The Masonry Contractors Ontario, Greater Toronto Area v. Labourers' International Union of North America, Local 183, 1996 CanLII 11128

[1996] OLRB Rep. November/December 951

0548-96-U The Masonry Contractors Ontario, Greater Toronto Area on its own behalf and on behalf of its members (MCO) and The Individual Employers whose names are set out on Schedule B attached hereto, Applicants v. Labourers' International Union of North America, Local 183 and Bricklayers, Masons Independent Union of Canada, Local 1 and The Masonry Council of Unions Toronto & Vicinity, Responding Parties v. Masonry Contractors Association of Toronto ("MCAT"), Intervenor

BEFORE: G. T Surdykowski, Vice-Chair, and Board Members F. B. Reaume and J. Redshaw.

APPEARANCES: Carl Peterson, O. Foster, Paul de Rose, Jack Prazeres for the applicant; S. B. D. Wahl, A. Dionisio for the responding parties; C. E. Humphrev, G. McGinnis, Joe Dc Caria, Louis Gregoris for the intervenor.

DECISION OF G. T. SURDYKOWSKI, VICE-CHAIR, AND BOARD MEMBER F. B. REAUME; December 11, 1996

I

1. This is a complaint under section 96 of the Labour Relations Act, 1995. The applicant complains that the responding parties have violated sections 17, 71, 73(2) and 76 of the Act.

2. At the hearing of August 26, 1996, the parties asked the Board to deal with only section 17 “bad faith bargaining" issue to the exclusion of the various other issues raised, including the issue of the status of the Masonry Contractors Ontario, Greater Toronto Area ("MCO"). The parties agreed that these other issues remain "live" for all purposes and that their agreement to proceed in this way is without prejudice to right of any party to raise any of those issues in either this or other proceedings. Neither any phrasing or anything else in this decision should be taken as any indication of how the Board might determine any of those other issues.

II

3. The factual basis for the section 17 part of this complaint is not in dispute and is relatively straightforward.

4. For purposes of dealing with the section 17 issue, the MCO and the Masonry Contractors Association of Toronto ("MCAT") are rival employer organizations, within the meaning of section 57 of the Act, which represent individual employers in the bricklaying and masonry industry. The re­sponding trade unions represent employees of employers which are members of the MCO and employ­ees of employers which are members of the MCAT. Neither the MCO nor the MCAT is an accredited employer's organization within the meaning of the Act (sections 134 to 143). This is not a case in which the bargaining agency designation provisions (sections 152 to l68) apply.

5. The responding trade unions served notice to bargain with respect to their collective agreement or collective agreements due to expire on or about April 30, 1995. The parties bargained and went through the conciliation process. In or about late January, 1996, the responding parties began a lawful strike against all masonry contractors, including the employer members of both the MCO and the MCAT.

6. In mid-April, 1996, the responding trade unions and MCAT settled their differences and, on or about May 27, 1996, entered into a collective agreement effective April 16, 1996 to April 30, l998. This collective agreement includes the following "Industry Fund" clause:

7. Industry Fund

17.01 (a) Each Employer bound by this Agreement who is not a member of the Masonry Contractors Association of Toronto Inc. shall contribute twenty cents ($0.20) per hour for each hour worked by each employee covered by this Agreement to the Association in compensation for the work done on behalf of the industry by the Association.

(b) The Employer shall remit such contribution with other contributions under Article 2.03 of this Collective Agreement together with the supporting information as may be required on the reporting form.

(c) The contributions together with the duly completed Employer Contribution Form are to he made by the fifteenth day (15th) of the month following the month for which payments are due.

(d) The Union shall act as Trustee for the Masonry Contractors' Association of Toronto Inc. to collect such contributions and shall pay such contributions to the Masonry Contractors' Association of Toronto Inc. by the fifteenth day (15th) of the month follow­ing the month in which payments are made.

(c) The Union agrees that any Collective Agreement which it enters into subsequent to the signing of this Agreement which deals with work of the type described in this Agreement shall contain an article containing the same provisions as those contained in this Article 17.

17.02 Having regard to the interest of the Masonry Contractors' Association of Toronto Inc. in ensuring that appropriate industry fund payments are made to the Association the Union agrees to provide to the Association copies of all remittance forms provided to the Union by companies that are not members of the Association performing work of the type covered by this agreement.

