United Food and Commercial Workers, Local 1227 v. Maple Leaf Pork, 1998 CanLII 18433

[1998] OLRB REP. MARCH/APRIL 250

4740-97-M United Food and Commercial Workers, Local 1227, Applicant v. Maple Leaf Pork, a Division of Maple Leaf Meats Inc., Responding Party

BEFORE: Timothy W Sargeant, Vice-Chair, and Board Members J. A. Rundle and R. R. Montague.

APPEARANCES: Judith McCormack for the applicant; Daniel J. Shields for the responding party.

DECISION OF TIMOTHY W. SARGEANT, VICE-CHAIR, AND BOARD MEMBER J. A. RUNDLE; March 20, 1998

1. This is an application under section 92.1 of the Labour Relations Act, 1995 (the "Act") for a number of interim orders namely:

2. An order that the responding employer cease and desist from taking any steps to implement the employer's final offer, or any steps which indicate to employees that the employer's final offer is in effect, pending the disposition of Board File No. 4622-97-U.

3. Without restricting the generality of the foregoing, orders prohibiting the responding employer from:

a) taking any steps in regard to paying out the cash payments to employees referred to in the responding party's letters of February 26th to employees;

b) taking any steps in regard to offering employees financial counselling in regard to the aforesaid cash payments;

c) taking any steps in regard to any other aspect of the aforesaid cash payments;

d) taking any steps in regard to the pension funds; and

e) taking any steps with respect to calling employees back to work, or scheduling them for work, or requiring them to make any decisions relating to whether they will work;

pending the disposition of Board File 4622-97-U.

3. An order prohibiting the employer from contacting employees directly, or making statements which would be likely to alienate employees from their bargaining agent, pending the disposition of Board File 4622-97-U.

In addition at the hearing counsel for the applicant asked for an order "prohibiting the responding party from closing the Burlington plant".

2. By way of background, the collective agreement expired on November 14, 1997. The applicant commenced a legal strike on or about November 15, 1997. Early negotiations were unsuccess­ful and led to a section 96 application being filed by the applicant (Board File No. 2986-97-U) alleging that the responding party had breached sections 5, 17, 54, 70, 72, 73, 76 and 78 of the Act. Negotiations continued on January 28, 29, February 10, 12 and February 25, 1998 according to the pleadings filed. These negotiations did not result in an agreement between the parties. The respondent requested the Ministry of Labour pursuant to section 42 of the Act to direct a vote on its final offer. The Minister directed such a vote which was held on March 6, 1998. The result of the vote was 454 ballots cast in favour of acceptance of the final offer of the respondent, and 368 ballots cast for rejection of the final offer.

3. Prior to the vote being conducted the applicant filed a section 96 complaint alleging a breach of sections 5, 17, 70, 72, 73 and 76 of the Act. Without detailing the full particulars of this application, the essence of the application is that the responding party had through its actions and correspondence sent to employees, threatened, coerced, intimidated and bribed employees so that their true wishes could not be expressed in any vote taken under section 42. The applicant's allegations of threats, coercion and intimidation are largely based on the respondent's correspondence to employees that it would close the Burlington plant if the final offer was rejected and also that the responding party would not sell the plant to a competitor. The allegation of bribes are based on the lump sum cash payments provided to employees under a formula in the final offer, which payments could range in excess of $20,000.00 to an incumbent employee. As part of the relief, the responding party in this application asks for a declaration that the vote conducted on March 6, 1998 is “null and void".

4. The responding party, wrote to the applicant on March 9, 1998 enclosing a "copy of the Collective Agreement for signing. To date, given the applicant's position in relation to vote, the applicant has not signed this document.

5. The responding party, following the vote, according to the declaration of Stephen Ingram, Vice-President and General Manager of the Maple Leaf Pork processing facility in Burlington:

In anticipation of the employee's return to work and the resumption of operations at Burlington Pork, Maple Leaf reinstated employee benefits effective March, 1998. In addition, Maple Leaf took steps to begin offering financial planning counselling to interested employees. Eighty-six (86) employees participated in financial counselling sessions on Wednesday, March II, 1998 prior to our receipt of the Union's application.

6. The applicant then filed this application for the interim orders as set out in paragraph 1. In essence the applicant is asking the Board to prevent the responding party from implementing any terms of the final offer until its section 96 application, Board File 4622-97-U has been decided.

