United Steelworkers of America v. Bennett Chevrolet Geo Oldsmobile Cadillac Ltd., 1999 CanLII 19491

[1999] OLRB REP. SEPTEMBER/OCTOBER 781

3296-98-U; 4068-98-R United Steelworkers of America, Applicant v. Bennett Chevrolet Geo Oldsmobile Cadillac Ltd., Responding Party; Fernando Melo and other Employees of Bennett Chevrolet Geo Oldsmobile Cadillac Limited, Applicants v. Retail, Wholesale Canada Canadian Service Sector Division of United Steelworkers of America, Local 414, Responding Party v. Bennett Chevrolet Geo Oldsmobile Cadillac Limited, Intervenor

BEFORE: Janice Johnston, Vice-Chair, and Board Members J. A. Ronson and R. R. Montague.

APPEARANCES: David Doorey for the union; Terry Billo, Fernando Melo and Shiloh Chirka for the group of employees; Ian Campbell and Dave Bennett for the employer.

DECISION OF JANICE JOHNSTON, VICE-CHAIR, AND BOARD MEMBER R. R. MONTAGUE; September 21, 1999

1. Board File No. 4068-98-R is an application to terminate bargaining rights in which the Board by decision dated March 9, 1999, directed that a representation vote be held. A representation vote was in fact held on March 11, 1999, but the ballot box was sealed and the ballots cast have not yet been counted. Board File No. 3296-98-U is an application pursuant to section 96 of the Labour Relations Act, 1995 (the "Act") alleging a violation of sections 15, 17, 58, 70 and 72 of the Act.

2. Prior to the hearing of this matter, the parties were able to agree upon all of the relevant facts and at the hearing held on April 6, 1999, the parties provided the Board with their legal arguments.

3. The parties provided the Board with a book of documents which reflected the matters which had been agreed upon and in addition, the parties provided the Board with a brief Memorandum of Agreement which also contained some agreed to facts. Accordingly, what follows is the Board's recitation of what we view to be the material facts gleaned from the various documents with which we were provided.

4. On March 17, 1998, the United Steelworkers of America (the "union"), applied to be certified for a bargaining unit of employees of the responding party in Board File No. 3296-98-U, Bennett Chevrolet Geo Oldsmobile Cadillac Ltd. (the "employer" or the "company"). In that application for certification the union made a claim pursuant to section 11 of the Act. In addition, on March 17, 1998, the union filed an application under section 96 of the Act alleging that the employer had violated various sections of the Act during the union's organizing campaign. On April 15, 1998, the union and the company signed Minutes of Settlement wherein the employer admitted that it had contravened the Act and that the automatic certification provisions contained in what was the existing section 11 of the Act should apply.

5. Pursuant to the Minutes of Settlement, the union and the company jointly requested that the Board certify the applicant as the bargaining agent for the employees in the following bargaining unit:

all employees of Bennett Chevrolet Geo Oldsmobile Cadillac Ltd., located at 445 Hespler Road in the City of Cambridge, save and except managers, persons above the rank of manager and shop foremen, tower operators, office, clerical and sales staff.

6. The Board by decision dated April 22, 1998 certified the trade union for the agreed to bargaining unit. On April 28, 1998, the union gave notice to the employer of its desire to bargain for a collective agreement. The parties met on June 18, 1998 for their first negotiating session. At the initial meeting, the union presented its collective agreement proposals for the employer's consideration. On June 17, 1998, the union had applied for the appointment of a conciliation officer and on June 30, 1998 a conciliation officer was appointed. The parties again met to negotiate on August 18, 1998. It is not clear from the agreed upon documents whether the conciliation officer was present at this meeting or not. On October 5, 1998, counsel for the employer wrote to the union to confirm that negotiations would continue on October 14, 1998. Attached to this letter was a document summarizing the articles which had been agreed to or agreed to as withdrawn at the last meeting on August 18, 1998. In addition, the letter indicated that the company would be prepared to provide its monetary position at the next meeting.

7. The parties agreed that the following excerpt from the application pursuant to section 96 of the Act which was filed by the union (Board File No. 3296-98-U), reflected agreed upon facts:

8. On or about October 14, 1998, the Employer provided the Union for the first time its monetary proposals. The proposed term offered by the Employer was one year from the date of certification, April 22, 1998. Mr. Jim Pound, Staff Representative of the Union, indicated to the Employer that he doubted the legality of the Employer's proposed term since the term would, in effect, only run for 6 months from the earliest that it could be ratified. However, Mr. Pound made a counter-offer of a two year term from the date of certification.

On October 15, 1998, the employer wrote to the union to provide a copy of the company's October 14th final offer in respect of the monetary items still in dispute. The company also provided the union with a document setting out the monetary articles which had been agreed to or withdrawn as of October 14, 1998.

8. On October 19, 1998, the employer wrote to the Minister of Labour and requested, pursuant to section 42(1) of the Act, a final offer vote. This letter and the final offer was copied to the union. The final offer indicated that the collective agreement was to commence April 22, 1998 and terminate April 21, 1999. On October 26, 1998, counsel for the trade union wrote to the Minister of Labour requesting that the Minister exercise his authority under section 42 of the Act and schedule the final offer vote for a date after the parties had had an opportunity to engage in further collective bargaining on outstanding issues. The union's argument in support of this request was expressed as follows:

……The Minister is given the express authority in Section 42 of the Act to attach conditions and terms to a final offer vote. The Union submits that the Employer's request in this case is premature. Section 2 of the Act states that one of it's [sic] purposes is to "facilitate collective bargaining between employers and trade unions". This employer did not provide its proposals on the outstanding issues until October 14, 1998 and it then bargained over those issues for half a day before it applied for a final offer vote. The Employer now asserts that it is "anxious" to have the first collective agreement resolved "as soon as possible".