7. Article 17 is not a new provision. In the mid- 1980's, the MCAT encountered problems with employer members violating its collective agreement with Bricklayers, Masons Independent Union of Canada, Local I (~Local I"), by paying less than the negotiated wage rates. When the MCAT fined these employers, they refused to pay the fines, resigned their memberships in the MCAT, and carried on as before. The MCAT concluded that this undermined its ability to maintain the integrity of its collective agreement. Accordingly, in the collective bargaining which led to a collective agreement with Local I effective July 7, 1986, to May 31, 1988, the MCAT tried to counter this conduct by negotiating a Letter of Understanding which required Local I to only enter collective agreements with other employers that contained the same terms and conditions as the MCAT agreement, and contained a provision requiring employers who were not members of the MCAT to contribute to the MCAT Industry Fund. The MCAT-Local I collective agreement effective May I, 1992 to April 30, 1995 contains substantially the same Article 17, the differences being the amount specified in Article 17.01 (a) and that there was no Article 17.02.

8. After reaching the Memorandum of Agreement (in mid-April 1996) which led to the collective agreement with the MCAT as aforesaid, the responding trade unions turned their attentions to the MCO, and on or about April 19, 1996, the following Memorandum of Agreement was entered into:

MEMORANDUM OF AGREEMENT

BETWEEN:

THE MASONRY CONTRACTORS ONTARIO (G.T.A.)

ON BEHALF OF ITS MEMBERS AND (THE MCO)

THE INDIVIDUAL EMPLOYERS WHOSE NAMES ARE ATTACHED

HERETO AS SCHEDULE "A"

and

THE MASONRY COUNCIL OF UNIONS

TORONTO AND VICINITY BEING L.I.U.N.A., LOCAL 183 AND

BRICKLAYERS MASONS INDEPENDENT UNION OF CANADA, LOCAL 1

WHEREAS the Union holds bargaining rights for the Individual Employers and has been engaged in a legal strike of the Employers.

AND WHEREAS the MCO claims to be entitled to bargain on behalf of the Individual Employers.

AND WHEREAS the Union has entered into a Collective Agreement with the Masonry Contractors Association of Toronto Inc. on behalf of all its members, receiving the payment of industry funds by non-members of MCAT.

AND WHEREAS the MCO and the Individual Employers wish to enter into Collective Agreements with the Union on the same terms as those contained in the Unions' Agreement with MCAT. save and except those provisions respecting the industry fund in that the MCO and the Individual Employers who the Association claims to represent takes the position the Union's insistence on those provisions constitutes bad-faith bargaining.

AND WHEREAS the Union's position is that it does not wish to sign any Collective Agreement inconsistent with the agreement reached with MCAT, and does not necessarily agree that the MCO is entitled to bargain on behalf of any or all of its members.

AND WHEREAS the parties wish to provide for the orderly settlement of the strike and renewal of the Collective Agreements, subject only to MCO's and the Individual Employers it claims to represent, claim that the industry fund payments to M.C.A.T. constitutes bad-faith bargaining.

NOW THEREFORE the parties agree as follows:

1. The MCO on behalf of its members and the Individual Employers on their own behalf agree to execute agreements and for renewals of the Collective Agreements between them and the Union on the terms set out in the Memoran­dum of Settlement reached between the Union and MCAT forthwith and in any event before work continues on Thursday, April 25, subject to the parties disagreement over the industry fund and their agreement set out below.

2. It is understood and agreed that such renewals and/or agreements are without prejudice to any parties positions. and that such renewals and/or agreements shall constitute valid Collective Agreements, subject only to the remedial powers of the Board should it sustain MCO's and the Individual Employers it claims to represent, position with respect to the industry funds.

3. MCO agrees that it will not object to MCAT and/or the Bureau participating at any hearing held by the O.L.R.B. to deal with this issue.

4. Should the O.L.R.B. determine that the Union's insistence upon the inclusion of the MCAT industry fund in the Collective Agreements constitute bad-faith bargaining. MCO agrees that an amount equivalent to the industry fund payments, will be required from its members to be paid to the MCO.

5. The MCO agrees to file its bad-faith bargaining complaint forthwith and in any event within 30 days hereof. The Union agrees to hold all industry fund payments received from MCO members in trust pending the Board's decision.

6. MCO agrees not to solicit non-members pending the Board's decision.

7. No damages will be claimed in the Board proceedings.

DATED at North York this 19th day of April. 1996.

