National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW-Canada), Local 124 v. Circuit World Corporation, operating as PC World, 1997 CanLII 15591

[1997] OLRB REP. JULY/AUGUST 711

0062-97-U; 0367-97-U National Automobile, Aerospace and Agricultural Implement Workers Union of Canada (CAW-Canada), Local 124, Applicant V. Circuit World Corporation, operating as PC World, Responding Party

BEFORE: Gail Misra, Vice-Chair.

APPEARANCES: Eric del Junco, Marilyn Lesperance and John Ali for the applicant; S. McArthur and Steve Aiken for the responding party.

DECISION OF THE BOARD; July 11, 1997

1The matters complained of in these applications arise out of the same set of negotiations for a new collective agreement, and a strike which commenced on January 9, 1997. The two files were therefore heard together.

2The applicant (the "union" or "Local 124") claimed that the responding party (the "em­ployer" or "PC World") had engaged in bad faith bargaining, and requested a number of remedies for the alleged breach. PC World denied it had breached the Act, and was seeking the dismissal of these applications.

3On July 4, 1997, following seven days of hearing, the Board issued a bottom-line decision with respect to both applications, wherein the Board found and directed as follows:

a) that the January 8, 1997 proposal made by the responding party has been extinguished by the passage of time and in the context of a long strike;

b) that the responding party has breached its obligation to bargain in good faith and to make every reasonable effort to reach a collective agreement;

C) that taken as a whole, the responding party's proposal of April 18, 1997, appears to have been designed to invite rejection by the applicant and its members, and is therefore a breach of section 17 of the Act; and,

d) the parties are directed to return to bargaining forthwith to bargain in good faith and to make every reasonable effort to reach a collective agreement.

These are the Board's reasons for that decision.

4Prior to the commencement of the hearing the parties argued about who had the onus in these applications, and which party should lead its evidence first. Raving heard the submissions of the parties, the Board ruled orally that the union should proceed first with its evidence, and that the Board would reserve until the end of the case the decision with respect to who bears the ultimate onus. As will become clear, it is unnecessary to address the issue in this case, and the Board therefore declines to rule on this issue.

5PC World is a manufacturer of circuit boards and complex bare boards for insertion into electronic equipment like satellites, computers, communication devices and cellular telephones. It operates in a highly competitive field, which five years ago had about five or six thousand manufactur­ers, but today only has about 1000 manufacturers left. The manufacture of circuit boards requires that the ultimate product goes through a sequence of between 25 and 60 different processes before being ready to ship. Each process can compromise the yield and effect later processes. Hence, the company has to diligently manage quality and work in process. The manufacture of circuit boards involves a high degree of operating sophistication and is subject to frequent design changes. PC World therefore has to manufacture a large number of its products in short runs and for tight delivery times. It also prepares prototype boards for its customers' engineering departments, which must be done on a 24-hour to 5-day turnaround. Most of the products it manufactures for its customers are only made for about one year before the design specifications change to meet consumer demands and changing technology.

6Local 124 is the certified bargaining agent for the approximately 103 employees of the employer in its Scarborough plant. In 1993 the parties entered into their first collective agreement. In 1995 that agreement was extended for a one-year period, and expired on December 8, 1996. During that one year extension, the employer and the bargaining unit, without the participation of the CAW­ Canada National Representative or the Local President, agreed to a matrix system (explained in more detail later), which defined functional skill development in all of the main work areas of the plant. The union gave notice to bargain for a new collective agreement on October 1, 1996, and as is usual for this union, applied for conciliation on November 21, 1996, prior to the commencement of bargaining. A conciliation officer was appointed on December 4, 1996.

7The union bargaining committee was comprised of Marilynne Lesperance, the National Representative for the CAW-Canada; John Ali, the President of Local 124, but not an employee of the responding party; and bargaining unit members Bobby Ramnath, Jude Wenaden, Perry Nalamuth, and Raj Jam from PC World. The employer bargaining committee was made up of Philip Wolfenden, counsel to the employer; Steve Aiken, Director of Human Resources; and Wayne Raskins, Production Manager. Ms. Lesperance and Mr. Wolfenden were the spokespeople for their respective committees. Ms. Lesperance had become responsible for this bargaining unit in November 1996 when she had to take over from the previous National Representative, Susan Spratt. She was therefore not very familiar with the membership at the time she had to begin negotiating in this round of bargaining. Nonetheless, Ms. Lesperance is an experienced staff representative who has negotiated over 300 collective agreements in her career.

8The parties met on December 4, 1996, at which time the union tabled its proposals orally. On the following day the union gave its proposal in writing, and the employer responded with its proposals. The union bargaining committee was aware that PC World was in financial trouble, and had been under bankruptcy protection since April 1995. It appears that PC World used to be a leader in the manufacture of circuit boards, but had begun to coast about five years ago. As other manufacturers became more competitive PC World began to lose clients approximately three years ago. In March 1995 the responding party applied for protection from its creditors under the Bankruptcy and Insolvency Act. That protection was due to expire in April 1997. By December 1996 PC World knew that its bank was no longer prepared to support it, and it was therefore searching for alternate financing. At every meeting for negotiations the employer informed the union of its dire financial situation and that it was seeking refinancing. During negotiations the employer offered to show to Ms. Lesperance the books or documents showing the responding party's financial status. It was attempting to avoid any labour disruption as it wanted the company to be stable as it was seeking new investors.

9The employer objectives in December 1996 were to keep the business running, to ensure a steady cash flow, and to maintain labour peace and stability to get its finances in order. By late December PC World had a new investor group in place to replace its bank financing, but it was not until December 31, 1996, when a payroll crisis was looming, that the financing finally came through.

10Mr. Aiken, the Director of Human Resources for PC World, was not happy with what the employer was agreeing to in bargaining with the union. It was his view that PC World was agreeing to language which would be difficult to administer and which would hamper the organizational changes which the employer needed to make to become more competitive and efficient. He was concemed that there were huge disparities in the wages of employees doing the same work. He was also concerned aboui~ the mechanics of dealing with union issues, and how much time was required to attend union related meetings. In a period when he believed the market for PC World's product was picking up, he was concerned the employer would suffer from a "slow strangulation" as a result of the agreement it was reaching. However, the employer bargaining committee felt that PC World was at a low point in terms of its insecurity, and it was prepared to pay a premium and agree to language to avoid instability on the labour front.

11The parties met and negotiated on December 10, 11, 13, 16, and on December 20 they reached a memorandum of agreement (the "memorandum"). The union bargaining committee was confident that the membership would ratify the memorandum. However, on December 21, 1996, 88% of the union membership rejected the tentative agreement. The employees voted 89% in favour of strike action and informed the union negotiating committee of what they wanted to see in a settlement if a strike was to be avoided. The employer was informed of the results of the ratification meeting. On December 23 the Ministry of Labour issued a "no board" report, but, due to the Christmas holidays, it was not received by the union until January 6, 1997.

12On January 7, 1997, when the plant reopened after the Christmas shutdown (December22 to January 6), the union informed the employer that a strike would commence on January 9, 1997. The parties met on January 8 to bargain for a last time to attempt to reach a collective agreement in light of the employees' rejection of the last tentative agreement.

13Following rejection of the memorandum on December 21, 1996, the three issues of major concern to the membership were for a percentage wage increase for all members, a greater increase in wage rates, and abolition of the matrix system.