The Employer's position on the monetary issues includes no wage increase and a term that would expire on April 21, 1999, less than six months from the earliest date upon which a final offer vote could be held. Section 58(1) of the Act provides that a collective agreement must have a term of at least one year. The reason for this requirement is that the Legislature has concluded that it is in the best interests of the parties to have at least one full year to operate under the collective agreement and to develop a collective bargaining relationship. The Employer's first and final position on the term of the collective agreement would require the parties to begin negotiations for a new collective agreement within months of ratifying the first collective agreement. This is unreasonable and contrary to the purpose and intent of the Act and makes no sense from an economic and practical perspective.

The collective bargaining process is designed in part to educate the parties and permit the collective bargaining relationship to develop. In this case, the parties have bargained for less than one day with respect to the outstanding issues. The Employer may be taking an uncompromising and unreasonable position with respect to the term of the first collective agreement. However, since the parties have bargained for less than one day with respect to the Employer's offer, the Union is prepared to meet with a professional conciliator and the Employer to attempt to bargain a collective agreement. A conciliation officer has scheduled a meeting with the parties. A professional conciliator may be able to assist the parties in reaching a mutually satisfactory first collective agreement. Moreover, the meeting with the conciliator may avoid future litigation between the parties arising out of the collective bargaining in this case.

This correspondence between the union and the Minister was not copied to the employer nor was it copied to any of the employees in the bargaining unit.

9. By letter dated October 30, 1998, the Minister declined to delay the final offer vote and indicated that it would be held on November 3, 1998. This letter was not copied to the employer or the employees. On November 3, 1998, the final offer vote was held, and the bargaining unit employees voted to accept the employer's final offer.

10. It appears that either before or shortly after the final offer vote, the employer provided the union with a copy of a draft collective agreement which contained the agreed to items and the employer's final offer. On November 20, 1998, the union sent the following letter to counsel for the employer:

Be advised that I have reviewed the draft Collective Agreement regarding the above and found no problems. The Union will require six (6) signed copies of the above.

11. On November 25, 1998, counsel for the employer sent the trade union six copies of the collective agreement which had been executed by the employer. It appears that the collective agreement was signed by the employer on November 25, 1998. The company requested that the union have the appropriate individuals execute the collective agreement and return three copies to the company. By letter dated December 18, 1998, the employer wrote to the union requesting that the union return three copies of the executed collective agreement. As of that date, the employer had not yet received the document back from the union.

12. On December 23, 1998 the union wrote the following letter to the employer:

This letter is further to results of the final offer vote held on November 3, 1998. The bargaining unit employees accepted the Employer's final offer by a margin. The Collective Agreement that the Employer put to the final offer vote will expire on April 22, 1999, less than 6 months from the date that the final offer vote was held. The Union believed that this term violates Section 58 of the Labour Relations Act and that the Employer violated various other sections of the Act, including the duty to bargain required by Section 17, when it insisted upon putting to a final offer vote a collective agreement with a term that violates Section 58.

The Union will be filing an application to the Labour Relations Board today requesting that the Board declare that the term of the collective agreement is illegal and that the Employer violated the Act by putting to a final offer vote a proposed collective agreement that will expire less than 6 months from the date of the vote. Among the remedies that the Union will seek from the Board is an order amending the Collective Agreement to include a term that runs one year from the date of the final offer vote.

Since Section 58 requires that there be a collective agreement in effect, the Union has attached a signed version of the collective agreement that was ratified by the employees in the final offer vote. However, the Union has signed the Collective Agreement without prejudice to its position that the term of the Collective Agreement is illegal and without prejudice to the application which will be filed by the Union today.

It is not exactly clear when the representatives of the trade union authorized to execute the collective agreement did so but presumably it was around the same time as the letter was written. The union also filed the section 96 application currently before the Board on December 23, 1998.

13. The collective agreement on its cover page provides that the collective agreement is to be effective from April 22, 1998 to April 21, 1999 and Article 29.01, the duration clause, provides that the agreement is to be effective from April 22, 1998 to April 21, 1999. Immediately under the duration clause the words "in witness thereof the parties hereto have executed this collective agreement on this 25th day of November 1998" appear followed by a single signature on behalf of the employer and four signatures on behalf of the union.

14. There is no evidence before us nor is it an agreed fact that the collective agreement or any portion of it was applied retroactively to April 22, 1998. None of the terms of the collective agreement were agreed upon as operating retroactively. Although Schedule "A" to the collective agreement did provide for a signing bonus of $400.00, there was no retroactive wage increase.

15. The following letter dated March 1, 1999 was sent to the employer by the trade union:

Please be advised that Retail Wholesale Canada, Canadian Service Sector Division the United Steelworkers of America. Local 414 wishes to renew the Collective Agreement currently in place.

Please respond with dates to start bargaining.

On March 3, 1999, the union requested the appointment of a conciliation officer.

16. On March 1, 1999, an application to terminate bargaining rights was filed (Board File No. 4068-98-R). As already noted, on March 9, 1999, the Board ordered the taking of a representation vote which was held on March 11, 1999. The ballot box was sealed pending the resolution of the issue of the timeliness of the application to terminate bargaining rights. In response to the application, the union took the position that the application to terminate bargaining rights was not timely. On March 31, 1999 the parties signed the following agreement:

Agreement of the Parties

Schedule "A" (1)

Between

Fernando Mello and other employees

The "Applicant" or

The "Employees"

• and -

Retail Wholesale Canada Canadian Service Sector of the United Steelworkers of America Local 414

"The Responding Party

or The Union"

• and -

Bennett Chevrolet & Geo Oldsmobile Cadillac Limited

"The Intervenor or the

Employer"

Agreement of Procedural Issues

Whereas the parties have met together with a Board's officer and have attempted to narrow the issues in dispute in an attempt to expedite the hearing in the matter of an application for termination of bargaining rights and a Section 96 application.

