[1996] OLRB Rep. May/June 370
1526-95-U Syndicat canadien de la Fonction publique et sa section locale 2519, Applicant v. Corporation Le Lycee Claudel, Responding Party
BEFORE: K. G. O 'Neil, Vice-Chair.
APPEARANCES: James G. Cameron for the applicant; Monique Couture, Terry McEwan, Patrick Floyd and Jean Claude Nadon for the responding party.
DECISION OF THE BOARD; May 2, 1996
This is a complaint alleging a breach of section 15 [now 17], the duty to bargain in good faith and make every reasonable effort to conclude a collective agreement. The applicant will be referred to as CUPE or the union in this decision and the employer as the Lyc~e or the school.
In June, 1995 the Lycee decided not to ratify what had been negotiated between its collective bargaining representatives and those of the union. The union's position is that either a collective agreement had been concluded at the table, or in the alternative that it was a breach of section 15 for the Board of Directors of the Lycde not to ratify the agreement presented to them by their negotiators. By contrast, the employer says that their negotiating committee never had more than a mandate to recommend acceptance, and that there were sound, lawful, reasons to reject the collective agreement.
Five days of hearing were held during which the evidence of 10 witnesses and argument were heard and a substantial number of documents were received into evidence. In the end, the facts necessary to this decision are not substantially in dispute, although there were differences of point of view, recollection and experience in the evidence of various witnesses - and fundamental differences over what conclusions should be drawn from the facts. It is my assessment that the evidence before me was given honestly by all the witnesses, but that there were important differences in how some of them perceived what was occurring. Where necessary I have noted how I have viewed any differences in the witnesses' evidence. I have carefully considered all the evidence and submissions, even if not explicitly set out below.
The Lycee Claudel is a private francophone school in Ottawa, incorporated under the laws of Ontario, and accredited by the Government of France as a French school abroad. This accreditation is fundamental to the school's character, and its ability to attract students from families in the foreign service and the international community living in Ottawa. Part of the accreditation process is the negotiation of an agreement with an agency of the French government, A.E.F.E., which brings with it the benefits of teaching staff, financial and institutional resources from the French government, as well as obligations on the part of the school to maintain standards acceptable to the authorities in France. To ensure the standards, there are several measures in place, including the provision of a school director (le proviseur), and school inspectors directly from France. The agreement touches on matters also dealt with in the parties' negotiations, such as the composition of certain required school committees.
The Lycee serves approximately 600 students from the primary to secondary level. The bargaining unit involved in this case is composed of approximately 40 of their teachers, those not directly paid by the Government of France.
The existing collective agreement between the parties was due to expire on August 31,
Notice to bargain was served on June 8, 1994, and proposals were delivered by the union to the outgoing president of the Board of Directors in November, 1994. The employer established its negotiating team in December, 1994, after the elections for the Board of Directors in November, 1994. The team was made up of the newly elected President, Yves Chartier, the Treasurer, Christophe Alviset, and the Ex-Treasurer, Henri Robcis. The evidence indicated that the committee was established by calling for volunteers who were able to take on the negotiating. In the opinion of the employer witnesses, the members of the team were not there in their roles as President and Treasurer, for example, but as members of the Board of Directors. The union's team was made up of Gilbert Balsamo, Local President, Frantois Le Maitre, Local Vice-President, Gilles Boumard, Local Secretary and Joanne Harvey, Union Adviser. When Ms. Harvey was seconded to another assignment between April and June, she was temporarily replaced by Jean-Marc Bezaire.
Bargaining took place between January and June, 1995. Application for conciliation was made on March 7, 1995 by the union. An April 10, 1995 vote of the union membership authorized strike action and mediation took place on May 15 and 16, 1995. There had been seven bargaining sessions before then and there were three after mediation.
Although in the union's view negotiations were too slow in getting started, and unproductive for too many months, the negotiating teams succeeded in agreeing on all the language issues by the end of mediation and all the monetary items shortly thereafter. There was no memorandum referring to ratification by either side. The parties had agreed early on in negotiations that they would sign off articles as they agreed to them instead of keeping minutes of each meeting. Almost all the clauses were initialled by each side, with the exception of a few items, including a salary grid, agreed to late in negotiations. Another item not initialed, but considered and agreed to by both parties was a definition of the word committee, drawn from a dictionary, indicating that a committee has the power to propose but not to decide. The meaning of the signing off will be dealt with in more detail below, but it is common ground that the negotiating teams had agreed on all the issues on the negotiating table. The problem which lead to this dispute only became clear at the ratification stage.
The problem between the parties is that the union team was of the view that it was negotiating with the employer itself, and that those at the table for the employer, being the President of the Board of Directors and its present and former treasurer, had the power to bind the corporation. However, the employer's committee was clear that it only had the power to recommend to the Board of Directors, and that ratification was necessary before a collective agreement could be signed. They saw their mandate as negotiating something agreeable to both committees and returning to the Board of Directors for acceptance or rejection.
When the committees had finished their negotiations, a document in the form of a collective agreement with a formal signature page was prepared from a computer disk provided by the employer team, and the union took it to its membership for ratification. It was accepted by the union membership, on the recommendation of their negotiating committee, by a wide margin.
A few days later, members of the negotiating teams of both sides met for supper, on the union s invitation, to celebrate their work. Although somewhat uncomfortable with the invitation himself, partly because he knew the agreement could be voted down, Mr. Chartier accepted out of politeness. At the end of the supper, the union presented the document setting out all the issues agreed to, with the union signatures in place, to the employer. Testimony differed somewhat about whether Mr. Chartier, the President of the Board of Directors, was ready to sign the agreement at that moment, but it is clear that he did not sign it. It is equally clear from the testimony of Messrs. Balsamo and Le Maitre, two members of the union committee present that night, that they knew that it had to go to the Board of Directors before being finalized. They were advised by members of the employer committee of the date of the next meeting when it was to be presented. However, the union side thought this was just a formality, and that there was no chance of its being rejected. No agreement had been rejected by the Board of Directors at the ratification stage before. As well, members of the union team had sat as faculty members on the Board and seen collective agreements for the support staff bargaining unit ratified with little discussion, to the point that they believed it would always be so. Otherwise, they said they would not have put it to their members to be ratified, or invited the employer team to dinner until the employer had ratified.