14The matrix system became a significant bone of contention during the negotiations. As noted earlier, it had been agreed to by the bargaining unit members without the knowledge of the CAW ­Canada National Representative or the Local 124 President. The matrix system allowed the employer to fill rush orders efficiently by moving people around to complete various tasks, without any concern about posting positions, or about seniority. Use of the system permitted the employer to simply consider who could do a particular job, and to transfer that person for the duration of the job. Employees who may only have one skill area would be unlikely to get transfers, and, in the event of a layoff, would be more vulnerable to being laid off because of their relative lack of flexibility. Under the matrix system, the employer had no obligation to train people in more skill areas. By the time of negotiations in December 1996, the employees were no longer happy with the matrix system, and wanted it to be changed so that senior employees who were not multi-skilled would have some protection against being laid off. Hence, the union attempted to bargain Article 8.02 of the collective agreement, which related to layoff and recall. In the memorandum the parties had worked out a training scheme so as to allow more employees to become multi-skilled. After December 21, the bargaining unit members clearly told the union bargaining committee they did not want the matrix system, even with a training regime, any longer.

15When the parties met to negotiate for the last time before the strike deadline on January 8, 1997, these issues were on the agenda. The union presented a list of II items which the membership had indicated it wanted. None of the items were new, but rather were items which the union and employer had negotiated about in December and either agreed upon or the union had withdrawn or compromised on. The membership had however wished these items to be renegotiated. By 1:30 p.m. the employer had agreed to all but three of the items. PC World did not agree to a shift premium proposal, abolition of the matrix (although, due to the lack of time before the strike deadline, it was prepared to discuss this issue after the collective agreement was reached), and a higher wage proposal made by the union. According to Mr. Aiken, the employer still wanted to avoid a strike because some of its investors wanted to be assured of two or three years of labour peace. Re conceded however that once PC World had the financing in place in late December 1996, it was in a less precarious position than when it had negotiated the December 20, 1996 memorandum.

16The union came hack with its counter-proposal at 4:30 p.m. While Ms. Lesperance believed the union should accept the employer's proposal, including a wage increase of 30 cents per hour in each of two years, the employee members of the bargaining committee believed there was an extra 5 cents which the employer would give them. Mr. Ali and Ms. Lesperance did not believe the company had any more money to give, but the committee would not go back to the membership with the employer's last offer. The basis of the employees' belief was that after the 1:30 p.m. meeting between the committees, Mr. Haskins had asked to speak directly to the bargaining unit members on the union committee. The union did not agree, so Mr. Haskins spoke to the whole committee. There is a difference in the evidence of Messrs. Aiken and Raskins on what transpired at this juncture.

17According to Mr. Aiken, Mr. Haskins wished to speak to the union bargaining unit members alone because he has been with the employer a long time and has a relationship with the workers. He wished to speak "from his own heart" to the workers on the union's bargaining committee because he was concerned that the bargaining process was not leading to resolution at that point. Messrs. Aiken and Wolfenden allowed Mr. Raskins to speak to the union committee. According to Mr. Aiken, he and Mr. Wolfenden left the room and were not present for the discussion, so that he claimed he did not know what was said. He said he did not believe that Mr. Haskins had at that time told the union committee that there was a little more money still on the table. He did think Mr. Haskins may have given bargaining unit members that impression later when they met with Mr. Haskins in the hall a number of times later in the afternoon. He also indicated that in these hall meetings there had been some discussion between the bargaining unit members and Mr. Haskins about splitting the difference between the employer wage position and the union's wage position, which were 30 cents and 50 cents respectively. When Mr. Wolfenden heard about what Mr. Raskins had told the union committee members. he was upset, and told the union bargaining committee that the employer offer was final, and that there was no more to offer. Mr. Aiken conceded in his evidence that had there been some movement on some other monetary issues, there may have been extra money available for wage increases, but he reiterated that the employer had reached its total monetary maximum at that stage.

18According to Mr. Raskins, in the mid to late afternoon of January 8th, when Mr. Wolfenden had left to attend another meeting, Mr. Haskins and Mr. Aiken met with the union bargaining committee. He made a plea for reason. He said to the committee that there was nothing more to give on uniforms or safety shoes. He then said he was sure that Steve (Mr. Aiken) would kick him under the table for what he was about to say, but that there may be some more money. The union bargaining committee thanked Mr. Haskins, and began to caucus. Thereafter, during the afternoon when each committee was in its own caucus room, bargaining unit members from the union committee went to speak to Mr. Raskins on a number of occasions to discuss what money they believed the employer may still have available to give to them as a wage increase. In one of those visits Mr. Haskins and two bargaining unit members talked about splitting the difference between what the union wanted and what the employer had tabled in its last offer. At that point the union members told Mr. Haskins that the union was prepared to take 40 cents, and the employer had been offering 30 cents. Hence, splitting the difference would amount to the employer going to 35 cents. Mr. Haskins offered to call Mr. Roseborough, the President of PC World, to see if there would be any more money offered. Re returned to the room and spoke to Mr. Aiken, who was not happy about what Mr. Haskins had been saying to the union side. Mr. Haskins called Mr. Roseborough and was told there was no more money available. Mr. Wolfenden had left the hotel for the afternoon to attend another meeting, so that he was gone from about 3 p.m. to 5:30 p.m. when all of these discussions took place.

19Raving considered both Messrs. Aiken's and Haskins' versions of the events of that after­noon, the Board finds Mr. Haskins' account to be more likely to reflect what transpired. Mr. Raskins was the main player in the events, and his recollection was relatively clear on the sequence of events. Also, he did not attempt to hide what he had said, even though it bolsters the union's contention all along that the union had been led to believe that there was an extra 5 cents which may be available for an increase in wages. It is unclear to the Board why Mr. Aiken did not recall or tell the Board that he had been present at the meeting with the union when Mr. Haskins had first told the union clearly that there may be more money available for wages.

20At around 6:30 p.m. on January 8 the committees met for the last time prior to the commencement of the strike. At that time Mr. Wolfenden informed the union that the company had made its last offer and had nothing more to offer. There is controversy about what was said at this juncture with respect to the employer withdrawing this final offer if the union commenced a strike, and I will deal with this issue below. The union committee started to shut their respective books and binders, and began to leave. The employer committee remained behind at the hotel where the meeting had taken place and discussed what would happen next. They called Gordon Roseborough to inform him that talks had broken down, and that a strike would begin at midnight. Messrs. Haskins and Aiken then returned to the plant.

21PC World contended that twice on January 8, 1997, Mr. Wolfenden informed the union that if it did not accept the final offer, once a strike commenced, the offer would be withdrawn. Mr. Aiken testified that at 1:30 p.m. and at 6:30 p.m. Mr. Wolfenden told the union bargaining committee that if the employer's final offer was not accepted, that the offer would be withdrawn when the strike commenced. Mr. Haskins testified that Mr. Wolfenden made this statement at 6:30 p.m. only, and not earlier in the negotiations. Both Mr. Ali and Ms. Lesperance never heard Mr. Wolfenden say that if the union commenced a strike, that the employer's final offer would be withdrawn. Finally, Mr. Wolfenden never testified at this hearing, so the Board did not have the benefit of his evidence. It is noteworthy, however, that in the two responses to these applications, filed by lawyers in Mr. Wolfenden's law firm who had apparently discussed with at least Mr. Aiken what had transpired on that day, there is no mention of Mr. Wolfenden having stated that the offer was withdrawn at any time on January 8, 1997. In all of the circumstances I am not convinced that Mr. Wolfenden ever told the union bargaining committee on January 8 that the employer's final offer would be withdrawn once the union went on strike. It is possible that Messrs. Aiken and Raskins had discussed this matter with Mr. Wolfenden in their private caucuses on that day. However, in the absence of any evidence from Mr. Wolfenden himself on this contentious point, when even Messrs. Aiken and Haskins do not agree on the timing of the comment being made, and when no one for the union heard the comment, I am not prepared to find that the comment was made at any point in open session that day.