The Parties have no objection to the Board being presented with the exhibits as requiring no evidence as to their validity as set out as Schedule "A" 2 and 3 hereto:

1. The Parties agree that the union reserves its right to argue that, by bargaining a term that the union alleges will operate for less than one year and requesting a final offer vote on a proposal that includes such a term, the Employer violated the Labour Relations Act. The Union acknowledges that it makes no other allegation of bad faith bargaining.

2. The Employer and the trade union agree that they bargained the terms of the collective agreement to an impasse.

3. The Parties agree to the facts as outlined in Paragraph 17 of the trade union s Section 96 application. [see paragraph 7 of this decision].

4. The Parties agree that a final offer vote was conducted on November 3, 1998, and the employer's final offer was accepted by the employees by a 16 to 6 vote count.

5. The Parties agree to argue this matter based upon the agreed documents and facts.

ARGUMENT

17. Counsel for the trade union argued that if the union was successful in the section 96 complaint, then the Board would have to conclude that the termination application was untimely. The union's case turns on the meaning given to and application of section 58(1) of the Act in light of the facts of this case. Counsel suggested that in bargaining a duration clause of less than one year to impasse, the employer violated section 58(1) of the Act. If the term of the collective agreement that the employer took to a final offer vote or impasse does not meet the requirements of section 58(1) of the Act, then it is illegal. The Board's jurisprudence makes it clear that taking an illegal term to impasse is contrary to section 17 of the Act. In support of this latter proposition counsel referred the Board to A.N. Shaw Restoration Ltd., [1976] OLRB Rep. Sept. 504. Accordingly, in counsel's view, the employer's conduct in this case violated section 17 of the Act. Counsel for the union also took the position that the employer, by taking to final offer vote a term of less than one year, was refusing to recognize the trade union and therefore in violation of section 70 of the Act.

18. Counsel for the union suggested that there were two central issues with regard to its argument pursuant to section 58(1) of the Act. Does Article 29.01 of the collective agreement (the term clause), in and of itself make the collective agreement operative for at least one year within the meaning of section 58(1) of the Act? If the collective agreement that was put to a final offer vote does not operate for one year, then when does the collective agreement commence to operate within the meaning of section 58(1) of the Act? The union took the position that merely providing for a retroactive commencement date in the collective agreement does not make the collective agreement operative for one year within the meaning of section 58(1) of the Act.

19. Counsel for the union suggested that the Board must interpret section 58(1) in the context of the Act. Counsel questioned whether section 58(1) can be satisfied by inserting a retroactive commencement date in a collective agreement. The word "operate" in section 58(1) is an active verb. Therefore, in order to operate for a year, the collective agreement must be in effect for one year. Merely inserting a duration clause intended to make the collective agreement retroactive does not mean that the collective agreement was actually operating in the period before it came into effect. Counsel for the union stressed that section 58(1) requires that the parties have actually operated under a collective agreement for one year. It is therefore inconsistent with this requirement and the case law for the employer to assert that the mere insertion of a retroactive term clause complies with section 58(1) of the Act. In support of these arguments, counsel referred the Board to Penick Canada, 1966 CanLII 811 (CA LA), 17 L.A.C. 296 (Weatherill); City of London, 1965 CanLII 1039 (ON LA), 16 L.A.C. 182 (Arthurs); MacMillan Bloedel, 1974 CanLII 2289 (BC LA), 5 L.A.C. (2d) 337 (B.C.L.R.B. per P. Weiler); Truck Crane, 1973 CanLII 2053 (ON LA), 4 L.A.C. (2d) 250 (O'Shea); Corporation for the City of Sarnia, 1980 CanLII 4114 (ON LA), 28 L.A.C. (2d) 276 (lanni, Q.C.); and Noranda Metal Industries, 1980 CanLII 4011 (ON LA), 26 L.A.C. (2d) 367 (Gorsky).

20. Union counsel argued that in interpreting section 58(1) of the Act it was necessary for the Board to keep in mind the purpose of the section. Section 58(1) serves important labour relations purposes. Counsel for the union stressed that it is intended to provide the parties with a year of peace, an opportunity to learn about collective bargaining and an opportunity to build and establish a bargaining relationship. Another purpose of section 58(1) is to give employees a minimum of one year to consider what it is like to be represented by a trade union and covered by a collective agreement. It gives the employees an opportunity to experience the benefits of collective bargaining and understand the benefits that a collective agreement can bring to them. It is also intended to provide a clear date to employees or others who may be seeking to terminate the bargaining rights of the union. If the employer's interpretation of section 58(1) of the Act is correct and the Board agrees that the mere insertion of a retroactive duration clause in the collective agreement satisfies section 58(1), then none of the above-noted purposes are satisfied.

21. In reviewing the circumstances of this case, counsel for the union pointed out that at the bargaining meeting held on October 14, 1998, the employer took the position for the first time that the term of the collective agreement should run from April 22, 1998 to April 21, 1999. The union representative responded by indicating that he thought this term would be illegal as it was contrary to section 58(1) of the Act. This was the last time that the parties met to bargain and the employer later took the position that the offer it had presented to the union at the meeting on October 14, 1998, was the employer's final offer. The union conceded that the employer should have been copied on the letter dated October 26, 1998, that was sent to the Minister of Labour indicating that it was the position of the union that the duration clause contained in the employer's final offer was contrary to the Act. However, due to an oversight it was not.

22. On November 20, 1998, the union sent a letter to counsel for the employer which indicated that the union had reviewed the draft collective agreement and had found no problems with it. In the same letter, the union requested that six signed copies of the collective agreement be forwarded to them for signature. In counsel's view, all this letter indicated was that the union had reviewed the draft collective agreement and had satisfied itself that it was consistent with the terms of the employer's final offer. After having satisfied itself of this, the union requested copies of the collective agreement so that the union could execute them and then make its argument pursuant to section 58(1) of the Act. In counsel's view it would be unfair and unjust to find that the union's application pursuant to section 96 of the Act could not proceed, or that the union had agreed to the duration clause contained in the collective agreement by doing what it had been told to do by the Board. In executing the collective agreement and then raising its arguments pursuant to section 58(1) the union was merely following the directions provided by the Board in Peacock Lumber Ltd., [1993] OLRB Rep. July 633.