7. We are informed by counsel for the responding party that it has filed an application under section 96 of the Act that the applicant in this proceeding has breached section 17 of the Act by not signing the collective agreement forwarded to it on March 9, 1998.

8. The parties have asked that the Board render its decision on this request for interim orders as quickly as possible. In these circumstances, the Board does not feel it is necessary to review in detail the correspondence or actions alleged by the applicant that form the basis of its section 96 complaint.

9. In the Board's decision OPSEU v. The Crown [/996] OLRB Rep. September/October 780 the Board considered its jurisdiction to issue interim decisions and the factors it might consider. As the Board stated in paragraph 45:

10. It is difficult to attempt to list the myriad factors that the Board considers when dealing with applications for interim relief, for one can fairly describe the approach as an attempt to take into account all the relevant circumstances, including, as Ombudsman indicates, the interests of the responding party. Those circumstances include a consideration of the nature of the specific remedy sought, and the fact that an interim order is an extraordinary remedy and ought not to be granted without consideration for the appropriateness of granting such relief before a hearing on the merits. Interim intervention in a bargaining relationship, or a potential one, may itself bring negative consequences for the relationship between the parties. Thus, the Board on occasion has dealt with applications of this nature by deferring consideration of the interim application and scheduling the merits to be heard in an expedited fashion.

11. Generally as set out in an earlier decision between these parties (Board File 3133-97-M), the Board first assess whether the application raised an arguable case for the relief requested. If so, the Board then balances the harm from granting the relief requested against the harm that would flow if relief was not granted.

II. Both counsel made extensive argument on this application. Having considered the submis­sions, the Board finds there is an arguable case for the relief requested. The Board in Canada Cement Lafarge Ltd., [1980] OLRB Rep. November 1583 determined that though a final offer vote normally would require a union to execute a collective agreement, the Board "cannot take the position that no standard of review is proper".

12. As the Board stated in Canada Cement Lafarge Ltd. at paragraph 16:

Pre-vote conduct or communications involving coercion, intimidation, threats, or undue influence can undermine the reliability of a directed vote and cannot be tolerated or have been intended. To require the trade union to execute a collective agreement where an employer has engaged in such conduct would simply contribute to the illegality and reward the wrongdoer.

13. In this instance, clearly an issue is raised by both the section 96 application filed by the applicant (Board File 4622-97-U) and the section 96 application filed by the respondent as to whether or not the applicant is obligated to execute the collective agreement.

14. On the issue of 'harm' in the declaration of Greg Zikos, on behalf of applicant, the following statements are relevant:

15. The employer through its conduct has created a climate of fear and confusion on the part of employees. This has created a mercurial and highly time-sensitive situation where any attempt by the employer to implement its last offer and to call employees back to work is likely to compound the effect of the employer's conduct.

16. One of the remedies requested on the main application is that the employer cease and desist from bargaining directly with employees. If the employer is permitted to pay out the cash payments it offered employees directly, this will make that part of the main application essentially useless.

17. Other remedies requested on the main application include a declaration that the final offer vote is null and void, an order requiring that the employer rescind its threats and statements about the applicant, and an order that the employer return to the bargaining table. If the employer is permitted to implement its final offer, this will severely impair or render ineffectual such remedies.

18. The ability of the union to represent employees in collective bargaining and conduct an effective strike has been seriously compromised by the responding employer's conduct. Allowing the employer to proceed as if there were a collective agreement and to recall employees to work will further exacerbate this damage.

19. If the employer is permitted to proceed with the implementation of its final offer and to recall employees, it will be extremely difficult, if not impossible, to unravel this situation subsequently without incurring further damage to the applicant's representation of employees.

20. In addition, requiring employees to decide whether they will be returning to work while the legality of the employer's cash payment offer to them is being determined by the Board would place them in a dilemma.