22Mr. Aiken testified that after he returned to the plant on January 8, 1997, he noted that production had slowed down or stopped, and that employees were milling about even though the strike was not due to start till midnight. Re intimated in his evidence that the employer was quite tolerant of this behaviour, even though people should have been working until the strike began. Mr. Haskins' evidence contradicts Mr. Aiken's version. He and Mr. Aiken returned to the plant together. Mr. Haskins attended the last part of a meeting called by Mr. Roseborough of all of the afternoon shift staff. Mr. Roseborough told the employees that negotiations had broken down, that a strike would commence at midnight, and that they could leave immediately if they wanted to. He indicated they would be paid to the end of their shifts. According to Mr. Haskins, by 8:30 p.m. he is not sure if any afternoon shift staff were still there. No production took place. After the II p.m. shift arrived, Mr. Roseborough told them they could also leave if they wanted to, and that they too would be paid for the one hour before midnight. Mr. Haskins never expected any production to take place since everyone had been told by Mr. Roseborough that they could go home. I accept Mr. Haskins version of events over Mr. Aiken's. I am bolstered in this by the fact that Mr. Ali had also returned to the plant at around 7:10 p.m. and saw the meeting with Mr. Roseborough in session. Re waited outside the cafeteria but Mr. Roseborough came out, spoke to him, and invited him into the meeting. Mr. Ali was told by Mr. Roseborough that everyone was being sent home from this shift, and would be sent home from the midnight shift as well.

23Mr. Haskins and the union strike committee negotiated a protocol for the picket line. However, at some point that protocol was violated by the picketers with the result that the responding party applied for an injunction against picketing, the details of which have been outlined in chronologi­cal order below.

24Within two days of the strike commencing Ms. Lesperance heard that PC World had begun to hire replacement workers. A number of employees crossed the picket line to return to work in the first two weeks of the strike. More followed later. When the strike commenced PC World had back orders to fill and only 45 salaried staff. A decision was made to utilize all of the salaried staff in production, with the exception of Mr. Aiken, who was to field all labour-related problems. While the employer lost $1.1 million in the first quarter of 1997 due to the strike, it has continued production throughout the strike. It is believed that in the second quarter of 1997 there has been a marked improvement in plant production, so that the employer hopes to break even or make a profit in this quarter.

25A number of bargaining unit employees indicated to the employer as the strike began that they wanted to come to work. They were invited back to work, and did not have to fulfill the requirements of section 80 of the Labour Relations Act, 1995 to do so. (A few employees who returned to work after two months on strike did have to send letters to the employer to request to return to work). Mr. Aiken claims that when the picketers saw fellow employees crossing the picket line they became upset. He alleges that he was told that the picketers would prefer if new replacement workers were hired instead of fellow employees crossing the picket line. Hence, Mr. Aiken began to hire replacement workers in the first week of the strike. By the second week of the strike the employer had hired 20 replacement workers and twenty bargaining unit employees, who had returned to work, also continued in employment. The employer operated one long shift of 11 to 14 hours at first. After a few weeks a second shift was added, and later on, the employer returned to its original three shift schedule. After two months of the strike the salaried employees were slowly extricated out of production and returned to their former duties. PC World now has one third more employees working in production than it did just prior to the commencement of the strike. As of March 24, 1997 the employer had in its production unit 34 bargaining unit members, 17 newly hired people, and 42 people from a personnel agency. Where just prior to the strike commencing there were approximately 77 people at work in the bargaining unit, at the time of the hearing there were approximately 119 people working.

26In the first week of the strike Ms. Lesperance called Mr. Roseborough, to try to get the employer to go back to the bargaining table. Mr. Roseborough did not return the first phone call. On the second occasion he told Ms. Lesperance that he would talk to Mr. Wolfenden. Re was of the view that the union bargaining committee was still in a state of high resolve and that nothing had changed yet, so he was not really interested in returning to bargaining. Ms. Lesperance asked Mr. Roseborough to please come back into bargaining, and that she was sure they could find a middle ground. Since Mr. Roseborough did not testify at this hearing, the Board did not have the benefit of his evidence. Two days later, when Mr. Wolfenden had not yet contacted Ms. Lesperance, she called him. He indicated that it was his view that the union committee was not yet ready to negotiate, that it was still strong and not ready to change its position.

27After the first week of the strike Ms. Lesperance called Mr. Roseborough a total of four or five times but was never able to reach him. On two occasions she left him messages which he did not return. She only spoke directly by telephone to Mr. Roseborough on the one occasion in the first week of the strike.

28Ms. Lesperance did not try to call Mr. Aiken. although she spoke to him twice on the picket line. On one occasion early on in the strike she saw Mr. Aiken when he was talking to people on the picket line. On the second occasion, about six or seven weeks into the strike, she approached him as he was driving across the picket line and asked him if the employer would return to bargaining. Mr. Aiken told her the bargaining committee's attitude was not yet "right", but that he would pass along bet' message to Mr. Wolfenden.

29Mr. Wolfenden was contacted by Ms. Lesperance on a regular basis throughout the strike. Sometimes she would call him weekly, sometimes daily. She called him on his cell phone, at his home, and left messages on his voice mail at his office. According to Ms. Lesperance, she would have done anything to end the strike, and she therefore spoke to or attempted to contact Mr. Wolfenden to attempt to achieve that end. Mr. Wolfenden told Ms. Lesperance that it was Mr. Aiken's view, based on his conversations with workers on the picket line, that the union committee was still not ready to change its position as it was still feeling strong. As the strike progressed, Mr. Wolfenden told Ms. Lesperance that the picket line problems were costing the employer a lot of money, and that the employer would not bargain until the problems stopped.

30Following an application by the responding party for an injunction, on February 18, 1997 Festeryga J., Ontario Court of Justice (General Division), issued an order (unopposed by the union) enjoining and restraining the union to no more than six picketers at each of the four entrances to the employer's property. There were distance and time restrictions also imposed, along with directions that the picketers could not make threats to anyone seeking entry onto the employer's property, and there could not be any trespassing and vandalism.

31Ms. Lesperance attempted to arrange a meeting with the employer through the conciliation officer. At the end of February she reached the conciliation officer in person, but he indicated he was having trouble reaching the employer. Ms. Lesperance told the conciliation officer that the employees on the picket line were demoralized, and that she wanted to resume bargaining. Nothing came of this discussion with the conciliation officer.

32Bob Chernicki, an assistant to the CAW President Buzz Hargrove, and Ms. Lesperance's superior in the CAW-Canada, also attempted to contact Mr. Wolfenden to try to get bargaining back on track. Finally Mr. Wolfenden agreed to meet with only Ms. Lesperance and Mr. Ali for a dinner meeting to attempt to reach an understanding about how the parties could begin to bargain again. Mr. Wolfenden was to bring Mr. Aiken or Mr. Roseborough with him, and they were all to meet at 7 p.m. on March 13, 1997. However, on the morning of March 13th there was a significant altercation on the picket line and Mr. Wolfenden cancelled the meeting saying that the employer wanted to reassess its position. Within two days of March 13 Ms. Lesperance called Mr. Wolfenden to try to get him to reschedule the meeting, but he said that Mr. Roseborough was extremely upset and that the employer was not ready to meet at

this time. Ms. Lesperance tried to convince him that if they could only meet then things could move forward, but to no avail.

33As a result of some violent actions on the picket line on March 13, 1997, the responding party retumed to the Court on March 18, 1997 with contempt proceedings. It was seeking to have the Court send Mr. Ali and Ms. Lesperance to jail, fine the union, order the union to pay for damage to property, and to have the judge enjoin the union from any picketing on the employer's property. On March 13 it appears that between 6 and 8 a.m. a large number of CAW supporters, who were largely not employees of PC World, demonstrated at the employer's premises, trespassed on the employer property, smashed some windows, damaged vehicles belonging to employees, and delayed vehicles entering PC World. On March 20, 1997 Somers J., of the Ontario Court of Justice (General Division) found there had been breaches of Festeryga J.'s order regarding picketing, but did not find that any of the PC World employees or CAW personnel named had committed any of the acts alleged or had counselled, aided or abetted anyone else to do so. Somers J. therefore declined to grant PC World most of the relief it was seeking. However, he did vary the terms of the Festeryga injunction order so that there was a total ban on picketing at PC World.

