Labourers' International Union of North America, Local 1059 v. Old Oak Properties Inc. and Ewald Bierbaum, 1996 CanLII 11126

Labourers' International Union of North America, Local 1059 v. Old Oak Properties Inc. and Ewald Bierbaum

[1996] OLRB Rep. July/August 648

2199-95-U; 3947-95-FC; 3132-95-R Labourers' International Union of North America, Local 1059, Applicant v. Old Oak Properties Inc. and Ewald Bierbaum, Responding Parties; Labourers' International Union of North America, Local 1059, Applicant v. Old Oak Properties Inc., Responding Party; Old Oak Properties Inc., Applicant v. Labourers' International Union of North America, Local 1059, Re­sponding Party

BEFORE: Jerry Kovacs, Vice-Chair.

APPEARANCES: Lorne Richmond, Luiza Monteiro, Jim MacKinnon and Irene Nowicki for Labourers' International Union of North America, Local 1059; Monique Smith, Greg Bierbaum, Aly Lalani and Jim Reilly for Old Oak Properties Inc.

DECISION OF THE BOARD; August 16, 1996

1. Board File No. 2199-95-U is an application by the Labourers' International Union of North America, Local 1059 ("the Labourers") under section 96 of the Labour Relations Act, 1995 alleging various contraventions of the Act by Old Oak Properties Inc. ("Old Oak"), including the statutory duty to bargain in good faith. Board File No. 3047-95-FC is the Labourers' application for direction that a first collective agreement be settled by arbitration. Board File No. 3132-95-R is Old Oak's application for a declaration to terminate the the Labourers' bargaining rights in respect of security guards.

2. At the time of these proceedings, the Labourers were conducting a lawful strike. The parties were no longer making efforts to negotiate a first collective agreement.

I. NATURE OF PROCEEDINGS

3. On May 16, 1995, the Labourers were certified as bargaining agent for all security guards in the employ of Old Oak. Old Oak is a property-holding and building-management company in London.

4. At that time, the governing statute was the Labour Relations Act, R.S.O. 1990, c. L.2, as amended by certain Acts between 1991 and 1994 ("the old Act", or "Bill 40"). Under that version of the Act, there were no restrictions on the type of trade union that might represent security guards. Bill 40 had repealed what was once section 8 of the Act ("the pre-Bill 40 Act"). Under the pre-Bill 40 Act, only unions that represented no one other than guards (i.e., "guards-only" unions) were permitted to represent guards. Membership in the Labourers' union is not restricted to guards.

5. Although bargaining between the Labourers and Old Oak began well, the parties' relation­ship faltered in late August, 1995. The flashpoint of conflict was Old Oak's announcement that it had contracted with Burns International Security Services Limited ("Burns") for the purpose of 'contracting­out' all of the security services that were performed by Old Oak employees represented by the Labourers. Under section 64.2 of the old Act then in force, contracting-out of security services was deemed to constitute a sale of business for the purposes of the Act's sale of business provisions. Old Oak took the position that the Labourers ought to be bargaining with Burns. Both Old Oak and the Labourers were aware that Burns was bound to a collective agreement with the United Plant Guard Workers of America, Local 1956 ("UPG WA") that covered all security guards employed by Burns in the London area. Both parties were also aware of the announced intention of the government to repeal Bill 40.

6. On September 6, 1995, the Labourers filed a complaint under section 91 of the old Act alleging that Old Oak and its principal owner and chief negotiator, Ewald Bierbaum, had violated the Act by, inter alia, breaching the duty to bargain in good faith and by altering terms and conditions of employment during the statutory 'freeze' period provided for in section 81. That matter is before this panel of the Board in File No. 2199-95-U.

7. On September 8, 1995, the Labourers commenced a lawful strike. Further collective bar­gaining was unsuccessful.

8. On November 14, 1995, the Labourers applied under section 41 of the old Act for a declaration that the first collective agreement be settled by arbitration. That matter is also before this panel in File No. 3047-95-FC.

9. On November 10, 1995, the Labour Relations and Employment Statute Law Amendment Act, 1995 (or "Bill 7") came into force. The Bill had received first reading on October 4, 1995, in midst of these parties' conflict. Bill 7 repealed the old Labour Relations Act and replaced it with the Labour Relations Act, 1995.

10. Bill 7 changed the law once more with respect to representation of guards. A union that is not a guards-only union may be certified as bargaining agent for guards unless an employer objects. In that event the union must satisfy the Board that no conflict of interest would result from the union becoming bargaining agent for guards. Bill 7 also repealed what was section 64.2 of the Act. The parties did not dispute the resulting effect that the contracting-out of security services would no longer constitute a sale of business for the purposes of the Act.

11. Although the Labourers became the bargaining agent for guards in this case prior to the coming into effect of the new Act, Bill 7 contains transitional provisions that affect the union's bargaining rights. Those provisions permitted an employer to apply to the Board for termination of bargaining rights held by unions that are not guards-only unions, provided the application was made within 90 days of the coming into force of Bill 7. In the event of such application, the transitional provisions direct the Board to terminate bargaining rights of the union unless the union satisfies the Board that no conflict of interest would result from the union continuing to represent the guards.

12. On November 20, 1995, Old Oak applied to the Board for termination of the Labourers' bargaining rights pursuant to the transitional provisions of Bill 7. That matter is also before this panel in File No. 3132-95-FC.

13. When the matters came on for hearing commencing December 4, 1995, the guards in the Labourers' bargaining unit at Old Oak were engaged in a lawful strike. At the outset of the hearing, Old Oak proposed that the Board first hear and determine independently the employer application for termination of the union's bargaining rights, since success in that matter would dispose of the union's two applications. In all of the circumstances, including the ongoing strike and the parties' anticipation of lengthy proceedings in respect of the conflict of interest issue, I ruled orally that all three matters would be heard concurrently. The parties then presented evidence and argument in respect of all of the applications.

II. SUMMARY - DISPOSITION OF THE THREE APPLICATIONS

Guards Conflict of Interest

14. Guards employed by Old Oak are not responsible for monitoring other employees of Old Oak. In any event, no other employees of Old Oak are represented by the Labourers. However, Old Oak 'contracts out' for the provision of cleaning services at its commercial buildings in downtown London. The Labourers represent cleaners employed by certain contractors who perform cleaning services for Old Oak at those buildings.

15. Although guards come into contact with cleaners in the course of their duties, the guards have no particular duty to monitor the cleaners. Guards are responsible for keeping and distributing the keys used by cleaners, but the relaxed system of key control is typical of the minimal security requirements in the downtown buildings. There are no "lunchbucket searches" conducted. Further, the guards have no authority over cleaners, and there is no indication of favouritism in treatment of cleaners who are fellow union members.

16. Despite the ongoing strike and picketing by guards represented by Labourers, there has been no disruption of the work performed by cleaners.

17. In all of the circumstances, I find that no conflict of interest would result from the Labourers continuing to represent the guards.

Breach of the Duty to Bargain in Good Faith

18. Old Oak misrepresented its position with respect to the contracting out of security services. At the same time that Ewald Bierbaum was bargaining limits on the right of the employer to contract out, Old Oak had already entered into a contract with Burns for security services. The union was informed after the action was taken and after employees were notified. From that point forward, Old Oak failed to bargain in good faith and failed to make every reasonable effort to make a collective agreement. At the only bargaining session that occurred after commencement of the Labourers' strike, Old Oak arbitrarily reneged on all earlier agreements the parties had made. In addition, Old Oak sent negotiators who had no authority to represent an employer position in bargaining. Old Oak and Ewald Bierbaurn thereby violated section 17 of the Act.

Direction to Arbitrate First Collective Agreement

19. The process of collective bargaining has been unsuccessful because of the employer's refusal to recognize the bargaining authority of the union and the employer's failure to make reasonable or expeditious efforts to conclude a collective agreement. Despite oral agreement in principle on the inclusion of some limit on the employer's right to contract out, Old Oak contracted out all bargaining unit work without warning in the midst of ongoing collective bargaining and refused to carry on bargaining. When it did return to bargaining, the employer consistently refused to discuss restrictions on the right to contract out; indeed, it changed its position to demand no restrictions in that regard. Moreover, the employer retracted its positions in respect of all other terms of the agreement, most of which had been agreed to prior to the commencement of the strike. The employer's approach to bargaining caused irreparable breakdown in the process of bargaining.

20. In accordance with section 43(2) of the Act, the first collective agreement between these parties shall be settled by arbitration.

III. REASONS FOR DECISION

File No. 3132-95-R: Guards Conflict of Interest

(i) The Evidence

21. Old Oak develops, owns, leases and manages commercial, residential and industrial proper­ties in the London area. It is amongst the most successful companies in its field, controlling thousands of residential, commercial and industrial units. The company is held and controlled by Ewald Bierbaum and his children, Greg Bierbaum, Bernie Bierbaum and Carroll Scott. Starting with little or nothing, Ewald Bierbaum built a substantial enterprise. He is the major shareholder and the ultimate decision-maker in the business. His children constitute the balance of the Board of Directors of the corporation.

22. Local 1059 is the London area local union chartered by the Labourers' International Union of North America. Of its approximately 2000 individual members, some 1300-1400 are employed in the construction industry. The rest of its members work in the service sector and include cleaners, security guards, day-care workers and employees of light manufacturing companies. The bulk of this non-construction membership, or about 500 members, are cleaners. The Labourers became very active in organizing cleaners after the enactment of Bill 40 amendments to the Labour Relations Act and the Employment Standards Act that provided successor rights to unions and a measure of job protection to employees upon changes in cleaning contractors used by building owners or managers. The same legislative changes also governed security guards and, to a much lesser extent, the Labourers also began organizing guards in the security industry.

23. Currently the Labourers represent guards in 4 different bargaining units, for a total of 35-45 guard members.

24. In the spring of 1995, guards employed by Old Oak researched the collective agreements of various unions that represent guards and decided to contact the Labourers. By May 16, 1995, the Labourers were certified as the bargaining agent for Old Oak guards.

25. Local 1059 of the Labourers is led by its Business Manager, Jim MacKinnon. In addition to MacKinnon, the union employs other staff: 3 business representatives, I organizer and 3 support staff. Two of the business representatives service the construction industry membership, while the third -Irene Nowicki - is responsible for the non-construction membership, i.e., including both guards and cleaners. MacKinnon is responsible for negotiation of all first collective agreements and also leads negotiations for most renewal agreements. He has also participated regularly in negotiation of province-wide collective agreements in the industrial, commercial and institutional sector of the construction industry. MacKinnon is also involved in most major decisions that affect the union, including whether particular bargaining units should engage in strike action.

26. In cross-examination, MacKinnon reviewed the constitution of the union with employer counsel. It provides a constitution for the international level of the union as well as constitutions for local unions (such as Local 1059) and for district councils (such as the Ontario Provincial District Council that includes all of the Labourers' local unions in Ontario). It also contains a variety of statements of purposes of the union and of obligations of membership. It is unnecessary to discuss those further other than to state the obvious: the union requires 'solidarity' among its members. However, it does not include a code of conduct in respect of dealings with fellow members. It does not, for instance, contain specific requirements that members support the picket lines of fellow members, nor prohibitions on members working for other employers on locations that are affected by a strike involving a separate employer. MacKinnon stated that Labourers' construction workers will continue to work on an employer's project even if Labourers' members in a different sector are on strike against the same employer. Accordingly, when the Labourers conducted a strike in the sewer and watermain sector, Labourers members would continue to work for affected contractors who also performed work in other (non-struck) construction sectors (e.g., the roads sector).

27. MacKinnon confirmed that all members of the union - construction workers, cleaners, guards, etc. - are invited to and may in fact attend various union gatherings. That includes monthly membership meetings (which the local may not in fact conduct on a monthly basis) and meetings associated with local executive board elections and other elections. Although general membership meetings are supposed to occur monthly, MacKinnon calls such meetings far less regularly. Instead, Local 1059 more usually holds meetings for each bargaining unit or sector of employees. The union mails two newsletters to all members each year. It offers training courses to all members. All members are invited to Christmas parties and in the last few years the union has organized a summer picnic for all members and their families.

28. In the case of Old Oak guards' strike, Nowicki (the business representative who services both cleaners and guards) was involved in organizing the picket line maintained at the downtown premises; MacKinnon also played a role in ensuring the picket line was maintained. After the strike began, an Old Oak manager found Labourers' postings regarding the guards' strike inside the premises in downtown Old Oak offices that are reserved for use by the cleaning subcontractor and its cleaner employees; in the posting, the Labourers ask that Old Oak tenants support the guards in their job action against Old Oak.

29. The guards in the Old Oak bargaining unit work in 3 areas - a downtown commercial/ residential building complex, a residential complex of 7 apartment buildings, and an industrial mall of some 160 units known as the Meadowbrook industrial site.

30. Most of the guard work is at the downtown location consisting of 5 high-rise buildings and parking garages. Three of the buildings span a city block and comprise the "Talbot Centre"; Old Oak built the two 18-floor towers located at 140 and 148 Fullerton Ave. in 1988-1990, and later added 465 Richmond Street to the complex. Between the two buildings on Fullerton and the third on Richmond is a complex of retail spaces including a food court. The Talbot Centre towers also include some residential units. Near to the Talbot Centre is the 10-floor tower at 130 Dufferin Avenue known as the "Dufferin Corporate Centre". Adjacent to it is the fifth building, the "Xerox Centre" at 150 Dufferin. In total, the five buildings house about 800,000 square feet of leased space. About 50,000 square feet is retail space with the balance occupied by office or commercial or residential tenants. There are multi-level parking garages attached to the Talbot Centre (with about 500 spaces) and the Xerox Centre (with about 450 spaces). There are also underground parking lots with about 550 spaces and a surface parking lot between the Dufferin Corporate Centre and the Xerox Centre with about 100 spaces.

31. The downtown commercial space is occupied by a variety of public and private sector tenants, including corporate offices, lawyers' and accountants' offices, government offices, RCMP offices, and the offices of Old Oak. Although the Old Oak office has employees, there was no evidence or issue that arose regarding any interaction between the guards and Old Oak office employees.

32. Old Oak employs maintenance staff for building systems maintenance and equipment repair (2 full-time and one part-time) and car-park staff (11 part-time) and snow removal/landscape staff (1 person) and security staff. None of them are unionized.

33. The company does not directly employ cleaners. At the Talbot Centre and Dufferin Corpo­rate Centre, Old Oak contracts for cleaning services with Martin's Building Maintenance (or David Martin Enterprises (London) Limited) (hereinafter referred to as "Martin's"). Martin's cleaners are represented by the Labourers. It is the interaction of these cleaners and the guards at those locations -all represented by the same union - that is said to give rise to a conflict of interest that should result in termination of the Labourers' representation rights for the guards, and I will provide greater detail below. The cleaners at the Xerox Centre are employed by Metropolitan Building Maintenance, whose contract Old Oak inherited when it purchased the Xerox Centre in 1992. Metropolitan's cleaners are also represented by the Labourers' union. Old Oak guards have little or no interaction with the cleaners at the Xerox Centre or, for that matter, with any cleaners that may be employed by cleaning contractors at either the 7-tower residential complex or the 160-unit industrial mall. In any event, there was no issue regarding any such interaction.

34. Prior to the Labourers strike, Old Oak maintained a schedule of 15 full-time guards; the schedule was affected by the strike and by the parties' eventual agreement regarding provision of essential services during the strike.

35. It is worth noting that none of Old Oak's proposals nor any part of the parties' eventual agreement regarding essential services lists any reference to the necessity of monitoring the employees of subcontractors e.g., cleaners. (For further discussion of the parties' bargaining, see the decision below in respect of the complaint of bad faith bargaining.)

36. In the normal course, 11 guards are employed over 3 shifts around the clock at the downtown buildings. Three guards are employed on the 7-tower residential site, one of whom averages a 40-hour work week while the other two average a 30-hour work week.

