[1995] OLRB Rep. May 649
1902-94-U United Steelworkers of America, Applicant v. Nelson Quarry Company, Responding Party
BEFORE: S. Liang, Vice-Chair.
DECISION OF THE BOARD; May 26, 1995
This is an application made pursuant to the provisions of section 91 of the Labour Relations Act, alleging violations of the provisions of section 73.1 ("the replacement worker provisions"). In a previous decision, the Board found that Nelson Quarry Company has violated the replacement worker provisions of the Act in engaging independent contractors to perform the work of an employee in the bargaining unit, contrary to sections 73.1(6)4 and 5.
The Board found in its previous decision that prior to the strike/lockout, one member of the bargaining unit (Wilfred Bester) performed deliveries of aggregate for the company using a tractor trailer. To the extent that the employer has continued to use independent brokers to perform this same work during the course of this strike/lockout, it has violated section 73.1. The Board rejected the company's argument that the purported resignation of Mr. Bester after the start of the strike/lockout changed the nature of the bargaining unit and the scope of bargaining unit work and rejected the argument that upon his resignation, the company was entitled to have replacement workers perform the work which Mr. Bester had performed.
However, the Board also found that it cannot establish with any certainty that any particular load of material would have been delivered by Mr. Bester but for the strike. Further, the Board found that over and above the work which would have been performed by a member of the bargaining unit, the company has engaged and is entitled to continue to engage independent brokers during the strike/lockout to perform tractor trailer deliveries.
In its previous decision, the Board rejected the request by the union for a blanket cease and desist direction against all deliveries, as a result of the company's violations of the Act. The Board requested further submissions from the parties with respect to whether it was possible to issue a cease and desist direction that was confined to the scope of the violation which it has found, and if so, what would be the terms of such a direction. The Board has before it the submissions of the union and of the employer, both dated January 16, 1995.
It appears that both the union's and the company's submissions with respect to a cease and desist direction recognize that it is not possible or at least practical to frame a direction which would prevent the company from performing prohibited replacement work, while permitting it to continue to perform other than prohibited replacement work. Given this, I now turn to a consideration of the union's position that if the Board does not or cannot prohibit the company from continuing to violate the Act, it ought to be awarded damages for this continuing violation.
In Radio Shack, [1979] OLRB Rep. Dec. 1220, the Board extensively discussed the purposes and principles underlying its remedial powers under section 91 [then 79] of the Act. The Board identified the unique challenges and considerations which face a labour relations tribunal in devising effective and fair remedies:
It is trite to say that all rights acquire substance only insofar as they are backed by effective remedies. Labour law presents no exception to this proposition. An administrative tribunal with a substantial volume of litigation before it faces a great temptation to develop "boiler plate" remedies which are easy to apply and administer in all cases. This temptation must be resisted if effective remedies are to buttress important statutory rights. An important strength of administrative tribunals is their sensitivity to the real forces at play beneath the legal issues brought before them and there is no greater challenge to the application of this expertise than in the area of developing remedies. To be effective, remedies should be equitable, they should take account of the economics and psychology permeating the situation at issue; and they should attempt to take into account the reasons for the statutory violation. Remedies should also be sensitive to the interest of innocent bystanders. This means then that the Board should try and tailor remedies to each particular case. It is equally true, however, that the Ontario Labour Relations Board cannot police the entire labour relations arena. As important as it is for this Board to safeguard the substantive rights it administers, ultimately, compliance with the Act depends on the vast majority of unions and employers according at least minimal respect to the legislation, the Board and the Board's directives. With its limited resources and the time that must be taken to adjudicate fairly issues of controversy, the Board must rely on the co-operation of employers and trade unions in the day to day administration of the Act. For this reason, the Board cannot get too far ahead of the expectations of the parties it regulates. It must be concerned that its decisions are perceived, in the main, as reasonable and fair to attract as much self compliance as possible. It has therefore been said that the ideal Board order must be both an instrument of education and of regulation.
- The Board set out three basic principles which it saw as underpinning section 91:
a) a remedy is not a penalty
b) monetary relief is compensatory
c) a collective agreement cannot be imposed.
The last principle set out above has, of course, been superseded by recent amendments to the Act which explicitly provide the Board with the power to settle the terms of a collective agreement.