(emphasis added)

9. In effect, the MCO and the responding trade unions agreed to a collective agreement with the same terms and conditions as in the MCAT agreement with the exception of Article 17. The inclusion of this provision would require MCO employers to contribute money to the MCAT Industry Fund. The responding trade unions were adamant that this provision had to be included in the MCO agreement before they would end their strike against MCO employers. The MCO refused to agree to such a provision, and took the position that the responding parties demand in that respect was unlawful. The parties entered into the aforesaid Memorandum of Agreement in order to end the strike but have the legality of the demand determined by the Board.

III

10. Section 17 of the Act provides that:

11. The parties shall meet within 15 days from the giving of the notice or within such further period as the patties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.

12. As cast by counsel, the narrow issue before the Board at this point is this: is it a breach of the section 17 obligation to bargain in good faith for a trade union to press to impasse a demand which would require an employer which is a member of one employer organization to make financial contributions to a fund operated by another employer's organization of which it is not a member?

13. The MCO submits that the answer to the question is "yes", and that the responding trade unions' conduct in pressing its Article 17 demand to impasse constitutes bad faith bargaining. Counsel argues that the subjective motivation for the demand is not important in this case. Counsel agrees that it is not improper to make such a demand, or to bargain over it, or for parties to agree to it. He submits, however, that it is unlawful to press such a demand to impasse, particularly where, as in this case, it is the only remaining issue between the collective bargaining parties, because it is inconsistent with the scheme of the Act and the underlying principles of representation and free collective bargaining. Counsel argues that section 57 of the Act contemplates voluntary employer organizations, and that only an accredited employers organization can obtain anything from an employer which is not a member (so long as that employer is covered by an accreditation order of the Board). Although he concedes that he has been unable to find any cases directly on point, counsel refers to the following Board decisions in argument: United Brotherhood of Carpenters & Joiners of America, [1978] OLRB Rep. August 776; Radio Shack, [1985] OLRB Rep. December 1789; Bruce Henderson Limited, [1977] OLRB Rep. August 480; Elirpa Construction and Materials Limited, [1994] OLRB Rep. July 838; Burns Meats Ltd., [1984] OLRB Rep. August 1049; Toronto Star Limited, [1979] OLRB Rep. August 811; Brantford Expositor, [1988] OLRB Rep. July 653.

14. Counsel for MCAT concedes that Article 17 may have the effect of "encouraging" masonry employers to become members in the MCAT, but he argues that it doesn't require any employer to join the MCAT, and that the MCAT is entitled to use its bargaining power and place in the industry to further the interests protected by Article 17 in its collective agreement with the responding trade unions. Counsel submits that this is merely a commercial case where two employer organizations are seeking a commercial advantage against each other, and that it raises no issue with which the Board ought to be concerned. Counsel submits that just as a trade union can strike on wages, it can strike on this issue, that it has nothing to do with the scheme of the Act generally, or with representation rights in particular, and that no labour relations interest is affected by the demand in issue. Counsel submits that there is nothing in the Act which prohibits an employer which has the clout to do so, from requiring employers who benefit from its activities to pay for that benefit.

15. Counsel for the responding trade unions also submits that an employers organization is entitled to look after its own interests and he wondered whether a "no industry fund" demand could be pressed to impasse (by a trade union). Counsel submits that the responding unions were under a contractual obligation to make and press the demand in issue and that doing so is not inconsistent with anything in the Act. Counsel says that the MCO has in effect taken the MCAT agreement and it should therefore "pay the freight" as required by Article 17, and that there is nothing improper about requiring MCO employers to do so, just as a trade union is entitled (under the legislated "Rand formula" in section 47 of the Act) to require that a collective agreement include a provision requiring non-member bargaining unit employees to pay union dues to it. Counsel referred to the Board's decision in J. G. Rivard Limited, [1980] OLRB Rep. July 1009 and Teskey Construction Co. Ltd., [1981] OLRB Rep. January 124, and submits that, in this case, the MCAT has followed the suggestions made in the Teskey decision.

16. There is no issue concerning the propriety of anything negotiated or agreed to between the responding trade unions and the MCAT. The MCAT is not accused of bargaining in bad faith. The responding trade unions are so accused, but in their dealings with the MCO, not in their dealings with the MCAT.

IV

16. "Industry funds" are raised by fees imposed by employers' organizations on employers to fund both the negotiation and administration of collective agreements they are concerned with, and the employers' organizations' activities in their industry. Both generally and in this case the payments are made by employers to the employers' organization and are calculated on the basis of the number of hours the employees of the employer work under the applicable collective agreement. It is an employer issue. This case does not raise an issue with respect to industry funds generally, or with respect to industry funds which require different levels of contribution by employers depending on whether or not they are members of the employer organization which operates the fund.