The Board of Directors held a meeting on June 27, 1995; consideration of the collective agreement was on the agenda. Also on the agenda was an item concerning the school premises, the upshot of which was that a proposed, and much needed, move of the school to better premises would not take place. The evidence is clear that the school is in a very bad state of repair and not large enough to comfortably house the current number of staff and students. How to solve this problem had been discussed for years. Negotiations with the Ottawa Carleton French Language School Board were undertaken and on May 23, 1995 an agreement was arrived at which involved an exchange of properties which would have enabled a move, on condition of an environmental review. After the environmental review, the school board rejected the agreement. This rejection was announced at the Board of Directors meeting directly before they considered the teachers' proposed collective agreement.
Copies of the proposed collective agreement had been distributed to the directors in advance of the June 27 meeting and they had heard very brief reports about negotiations at meetings prior to June. From those discussions Mara Sfreddo, a member of the Board of Directors, had heard mention of salaries and the percentage increase and knew why the administration thought principal teachers, about which there were new provisions in the proposed agreement, were a good idea. But there had been no in depth discussions. The employer team had consulted somewhat with the school's directors and administrator but not after May 15 when the bulk of the negotiations took place.
It was the uncontradicted evidence of the employer that the Board of Directors' attention had been largely taken up with the question of the proposed move of the school to better premises between December, 1994 and June, 1995. It was a subject that had been discussed on and off for years, and it was the general view that this time the move was really going to happen. Forhis part, Mr. Alviset, the Lycee's treasurer, thought the move was practically certain, and this had an impact on what he was willing to agree to at the table. The move would have meant more space and the ability to increase enrollment or offer day-care and kindergarten services, thus increasing the school's revenue. He was of the view that there would not be a problem putting the agreement in place as signed by the parties at the table.
By the time of the meeting to consider the proposed collective agreement, the Board also had information to the effect that enrollment was declining for the first time in the history of the school. Mr. Alviset's assumptions had been based on increasing enrollment.
Mr. Alviset presented the document to the Board for their approval. A discussion ensued, which involved the directors giving their impressions of the agreement, which were for the most part negative. Given the tenor of the discussion, neither Mr. Alviset nor Mr. Chartier, the other member of the negotiating team present, felt it advisable to put a formal motion, as it was clear to them that the agreement would not be ratified.
The consideration of the collective agreement by the Board of Directors was continued two days later, on June 29, for over three hours. The collective agreement was reviewed page by page, up to, but not including, the monetary portions. However, the directors were aware of the overall percentage agreed on, about 17% over four years. At that point Mr. Alviset had to leave, and the four remaining directors continued to discuss the matter for another 45 minutes, at which point they decided not to ratify. Mr. Alviset had expected discussion to continue at another meeting on June 30, 1995. However, he was called the following day to be informed that it would not take place, much to his dismay.
The evidence indicates that there were a number of matters of concern to the Board in the proposed agreement. In general, Mr. Chartier said the members of the Board thought it posed a risk to the financial health of the school. This was because of the cost of the proposed agreement in the context of the decreased enrollment and the problems with the premises. As well, portions of the agreement were seen to be in conflict with the convention with France. This too had financial implications, because if the convention was jeopardized, the school's status as a French school abroad would be threatened, along with the funding that went with it.
The rejection of the contract was communicated to the union by letter dated July 4, 1995. The members of the union negotiating team who testified were shocked by the rejection, and this complaint followed within a week.
Although the union objected, the Board admitted evidence of what transpired after the rejection, as relevant to the employer's theory of the case that it was not acting in bad faith, but for legitimate reasons in rejecting the contract. Members of the Board of Directors wished more detailed calculations. In September the Board of Directors appointed Mr. Jean Denys Archambault to continue negotiations with the union and authorized the retention of a consulting firm to more fully cost the proposals. Mr. Archambault gave evidence about what he saw as the problems with the collective agreement, but with the exception of a few general areas, there is no evidence as to whether or not those rejecting the memorandum in June had precisely the same concerns. Mr. Archambault was not on the Board of Directors in 1995, although he had served on the Board of Directors and as a member of its negotiating team in previous rounds of negotiation.
Although Mr. Alviset had been convinced there were adequate funds to pay for the settlement at the time he agreed to it, when he testified, his view had changed. He was dubious that the suggestions of union counsel, such as raising tuition by a percentage larger than the usual annual range of increase, were viable ways to finance it because of their potential negative effect on enrollment. He noted that it is a time of uncertainty of employment among civil servants in Ottawa, many of whom have their children in the school. As to suggestions to increase enrollment, Mr. Alviset said this is out of the question until another solution is found to the problem of the premises. An architect is currently being consulted about renovations to the current premises and the possibility of finding space for a kindergarten. Mr. Nadon, the administrator, was of the view that the decline in enrollment was linked to the rise in tuition, especially because of job loss in the Ottawa area among the parents. Also of concern from the revenue side is that funding from both the Governments of Canada and France is being decreased.
Having set out the basic facts of the dispute, it is appropriate to expand on them in the course of considering the arguments presented by each side as to the application of section 17 [formerly section 15] which provides as follows:
The parties shall meet within IS days from the giving of the notice or within such further period as the parties agree upon and they shall bargain in good faith and make every reasonable effort to make a collective agreement.