The Board's discussion of the above principles was in the context of its finding that the employer had failed to bargain in good faith, contrary to section 15 [then 14] of the Act. The Board viewed the loss to the union and to the employees it represented in that case as amounting to a "loss of an opportunity" to negotiate a collective agreement or the loss of an opportunity to achieve an agreement at an earlier point in time. Monetary relief is warranted in such a case; the Board stated that "[un labour relations terms these employee losses are real; the potential employer gains unjust; and both are accomplished by the violation of a fundamental duty imposed
by the legislation - bargaining unit recognition. The failure to consider any monetary relief seems to encourage these consequences." [para. 100]
- The Board went on to consider the argument that the quantification of such a loss of opportunity is too uncertain to form the basis of an award of damages:
It can, of course, be argued that damages for the loss of such an opportunity are too speculative to estimate and if arbitrarily set would be punitive in nature - a result that would appear to contravene the first tenet discussed. The argument, however, is inconsistent with the long accepted principle that one whose wrongful act precludes the exact determination of damage should not be able to evade his duty to compensate for that damage because of an uncertainty caused by his own wrongdoing. See Mayne and McGreger on Damages 12th ed., 1961, para. 174. In private litigation before our courts, a party is not burdened with an unattainable standard of accuracy in the assessment of damages. Business losses in commercial law suits and the compensation awarded in personal injury cases to persons who may never have been employed are important examples. See for example: Withers v. General Theatre Corporation, [1933] 2 KB. 536; Roach v. Yates, [1938] 1 K.B. 256 (C.A.). Even more directly in point are those cases that explicitly grapple with the wrongful loss of an economic opportunity.
In Consolidated Bathurst Packaging Ltd., [1984] OLRB Rep. Mar. 422 the Board faced squarely the problem of quantifying a union's loss arising out of the employer's violation of the duty to bargain in good faith. In this case, the violation consisted of the failure by the employer to disclose an impending plant closure, and the loss consisted of a loss of opportunity to negotiate on the mater of the plant closing. In arriving at a sum of damages to compensate for this loss the Board reconstructed what would likely have occurred had the union been given the opportunity to negotiate provisions with respect to the closing of the plant, taking into account the likely positions on either side and the factors which might have had an impact on the result.
In the above cases and, indeed, and in most of the Board's cases finding an unfair labour practice, the Board can assume that the activity which it has found to be unlawful will cease from the date of its decision. The discussion of damages, therefore, occurs in the context of losses accruing from unlawful conduct preceding the date of the Board's decision. The circumstances of the present case are quite unusual because I have found, and the parties are in agreement, that no cease and desist direction is practical in the circumstances. In addition to potential losses for the past unlawful conduct, therefore, there is also the possibility that the unlawful conduct will continue into the future.
On the facts of this case, and given the findings of the Board, the company now has a choice: it can discontinue its operations during the course of the strike/lockout as a means of avoiding further violations of the Act, or it can continue to operate as it has until now. If the company decides to take the latter direction, it will have chosen to embark on a course of action which continues its breaches of the provisions of section 73.1.
In anticipation of this continuing breach, and as a consequence of the recognition that an appropriate cease and desist direction cannot be made, the union has requested the Board, in essence, to award it damages for the continuing violations of the Act which will occur if the company continues to operate during this strike/lockout.
The Board sees no reason why it cannot award compensation for continuing breaches, where a party can show that its losses are reasonably certain. Although the principles set out in Radio Shack were with reference to compensation for losses which end as of the date of the Board's decision, there is no reason why they cannot also be applied to continuing losses. At common law, courts of equity have recognized that where an injunction to prevent future wrongs is refused, there is power to give an equivalent in damages for what is lost by the refusal of the injunction, including damages for future injury: see I.C.F Spry, The Principles of Equitable Remedies, 4th ed., 1990 at pp. 620-21.
What is the nature of the union's continuing injury? There is no doubt that if the company continues to operate during this strike/lockout, the ensuing continued violation of the replacement worker provisions of the Act will result in a loss to the union. As the Board has stated elsewhere, among the purposes of section 73.1 is the enhancement of a union's ability to wage a successful strike or withstand a lockout. The provisions of section 73.1 are, therefore, an element in the degree to which economic sanctions can be effective. To the extent that a company uses prohibited replacement workers and gains an advantage in the economic warfare of a strike/lockout, so correspondingly does the union suffer a loss. The union's loss consists of being deprived of the ability to rely on these provisions in attempting to extract a bargain from the employer.
