at bar­gaining and during these proceedings, the union merely gave voice to the widely disparate and, as counsel for the trade union frankly conceded, rather extreme positions of the respective groups of employees. It appears that the single issue upon which the employees of the two respective units were able to reach consensus was a rejection of the employer's "dovetailing" proposal. Not sur­prisingly, no agreement could be reached between the trade union and the employer when these issues were discussed at bargaining.

Should the Board Exercise its Discretion Under Subsection 7(5)?

13. The Board is conscious that the legislation granting it remedial authority under section 7(5) was not intended to replace the processes of collective bargaining with a general interest arbi­tration function. To this end, the Board has consistently refused to embark upon determinations involving the setting of terms of collective agreements until the parties have fully explored their own solutions for the transitional difficulties that might arise from the combination of bargaining units. At the least, the Board has required the parties to make reasonable efforts to resolve the outstanding disputes by way of full and rational discussion. (See, in particular, Olympia & York Developments Limited, [1994] OLRB Rep. May 583.)

14. At the same time, we are mindful that the grant of discretion set out in subsection 7(5) of the Act is expressed in extremely broad language. The Board has been empowered to amend "any" term of a collective agreement, and in addition, to make any order that it sees fit. We take this to be indicative of the Legislature's clear intention that the Board be in possession of sufficient authority to give practical effect to its combination orders, and that of necessity, this may involve the Board in adjudicating upon or otherwise determining the terms and conditions of collective agreements.

15. With this in mind, the parties' access to the exercise of the Board's remedial powers under subsection 7(5), while it must be sufficient to achieve the statutory objective, cannot be "au­tomatic". In determining whether to adjudicate upon or otherwise dispose of the matters placed before it in such circumstances, the Board must bear in mind the broader labour relations values inherent in the statute, one of the most significant of which is the freedom of parties to negotiate the terms and conditions of their collective agreements. The task for the Board in each case will be to draw an appropriate balance between these often competing imperatives.

16. In the present circumstances, it is apparent to the Board that the failure of the trade union to adopt a single position with respect to the seniority issue adversely affected the quality and the nature of the bargaining that took place with respect to that matter. Indeed, it appears that the impasse in negotiations was in large measure attributable to the trade union's forwarding of two extreme, and diametrically opposed, positions. There is no question that the situation in which the trade union found itself was both difficult and, as the responding party to this application, in many respects not of its own devising. Furthermore, it is true that parties have otherwise engaged in a meaningful process of bargaining that has resulted in a "combined" collective agreement. In turn, the seniority issue was discussed on numerous occasions of bargaining and, albeit in the "dual" form described above, positions were exchanged. Nevertheless, in light of the failure of the trade union to take a unified position, it is difficult to conclude that the parties have entirely exhausted the processes of collective bargaining with respect to the seniority issue.

17. It is by no means clear, however, that the interest in negotiated settlement of agree­ments would be advanced were the Board to direct the present parties to continue their negotia­tions. It is important to note that the request for the Board to resolve the parties' differences is a joint one and thus, it is also the employer's express preference for the matter to be determined by the Board. Given the nature of the bargaining that has taken place to date, this is not surprising. Although it hardly accrues to the trade union's credit, we are prepared to accept its assertion that it is "unable" to adopt a single position on seniority and that is unlikely to be able to do so in the future. Under such circumstances, not only are we far from confident that further bargaining would serve any constructive purpose, we are also disinclined toward directing the employer to continue to participate in such a process.

18. More generally, we are convinced that collective bargaining interests militate strongly in favour of granting an order of the sort requested. The parties have placed before us a labour rela­tions issue fundamental to their relationship that directly results from a combination direction. That issue simply must be resolved so that the collective bargaining relationship can continue. We see little that would be gained were the present matter to be allowed to run its "normal" course and the dispute to result either in a futile strike or lock-out, or in inherently divisive litigation before the Board or elsewhere. Given that the collective bargaining interests underlying the amendments include the promotion of viable and stable collective bargaining, we simply cannot take it to be the Legislature's intention that the transitional difficulties of the sort encountered by the present parties be resolved in such a manner.