34On March 17, 1997 Ms. Lesperance saw Mr. Roseborough as he was crossing the picket line in his vehicle. She introduced herself, as he had never met her before, and asked if they could please get back to the bargaining table. Mr. Roseborough told Ms. Lesperance that as long as there were CAW "goons" on the picket line he was not prepared to bargain. Furthermore, he told Ms. Lesperance, that the union bargaining committee and about ten other employees would never set foot in his plant again. Re was prepared to wait till a new negotiating committee was elected before he would talk to Ms. Lesperance. Mr. Roseborough told Ms. Lesperance that the company had lost about $1 million and had been on the verge of bankruptcy. Ms. Lesperance tried to explain to him that she did not condone illegal acts and that she did not know who had caused the damage to the plant property. She pointed out that the employer was inciting high emotions by holding pizza parties for the replace­ment workers, to celebrate the end of another week of having beaten the strike. Nothing came of this conversation and the parties did not return to bargaining.

35According to Mr. Aiken the employer hosted three Friday pizza lunches in the early weeks of the strike when the employees had worked particularly hard. The employer used the lunches to meet with all employees and to discuss with them the achievements up to that point. PC World also hosted a Valentine's Day party for the employees at which they had red and white balloons, cake and roses for the female staff. It was the employer's view that these were necessary gestures of thanks to employees who were making extraordinary efforts to get to work and to maintain production.

36On March 20, 1997, after the Court decision issued removing all pickets from the picket line, Ms. Lesperance sent Mr. Wolfenden a letter asking again to return to bargaining so that the parties could put an end to the long strike. She received no response.

37Ms. Lesperance conceded that prior to the meeting which she and Mr. Wolfenden had planned for March 13, 1997, Mr. Wolfenden had said that if the parties ever got back to the bargaining table, then the last employer offer would probably be gone because the strike had cost the employer over $1 million. He indicated that there would be a lot less in an offer now than there had been before. Ms. Lesperance had been prepared to meet under these conditions, but that meeting never took place. Hence, Ms. Lesperance was of the view that the employer's last offer was still outstanding and capable of being accepted by the employees. Therefore, on March 23, 1997 a bargaining unit meeting was convened to present to the membership the company's last offer from 1:30 p.m. on January 8, 1997. A secret ballot vote was held in which the employees voted overwhelmingly to accept the employer's January 8th offer. Ms. Lesperance contacted Mr. Wolfenden by FAX that same day to inform him that the members had accepted the employer's 1:30 p.m. offer from January 8, 1997, and to inform him that the workers would be ending their strike and returning to work on March 24, 1997.

38On March 24, 1997 many employees on each of the three shifts at PC World attempted to return to work. Each had been given a copy of Ms. Lesperance's letter to Mr. Wolfenden informing him and the employer of the ratification of the purported last offer. Mr. Aiken spoke to a number of the employees who arrived for the 7 a.m. shift and told them that there was no outstanding offer and that they could not return to work unless each of them wrote to him to indicate that each one wanted to return to work. Re would then discuss the conditions under which they could do so. On one employee's letter he wrote "The final position was withdrawn when the bargaining unit went on strike. Steve Aiken March 24/97". Mr. Aiken also spoke to employees who attempted to return to work for the afternoon shift and told them the same thing.

39Ms. Lesperance received a letter from Mr. Wolfenden on March 24th telling her that the offer made to the union on January 8, 1997 had been "withdrawn sometime ago". Re indicated that any employees who wished to return to work could follow the procedure outlined in the Labour Relations Act, 1995, and that they could do so on the terms and conditions the company had now set. Mr. Wolfenden indicated that the employer was of the view that the union was still on strike. Re made no mention of returning to bargaining.

40In a telephone conversation Ms. Lesperance had with Mr. Wolfenden, she attempted to elicit from Mr. Wolfenden what the working conditions inside the plant were, but he did not tell her anything. She therefore wrote to Mr. Wolfenden on March 26, 1997 and asked that she be advised immediately of what exactly the wages, benefits, and working conditions were for the replacement workers working at PC World, so that she could inform the bargaining unit members who were out on strike and may wish to return to work. If the working conditions were reasonable, Ms. Lesperance was going to recommend to the striking workers that they return to work while the union continued to bargain with the employer. Ms. Lesperance indicated she was getting desperate as the company was operating using replacement workers and bargaining unit members who had returned to work, there were no pickets allowed, and the employer was now saying it had withdrawn its last offer. She was concerned about the 80 demoralized striking workers. Mr. Wolfenden never responded. Mr. Aiken saw that letter, but he did not respond either, as he understood that Mr. Wolfenden would take care of it. It was not until the fifth day of this hearing, when Mr. Aiken was testifying, that the union finally heard what the working conditions were for the employees who had returned to work following the commencement of the strike. It would appear that employees at work in the plant are working under the conditions outlined in the employer's proposal of April 18, 1997. Thus, those who had been earning more than $12 per hour before the strike have had their rate reduced to $12, and those earning less than $12 per hour are being paid at whatever was their rate before the strike. Floaters and team leaders are receiving a $2 per hour premium. Those working on an evening shift are receiving a 50 cents per hour shift premium. The benefits have not yet been changed to reflect what the employer has proposed.

41The union applied for a stay of Somers J.'s decision. By a decision dated May 23, 1997, Laskin J.A. for the Court of Appeal of Ontario, found that after the strike began there had been some instances of picketers intimidating workers crossing the picket line and some car tires had been slashed, when tensions had mounted after replacement workers had been hired and bargaining unit members had returned to work. However, after the first injunction, Laskin l.A. found that the union had generally obeyed the terms of the Court order. However, on March 13, 1997 there had been the breaches outlined above and there had been some breaches between March 13 and 20, 1997. There had been no breaches of the Court order of March 20, 1997. Laskin J.A. therefore granted the stay requested by the union, and, except for five named individuals who had been found to be in contempt of the original injunction order, he restored the Festeryga J. order.

42On April 4, 1997 the union filed the first unfair labour practice complaint with the Board. Thereafter, Bob Chernicki made a direct request to the Ministry of Labour for mediation assistance, and eventually a meeting was set up between the parties for April 16, 1997. On that date the parties never met face to face, each sat around for about 5.5 hours, and at the end of the day the mediator told the union that it would be receiving a written offer from the employer. There were no negotiations on April 16, 1997.

43The employer sent to the union its new offer on April 18, 1997, and advised that it was prepared to continue mediation. In the union's view the employer's latest proposal seeks to gut the previous collective agreement, even on relatively uncontentious matters. From the employer's vantage point, the proposal was to be a starting point in negotiations, and was not an attempt to put forward a document which the employer knew to be incapable of acceptance by the union. Rather than reciting the parties' respective views on the various provisions, I intend to review all of the proposed substantive changes to the last collective agreement.

44Article I, the Statement of Principles and Intent, was amended to add the following:

"Ultimately, in this highly competitive circuit board business, the company and its employees must constantly strive to exceed customer expectations in order to maintain PC World's prominent position in the industry."

45In Article 5.08, the provision for Data to be Supplied to the Union, the employer proposed to only provide all data regarding employee seniority, rates, classifications, transfers into and out of the bargaining unit, leaves of absence, layoffs, recalls, lost seniority, discharged employees, etc. on a semi­annual basis upon request, instead of providing such information quarterly, without the requirement of a union request, as had been the case previously.

46The Seniority provision, Article 7, was to be changed so that a seniority list would be provided to the union and posted in the workplace annually, where it used to be provided every six months. The probationary period was doubled from 65 to 130 days actually worked in a 12 consecutive month period. Seniority is not granted until an employee passes his/her probationary period, so that this doubles the period before an employee acquires seniority (Article 7.04). Employees will lose all seniority if they do not return from layoff within 3 days of recall, whereas they used to have 5 days in which to return (Article 7.06 (D)). Laid off employees will lose all seniority and be terminated after 12 months of layoff, as opposed to the 18 months previously in Article 7.06 (F).

