Ontario Labour Relations Board

[1998] OLRB REP. JULY/AUGUST 614

0530-98-G Masonry Council of Unions, Toronto & Vicinity and Bricklayers Masons Independent Union of Canada, Local 1 and Labourers' International Union of North America, Local 183, Applicants v. Gottardo Masonry & Contracting Ltd., Responding Party

BEFORE: Gail Misra, Vice-Chair, and Board Members G. Pickell and G. McMenemy.

APPEARANCES: Mark Lewis for Masonry Council of Unions, Toronto & Vicinity and Bricklayers Masons Independent Union of Canada, Local 1; Mark J. Lewis, Nicholas Keresztesi and Mario Moschella for Labourers', Local 183; Brett Christen, Denise Bolohan and Ron Gottardo for the responding party.

DECISION OF THE BOARD; July 2, 1998

1. This is a referral to arbitration of a construction industry grievance pursuant to section 133 of the Labour Relations Act, 1995 (the "Act").

2. The applicant (the "union") grieves that the responding party (the "employer" or "Gottardo") improperly laid off three employees and failed to recall them to employment at a job site at Kennedy Road and Ellesmere Avenue in Scarborough, Ontario. The employer made a preliminary objection that the grievance is untimely, and therefore inarbitrable. Further, the employer maintains that since the collective agreement does not provide a right of recall for laid off employees, that the grievance does not disclose a prima facie case for a violation of the collective agreement. The parties made submissions on these threshold issues on the first day of hearing.

3. The grievors, David Aguiar, Mario Aguiar, and Emanuel Aguiar ("David", "Mario", and "Emanuel", or the "Aguiars") along with Antonio Aguiar, were employed by Gottardo as a bricklaying crew on a residential low-rise project at Kennedy Road and Ellesmere Avenue in the week of March 18, 1998. On March 18, 1998 a scaffolding accident occurred on the job site which resulted in Antonio Aguiar (the father of David and brother of Mario and Emanuel) sustaining some injuries and having to be taken to a hospital. The Ministry of Labour issued a stop work order as a result of the accident, and the employer was directed to make some repairs. When the job site was closed it would appear that all employees including the three grievors, David, Mario and Emanuel Aguiar, were sent home.

4. The union alleges that on the day following the accident Mr. Ron Gottardo, the principal for the employer, called David Aguiar. When Mr. Gottardo was asked when the Aguiars could return to work he is alleged to have indicated it would take two or three days to make necessary repairs, and then the Aguiars would be able to return to work. The union alleges that David called Mr. Gottardo a number of times after that to see when the Aguiars could return to work, but was told that it would be in a few days. None of them was ever allegedly recalled. On March 31, 1998 David received a Record of Employment which indicated he had been laid off due to a lack of work. Neither of the other two grievors ever received a Record of Employment.

5. The employer claims Mr. Gottardo called David on the evening of March 18 and at that time asked him to return to work the next day. However, according to the employer, David indicated he would not come to work the next day and that he was taking his father to the hospital. The employer position is therefore that it did ask David to return to work, but he refused. It would appear that on March 20 Emanuel called Mr. Gottardo to ask why bricklayers were working at another job site when he had not been called back to work. In the course of that conversation it is alleged that Mr. Gottardo told Emanuel that the job site was still closed and he could not therefore call Emanuel back yet. On March 21 Mr. Gottardo allegedly spoke to Mario and in the course of that conversation told Mario that he could return to work on March 23, and that he would be recalling David and Emanuel too at some point. The employer claims that Mario refused to come back to work unless all the Aguiars could work together, which Mr. Gottardo would not allow.