23. In the Peacock Lumber case, the Board dealt with a fact situation similar to the one currently before the Board. In the Peacock Lumber case, the union refused to execute the collective agreement as it took the position that the collective agreement did not operate for a minimum period of one year in accordance with what is now section 58(1) of the Act. Union counsel argued that in the Peacock Lumber case, the Board made it clear that before a party can make an argument under section 58(1) it must first execute the collective agreement. In the case before us the union found itself in a difficult position. A final offer vote had been held on a final offer which contained a duration clause for the collective agreement which was contrary to section 58(1) of the Act in the view of the union. In the vote, the employees accepted this offer. In his submission, the Board's jurisprudence makes it clear that it is a violation of section 17 of the Act for a trade union to refuse to execute a collective agreement which has been accepted by the employees pursuant to a final offer vote (see in this regard Wilf McIntyre, [1990] OLRB Rep. Oct. 1052; and Canada Cement Lafarge Ltd., [1980] OLRB Rep. Nov. 1583). Therefore, even though the union felt that the duration clause in the collective agreement was illegal, it felt it had to execute the collective agreement to avoid being found in violation of section 17 of the Act and to put itself in a position to make its arguments pursuant to section 58(1) of the Act. Counsel for the union took the position that by executing the collective agreement the union was merely agreeing that the terms of the collective agreement were those put to employees in the final offer vote.

24. Counsel for the union argued that none of the terms of the collective agreement were applied retroactively to employees in the bargaining unit. Counsel pointed out that the Board has considered the question whether or not a retroactive commencement date in the collective agreement in and of itself satisfies section 58(1) of the Act. In R & R Pre-Cast Erectors Limited, [1968] OLRB Rep. May 172, a collective agreement executed on September 20, 1967 included a retroactive commencement date. In the R & R Pre-Cast case, the Board stated that in the absence of any provision to the contrary, the Board has interpreted the commencement date of a collective agreement to be the date on which it was entered into by the parties. Although in the R & R Pre-Cast case the parties had provided for a retroactive term, the Board concluded that there was no provision in the agreement itself nor any extrinsic evidence that suggested that the parties' envisioned any operative effect of the agreement prior to its execution. The Board went on to conclude therefore that the retroactive term in and of itself did not satisfy what now is section 58(1) of the Act.

25. Union counsel suggested that in our case, just as in the R & R Pre-Cast case, there is no evidence that the collective agreement was applied or made operational retroactively. Although the law says that it is possible for the parties to make a collective agreement retroactively operational, because of the absurdities often created by this, the parties have to be very clear in their intention to make the collective agreement operational retroactively. In support of this conclusion, counsel referred the Board to Intercontinental Warehouses Limited (Rexdale), [1959] OLRB Rep. Mar. 34; Town of Palmerston, [1990] OLRB Rep. Jan. 65; and Seven-Up (Ontario) Limited, [1972] OLRB Rep. Nov. 965. In all of these cases, the Board concluded that a duration clause which was made retroactive to a date earlier than the date of signing was insufficient in and of itself to cause the collective agreement to be "in operation" in accordance with section 58(1) of the Act.

26. Counsel for the union argued that Article 29.01 of the collective agreement does not make the terms of the collective agreement operate retroactively. There is nothing in the collective agreement that indicates, for example, that an employee has a right to retroactively grieve a matter or that the seniority provisions with regard to lay off may be applied retroactively. The employees could have gone on strike or the employer could have locked them out in the period from April, 1998 to November, 1998 because no collective agreement was in force. In addition, there is no dispute between the parties that the freeze provisions of the Act applied from April to November, 1998. Therefore, in the situation before us there was no collective agreement in operation from April to November, 1998. Counsel for the union disagreed with employer counsel's position that Article 29.01 of the collective agreement makes it "operate" retroactively during that period because if the collective agreement was actually operational then none of the above would be true.

27. Union counsel stressed that arbitrators have concluded that in spite of the fact that collective agreements provided for retroactive duration clauses, actions which had been engaged in by the employer prior to the execution of the collective agreement were not grievable. These cases indicate that it is not possible to comply with obligations created by the execution of a collective agreement, that were not even contemplated at any time prior to the execution of the collective agreement. Employees did not have any retroactive right to grieve events which occurred prior to the execution of the collective agreement. Even though in some of the arbitration cases wages were retroactive, the arbitrators nevertheless concluded that the collective agreement in its totality was not in operation retroactively. The collective agreement in the case before us was clearly not intended to operate in the period from April to November, 1998, as the parties were not bound by terms and conditions of employment which did not come into existence until November, 1998.

28. Counsel for the trade union pointed out that collective bargaining is costly and disruptive. Therefore normally an employer does not want the collective agreement to expire shortly after bargaining has concluded. In this case the employer wanted the collective agreement to be in place for as short a period as possible as it was confident that a termination application was coming and that the union would be decertified. The employer is not concerned with having a break from collective bargaining. Counsel urged the Board to remember that the certification in this case was achieved pursuant to section 11. Therefore the parties started off on a bad foot to begin with as the employer had engaged in various unfair labour practices to avoid unionization. In counsel's view this bargaining relationship has never had a chance to develop. If the union is successful with regard to its arguments pursuant to section 58(1) of the Act, the termination application is untimely. The collective agreement would continue to operate but the only clause affected is the term clause. Counsel argued that the collective agreement actually commenced to operate on November 25, 1998, or in the alternative, it commenced to operate on the date of the final offer vote.