47In the previous agreement, in Article 7.08 the parties had recognized that job opportunities and seniority should increase in proportion to length of service, and all promotions, demotions, filling of vacancies, layoff and recall were to be strictly in accordance with this principle. The employer has added a provision to this section such that this Article is now made subject to the criteria in Articles 8.02 and 10.02. Article 8.02 has been significantly altered in this proposal so that during a layoff, bumping rights have been made subject to a bumping employee having to prove that he or she is "as or more qualified" than the incumbent to perform the work efficiently. Hence, where previously a bumping employee had to be qualified to do a job efficiently, now such an employee would have to compete with the incumbent employee for the job, no matter that the incumbent would be a person of less seniority. The provision would appear to diminish the utility of Article 7.08.

48Changes to Article 9.02 would lead to a transfer being considered temporary for a 60-day duration, whereas it used to be for a 30-day duration. During this period the transfer position is not subject to the seniority provisions of the collective agreement. Hence, the employer would be further diluting the seniority protections.

49When new jobs are created or vacancies occur, the employer used to post the job for three days. Under the proposal, the posting would be up for two days (Article 10.01). Pursuant to Article 10.03, one subsequent job vacancy, created by a successful internal candidate filling the vacancy, was also posted. The employer proposes to change this so that any subsequent job vacancy is to be filled at the discretion of the employer.

50In December 1996 the parties had agreed to some changes to Article 14.01. The employer has proposed maintaining those changes, and seeks to add that an employee must utilize any remaining vacation time before commencing an authorized leave of absence.

51Article 38, Work by Supervisors, has a number of proposed changes to allow supervisors to work on the development and production of prototypes, the assessment and development process improvement, to replace workers who have declined to work overtime, when bargaining unit employees are not readily available, and during breaks and lunch periods to deal with backlogs or to alleviate production delays. Supervisors and excluded employees had only been permitted to do bargaining unit work previously during emergencies, and two other very limited circumstances.

52The above items are the non-monetary items on which the employer made proposals. It also had a number of monetary proposals in its April 18, 1997 offer. The employer proposed to reduce the number of unpaid days employees could take for union courses from 20 days per year to ten days per year (Article 16.02). The shift premium is to be reduced from 10% of the hourly rate to 50 cents per hour, and would only apply to hours worked between 6 p.m. and 6 a.m. where the majority of the scheduled shift falls between these hours. Under the previous collective agreement the shift premium used to apply between 3 p.m. and 7:15 a.m. (Article 17.01).

53The overtime pay provisions, Articles 33.04 and 33.05 are changed completely so that the employer proposes to reduce the payment for overtime to the minimum standard articulated in the Employment Standards Act. The rest periods were to be reduced to one per shift, of 10 minutes duration, where there used to be two 15-minute rest periods per shift (Article 34.01). Two five-minute wash-up periods, one before the lunch break and one before the end of the shift, were to be completely eliminated (Article 35.01). Employees required to work on a paid holiday used to be paid twice their regular hourly rate for all hours worked, plus holiday pay. The employer proposes to reduce the payment to 1 .5 times the regular hourly rate, plus holiday pay (Article 49.03).

54In the area of benefits, the employer proposes to reduce benefits by increasing the interval between dental check-ups from 6 months to 9 months; to require that generic drugs be used where available; and, physiotherapy be provided to a maximum of $500 per year.

55In the Wages article, Article 51, there are a number of proposed changes such that there would be only two classifications, one for Operators paying a range of $9 to $12 per hour, and another for Skilled Trades, paying a range of $16 to $20 per hour. There used to be six groups of classifications in the previous collective agreement. Any employee making over the maximum in the range would be reduced to the maximum rate for his or her classification. Employees earning less than the maximum would have their rates frozen for the life of the collective agreement. The employer, in its discretion, can designate "floaters" who would receive a $2 per hour premium. It can also, in its discretion, designate "Team Leaders" who would also receive a $2 per hour premium. The employer can remove the floater or team leader designation at its discretion. Employees cannot receive a pyramiding of premiums.

56It is undisputed that approximately half of the bargaining unit (44 to 45 employees) would be affected by the proposed wage rate changes such that they would have their hourly rates reduced to $12 per hour, some from a high of $16 per hour. Most of the affected employees would experience a $1/hour reduction in hourly wages. All of the employees of PC World have not had a wage increase in years, even prior to the strike.

57Of the 36 or 37 people who have crossed the picket line and returned to work, ten employees have had their wages reduced to either around $12 per hour, or to $14 per hour. This latter rate would be given because where someone earned over $12 per hour before the strike, by designating such persons as floaters or team leaders, the employer gave them the premium rate when they crossed the picket line and returned to work. The returnees are not representative of the bargaining unit in general. Prior to the strike there were between six and 10 team leaders per shift. The floater position did not exist before the strike, however, the employer did have a QTA position (Quick Turnaround) which was similar to the new floater position.

58According to Mr. Aiken, the new proposals represent the product of months of discussions during the strike, in which senior management met with Mr. Wolfenden to review what the employer wanted. The meetings began in January 1997 and continued. There were many meetings held and vigorous internal discussions about what was relevant to the future course of the responding party. Mr. Raskins testified that he had been asked for his wish list for what he would like to see in a new collective agreement, and he indicated he wanted to see supervisors able to do any work they wanted to, and to have a part-time reserve labour force which could be utilized whenever the employer needed anyone. It would appear that Mr. Raskin's suggestion regarding supervisors doing bargaining unit work was incorporated in part into the employer's April 18th proposal. Mr. Aiken intended that in this proposal the employer would deal with a lot of the operational changes it had wanted to make over time, and which may have taken a number of contracts to achieve. Hence, the employer decided to replace the matrix system with one classification and wage rate with the objective of encouraging flexibility. Multi-skilled people would be paid more as floaters or team leaders.

59While Ms. Lesperance was not surprised by the employer's proposals having hardened to reflect the fact that it too had endured a three and a half month strike, she was surprised that the employer appeared to want to "gut" the collective agreement. Nonetheless, following receipt of the employer's proposal, the union held a bargaining unit meeting and explained the proposal to the employees. In addition to the specific proposals outlined above, the employer had also indicated in the proposal document that there would be contracting out of work which the bargaining unit had done prior to the strike, a department would be eliminated, other positions would be eliminated, and supervisors would be able to do bargaining unit work. Approximately 16 bargaining unit positions may be eliminated by the contracting out of work and the closure of a department. The employees had hoped for something on which they could return to work, but found the employer proposal completely unacceptable. Notwithstanding the reception the employer's proposal got, Ms. Lesperance indicated at the hearing her willingness to continue to bargain with the employer. Ms. Lesperance has indicated that while the union was prepared to negotiate, it could not live with all of the concessions the employer is seeking. Ms. Lesperance believes the employer proposal of April 18, 1997 was designed for rejection by the union membership. Since April 18, she has asked the employer for the costs it is claiming for clean up of the strike site, and has asked for the employer's proposal for a "back to work" protocol, but has received nothing. The parties appear to have only met once since April 18th to discuss a protocol for future negotiations.

60The employer has suggested that after December 4, 1996 the union never made any written proposals while the employer made a number of written proposals. The Board is satisfied that this was the way the parties had implicitly agreed to operate. There is no suggestion in the evidence that after December 4, 1996 the employer ever asked the union to reduce its proposals to writing, and indeed, the union never did. Therefore, nothing can be taken from the conduct of the union in bargaining in this respect.