6. It appears that David approached the union on March 31 as soon as he received his Record of Employment. A union staff person prepared a grievance which was reviewed by Mr. Lewis, counsel for the union, on April 7. As the grievance as drafted was not entirely accurate, Mr. Lewis instructed Mr. Keresztesi, also counsel for the union, to inquire into the matter. Mr. Keresztesi met with David Aguiar on April 15 and then dictated a draft grievance. Somewhat inexplicably the grievance was not typed up until May 7, although the Board was informed that all of the union's legal department software was being changed and that that caused the computers to cease functioning at some point during this period. The grievance was both delivered to the employer on May 7, and this referral to arbitration was made to the Board on the same date. The union concedes that the grievance was filed late. There is no evidence that the union asked the employer for an extension of the time limits. By a letter dated May 8, Mr. Gottardo informed the union that the three grievors had been contacted several times after March 18 to return to work, but had refused to do so. He indicated he had discussed these refusals with Mr. John Meiorin, of the union and suggested that a meeting should be set up with the employer, union, and the grievors present.

7. The Board scheduled a hearing to be held in this application on May 21, 1998, with a terminal date for the filing of a response on May 20, the day before the hearing was to commence. No response was filed, but the parties agreed to adjourn the hearing to May 29, and to meet to discuss the matter in dispute on May 27. The May 27 meeting never took place as prior to that date counsel for the two parties had a discussion by telephone and ascertained that there was no point in meeting as it did not seem likely that a settlement could be achieved. The response was filed on May 28, and in it the employer took the position that the grievance was untimely. The union alleges it was not until this juncture that the employer raised this issue, even though Gottardo had been dealing with the merits of the grievance up to this point. The union therefore argues that the employer waived the time limits by its conduct. The Board, for reasons unrelated to the parties, adjourned the May 29 hearing date, and this matter was first heard on June 11, 1998.

8. The collective agreement governing the relationship between these two parties, and under which this grievance has been filed, is between the Masonry Contractors' Association of Toronto and the Bricklayers, Masons Independent Union of Canada, Local 1, the Labourers' International Union of North America, Local 183, and the Masonry Council of Unions Toronto and Vicinity, and is effective from April 16, 1996 to April 30, 1998. The parties agree that this is the collective agreement to be applied in this case. Article 4 of the agreement addresses the grievance procedure. The relevant sections are as follows:

4.01 The parties to this Agreement are agreed that it is of the utmost importance to adjust complaints and grievances as quickly as possible.

4.02 Grievances properly arising under this Agreement shall be adjusted and settled as follows:

Step No.1

Within ten (10) working days after the circumstances giving rise to the grievance occurred or originated, the aggrieved employee with his business representative may present his grievance. which shall be reduced to writing, to the Employer. Should no settlement satisfactory to the employee be reached within five (5) full working days. and if this grievance is one which concerns the interpretation or alleged violation of the Agreement. the grievance may be submitted to arbitration as provided in Article 5 below any time within ten (10) working days thereafter but not later.

4.05 In determining the time which is allowed, Sundays and Statutory Holidays shall be excluded; however, any time limit may be extended by agreement in writing.

4.06 In the event the Union does not pursue a grievance in a reasonable manner or time, such grievance shall be deemed abandoned.

9. Article S of the collective agreement addresses the arbitration process and the relevant sections state:

5.01 The parties to this Agreement agree that any grievance concerning the interpretation or alleged violation of this Agreement which has been properly carried through all steps of the grievance procedure outlined in Article 4 above and which has not been settled, will be referred to a Board of Arbitration at the request of either of the parties thereto and in accordance with the Ontario Labour Relations Act, particularly Section 126 [now 133] thereof.

5.06 The Board of Arbitration shall not have any power to alter or change any of the provisions of this Agreement or to substitute any new provisions for any existing provisions nor to give any decision inconsistent with the terms and provisions of this Agreement.

5.08 •••

(b) If advantage of the provisions of Article 4 and 5 is not taken within the time limits specified therein or as extended in writing, as set out above, the grievance shall be deemed to have been abandoned and may not be re-opened.

10. The employer argues that the time limit began to run from March 18, 1998, when the accident occurred and the job site was shut down. The Board cannot accept this proposition. At that juncture, and assuming that the union can make out its claim that the Aguiars were told a few days after March 18 that they would be called back to work, there would have been no cause for concern on the part of the grievors. In addition, at that time all employees working on the particular job site had been told that they could not work. In our view it is on March 31, 1998, when David received a Record of Employment, that the potential problem crystallized: At that point David knew with certainty that he was not going to be recalled, and it is likely that the other two grievors would have surmised that they too would not be called back. Therefore, the Board accepts the union 's view that the time for filing a grievance began on March 31, 1998.