As noted in Radio Shack, supra, courts have recognized the principle that damages may be assessed for loss of an opportunity to bargain (see R.J. Sharpe and S.M. Waddams, "Damages for Lost opportunity to Bargain", 2 Ox. J.L.S. 290 (1982)). For instance, plaintiffs have been compensated for the deprivation of a right to negotiate reasonable license fees, where a defendant has unilaterally and irreversibly committed a tortious act infringing on the plaintiffs economic or property rights. In S.M. Waddams, The Law of Damages (2nd ed., 1994), the learned author discusses a series of mining cases dealing with unauthorized use by the defendant of passages under the plaintiffs land for the transport of coal. The plaintiff was awarded a reasonable payment for the use of the passages (called "way-leave"). This award was made even though courts have also recognized that trespass to land is not a tort that can be waived (p. 9-2). This principle has been followed in subsequent cases before both English and Canadian courts. In The Law of Damages, the decision of Bracewell v. Appleby, [1975] Ch.408 is referred to, in which the defendant built a house accessible only over the plaintiffs land. The author notes that an injunction restraining the trespass was refused because of the plaintiffs undue delay, but damages were awarded based on a "proper and fair price which would be payable for the acquisition of the right of way"(p. 9-3).
It should be stressed that the Board's application of this theory of damages to violations of section 73.1 of the Act must not be taken as approval of the notion that parties can negotiate license fees, in effect, for the ability to violate the Act. In the present circumstances, this theory is helpful insofar as it is a means to quantify the loss to the union resulting from the wrongful acts of the company. Further, it is possible that in another case under section 73.1, the Board may find another way of measuring a union's loss. The facts of this case, as both parties recognize, are fairly unique. The mix of unlawful and lawful activity is such that the Board cannot fashion a cease and desist remedy which restrains only the unlawful activity. It is in that context that I refer to the common-law theories above as guidance for my decision here.
The Board disagrees with the company's submission that there is no loss to the union arising out of the company's continuing use of tractor trailers to deliver materials, since by the time this application was filed, the sole person in the bargaining unit driving a tractor trailer had (purportedly) resigned. I have already indicated in my prior decision that the apparent resignation of Mr. Bester after the commencement of this strike/lockout has no bearing on my determinations. As I stated there, the definition of the work of employees in the bargaining unit for the purposes of section 73.1 should be made with reference to pre-strike conditions. Otherwise, the Board would be relying on the uncertain and shifting foundation of strike/lockout events on which to base its assessments, second-guessing the motives of the various participants. Would Mr. Bester have resigned but for the strike/lockout? Might the company have actually increased its complement of dependent contractors driving tractor trailers but for the strike/lockout?
I accept, therefore, that as long as this company continues to use replacement workers to perform work which, prior to the strike/lockout, was performed by an employee in the bargaining unit, this union and its members suffers a loss. What is the measure of this loss? In my view, it is similar to the kind of "loss of opportunity" to negotiate a collective agreement or to achieve a collective agreement at an earlier point in time, such as described in Radio Shack, supra. This is so in the sense that the appropriation by the company of one of the means by which the union can enhance its bargaining power during this strike/lockout makes it less likely that a collective agreement will be achieved, or will be achieved as quickly as otherwise. However, the loss in the present circumstances may be more amenable to quantification than the loss of opportunity resulting from a failure to bargain in good faith.
This is because it is easier to discern what it is the union has been deprived of. By illegally using prohibited replacement workers, the company deprives the union of its ability to rely on these provisions to its advantage during the collective bargaining process. The company, in a sense, has "appropriated" the benefit of these provisions from the union. In my view, the most accurate means of assessing the loss to the union as a result of the continuing violation of the Act is to measure the delivery charges that would have been payable under the collective agreement, for that portion of the deliveries made by independent brokers which would have been attributable to Wilfred Bester. To the extent that the union has lost the benefit of being able to prevent the company from having this portion of the bargaining unit's work from being done, the value of this work, as measured by the rate payable under the collective agreement, is a reasonable measure of the union's loss.
It might be argued that the measure of this benefit does not equal the amount which the company pays to have material delivered, since the company passes on this charge to its customers. Yet this would also be true of wage costs, or of any other costs incurred by an enterprise in selling a product. Presumably, these costs are incurred because the enterprise calculates that it will gain at least an equal benefit ultimately. It might also be argued that even if the union has lost the ability to withhold this benefit during the bargaining process, its loss does not equal the value of the delivery charges because it could not ever extract from the company the full value of these charges during bargaining. The company would not "pay" the union the full amount of delivery charges it will then incur in duplicate when it pays an independent broker to perform the work.