61The employer has also suggested that the union has been unprepared to respond to or negotiate the April 18, 1997 employer proposal. That suggestion is at odds with the evidence of Ms. Lesperance that after receipt of the April 18th proposal she telephoned Mr. Wolfenden to discuss the proposal with him. A meeting was subsequently held on April 29, 1997, attended by Ms. Lesperance, Mr. Ali, and Hemi Mitic, an assistant to the CAW-Canada President, and with Messrs. Wolfenden and Aiken. At that meeting the union indicated to the employer that it could accept the status quo, but could not agree to the employer wanting to take everything out of the collective agreement, which the union characterized as "union busting". Mr. Aiken confirmed that the union made some comments about the proposal at the meeting on April 29, 1997. The union did not give the employer its second unfair labour practice complaint until after the end of the meeting as it had hoped to avoid doing so if the employer showed any sign of being prepared to start to bargain. However, by the end of the April 29th meeting it was of the view that the employer was not going to bargain about its April 18th proposal.

62PC World is of the view that its January 8, 1997 offer was withdrawn when the strike commenced. It is undisputed that the parties never met between January 8 and April 16, 1997, and that no employer offer was substituted for the January offer, until April 18, 1997. According to Mr. Aiken the employer would not meet with the union because there was too much negative activity on the picket line, the union bargaining committee's expectations were too high, and everyone in PC World was too busy producing product to find time to meet with the union.

DECISION

63The union has alleged breaches of sections 5, 17, 70, 72, and 76 of the Act. However, the two applications appeared to focus on union contentions that the employer failed to meet and bargain in good faith, and to make reasonable efforts to reach a collective agreement between January 8 and April 29, 1997. The focus of the Board's consideration in these applications has therefore been on section 17 of the Act. It is worth noting at the outset that the union was not making any allegations about the employer's bargaining conduct prior to January 8, 1997, and there would appear to have been no problem with bargaining up until the strike commenced.

64The first question for the Board to address itself to was whether there was an offer outstanding from the employer on January 8, 1997 and thereafter, until the union membership purported to ratify that offer as a collective agreement on March 23, 1997. It was the union position that the employer never withdrew its offer on or after January 8th, and that since the parties never met thereafter, and before the ratification meeting of March 23, 1997, that the offer remained outstanding. It was PC World's position that the offer was specifically withdrawn on January 8th once the union commenced the strike, and that the union was further alerted to the withdrawal in early March 1997 when Mr. Wolfenden and Ms. Lesperance were discussing the meeting which was eventually set for March 13, 1997. In any event, in the context of a long strike, the employer argued that the offer should be considered to have elapsed.

65On the evidence before me, and for the reasons outlined above in the review of the evidence, I am of the view that PC World never told the union on January 8, 1997 that if a strike commenced that the employer's last offer was being taken off the table. From the evidence it would also appear that as of early March, Mr. Wolfenden was simply saying that ~f the parties got back to the bargaining table, then the union could expect that the employer's last offer would no longer be available. As is clear, the parties never got back to the bargaining table before March 23, 1997, when the employees claimed to ratify acceptance of the outstanding offer.

66In Shoppers Drug Mart, [1994] OLRB Rep. Oct. 1419, the Board reviewed the jurisprudence regarding the extinguishment of an offer in the context of a strike or lock-out. The Board stated:

23. In The Toronto Jewel/en' Manufacturers' Association, [1979] OLRB Rep. July 719, the em­ployer made an offer for renewal of a collective agreement at a meeting with the union in January 1979. At that juncture the union made a counter-offer. Nonetheless, the employer reduced its offer to writing and sent it to the union in February, 1979. The employer thereafter notified the union in March, 1979, that it was making no further proposals. The union took the bargaining unit out on strike between early and the middle of April, and then on May 8, 1979, advised the employer that it was ratifying and accepting the employer's last February offer. When the employer then refused to sign a collective agreement, the union argued that the employer's last offer, its March notification, and the union's acceptance of the employer offer, constituted a collective agreement. The question considered by the Board in that case was whether the offer was still outstanding for the union to accept in May 1979, and the Board stated as follows:

24. Collective bargaining is a dynamic process and it is also one to which the parties apply their relative bargaining strengths in an attempt to gain from each other concessions and compromises which eventually produce a collective agreement. There is an implied expectation in the give and take of collective bargaining that concession and compromise will result in agreement without the exercise of economic sanction. In fact, it is not uncommon for either party to make this an explicit condition attached to tentative agreement on any or all items so that, if there is either a lockout or strike, all issues are "back on the table". There is no evidence in our case that such a condition was attached to the Association's last offer and the evidence is that it did not subsequently withdraw its offer. The Board, therefore, must consider what effect, if any, the passage of time and the intervening events have had on the status of the offer.

25. The Board in that case found that since the employees had been on strike for three weeks before the union tried to accept the employer's February offer, the employer's last offer had by then been extinguished by the passage of time and the intervening event of the strike.

26. In Wilson Automotive (Belleville) Ltd., [1980] OLRB Rep. July 1136, the employer made a final offer to the union, which was rejected and the employees went on strike for over six months. More than five months into the strike the employer informed the union that due to its business deteriorat­ing as a result of the strike, it was withdrawing its earlier proposal. Nonetheless, approximately two weeks later, and six months into the strike, the union said it was accepting the employer's pre-strike offer. When the employer refused to endorse such an agreement, the union complained to the Board that the employer was acting in bad faith. The Board found that if the financial condition of a company deteriorates after it has made a monetary offer in collective bargaining, but before the union has accepted that offer, then the employer may have cause to reconsider its offer and it should communicate its revised position to the union at the earliest possible date. In that case as the employer did not inform the union of its changed position until five and a half months into the strike, and the employer altered its bargaining position dramatically, the Board found a section IS violation. In Radio Shack, 119851 OLRB Rep. June 901, the union struck for almost six months before informing the employer it was accepting the employer's last offer made just prior to the commencement of the strike. The employer immediately indicated to the union that there was no contract reached between them as a result of the union's acceptance. The Board adopted the reasoning in Toronto Jewellery Manufacturers' Association, supra, and found that the employer's offer had been extinguished by the passage of time and the intervening lengthy strike, and found that the employer had not violated section 15.

67Notwithstanding that I have found that the employer did not specifically withdraw its offer on January 8, 1997, I am of the view that by early March, when the strike had been in progress for two months, and when Mr. Wolfenden had informed the union of the employer intention to change its offer should bargaining resume, that the union should have understood that the employer offer was no longer outstanding. The union had engaged in a bitter strike of more than two and a half months duration by the time that it purported to accept the employer's offer. In the context of such a lengthy strike, and when counsel for the employer had signalled to the union three weeks before the ratification meeting that the offer would be changed, I am satisfied that the employer offer of January 8, 1997 had been extinguished by the passage of time and the course of the intervening events.

68The union argued, in the alternative, that if the employer offer had been withdrawn or extinguished, then the employer had failed to bargain in good faith because it had never met with the union once from the commencement of the strike, and until April 16, 1997.

69Section 17 of the Act states:

The parties shall meet within 15 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.

70In Wellington-Dufferin-Guelph Health Unit, [1979] OLRB Rep. Nov. 1115, the Board outlined its approach to cases alleging a breach of what is now section 17 of the Act. The language of this section has not changed, and what the Board said then remains appropriate. At paragraphs 22 and 26 the Board stated as follows:

22. The duty to bargain in good faith has been part of the collective bargaining law of the Province of Ontario since 1944. Its present statutory formulation imposes two requirements:

(a) to meet and bargain in good faith; and

(b) to make every reasonable effort to make a collective agreement.