37. At the downtown complex, 2 guards work the day shift. One of the guards remains stationed at the information desk at 140 Fullerton, which is the guards' main station at the Talbot Centre. The other guard patrols or 'floats'. The information desk is a busy traffic centre during the day shift. The guard stationed there gives directions to the many visitors to the complex, and the desk becomes a 'receiving area' for the many deliveries coming to the various buildings. At the desk is a television monitoring system with 4 monitors. Two of the monitor screens are divisible into 16 boxes, so that a guard can monitor the images shot by the 32 cameras located at building entrances/exits, parking areas and the food court (there are none elsewhere within building, i.e., there are none on the tenant floors where the cleaners are at work). Although the cameras are fixed, i.e., do not move or rotate, they do feature a 'zoom' feature allowing the guard to focus more closely on persons. The system allows the guard to call any one of the 16 images up onto the full screen for better view.

38. The information desk, however, is a busy area during the day shift and the guard stationed there is unable to monitor the camera surveillance system with much regularity. The same is true of the 'enunciator panels' that control fire alarm systems throughout the downtown complex. In addition to the interruptions by delivery people and by inquiries from the public, the guards are also responsible for issuance of building access permits and parking passes to tenants. This involves taking information from the applicant, taking photographs, producing laminated cards, and receiving payment. The desk guard also controls an intercom system for the various entry points and elevators in the buildings (and which can be used for emergency "all-call" announcements throughout the buildings), as well as an emergency phone system. In addition, there is a telephone at the desk where the guard takes calls regarding general information, security concerns, building maintenance problems, and requests for moving carts/equipment. The guard is also responsible for the control of elevators, e.g., providing for service usage.

39. A log-book is kept at the desk. In it guards keep a detailed account of their observations (both at the desk and on patrol), of incident reports, of phone calls, and of any action taken by the guards. Some examples of the use of the log-book are described below.

40. The guard at the desk as well as the floater guard carry 2-way radios. About 30 persons carry a radio and are "on the system", from Ewald Bierbaum to the Martin's manager/lead hand to the Old Oak building maintenance staff to the guards at all of the Old Oak locations.

41. The patrol or floater guard on the day shift at the downtown complex uses the information desk as his base. He walks through the buildings and around the perimeter of the buildings, watching for anything suspicious or problematic. He may remove transients from the food court, or report a gas leak to maintenance staff, or a spill to the Martin's cleaner (using the 2-way radio or simply telling down the cleaner if they pass each other). He enforces the no-smoking rule, he helps tenants having problems with access cards, he does a safety check in parking areas, and he answers questions from anyone who might 'flag him down' (guards are noticeable in that they wear uniforms). On occasion, he may assist a tenant; for instance, a court reporting service has asked for the presence of a guard when concerned that a deponent might be violent. Parking attendants might bring problems to the guard's attention (e.g., an unsafely parked car, in which case the guard may attempt to locate the driver). He may also assist the regular delivery persons who attend at the downtown site.

42. Although Martin's has cleaners on the premises most days between 6:00 a.m. through until 1:00 a.m., there is only a skeletal staff of cleaners (one or two) working during the guards' day shift; during the day the 2-way radio in Martin's control is usually held by the Martin's supervisor. They mainly service the food court and retail common areas. The majority of the cleaners (dozens) work after normal business hours, when most tenants close for the day. Martin's assigns cleaners to clean each of the floors in the Talbot Centre and Dufferin Corporate Centre, with each cleaner working alone or sometimes with another cleaner. A Martin's lead hand usually has the 2-way radio during the busy afternoon shift.

43. The afternoon shift of guards at the downtown site starts at 3:00 or 4:00 p.m. and is staffed by 3 guards. One guard is stationed at the desk, another patrols the Talbot Centre and adjacent parking, and the third patrols the Xerox Centre and adjacent parking. All three are in radio communication with each other. By 6:00 p.m. most offices are closed and the buildings have cleared for the most part. Guards on patrol or floater duty are responsible for lock-up checks to ensure that tenants' premises are locked. They check most floors with the exception of those where the tenant continues business hours of operation (e.g., Bell has a crew working until 11:00 p.m.). They check the mechanical rooms. They patrol the perimeter of each building.

44. During these recurring 'rounds', the floater guards look for anything unusual or problematic, e.g., a toilet running, a coffee machine left on. They report minor maintenance items, e.g., burned-out lights, broken door hardware, water leaks. If they discover a serious problem (e.g. a broken watermain), they will contact maintenance staff or a contractor; if the problem is less serious (e.g., broken door handle), they simply log the item in the guard log book kept at the information desk. The floater or patrol guards also check elevators to ensure that those that should be locked off are locked and that those that the cleaners are using for service purposes have not been left unattended. If cleaners leave an elevator unattended or neglect to lock off an elevator that was used for service, the guards will log the incident in their log book. If they pass by a cleaner, they may tell them of such a problem. Generally, however, the floater guards have minimal contact with the cleaners. Cleaners are, for the most part, working within tenant offices, and guard patrols do not involve walking through tenant's offices.

45. There is limited complimentary interaction between guards and Martin's cleaners in the performance of their duties. They pass information to each other, e.g., a cleaner may tell a guard where a door was left unlocked, and a guard might ask the cleaners to place "caution" signs at wet floor areas in the winter or might tell the cleaner of a spill.

46. The more regular interaction between guards and cleaners happens at the information desk, where the guard keeps the keys used by Martin's cleaners in the Talbot Centre and Dufferin Corporate Centre. Metropolitan cleaners at the Xerox Centre keep their own keys and so the guards' interaction with those cleaners is minimal (if at all existent); the Metropolitan cleaners do not have a radio in the Old Oak 2-way radio network. Martin's cleaners come to the desk and ask the guard stationed there for a particular key ring, which contains a combination of keys and access cards. Cleaners carry no Martin's employee identification and are not required to formally identify themselves, although they do wear uniforms issued by Martin's and many of them are familiar/recognizeable to the guards. The guards do not have list of Martin's employees. The cleaner signs her or his name in a "sign-out log" and the guard initials. At the end of her or his shift, the cleaner is expected to return the key ring to the desk and to sign out and the guard is expected to initial the entry and note the time. However, since the commencement of the guards' strike, the guards have not performed that initialling or notation. Both before and after the strike, the guards have not always supervised the return of cleaners' keys; this is in part because the cleaners' shifts and guards' shifts overlap, so that the guard present for the sign-out is not always the same guard present for the sign-in that is supposed to happen.

47. The majority of Martin's cleaners are on duty between 6:00 and 11:00p.m.; about 5 cleaners are present between 7:00 and 10:00 a.m.; and there is one cleaner on duty during the day.

48. Although the guards have a record sheet that notes which areas are accessed by most (if not all) of the key rings and although most keys are identified with a luggage tag, the guards do not control or monitor the particular collection of keys or access cards on each ring. Nor do the guards control or monitor which cleaner takes which ring, nor do they keep track of the keys and access cards kept on any particular ring. The cleaner requests the ring and the guard gives it to the cleaner. The guards keep no list of cleaners' assignments to particular floors of the buildings. Cleaners may be reassigned to different floors from time to time but the guards are not informed of changes in assignments. Although cleaners obtain their keys from the security desk, they then report to a Martin's office/shop on the tenth floor where they punch in at a Martin's punch clock. If a cleaner fails to return a key ring to the desk at the end of shift, the guards will investigate to discover whether the cleaner is still on site. If the cleaner is no longer on site, the guard will simply make a log entry noting that the key ring was not returned. That problem would typically be followed up by the guards' supervisor who would contact the cleaners' supervisor without any further involvement of the guards or Old Oak generally.

49. Jim Reilly (the guards' manager) admitted that there was no way for guards to determine whether cleaners had swapped or altered key rings, nor to determine where cleaners were during their shifts. He further admitted that guards could not know with certainty the areas to which each cleaner might have access by means of key rings provided by the guards. As he summarized, "the system isn't perfect; this isn't a penal institution".

50. Guards have no role or business in checking to see where cleaners are working, or ensuring that they are in certain areas and not in other areas, or performing whatever tasks they are supposed to be doing. Moreover, guards have no special role requiring them to check to ensure that cleaners are not doing certain things, except as they might randomly interact with them or as they might be required to do in checking door and elevator security. For example, a guard stopped a Martin's cleaner who wanted access through a particular door for which the cleaner did not have a key or access card; the guard warned the cleaner that this would amount to unauthorized access. In another instance, a guard observed a cleaner jimmying' a door open, and stopped the attempt; the incident was logged.

51. As their manager admitted, the guards' monitoring duties in respect of the Martin's cleaners are the same as in respect of Old Oak tenants and tenant employees. With any of those classes of persons, plus any other person visiting the site, guards would be empowered to stop and search a person if something were obviously amiss. Both guards and their manager gave the example of someone inexplicably leaving the building with a computer. However, this is not a posted rule that guards are asked to enforce. Nor has there ever been an actual incident that has led a guard to exercise this supposed authority to stop and search a person.

52. The guard on desk duty has other duties, of course, beyond his dealings with the Martin's cleaners. There are still the security cameras to be monitored and the phones to answer, both for emergencies and for routine inquiries for information, maintenance or security assistance. A sign-in sheet is kept and tenants and visitors are directed to sign-in before going up elevators after hours, making note of their name, company and time of entry; however, most people apparently ignore the direction and the guards are not expected and do not block their access. Although anyone entering the floors of the towers after business hours must have an access card, guards have discretionary authority to permit entry even where a person does not have the card. As the guards' manager Jim Reilly put it guards can use common sense; if the guard is familiar with person who have forgotten access cards or keys in an office on one of the floors, the guard may give them access to their office. In addition, guards will enforce requests by particular tenants to block attempts by certain persons to access their premises. For instance, a tenant who has just dismissed an employee may ask that the guards prohibit that employee from entering the tenant's premises.

53. The third shift, or 'night shift', at the downtown complex consists of 2 guards. They have a quieter time than the afternoon shift. Although there is some overlap with the Martin's cleaners, most cleaning staff have left by the time the night guards are on duty. No other cleaners arrive during the night shift of guards (or at least none other who come to the desk to obtain a key ring), although some complete their duties and are expected to hand in and sign out their keys with the night guard at the desk. The balance of the night guards' duties are similar to those of the desk and patrol guards of the afternoon shift. The night guards have the additional lock-up check in the retail area of the mall that is occupied by a bar that closes in the early hours of the morning; they also patrol to ensure that the bar's patrons leave the retail mall area.

54. Both parties in this case offered extensive references to the log book kept by guards at the Talbot Centre desk. Both the guards and their manager understand the 'cover your ass' purpose (as they put it) of the log book. The log stands as proof that guards have done whatever they were able to do in any specific incident. It gives a detailed account of everything done, every area patrolled, anything found, and any course of action taken. If a tenant complains about guards' failure to deal with a matter, the log should show exactly what other matters guards were engaged in at the time. (The patrol guard uses an access card for a similar purpose: the guard 'swipes' an invalid access card at various points in his rounds, which records the time of an unsuccessful attempt to enter a particular door, thus proving the guard's presence at the place and time.) The log book is also used to record phone calls from tenants, radio calls from others on the 2-way radio system, breakage or damage, removal of transients, and anything out of the ordinary. Each shift of guards uses it to inform the next shift of things that happened on the previous shift.

55. Guards log any breach of security, including any failure by Martin's cleaners to lock off elevators used for service. Similarly, guards will log instances in which a cleaner fails to lock a door at end of shift, or leaves a door open while on a cigarette break (and according to the guards' manager, tenant areas are often found unlocked). Guards have also logged incidents where cleaners have allowed persons access to the building after business hours. In one instance, a cleaner allowed someone without an access card into the building; the guard logged it, as well as a comment that Martin's cleaners should be reminded of correct building access procedures. In such matters, the guard's only business is to record his finding. Jim Reilly, their manager, reviews the log on a daily or weekly basis and if he sees record of such security breaches by cleaners he will follow up with Greg Martin of Martin's cleaners. Guards have no further involvement. Apart from security breaches by the cleaners, the guards also log any complaint from a tenant, e.g., that cleaners are smoking on the premises, or engaging in petty pilfering of munchies - and in such cases, the guards may go to the floor to investigate. However, there were no examples of guards involvement in theft by cleaners. Guards also log any damage caused by cleaners, e.g., there were several notations of damage caused by a large and apparently unwieldy cleaning machine.

56. Guards have never been required to give evidence in any investigation or proceeding involving cleaners. It remains a possibility, however.

57. There has been only one major breach of security by Martin's cleaners, involving ongoing theft. In that case, Bell Canada through its own in-house security reported to Jim Reilly that they suspected a problem. However, no one - including Old Oak's guards - was free from suspicion initially. Eventually, Jim Reilly told guards to keep watch for anything unusual. However, Old Oak guards were assigned no particular role in investigating the problem (although they were interested in such a role). Bell's in-house security picked up the thief using their own surveillance, without any assistance from the Old Oak guards.

58. Old Oak guards in the Labourers' bargaining unit also work at two other sites.

59. At the Meadowbrook industrial park there are 160-180 units in a 'strip mall'. A single guard is present during two shifts (nights between 9:00 p.m. - 6:00 a.m. and days between 7:00 a.m. - 4:00 p.m.). The guard patrols the large mall area in a patrol car throughout the shift. His only duty is to watch the grounds for anything unusual. There is no interaction with any employees of any tenants, and guards are not aware of any cleaners employed by or under contract to tenants or Old Oak. Guards have no keys to the premises (except to a washroom) and have no role in monitoring the comings and goings of tenants or employees.

60. At Old Oak's residential complex, a single guard is employed on a night shift from about 7:00 or 8:00 p.m. to 4:00 or 5:00 a.m. The guard is stationed in a cubicle at the entrance to the parking area for the complex. In that small guardhouse are television monitors displaying the view from cameras at the entrances to the buildings and the parking areas. Although there are other Old Oak employees (building superintendents, maintenance employees), the guard has no interaction with them except to pass on requests from tenants for maintenance; in an emergency the guard might phone someone to deal with a maintenance problem. The guard does ‘walk-abouts’ to check the building lobbies and interiors and to check the parking lots for any damage or any unusual activity. The guard also escorts people to cars in the parkades or to a nearby bus stop.

61. There is no evidence that striking Old Oak guards have stopped or attempted to stop Martin's cleaners from crossing the picket line to work. Indeed, there is no evidence that the Labourers have prevented or attempted to prevent any person from crossing their (occasional) picket line to enter Old Oak premises. According to the Business Manager of Local 1059, Jim MacKinnon, the Labourers have made no effort to encourage Martin's cleaners (who are members of the Labourers' union) to support the guards' strike in any way. MacKinnon recalls only that near the start of the strike he received a call from a Martin's cleaner who asked what her obligations or duties were in the circumstances; MacKinnon told her that she must honour her obligations to work in accordance with her union's collective agreement with Martin's. Apart from that call, there was no clear evidence that Martin's cleaners supported or were concerned about supporting the guards' strike. MacKinnon admitted that it was possible that off-duty cleaners participated in picket support.

62. There was some further evidence regarding the actions of one Metropolitan cleaner on December 11, 1995. Metropolitan is the cleaning contractor at the Xerox building owned by Old Oak. As noted above, Metropolitan's cleaner employees are represented by the Labourers. On December 11 a massive demonstration - a 'Day of Protest' organized by the broader labour movement as part of a larger protest against the government - involving thousands of persons occurred in London. On that morning a cleaner employed by Metropolitan called his employer to advise that he would not be reporting for his shift that day because he was taking part in the Day of Protest. (Metropolitan did not discipline him for the absence.) Later on that morning a group of protesters including members of the Labourers' Local 1059 as well as busloads of members of other unions gathered at the front of the Xerox building. That group included the Metropolitan cleaner who had failed to report for work. Not long after that group formed, the striking Old Oak guards moved their picket line to the entrance of the Xerox building parking garage, about 80 feet from the building entrance where the other group gathered. Over the course of the next few hours, the two groups intermingled and became one large protest, ending at 9:30 a.m.