29. Counsel for the company stressed that this case turned on its facts. He suggested that the onus was on the union to establish that the term of the collective agreement was anything other than what it states on its face. He also stressed that this case is about employee rights. Employer counsel argued that the Board's jurisprudence makes it clear that the date given in the collective agreement as the date when it commences to operate, should be considered to be the operative date of that agreement and that a heavy onus rests on anyone who seeks to establish the contrary. In support of this counsel referred the Board to WE Lambden & Sons Ltd., 59 C.L.L.C. ¶18,141 - Ontario Labour Relations Board, May 8, 1959; and Hiram Walker & Sons Limited et al., 61 C.L.L.C. November 29, 1960, at ¶116,186.

30. Employer counsel pointed out that the current Act emphasizes employee rights. In support of this he pointed to the purposes of the Act which are found in section 2 and which include among other things: the facilitation of collective bargaining between employers and trade unions that are the freely designated representatives of the employees; and the promotion of flexibility, productivity and employee involvement in the workplace. In this case, the term of the collective agreement was clearly set out in the employer's final offer and the employees voted to accept the employer's final offer.

31. Employer counsel suggested that if the argument of counsel for the union regarding section 58(1) of the Act is accepted, then it would not be possible to have a collective agreement with a one year term operate retroactively. Counsel suggested that this was an untenable conclusion. In support of his position, counsel provided the Board with Mortlock Construction (1963) Limited, [1973] OLRB Rep. April 204. In that case, after considering the current collective agreement as a whole, the evidence before it and the representations of the parties the Board concluded that the collective agreement envisaged an operative effect prior to its date of execution. Although the collective agreement was executed on October 11, 1972, the Board concluded that it commenced its operation on May 1, 1972.

32. Counsel for the company also relied upon Dad's Cookies Ltd., [1978] OLRB Rep. Jan. 116. In that case the Board, in the context of a termination application, was dealing with a situation in which the parties signed a collective agreement on September 12, 1977, which provided for retroactive effect back to January 1, 1977. The collective agreement was due to expire on December 31, 1977. The collective agreement provided for the payment of retroactive wages back to January 1, 1977. The Board in that case concluded that the collective agreement commenced to operate as of January 1, 1977, because to do otherwise would negate the clear intention of the parties as evidenced on the face of the agreement. The Board also found that this conclusion was consistent with satisfying another important labour relations objective, namely, that the employees concerned were entitled to be able to determine from the face of the collective agreement at what point the performance of their particular bargaining agent could be legally reviewed. Employer counsel urged the Board to follow the reasoning set out in the Dad's Cookies case.

33. Counsel for the employer disagreed with the union's assertion that the employees had no seniority rights in the period from April, 1998 to November, 1998. He pointed out that the Memorandum of Settlement entered into by the parties to resolve the unfair labour practice complaint, which had been filed at the time as the application for certification, made it clear that any lay offs had to be done in reverse order of seniority.

34. Employer counsel pointed out that the Board's jurisprudence makes it clear that the parties can agree to a term of operation of a collective agreement that is less than one year and not be in violation of section 58(1) of the Act. Employer counsel argued that the conduct of the union in this case was consistent with the conclusion that it had accepted the term of the collective agreement. He agreed that at the meeting on October 14, 1998, the union's representative said that in his view the term clause may be an issue, but neither the employer nor the employees knew that the union was still pursuing this issue until the letter from the union dated December 23, 1998, was received. The letter to the Minister by the union was not copied to the employer or to the employees, nor was the Minister's response to the union copied to the employer or employees. The letter from the union dated November 20, 1998, indicated that the union had reviewed the draft collective agreement and found no problems with the collective agreement. How could the union say that if it was intending to pursue the position that the term clause in the collective agreement was contrary to section 58(1) of the Act? The letter does not mention any concerns with the term clause in the collective agreement, nor does the union indicate that it is agreeing to the collective agreement subject to its right to raise its concerns with regard to section 58(1). Therefore, the conduct of the union constitutes acceptance of the collective agreement including the term clause. In counsel's view, the union accepted or agreed to a retroactive term clause which would run from April, 1998 to April, 1999, and they cannot now resile from that agreement.

35. Employer counsel pointed out that even after having written the December 23rd letter, the union then went on to give notice to bargain and to make an application for conciliation in March, 1999. This indicates that the union was treating the collective agreement as ending in April, 1999. Employer counsel stressed that none of the letters, either the ones written in March, 1999, nor the letter dated November 20, 1999, indicated that the union was acting without prejudice to its argument with regard to the effect of section 58(1) of the Act, nor did any of this correspondence indicate that the letters were subject to any potential litigation which might take place at the Labour Relations Board.

36. Accordingly, counsel for the employer argued that the Board should start with the proposition that the collective agreement was clear on its face with regard to its term. The face page of the collective agreement and Article 29.01 make it clear that the duration of the collective agreement was from April 22, 1998 to April 21, 1999. Counsel pointed to various provisions in the collective agreement such as Article 7.05 which provides for a foot wear allowance and Article 25.14 which provides for a tool allowance and suggested that there was no indication in the collective agreement that those provisions only commenced operation from the acceptance of the final offer vote. In addition, the signing bonus provided for in Schedule "A" although not clearly retroactive, could be construed as payment for services already rendered.

37. Counsel argued that section 58(1) must be interpreted in light of the purpose sections of the current Act. In his view, much of the jurisprudence dealing with the operative date of collective agreements was very old and very paternalistic. At that time there were very few provisions in the existing legislation that empowered employees. Therefore, the Board should look carefully at some of the old cases in light of the current purpose provisions of the Act. Counsel for the employer stressed that the Board should not forget that the onus is on the union to show that the term set out in the collective agreement is not in fact the term of the collective agreement. In his view, the union has not met this onus as there is no evidence before the Board that the collective agreement was not applied retroactively. If one looks at the collective agreement in its totality, one can conclude that it ran from April, 1998 to April, 1999.