The union's first argument is based on the idea that the employer's team either had a mandate to conclude a collective agreement or acted as if they did, leading the union into mistakenly believing they did. Thus it is argued the Board should find that the document ratified by the union is the collective agreement between the parties, and the employer should be ordered to sign it.
Actual Mandate
Dealing first with whether the employer's team actually had a mandate to conclude a collective agreement, the evidence from the employer witnesses was clear that they thought they had no more power than any other committee of the Board of Directors, i.e. the power of recommendation rather than the power of decision. There is nothing before the Board about the meeting where the employer committee was struck or the mandate given which would contradict the evidence that the actual mandate given was a mandate to negotiate and recommend, rather than a mandate to return with a concluded collective agreement. Several employer witnesses testified that it was the long-standing practice of the Board to only give a power of recommendation to the committee, a view consistent with the evidence of the members of the employer's committee for this round.
By contrast, there was evidence from Mr. Fleuriau-Chateau, a former president of the Board of Directors and member of the employer's negotiating committee, that when he negotiated he believed he had the power to conclude a collective agreement and would have resigned from the Board of Directors immediately if what he had negotiated had been rejected. This evidence was given in a credible manner, and there was no reason offered in final argument for me to discount it. However, given that this was for a separate round of negotiations, it does not outweigh the evidence given specifically about this round and the mandate given to this employer team. There is nothing to say that the mandate need be the same during each round of negotiations, or that participants during different rounds (or the same round for that matter) would all share the same understanding of their role. The cases bear this out. See for example the Professional Institute of Public Service Canada, [1978] OLRB Rep. Jan. 18, where the employer's negotiator resigned because ratification was not a rubber stamp as he had thought it would be. In any event, although the past practice is relevant to the understanding which each team brought to the table, it is not determinative on the point of whether or not the employer team in this round had an actual mandate to bind the employer.
It is my finding from the evidence before me that the employer's negotiating team constituted in December 1994 was not mandated specifically to conclude a collective agreement, but rather to negotiate and report back to the Board of Directors. The two main negotiators for the school, Yves Chartier and Christophe Alviset, gave credible evidence to this effect, and it was not contradicted by other evidence.
Apparent Authority
Despite the lack of a specific mandate did the actions of the employer team nonetheless bind the Corporation such that a collective agreement is now in place? Both the common law of agency and the jurisprudence of a number of Canadian labour boards recognize situations when someone negotiating a contract will succeed in binding a principal even though the negotiator does not have the actual authority to do so. This is referred to as having apparent authority. See, for example Vic Starchuk Associates, [1980] OLRB Rep. April 5 16, Steds Limited, [1992] OLRB Rep. Jan. 67 and G.A. Baert Construction, [1971] OLRB Rep. Dec. 766. On the facts before me, the question is whether the conduct of the Board of Directors in allowing its team to act in the way it did amounts to a situation where the team had apparent authority sufficient to bind the employer. That is the conclusion argued by the union, while the employer says that both parties knew that the parties' agreement at the table was subject to ratification, and the union was wrong to believe that there was no substance to that step on both sides. Whether the employer team had the apparent authority to conclude a collective agreement and whether the agreement reached was subject to ratification are essentially questions of fact.
We will discuss the cases in more detail below, but the general concept of apparent authority can be briefly summarized: where an agent is placed in a position by a principal and given the authority to act in a way which indicates that an agent has authority to bind the principal, and a third party relies on that to change its position, the principal will be bound by the actions of the agent. However, a third party cannot rely on a representation of an agent's authority if the third party knew or ought to have known of the limited nature of the agent's authority, or if the third party ought reasonably to have been suspicious of the agent's apparent authority. See, for example, Cameron Harvey's Agency Law Primer at pp. 53 and ff.
The union says that by its actions, the employer represented to them that its negotiating team had a mandate to bind the corporation. The union argues its representatives relied on this in having its membership ratify the agreement and communicating that to the employer, thus seriously compromising its bargaining position if the employer is allowed to repudiate the agreement. Further, the members of the negotiating team testified that their knowledge of the past practice of the school lead them to reasonably believe that review of the settlement by the Board of Directors was nothing but a formality, and that there was no chance that a negotiation concluded by the President and Treasurer of the corporation would be repudiated. Thus, it is said that the employer should be held to the bargain made by its negotiating team.
Reference was made to Article 6.01 of the By-laws of the Corporation which provides that the president and the treasurer, among others, are officers of the corporation, agents of the directors and represent the Board of Directors or the school. Thus, Messrs. Chartier and Alviset have the authority under the corporation's By-laws to act as agents of the school, by reason of their office. Although I have found above that they did not have the express or actual authority to conclude a collective agreement on this occasion, the fact of their corporate authority to act as agents gives a formal basis to the view of the union bargaining committee members that they did have the authority to bind the corporation. However, the general authority to so act was not argued to mean that in every situation the President and the Treasurer would bind the corporation. If the President and the Treasurer are by virtue of the By-laws the agents of the Board of Directors, the Board of Directors is capable at law of limiting the mandate of its agents.
The evidence about the initial meetings of the two bargaining teams establishes that the employer team introduced itself, and it was clear to the union that its members were bargaining on behalf of the employer. Beyond that, the communication was less explicit on the subject of mandate. For example, the evidence does not establish that it was ever said that they were just a committee of the Board of Directors, with no authority to bind the corporation, or that all agreements at the table were tentative and subject to ratification by the Board of Directors. Nor was it ever stated that they had the power to conclude a collective agreement. Mr. Chartier said that although it was not expressly stated that they only had a mandate to negotiate it was implicit in their presentation and he believed the procedure had been established in advance.