63. Apart from the circumstances of guard work at Old Oak, the Board heard some evidence regarding guards in the few other guards bargaining units represented by the Labourers.

64. The Labourers represent two bargaining units of guards employed by Stinson at two separate locations. One of the collective agreements is in respect of Stinson guards at a Cuddy Foods factory. The guards there monitor Cuddy employees when they enter and exit the plant. They also monitor the plant when it is operating at reduced capacity to ensure that Cuddy employees are not stealing Cuddy property. On night shifts, the plant is occupied predominantly by Cuddy maintenance staff and by the cleaners employed by Dom Clean Building Cleaners ("Dom Clean"). The Labourers also represent the Dom Clean cleaners who clean offices at the Cuddy plant. On the night shift, the Stinson guards are charged with monitoring the activities of maintenance workers and cleaners. This includes logging of any infractions in a log book.

65. According to Jim MacKinnon, Stinson expressed some concern about the interaction of its guard staff with Dom Clean cleaners who were fellow union members, and also about the possibility that guards might refuse to cross a picket line of striking plant employees (who are represented by the UFCW). It became the subject of collective bargaining and resulted in the following provision of the parties' collective agreement:

7.03 The Union and its members covered by this agreement agrees that a strike or picketing by another Union and or members of the Union working under other agreements will not alter or affect an employee's responsibility under this Collective Agreement to report for work, and complete his or her shift.

This issue was never the subject of discussions or collective bargaining between Old Oak and the Labourers. Old Oak never raised a similar concern. (For detailed discussion of this point, see the decision below regarding the complaint of bad faith bargaining.)

66. When the UFCW bargaining unit at Cuddy Foods last engaged in strike action including picketing, Labourers' members working as security guards for Stinson and as cleaners for Dom Clean crossed the UFCW picket line and performed their duties. There was also a strike in 1995 by construc­tion workers represented by the Labourers who were performing curb and gutter and sidewalk work outside the Cuddy plant. Labourers' members employed as Stinson guards or Dom Clean cleaners did not join any picket line of construction workers nor did they refuse to cross any picket line to enter the Cuddy plant to perform their duties.

67. The Labourers represent a second bargaining unit of Stinson employees at a downtown London building known as the City Centre. The Labourers originally obtained bargaining rights at that location when the guards were employed directly by the building manager, City Centre Management Inc. The Labourers' collective agreement dealt with the contracting out of bargaining unit work in the following provtsion:

2.05 . . .

Should the Employer contract out any or all of the work performed by bargaining unit employees, the Employer agrees as follows:

(a) Such new Employer (contractor), contracting or performing such work, shall be required to enter into and be bound to the terms and conditions of this agreement as if an original party thereto.

(b) Employees performing such work shall be hired by the Contractor and be covered by all the terms and conditions of this Agreement. All seniority and conditions of employment applicable to such employees, shall also be assumed by the Contractor.

(c) Articles 18 and 19 [Job Posting and Seniority] shall be applied by the Employer and the Contractor as if their employees were still employed by the Employer. This shall only be applicable to the employees in the attached Appendix "B".

When City Centre contracted out its security services in July of 1995, the contractor was Stinson.

Stinson advised the Labourers that it agreed to be bound by the Labourers' collective agreement with City Centre "as per Article 2.05 of the collective agreement".

68. At City Centre, the Labourers also represent cleaners employed by Martin's and mainte­nance staff employed by City Centre, under separate collective agreements. The guards and maintenance employees engaged in a strike for their first collective agreement (before City Centre contracted out the work to Stinson, guards and maintenance employees were within a single bargaining unit). During that strike, fellow Labourers’ union members employed as cleaners by Martin's performed their duties as usual.

69. Stinson guards at the City Centre are stationed at a kiosk with security camera television monitors. Like Old Oak guards, they keep a log to record tenants and contractors who enter the building after business hours. They patrol the building and its parking garage. Guards 'monitor' cleaners and maintenance staff only in the sense that they come into random contact with them while on 'rounds'.

70. Both parties took the position that evidence of guards' work in entirely unrelated workplaces was relevant to the determination of Old Oak's allegation of conflict of interest. Given this shared view, I decided the evidence might arguably be relevant to their case. Although the evidence offered was lengthy and included great detail I have found that much of it is neither material nor relevant to the case before me.

71. In essence, it is not the business of this panel to determine whether CAW guards at auto plants are in a position of conflict of interest where their duties include monitoring CAW members employed inside the plant; and the same is true of the various other workplaces covered in the evidence. The evidence is useful to a degree: it puts the duties of Old Oak guards in the larger context of security guard work as it is performed variously throughout the province in a variety of settings.

72. This 'extrinsic' evidence also helps to provide context for the interpretation of the new provisions of Bill 7. Obviously, the circumstances of Old Oak guards are not necessarily representative of the greater variety of security services that the legislation governs.

73. The Labourers offered the evidence of Alexander Petutin, a security guard employed by Pinkerton's at the General Motors ("GM") plants in St. Catharines. When Petutin began work as a guard at that location, GM provided 'in-house' security services, i.e., through its own employees. Although its plant workers have long been CAW members, the guards were for a long time represented by the UPGWA during the time when GM employed them directly. After Bill 40 changed the rules regarding unionization of guards, the guards decided to seek representation from a union other than the UPGWA. When GM contracted out (across Ontario) security services to Pinkerton's, the CAW was certified to represent Pinkerton's guards. Pinkerton's and the CAW engage in "master bargaining" for all of the CAW units at GM plants where Pinkerton's employs guards.

74. At GM plants, the Pinkertons guards' primary function is to control persons' access to the plants. All persons must stop at guardhouse stations and present identification to guards. Guards are authorized to stop and search people and vehicles, and do so. At the end of each shift (of GM production), GM production employees must present their lunch boxes and any parcels to guards for inspection in order to ensure against theft. Guards also patrol the plant during production workers' shifts. Guards monitor production employees' movements to ensure that only authorized persons access certain sensitive areas. Guards investigate and conduct surveillance of production workers suspected of theft or other illegal activity; guards will search suspects on their exit from the plant.

75. Petutin is active in the CAW Local 199 that represents both GM production workers and the Pinkertons guards. He explained that he led the guards move to the CAW from the UPGWA because the guards wanted a union with greater resources and more power. It was also clear that Petutin's view was that the guards could rely on the combined strength of all of Local 199 in battling any attempt that Pinkertons might make to terminate CAW bargaining rights for guards under the Bill 7 transitional provisions; he actively seeks general union support for issues (like labour law changes) that affect guards.

76. No strike has occurred in either the production workers' or guards' bargaining unit since each has been represented by the same trade union. Petutin claims that nothing in the union constitution would require (and the union would not encourage) employees of either bargaining unit to support the other by refusing to cross a picket line in the event of a strike. The guards agreement with Pinkerton contains language to address the employer's concern that guards not show favouritism to fellow union members (somewhat akin to the provision MacKinnon negotiated in respect of Labourers guards employed by Stinson, mentioned above).

77. All members of Local 199 share a union hall and take part in common meetings (e.g., membership business, training, social functions).

78. Old Oak called Ron Flescher, a Pinkerton's supervisor at the Oshawa General Motors location. In general, his evidence confirmed Petutin's evidence of the nature of guard duties at GM plants. Flescher also described how guards occasionally plan and execute surveillance and arrest procedures involving production workers using alcohol or illegal drugs on plant premises.

79. Flescher was concerned that CAW guards showed favouritism to CAW production workers. In one instance, a guard was surrounded by an angry crowd of production workers trying to leave the plant; in filing a later report, guards were unable to identify any particular production worker. (There was no evidence that guards recognize or should recognize a certain number of faces in a plant that employs thousands of production workers.) In another instance, guards reported that there were no witnesses to provide evidence in respect of a production worker drinking on the job. None of his examples raised anything more certain than Flescher's own suspicions, regardless of the union affilia­tion of those involved.

80. Flescher also produced a posting that he found on the guards' bulletin board in the workplace and that he claimed was union propaganda. Referring to an "Alert Line" established by the employer to receive calls on suspicious activity, the poster poked fun at 'ratting' on fellow employees. Flescher claimed it was produced by production worker union members.

81. Flescher also testified about his previous guard experience at Rio Algam. He was employed there for 9 years; in his last year, the guards became unionized, represented by the same union that represented general employees (the Steelworkers). Flescher said that, after unionization, no guard other than himself reported any incident of theft by the general employees, despite the fact that there were usually a number of thefts each year. Flescher said that other guards told him that they would not cause other employees to lose their jobs.

82. The Labourers also presented evidence through Stewart Deans, a representative of the United Steelworkers of America. Deans is responsible for the Steelworkers' organizing and collective bargaining efforts in respect of guards in Ontario. Like Petutin, he had been a leader of a guards-only union - the Canadian Guards Association (the "CGA"). After the introduction of Bill 40, the CGA merged with the Steelworkers. The Steelworkers now represent about 5000 guards working for various employers in Ontario. The union has established a division (the Ontario Security Officers' Council) to manage Steelworkers' business in respect of security guards. Guard members of the Steelworkers enjoy all the same benefits (e.g., strike fund, training, legal representation) that non-guard members enjoy. Guards also participate in certain levels of union government and take part in union political action.

83. Old Oak called Paul Rivenbank, the President and Chief Executive Officer of Group 4 CPS, a security services contractor employing guards at more than 400 sites in Ontario. Rivenbank has an extensive background in management in the security industry. Group 4 CPS has collective bargaining relationships with 8 unions that represent its guards in various bargaining units. Although I received Rivenbank's evidence, I do not find that his opinion is helpful (in the suggested way of expert evidence) in answering the very question that the Board must answer, i.e., what constitutes conflict of interest.

84. Rivenbank testified that he believed there was conflict of interest where "the guard and the guarded" were in the same union. He believed that there would be pressure to avoid reporting infractions by a fellow union member. He suggested the possibility of intimidation or coercion by fellow union members. He also believed that the same conflict existed where the guard and the guarded were family members. He admitted that favouritism was also a concern if the guard and the guarded were in the same church, or had children in the same school, or happened to be friends. He also said that favouritism is generally difficult to detect. When asked about favouritism engendered by unionization, Rivenbank was only concerned about guards in the same union as those whom they monitor; he saw no reason for concern where the guard and the guarded were in different unions. After passage of Bill 40, Rivenbank says that his company lost 140 clients because of client concern of potential conflict of interest caused by unionized guards.

(ii) Decision

85. Old Oak's application for termination of the Labourers' bargaining rights is made pursuant to the transitional provisions of Bill 7.

86. Of Bill 7's transitional provisions, section 8 reads as follows:

87. (1) This section applies with respect to bargaining units that include, on the day this section comes into force, guards who monitor other employees or who protect the property of an employer.

(2) Within 90 days after this section comes into force, an employer may apply to the Ontario Labour Relations Board for a declaration that a trade union no longer represents the guards in a bargaining unit,

(a) if the trade union admits to membership persons who are not guards; or

(b) if the trade union is chartered by or affiliated with an organization that admits to membership persons who are not guards.

(3) The Board shall issue the declaration unless the trade union satisfies the Board that no conflict of interest would result from the trade union continuing to represent the guards.

(4) Within 90 days after this section comes into force, an employer may apply to the Ontario Labour Relations Board for a declaration that a trade union no longer represents the guards in a bargaining unit that includes other employees.

(5) The Board shall issue the declaration unless the trade union satisfies the Board that no conflict of interest would result from the guards remaining in the bargaining unit.

(6) The Board shall consider the factors set out in subsection 14(5) of the new Act in determining whether a conflict of interest would result for the purposes of subsection (3) or (5).

(7) Upon the issuance of a declaration under this section, the collective agreement, if any ceases to apply with respect to the guards.

87. Section 14 of the Labour Relations Act, 1995 provides as follows:

88. (t) This section applies with respect to guards who monitor other employees or who protect the property of an employer.

(2) Unless the employer notifies the Board that it objects, a trade union that admits to membership persons who are not guards or that is chartered by or affiliated with an organization that does so may be certified as the bargaining agent for a bargaining unit composed solely of guards.

(3) Unless the employer notifies the Board that it objects, a bargaining unit may include guards and persons who are not guards.

(4) If the employer objects, the trade union must satisfy the Board that no conflict of interest would result from the trade union becoming the bargaining agent or from including persons other than guards in the bargaining unit.

(5) The Board shall consider the following factors in determining whether a conflict of interest would result:

1. The extent of the guards' duties monitoring other employees of their employer or protecting their employer's property.

2. Any other duties or responsibilities of the guards that might give rise to a conflict of interest.

3. Such other factors as the Board considers relevant.

(6) If the Board is satisfied that no conflict of interest would result, the Board may certify the trade union to represent the bargaining unit.

88. Under the old Act (or Bill 40), there were no restrictions on the type of trade union that could represent guards. However, there were rules regarding the appropriateness of bargaining units that contained guards. Section 6 of the old Act directed the Board to determine the appropriateness of the bargaining unit in an application for certification and contained the following specific provisions in respect of guards:

(6) A bargaining unit consisting solely of guards who monitor other employees shall be deemed by the Board to be a unit of employees appropriate for collective bargaining,

(a) if the applicant trade union or the employer requests that the Board do so; and

(b) if the Board is satisfied that the monitoring of other employees would give rise to a conflict of interest if the guards were included in a bargaining unit

with the employees they monitor.

(7) The Board may include other guards in the bargaining unit described in subsection (6).

89. Prior to Bill 40, the Act permitted only guards-only unions to represent guards, and prohib­ited the mixture of guards and non-guards in the same bargaining unit. Section 12 of the pre-Bill 40 Act read as follows:

90. The Board shall not include in a bargaining unit with other employees a person employed as a guard to protect the property of an employer, and no trade union shall be certified as bargaining agent for a bargaining unit of such guards, and no employer or employers' organization shall be required to bargain with a trade union on behalf of any person who is a guard if, in either case, the trade union admits to membership or is chartered by, or affiliated, directly or indirectly with an organization that admits to membership persons other than guards.

The provision is framed in the form of prohibitions that apply with respect to representation of guards.

90. What is a "guard"? The term has not been legislatively defined in any of the statutory treatments of guards. Under the long-standing provisions of the pre-Bill 40 law with respect to guards (which existed essentially unchanged from 1950 until 1993), the Board's case law was limited to consideration of whether employees were "guards" for the purposes of section 12, i.e., "employed as a guard to protect the property of an employer". This meant analysis of guards' duties to determine "the character and degree of monitorial and admonitory authority" in respect of their employer's other employees. This approach was based on the presumption of a legislative intent to prevent any alliance between guards and other employees that might compromise guards' loyalty to their employer or the special duty to protect the employer's property.

91. The impermissible conflict of interest was rooted in the conflict of loyalties that would face unionized guards. The Board tailored its interpretation of the meaning of "guard" to fit its view of the purposes of section 12:

……to be considered guards as contemplated by the legislation their duties must be of such a nature that inclusion in a bargaining unit with non-guard employees would confront them with a real and serious conflict between their special duties to their employer to protect his property and their expected loyalty to fellow bargaining unit employees. (See Geo. A. Cram & Sons Ltd. et al., (1963) 63 CALL 1205).

In assessing the evidence of particular guards' duties, the Board was prepared to consider both actual or potential conflict of interest. In at least one case, the Board found that conflict of interest existed where guards' monitorial authority permitted them the power to search the belongings of other employ­ees, even if such power had not been exercised. See Imperial Leaf Tobacco Company of Canada Limited, [1969] ORB Rep. Feb. 1168.