38. Counsel asked the Board to dismiss the union's unfair labour practice complaint and to find that the termination application was timely.

39. Counsel on behalf of the group of employees who are seeking to terminate the bargaining rights of the union, argued strongly that this application dealt with the right of employees to determine their bargaining agent and pursue their rights under the Act. In the case before the Board, the employees voted to accept the employer's final offer and the duration clause for the collective agreement that it included. Based on that term clause, the employees applied to the Board to terminate the union's bargaining rights. Because there is a dispute with regard to the term clause, a question has been raised with regard to the timeliness of the application to terminate bargaining rights. The employees in this case have already cast their ballots with regard to the termination application and they want their wishes to be known. Therefore, counsel for the group of employees urged the Board to find that the termination application was in fact timely, unseal the ballot box and count the ballots. He argued that the employees in this case want their voices heard.

40. On the face of the collective agreement, the term clause provides that it is to be in effect from April, 1998 to April, 1999. Counsel agreed with the assertion made by employer counsel that the union was subject to a heavy onus to prove that the term of the collective agreement was anything other than as stated on its face. Absent large and overriding considerations that it should be something different, counsel urged the Board to conclude that the term of the collective agreement was as stated on its face.

41. Counsel for the employees stressed that in this case no one advised the employees that the union was taking the position that the term clause provided for in the employer's final offer was illegal. No one communicated with the employees and advised them that the trade union would be challenging the term clause. Therefore, when the employees voted on the employer's final offer they had no idea that the union was taking the position that the term clause was not in accordance with the Act. If the union was going to take this position then it should have advised the employees of this fact because the right of employees to bring a termination application and the timing of such an application was dependent on the term of the collective agreement. By not advising them of its position with regard to the term clause, the union misled the employees. Counsel argued that there was nothing before the Board to indicate that the employees had been notified in any way by the union that it was taking issue with the term clause in the collective agreement.

42. Counsel pointed out that the union did not copy the employees on the letter it wrote to the Minister of Labour, nor were the employees copied on the response from the Minister of Labour. Counsel suggested that if the union was going to challenge the Minister's decision it should have done so immediately. If the union had initiated an unfair labour practice complaint prior to the final offer vote, it would have made it abundantly clear to the employees before the voted on the employer's final offer that the union was taking the position that the term of the collective agreement was illegal pursuant to section 58(1) of the Act. This could have affected how the employees voted. In support of his argument counsel referred the Board to Peacock Lumber Ltd., [1993] OLRD No. 4016 (the reconsideration decision).

43. In counsel's view the November 20, 1998 letter in which the union indicated that it had no problems with the collective agreement, was an unqualified acceptance of the collective agreement. If the union truly intended to pursue its objection to the term clause on the basis that it contravened section 58(1) of the Act, then it should have indicated in the letter dated November 20, 1998 that it was accepting the collective agreement subject to the position that the term clause was contrary to section 58 of the Act. Counsel for the employees submitted that the notice to bargain and the conciliation request made by the union in March, 1999, can only be conduct which demonstrates an unqualified acceptance of the fact that the term of the collective agreement runs from April, 1998 to April, 1999. Neither were made subject to the union's position that the term clause in the collective agreement was contrary to section 58(1) of the Act.

44. In this case, counsel pointed out that the section 58(1) issue has little to do with this fact situation and this collective bargaining reality. He suggested that the employees need to be heard through the ballot box and that the Board should not interpret section 58(1) of the Act in the manner urged by the union, as there is no practical labour relations purpose served by doing so.

45. Should the Board give effect to the union's argument that the duration of the collective agreement must be different than April, 1998 to April, 1999 it would be very costly for the employees. Changing the expiry date for the collective agreement would make their termination application untimely and they would have to bring another application at a subsequent time. As this makes it looks like employees cannot get a vote, this would bring labour relations into disrepute in the Province. It also makes the employees look like pawns of a bigger political process.

46. Counsel for the employees urged the Board to look carefully at the union's suggestion that the term of the collective agreement should be from November, 1998 to November, 1999. The union had suggested that the collective agreement commence operation on November 3, 1999, the date of the final offer vote or on some other day in November. Simply picking a commencement date in November would be arbitrary. November 3, 1998 was a date picked by the Minister for the final offer vote. Choosing it as the commencement date would be arbitrary as well. If the Board concluded that the commencement date for the collective agreement was the day the union signed it this would give the union control over when the collective agreement commences to operate. Accordingly, employee counsel urged us to accept that the term set out in the collective agreement, April, 1998 to April, 1999 was the term of the collective agreement as there is no clear alternative.

47. Counsel for the employees pointed out that the Dad's Cookies case was on all fours with the case before the Board. He urged the Board to adopt the conclusion reached in the Dad's Cookies case that employees have a right to know the timing within which they can bring a termination application. Counsel argued that the cases relied upon by the union which set out the labour relations purposes of section 58(1), also stressed the importance of providing the employees with some certainty with regard to when they can attempt to de-certify the union.

48. Counsel for the employees urged the Board to give weight to the employee's right to vote and to make a choice in both the final offer vote and the termination application vote. With regard to the final offer vote the employees accepted a collective agreement term which was to run from April, 1998 to April, 1999. At the time they voted and in the period immediately after the final offer vote, there is no evidence before the Board that the employees knew that the union had any concerns with regard to the term clause. It was not until they received the unfair labour practice complaint which had been filed by the union that the employees knew that there was a problem. Nevertheless, the employees continued to rely upon the term clause set out on the face of the collective agreement and filed an application to terminate bargaining rights. Counsel urged the Board to find that this termination application was timely and to count the ballots which have been cast.