I am satisfied that the notional bargain that the union may have been able to extract from the company based on the provisions of section 73.1 may reasonably be less or more than the amount paid out by the company for deliveries. The fact, for instance, that by using replacement workers the company is essentially able to run its business without regard for the strike/lockout and without having to re-arrange its business in any significant way suggests that there is an "administrative convenience" factor for which the company may well have been prepared to pay. Any attempt to quantify the value of this loss of benefit, therefore, will pose some difficulties. As the Board indicated in Radio Shack, parties should not be burdened with an unattainable standard of accuracy in the assessment of damages, particularly where uncertainty in the quantification of damages is caused by the nature of the wrongdoing itself. I find that the charges paid by the company for the deliveries which would have been attributable to Mr. Bester but for the strike is a fair estimate of the damages, taking into account both the possibility that the losses may be either greater or smaller if it were possible to measure them with exactitude.
Damages assessed on this basis also reflect the reality that the union's diminished bargaining power will also likely prolong this economic conflict. To the extent that the union may reasonably have expected a resolution of this strike/lockout which would have returned its members to work, it is also appropriate to compensate the union for this loss.
In this respect, I accept part, though not all of the union's alternative position on remedial relief in lieu of a cease and desist direction. I have accepted its position that the Board assess damages on the basis of delivery charges, although I have applied a different theoretical basis. The union submits that the delivery charges which would have been attributable to Mr. Bester are an appropriate measure of damages to the union since "its member would otherwise have received these payments". I have some doubt as to whether this is a valid ground for these damages since the very provisions of section 73.1 prohibit bargaining unit members from performing replacement work during a strike. On the union's theory, it would be compensated, in other words, for the losses which its members suffer as a result of the lawful lockout/strike itself. In my view, it is more consistent with the purposes of these provisions to assess damages based on the notion of the prohibition against replacement workers as an element in a union's capacity to apply or withstand economic sanctions and extract a bargain in return.
I also reject the union's position that the Board ought to in addition order the company to pay to the union the amount of any profits which it makes on the sale and delivery of materials delivered in violation of section 73.1. I find that the payment of delivery costs is sufficient to compensate the union for its losses, and to order damages based on profits in addition would duplicate to an extent the award of compensation. It may be argued that profits and not delivery costs, are an alternative measure of compensation available here. Although courts have on occasion seen fit to deprive a wrongdoer of the profits made from a tortious act, in the particular circumstances of this case, the profits bear less resemblance to the union's loss than does the measure of delivery costs. Delivery costs also have the advantage of being easier to calculate and less easy to manipulate.
The union asserts that the Board ought to look at the percentage of overall deliveries made by Mr. Bester prior to the strike in the calculation of damages. I find that the appropriate way to measure the delivery charges that would have been attributable to Mr. Bester is not on the basis of a percentage, but on the basis of the average number of deliveries which he performed per representative period prior to the strike. I find that it cannot be inferred that but for the strike Mr. Bester would have continued to perform the same percentage of deliveries as he had prior to the strike. Whether the company's deliveries increase, or decrease, Mr. Bester would only have been able to deliver a limited number of these. However, I have also found that he has traditionally been offered deliveries before any of the independent brokers. Thus, it is also fair to infer that as long as the company's activities do not fall below the number of deliveries Mr. Bester was able to perform on a given day, those deliveries would have gone to Mr. Bester.
Finally, I find it appropriate to order that these damages be paid in one lump sum covering the period from the date of my earlier decision to today, and then on a periodic basis from today henceforth. Since it is possible that the company may decide at any moment to cease its illegal activity, it would not be possible for the Board to assess a fixed sum of damages now for the union's anticipated losses. The Board appoints a Labour Relations Officer to meet with the parties to attempt to agree on the quantum of damages which is owing to the union to date as a result of this decision, as well as to attempt to resolve a method for payment of the continuing damages. It should not be difficult for the company and the union to calculate the average delivery charges which would have been paid to Mr. Bester but for the strike, based on the practice prior to the strike. I remain seized in the event of difficulties in the determination of the quantum of damages arising out of this decision.
I note that because of the order in which the issues have been raised before me, this decision applies to those damages which are owing as a consequence of the company's continuing
illegal activities since the date of my findings that it has violated the Act. I still remain seized of the issue of damages as they relate to the period before my prior decision was issued.