17. The question before the Board is, as set Out above (in paragraph II): can a trade union bargain to impasse, or take or continue a strike, a demand that employers which are members of one employers' organization make industry fund payments to another employers' organization? The specific question in this case is whether the responding trade union's demand that the MCO include Article 17 from the MCAT agreement in the collective agreement between the MCO and the responding trade unions is one which could be the basis for continuing the strike in which the responding trade unions were engaged against members of the MCO.

18. First, we reject out of hand the responding trade unions' suggestion that there was no impasse. Clearly, there was an impasse on the Article 17 issue. In the Board's view, the parties dealt with this in a sensible way. To accept the responding unions' argument would be to invite parties to continue a labour relations conflict while litigating an issue before the Board. The Board is here to try to assist parties to a resolution of labour relations disputes, not to encourage conflict to continue.

19. Second, it is no answer to the complaint for the responding trade unions to say that they were under a contractual obligation to do what they did. Contractual agreements or obligations are always subject to the Act, which no parties can contract out of. Consequently, while the responding trade unions' collective agreement obligations to the MCAT may provide an explanation for their conduct, and may place them in an awkward position, they do not necessarily excuse them from their section 17 obligation to bat-gain in good faith with the MCO.

V

20. It is well established that one of the purposes of the section 17 obligation is to reinforce an employer's obligation to recognize and bargain with the trade union which holds bargaining rights for its employees, and to require both the employer and the trade union to approach collective bargaining with a view to making a collective agreement, by engaging in a rational and informed negotiating process to that end.

2 I. The Board has found a violation of the obligation to bargain in good faith when demands by a trade union that its bargaining rights be expanded, demands by an employer that the trade union's bargaining rights be reduced, demands for a "check-off' provision which is less comprehensive than that contemplated by section 47 of the Act, and demands concerning work jurisdiction have been pressed to impasse. Such demands may be made and bargained, but must be withdrawn when a strike or lockout becomes imminent. That is, such demands cannot be bargained to impasse, or, to put it another way, cannot be the basis for a strike or lockout.

22. In some jurisdictions (The National Labour Relation's Board in the United States comes to mind) there has developed a class of "illegal demands" which are deemed to constitute bad faith bargaining independent of any other breach of the applicable legislation. We observe that the experience with this approach has not been a particularly satisfactory or productive one, both because of the litigation it has spawned and the effect it has had on collective bargaining relationships.

23. As a general matter, the Board has declined to follow this approach. For example, the expansion or reduction of bargaining rights cannot be bargained to impasse because the Act provides the means by which bargaining rights are obtained or lost (and while the Act provides for voluntary recognition and contemplates the abandonment of bargaining rights, the legislation as a whole operates to prohibit either of these from being forced upon a party outside of the statutory certification or termination process); a trade union can demand the Rand formula (outside of the construction industry) because section 47 of the Act says it can; and parties cannot bargain work jurisdiction to impasse because the jurisdictional dispute provisions in section 99 of the Act provide the mechanism for resolving such issues (although "no subcontracting" demands, which may have a similar effect, can be bargained to impasse).

24. The principles of free collective bargaining have long been enshrined in the Act and are certainly no less important to the scheme of the current Act. In applying these principles, the Board has determined that it is appropriate to, as much as possible, leave collective bargaining parties to create their own bargaining process and make their own deals, and if they find it necessary to do so, to resort to economic sanctions, within the framework of the Act. (Devilbiss (Canada) Ltd. [1976] OLRB Rep. March 49.) Indeed, the Board's experience from many years of administering and adjudicating disputes under the Act, as amended from time to time, teaches that the best collective bargaining is free collective bargaining. The best foundation for a good collective bargaining relationship is laid when parties are left to make their own deals. (Of course, leaving the parties to their own devices may result in a situation where a collective bargaining relationship may founder or even die, but the Act serves only to encourage and facilitate collective bargaining, not to guarantee any particular results.)

25. In the result, although a party will not necessarily have to link the bargaining conduct complained of with a breach of another provision of the Act (that is, between the bargaining conduct and some other right, obligation or prohibition in the Act) in order to establish a breach of the obligation to bargain in good faith established in section 17, it will generally have to do so.