92. In considering cases under former section 12, the Board expounded upon its responsibility to take a balanced view in assessing the potential for conflict of interest:

…..Since the effect of section It [later section 12] is to place limits on what constitutes an appropriate bargaining unit and on an employee's free choice of what trade union will represent him in collective bargaining, this test is a reasonable balancing of those restrictions with the need to protect an employer from the conflict posed by a guard's duty to protect that employer's property and any loyalty that the guard might feel towards other employees of the employer.

See Wells Fargo, Armcar Inc., [1981] OLRB Rep. July 1046, upheld Wells Fargo Armcar Inc. (1982), 1982 CanLII 1786 (ON HCJ), 36 O.R. (2d) 361 (Div. Ct.).

93. The Legislature fundamentally altered the rules governing guards in the enactment of the amendments in Bill 40. It removed the absolute prohibition on the inclusion of guards in a bargaining unit with other employees. It also removed the restriction on the ability of trade unions to represent guards, opening the right to unions that were not guards-only unions. Section 6(6) directed the Board to consider only whether a conflict of interest would arise if guards were included in a unit with employees whom they monitored. As the Board commented, the choice of statutory language indicated that the Act had

……specifically adopted and codified the Board's conflict of interest test, making it clear that whatever restrictions remain in respect of guards and collective bargaining will apply only to guards whose monitoring of other employees would give rise to a conflict of interest. In this respect although the restrictions have been significantly altered, they would appear to apply to the same class of persons.

See The Municipality of Metropolitan Toronto, [1994] OLRB Rep. June 795. In a later decision in the same proceedings, the Board commented that "section 6(6) generally requires separate bargaining units for guards" (see the unreported decision dated February 13, 1995 in The Municipality of Metropolitan Toronto, Board File Nos. 3730-93-R; 373 1-93-R.)

94. Before interpreting the language of the Act as it now reads, I should highlight some distinctions between the pre-Bill 40 guards provision and those which followed in the Act as amended by Bill 40. As the Board commented in the variety of cases under section 12 of the pre-Bill 40 Act, the statute did not define the term "guard". However, old section 12 did modify the term to some extent by referring to persons employed as guards "to protect the property of an employer". It was the Board that added through its jurisprudence the notion that the provision affected only guards that "monitored" other employees. Only from this monitorial authority did the Board envision that a conflict of interest might arise.

95. Bill 40's section 6(6) clearly took heed of the oft-repeated language of the Board's case law. In deeming the appropriateness of a guards-only unit, section 6(6) adopted some of the Board's parlance. The statutory reference was to "guards who monitor other employees". The Act directed the Board to find as appropriate a unit of only guards if "the monitoring of other employees would give rise to a conflict of interest". Reflecting the experience of the Board, the statute envisioned that a certain degree of monitorial authority would give rise to a conflict of interest. If the conflict of interest existed, the statute required that guards be kept in a unit apart from any other employees. As the Board commented in the June, 1994 decision in The Municipality of Metropolitan Toronto, supra, the Act made no rules in respect of the selection of bargaining agents even in the event that the Board found that a conflict of interest existed between guards and employees who were fellow union members. As that panel of the Board put it, at para. 20:

…..We accept the employer's argument that a resulting complete elimination of any conflict of interest is not a prerequisite to the application of section 6(6). Rather, the legislature, in its wisdom, has determined that where a conflict of interest exists the appropriate response is not to limit a guard's selection of bargaining agent, but rather to simply deem a bargaining unit consisting solely of guards to be appropriate for collective bargaining. It is not for the Board to determine in any particular case whether the resulting "guards only" unit will eliminate or seriously reduce the potential for conflict of interest.

96. Taking into account the perceived codification of Board jurisprudence, the Board essentially found that the "guards-only" deemed unit rule must apply wherever the Board found the degree of monitorial authority that raised a conflict of interest of the sort described by the Board under former section 12.

97. The "deeming language" used in section 6(6) was similar to pre-existing language from section 6 of the pre-Bill 40 Act. As with those older provisions concerning appropriate bargaining units for members of a craft, engineers and dependent contractors, the Bill 40 provisions used particular language that the Board had long construed as constituting a legislative direction to find certain bargaining unit configurations appropriate. For guards, the statute indicated that guards-only units "shall be deemed by the Board to be a unit of employees appropriate for collective bargaining". In this way, the statute indicated that the Legislature started with the proposition that certain guards must be kept in units distinct from other employees.

98. 1 should also note that Bill 40's section 6(6) contained no reference to a guard's duty "to protect the property of an employer". That modifying phrase from the old section 12 had been dropped.

99. Bill 7 fundamentally alters yet again the statutory treatment of guards and brings a new arrangement of some of the old statutory phrases. The new Act approaches the guards issue differently than either Bill 40 or old section 12 of the pre-Bill 40 Act.

100. Although the instant case is an application pursuant to section 8 of the transitional provisions of Bill 7, section 8 directs the Board to consider the factors set out in subsection 14(5) when determining whether a conflict of interest would result. Before turning to the specific effect of the transitional provisions, I will consider the meaning of section 14 of the new Act.

101. In defining the term "guard", section 14 borrows from both of its predecessor provisions. Instead of modifying the term "guards" as old section 12 did ("a guard to protect the property of an employer") or as Bill 40's section 6(6) did ("guards who monitor other employees"), it combines the two approaches. Subsection 14(1), which sets the context within which the new rules apply, provides that the new section applies to "guards who monitor other employees or who monitor the property of an employer".

102. To put the new provisions in statutory context, I should note that the new Act continues some of the long-standing provisions regarding appropriate bargaining units. The sections regarding units of craft members, engineers and dependent contractors are now found in subsections 9(3)-(5) of the new Act and the format of 'deemed appropriate bargaining units' remains. Guards, in contrast, are now removed from that context. The statutory location of the new provisions is more similar to that of old section 12 of the pre-Bill 40 Act. Like old section 12, new section 14 is a free-standing provision placed in that part of the Act that deals with certification. And like old section 12 it deals not only with permissible bargaining unit structure but also with restrictions on the right of certain trade unions to be certified to represent guards.

103. Yet it is not a return to the formula of old section 12. Old section 12 was a strict prohibition. Section 14 prohibits nothing. It is permissive in its provision that certain configurations of guards bargaining units and bargaining agents "may" exist. A union "may" be certified to represent guards even if the union is not a guards-only union. Guards "may" be included in units with other employees. Although the new provisions are permissive, the severe strictures apply as soon as an employer registers an objection. If the proposed bargaining agent or bargaining unit is to survive, the union must satisfy the Board that no conflict of interest would result from its proposal. If a conflict of interest would result, the trade union that represents persons who are not guards simply cannot represent the guards whom it proposes to represent.

104. The 'permissive' as opposed to 'mandatory' structure also distinguishes the new law from the Bill 40 provision. Subsection 6(6) of the old Act mandated a guards-only bargaining unit in certain circumstances, i.e., where (a) the employer or union so requested, and (b) the inclusion of guards with employees whom they monitored would give rise to a "conflict of interest".

105. The manner in which the new law uses the phrase "conflict of interest" also distinguishes it from its predecessor provisions. The crux of section 14 is a code of guidelines that the Board must consider when assessing whether a "conflict of interest" exists.

106. Under Bill 40, the Board assessed whether "the monitoring of employees would give rise to a conflict of interest". Without statutory definition or restriction on the meaning of those phrases, the Board resorted to its earlier case law and noted its view that the Legislature had in essence codified that case law. The focus was the monitorial authority of the guards, just as it had been under the Board's interpretation of old section 12. Under the new Act, the focus shifts slightly. Now, the monitorial authority of the guards is just one of a number of factors that the Board must assess in judging whether a conflict of interest exists.

107. By mandating that the Board consider certain factors in determining whether a conflict of interest would result, the Act suggests that there are a variety of things other than guards' monitorial authority that might affect the determination. The list of factors in subsection 14(5) encompasses: (i) guards' duties monitoring other employees; (ii) guards' duties protecting their employer's property, (iii) other duties and responsibilities; (iv) other factors the Board considers relevant. The last item on the list indicates the generality of the inquiry, i.e., that assessment of conflict of interest is no longer rooted merely in consideration of "the monitoring of other employees".

108. In practical terms, this means that the determination of the existence of a conflict of interest may now rest upon something other than a simple finding such as the guards' authority to search the belongings of other employees. No such simple line is drawn in the statutory guidelines for determina­tion of whether conflict of interest would result. Indeed, it is at least conceivable that the Board might find that other factors outweigh the effect of monitorial authority.

109. Even on that one factor, i.e., the guard's monitorial authority, the new Act has significantly altered the assessment. In case law under old section 12 and under the language of Bill 40's section 6(6), the Board simply looked for the existence of "monitorial" authority. Bill 7's language requires the Board to assess "the extent of the guard's duties monitoring other employees of their employer". It suggests a gradation in monitorial duties, and that some degree of monitorial duties may give rise to a conflict of interest while some may not. Counsel for the Labourers argued that "monitoring" duties must include, at a minimum, a role in admonishment or warning of those monitored. While this may reflect one of the 'degrees' of monitorial authority contemplated by paragraph 14(5)1, 1 am not convinced that it is the only sort contemplated in the new scheme. Without doubt, a role in admonishing those whom one guards amounts to a greater degree of monitorial authority.

110. The notion of a scale of degrees of monitorial responsibility is not new. It reflects the reality of a wide range of guarded properties, from low security to high security. For example, in Windsor Casino Limited, [1995] OLRB Rep. Feb. 206, the Board distinguished between the duties of security guards and surveillance officers in a casino. While security guards had a merely incidental duty to monitor surveillance officers (e.g., while entering or exiting the building), a fundamental duty of the surveillance officers was to monitor other employees (including security guards). Although there had been no dispute between the parties in that case regarding the separation of the security staff unit from the unit of other casino employees, the employer sought a separate unit for surveillance staff. The Board highlighted the "unique responsibility" of surveillance officers to their employer. Since the monitoring of security guards was an essential part of the security officers' work, a conflict of interest was inevitable.

111. In determining whether a "conflict of interest would result" in the new statutory context, the Board's original analysis in Geo. A. Cram & Sons Ltd. remains helpful. Unacceptable conflict arises where there is a "real and serious" conflict of loyalties. Though the new provisions point to a broader range of factors to be considered and to differing results across the spectrum of guarding authority, the Board ultimately must still decide whether it sees "conflict of interest". And the determination of "conflict of interest" remains rooted in the unique labour relations context of an Act which governs the often competing interests of employers and unions. Where an employer contends that a "conflict of interest" would result from the representation of its guard employees by a trade union that admits to membership persons who are not guards, the essential question is this: does the guards' relationship to such a union undermine the employer's reliance on the guards?

112. While all of these principles and considerations apply inasmuch as subsection 14(5) governs the case before me, the case must also be judged in its context as an application under the transitional provisions in section 8 of Bill 7.

113. Section 8 of the transitional provisions of Bill 7 provided a 90-day 'open period' within which an employer could apply for a Board declaration to terminate bargaining rights held by unions that are not guards-only unions, or for a declaration removing guards from a 'mixed' bargaining unit. In Old Oak's case, this led to an application pursuant to subsection 8(3). That section requires the Board to issue the declaration unless the Labourers satisfy the Board that "no conflict of interest would result from the trade union continuing to represent guards".

114. As in the analysis of section 14 of the Act, it is helpful to note what section 8 of the transitional provisions does not say or require, especially in contrast with other transitional provisions. Section 8 does not automatically terminate established bargaining rights in the way that section 7 of the transitional provisions does. Nor does it provide that such rights will be terminated unless the parties agree otherwise, as in section 6 of the transitional provisions.

115. Unlike professionals' rights or combined bargaining unit structures, guards' representation rights and bargaining structures fixed under Bill 40 remain permissible and enforceable under the new Act unless an affected party acted within 90 days of November 10, 1995. And even if it made its application to the Board, section 8 envisages that the Board might find that the continuation of pre­existing structures is appropriate. In the words of subsection 8(3), this can happen where the union "satisfies the Board that no conflict of interest would result for the trade union continuing to represent the guards".

116. An application under the transitional provision in section 8 involves workplaces that have had experience (started under Bill 40) with unionized guards. In Old Oak's case, this means that there is evidence of actual interaction between unionized guards and with fellow union members. In the context of an application under the transitional provisions where the test is directed at the appropriate­ness of continuation of pre-existing bargaining rights, the Board should consider the actual experience of the workplace. Apart from any interpretation of the wording of section 8, the parties' experience is a relevant factor that should be considered under paragraph 14(5)1.

117. As noted earlier, there was no question that the Labourers~ union admits to membership persons who are not guards, thus making it susceptible to an application under subsection 8(2)(b) of Bill 7's transitional provisions. Further, there was no question that Old Oak had made timely application for termination of the Labourers' bargaining rights within the strictures of those provisions. The parties did not focus argument on whether a particular party had discharged any onus; the issue litigated was whether conflict of interest would result from the Labourers continuing to represent Old Oak guards.

118. Subsection 8(6) requires the Board to consider the factors set out in subsection 14(5) of the Act:

119. The extent of the guards' duties monitoring other employees of their employer or protecting their employer's property.

120. Any other duties or responsibilities of the guards that might give rise to a conflict of interest.

121. Such other factors as the Board considers relevant.

As noted earlier, Old Oak does not contend that the guards' duties include monitoring other employees of Old Oak, thus obviating the relevance of that factor in paragraph I of subsection 14(5).

119. Old Oak contends that the factors contemplated within each of the 3 paragraphs in subsection 14(5) lead to determination that a conflict of interest would result. In particular, the employer points to:

120. The guards' duties "protecting their employer's property", contemplated by paragraph 1 of the provision;

121. The guards' duties monitoring the employees of Old Oak's subcontractor (the Martin's cleaners and Metropolitan cleaners who are fellow mem­bers of the Labourers' union), and monitoring all other persons present on Old Oak properties, contemplated by the reference in paragraph 2 to any other duties or responsibilities of the guards that might give rise to a conflict of interest";

122. The guards' interaction with fellow union members, contemplated by the reference to "such other factors as the Board considers relevant" in paragraph 3.

123. As the parties acknowledged, this case is not about any guards' duties monitoring employees of Old Oak. This case is primarily about the extent of guards' duties monitoring Martin's cleaners in downtown buildings. Although the Labourers also represent Metropolitan's cleaners at the Xerox building, there is essentially no interaction between the guards and those cleaners. Similarly, there are no duties or responsibilities of the guards in respect of either the industrial park or the residential complex that give rise to any suggestion of a conflict of interest.

124. In reviewing paragraph 14(5)2, Old Oak took the position that guards' duties monitoring a contractor's employees were the sort of duties contemplated in the reference to "other duties or responsibilities of the guards that might give rise to a conflict of interest". In my view, those duties may also be of the sort contemplated by the reference in paragraph 14(5)1 to "duties...protecting their employer's property". The phrase recalls the old (pre-Bill 40) section 12 reference to "guards who protect the property of an employer".

125. As under old section 12, the Board's task is "to decide what is the meaning of that term as it occurs in the context of this statute". (See the comments made by the Divisional Court in considering the Board's extrapolation of a 'conflict of interest' test from old section 12: Wells FargoArmcar, supra.) Under old section 12, the Board interpreted "guard [who] protect[s] the property of an employer" to mean reference to guards who had duties monitoring other employees. In determining what the Act means by duties "protecting their employer's property" in paragraph 14(5)1 of the current Act, the Board must again look to the statutory context. Here, the phrase arises within the requirement to determine whether "conflict of interest would result" from guards' representation by a union that admitted employees other than guards. "Conflict of interest" in this context refers to the conflict between guards' special duties to their employer and their expected loyalty to fellow union members. A guard's relationship to the employer's property, in itself, is not critical. In the statutory context, what matters is the guard's duty to protect that property from intrusion by persons who may include fellow union members. Thus, paragraph 14(5)1 would appear to be broad enough to encompass guards' duties protecting their employer's property from fellow union members, including those working for other contractors on the employer's site.