The first requirement refers to the parties' state of mind or motivation. Essentially it requires negotiations with the shared intention of achieving agreement. The second part of the statutory duty requires that there be a significant commitment of time, effort and energy in the pursuit of this shared objective. There is an obligation to follow a procedure which will increase the prospects for a negotiated agreement, and will minimize the likelihood of industrial conflict. Of course, it is undeniable that the use of economic power underlies the collective bargaining process. There is no inconsistency between a genuine desire to come to agreement and reliance upon one's economic power to get the kind of agreement one desires. Section [17] is not intended to equalize bargaining power, nor is a party with soperior economic leverage prohibited from "hard bargaining" in pursuit of his own economic advantage. The Board does not sit in judgment on the reasonableness of the parties' position, or impose its own notions of fairness upon them. On the other hand, if the Board is not to be blinded by empty talk and the mere surface motions of collective bargaining, it must take some cognizance of the substantive positions taken by the parties in the course of their negotiations. As a practical matter, it will be difficult to demonstrate that one has bargained in good faith and made every reasonable effort to make a collective agreement if one has rigidly adhered to a position for which there is no apparent rational justification. One cannot really divorce the parties' bargaining behaviour from the substantive positions which they have taken and, in making its section [17] determination, the Board may be influenced by both. The real problem is to fashion a standard of "good faith" and "reasonable efforts" which does not impair the consensual aspect of the bargaining process or encourage parties to seek, through litigation, what they have been unable to achieve at the bargaining table.

26. It is clear that the expiry of the conciliation process or the occurrence of a strike does not extinguish the union's bargaining rights or the parties' obligation to bargain in good faith - although the contents of the duty to bargain may change. The Board in New Method Laundry, 57 CLLC para 18,059, put it this way:

"Although the obligation to bargain is not extinguished when the time limit set in section 49 [now 63] has come to an end, the nature and extent of the bargaining in which a party is required by law to engage at that point may be quite different from what they were earlier. It is impossible to spell out in detail what an employer or a trade union will or will not be required to do at that stage in order to comply with section [17]. Each case will turn on its own peculiar facts and there is little profit in seeking to set out my views on what must of necessity be a series of hypothetical situations. Some of the factors which will have to be taken into account will probably be whether one of the parties has requested the other to resume negotiations, whether the party making such a request has indicated that it is prepared to make significant concessions, whether a strike or lock-out is in progress and similar matters.

That case involved an attempt to pursue negotiations after the commencement of a bitter strike, but we believe the principles espoused are equally applicable here. The Act does not require that a party engage in fruitless marathon discussions at the expense of a frank statement in support of his position, but as Professor Cox commented:

Participation in debate often produces changes in a seemingly fixed position whether because new facts are brought to light or because the strength and weaknesses of the several arguments become apparent. Sometimes the parties hit upon some novel compromise of an issue which has been thrashed over and over. Much is gained even by giving each side a better picture of the strength of the other's convictions. The cost is so - slight that the potential gains easily justify legal compulsion to engage in the discussion.

71The union commenced its strike on January 8, 1997. Although there is scant evidence before the Board about what precisely transpired on the picket line in the early weeks, it appears uncontradicted that picketers engaged in some intimidatory tactics against those crossing the picket line to go to work. Hence, on February 18, 1997 an uncontested injunction regarding picketing was issued limiting to six per entrance the numbers of picketers, along with some other restrictions. There is no evidence that there were serious problems with the picketing restrictions until March 13, 1997, when there were violent confrontations and breaches of the injunction. On March 18 the Court issued a total ban on picketing, and there were no breaches of that injunction before the parties met for the first time since the commencement of the strike, on April 16, 1997.

72As has been outlined in the evidence, from the commencement of the strike the union persistently asked and pleaded to meet with the employer to recommence bargaining. The employer steadfastly refused to do so until early March when it appeared it would have been prepared to meet, although not to bargain. Nonetheless, the union was prepared to meet under any circumstances. It is understandable that the employer cancelled the March 13th meeting in light of the violence on the picket line that day. However, after it had a total ban on picketing on March 20, it still refused to meet. PC World did not agree to meet with the union until after the filing of the first unfair labour practice complaint which relied upon and outlined all of the efforts the union purported to have made to get back to the bargaining table, and which alleged that the employer had been bargaining in bad faith by refusing to meet.

73Section 17 requires that there be a shared intention of achieving a collective agreement, and that the parties commit a significant amount of time, effort, and energy to pursuit of that objective. On the evidence before the Board it is apparent that, except for agreeing to the March 13th meeting, PC World did not make any real effort to meet and bargain with the union despite repeated union entreaties which began in the first week of the strike in January and continued on until April. The Board accepts that during the period between March 13 and 20 the employer had good reason not to pursue any negotiations, given the nature of the breaches of the Festeryga J. injunction order.

74Looking first at the period from January 9 to March 12, 1997, it would appear that the employer never closed its plant for one working day. One reason given by the employer for not meeting with the union is that it was very busy with production issues, and therefore had no time to devote to bargaining. PC World recommenced production on the first day of the strike, and it hired replacement workers to augment those employees who had crossed the picket line to return to work within a week of the strike beginning. The Board recognizes that a strike is an extremely disruptive event to the production and running of a company. Therefore, it is understandable that PC World may have been unable to contemplate negotiating in the first two weeks of the strike while it was trying to train new people and keep production going. However, there is no cogent explanation for why the employer did not bargain thereafter, and until March 12. Despite Mr. Aiken's evidence that the employer was extremely busy focusing on production, and that Mr. Aiken was the only employee of the company not dedicated to the production line, from early January on, Mr. Aiken and other senior management were meeting frequently with Mr. Wolfenden to formulate new proposals. If the members of senior management had time for extensive meetings with Mr. Wolfenden, it is unclear why they did not have time to meet to bargain for a new collective agreement.

75A second reason advanced by the employer for not meeting with the union to bargain is that there were problems on the picket line, and that the employer was unprepared to meet until those problems ceased. It is not unusual during a strike for there to be picket line incidents, but, in the absence of other compelling reasons, that cannot be a reason for an employer to refuse to meet to negotiate. It seems obvious that the longer a strike goes on, with replacement workers and others crossing picket lines, and when an employer refuses to meet to bargain, the level of frustration on the picket line rises. It is incumbent on parties to behave in a responsible fashion in these circumstances, and the Board does no condone picketers' engagement in any illegal picket line activity.

76On February 18, 1997, Festeryga J. issued an uncontested injunction limiting picketing. According to Laskin J. there were no violations of the injunction between February 18 and March 12. It is therefore unclear why the employer did not meet with the union during this three-week period, when Ms. Lesperance had been asking PC World to resume bargaining for months.

77As noted earlier, it is understandable why the employer did not wish to meet with the union in the aftermath of the March 13th fracas. However, following the Somers J. total ban on picketing on March 20, 1997, and given that there were no violations of that injunction, there is no cogent explanation for why PC World then continued to refuse to meet with the union to bargain. By that stage in the strike the employer was running three shifts, as it had before the strike, there were no picketers and no picket line disruptions, and its senior management was still finding time to have meetings with Mr. Wolfenden to formulate proposals. However, despite Ms. Lesperance's requests there was no movement to the bargaining table. Even after the union's purported acceptance of the employer's last offer, and after the employer had said that offer had been withdrawn some time ago, PC World did not make any attempt to resume bargaining. Furthermore, PC World would not give Ms. Lesperance any of the information about what conditions the striking workers could return to work under if they decided to ask the employer to return to work.

78PC World's third reason for not meeting with the union to bargain is that the employer was of the view that the bargaining committee's attitude was not yet right, and that its expectations were too high. It is unclear to the Board how the employer came to hold this view, although Mr. Aiken testified that he got this impression from speaking to some people on the picket line. There is no evidence that Mr. Aiken or anyone else developed this idea from speaking to any member of the bargaining committee. Even if the Board accepts that in the early days of the strike there may have been some bravado among employees on the picket line, there is no evidence that this bravado persisted, nor that it was ever shared by the bargaining committee. Ms. Lesperance's continuing requests to return to bargaining belie the suggestion that the bargaining committee was not ready to resume bargaining. By early March Ms. Lesperance was prepared to meet under any conditions, and she so informed Mr. Wolfenden. By late March she was willing to consider sending the employees still on strike back to work, but the employer would not tell her what the working conditions were in the plant, and would not bargain. In all of the circumstances the Board is not satisfied that, for the entire period of January 9 to April 16, 1997, the employer could have reasonably believed that the bargaining committee's expectations were too high to resume bargaining.