The witnesses for each side remember different aspects of the later discussions at the table. Mr. Balsamo recalls that, the two team's having agreed to signing off articles, when they came to the first occasion of agreement, he made a comment to the effect that this was serious, that it committed everyone. Although management witnesses could not recall that in particular, it was not denied. I accept Mr. Balsamo's evidence on this point, but it is not, in the end, an answer to the problem before us, because to say that it committed them begs the question as to what it committed them. Did it commit them to recommend the agreement for acceptance, or to having agreed once and for all'? Clearly for the union side, there was never any question on that point: everyone was clear that the union would be taking the matter back to its members for ratification and that signing off did not mean final acceptance. Thus, it is not the signing off itself which can be the determinative factor.
The employer witnesses recall references by the union team to each of them taking the matter back to their superiors, although the details of the exchanges were not clear in their memory. Again, these were not denied by union witnesses, but it was their evidence that there was never anything clearly stated to the effect that the employer committee could not bind the Board of Directors, or that the agreement might not be ratified at the Board of Directors. Although the union adviser, Ms. Harvey, said there was no mention of ratification when she was at the table, she was not there for the meetings at which most of the signing off was done, and it is clear from the evidence of the members of the team who are employees and were there throughout the negotiations, Messrs. Balsamo and Le Maitre, that they knew at all times that it would have to go to the Board of Directors. The dispute is over what would happen at the Board of Directors.
Mr. Chartier acknowledged, as Ms. Harvey had testified, that there were times when the employer team indicated that they needed information from the proviseur or other officials of the employer or members of the Board before signing of, e.g. on the subject of principal teachers, although there were times as well when they did not. As to the proposals entitled "Administration Proposals" they were drafted by Mr. Alviset, and did not come from the Board or the administrative employees of the school.
There was evidence about other rounds of negotiation, between the school and both the teachers' and the support staff bargaining units. The evidence demonstrates that the agreed on items were presented to the Board of Directors and on each occasion, the Board of Directors ratified the collective agreements agreed to with the negotiating teams, be they teacher or support staff. The evidence established that often there was very little discussion. Mr. Le Maitre's experience was that how easily something passed often depended on who presented it. Mr. Balsamo had served on the Board of Directors as a faculty representative as well, and his view was that once the deal was made at the table, it would always be ratified by the Board of Directors. The members of the union team were excused from the Board meetings during the discussion prior to the ratification of previous teachers' agreements, but had been present for discussion prior to the ratification of support staff agreements. Mr. Nadon, the school's administrator testified that the amount of discussion depended on how much was at issue and whether the changes involved language issues or monetary ones, the latter requiring less explanation. The members of the Board of Directors who testified for the employer were of the view that they always had had the right to reject a proposed collective agreement.
Ms. Harvey had negotiated with the Lycde before and there were a variety of procedures in her recollection. Sometimes there was a protocol explicitly setting out that the agreement was subject to ratification, as is usually the case when she negotiates with lawyers. None of the members of either bargaining team were lawyers on this occasion and no protocol was signed. Ms. Harvey was clear in her own mind that when the President of the Lycde signed off an article, that was an act of the corporation. This was reinforced in her mind by the fact that at times during the negotiations the employer team left to consult with the proviseur (the director of the school) before signing off.
As stated above, the evidence about the previous rounds of negotiation is not determinative, but it is relevant to the reasonable expectations of both parties. The one thing that emerges very clearly is that with the exception of the union representative, all the witnesses knew that the agreement had to go to the Board of Directors before it was signed. The difference between the two is whether or not it was just a formality or a substantial step in the process.
The cases which deal with the question of whether ratification can be assumed to be a complete formality, rather than carrying with it the risk of rejection, are not many. Employer counsel referred us to Board of Education for the City of Hamilton, [1993] OLRB Rep. April 308. In that case, the employer's negotiating team had been given a specific mandate by the Board of Education prior to school board elections. When the time came to ratify what their team was recommending, the newly elected Board refused to ratify, citing changed circumstances. The union committee had concluded from its lack of problems at the ratification stage in the past, that ratification was a formality. Management had given some warnings to the union, before ratification, in the form of urging the conclusion of negotiation before a budget speech of the Premier's, and again after the union reported that their members had ratified, in the form of an explicit statement that there might be difficulty obtaining ratification, a difference of fact on which union counsel relies to distinguish this case. The facts are distinguishable in that respect and also because it was not an officer of the Board who was negotiating for the employer, and the agreement was explicitly subject to ratification. However, on the point of whether or not there was a risk of defeat on ratification, or whether it was a rubber stamp, the case is quite similar. In concluding that the union's assumption that there was no chance of rejection was unwarranted the Board had this to say at paragraph 47:
... The fact is, whatever Ms. Cooke's [the union negotiator's] experience may have been, there was no guarantee that the newly-elected Board would cede its political authority and simply rubber stamp" the recommendation of its subcommittee - any more than there was a guarantee that the union membership would ratify the settlement proposed by union officials. Nor is it surprising that when exercising the prerogative reserved to it by the terms of the Memorandum, the Board would consider all of the relevant circumstances, including the Board's financial difficulties and the impact of the Premier's recent announcement.
and further at paragraphs 62 and 63:
In the instant case, it is important to note that the January 16 settlement expressly contemplates that it will be subject to ratification. Prima facie, the terms of that settlement mean what they say. The deal is provisional; and, OPEIU [the union] seems to have taken it for granted that its members retained a veto, and were entitled to reject the settlement if, for some reason or other, they found it wanting. It seems to be acknowledged that that is a political process in which the OPEIU membership had a free hand to disregard the recommendation of their negotiating team. There is nothing to suggest that the Board ever gave up a reciprocal right to reject, and there was no representation from its negotiating committee to this effect. Obviously, the Board, too, is a "political body" with responsibilities to its electorate and its own view of the employer's interests - especially in the wake of an election, and in light of the employer's escalating economic difficulties.