21. On this issue, in the declaration of Stephen Ingram for the responding party the following statements are relevant:

22. To date, the Union's representatives have refused to sign the collective agreement. As a result, Maple Leaf Pork has suffered and will continue to suffer damages in the form of unabsorbed fixed costs and other direct losses at Burlington Pork at the rate of approximately $200,000.00 per week as it remains unable to commence operations of Burlington Pork. Furthermore, Maple Leaf Pork is unable to institute a back to work protocol unless and until the Applicant executes the collective agreement as it is required to do. Particulars of the fixed cost losses suffered on a weekly basis due to the Union’s conduct from March 10, 1998 are as follows:

Taxes and Insurance 35,000 Utilities 40,000 On-Going Maintenance 15,000 Security 20,000 Salaried and Office Staff 20,000 Depreciation 65,000 Quality Control at Co-Packers 5,000 $200,000

This amount includes no consequential losses nor does it reflect any absorption of inter-company charges or fixed costs for services provided such as advertising, promotion, accounting or legal services. If these amounts were included the weekly losses could be as great as $300,000.00.

46. I have taken these steps to stop the implementation of the collective agreement on the advice of counsel but the delay is of grave concern. I am concerned with the very significant financial losses which are described earlier. I am also very concerned that we are being asked to refrain from proceeding with items for our employees that we agreed to implement in a timely way and also that I am restricted in telling employees anything that is happening. This has been a very difficult labour dispute for me personally. I believe it has been difficult for the employees, I believe the vote expressed the will of the majority. I want to get back to work. I believe the employees who had agreed to come to work on Friday, March 13, 1998 are ready to come back to work.

47. In addition, if the relief sought by the Applicant in this interim application is granted, the labour dispute at Burlington Pork will continue indefinitely and Maple Leaf Pork will be unable to commence its operations until the collective agreement accepted by the employees is no longer the subject of litigation. As a result, Maple Leaf Pork will continue to incur damages in excess of $200,000 per week as described. In addition, I am concerned that Maple Leaf Pork will have no recourse or remedy to recover these damages if the Board grants the relief In particular, I am concerned that the Local Union does not have sufficient assets to satisfy the huge losses which the Company is experiencing due to the Union's conduct should the Company's position prevail in this litigation or any other proceeding.

48. Counsel for the applicant submitted that unreasonable harm to the applicant would occur if payments as required in the final offer were made to employees - it would make one of the remedies the applicant sought moot. To allow the responding party to implement the final offer would in effect put a defacto end to the coercion and be extraordinarily difficult to unravel. Further it would be unfair to ask employees to make the choice of whether to return to work, in these circumstances. For example, it is unfair for employees to have to choose whether to return to work, not knowing if the respondent has acted contrary to the Act or not knowing whether the strike is still lawful. To allow the responding party to implement the terms of the final offer would promote self help. The best option, counsel argues, is to maintain the status quo that existed before the vote, namely that employees remain on strike with the plant not operating.

49. Counsel for the respondent on this point argues that it would be an extraordinary remedy not to allow an employer to operate. There is a substantial money cost to the employer in not operating. If it was prohibited from ceasing operations these costs would be ongoing. In regards to the status quo argument counsel submits that the applicant is trying to unilaterally change the status quo. The status quo is that even during a strike an employer is allowed to operate. Further employees are allowed to come to work if they wish. Even if there was no final offer vote, the respondent could offer employees an opportunity to work based on its last offer. Under section 80, counsel maintains that employees have a right to return to work. Given the extraordinary nature of the request the balance of harm clearly should be weighed in favour of the respondent.

50. On this latter point, counsel for the applicant stated it did not intend to interfere with an employee's right to return to work under section 80, and would agree that any order of the Board could clarify this position.

51. The Board has considered the submissions of the parties. There is a third party involved, namely employees. Certainly under the Act employees have a right to return to work based on the last offer of the respondent. The respondent takes a risk if it pays this money and subsequently it is found that the applicant is not obliged to execute a collective agreement. Though the Board understands the concerns of the applicant, it is not convinced that appropriate remedies cannot be fashioned if the applicant is successful in its section 96 complaint. If it is not successful the applicant runs the risk that the Board may award damages. The Board agrees with counsel for the respondent that the potential harm to his client is greater than the potential harm to the applicant.