26. As far as we are aware, the only circumstances in which no such connection has been made are the "offer and acceptance" cases. In Sparton of Canada Limited, [1985] OLRB Rep. Sept. 1420, for example, the employer offered to extend the collective agreement which had been in effect between the parties without any changes, which offer the union accepted, after the employer changed its mind but before it had withdrawn the offer or otherwise communicated the change in its position to the union. The Board held that notwithstanding that the employer had acted without mala fides, the employer could not be permitted to withdraw its offer after it had been accepted, and the Board directed the employer to enter into a collective agreement which reflected the offer which the union had accepted. Cases like this merely stand for the proposition that an offer which is accepted before it is withdrawn constitutes a binding contract between the party making the offer and the party accepting it, a principle which is fundamental both to the collective bargaining process, and to the law of contracts generally.

VI

27. In this case, the MCO alleges that the responding trade union's bargaining position with respect to Article 17 "constitutes a violation of sections 17, 71, 73(2) and 76 of the Act". In argument, the MCO also referred to section 57 and the accreditation provisions in sections 134 through 138 of the Act.

28. In effect, the MCO asserts that by insisting that Article 17 be included in the MCO agreement and pressing that demand to impasse, the union's have improperly interfered with the administration of the MCO and have interfered with the MCO's representation of its members by seeking to compel its members to leave it and join the MCAT. The MCO offered the analogy of a trade union requiring that an employer deduct union dues from non-member employees that are not in any bargaining unit it represents as well as from non-member employees in a bargaining unit which the union does represent. (Perhaps a closer analogy is an employer requiring a trade union to agree to a provision which would have the effect of requiring employees represented by that trade union to remit dues to another trade union with which the employer has a collective agreement.)

29. Our first reaction is that it is somehow wrong for a trade union to insist that members of one employer organization agree to pay fees to another employer organization as a condition precedent to ending a strike. But whether it is "somehow wrong" is not the issue. The question is whether it constitutes a breach of the Labour Relations Act, 1995.

30. Sections 70, 71, 73(2) and 76 of the Act provide that:

31. No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administra­tion of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of the employer's freedom to express views so long as the employer does not use coercion, intimidation, threats, promises or undue influence.

32. No trade union and no person acting on behalf of a trade union shall participate in or interfere with the formation or administration of an employers' organization or contribute financial or other support to an employers' organization.

73.(2) No trade union council of trade unions or person acting on behalf of a trade union or council of trade unions shall, so long as another trade union continues to be entitled to represent the employees in a bargaining unit. bargain with or enter into a collective agreement with an employer or an employers' organization on behalf of or purporting, designed or intended to be binding upon the employees in the bargaining unit or any of them.

76. No person, trade union or employers' organization shall seek by intimidation or coercion to compel any person to become or refrain from becoming or to continue to be or to cease to be a member of a trade union or of an employers' organization or to refrain from exercising any other rights under this Act or from performing any obligations under this Act.

[emphasis added]

31. It is not apparent that section 73(2) has any application in this case. Nothing which the responding trade unions have done could be construed as interfering with another trade union's bargaining rights. There appears to be no other trade union on the scene.

32. The real issue seems to be whether the union's bargaining conduct constitutes "intimidation or coercion" which is contrary to section 76, or amounts to interference in the administration of the MCO. or perhaps improper support for the MCAT, contrary to section 71 of the Act.

33. Not all intimidation or coercion is unlawful under the Act. For example, employing eco­nomic sanctions is intended to be coercive and often is. It can also be intimidating, but it is not unlawful if it is done during a permitted time. Similarly, mere persuasion is a form of coercion, and a suggestion that certain consequences may follow upon certain acts, may be intimidatory, but will not necessarily amount to intimidation or coercion within the meaning of section 76.

34. Assuming that an employer can be a "person" within the meaning of section 76, this provision appears on its face to apply equally to everyone to whom the Act applies. Similarly, at first glance, section 70, which prohibits employers from participating or interfering in the formation, selection or administration of a trade union, appears to be analogous to section 71. But this bears closer scrutiny.

35. The Act establishes a structure of labour relations rights, duties and prohibitions for employ­ees, trade unions and employers who are covered by it. But this does not necessarily mean that the rights, duties and prohibitions which apply to each of employees, trade unions and employers are congruent. That is, it is not necessarily the case that the rights, duties and obligations which the Act creates for one are also created for the other two or either of them.

36. This should come as no surprise, particularly when one recalls the genesis and development of labour relations legislation, and particularly the Labour Relations Act, in this province.