The Board is not a private sector enterprise, where the authority of the negotiating agent may be much more closely fused with that of the "principal". The relationship between the full Board and its sub-committee is different, and, quite frankly, whatever the past practice might have been, it was unwise for OPEIU to treat the full Board as a mere "rubber stamp", or a proforma process of automatic approval - especially when, as early as January 16, the Board's negotiators were worried about the shifting economic circumstances, and warned Ms. Cooke that the Premier's speech would impact upon bargaining. We do not suggest that an elected body has an entirely free hand to resile from its agreements or float with the political winds; however, it is entitled to exercise its own judgement in accordance with the negotiated terms of settlement. There was no agreement to ratify, but merely an undertaking on the part of the employer's representatives, to recommend ratification. Those parts of the settlement would be meaningless if it were not contemplated that the Board had an option to reject.
See also Central Park Lodges, [1988] OLRB Rep. May 454.
In Municipality of Casimir, Jennings & Appleby, [1978] OLRB Rep. June 507 there is an example of a single round of bargaining with two formal attempts at ratification before the municipal council. On the first attempt council rejected. After a strike, negotiations were concluded and agreement reached on all matters in the presence of The Reeve and Deputy Reeve, apparently the most senior municipal officials. Because of their presence at this final round and because council ratified the content, only refusing to implement because of a pending judicial review, a breach of section 15 was found and the employer ordered to sign the document agreed to at the table. As part of the Board's finding at paragraph 23 that the parties intended that the results of their final efforts at the table would be the execution of a collective agreement, the Board notes apparently with approval, that the union's negotiator operated on the assumption that the discussions in the presence of the Reeve and Deputy Reeve, the senior elected officials of the municipality, were the equivalent of a representation that ratification by Council was merely a formality and that all that remained to be done was to provide a form to the understandings suitable for execution. Because the main issue in this case was the failure to implement the terms agreed on, this latter fact is not decisive in the case. However, it is illustrative of how the surrounding circumstances will support or detract from a finding on whether ratification is just a formality. In Hamilton Board of Education, as noted above, they pointed in the other direction - to a finding that the step of ratification was not just a formality. However, it is clear that an assumption not based on a representation, verbal or by conduct, is not enough to show that ratification was just a formality.
In argument union counsel listed the following elements as establishing that there was a mandate, real or apparent: the nature of the employer team itself, including the president and the treasurer; the length and frequency of the negotiations - more than 10 meetings over six months; the seriousness of the negotiations, there having been give and take and serious negotiation over many items; a strike vote had been taken; conciliation went on for two days; the fact that what got the negotiations restarted were proposals from the employer; the fact that in April the employer appeared at the table with a document entitled "Administration Proposals" which shows that they were coming directly from the administration; all items were signed off by the presidents of both sides with the exception of the salary grid which came directly from the employer. Union counsel queries how it is that the Board of Directors posed no questions during the whole course of negotiations, even with a strike vote and two days of conciliation, if their team had no mandate to negotiate a collective agreement. Otherwise, he suggested it would mean the employer sent people without the authority to negotiate to the table.
In sum, the union says that the employer team did nothing to change the impression that they were negotiating with the employer itself or their belief that ratification was only a formality. There is not a significant body of law on whose onus it is to establish the bargaining authority of the opposite side and no clear guiding principle is obvious. Each case must be determined on its facts and the potential combinations of facts are many. See, for example, Stadco Forest Products, [1981] 1 CLRBR (B.C.), where it was held that a mistake about the negotiating authority of the other side was the responsibility of the party making the error; it was that party's duty to ascertain the scope of the negotiating authority of the opposite negotiator. By contrast, in John Inglis, [1974] CLRBR 481, the B.C. Board seemed to put the onus on the negotiators with limitations on their authority to communicate what those limitations were, rather than the other way around. However, that conclusion was subject to the caveat that where there is good reason to suspect the authority of the opposite party, the other party must inquire further.
It is the Board's view that there is no settled onus in this respect. Prudent negotiators will make their own authority clear at the outset of negotiations and inquire about the other side's authority explicitly. Where the situation is left less clear than that, as in the facts of our case, it will be judged in light of the particular circumstances of the case. As indicated above, whether or not there is apparent authority sufficient to bind the employer is a question of fact on the balance of probabilities.
On balance, it is the Board's view that the knowledge of the President and Vice-President of the union Local that the agreement had to go to the Board of Directors for approval is fatal to the idea that the employer negotiating committee had apparent authority to finally conclude a collective agreement. Although it may be understandable that the union team thought they were dealing with the people of influence on the Board, and that there was little or no chance of their recommendation being turned down by the Board, the evidence is not sufficient to warrant a finding that it was safe to assume that ratification by the Board was not a real second step. For instance, it seems odd that the teacher members of the Board of Directors would have absented themselves for the discussions before ratification of teacher agreements in the past if ratification was nothing but a formality. It is my view that the reason the members of the union team had come to the conclusion that ratification was a foregone conclusion had less to do with the representations of the employer negotiating team, since there is no evidence of any explicit representation that they had the power to bind the employer, but with their experience in the past. No other collective agreement had ever been defeated at the Board. It may be understandable that the union drew the inference from that history that this time would not be an exception. However, we find that there was a mutual understanding that each side had to take the matter to its principal and that this understanding was never subject to any representation at the table that there was a limitation on the power of the Board of Directors to say no, rather than yes. All of the evidence together indicates that, impressive though the individuals on the employer's team may be, individually and by reason of their office, committees of this Board of Directors could not safely be thought to have the power of final decision. The employee members of the union bargaining team knew this to be the case for every other committee of the Board of Directors, including those on which they had sat in the past. Their assumption about the difference in the power of this committee was rooted in both their past experience in getting contracts ratified, and their knowledge of the network of influence within the school and the Board of Directors. When the result was at odds with their experience, members of the union team were surprised and shocked. Nonetheless, we do not find that there is sufficient evidence of a representation of apparent authority before us that we should find that the employer negotiating team bound the employer to the agreement reached at the table.