52. For the above reasons, the Board dismisses this application.

DECISION OF BOARD MEMBER RENE R. MONTAGUE; March 20, 1998

1. I strongly disagree with the disposition of the majority. Had the majority decided this application on the basis of the Board's settled approach to interim orders, instead of merely paying it lip service, they would have concluded that the balance of harm in this case weighed heavily in favour of granting the orders sought. A good illustration of the Board's long settled approach is set out in a decision of the present Chair of the Board in Tate Andale Canada Inc., [1993] OLRB Rep. Oct. 1019 at p. 1032 where the Board wrote:

“…..we do think it necessary to consider what "harm" may occur if an interim order is not granted. and what "harm" may occur if it is granted; moreover, that assessment should be made from a labour relations perspective, having regard to the scheme and purpose of the Act [emphasis added]

2. As I will endeavour to explain below, the potential harm to the union in this case of not granting the relief sought is substantial. Indeed, while the Board has held that it is not necessary that there be irreparable harm before the Board will grant interim relief, this is one of those occasions where such harm would indeed occur if such relief is not granted. On the other hand, the potential harm flowing to the employer from granting interim relief is primarily financial and fully compensable in damages.

3. The statutory tribunal responsible for promoting and safeguarding employees' freedom of association rights must never shy away from fulfilling its statutory mandate. As for potentially compet­ing "business" or "commercial" rights, a unanimous panel led by the present Chair of the Board said it best in Nelson Quarry, [1995] OLRB Rep. June 825 at pp. 838-839:

“The right to operate a business is not derived from or dependent upon the Labour Relations Act... Obviously, a collective bargaining activity may impinge upon the way in which a business operates in the marketplace. But we do not think that those business activities are themselves rights under the Labour Relations Act, created, derived from or addressed in the statute. They are not statutory rights."

4. It follows that in a contest with important statutory rights, an employer's "business" rights (or, put another way, the threat of "business" or "economic" loss) should not prevail. The majority, apparently, does not see it this way.

5. Every case, of course, must turn on its own specific facts. In this case, the following facts are important.

6. The union and its members have been engaged in a very public, very bitter strike since November 14, 1997. In February of this year. the employer applied to the Minister of Labour for a vote of employees on its final offer. That final offer represents the most dramatic and adverse change in working conditions that I have ever seen in my 30 years' involvement in labour relations — provincially, nationally and internationally, in any industry

7. On February 28, 1998, the employer sent a letter to each employee which was received on March 2, 1998. The letter contains passages in which the employer: (i) offers individualized cash payments to each employee within 15 days, together with a "secure future", if they vote to accept the employer's offer; and (ii) threatens that the plant will close and that employees will lose their jobs if they vote to reject the contract. The letter directs various disparaging statements at the union, and accuses the union of being willing to sacrifice the jobs and cash payments of employees in order to close the plant.

8. On March 3, 1998, the employer also sent a letter to employees which, among other things, (i) describes the union as wanting employees to sacrifice their jobs so that someone else will get it; (ii) sets up the union in opposition to employees and seeks to generate conflict between them; and (iii) reiterates that the employer is not bluffing about closing down the plant and that it will close the plant if employees do not accept the employer's offer.

9. On March 4, 1998, the union filed an unfair labour practice complaint with the Board (the '~main application"). It alleges that the employer has violated the Act by intimidating employees, by failing to recognize the role of the union, by interfering with the union's representation of employees. by attempting to circumvent the union and deal directly with employees and by threatening to discrimi­nate or discriminating against employees exercising rights under the Act. The union asks that the employer be directed to rescind its threats and to cease and desist its unlawful conduct. The Board has also been asked to declare the final offer vote null and void.

10. On March 6,1998, the final offer vote was conducted. About 55% of the employees voted to accept that offer.

11. As the majority has recognized, the union has pleaded an arguable case that the employer has committed very serious violations of the Act. It is, to say the least, arguable that it was the employer's illegal conduct that generated the majority employee vote in favour of the employer's offer. Assuming that the employer has acted illegally, the prejudice to the union already generated is profound. If the union is right and if the employer's conduct is fairly described as coercive and threatening, is it not obvious that the union's present ability to fulfill its statutory responsibilities has been seriously undermined by that conduct? Does it not also follow, if the union is right, that the employer has abused the process established in section 42 of the Act to further undermine the union and weaken its collective bargaining position?

12. What harm will the union suffer if no interim order issues? In a nutshell, permitting the employer to implement its final offer and to call employees back to work, will compound the effect of the employer's conduct and render the main application largely, if not entirely, moot.