11. A grievance should then have been filed within 10 working days of that date, not counting Sundays and statutory holidays (see Article 4.OS). Since Good Friday was on April 10, the deadline for the filing of the grievance would have been on April 13, 1998. While a grievance had been prepared after David complained to the union about his layoff, that grievance was found to be incomplete by Mr. Lewis on April 7. However, Mr. Keresztesi did not meet with David Aguiar until April 15 to refine the grievance, which was subsequently dictated but not typed up until May 7. Thus the April 13 deadline was missed before Mr. Keresztesi had met with David, and before the second draft grievance became mired in the union's computer problems. The Board has heard no explanation for the lapse of time between April 7 and 13.

DECISION

12. The first issue to be addressed is whether the grievance is untimely, and therefore must be deemed to have been abandoned. A review of the language of the collective agreement, as outlined above, indicates that the parties to the agreement intended that complaints and grievances be addressed as quickly as possible (see Article 4.01). To this end the language agreed to by the parties in Article 4 regarding the "Grievance Procedure" suggests that there was agreement as to how grievances about particular issues would be dealt with. Thus, complaints regarding payment for hours or work, rates of pay, overtime, premiums, travelling expenses, room and board allowances, and reporting allowances may be grieved within two months of the circumstances arising. Issues regarding the payment of pension contributions, welfare contributions, industry fund contributions and union dues may be grieved within 45 days after the circumstances became known, or ought reasonably to have become known to the union (see Article 4.03). All other matters appear to be addressed in the time limits set out in Article 4.02, which states that an aggrieved employee may present his/her grievance in writing within 10 working days of the circumstances giving rise to the grievance having occurred.

13. The matter in dispute in this case falls under Article 4.02. The Board has found that the issue crystallized on March 31, 1998, and that the 10 day time limit therefore expired on April 13, 1998. Although the collective agreement anticipates that a time limit may be extended if the parties agree in writing, that agreement was neither sought nor obtained in this case.

14. The parties agreed that if the provisions of Articles 4 or 5 are not engaged within the time limits specified therein or as extended in writing, the grievance shall be deemed to have been abandoned and may not be re-opened (see Article 5.08(b)). The parties clearly turned their collective minds to what the consequences of not meeting time limits would be. This is not surprising since they were ad idem that it is of the "utmost importance" to resolve complaints and grievances as quickly as possible.

15. In Centro Masonry Limited (Unreported, Board File Nos. 2656-96-R and 2657-96-G, July 8, 1997) the Board considered the issue of timeliness in the filing of a grievance under the same collective agreement as is before this panel. While in that case the Board was considering an issue with respect to Article 4.04, it had occasion to also consider the meaning of Article 5.08(b). At paragraph 21 of the decision the Board stated:

…..Article 5.08(b) states that if grievances are not processed in accordance with the time limits specified in articles 4 and 5, then they "shall be deemed to have been abandoned and may not be reopened." It is certainly the case that the use of "may" relied upon by the applicant in article 4.04 is ambiguous in the context of that article. What is clear however is that the parties through the use of the term "shall" in article 5.08(b), intended that grievances which were not processed in a timely fashion were to be deemed to be abandoned and not re-opened. The clarity in the following article qualifies the ambiguity in the preceding one. If the applicant's interpretation of article 4.04 were correct, article 5.08(b) could not be read with it and there would be a clear conflict between the two provisions. Where possible, the collective agreement should be read in a manner which provides for internal consistency.

16. The Board in Centro also addressed whether section 133(2) of the Act permits the Board to accept a referral of a grievance to arbitration at any time. This panel agrees with the Board's statement at paragraph 33 of that decision:

In my view, the correct interpretation of section 133(2) is to permit the Board to accept a referral at any time while the matter constitutes a "grievance" as defined by the collective agreement. This is consistent with the language of section 133(1) which uses the category "grievance", to describe the thing which is referred under that section. While the matter is still considered "alive" for purposes of the collective agreement, it can be brought to the Board without exhausting the grievance procedure. This is why the process is considered to be an expedited one. Once the matter however is deemed to be abandoned, it no longer exists as a "grievance". At this point, according to the agreement there is nothing left to be referred "at any time". Without an extant "grievance", the Board has nothing with which to proceed.