19. In sum, while the Board is concerned that the issue of seniority may not have been the subject of meaningful negotiation, at the same time, we are not convinced that further bargaining with respect to the matter is likely to result in a satisfactory resolution in labour relations terms. On balance, then, we are satisfied that this would be an appropriate case for the Board to make a direction with respect to the terms of the parties' collective agreement.

What Direction Should the Board Make?

20. Upon carefully considering the matter, it is clear to us that the Board should accept the proposal advanced by the employer, in which each employee would be given full seniority credit for their service with the employer, and in which the employees formerly subject to the "parts" collective agreement would retain incumbency in their positions, but classified in the material handler classification. An important reason for our so finding relates to the failure of the trade union to adopt a unified position either during the course of bargaining, or in the subsequent proceedings before the Board. While in some circumstances such a failure may result in the Board altogether declining to exercise its remedial powers, for the reasons expressed above, we do not find that to be an appropriate response in the present case. In the present circumstances, however, the union~ s advancing of two diametrically opposed positions strongly inclines us toward placing little credence in either of those positions.

21. We are, in any event, persuaded that the dovetailing proposal of the employer repre­sents the most equitable and feasible reconciliation of the interests involved in this dispute. As this case has demonstrated, seniority constitutes a fundamental collective bargaining right for employ­ees, in which their investment of service with a particular employer can be redeemed for such criti­cal goods as job security. The parties themselves have recognized the significance of this principle in their own collective agreements: a wide range of employee rights and benefits, including, of course, job security, are regulated in whole or in part on the basis of seniority. In each case, seniority is calculated on the basis of the date of hire with the employer.

22. In light of the significance of that right, it is widely accepted in the labour relations case-law that employees' accumulated seniority ought not to be abrogated except in the most unusual circumstances. For that reason, we are persuaded that a resolution that least undermines the important labour relations expectation that seniority will be accumulated from the date of hire must be considered a starting point for discussion of any resolution of seniority disputes.

23. Furthermore, especially in the circumstances of a combination of bargaining units in which both units share a history of allocating employment rights on the basis of seniority, a proce­dure which recognizes the equality of the seniority of the respective groups is one that is most con­sistent with the overall structure of the combination provisions of the Act. There is nothing in the language of section 7 or elsewhere in the Act to suggest that the relative "status" of units to be combined by way of a Board direction is anything but one of equality for labour relations pur­poses. This suggests to us strongly that the seniority claims of the employees in the respective groups ought to be accorded correspondingly equal treatment.

24. It is clear to us that a "dovetailing" procedure, in which employees' relative seniority would be based on their length of continuous service with the present employer, is a method of merging of seniority lists most consistent with the principle of retention of seniority and the equal status of the respective groups. There are, to be sure, circumstances in which a resolution of a seniority list dispute in a manner other than dovetailing might be appropriate. (See for example, Great Atlantic & Pacific Tea Company Limited, [1986] OLRB Rep. Apr. 485). However, such cir­cumstances are not before us in the present application. Instead, the circumstances of the present case can fairly be described as typical of the combination applications handled by the Board. Both groups before us have been employed by the same employer, and have been engaged in essentially the same enterprise, in the same plant, performing related and in many respects similar work. In that respect, both their starting points and their economic prospects must be considered as essen­tially equal. Moreover, they have been represented by the same trade union, and, given the simi­larity of their collective agreements, have enjoyed the same terms and conditions of employment and have earned seniority-based benefits at substantially the same rate. In our view, the dovetail­ing proposal of the employer, in which each employee is credited with his or her full service with the employer, and in which the seniority claims of the respective groups are treated as equal, most accurately captures the equities inherent in such circumstances.