37. Prior to 1943, there was nothing resembling the Labour Relations Act as we know it today. Trade unions were not recognized as legal entities. On the contrary, they were considered to be unlawful combinations. Employees had no recognized right to bargain collectively with employers.

38. In 1943, the government of Ontario made one of the first attempts in Canada to construct a scheme for compulsory collective bargaining. The Collective Bargaining Act. 1943 abolished the common law doctrines of conspiracy and restraint of trade as applied to trade unions. This legislation recognized trade unions as legal entities for collective bargaining purposes, and gave employees the right to join and participate in the lawful activities of trade unions.

39. In 1947, the Labour Relations Board Act, 1947 created the Board, and was followed the next year by the Labour Relatiomts Act, 1948. and in 1950 by the Labour Relatio,ts Act. 1950. Although it had some other limited powers, the Board's major function at that time was to deal with applications for certification.

40. In succeeding years. the rights of employees and trade unions, and the Board's powers increased incrementally. By 1975. the Board's powers under the Labour Relations Act had been expanded to include the power to hear complaints that rights or obligations under the Act had been violated, and to provide labour relations remedies for breaches of the Act. Since 1975, the Act has been amended many times: in 1980, 1983, 1984, 1986, 1990, 1991, 1993 (Bill 40), 1994 (Bill 80) and most recently in November, 1995 (Bill 7).The striking thing about the history of the Labour Relations Act in this province, is that the fundamental purposes of the legislation have remained the same throughout; that is:

(a) to ensure the right of employees to freely choose whether or not to join a trade union, and if they choose to do so, to bargain collectively with their employer through that trade union; and

(b) to facilitate the orderly and expeditious resolution of workplace disputes.

This has been accomplished by structuring a legislative scheme which establishes the means by which bargaining rights can be obtained or lost, primarily based upon some expression of the wishes of employees; by providing a structure which provides some guidance with respect to collective bar­gaining, and which requires that workplace disputes during the course of a collective agreement be resolved through a grievance and arbitration process without resort to economic sanctions; and by requiring trade unions to represent employees for whom they hold bargaining rights fairly. This remains the case under the current Act, and the focus remains on the rights of employees and trade unions, primarily as against employers. In effect, the rights of employees and trade unions under the Act have been created by altering or limiting the historical rights of employers. (Of course the Board's jurispru­dence demonstrates that the rights of trade unions are limited as well. This is why a trade union cannot press to impasse a demand that its bargaining rights be expanded any more than an employer can press to impasse a demand that such bargaining rights be reduced.)

41. In addition to the development of the legislation, the Board's jurisprudence also demon­strates why this is the case. The vast majority of unfair labour practice complaints have been brought by trade unions or employees. More specifically, we are aware of no previous case in which an employer or an employers' organization has alleged that a trade union has acted in a manner contrary to section 76 with respect to membership in an employers' organization. Complaints that section 76 has been breached are sometimes made by employees, but generally they are made by trade unions. Similarly, we are unaware of any previous complaint by an employers' organization that section 71 has been breached by a trade union. Complaints that section 70 has been breached by an employer are legion, and are often made in relation to an application for certification or organizing activity.

42. Returning to the analogy suggested by the MCO (see paragraph 28 above), though no employer could reasonably expect a trade union to agree to such a demand, it is not apparent that there is anything which prohibits an employer from making it. Pressing such a demand to impasse, however, is another matter. Doing so may well be unlawful, but not because it interferes with the administration of a trade union. Rather, it may tend to undermine the trade union and interfere with the representation of employees by the trade union, which is prohibited by section 70 of the Act.

43. This highlights a significant difference between section 70 and section 71. Section 70 prohibits employers from interfering in the formation, selection or administration of a trade union, or with the representation of employees by a trade unions. Section 7 I does not contain the latter prohibition. This difference must mean something, and what it means is that it is only when a trade union interferes in the formation or administration of an employer's organization, or improperly offers support to an employer's organization that its conduct runs afoul of section 71.

VII

44. In this case, the Board is satisfied that the responding trade unions considered themselves to be under a contractual obligation to press their Article 17 demand to impasse if necessary. It also seems likely that they considered it in their general interests to to so. The MCO conceded that the responding trade unions were not motivated by improper considerations. But it is not the responding trade unions' subjective intent which is important or in issue.