13. Permitting the employer to proceed with the implementation of its final offer and to recall employees will mean that the Board will be faced with afait accompli by the time it renders its decision on the main application. Such afait accompli will be impossible to displace without further damage to the union's representation of employees. The majority indicates that the interests of employees must be taken into account. I agree. But the result of the majority decision is to require employees to decide whether they will be returning to work while the legality of the employer's cash payment offer to them is being determined by the Board. The effect of that is that employees will be required to essentially gamble on the outcome of the main application.

14. On the other hand, what harm will the employer suffer if the interim order is made? The majority has already reproduced paras. 41 to 47 from the declaration of Steven Ingram for the company. I take the liberty of again reproducing this excerpt:

"41. To date, the Union's representatives have refused to sign the collective agreement. As a result, Maple Leaf Pork has suffered and will continue to soffer damages in the form of fixed costs and other direct losses at Burlington Pork at the rate of approximately $200,000.00 per week as it remains unable to commence operations of Burlington Pork. Furthermore, Maple Leaf Pork is unable to institute back to work protocol unless and until the Applicant executes the collective agreement as it is required to do. Particulars of the fixed cost losses suffered on a weekly basis due to the Union's conduct from March 10. 1998 are as follows:

Taxes and Insurance 35,000 Utilities 40,000 On-Going Maintenance 15,000 Security 20,000 Salaried and Office Staff 20,000 Depreciation 65,000 Quality Control at Co-Packers $200,000

This amount includes no consequential losses nor does it reflect any absorption of inter-company charges or fixed costs for services provided such as advertising, promotion, accounting or legal services. If these amounts were included the weekly losses could be as great as $300,000.00.

46. 1 have taken these steps to stop the implementation of the collective agreement on the advice of counsel but the delay is of grave concern. I am concerned with the very significant financial losses which are described earlier. I am also very concerned that we are being asked to refrain from proceeding with items for our employees that we agreed to implement in a timely way and also that I am restricted in telling employees anything that is happening. This has been a very difficult labour dispute for me personally. I believe it has been difficult for the employees, I believe the vote expressed the will of the majority. I want to get back to work. I believe the employees who had agreed to come to work on Friday, March 13, 1998 are ready to come back to work.

47. In addition, if the relief sought by the Applicant is this interim application is granted, the labour dispute at Burlington Pork will continue indefinitely and Maple Leaf Pork will be unable to commence its operations until the collective agreement accepted by the employees is no longer the subject of litigation. As a result, Maple Leaf Pork will continue to incur damages in excess of $200,000.00 per week as described. In addition, I am concerned that Maple Leaf Pork will have no recourse or remedy to recover these damages if the Board grants the relief sought. In particular, I am concerned that the Local Union does not have sufficient assets to satisfy the huge losses which the Company is experiencing due to the Union's conduct should the Company's position prevail in this litigation or any other proceeding."

48. Even a novice labour relations practitioner would know that a strike that has unravelled as a consequence of the unfair labour practices alleged could never, ever, be re-mounted. In the absence of an order from the Board, employees will return to work (or resign their employment and accept the financial buy-out) and a collective agreement will defacto be imposed. Yet, the majority says that it is not convinced that appropriate remedies cannot be fashioned if the union is successful in its section 96 complaint. Does the majority honestly think that a "cease and desist direction" or a "board posting" or even "damages" can restore the union's position? How could a Board remedy imposed months from now undo the grave damage done to the union? Is it not appropriate for the majority to recognize, as the Board has in countless other cases, that delay often alters the labour relations context so substan­tially that the Board's final remedial powers are simply inadequate.

49. In my view, the harm pleaded and relied upon by the employer is primarily, if not exclu­sively, financial in nature. The Board has on many occasions confirmed that "financial harm" should not figure prominently when balanced against significant "labour relations harm". (See, most recently, Airline Limousine, unreported decision dated February 27, 1998 (Board File No. 3715-97-M). See, also, Morrisson Meat Packers Ltd., [1993] OLRB Rep. April 358 and Price Club, [1993] OLRB Rep. July 635.)

50. In this case, when one weighs the significant labour relations harm to the union against the primarily "financial harm" to the employer, the balance falls dramatically in favour of granting relief. I would have allowed the application and granted the orders requested. I would further direct that the pending unfair labour practice applications be listed for hearing (or continuation of hearing) immedi­ately, and that they be heard on consecutive days from Monday to Friday until completed.

51. It seems to me that a faithful approach to the Board's established jurisprudence would have — and should have — produced a different result in this case.