49. In response, counsel for the trade union indicated that it was not his position that it is impossible for a union and employer to negotiate a collective agreement which is operative retroactively within the meaning of section 58(1). But counsel pointed out that if the parties intend a retroactive operation of the collective agreement they must use very clear language or be in a position to provide examples that the collective agreement was in fact applied retroactively. To establish that the parties intended the collective agreement to apply retroactively, there must be clear evidence regarding how it applied retroactively. Whether or not the parties have agreed to a retroactive operation of the collective agreement depends on an assessment of all of the evidence before the Board.

50. Union counsel did not agree with counsel for the employer that the collective agreement provided examples of the retroactive operation of the collective agreement. In his view, the signing bonus, the tool allowance and the footwear allowance were all examples of monetary provisions that came into operation as of the date of the execution of the collective agreement. Counsel pointed out that in April, 1998, the employer was was under no obligation to pay tool allowance. In addition, counsel pointed out that the Articles in the collective agreement dealing with job postings, lay-off and recall were clearly not in effect from April, 1998 to November, 1998 and that no one has suggested otherwise. In this case no terms of the collective agreement were applied retroactively.

51. Accordingly, counsel for the union asked us to conclude that whether or not the parties have agreed to a retroactive operation of the collective agreement turns on an assessment of the facts in this case. There is no indication that the parties ever intended the collective agreement to operate retroactively from April, 1998 to November, 1998. In the alternative, counsel suggested that even if the union had agreed to a retroactive term in the collective agreement this does not end the matter. It is necessary for the Board to determine whether or not the collective agreement was actually operating retroactively as required by section 58(1). Even if the parties agreed to a retroactive term in the collective agreement, to be in compliance with section 58(1) of the Act, there must be some evidence that the collective agreement actually operated retroactively.

52. In response to the concerns raised with regard to the notice to bargain sent by the union in March, 1999, and the request for conciliation, counsel for the union pointed out that by the time these letters were sent the union had the termination application. In the event that the trade union was successful in convincing the Board that the termination application before the Board was untimely, the union wanted to protect itself from additional termination applications. Therefore, it sought to rely upon the protection of the Act by providing notice to bargain and a request for conciliation. Once notice to bargain is given, pursuant to section 67(2), the window has been closed with regard to further termination applications. This would therefore give the union and the employer time to focus on collective bargaining.

53. Counsel for the union disagreed with the assertion made by counsel for the employer that the new purpose clause found in the Act had any affect on the interpretation of section 58(1). He pointed to section 2.6 of the Act which provides that one of the purposes of the Act is "to encourage co-operative participation of employers and trade unions in resolving workplace issues". If the employer was correct and a collective agreement can be made retroactive for one year without providing for the actual operation of it, then there is no time for the union and employer to work together.

54. Union counsel pointed out that neither the WE. Lambden & Son Ltd. case, nor the Hiram Walker & Sons Ltd. et al case, dealt with section 58(1) and the issues raised under it. Accordingly, both those cases dealt with fact situations very different from the one before the Board. However, both the R. & R. Precast case, and the Intercontinental Warehouses Limited case, did in fact deal with section 58(1). In neither of these cases does the Board say that the party disputing retroactivity has the onus of proving that the collective agreement was in fact inoperative. Accordingly, the cases relied upon by counsel for the employer and counsel for the employees do not apply to the fact situation currently before the Board.

55. Counsel distinguished the Dad's Cookies case, supra, on the basis that the Board concluded in it that because the wages were to be applied retroactively that made the collective agreement operate retroactively. There was no retroactive wage increase in our case. Secondly, in the Dad's Cookies case, the union at no time prior to receiving the termination application indicated that it considered the collective agreement inoperative. Until the union received the termination application, it treated the collective agreement as being operative. It was only after it got the application for termination that the union raised the timeliness issue. In our case, the union took the position from the outset that it felt the term of the collective agreement was illegal. But for the difficulty with the lack of Board resources, the unfair labour practice complaint would have been heard before the termination application. The termination application did not trigger the unfair labour practice complaint. In conclusion, counsel suggested that if the Dad's Cookies case stands for the proposition that the mere inclusion of a retroactive term and the payment of wages retroactively renders a collective agreement operative prior to the date of its acceptance, that it is wrong in law and ought not to be followed. This conclusion would be inconsistent with the other Board cases that say that merely stating a retroactive term in the collective agreement and the payment of wages retroactively does not make it retroactive.

Decision

56. The relevant sections of the Act are as follows:

57. 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.

58. (1) If a collective agreement does not provide for its term of operation or provides for its operation for an unspecified term or for a term of less than one year, it shall be deemed to provide for its operation for a term of one year from the date that it commenced to operate.

(2) Despite subsection (1), the parties may, in a collective agreement or otherwise and before or after the collective agreement has ceased to operate, agree to continue the operation of the collective agreement or any of its provisions for a period of less than one year while they are bargaining for its renewal with or without modifications or for a new agreement, but such continued operation does not bar an application for certification or for a declaration that the trade union no longer represents the employees in the bargaining unit and the continuation of the collective agreement may be terminated by either party upon 30 days notice to the other party.

63. (1) If a trade union does not make a collective agreement with the employer within one year after its certification, any of the employees in the bargaining unit determined in the certificate may, subject to section 67, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit.

(2) Any of the employees in the bargaining unit defined in a collective agreement may, subject to section 67, apply to the Board for a declaration that the trade union no longer represents the employees in the bargaining unit,

(a) in the case of a collective agreement for a term of not more than three years, only after the commencement of the last two months of its operation;

(b) in the case of a collective agreement for a term of more than three years, only after the commencement of the 35th month of its operation and before the commencement of the 37th month of its operation and during the two-month period immediately preceding the end of each year that the agreement continues to operate thereafter or after the commencement of the last two months of its operation, as the case may be;

(c) in the case of a collective agreement referred to in clause (a) or (b) that provides that it will continue to operate for any further term or successive terms if either party fails to give to the other notice of termination or of its desire to bargain with a view to the renewal, with or without modifications, of the agreement or to the making of a new agreement, only during the last two months of each year that it so continues to operate or after the commencement of the last two months of its operation, as the case may be.