45. It is true that there is nothing in Article 17 which requires that the MCO itself do anything, either administratively or otherwise. Nor does anything in Article 17 require employer members of the MCO to join the MCAT. It may, as the responding trade unions and the MCAT conceded, encourage MCO members to do so, but there are any number of collective bargaining demands which would have the same effect which can clearly be bargained to impasse. (We could give examples, but we will not because we do not think it would be helpful or beneficial to the labour relations involved in this case to do so.) There is nothing necessarily improper in a trade tin ion preferring to deal with one employers' organization over another, or from advancing bargaining demands which would tend to make member­ship in one employer's organization more appealing to employers than non-membership or membership in another employers' organization.

46. A demand like the Article 17 demand in this case, is likely to undermine the representation of employers by an employer's organization. But it is only when a trade union interferes with the administration of an employers' organization, or improperly contributes financial or other support to an employers' organization, that it comes up against the section 71 prohibition against such interference. The question is whether the responding trade unions' Article 17 demands do so.

VIII

47. Counsel for the MCO waxed somewhat eloquent when he argued that the effect of Article 17 is "taxation without representation". Nevertheless, it is true that including Article 17 in the MCO agreement would require MCO employers to pay a fee to MCAT without allowing them any input into the administration of those funds, and without any direct benefit from the use of those funds. A significant part of the purpose of the MCAT industry fund is used to pay MCAT's costs in negotiating and administering the MC'AT agreement. Even if the MCO agreement is identical in every way (except for Article 17) to the MCAT agreement, the MCAT's activities in that respect have nothing directly to do with the negotiation of the MCO agreement, and nothing at all to do with administering the MCO agreement. The MCAT's industry activities are designed to further interests of its members, and not the interests of MCO employers (or other employers) which are not its members. Whatever indirect or collateral general positive effects the MCAT's activities might have in that respect on non-MCAT masonry contractors, these effects are just that: indirect or collateral.

48. Further, to the extent that any indirect or collateral effects of the MCAT's activities are beneficial to employers which are members of the MCO, they are unintended. As competing employers' organizations, the MCAT and the MCO are not interested in helping each other or each others members. On the contrary it is apparent that the MCAT would like to see the MCO gone. It is likely that the MCO feels much the same way about the MCAT, but at the very least it wants nothing to do with the MCAT.

49. In these circumstances, it is somewhat disingenuous to suggest that the MCO should "pay the freight" for incorporating the terms of the MCAT collective agreement into its own agreement. The fact that, with the exception of the disputed Article 17 of the terms of the MCO agreement are identical to those in the MCAT agreement tends to benefit the MCAT as well, and also tends to provide stability in the industry. Further, the MCO did not arrive at the MCO agreement all by itself. The responding trade unions, at the insistence of the MCAT through Article 17 in the MCAT (primarily an employers' organization provision) were full participants in achieving that result.

50. In any event, there are two separate collective agreements in play. The MCO will have to administer its own agreement. At the same time, the MCO will have no say or other role in the administration of the MCAT agreement. Why should the MCO be required to "pay the freight", or anything at all, to help or defray the expenses of a rival employers' organization with respect to a collective agreement it has nothing to do with. particularly when it is clear that one of the objects of the MCAT is to eliminate the MCO and occupy the employer part of the field in the industry?

51. Further, whatever duties the MCAT owes to its members, it is not apparent that it owes anything to employers which are not its members, and particularly to employers which are members of a rival employers' organization (in this case, the MCO). Consequently, the Rand formula analogy is not an appropriate one since a trade union has rights, duties and obligations with respect to all employees in a bargaining unit it represents, whether or not they are its members. (And we note that section 47, the Rand formula provision, does not apply in the construction industry.) This analogy may be (but isn't necessarily) raised by Article 17 in the context of the MCAT agreement itself in that non-member employers bound by that agreement, that is, by the MCAT agreement (rather than by a separate agreement which contains identical provisions) are required to remit industry fund "dues" to the MCAT industry fund, just as non-member employees covered by the collective agreement in which a section 47 provision is included are required to pay union dues to the trade union. It is not raised outside of the MCAT agreement, and specifically not under any MCO agreement since the MCAT has nothing to do with such an agreement.

52. The effect of section 57 of the Labour Relations Act, 1995 is to recognize non- statutory or unaccredited voluntary employers' organizations as legitimate collective bargaining entities under the Act. The responding trade unions have chosen to bargain with the MCO as the collective bargaining representative of certain masonry employers with respect to which they hold bargaining rights, thereby recognizing the MCO as a collective bargaining partner.