25. By contrast, the draconian result contemplated by the proposal of the manufacturing employees flows from the premise that the parts unit is to be considered as "inferior" for purposes of the combination. There is foundation neither in policy, as described above, nor in fact to sup­port such an assumption. Although it is the case that the size and function of the parts unit has been significantly reduced, it remains a viable aspect of the employer's overall operations and its process of integration into the larger unit can be characterized as one of mutual accommodation. In this respect, we do not accept the analogy of an accretion upon the sale of a bankrupt operation, suggested by the manufacturing unit. Furthermore, it is only if the inferior status of the parts unit is assumed that the positions currently held by the parts employees can be construed as vacancies subject to the displacement provisions of the collective agreement. To repeat, there is no basis to such an assumption in the present circumstances.

26. Similarly, the proposal of the former parts employees, which would create a seniority enclave effectively insulating their positions from the seniority-based claims of other employees, harmonizes neither with the policy underlying the statute nor with the provisions of the collective agreement. The Board has stated on a number of occasions that the policy rationale underlying broader-based bargaining includes the facilitation of lateral mobility amongst employees and the development of a common set of conditions of employment (National Trust, [1986] OLRB Rep. Feb. 250, Mississauga Hydro-Electric Commission, [1993] OLRB Rep. June 523). The proposal of the parts unit would do little to serve such interests, and by exempting the jobs in question from the operations of some of the most significant provisions of the collective agreement, could fairly be seen as undermining the very purpose of the combination order.

27. Moreover, the parts employees' position, if implemented, would have the effect of cre­ating a windfall for that group by placing them into what is effectively a superior position. We have already found that there no longer exists a factual basis upon which to found a distinct classifica­tion for the former parts employees in that they perform essentially the same functions as the material handlers in the manufacturing unit. Similarly, the further factual premise upon which the seniority island proposal appears to have been based, i.e., that the parts function is not as respon­sive to downturns in the economy as the manufacturing operations, is belied by the fact of the employer's reorganization. There appears to be no basis to support a claim that the parts position is an inherently more secure one, and we see no reason to exclude it from the operation of the dis­placement provisions of the collective agreement.

28. Further, it is noteworthy that the seniority island proposed by the parts unit would cre­ate at least two significant anomalies within the collective bargaining relationship as negotiated by the parties. As described above, prior to the events of the reorganization, the union and the employer created the "material handler" classification to encompass the job functions previously performed by a series of analogous classifications. We interpret this bargaining history to express the parties' intention to avoid the placement of barriers to the operation of the job security provi­sions of the collective agreement based on minute differences in job function. To endow the parts employees with a separate classification at this stage would in effect be pushing the process of col­lective negotiations backwards. Even more significantly, as a result of many years of negotiation, the displacement provisions of the collective agreement now operate on a plant-wide basis. In light of the importance that such a principle plays in the overall collective bargaining structure negoti­ated by the parties, we are most reluctant to grant the parts employees exemption from its opera­tion in the absence of any compelling reason to do so.

29. On balance, then, we are confident that the proposal forwarded by the employer is the most consonant with the purposes of the combination provisions of the Act, with the structure of the collective bargaining relationship that the parties have established in their collective agreements, and constitutes the fairest balance of interests between the various groups. Accordingly, we direct that:

30. the employees of both the former parts and manufacturing collective bargaining units be credited with seniority from the date of their hire with the employer;

31. that the positions held by the remaining employees formerly under the parts collective agreement now be classified under the "material handler" classification of the collective agreement currently in effect;

32. that the employees formerly in the parts bargaining unit retain incumbency in the positions that they currently hold subject to the normal operation of the provisions of the collective agreement.

33. The parties at the hearing indicated that they anticipated no difficulty in rendering any direction made by the Board into language appropriate to their collective agreement. Accordingly, we leave the matter of drafting to them. In the event that they encounter any difficulty in this regard, or in any other respect, the Board remains seized with respect to further remedial ques­tions.