The above leads to the conclusion that a collective agreement has not been concluded between the parties, and it is unnecessary to deal with the question as to whether the lack of employer initials on a number of items means that the document would not meet the Act's requirement that a collective agreement be a document in writing.
Duty to make every reasonable effort to conclude a Collective Agreement
The union's alternative argument is that even if a collective agreement was not finally concluded at the table, it was a breach of section 15 to not ratify. The union argues that the manner in which the Board of Directors considered the document put to it is insufficient to meet the duty to bargain in good faith and make every reasonable effort to conclude a collective agreement. Union counsel argues that the cursory treatment of the monetary portion in the absence of its author, and treasurer, as well as the ex-treasurer who had been part of the team, as well as the failure to continue discussing the matter on June 30 point to a surface consideration of the document. As counsel put it, it is one thing to bargain hard, it is another thing to not even give your own representative the chance to explain such a significant part of their six months of work.
Furthermore, it is argued that in not recommending the agreement for acceptance, or posing a resolution Mr. Chartier's conduct fell below the standard required by the statute.
In arguing the portion of the case on apparent authority, union counsel put it at one point that the employer team had apparent authority, unless the Board of Directors was sending people to the table without authority. He queried how it was that the Board had asked no questions the entire time if the committee did not have the mandate to bargain. We have found that the committee had a limited mandate to bargain, and not to conclude a collective agreement. But this does not answer the questions implicit in those raised by the union, which are essentially about the sufficiency of the mandate to meet the obligation to make every reasonable effort to conclude a collective agreement.
As well, the union argues there was insufficient reason to reject the proposed agreement. In the union's view, it was far from being obvious that the school would go bankrupt, and the later calculations of Mr. Archambault and the Board's consultants were not the basis of the decision to reject, since they did not exist at the time.
The employer argues that this is simply a case where circumstances have changed as in Hamilton Board of Education, cited above. The evidence in their view clearly establishes that they were willing to meet and seriously negotiate, and remain willing to do so. Failure to reach an agreement should not be found to constitute bad faith.
On the question of the failure of the Board of Directors to ask questions earlier, the employer argues that the agenda was heavy and that collective bargaining was often at the end of the agenda. Because of other concerns such as about the premises, there was not time to engage in earlier discussions in depth.
Counsel for the employer argues that nothing should be made of the fact that Mr. Chartier did not propose a motion to adopt, or put the matter to a vote. He did not disavow the settlement, and Mr. Alviset put it to the Board of Directors for their approval. Counsel submits that the Board of Directors then had substantial reasons for not ratifying and no breach should be found.
These arguments put in issue both the period prior to the signing off of the proposed agreement at the table, in respect of the mandate of the committee from the Board of Directors, and the failure to ratify itself.
The relationship between mandate and ratification is ideally very straightforward. They are the beginning and end points of a successful bargaining process. If there is a clear mandate, adhered to by a negotiator or committee, and a tentative agreement reached within that mandate, problems with ratification ought to be rare. However, as the cases demonstrate, what occurs between mandate and ratification is not always so linear. But at a minimum, reasonable efforts to conclude a collective agreement and good faith require that there be substance to the authority and mandate of a team, so that progress toward a collective agreement is real and not illusory. Even where agreements are made at the table subject to ratification, the statutory duty continues to apply, as the cases make clear. A formal mandate with no content is problematic as is the repudiation of agreements within the mandate without sufficient reason. Adequate authority should mean for instance, at the very least, that if an employer's proposal was adopted in its entirety by the other side, there would need to be a very good reason why it was not ratified.
The relationship between mandate and ratification is part of the assessment of whether the duty to bargain in good faith has been breached. The Alberta Board put the proposition as follows in Barber Industries & Allied Workers 3 CLRBR (2d) 288 at page 297:
When assessing the obligation to bargain in good faith, the Board must look at the question of ratification along with the parallel notion of a mandate. The legislation permits an employer to bargain through a bargaining committee and allows an employer to stipulate a process of ratification. However, there is a duty to provide any such bargaining committee with clear direction about what the employer wishes to achieve and is willing to accept. This is an important part of the duty to bargain in good faith and make every reasonable effort to enter into a collective agreement.
An unexplained failure to ratify a proposal negotiated by a committee, ostensibly acting within their mandate, calls into question either the bona fides of the refusal to ratify or the adequacy of the mandate given to that bargaining committee. This is particularly so where the employer's committee has made the proposal to the trade union, rather than the other way around. It is also particularly so for a small employer with close links between the bargaining committee and the persons responsible for ratification.
In that case, the Alberta Board found deficiencies in the communication between the principal and the committee in terms of mandate. As remedy, the employer was ordered to give clearer directions to its negotiators on certain points, to make the importance of certain items clearer in negotiations and to table an offer which did not require ratification.
We will deal first with the period prior to the failure to ratify. The evidence before the Board established little in the way of content of the mandate of the employer committee, although it established that the employer's initial proposal was to simply renew the old collective agreement, a proposal which no doubt would have been ratified by the employer if it had been accepted by the union. The employer committee consulted with members of the administration and made brief reports to the Board about progress of negotiations. Each meeting of the Board of Directors at which negotiations were mentioned was the subject of evidence, but there is no evidence that there was any decision by the Board of Directors about what they were willing to accept, even in the broadest of outlines, beyond the simple renewal of the expired collective agreement. In that respect, the mandate seems to have been vaguely defined, if at all. Although it appeared to the union committee that consultation was ongoing with the administrative staff of the school, the evidence indicates that what there was was brief and occurred early on in negotiations. And during the period when the bulk of bargaining was done, there appears to have been no communication at all between negotiators (the committee) and principal (the Board of Directors) about what the Board of Directors was willing to accept. In sum, the evidence bore out what the employer pleaded: questions were not sent to the Board before being signed off, and it was never informed of the content of the negotiations until the meetings at the end of June.