53. Collective agreements set out the rights, privileges, duties and obligations which govern the labour relations of the parties which are bound by them. Including an industry fund provision in the collective agreement creates a right in an employers' organization to obtain dues and an obligation in individual employers to pay them. But how can an employers' organization agree with its trade union bargaining partner to create such a right-obligation relationship with employers which are not its members (and indeed are members of a rival employers' organization) which it does not and has no right to represent, and which are not bound by the actual collective agreement between that employers' organization (here the MCAT) and the trade union (here the responding trade unions), unless it has the consent or agreement of such non-member employer's'? In our view it cannot.

54. If it cannot do so for individual non-member employers who have not agreed to be bound by the employers' organization's agreement (as opposed to a separate but identical agreement without the operative "dues" or industry fund provision), how can it do so for employers which are members of a separate, competing employers' organization'? It cannot.

55. With respect, the Board's decisions in J.G. Rivard Limited, supra, and Teskey Construction Co. Ltd., supra, do not stand for the proposition suggested by counsel for the responding trade unions. First. J.G. Rivard Limited, supra, was a case which dealt a provincial collective agreement under the statutory provincial bargaining scheme established for the ICI sector of the construction industry, which gives employers' organizations which are the designated employer bargaining agencies rights with respect to members and non-members. Second, in Teskey Construction Co. Ltd., supra, a case which dealt with a collective agreement outside of the ICI sector, the Board concluded that an employer organization could not collect industry funds from either a non-member employer bound by a separate "like agreement", or from the trade union which was their mutual collective bargaining partner. That is, in the absence of consent or agreement, an employers' organization cannot demand industry fund dues from employers which it does not represent. Accordingly, an employers' organization cannot require non-member employers which it does not represent to pay such dues through the instrument of their mutual collective bargaining partner.

56. If an employers' organization cannot impose such a requirement, how can a trade union press a demand for one to impasse'? In our view it cannot.

57. When a trade union demands that members of one employers' organization help pay for the collective bargaining activities and administration of a rival employers' organization, refuses to accept a refusal to do so, and takes the demand to impasse, the trade union acts unlawfully. This is what the responding trade unions did in this case. By making payment into the MCAT industry fund a strike issue in their negotiations with the MCO, the responding trade unions interfered with the administration of the MCO, and gave improper support to the MCAT, contrary to section 71 of the Act. What greater interference could there be than trying to force the MCO to encourage its members to leave it'? What greater support could a trade union give an employers' organization than helping drive a rival employers' organization out of business and off the field'? As such, this conduct also constitutes a breach of section 17.

58. In the alternative, and even if this conduct did not constitute a breach of section 71, the Board is satisfied that it nevertheless constitutes a breach of section 17. In pressing their Article 17 demand to impasse in this case, the responding trade unions were in effect requiring the MCO to finance the activities of the MCAT to its own detriment. As reluctant as we are to venture down the road of free-standing breaches of section 17, a trade union cannot be allowed to take to impasse demand which has nothing directly to do with the collective bargaining relationship, and where the effect of such a demand is to force an employers' organization which is its collective bargaining partner to contribute to its own demise for the benefit of a rival employers' organization. It may be that taking other demands to impasse (such as high wage demands, for example) will likely have similar impact. Whatever the motivation for such other demands (which may also put an employer or employers' organization out of business), there is nevertheless a direct relationship between those demands and the collective bargaining relationship, and no direct relationship to another, separate collective bargaining relationship. Just as it is lawful to avoid income tax but unlawful to evade it, some means of achieving a labour relations goal will be lawful, while other means of achieving the same goal will not.

59. In the result, the Board finds that pressing the Article 17 demand which the MCO would not acquiesce to would, in the circumstances of this case amount to a failure to bargain in good faith, contrary to section 17 of the Act.

60. Normally, the Board would proceed to make the appropriate declarations and orders. However, there are other issues which must be disposed of before that can happen.

61. The Registrar is therefore directed to schedule a hearing for the purpose of dealing with the remaining matters in issue.

DECISION OF BOARD MEMBER J. REDSHAW; December 11, 1996

1. I dissent.

2. The Labourers are caught between two warring factions in the masonry business.

3. If (as the majority has found) the Labourers have engaged in bargaining in bad faith, they were put in an awkward position by MCO and MCAT. Who was to be the beneficiary of this scheme'? MCAT should not be held blameless in this case. They are as much at fault as the Labourers.

4. If I were negotiating on behalf of the Labourers I would not agree to collect industry funds for either MCO and MCAT until they settle their differences.

5. Because of the circumstances in this case I would not have found that the Labourers had bargaining in bad faith.