126. Whether the Board considers the relationship of Old Oak guards and Martin's cleaners under one statutory provision or the other, the parties agreed that that relationship was the central issue in the case.

127. As Old Oak acknowledged, the main duty of its guards is to observe. During day shifts, guards are not expected to control or limit general access to the downtown buildings which, after all, are commercial areas open to the public. Although the day shift guards watch for anything out of the ordinary, the 2 guards can hardly be expected to ensure against unwanted access or damage to a property as large as the downtown complex. While guards must watch for vandalism, theft, property damage, equipment failure, and fire, it can hardly be said that they are expected to prevent all of these things. The single patrol guard could not possibly manage such a task across the large area that he patrols. As for the desk guard, much of his duties consist of providing service to tenants and visitors to the buildings. Although there are surveillance cameras, enunciator panels and intercom systems to monitor, guards spend much of their time assisting visitors to the building, answering tenant inquiries, dealing with tenant parking and access cards, directing delivery persons and contractors and the like.

128. The guards' role in property protection is somewhat more intensive during the afternoon and night shifts. However, this has more to do with the fact that the commercial buildings are closed for business and thus much quieter, allowing desk guards greater opportunity to monitor the surveillance camera screens and other systems monitors and allowing patrol guards to check premises that are locked rather than wide open to the public. Although there are three guards on the afternoon shift, this does not allow for (and the employer does not appear to expect) a guard force that can prevent vandalism, theft and the rest. Guards succeed in that role to some extent because of the deterrent role served by a constant patrol; but they cannot be expected to be simultaneously aware of all happenings at all locations in the large complex. They observe what they can and investigate what is reported to them; their manager's main expectation is that guards 'log' what they have observed and anything that has been reported to them. In reviewing the parties' detailed references to the guards' duties and to their log book, I note no change in performance of guards' duties or in the sorts of occurrences that they have addressed before and after their strike. This includes reports of any damage or security violations by Martin's cleaners.

129. Given the nature of Old Oak's premises, it is not surprising that the guards' role is not as intensive as the role of guards at other sorts of workplaces. In the spectrum of "extent of duties" in property protection, the duties of Old Oak guards are far less intensive than those of guards in factories producing banknotes, or of guards employed in casinos (see B.A. Banknote a division of Quebecor Printing Inc., [1994] OLRB Rep. Nov. 1484, and Windsor Casino, supra.) As Old Oak's building manager succinctly described the downtown office complex, "it isn't a penal institution". In other workplaces employers have greater reason to fear problems such as vandalism or theft. Arguably, employers have greater reason to be vigilant for conflict of interest in such circumstances.

130. Old Oak's main contention was that the guards' duties in monitoring cleaners who were fellow union members would give rise to a conflict of interest. While recognizing that part of the relationship between cleaners and guards is 'teamwork' (in that one group advises the other of problems within the other's scope of responsibility), Old Oak sought to distinguish the relationship that guards have with their employer from that which the cleaners have either with Martin's or Old Oak. Old Oak contended that guards are a higher level of employee, amounting to "managerial assistants" with a greater responsibility to their employer. Without doubt, the general nature of a guard's role (whatever the extent of his or her duties) demands a special loyalty to the employer's interests. But as a matter of general principle I am not certain that all types of guards owe a loyalty or duty necessarily more onerous than that of all cleaners. Cleaners may have extraordinary access to secure places and may also owe a special responsibility to their employer or their employer's contractor.

131. Beyond that general point, Old Oak argued specific aspects of the relationship of Old Oak guards and Martin's cleaners. In Old Oak's contention, guards have an indirect role in discipline of cleaners because they monitor cleaners to ensure that they are not doing things that they should not be doing and because guards log incidents that could lead to discipline. Even if one characterized the guards' role in the fashion suggested by Old Oak, I am not persuaded that it results in a conflict on the facts of this case. First, I note that there were no examples of a guard report leading to discipline of cleaners, and no example of a requirement that guards testify in any forum against cleaners. Second, and more significantly, the guards' monitorial function in respect of the cleaners is far from intensive. I was not convinced that guards have any greater role in monitoring cleaners' activities than those of other persons in the buildings after business hours. While the guards may come across cleaners in the course of their patrol rounds, the same is true in respect of tenants and their guests who may be on the premises after business hours, and contractors who may be working on site. The guards perform no strict monitorial role in respect of either category of persons.

132. The evidence does not disclose that guards have some preventive role in ensuring that cleaners follow security rules. Although guards will take action where cleaners leave elevators unat­tended or fail to lock a tenant's doors, this occurs by chance in the midst of regular patrols. Guards have a role in ensuring that the building is secure. While cleaners might be responsible for a security breach, so might a tenant or maintenance staff. The guard has no particular duty that amounts to supervision of the cleaners. In fact, the patrol guards make no special effort to check on cleaners, despite the special access that cleaners have to the building through use of their own keys. And where guards have had problems with cleaners (e.g., allowing someone without an access card into the building after business hours), the guards have acted without hesitation as they presumably would have in the case of security breaches that did not involve a fellow union member.

133. The guards role in provision of keys to the cleaners is not one that suggests significant monitorial responsibility. While there was some dispute about the degree of care with which Old Oak and the guards monitor the keys (e.g., whether the guards have an accurate list of the premises to which each key ring gives access), it is beyond doubt a relatively lax system. Cleaners are not required to formally identify themselves when obtaining keys, and guards have no business in monitoring to ensure that the cleaner takes only keys for assigned work areas.

134. It is also important to note the sorts of duties that guards do not perform with respect to the cleaners. Guards do not search cleaners' lunch pails or other belongings. They do not follow or observe cleaners in the performance of cleaning duties. They do not perform surveillance or arrest of cleaners suspected of theft; on the one occasion where theft was suspected, outside security forces were used, to the consternation of at least the one Old Oak guard who testified in these proceedings. Although guards would stop a cleaner removing something that obviously ought not to be removed (e.g., a computer), they are not required to search cleaners to ensure against theft.

135. A review of the Board's case law and of the evidence presented in this case regarding other workplaces illustrates that the role of guards at Old Oak in monitoring other employees is not nearly as intensive as in other workplaces. Old Oak guards do not search cleaners upon their entrance or exit from Old Oak premises. This is not an industrial workplace with tightly secured boundaries that can only be crossed with proper identification and by subjecting oneself to personal search. Indeed, Old Oak guards hand over keys to cleaners without any requirement of identification. Of course, there is nothing inherently wrong with this system. It clearly meets the security needs of the Old Oak location; there is no evidence of any problem with the system. The point is that some workplaces require more intensive security than Old Oak requires and that Old Oak requires a relatively low level of security.

136. On the scale of degrees of monitorial authority over a contractor's employees, Old Oak guards exercise minimal authority. Whether this factor is considered as part of the "extent of guards' duties...protecting their employer's property" (under paragraph 14(5)1) or as part of "other duties or responsibilities of the guards that might give rise to a conflict of interest", I do not find that a conflict of interest would result.

137. Both of the parties suggested a number of factors that I ought to consider pursuant to paragraph 14(5)3 ("such other factors as the Board considers relevant").

138. Old Oak reviewed the composition of Local 1059 of the Labourers' union, highlighting the fact that most of the union's 500 non-construction members - out of a total membership of 2000 - are cleaners. There are only 35-45 guard members of the union. Despite being overwhelmed in numbers by the cleaners in the non-construction portion of the union, I find little support for the proposition that the union's structure makes it likely that guards would be subject to pressure from the cleaners.

139. Even though guards' and cleaners' bargaining units are serviced by the same business representative, it appears that the union generally deals separately with its bargaining units. MacKinnon stated that the union does not ask members to support other members' picket lines. MacKinnon also stated that he prefers to call meetings of bargaining units rather than general membership meetings. Other than occasional general membership meetings, the union contacts members universally through a twice-per-year newsletter, a Christmas party and a summer barbecue. Although the union has had occasion to offer some English language courses to the entire membership, most of its training appears to be specific to the sort of work members perform. There are no political action or social committees.

140. As already noted in discussion of section 8 of the transitional provisions of Bill 7, this is a case where the continuation rather than establishment of bargaining rights is at issue. I agree with the submission of both parties that the guards' ongoing strike experience is another relevant factor to the determination of whether a conflict of interest exists. As I indicated in my review of the evidence, I found no example of guards encouraging cleaners to support their strike by refusing to cross the picket line. I found no example of a cleaner supporting the guards' picket line; as described above, I find that Mr. Totten's picketing was more likely related to the general day of protest that day in London rather than a refusal to cross the guards' picket line. Thus, the picket line has not obstructed the performance of cleaners' work.

141. More significant is the evidence of the ongoing interrelationship of guards and cleaners in the workplace, where guards continue to work pursuant to an essential services agreement with Old Oak. In reaching that agreement, it is noteworthy that the employer never raised monitorial duties in respect of cleaners as part of the essential work of its guards. In working under that agreement, there has been no significant change in the relationship between the two working groups. Given this experience, I see no reason to predict any different result in the event that cleaners were to strike while guards were not on strike. In fact, the Labourers other experiences with guards and cleaners at other workplaces supports that conclusion; a strike by one bargaining unit has not affected the ongoing performance of duties by fellow members in the other unit.

142. Taking these factors into account, I have concluded that no conflict of interest would result from the Labourers continuing to represent the guards at Old Oak.

File Nos. 3199-95-U and 3047-95-FC:

Bad Faith Bargaining and First Contract Arbitration

(i) The Evidence

140. The Labourers served notice to bargain to Old Oak by letter dated May 25, 1995.

141. At an introductory meeting on June 12, the parties discussed the format of collective bargaining that they would follow. Jim MacKinnon attended for the union, and Ewald Bierbaum and Aly Lalani attended for Old Oak. MacKinnon explained that he would soon meet with the bargaining unit employees in order to choose a negotiating committee to support him in bargaining.

142. The key negotiators were MacKinnon and Ewald Bierbaum. Ewald Bierbaum always attended with Aly Lalani, but it was Bierbaum who spoke on behalf of and made decisions on behalf of Old Oak. MacKinnon was supported by a committee of guard employees and the business representa­tive, Irene Nowicki, who services the non-construction members of the union, but it was MacKinnon who controlled and presented the union's position.

143. Clearly, MacKinnon came to the bargaining table with far greater knowledge of and experience in collective bargaining, having negotiated hundreds of collective agreements over many years. Ewald Bierbaum, on the other hand, had never negotiated a collective agreement. Nonetheless, it is difficult to picture him as a neophyte negotiator over his head in these circumstances, even without the benefit of his appearance as a witness in these proceedings. On the evidence offered through Aly Lalani and others, Ewald Bierbaum emerges as an impressive 'self-made' success. In building a substantial commercial enterprise out of little or nothing, he was inevitably involved in all sorts of commercial negotiations. And although none of these were negotiations with unions in respect of collective agreements (as Old Oak counsel was quick to highlight), it does not detract from Bierbaum's high level of competence and confidence as a negotiator. As is clear from the story of his bargaining with the Labourers, Ewald Bierbaum always had available to him the option of utilizing a lawyer experienced in collective bargaining. But as Lalani testified, Ewald Bierbaum wished to bargain this contract on his own, using legal support only in the background.

144. In summary, it was Ewald Bierbaum and MacKinnon who played the central roles in collective bargaining. They led their party's positions at the meetings which occurred on June 12, and July 17, 21, 24, and August 2, 16, 21, 25 and 31 (all in 1995).

145. The union commenced strike action on September 8 and the parties did not meet in an attempt to bargain a collective agreement until October 17. At that meeting, the employer was repre­sented by a lawyer, Rod Dale, and by the guards' manager, Jim Reilly, neither of whom had been present at any of the prior meetings between the parties. MacKinnon continued to lead negotiations for the union at that October 17 meeting.

146. At the hearing of this case, MacKinnon gave extensive and detailed evidence of the negotiations and presented detailed contemporaneous notes that he kept during the meetings. He had independent recollection of most key events at the meetings, but occasionally used his notes to refresh his memory.

147. Ewald Bierbaum did not testify.

148. Aly Lalani testified and presented his notes which generally were vague. More significantly, Lalani was not certain of the time at which he made the notes, i.e., some might have been made in preparation for meetings, some might have been made during meetings and some afterwards. He was also uncertain which parts of his notes reflected a record of statements uttered at meetings as opposed to notes to himself about outstanding issues. Furthermore, Lalani testified generally that he wrote notes either at the meetings themselves or at some point in the day or two days after each meeting. He was unable to be more specific about the particular sets of notes. As a result, I found Mackinnon's recollection of events to be more accurate and, generally, more reliable.

149. At the parties' meeting on June 12, MacKinnon explained the method by which he proposed that the parties should proceed. As he noted, it was the method that he uses whenever bargaining a first collective agreement. The union would start the process by tabling a proposed full collective agreement. After each bargaining meeting, MacKinnon would update the collective agreement on his office word processor to reflect the state of discussions. He would continually update the agreement to show what items were agreed and what items were outstanding. He would date each version of the document so that everyone could "follow where we're at". Each updated version would be provided to the employer prior to the next meeting so that the employer would have an opportunity to review the document for accuracy. Finally, MacKinnon indicated that the union, as per its usual course, wished to deal with monetary issues only after resolution of language issues.

150. The employer representatives neither objected to nor questioned MacKinnon's proposed process, and the negotiations carried on in that manner.

151. Lalani explained at the hearing that it was his understanding that nothing - no single item -was "set in stone" until the collective agreement was agreed to in full and signed by the parties and ratified by the employees. However, that view was never expressed to union representatives during the actual bargaining. Old Oak never suggested that it was of the view that it eventually expressed after the breakdown in negotiations, i.e., that items were merely tentative agreements with a reserved right to veto. What Ewald Bierbaum did say, at either the first or second bargaining meeting, was that he wanted to clarify that the collective agreement would not be effective until all items had been agreed to, as opposed to becoming effective item by item as agreed to during the bargaining process. MacKinnon confirmed that that was the case.

152. After that first introductory meeting, the parties received notice that the Minister of Labour had appointed a Conciliation Officer. The parties continued to meet and bargain pending the arrange­ment of a meeting with the Conciliation Officer.

153. On June 29, Lalani complied with the union request for provision of an employee list including current wage rates.

154. On July 12, MacKinnon sent the full collective agreement that the union was "proposing to work from" at the parties' next meeting. It included the following proposal in respect of contracting out of bargaining unit work:

2.05 The Employer agrees that all work covered by the Collective Agreement shall only be performed by bargaining unit employees under the terms and conditions of this Agreement.

The Employer agrees not to subcontract or contract out any or all of the work covered by this collective agreement.

155. The first real bargaining of terms and conditions occurred at the next meeting, on July 17. The parties undertook an article-by-article review of the union proposal. In discussing proposed Article 2.05, Ewald Bierbaum stated that the employer wanted to have the "option to contract out". MacKinnon asked "when", and Bierbaum replied simply, "at some point". MacKinnon told Bierbaum that the Labourers had dealt with such concerns in other circumstances, and described in general the arrange­ment that the Labourers had negotiated with City Centre in respect of the Labourers' guards bargaining unit with that employer (see paragraph 67 above). MacKinnon explained that City Centre had been able to contract out the security services and that the contractor, Stinson, inherited the Labourers' collective agreement with City Centre. MacKinnon indicated that the union would be prepared to look at such an arrangement.

156. Although already set out above in the decision regarding guards' conflict of interest, it may be helpful to show again the relevant contracting-out language of the Labourers' agreement with City Centre. It reads as follows:

2.05

Should the Employer contract out any or all of the work performed by bargaining unit employees, the Employer agrees as follows:

(a) Such new Employer (contractor), contracting or performing such work, shall be required to enter into and be bound to the terms and conditions of this agreement as if an original party thereto.