Between January and April, negotiations were mainly taken up with the employer responding to union proposals. The employer did not make its own proposals until April for language items, which were a response to the union and a summary of the progress made to date, and until May for monetary ones. Although the monetary proposals were based on information that had been obtained from the administration such as the current salary, seniority and qualifications of the staff, they seem to have been developed in isolation from any specific mandate from the Board to offer them. The evidence also indicates that the employer did not have detailed information about what some of the proposals would cost until after the tentative agreement was reached, although extensive work had been done on the salary grids. Although it is pleaded that the budget provided a mandate of 2 c for the budget years 1995/96 (September 1, 1995 to August 31, 1996) which was exceeded by the negotiators when they agreed to 17% over four years, there was no evidence that the budget had been finalized by the time the financial proposals were made, or that they were in fact a specific part of the committee's mandate.
Although the above state of affairs is hardly ideal, it is not very surprising, nor probably unusual. This is a small school, with parent volunteers on the Board of Directors and the employer's negotiating committee. In this particular case the volunteers had no experience in collective bargaining. The Board is convinced that all the individuals concerned were acting in good faith in the personal sense of the words and in the sense of having the intention to recognize the union and conclude a collective agreement. But section 15 can be breached even where there is good faith, because of the companion obligation to make every reasonable effort to conclude a collective agreement. See Dc Vilbiss (Canada) Limited, [1976] OLRB Rep. March 49. The real question is whether, on balance, what happened amounts to reasonable efforts to conclude a collective agreement.
To my mind, this is the area in which the factors listed by union counsel in arguing apparent mandate accumulate to become quite problematic. The fact that the two committees engaged in serious negotiations over six months when in fact the employer side had no specific instructions as to what was acceptable means that there was no guarantee that the parties were not engaged in a fruitless exercise -when the object of section 15 is to ensure that negotiations bear the fruit of a collective agreement if reasonably possible.
It is clear that the first real in-depth look at negotiations by either principal happened at what both committees thought was the end of bargaining. This was the practice of the parties during the earlier rounds of bargaining. And it had not caused problems before; it had been good enough until this round. On the union side it is the standard way to put a settlement to a group of employees, particularly where a mandate to negotiate has included specific proposals or goals at the front end. But, the ratification process is not perfectly symmetrical, as the Board has observed in Central Park Lodges, and Hamilton Board of Education, cited above. On the employer side, especially, as here, where there is no practical difficulty in communicating with the principal, it is my view that the apparent failure to develop a mandate which included content acceptable to the Board of Directors falls short of making every reasonable effort to conclude a collective agreement. The fact that it had not been necessary in the past, does not make it any less true that there was an essential element, missing in the employer's approach. The lack of authorization for specific content, by the time of the important exchanges at and after mediation at the very latest, prevented there being any security that the horizon of conclusion of a collective agreement was not endlessly receding although it appeared to be close at hand. Neither side is required to have a complete mandate at the outset. However, sufficient communication between principal and negotiator is necessary for informed progress towards a collective agreement to be possible. When matters are clearly coming to a head, as they were at conciliation and after, a clearer mandate was necessary for the employer to be found to be making every reasonable effort to conclude a collective agreement.
This is not the end of the matter however. The period during which the matter was being considered by the Board of Directors must be considered in order to answer the further question of whether, in any event, it was a breach of the section 17 duty to fail to ratify the agreement. The uncontradicted evidence about the change of circumstances concerning the school's premises right before the vote on the collective agreement is an important intervening fact. The union did not challenge the timing of the employer's knowledge about the cancellation of the move due to the repudiation of the agreement by the French Language School Board. Thus, the evidence before me is that these two items were concurrently before the Board of Directors. As of May 23, the Board, and Mr. Alviset who was putting together the employer's financial proposals, thought they had a contract which would mean that the school was moving - with the expansion potential and increased revenue that went with that. The fact that the move was no longer possible on June 27 meant that the financial assumptions Mr. Alviset had used in making the May 23 financial proposal were no longer applicable. Whether or not there was any obligation on the employer to make its proposals conditional on the move going through is not something that was argued before me, and therefore I make no comment thereon. Members of the union team were aware there was a question of moving during negotiations, although it was not part of negotiations. On the evidence and argument before me, however, it is my view that the fact that the move did not go through as anticipated is sufficient change of circumstances to explain the employer's lack of ratification without a finding of a breach of the Act, given the monetary implications of both.
There were also several instances of problems with the interplay between the agreement with France and the provisions of the tentative collective agreement which were real and add to the finding that there were reasons of substance for the Board to reject the collective agreement. For instance, the evidence was convincing that the agreement at the table about the composition of the evaluation committee, an important committee to both sides, meant that the proviseur could not convene the committee without breaching either the agreement with France or the collective agreement, depending on how he decided to constitute the committee. I have taken into account the evidence, which I accept, that there is some leeway in how one convenes committees under the agreement with France, but this leeway does not persuade me that the concerns about the conflict in the composition of the committees lacked substance, or were a device to avoid a collective agreement. Although the issues surrounding the potential conflict with the agreement with France may be more easily solvable than some of the employer's testimony implied, they are nonetheless real and important to the functioning of the school. Having found that the ratification step is a real one on the employer side, I am not of the view that there was an obligation to ratify with those problems in the agreement.