17. The Board finds that the language of the collective agreement suggests a penalty if the time limits for the filing of grievances are not adhered to. The parties, in Article 5.06 of the agreement, state that a board of arbitration shall not have any power to give any decision inconsistent with the terms and provisions of the agreement. In the circumstances of this case it would appear that the union simply missed the deadline for the filing of a grievance. In the construction industry time is of the essence as the duration of any job can be quite short. It has therefore been considered important to resolve any construction workplace issues as quickly as possible to properly preserve the rights of all parties to a dispute. This is the reason why the Act allows a party to a grievance in the construction industry to file an application for arbitration and to get a hearing 14 days from the date of application. The parties to the collective agreement presently before the Board appear to have been particularly concerned that disputes be identified and dealt with quickly.

18. We are further bolstered in our view that the parties had intended that the time limits agreed to would be of some significance because they agreed to different time limits for various types of grievances. It would appear that all matters not included in the specified time frames are subject to the ten day time period. The Board is of the view that the language of the collective agreement on the issue of time limits is mandatory, and not directory. This is particularly so when the various sections of Articles 4 and 5 are read as a cohesive package: These parties articulated their goal of dealing with complaints and grievances as quickly as possible; they then state the time limits for the filing of various types of grievances; they define what is included in the count of days, and specifically and somewhat unusually, include Saturdays in the days to be counted; and then, at Article 4.06, state that if the union does not pursue a grievance in a reasonably timely matter, a grievance shall be deemed abandoned. Finally, and in case any of the other provisions were not clear enough, these parties agreed that if advantage was not taken of Articles 4 or 5 within the time limits (or as extended in writing), the grievance shall be deemed to have been abandoned and may not be re-opened.

19. Unless the Board finds that the employer has waived the time limits, or exercises its discretion under section 48(16) of the Act to relieve against the time limits in the agreement, the referral to arbitration will be untimely. Section 48(16) states:

20. (16) Except where a collective agreement states that this subsection does not apply, an arbitrator or arbitration board may extend the time for the taking of any step in the grievance procedure under a collective agreement, despite the expiration of the time, where the arbitrator or arbitration board is satisfied that there are reasonable grounds for the extension and that the opposite party will not be substantially prejudiced by the extension.

21. As noted earlier, the union argues that the responding party has waived its right to raise the timeliness of this grievance. In Centro, cited earlier, the Board addressed the same argument. As the Board noted in that case, the time limits in a collective agreement are procedural matters which may be waived. Waiver of procedural rights will occur when the responding party takes a "fresh step" without either raising the issue of timeliness or reserving its right to rely on it at a later time (see Re Port Colborne General Hospital and Ontario Nurses Association, (1986) 1986 CanLII 6715 (ON LA), 23 L.A.C. (3d) 323). Whether or not there has been a waiver of rights is a question of fact, and the party who asserts the waiver bears the onus of proof.

22. In this case the employer wrote to the union the day after receiving the grievance and indicated its side of the dispute. Further, the employer suggested that the parties meet to discuss the grievance. No mention was made of the apparent untimeliness of the grievance. Thereafter the parties engaged with each other a number of times to adjourn Board and meeting dates, and counsel for both sides discussed the possibility of reaching a settlement. During all of those interactions the responding party never told the union it was objecting to the grievance on the basis of timeliness. It was only around the time when the response was filed that the union was made aware of the employer's objection on the basis of timeliness.

23. The employer did not object to the union's characterization of the sequence of events as they have been outlined in this decision. Although it is clear that the employer corresponded with the union and the parties discussed the grievance after it was filed and referred to arbitration, there is nothing to suggest that prior to May 27, 1998 the employer ever indicated to the union that it was preserving its right to object to the grievance on the basis of it being untimely, or was in fact objecting to the grievance on that basis. In these circumstances, it would appear to the Board that the employer waived its right to object to the grievance on the basis of timeliness.