(b) Employees performing such work shall be hired by the Contractor and be covered by all the terms and conditions of this Agreement. All seniority and conditions of employment applicable to such employees, shall also be assumed by the Contractor.

(c) Articles 18 and 19 hub [Posting and Seniority] shall be applied by the Em­ployer and the Contractor as if their employees were still employed by the Employer. This shall only be applicable to the employees in the attached Appendix "B".

157. According to MacKinnon, Bierbaum never indicated on July 17 or at any other time that the employer actually intended to or wished to contract out security services. MacKinnon merely under­stood that Ewald Bierbaum wanted language that would permit the "option to contract out...at some point". From MacKinnon's perspective, this meant that the parties should be turning their minds to an arrangement like the one the Labourers had with City Centre. In his view, nothing Ewald Bierbaum said led him or ought to have led him to conclude that Old Oak had an active business plan to contract out bargaining unit work.

158. As MacKinnon put it, an indication of an actual plan to contract out would not have been passed by lightly. It would have changed the complexion of negotiations entirely and become the primary focus of bargaining for the union. The union would not have spent time and energy discussing terms and conditions of employment with Old Oak if it knew that Old Oak did not intend to continue to employ its people. The union instead would have focused its energies on ensuring that the contract provided for successor rights and job protection in the event of contracting out.

159. MacKinnon made a note that the union would look at contracting-out language such as that negotiated with City Centre, and the parties moved on. In the result, the union and employer conducted their first full joint review of the union's proposed agreement during their meeting on July 17, 1996. On a few items they reached agreement, sometimes by way of simple variation on the original union proposal.

160. On July 19, 1996, MacKinnon sent an updated collective agreement to Old Oak, noting that the parties would work "from this amended Agreement at [their] next meeting on July 21, 1996". MacKinnon's cover letter stated that the amended document was "based on our positions on July 17, 1995" and that:

Specifically, the following Articles have been amended:

Article 3.01(a)

Article 10.01

Article 17.01

Article 19.01

Article 26.04

161. When the parties met on July 21, they again worked through the entire agreement. They made some further progress and reached agreement on a number of items, although there was no progress on the issue of contracting out or proposed Article 2.05. As MacKinnon and Lalani each recalled, Ewald Bierbaum indicated that he wanted to meet eventually with his lawyer to review the items in respect of which the employer was indicating agreement. In MacKinnon's recollection, Ewald Bierbaum made it clear that the purpose of legal advice would be to confirm that the language reflected the intent of the parties' agreements on such items. MacKinnon recalled that Bierbaum reiterated on a number of occasions (at this and other meetings) that the intent would not change; Bierbaum only wished to ascertain that the agreed language said what it was meant to say.

162. Lalani testified repeatedly about what he understood to be the conditional nature of the employer's agreements on particular items; all items were subject, he believed, to review by Old Oak's lawyer. To Lalani, this meant that no item was "set in stone". (And as is discussed below, this was an important part of the employer theory of the case, given that Rod Dale suddenly took the position on October 17 that the employer had never agreed to any particular item and that the parties should start bargaining anew.) When pressed in cross-examination, Lalani admitted that he could not recall Ewald Bierbaum's words and that it was indeed possible that Bierbaum had said to MacKinnon that "the intent would not change" and that the lawyer's role was only to ensure that the laymen's language captured the discussed intent. When further pressed, Lalani also admitted that "it would be difficult to change" the employer's position on items that had been marked as agreed.

163. In the circumstances - including Old Oak's decision not to call evidence through Ewald Bierbaum to rebut MacKinnon's version of events, and Lalani's vague recollection and imprecise notes - I accept MacKinnon's testimony that Ewald Bierbaum promised that the intent of the parties' agreements would not change despite the employer's request to make language finalization subject to the lawyer's review. This fits with MacKinnon's decision to permit Bierbaum's request. MacKinnon testified that bargaining had been proceeding well and that the parties had been making some progress; in those circumstances he had no problem with the employer request. It seems likely that MacKinnon would have voiced some objection and made some more serious notation in his notes about an employer position that agreed items were not really agreed until the employer lawyer had reviewed them. That version also does not seem to fit with what I can gather to be the character of Ewald Bierbaum; on all of the evidence he appeared to be a forceful and decisive and capable negotiator - it seems unlikely that he would state that his decision-making authority was subject to a lawyer's advice.

164. At the July 21 meeting it was clear that there was agreement on a substantial number of items, even if many were of minor significance. MacKinnon advised that he would continue to provide updated versions of the working document. He advised that he would now use bold (or "highlighted") typeface to show items that remained in dispute, and 'unbolded' typeface to show areas of agreement.

165. Upon return to his office after the meeting, MacKinnon prepared the updated agreement and sent it to Old Oak on the same day, July 21, with a cover letter stating that the document "reflected the negotiations this date" and that the "highlighted areas are still outstanding".

166. The parties' next meeting was with a Conciliation Officer from the Ministry of Labour on July 24. Ewald Bierbaum stated that he wanted to consult with his lawyer with respect to the outstanding items and again stated that he would review the language of agreed items with him as well. MacKinnon's notes of the exchange state: "employer to talk to lawyer on outstanding issues; agree to items, intent will not change". At this meeting the employer raised the issue of wage rates. As Lalani explained in his testimony, the issue was very important to the employer since it would determine the cost of security services. The Conciliation Officer engaged the parties in some discussion of current hourly rates and classifications and sought to determine the average wage rate; MacKinnon's notes show that the $8.00 was the average wage discussed. The parties did not move beyond that general discussion into any exchange of wage offers.

167. The next scheduled meeting between the parties was August 2. MacKinnon and his bar­gaining committee had miscommunicated and MacKinnon appeared alone on behalf of the union. As a result, little happened and the meeting was brief. However, a few minor items were discussed, and the employer noted that it now agreed to a particular Article. MacKinnon also raised a concern that the employer had altered working conditions in that Ewald Bierbaum was now doing a minor duty usually performed by the guards (collection of coins from a laundromat). Because bargaining had been going well, MacKinnon said, he did not want to press the point, and the parties reached agreement that Bierbaum could do the work on Sundays. Lalani recalls that the employer also asked that the union table its wage demand. MacKinnon's general answer to this question, whenever raised by the employer, was that compensation items ought to be dealt with only after the parties had finished working through the language issues.

168. After the meeting and on the same date, August 2, MacKinnon prepared and sent to the employer an updated version of the agreement. He noted that the new version now showed as agreed the minor items that they had discussed on that date. The cover letter also noted that he had amended the document to show Article 26.00 (concerning a proposed joint health and safety committee) as outstanding. MacKinnon recalled that Ewald Bierbaum was adamant in his opposition to the concept of such a committee, fearing that it would be used for purposes other than health and safety matters.

169. The next negotiating session was on August 16. At the start, Ewald Bierbaum advised that he had met with his lawyer. Bierbaum had received counsel on items that had not yet been the subject of any agreement. Bierbaum then put forward the employer's position on these items; in many instances, the union was able to instantly agree to the employer's proposal and MacKinnon made notes accordingly. Bierbaum had also reviewed with his lawyer the items in respect of which the parties had already reached agreement. Despite the earlier promise that the "intent would not change", Bierbaum proposed minor changes to even these items. For example, Article 4.04 described limits on the grievance rights of employees "with less than 30 days service". Bierbaum now sought a change to "60 days". MacKinnon immediately agreed. Under cross-examination, MacKinnon was asked why he would permit substantive changes to Articles that he believed were agreed and that would not change in their intent. MacKinnon explained that the requests were minor, were ones that the union could live with, and were worth permitting in order to keep up the pace of progress in bargaining.

170. At the August 16 meeting the employer reiterated its position that it wanted the option to contract out security services. There was no suggestion of an actual plan under consideration. MacKin­non again told Bierbaum that the Labourers had made arrangements with another employer that allowed for contracting out and that the union was prepared to consider such arrangements with Old Oak.

171. After the conclusion of the meeting, MacKinnon prepared an updated agreement at his office. The cover letter dated August 16 was somewhat more detailed than in earlier instances. Again, the letter noted that outstanding (or unagreed) items were "highlighted", i.e., in bold typeface. But on this occasion MacKinnon listed all of the Articles (24 in total) that he had "amended...either as outstanding or agreed to based on the parties' positions this date". Further unlike his earlier letters, he asked for a written response prior to the next meeting in the event that the employer questioned the accuracy of his updated document. As MacKinnon testified: "this was the effort after they had met with their lawyer, so I wanted to be clear about our understandings." There was no response until oral discussions at the next meeting.

172. When the parties met next, on August 21, the employer sought further changes to items that MacKinnon had marked as 'agreed items'. Again, MacKinnon agreed to changes. In his view, the requests were again so minor that he did not want to hold up the progress of continued bargaining on outstanding items. For example, Article 6.02 dealt with shop stewards conducting union business during working hours with the consent of the employer. The Article as agreed stated that "Any such meeting must be held at the place of work". Ewald Bierbaum very much wanted the word "meeting" to be replaced with the word "duties". Although the change did not make much sense to MacKinnon, it was unimportant to the union. He agreed to the change in an effort to satisfy Bierbaum and to move on.

173. It was at the August 21 meeting that the parties finally gave substance to the critical discussion of contracting-out language. MacKinnon came to the meeting with a detailed written proposal that would allow a form of contracting-out. As he testified clearly in both examination-in-chief and under cross-examination, he came to the meeting with the plan that no language would be presented until he was certain that Ewald Bierbaum accepted the basic principle of the union proposal. As MacKinnon stated, he "specifically asked" if Bierbaum agreed that in the event of contracting out the contractor would be required to hire Old Oak guard employees, and that the contractor would be bound to the Labourers' collective agreement with Old Oak. According to MacKinnon, Bierbaum said that he did not have a problem with that principle. Only after hearing that assent was MacKinnon prepared to present his language proposal. He then did so, explaining that the union would be prepared to "work from language like this". It read as follows:

2.05 The Employer agrees that all work covered by the Collective Agreement shall be performed by bargaining unit employees under the terms and conditions of this Agreement.

Persons not covered by this Agreement, shall not perform work that is covered by this Agreement.

The Employer agrees not to subcontract or contract out any or all of the bargaining unit work covered by this Collective Agreement, unless;

(a) The Contractor, contracting or performing such work, shall enter into and be bound to the terms and conditions of this Agreement and any renewals thereof, as if an original party thereto, and both the Employer and the Contractor shall be parties to this Collective Agreement and any renewal thereof.

(b) The employees in the bargaining unit at the time of the subcontracting or contracting shall be hired by the Contractor and be covered by all the terms and conditions of this Agreement which shall continue to apply to all such work and all such employees including, but not limited to the seniority and other conditions of employment.

(c) Articles 18 and 19 shall be applied by the Employer and the Contractor as if their employees were still employed by one Employer.

(d) If the Employer and the Contractor breach (a), (b) or (c) above, absent any other effective remedy for such breach, the Employer agrees to hire those persons who are, or were, performing bargaining unit work and shall in accordance with (c) above retain all rights and privileges afforded them by this Collective Agreement.

MacKinnon asked Bierbaum to review the language before the next bargaining session. There was still no suggestion of any actual employer plan to contract out bargaining unit work. The parties then moved on to another item.

174. Lalani remembered that the union presented its proposed contracting out language at the August 21 meeting. He also recalled that MacKinnon asked whether Old Oak accepted the principle that any subcontractor would be required to adopt the Labourers' collective agreement; he did not recall whether that question was posed before presentation of proposed language. In his view, Ewald Bierhaum never said that he had no problem with that concept; he believed that Bierbaum had only agreed that employees would not lose their jobs. However, Lalani was uncertain of whether Bierbaum might have agreed that the employees would be hired under "the same terms and conditions", or "under the same agreement

175. As already noted, Ewald Bierbaum never testified in these proceedings. As in other in­stances, Lalani's recollection and the notes made around the time of negotiations were vague and uncertain when contrasted with MacKinnon's clear and consistent testimony. In respect of this critical point in evidence, the problem with Old Oak's decision to forego calling Ewald Bierbaum as a witness is set in its greatest relief. Lalani's testimony amounted to his understanding of what Bierbaum had agreed or not agreed to. Given his inability to recall the words uttered long ago, and his lack of reliable notes to refresh memory, his mere understandings of Bierbaum's intent are not particularly helpful to me. As Lalani admitted, Bierbaum alone was the decision-maker for Old Oak. Especially on the essential issue of negotiations regarding contracting out, only Bierbaum's testimony might have fully contradicted MacKinnon's testimony. As a witness to words uttered and to sequences of events, MacKinnon proved a more reliable witness - hardly surprising given that collective bargaining is his main business, in contrast with Lalani who was new to the process and who was not responsible for decision making.

176. In the result, I accept MacKinnon's recollection of events. In particular, I find that Ewald Bierbaum advised the union on August 21 that Old Oak accepted the principle that contracting out would be permissible in the event that the contractor assumed the Labourers-Old Oak collective agreement and hired the Old Oak guards.

177. Under cover of a letter dated August 22, MacKinnon provided a further update of the 'working version' of the collective agreement. His letter summarized which Articles had been updated to "reflect the items amended, deleted or agreed to" at the August 21 meeting. As usual, he dated the new version with the date of the parties' next meeting. In this case, the next bargaining session was slated for August 25.

178. Unbeknownst to the Labourers, Old Oak was at this time in the midst of discussions with Burns regarding the contracting out of Old Oak's security services. And by contract dated August 23, Old Oak entered into a contract with Burns. As Lalani admitted, he was aware that Old Oak had decided to contract out the Labourers' bargaining unit work prior to the negotiating session of August 25. And as Ray Hibberd, Burns' General Manager for Southwestern Ontario explained, Burns had been actively seeking a contract with Old Oak for some time (certainly as early as July).

179. At an early meeting with Ewald Bierbaum, Aly Lalani and Greg Bierbaum, Hibberd advised Old Oak that Burns would need to know the number of Old Oak guards, their hours worked per week, their rates of pay in order to allow Burns to prepare an offer that would comply with the requirements of the Bill 40 provisions in the Employment Standards Act. (Since repealed by Bill 7, those provisions required a contractor taking over security services from another contractor or building owner/manager to, inter alia, make reasonable offers employment to the former employer's employees.) Hibberd also provided the Old Oak representatives with copies of Bill 40, the Burns-UPGWA collective agreement, and a copy of the collective agreement between Pinkertons (its competitor) and the Steelworkers. Old Oak advised Hibberd of the Labourers' certificate and that no first agreement had been reached. As Hibberd testified, "it was [hisi impression that they thought the Labourers would be our problem".

180. The Burns-UPGWA contains some significant differences from the proposed agreement that Old Oak and the Labourers were developing in the course of their bargaining. It contains no provision for job protection or protection of bargaining rights in the event of contracting out. Most significantly, the UPGWA agreement contains an appendix that lists many reasons that constitute just cause for exercise of the management right to discipline or dismiss guards. It includes provision that Burns has cause for dismissal of an employee if a customer complains about the guard or wants the guard removed from its site. Although they had received a copy of the UPGWA collective agreement, Greg Bierbaum and Aly Lalani said that they never knew of such a provision and that, in any event, Old Oak would not contemplate exercising such an option as a customer of Burns since Old Oak's intention was to ensure that its guards continued in employment. Burn's representative, Ray Hibberd, testified that this provision of the agreement was not enforced; he knew of only one incident where a customer was displeased with a guard and which was resolved with the transfer of the guard to a different location.

181. Old Oak never mentioned these dealings to the Labourers. Old Oak did not advise the Labourers that it was making plans to subcontract the work, nor did they later advise that they had signed a contract with Burns. As I have already found, Old Oak never did more than indicate that it wanted the "option" to contract out at some indefinite point in the future.

182. Indeed, at the parties' next meeting on August 22, Old Oak carried on bargaining with respect to the terms and conditions of contracting out - despite the fact that it had already done so on its own terms, without notice to the Labourers.