79Raving reviewed the reasons for why the employer did not meet with the union for three and a half months of the strike the Board was not satisfied that PC World had demonstrated an intention to attempt to reach a collective agreement, nor that it had made any significant effort to return to bargaining. While the Board is sympathetic to the upheaval caused to the employer as a result of the strike, and while there may have been a period in which the employer was legitimately concerned about the problems on the picket line, there were weeks during the strike when PC World made no attempt to bargain in good faith to reach a collective agreement, as required by section 17 of the Act. From the evidence led it appears that the employer, having ascertained that it could operate without the striking workforce, chose not to heed the union's repeated overtures to return to bargaining.

80Turning now to the employer's offer of April 18, 1997. A comparison of the employer's last offer on January 8, 1997 to the April 18 offer shows dramatic differences. However, it is not particularly helpful to compare the January 8th offer to the April 18th offer, because, as the union conceded, it had significant bargaining power in December 1996 and January 1997, when the employer was looking for stable financing for its operations and was prepared to buy labour peace. Thus, the January 8th offer reflects the union's enhanced bargaining power. The Board has therefore compared the previous collective agreement, a first collective agreement between these two parties, with what the employer was offering on April 18, 1997. After a three and a half month strike, the balance of power had clearly shifted to the employer, which had continued to operate its production uninterrupted, in a market that was improving.

81As the Board recognized in Shaw-Almex Industries Limited, [1984] OLRB Rep. Oct. 1502, section 17 is not intended to redress any imbalance of bargaining power between the parties. Hence, hard bargaining does not necessarily amount to bad faith bargaining, if the bargaining is done in good faith, is not surface bargaining, and so long as the employer's terms are not so unreasonable as to suggest that in reality it does not want to reach an agreement with the trade union. The Board, in paragraph 69 of the decision in Radio Shack, [1979] OLRB Rep. Dec. 1220, stated:

…….patently unreasonable contract proposals lacking any semblance of business justification may suggest an employer's desire to embarrass the union and encourage its abandonment by the employees. The legislation requires the parties to make every reasonable effort to make a collective agreement, a duty which patently unreasonable proposals fly in the face of.

82In Fotomat Canada Limited, [1980] OLRB Rep. Oct. 1397, the Board recognized that it must be careful to avoid being used by a trade union to supplement its bargaining power, especially in the context of a prolonged strike. However, the Board indicated it must be cautious to ensure that hard bargaining does not have as its purpose the destruction of the trade union. In Pine Ridge District Health Unit, [1977] OLRB Rep. Feb. 65, the Board stated:

Similarly, the move to a position tailor-made for rejection would betray an intention not to conclude a collective agreement contrary to the duty imposed by section [17] of the Act. It follows, therefore, that while the parties may govern themselves by self-interest and may alter bargaining positions in response to changes in relevant conditions, a party which alters its bargaining position may leave itself open to the allegation that it is bargaining in bad faith. It falls to the Board in these cases to examine the evidence in light of the labour relations dynamics and draw the appropriate inferences.

83The Board's review of the employer's April 18 proposal reveals a number of provisions in which the employer was seeking to significantly limit the benefits of seniority, or to limit access to the protection of the collective agreement. Compared to the parties' first collective agreement, in the proposal there was far increased discretion for the employer to transfer, promote, demote, layoff and recall employees, so that the concept of seniority would be severely undermined, and so that the employer's discretion would be largely unchecked. With the probationary period doubled, employees would not gain seniority for 130 days. The employer could transfer employees for 60 days without any consideration of seniority or posting the position. When a vacancy is filled, any subsequent vacancies would be filled at the complete discretion of the employer. People could lose their earned seniority rights more easily and quickly.

84The Board noted that proposals regarding the work which can be done by supervisors has been dramatically increased, so that there would be limited circumstances in which supervisors could not do bargaining unit work. In addition to all of the language changes the employer is seeking, it is also proposing to reduce the unpaid days employees could take for union courses, reduce significantly the shift premiums, reduce overtime pay provisions drastically to the minimum employment standard in Ontario, and to reduce the paid rest periods and wash up times. The impact of the latter two reductions would be that employees would be working for 20 minutes more per day without any more pay. Finally, the employer proposal would reduce half of the employees' wages to $12 per hour, and would freeze the wages of those making under $12 per hour. Only those who the employer picks in its exclusive discretion would be eligible to make the $2 per hour premium rate for floaters and team leaders.

85It was the employer's position that it had been financially negatively effected by the strike. It argued it had been under bankruptcy protection for two years, and only come out from under that protection at the end of April 1997. To be competitive it argued it needed the language it was proposing, and it argued further that the employer proposal was not designed to undermine the union, but was in recognition of PC World's need to be competitive when it is in a poor financial position. It was conceded that the proposal was concessionary, but the employer characterized the concessions as "modest", and a reflection of its improved bargaining position.

86The Board had heard evidence of the employer's financial position in every quarter from the beginning of 1996. It would appear from the figures presented that from the second quarter of 1996 on, PC World had steadily increasing losses in each quarter, with operating losses of $885,000 in the fourth quarter of 1996, and operating losses of $1.1 million in the first quarter of 1997. However, Mr. Aiken testified that in the second quarter of 1997 PC World would likely do much better, either breaking even or showing a profit. Mr. Haskins had testified that productivity was up and better than ever. It is therefore clear that upon coming out of bankruptcy protection the employer was doing well, and that while it had sustained a loss in the first quarter of this year, when it is at full production, it is doing well. It is therefore difficult to see how the employer can maintain that it must, for financial reasons, seek the concessions it is seeking in its April 18 proposal.

87In the context of ongoing negotiations between the parties the Board is of the view that it would be inappropriate to comment on any particular provision of the employer's proposal. However, in its overall review of the April 18 proposal, it appeared to the Board that the proposal suggested that the employer did not want to reach an agreement with the union and had tabled a proposal which was designed to undermine the union and any protections it could provide to employees in their employment relations. While it may be the case that after a relatively lengthy strike the employer has again experienced what it is like to operate without a trade union as the bargaining agent for employees, nonetheless, this trade union remains the bargaining agent for PC World employees. The employer is entitled to bargain hard in its enhanced bargaining position, but it is not entitled to embarrass the union or to table a proposal which seems designed for rejection by the union and its members.

88I am bolstered in my view that the employer was trying to embarrass the union by the fact that despite numerous requests to bargain, the employer ignored the union bargaining committee. It then ignored the union representative when, in desperation, she asked to be informed of what the terms and conditions of employment would be if the striking employees returned to work. The employer appears to have wanted to signal to the employees that their union representatives could get them nothing, and that if they wanted their jobs back, they would each have to come to the employer individually to beg for their respective jobs.

89In a unionized workplace, even one in which there has been a long strike, it serves no labour relations or other purpose to embark on such a course of conduct. The Board has found here that PC World breached its duty to bargain in good faith by failing to meet with the union to bargain for a new collective agreement. The Board also finds that the employer, by tabling the proposal it did on April 18, 1997, breached its duty to bargain in good faith. However, since the Board does not wish to interfere in the process of collective bargaining, it did not order that the parties recommence negotiations with the January 8, 1997 proposal on the table. Clearly, after a lengthy strike of the sort experienced by these parties, positions will have changed, and the employer is entitled to exercise its increased bargaining power, so long as it bargains in good faith and without the purpose of the destruction of the union.

90It was for all of the above reasons that the Board made the orders and directions it did in its decision of July 4, 1997.