24. Having found that the responding party waived its rights regarding timeliness, it is unnecessary for the Board to address the issue of the exercise of the Board's discretion pursuant to section 48(16).

25. We now turn to the employer's second objection. It is argued that the union has not made out a prima facie case for a violation of the collective agreement. The union concedes that there are no provisions in the collective agreement regarding seniority or a right to be recalled to employment.

26. The Management Rights clause of the collective agreement states as follows:

3.01 The Union agrees and acknowledges that it is the exclusive function of the Employer to manage his enterprises and without limiting the generality of the foregoing:

(a) to conduct and determine the nature of his business in all respects, including the right to manage the jobs, locate, extend, curtail or cease operations, to determine the number of men required at any or all operations. to assign work, to determine the kinds and location of machinery, tools and equipment to be used and the schedules of production, to judge the qualifications of the employees and to maintain order, discipline and efficiency;

(b) to hire, discharge, classify, transfer, promote, demote, lay off, suspend or otherwise discipline employees, provided that a claim by an employee that he has been disciplined or discharged without reasonable cause, shall be subject to the provisions of the grievance procedure;

(c) to make, alter from time to time and enforce reasonable rules of conduct and procedure to be observed by the employees.

It is agreed that these functions shall be exercised in a manner inconsistent with the express provisions of this Agreement.

26. As is clear from the management rights clause, while there is a reference made to "lay off', there is no reference made to recall. There is therefore nothing in the collective agreement regarding the recall of construction employees to employment. The Board therefore agrees with the responding party that the union has failed to make out a prima facie case for a violation of the collective agreement with respect to the recall of the grievors to employment at Gottardo.

27. As lay off is referenced in the management rights clause as one of the exclusive functions of the employer in the management of the enterprise, the union argues that when an employer seeks to exercise its lay off right, it must do so in a reasonable manner, and cannot do so arbitrarily, discriminatorily or in bad faith. The basis of the union's grievance with respect to the lay off of the three grievors is that they were laid off arbitrarily, or in a discriminatory or bad faith manner following the accident at the job site.

28. The employer responds that the grievance did not suggest that this was a ground that the union was relying upon.

29. In Keele Carpentry Ltd., (Unreported, Board File No. 0981-95-G, November 8, 1995), the Board considered the issue of whether an employer is obliged to exercise some or all of its management rights in a fair and reasonable manner. The Board stated:

(a) Duty to Act Reasonably

19. There is no provision contained in the collective agreement which mandates the employer to act reasonably when exercising all of the rights of management which are reserved to it (though the exercise of certain rights are circumscribed by such an express requirement). The arbitral jurisprudence has, until recently, been contradictory, and it was unclear whether an obligation to act fairly, reasonably, and in good faith is implicitly required of an employer in the exercise of management s rights contained in the collective agreement (contrast, for example, Re Metropolitan Toronto Board of Commissioners of Police and Metropolitan Toronto Police Association et al., (1981), 1981 CanLII 1689 (ON CA), 124 D.L.R. (3d) 684 with The Council of Printing Industries of Canada and Toronto Printing, Pressman & Assistants' Union No. 10 et al. (1983). 1983 CanLII 1638 (ON CA), 149 D.L.R. (3d) 53, both decisions of the Ontario Court of Appeal).

20. The most recent Ontario Court of Appeal decision addressing this issue has clarified the law, and concludes that an obligation to exercise management's rights in a reasonable manner is implicit in a collective agreement in circumstances such as those before the Board. In Re Municipality of Metropolitan Toronto v. CUPE, Local 43 (1990), 1990 CanLII 6974 (ON CA), 69 D.L.R. (4th) 268 (hereinafter "Metropolitan Toronto"), a board of arbitration had issued an award in which it determined that a unilaterally-implemented rule requiring ambulance attendants to use warning lights and sirens in certain circumstances was not founded on a valid employer interest and ruled that any discipline based on the rule would be unjust. The Divisional Court determined that the decision of the board of arbitration was patently unreasonable, and quashed the award. On appeal to the Ontario Court of Appeal, the appeal was allowed.