183. On August 25, the parties returned to the Labourers' proposal on contracting out. MacKinnon recalled that Ewald Bierbaum's concerns were focused on those parts of the language that addressed the continuing renewal of the agreement, and MacKinnon made a note of that, as well as circling the problematic wording on his copy of the language proposal. Bierbaum explained that the notion was unusual to him, since in all of his other dealings he was accustomed to negotiating a definite end to the contract. He was concerned with the labour relations concept of 'automatic renewal' of contracts. MacKinnon circled the "renewal" language on his working document, showed it to Bierbaum, and asked if Bierbaum would agree to the proposal if that wording came out. Bierbaum deferred his answer, and the parties moved on to discussion of other items. MacKinnon recalled, and his contemporaneous notes confirmed, that the parties agreed that the first sentence of the union's original Article 2.05 was now agreed (while the main content of the contracting out language remained outstanding). [The first sentence read: "The Employer agrees that all work covered by the Collective Agreement shall only be performed by bargaining unit employees under the terms and conditions of this agreement."]

184. Again, Lalani's recollection was more vague; and his notes were dated August 28, though he believed that was an error and that, in any event, his notes reflected his understanding of what occurred on August 25. He thought that he and/or Bierbaum had indicated that they were not comfort­able with the union proposal and that they would review it to see if they could live with any of it. He also did not believe that Old Oak had indicated that agreed to the first sentence of Article 2.05 (the contracting out provision). Again, I accept MacKinnon's recollection as the more accurate record of things said on that date. It is also the more likely version of events, given what I find to have occurred at the previous session. Since Old Oak had indicated on August 21 that it accepted the basic principle (of flow-through of bargaining rights, and of job security for the guards), and since MacKinnon had left the language proposal for Old Oak to review with a mind to future discussion, it is not likely that MacKinnon would have failed note on August 25 (as he did on August 21) that the employer would review the language to "see if [they] could live with any of it". As reviewed below, I also accept MacKinnon's version of the agreement on the first sentence of Article 2.05.

185. In MacKinnon's view, nothing happened on August 25 to upset the agreement in principle that had been reached on August 21 with respect to contracting out. For that reason, he was content to move on to discussion of other issues after his and Bierbaum's exchange regarding "renewal" language in the contracting out proposal.

186. After the meeting, MacKinnon did his usual update of the working version of the agreement. His cover letter dated August 25 indicates that the new version reflected agreements with respect to several items, including the first sentence of Article 2.05. That was never challenged by the employer until these proceedings. MacKinnon's letter also advised that the union was now prepared to accept an employer proposal regarding hours of work, and the working document was amended accordingly. The new version was dated August 31, the date of the parties' next scheduled bargaining session.

187. MacKinnon later noticed that he had made two errors (as pointed out by one of the guard employees at the union negotiating committee's meeting with the bargaining unit following the August 25 meeting). By letter dated August 25 he pointed them out to Old Oak.

188. There was no further contact between Old Oak and the union prior to the August 31 meeting.

189. On August 30, the guards received both a memorandum to all employees from Old Oak and a letter to the guards from Burns. The Old Oak "Notice to All Security Employees" dated August 28 advised that

effective September 18, Burns will be operating all security services at Old Oak sites.

It said nothing of what would become of Old Oak guards' employment or of their bargaining agent, the Labourers. The Burns letter, the intent of which was disputed at the hearing of this matter, stated as follows:

It gives me great pleasure to inform you that Burns International Security Services Limited has been awarded the security services contract at Old Oak Properties Inc. effective at 0800 hours, Monday, September 18, 1995. We have been informed by our new client that you are presently assigned as a Security Officer at Old Oak Properties.

Amendments to the Ontario Employment Standards Act (Bill 40) requires that if a successor employer replaces a previous employer who is providing services at the premises, the successor employer shall make reasonable offers of available positions to those persons;

a) who are in a continuing or a recurring and cyclical employment relationship with the previous employer immediately before the successor employer begins providing the services at the premises; and

b) whose principal place of work with the previous employer is the premises affected by the change in the employer providing the services.

The successor employer shall make offers to the persons employed by the previous employer in descending order of each person's seniority with the previous employer until all positions are filled.

The position offered must consist of performing, at the same premises, the same work that the person did for the previous employer, if such a position is available.

May I ask that you follow the following steps in order to ensure a smooth transfer of security services:

i) Kindly contact the writer no later than Thursday, August 31, 1995, 1700 hours to advise whether or not you intend to join Burns International Security Services Limited.

ii) If you are interested in joining Burns International Security Services Limited, you will be required, as a condition of employment, to complete the following process:

• complete an Employment Application Form at our office.

• be interviewed and informed of the hourly wage rate, eligibility for the

• employee benefits plan, and schedule of work;

• complete the Security Officer Induction Training Programme

• initiate the process and obtain from the Ontario Provincial Police a Security Guard Licence

• complete an employee file (Policies and Procedures)

• receive the required uniform

Should I not hear from you on or before Thursday, August 31, 1995, 1700 hours, we will assume that you have declined the opportunity to join Burns International Security Services Limited.

190. Those Old Oak guards who responded to the Burns "offer" received a package that Burns' General Manager for Southwestern Ontario, Ray Hibberd, described as typical of the sort given to applicants for employment as Burns guards. It includes information on training and orientation, a copy of the Burns-UPGWA collective agreement, and an application for membership in the UPGWA. As Hibberd explained, in order to be successful an applicant must be licenceable by the Ontario Provincial Police and must sucessfully complete the Burns orientation program. The package received by appli­cants also says that successful completion of the orientation program is no guarantee of employment. (Eventually, six guards responded individually to the Burns "offer" and attended the orientation program; 3 accepted employment.) The package also makes it clear that employees must serve a probationary period consistent with the UPGWA-Burns collective agreement. There was never any suggestion that Burns would waive the probationary period in employment of former Old Oak guards.

191. Greg Bierbaum testified that it was his understanding that the decision to contract out to Burns would have no adverse effect on the guards employed by Old Oak. He understood from his discussions with Burns that Old Oak employees would be hired under the same terms and conditions of employment that were in place under Old Oak. Aly Lalani understood the same. Both Lalani and Greg Bierbaum said that, for Old Oak, this was a key requirement of the deal with Burns. In cross­-examination, Lalani admitted that there is nothing in Old Oak's contract with Burns that addresses the rate of pay that guards will receive or their other terms of employment. The contract refers only to the billing rate that Burns will charge to Old Oak.

192. Neither Old Oak nor Burns sent anything to the Labourers nor did they contact them in any way. Lalani testified that this was an oversight. Eventually, Old Oak sent an official notice of the contracting out to the Labourers, but not before the MacKinnon and the Labourers had already learned of what had happened through their members employed as guards.

193. After hearing from the guards, MacKinnon gave formal reaction on behalf of the union and its members at Old Oak. In a union letter to both Burns and Old Oak, MacKinnon staked out the Labourers' position that the surprise move to contract out bargaining unit work constituted violation of the Labour Relations Act and that Old Oak could not pass off employment of the guards. The letter carried on to set out the union's alternative position that it accepted on behalf of the guards employment with Burns.

194. Despite these occurrences, Old Oak and the Labourers carried through with their meeting as scheduled for August 31. Not surprisingly, the only topic of discussion was Old Oak's subcontract of security services to Burns. However, Ewald Bierbaum and Aly Lalani had very little to say. Bierbaum said that the Old Oak and Burns letters to employees were self-explanatory of the situation. When MacKinnon asked where this left the parties in collective bargaining, Bierbaum answered that Old Oak had to "remove [itself] from negotiations" since they could not negotiate for "someone else's employ­ees". Lalani confirmed this story in his testimony, as well as the fact that Bierbaum advised that it was his view that the Labourers should now be negotiating with Burns. MacKinnon was very upset. No other issues were discussed. MacKinnon advised Bierbaum and Lalani that the Labourers would be proceeding with charges of bad faith bargaining.

195. The Labourers never met with Burns. On September 8 (ten days prior to the scheduled take­over of security services by Burns), the union commenced a lawful strike. Greg Bierbaum, the Vice-President of Properties Administration, testified about his statements published in the London Free Press soon after the Labourers' strike started. Although he explained that the comments were made in the heat of tension, he did confirm that he said that he saw the strike as a union boss' (MacKinnon's) battle to keep members and their dues. It was Greg Bierbaum's view that the guards "would be better served by a security union than the Labourers". He also said that "Bill 40 is history come Monday when the Legislature meets".

196. After commencement of the strike, Old Oak notified the Labourers that they wished to employ "specified replacement workers" in accordance with section 73.2 of the version of the Act then in force. The union requested further particulars of the employer's needs. Meanwhile, Old Oak started to use Burns to provide what it described as the 'essential services' left unprovided with the commencement of the strike. The Labourers filed a complaint before the Board alleging violation of section 73.1 (the prohibition against certain replacement workers then contained in the Act). That matter, in Board File no 2223-95-U, was settled by the parties on September 13 and the settlement was incorporated into an order of the Board. Old Oak agreed that it would only use Old Oak bargaining unit employees to perform guards' work. The parties reached agreement on the level of services to be performed during the currency of the guards' strike.

197. On or about September 18, Burns began to employ its guards to perform security services at Old Oak sites. The Labourers filed further applications before the Board alleging violation of the earlier settlement and further violations of the Act. Once again the parties were able to settle the matters prior to hearing and the Board incorporated their settlement into an order, in Board File Nos. 2328-95-U and 2329-95-U. Once again, Old Oak promised not to use Burns and use only Old Oak bargaining unit employees to perform guards' work. The parties renewed their agreement on the essential services that guards would perform during the currency of their strike. That level of service has been maintained since then.

198. In those matters before the Board in September of 1995, Old Oak was represented by Rod Dale, a partner at a London law firm. (Old Oak changed counsel prior to the hearing of these matters.) Although Ewald Bierbaum did not attend at the Board hearings regarding replacement workers, it was clear that Dale was receiving instructions on Old Oak's position from Bierbaum through telephone contact. At some point, Dale indicated that the parties should attempt a return to collective bargaining. MacKinnon agreed to the suggestion. With the assistance of the Ministry of Labour Conciliation Officer, the parties met again on October 17. It was their first effort at collective bargaining since the events of late August.

199. For the first time in the parties' experience, Old Oak was not represented by Ewald Bierbaum and Aly Lalani. Instead, Rod Dale and Jim Reilly attended for the employer. Dale testified that he wanted to have an employer representative who had "hands-on, nuts and bolts" experience with the work of the bargaining unit. According to Dale, he felt that it was important to have someone to advise him with respect to particular clauses. Although Dale acknowledged that MacKinnon's updated August 31 version of the collective agreement reflected the last state of negotiations, Dale thought that the purpose of the October 17 meeting ought to be a clause-by-clause review of the agreement with feedback from Reilly and from the Old Oak employee members of the union negotiating committee. In that regard, Dale appeared (both at the meeting and in his testimony before me) to by displeased with the fact that MacKinnon was sole spokesperson for the union and that Dale was unable to draw comments from guard members of the union committee.

200. Although Dale took the position that the parties should revisit each and every clause, he did not come to the meeting with written proposals because "it was a mediation". Dale says that he readily conceded that neither he nor Reilly had authority to bind Old Oak to any position; Ewald Bierbaum remained the ultimate decision-maker. But in Dale's view, MacKinnon was in the same position since he had to ratify an agreement. Nonetheless, Dale went through each clause and set out an employer position.

201. As MacKinnon recalled and Dale did not rebut, Dale jotted down his proposals as he made them.

202. In many cases of clauses that were marked as agreed to in the August 31 version of the agreement, Dale changed the employer position. Although Dale denied MacKinnon's allegation at the hearing of this matter that Dale was merely "winging it" (or making up an employer position as he went along), Dale admitted that he could "see how MacKinnon could be left with that impression, if he thought I would be attending the meeting with a formal proposal; I could see how he could come to that honest belief, albeit a mistaken one".

203. Both parties were unsatisfied with the October 17 meeting. Dale felt that MacKinnon was uninterested in negotiating. On return to his office, Dale dictated a formal version of the proposals that he made during the October 17 meeting and sent them to MacKinnon in a letter dated October 19. In a number of instances, the written proposals differed from the oral position set out by Dale at the meeting. As Dale explained: "since [MacKinnon] didn't give me any feedback I felt it didn't matter, I had perfect licence to make any amendments or improvements". Dale sent the October 19 letter without having its contents reviewed by his client, Old Oak.

204. MacKinnon was convinced that Old Oak had sent representatives who had no bargaining authority. At a number of points in the October 17 meeting, he pressed this point with Dale. In particular, he suggested that it was clear that Dale had never discussed the state of prior bargaining with Ewald Bierbaum and that Dale had no idea of the agreements of certain items that the employer had already reached with the union. For example, MacKinnon thought it more than a little odd that Dale was seeking changes to specific language that Ewald Bierbaum himself had demanded (e.g., the language about union "meetings" versus "duties" done during working hours) and that Dale was willing to agree to things that Ewald Bierbaum had often and adamantly refused (e.g., a joint health and safety committee). Dale refused to be drawn into a discussion of the issue, claiming solicitor-client privilege prevented such discussion.

205. The issue of solicitor-client privilege was an important one at the hearing of this matter, since Old Oak refused to waive privilege in respect of questions put to Dale in his testimony. In upholding the Old Oak objection to union cross-examination of Dale, I noted that I thought it unusual for an employer to forego an opportunity to offer rationale for positions taken in bargaining when subject to allegations of bad faith bargaining. Typically, an employer seeks to explain the instructions that its principals have given to their negotiator. In this case, Old Oak chose not to offer any explanation for the positions taken by Rod Dale.

206. The problem caused to the employer case by the general lack of explanation was amplified by the bits of information that it did permit its lawyer to disclose. Dale advised that prior to October 17, he had received instructions from either Ali Lalani or Greg Bierbaum. The last time that he had met with Ewald Bierbaum was in August. It is simple, then, to deduce that Dale came to the October 17 meeting without having reviewed the employer position with Ewald Bierbaum, the employer decision-maker. When asked whether he had authority to make the proposals he did (without having consulted Ewald Bierbaum), he answered that "I was given instructions to...[he rephrased at this point]...my mandate was to negotiate a collective agreement subject to ratification by my clients". It is clear to me that his proposals had not been approved by his client. At some point in the tense interchange on this issue in the October 17 meeting, Dale sarcastically told MacKinnon that he "had a hunch" that the employer would accept his recommendations.

207. Dale testified that he realized that the parties had reached agreements on a number of Articles in the proposed agreement. But in his view, "nothing was signed off'. The August 31 document showed tentative agreements, but Dale was there to negotiate and to bring his expertise to the employer. He saw the agreements on certain items as tentative ones that either party could change in the 'give and take' of bargaining.

208. Throughout the October 17 meeting, MacKinnon took notes as usual. On this occasion, however, he was more meticulous; at several points he stopped Dale in order to be sure that he had accurately recorded what Dale had said. For the most part, Dale did not challenge MacKinnon's notes and I accept them as accurate record of the matters that I have found relevant. MacKinnon asked whether Dale's proposals had been agreed to by the employer, and Dale said he would have to go back to the employer. Dale refused to answer whether he had even discussed the proposals he was making with the employer, claiming that such information was privileged.

209. On the key issue of contracting out, MacKinnon was especially careful in his notes. For the union it was now, of course, the crux of bargaining. MacKinnon asked whether Old Oak would agree to language that required a subcontractor to be bound by the Labourers-Old Oak collective agreement. Dale answered, "no, not unless the law required" such a result. When cross-examined, Dale confirmed that he had said as much. In explaining it, Dale stated that MacKinnon knew that Old Oak had had discussions with Burns and that Burns was bound to a collective agreement with a different union (UPGWA). As Dale said, "if the law did not require it, I'm not going to enter an agreement binding the next union". (Both MacKinnon and Dale were aware of the Board's decision in Ensign Securily Services Inc., [1994] OLRB Rep. Oct. 1310, and both understood that the decision implied that the bargaining rights of Old Oak guards were likely to transfer to the UPGWA in the event that the guards became Burns' employees.)