On balance, it is my view that the failure of the agreement which would have enabled the move is a fact which has overtaken the deficiencies in the mandate of the employer. It is impossible to know now if the deficiency in the employer's mandate is in fact responsible for the failure to ratify. It is just as probable that even if the mandate had been properly formed, and the employer committee had agreed to something within the mandate, ratification would not have been forthcoming because of the new information about the failure of the move. Thus, although the failure to develop a mandate with content acceptable to the Board of Directors objectively falls short of making every reasonable effort to conclude a collective agreement on the employer side, the Board is not persuaded that it is in fact responsible for the failure to ratify.
What is the appropriate response from the Board in these circumstances'? We have found that the development of the mandate on the employer side fell short of the duty to make every reasonable effort to conclude a collective agreement, and thus a declaration to that effect is in order.
The union wishes the Board to go further and order the employer to sign the document ratified by its members. Where a breach of the Act has been found at the ratification stage and the Board finds that all the issues had been settled at the table, the Board has given such a remedy. See, for example, Municipality of Casimir, Jennings and Appleby, [1978] OLRB Rep. June 507 and Northwest Merchants Ltd. Canada, [1983] OLRB Rep. July 1138. However, in general, the Board has been reluctant to impose collective agreements, or even portions of them, because of the distortion of the intended statutory process, based on voluntarism, which that would represent. See, among others, Treco Machine and Tool, [1982] OLRB Rep. Dec. 1954. The Board has not done so where it has found there were lawful reasons for the failure to ratify, such as in Hamilton Board of Education, cited above. Where a breach is found at the mandate stage, the remedy is more likely to be like that given in Barber Industries, cited above: an order to return to the table with a proposal the principal will ratify.
The employer argued that since the recent amendments to the Act which were part of Bill 7, it was no longer within the Board's power to impose a collective agreement. Bill 7, which received Royal Assent on November 10, 1995, before the hearings in this matter had been concluded, changed section 91(4) which formerly read:
91.-(4) Where a labour relations officer is unable to effect a settlement of the matter complained of or where the Board in its discretion considers it advisable to dispense with an inquiry by a labour relations officer, the Board may inquire into the complaint of a contravention of this Act and where the Board is satisfied that an employer, employers' organization, trade union, council of trade unions, person or employee has acted contrary to this Act it shall determine what, if anything, the employer, employers' organization, trade union, council of trade unions, person or employee shall do or refrain from doing with respect thereto and such determination, without limiting, the generality of the foregoing may include, despite the provisions of any collective agreement, any one or more of,
(a) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to cease doing the act or acts
complained of;
(b) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to rectify the act or acts complained of;
(c) an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate instead of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers' organization, trade union, council of trade unions, employee or other person jointly or severally; or
(d) an order, when a party contravenes section IS. settling one or more terms of a collective agreement if the Board considers that other remedies are not sufficient to counter the effects of the contravention.
to what is now section 96(4), which reads as follows:
96.(4) Where a labour relations officer is unable to effect a settlement of the matter complained of or where the Board in its discretion considers it advisable to dispense with an inquiry by a labour relations officer, the Board may inquire into the complaint of a contravention of this Act and where the Board is satisfied that an employer, employers' organization, trade union, council of trade unions, person or employee has acted contrary to this Act it shall determine what, if anything, the employer, employers' organization, trade union, council of trade unions, person or employee shall do or refrain from doing with respect thereto and such determination, without limiting the generality of the foregoing may include, despite the provisions of any collective agreement, any one or more of,
(a) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to cease doing the act or acts complained of:
(b) an order directing the employer, employers' organization, trade union, council of trade unions, employee or other person to rectify the act or acts complained of; or
(c) an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate instead of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers' organization, trade union, council of trade unions, employee or other person jointly or severally.
It can be readily seen that subsection (d) of the former section 91(4) is notable by its absence. The employer argued that the Board's remedial response could not include the settlement of any terms of the collective agreement, or the imposition of one, and it was said the granting of the union's request for relief would require that. To the extent that the employer's argument suggested that it was no longer within the Board's power to find that a collective agreement existed as a question of fact, or that all the terms of one had been agreed to and therefore should be executed, the Board does not agree. However, given our findings above, we are not in that situation. And it is not necessary to finally determine the extent of the effect of the above-noted amendment. Since we have found that the failure to ratify was not unlawful, and in light of the Board's previous jurisprudence, we are not of the view that it is appropriate to grant remedial relief in respect of the terms of the eventual collective agreement itself.
The appropriate response in the Board's view is to declare that section 15 has been breached by the employer in that its failure to develop an adequate mandate falls short of the obligation to make every reasonable effort to conclude a collective agreement. As remedy, the employer is ordered to develop an unconditional proposal for a collective agreement and return to the table and bargain with the union in good faith. By unconditional, the Board means a proposal that the Board of Directors is willing to accept and authorize its president to sign without further ratification. Both parties should then address the changed situation in good faith at the negotiating table.
This is not to say that the parties are returning to zero. It is clear that there is much of the agreement negotiated at the table that has little or nothing to do with the changed fiscal situation, the agreement with France or any reason said to have warranted the rejection of the agreement by the Board of Directors. And it is also clear that the union had convinced the employer's negotiators of the acceptability of their proposals in good faith, which included their arguments about the gap between their salaries and those of teachers in the public system. Echoing the remarks of the Board in Hamilton Board of Education at paragraphs 69 to 77, the union has some good arguments to make in defense of its proposals, move or no move. The place to reinforce those arguments now is at the table or in whatever appropriate forum the school milieu provides. Both parties continue to be under an obligation to comply with section 17.
For the reasons given, the complaint is allowed to the extent indicated. The Board will remained seized to deal with any difficulty implementing the above decision.