21. The Court of Appeal dealt with a number of issues, including whether an implicit obligation to exercise management's rights reasonably could be read into the collective agreement. In that case, the collective agreement had, in addition to a broadly-worded management's rights clause, a provision which stated that the employer "agrees that it will not exercise any of [the rights reserved to management] in a manner inconsistent with the provisions of this Agreement". As a result of that provision, the board of arbitration concluded that management could not issue rules which undermined the "reasonable cause" protection contained in the management's rights clause, as to do so "would be to invite subversion of the reasonable cause clause".

22. The Court of Appeal approved the approach taken by the board of arbitration, and, intact, went beyond the approach to suggest that an "overall notion of reasonableness" is implicit in the exercise of management's rights notwithstanding the wording of the particular collective agreement. In reference to the particular facts before it, the Court of Appeal noted as follows (at p. 286 D.L.R.):

…..The arbitrator's use of art. 3.02 and of the "reasonable cause for discipline" provision in art. 3.01(ii) is of a similar character. In neither of these cases was the provision relied on entirely explicit. However, it does not seem patently unreasonable to view the collective agreement in a holistic manner, where even management rights may be circumscribed in order to avoid negating or unduly limiting the scope of other provisions.

The Court observed that, unlike the previous two Court of Appeal decisions, the one before it involved a rule with "disciplinary consequences", and it further noted that arbitral jurisprudence had universally established that rules unilaterally promulgated by management are required to be reasonable (see, for example, Re KVP Co., (1965), 1965 CanLII 1009 (ON LA), 16 L.A.C. 73 (Robinson)).

23. Going beyond the case before it, though, the Court of Appeal dealt with the union's argument that a "notion of reasonable contract administration" ought to be imported into the regime of collective agreement administration. While the Court noted that the authority cited by the trade union in support of that concept was not on point and "difficult to apply" in the collective bargaining context, it made the following observation (at p. 287):

…..Like the analogy with respect to standing, it is difficult to apply this case in the context of collective bargaining. Nonetheless, it is true that a collective agreement is an intricate contract, which attempts to reflect the outcome of bargaining on a myriad of issues. It is also true that parties intent on reaching a settlement do not always have the time, the incentive, or the resources to consider the full implications of each and every phrase.

There is, therefore, a place for some creativity, some recourse to arbitral principles, and some overall notion of reasonableness: see, for example, David Beatty, "The Role of the Arbitrator: A Liberal Version" (1984), 34 U.T.L.J. 136. The presence of an implied principle or term of reasonable contract administration was also acknowledged by Craig J. in Wardair, supra, at pp. 668-9. (emphasis added)

Ultimately, the Court concluded that the board of arbitration did not interpret the collective agreement in a patently unreasonable manner, and allowed an appeal from the Divisional Court.

30. We are in agreement with the statement of the law as outlined above. It would therefore appear that it is open to the Board to consider the union's argument in this case. We turn now to address the responding party's concern that the union had not indicated in its grievance that it would be relying on this argument.

31. In the grievance filed on May 7, 1998 the union indicated to Gottardo that it was alleging a violation of Article 3, the Management Rights clause. While the union did not outline the precise nature of the argument it would be making, the Board is satisfied that the union had advised the employer of what clause it was relying upon in this grievance. There is no requirement that in a grievance a trade union set out in any detail the actual arguments it intends to make. It is sufficient that an employer be made aware of precisely what it is that the union believes is in dispute, what articles of a collective agreement are being relied upon, and the remedies which the union is seeking.

32. To summarize our findings then,

• the Board finds that while the grievance was untimely, the employer waived its right to object to the timeliness of the grievance by taking steps to settle the matter without ever raising any objection or reserving its right to do so in the future;

• the Board finds that there is no prima facie case for the union's grievance regarding recall to employment for the three grievors; and,

• the Board finds that the union has made out a prima facie case with respect to the lay off aspect of the grievance.

33. This panel is seized.