210. Dale told MacKinnon that he would negotiate contracting out protection for the Labourers "only if the law required it". MacKinnon was also struck by the new position that Dale presented on behalf of the employer: Dale now proposed that the agreement should contain specific language that expressly allowed the employer the right to contract out, even though Ewald Bierbaum had never suggested such a provision. MacKinnon says that he saw that there was no point in further bargaining.

When this perspective was put to Dale in cross-examination, his response was reflective of the employer's general position in response to the union's allegation of bad faith bargaining. In his view, there was no adverse impact on the employees in the event that Burns took over their employment. They would work for Burns, still protected by a collective agreement, merely paying their dues to a different union. If the Bill 40 sale of business provisions with respect to contracted-out security services survived a change in law, then there might be a question of whether the Labourers' bargaining rights survived the transfer; the question would be which of the two unions was paramount. As Dale summarized, "employees would not be affected in an adverse way".

211. After receiving Dale's letter of October 19, the union filed its complaint of bad faith bargaining. No bargaining occurred thereafter.

(ii) Decision

212. In pleading its defence to the Labourers' allegations of bad faith bargaining, Old Oak staked its response on the argument that it could not be found to be motivated by anti-union animus in light of the fact that its chosen subcontractor, Burns, was a unionized contractor. The Response filed by the employer put it this way:

Old Oak denies that it has conducted itself to avoid its obligations under the Act, to avoid dealing with a union, or to penalize its employees for seeking to unionize. The U.P.G.W.A. is the bargaining agent for employees of Burns.

213. Old Oak's conduct after announcing to the Labourers its contract with Burns does not support such a conclusion. Its desire to remove itself from collective bargaining obligations was immediately apparent. At the parties' meeting on August 31, Ewald Bierbaum and Aly Lalani took the position that they no longer had any obligation to bargain. In no uncertain terms, Old Oak advised the Labourers that the problem of collective bargaining was now Burns' business. Indeed, this was the same impression that Burns' representative (Hibberd) had of Old Oak's position during the Burns-Old Oak contractual negotiations. By August 31, Old Oak no longer had anything to say to the Labourers about contracting out or about any other collective bargaining matter. In short, the employer refused to bargain after advising the union of the deal with Burns. This violated the employer's statutory duty to bargain. Moreover, the employer's conduct before and after that event constituted further violation of the duty to bargain in good faith pursuant to section 17 of the Act.

214. Old Oak was obliged to advise the Labourers of its plan and its eventual implementation of contracting out of bargaining unit work. Yet Ewald Bierbaum raised the issue as merely one of general "option" and, despite MacKinnon's request for specifics, concealed the fact of an actual plan under consideration. (As Burns' representative Hibberd noted, Burns had been speaking with Old Oak since at least July.) Instead, Old Oak continued to bargain without advising the union of its plans - and its eventual action -in respect of the most critical issue on the table. While Old Oak disputes that it had reached agreement on the principles of contracting out (i.e., that any subcontractor would inherit the Labourers-Old Oak agreement and hire Old Oak guards), it cannot dispute that it failed to disclose its plans and its actions in respect of contracting with Burns. The evidence discloses unequivocally that Old Oak pretended that the issue was a live one despite the deal already made with Burns. Despite having already contracted out to Burns on his own terms, Ewald Bierbaum went through the motions of supposed consideration of the Labourers' contracting out proposal on August 25. As Aly Lalani put it, the employer position on August 25 was that it wanted to look at the MacKinnon contracting out proposal "to see if we could live with it". Instead, the employer's quiet dealings with Burns proved that the employer had no intention to consider such an option.

215. In the parlance of the Board's case law, Old Oak engaged in "sham" bargaining on the critical issue of contracting out. While the employer was free to engage in "hard bargaining" and was free of any obligation to actually reach an agreement, it was obliged to make every appropriate attempt. (See Plaza Fiberglass Manufacturing Limited, [1990] OLRB Rep. Feb. 192 at paragraph 19.) Its pretentions of continuing bargaining on the issue of contracting out were clearly inappropriate in face of the fact that it had already made a contract with Burns in full knowledge of the probability (or at least possibility) that the Labourers would lose bargaining rights to the UPGWA. Even if Old Oak's decision was wholly free of anti-union animus, it had an obligation to raise and discuss its decision to contract out. (See Plastics CMP, [1982] OLRB Rep. May 726, and especially paragraph 34).

216. The Board has also had occasion to discuss the obligation of an employer to disclose during negotiations initiatives that will significantly impact the bargaining unit. In Westinghouse Canada Limited, [1980] OLRB Rep. Apr. 577, the Board described the duty as follows:

39 the section [17] duty requires an employer to respond honestly when asked in bargaining if he is contemplating initiatives of the type which have a real likelihood of significantly impacting on the bargaining unit. Similarly, can there be any doubt that an employer is under a section [17] obligation to reveal to the union on his own initiative those decisions already made which may have a major impact on the bargaining unit. Without this information a trade union is effectively put in the dark. The union cannot realistically assess its priorities or formulate a meaningful bargaining response to matters of fundamental importance to the employees it represents. Failure to inform in these circumstances may properly be characterized as an attempt to secure the agreement of the trade union for a fixed term on the basis of a misrepresentation in respect of matters which could fundamentally alter the content of the bargain.

When MacKinnon asked Ewald Bierbaum for specifics of the employer proposal of the "option" to contract out, Old Oak and Ewald Bierbaum had a duty to respond honestly in order to permit the union an opportunity to alter its approach to bargaining. (See paragraph 31 of Plaza Fiberglass.) As MacKin-non testified and as I accept, knowledge of the employer's actual plan to contract with Burns would have dramatically altered the union's focus in negotiations.

217. I further find that the employer renegged on the agreement in principle that Ewald Bierbaum and MacKinnon had reached in respect of contracting out. At the same time that the employer reached agreement with the Labourers that contracting out would occur only in the event of continued Labourers' bargaining rights and employees' job protection, the employer was making a deal with Burns that it knew would jeopardize those matters. Had the union understood that the employer was considering an actual plan to contract out, bargaining would have immediately taken a different form; as MacKinnon testified, and as is reasonable to presume in the circumstances, the union's sole focus would have been contracting out.

218. On August 31, the employer took matters a step further. It refused to bargain further with the Labourers, taking the position that it was no longer Old Oak's responsiblity. Its position was uncompromising. While it returned to the table some weeks later after various Board proceedings, it remained uncompromising on the critical issue of contracting out and refused to acknowledge its earlier agreement in principle to the Labourers' proposal.

219. I further conclude that upon later return to the bargaining table on October 17, the employer sent a representative who was not fully informed of the state of bargaining, who had no specific authority to reach agreements on any item, and who was not in communication with the employer decision-maker, Ewald Bierbaum. Moreover, the employer now sought to reneg on all agreements that had been reached in prior bargaining. I find that MacKinnon's updated version of the collective agreement dated August 31, together with his two letters of August 25, reflected the parties' agreements as of the last bargaining session (on August 25).

220. The most significant change of position, of course, was that regarding the principles that should govern contracting out. Beyond abandoning its earlier agreement in principle, the employer refused to bargain any form of restriction on contracting out, and now sought specific contractual endorsement of the management right to contract out. As in other examples (such as the health and safety committee), the employer took a position that contradicted its earlier commitments in collective bargaining. The employer's positions on October 17 contradicted the agreements in place as of August 25, without explanation. In his testimony, Dale effectively rebutted the union's pleading that the employer had renegged because it took the view that "all deals were off' because the union had commenced a strike. Yet neither he nor any other representative of his client offered any meaningful explanation for the employer's new position as of October 17. Nor was any offered in his letter dated October 19, in which Dale altered the positions set forth on October 17 (and which Dale sent to the union without ever consulting the employer decision-maker).

221. If the employer was unwilling to commit to the principle that a subcontractor was bound to the Labourers' agreement and bound to hire Old Oak guards, then it was understandably difficult for the union to see any point in bargaining about any other items. If Old Oak was to contract out to a company that was not bound to the Old Oak agreement, what was the point in an agreement? Old Oak's answer was simple: continued negotiations made sense only if the law required a contractor to 'inherit' the building owner's agreement upon contracting out of in-house security services. The impending changes in law that form a backdrop to this case, and the impact that they would have on the Labourers' bargaining rights, were not lost on any of the participants. Bill 40's provisions in what was section 64.2 of the Act would have ensured flow-through of the Labourers' bargaining rights and any collective agreement to a subcontractor (subject to the competing rights of a trade union with incumbent bar­gaining rights with the subcontractor, e.g., as the Board found superseded the predecessor's rights in its decision in Ensign Security Services Inc.). But the government had promised repeal of all of Bill 40.

222. Taking into account all of these factors, I find that Old Oak sought to avoid its obligation to bargain with the Labourers. And when it returned to bargaining, it failed to send negotiators who were sufficiently knowledgeable of the process, including "its history and parameters"; this was "inimical to the process of rational, informed discussion which is crucial to bargaining in good faith", as the Board said of similar circumstances in Crane Canada Inc., [1988] OLRB Rep. Jan. 13, at paragraph 28. Further, the failure of communication between Rod Dale and Ewald Bierbaum (the decision-maker) constituted a failure of the employer to make reasonable or expeditious efforts to conclude a collective agreement as contemplated by section 43(2)(b) of the Act. (See similar circumstances described in Co­Fo Concrete Forming Construction Limited, [1987] OLRB Rep. Oct. 1213, at paragraph 33.)

223. In other support of its claim that it acted without anti-union motive, the employer stressed its position that contracting out would have no adverse impact on its employees. Old Oak argued that Burns offered all of the guards employment on the same terms and conditions that were in place with Old Oak.

224. Greg Bierbaum told of his understanding that the decision to contract out to Burns would have no adverse effect on the guards employed by Old Oak. From his discussions with Burns, he claims that he understood that Old Oak employees would be hired under the same terms and conditions of employment that were in place under Old Oak. Aly Lalani understood the same. Both Lalani and Greg Bierbaum said that, for Old Oak, this was a key requirement of the deal with Burns.

225. In fact, Lalani's and Greg Bierbaum's claims were not reflected in Burns' dealings with the Old Oak employees. The Burns' "offer" to employees contained in its letter of August 28, 1995 indicates conditions that could result in screening out of some of the Old Oak guards from employment with Burns. For example, Burns, as a registered security firm, must ensure that all of its guards are licenceable by the OPP. Further, as Aly Lalani admitted in cross-examination and as is clear from the face of the contract entered by Old Oak and Burns, there is nothing in the contract that addresses the rate of pay that guards will receive. In addition, employees would be faced with a period of probationary employment.

226. I also find that Old Oak understood the possibility, if not the probability, that the UPGWA would become bargaining agent for guards who accepted employment with Burns. Old Oak principals had discussed with Burns representatives the impact of Bill 40 provisions on the contracting out of security services. From the start of discussions with Burns, Old Oak principals had a copy of the Burns­ UPGWA collective agreement. Burns provided a copy of the Pinkertons-Steelworkers agreement for contrast; in addition, Old Oak had their own ongoing collective bargaining experience with the the Labourers to contrast with the UPGWA deal with Burns. Without setting out the details of the UPGWA agreement, it suffices to note that it contains terms and conditions that were never contemplated in Labourers-Old Oak bargaining, especially in respect of management rights in discipline and dismissal and in respect of contracting out.

227. Perhaps the most obvious change in circumstances would be in respect of the guards’ choice of bargaining agent. This possibility was clear to Old Oak at all times. Indeed, the evidence indicates that Old Oak viewed it as the likely result and a preferred result. Greg Bierbaum’s comments to the press underscored the employer’s consistent position that employees were not adversely affected as long as they would be represented by one union or another. Old Oak failed to recognize the right of its employees to select a bargaining agent of their own choice.

228. In this last respect, Old Oak’s actions were somewhat akin to those of the employer in The Corporation of the City of Sault Ste. Marie, [1991] OLRB Rep. Sept. 1091. In that case, the CUPE held bargaining rights in respect of City employees, including those responsible for maintenance work. Subsequently, the Labourers obtained bargaining rights for construction employees. The City main­tained throughout collective bargaining that it would only employ CUPE members in the work that the Labourers’ claimed. The City refused to consider any of the Labourers’ proposals regarding subcon­tracting of bargaining unit work. The Board found that the City’s conduct amounted to a refusal to recognize the bargaining authority of the Labourers. In the instant case, Old Oak acted with similar anti-union animus with respect to the Labourers. Although the employer had no objection to its guards being represented by the UPGWA, it was evading the employees’ selected bargaining agent, the Labourers.

229. 1 conclude that Old Oak intended to remove the Labourers from its workplace without regard to the wishes of employees. This constituted interference in employees’ selection of a trade union, in violation of section 70 of the Act. And as the Board concluded in the City of Sault Ste. Marie decision, I find that Old Oak’s actions amounted to the refusal to recognize the bargaining authority of the union as contemplated by section 43(2)(a) of the Act.

230. For all of these reasons, I have concluded that: (i) Old Oak violated section 17 of the Act by failing to bargain in good faith; and that (ii) the process of collective bargaining has run its course, and was unsuccessful because of the employer’s actions aimed at avoiding the Labourers’ bargaining rights and the employer’s failure to make reasonable or expeditious efforts to conclude a collective agreement.

231. One aspect of the hearing requires some comment.

232. At several points in the hearing, Old Oak sought to expand its defence to the bad faith bargaining complaint. I should note that Old Oak's pleadings were submitted by a law firm different from the firm that eventually represented the employer at the hearing; nonetheless, new counsel relied on the original pleadings and did not seek to amend them until many days into the hearing.) In particular, the employer sought to offer positive business rationale for its decision to contract out security services to Burns. I ruled orally that Old Oak could not amend its defence; in summary, I found that the request had come too late in the hearing and the applicant would be irremediably prejudiced because it had already called its case in full and because it had already conducted numerous cross-examinations of employer witnesses that it might have conducted differently had it been responding to such a defence.

233. After ruling against the request to amend pleadings, Old Oak nonetheless attempted to lead evidence regarding business rationale for the decision to contract out. And although I upheld objections to examination-in-chief on that point, witnesses nonetheless managed to include in their testimony that which I had ruled inadmissible in evidence. In argument at the close of the hearing, Old Oak asked that I consider those statements. Although I would not rule (and do not so rule) that the evidence became admissible merely because witnesses disregarded my rulings and uttered the statements, I think it would be of some use to Old Oak for me to offer some comment on the import of the evidence and the defence that they wished they had put forward from the start of the case.

234. Greg Bierbaum said that the decision to contract out did not relate to dislike for unions or the Labourers in particular. Rather, Old Oak was concerned about its managerial inexperience in dealing with unions. They wanted "someone who had the resources to manage a union security [workforce] for [them]". Jim Reilly used similar words. He added that he had no experience in dealing with union personnel. He also thought it would be useful for him to spend less time in employee supervision and more time on other building management matters.

235. I have no cause to rule on the sufficiency of this proposed additional defence to the claim. Yet I would comment that the purported business rationale for the decision to contract out would not necessarily alter a finding that Old Oak was motivated at least in part by desire to remove the Labourers from its workplace. In other words, it seems unlikely that some legitimate business reason for the employer actions would dispel the taint caused by the anti-union motives that I have described.

IV. DECLARATIONS AND ORDERS

236. The employer application in File No. 3132-95-R to terminate the union's bargaining rights is hereby dismissed.

237. In respect of File No. 2199-95-U, the Board declares that the responding parties violated sections 17 and 70 of the Act.

238. In respect of File No. 3047-95-FC, the Board hereby directs that the first collective agreement be settled by arbitration.