(12) After the representation vote has been taken, the Board may hold a hearing if the Board considers it necessary in order to dispose of the application.

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

71. No employer, employers' organization or person acting on behalf of an employer or an employers' organization,

(a) shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;

(b) shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or

(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to compel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

57. The key issue in this case is the interpretation of section 58(1) of the Act. Depending on the conclusions reached by the Board with regard to the meaning and effect of section 58(1) of the Act, as applied to the facts in this case, the termination application may or may not be timely. Accordingly, it makes sense to commence our analysis with a review of the Board's jurisprudence concerning the meaning of section 58(1) of the Act. The jurisprudence is not extensive and some of it dates from an early period where the reasons given by the Board for its decisions were often very brief.

58. The earliest Board decision dealing with what is now section 58(1) appears to be the Intercontinental Warehouses Limited case. In that case the Board endorsed the record as follows:

"The collective agreement between the respondent union and the intervener, Intercontinental Warehouses Limited, was executed "as of the 1st day of January 1958", to be in effect for one year from that date and to continue automatically thereafter for annual periods of one year in default of notice. The evidence given at the hearing, however, discloses that the settlement between the parties was reached on March 18, 1958, and the agreement itself was executed about March 26, 1958. There is nothing in the agreement itself or in the evidence adduced at the hearing to show that it was in operation prior to the date of its execution. Under section 37(1) of The Labour Relations Act, the agreement must be deemed to operate for one year from the date of its execution. The application for termination of bargaining rights in the instant case, having been filed with the Board on December 4, 1958, is therefore untimely under section 41(2)(c) of the Act and must be dismissed".

Therefore, despite the fact that on its face the term of the collective agreement was from January, 1958 to January, 1959, the Board concluded that as it had been executed by the parties in March, 1958 and because there was nothing in the agreement itself or in the evidence to show that the collective agreement was actually in operation prior to the date of execution, that it did not comply with what is now section 58(1) of the Act.

59. In R & R Precast Erectors Limited, supra, the parties executed a collective agreement on September 20, 1967 which included a duration clause indicating that the agreement was to be effective from May 1, 1965 to April 30, 1968. Since the collective agreement was entered into by the parties less than a year prior to its expiry date, in accordance with the provisions of what is now section 58(1) of the Act, it was argued that the collective agreement must be deemed to remain in operation for a term of one year from the date that it commenced to operate, namely September 20, 1967. The Board was dealing with a displacement application for certification and the issue was whether or not the application was timely as it had been made on April 23, 1968. If the Board concluded that the collective agreement ran in accordance with the agreed to duration clause, then the application was timely. But if the Board concluded that it ran afoul of section 58(1), then it would not be found to be timely. In concluding that the application for certification was untimely, the Board said:

60. In the absence of any provision to the contrary, the Board has interpreted the commencement date of any collective agreement to be the date on which it was entered into by the parties ( see R.C.A. Victor Company Limited (1956) Canadian Labour Law Cases, Vol. 1, 1944-1959 ¶18,045). In the instant case, there is no provision in the agreement itself nor any extrinsic evidence that suggests that the parties envisaged any operative effect of the agreement prior to its execution. In these circumstances, in accordance with section 39(1) [now section 58(1)] of the Act, the collective agreement is deemed to remain in effect for a period of one year from September 20th, 1967, the date on which it commenced to operate.

In other words, in the absence of any specific wording indicating that particular clauses in the collective agreement were to be applied retroactively or evidence that portions of the collective agreement did in fact operate retroactively, the Board concluded that the collective agreement is deemed to be in effect for one year from the date of execution.

60. In Seven-up (Ontario) Limited, supra, the Board was dealing with an application to terminate bargaining rights. The most recent collective agreement on its face provided that it was entered into on April 24, 1972 and was to expire on September 18, 1972. As the collective agreement provided for a term of operation of less than one year, the Board of its own motion raised the issue concerning the timeliness of the application in view of the provisions of what now is section 58(1) of the Act. It was common ground between the parties that the collective agreement they intended to have expire on September 18, 1972 was also intended to be the continuation of the previous collective agreement which had expired on September 19, 1971. The parties agreed that they intended to have the collective agreement which expired on September 19, 1972, commence to run on September 19, 1971. In concluding that despite the agreement and intention of the parties, the collective agreement did not in fact commence running on September 19, 1971, the Board stated the following:

61. What the Board is concerned with in this case is not the date of the expiry of the collective agreement as therein stated but rather the date of commencement of the collective agreement. The parties took the position that the agreement commenced to operate on September 19, 1971 and was to run for the period of one year and was to expire on September 18, 1972. However, nowhere in the collective agreement does this intention appear. On the contrary, the collective agreement specifically states that the collective agreement "shall remain in force from the date hereof to September 18th, 1972. The date of commencement as appears on the collective agreement was April 24, 1972. The use of the phrase shall remain in force is synonymous with the phrase "shall be effective from". Had the parties intended otherwise, it would have been a relatively simple matter for them to state that this agreement shall be deemed to have been in effect from September 19, 1971 to September 18, 1972. This, of course, the parties did not do. In argument, the parties pointed out that many of the provisions of the collective agreement in addition to wage rates were changed, including provisions relating to seniority. Apparently, if the whole collective agreement was made retroactive to September 19, 1971, difficult problems would have been created as a result of such total retroactivity and accordingly the parties only made provisions with respect to wages retroactive to September 19, 1971. Since only the provisions relating to wages were made retroactive, it therefore follows that none of the other provisions of the collective agreement were made retroactive to September 19, 1971. If none of the other provisions of the collective agreement were made retroactive, it accordingly follows that the agreement as a whole was not made retroactive to September 19, 1971 but commenced to operate, as stated on the face of the agreement, on the date the agreement was entered into, i.e. April 24, 1972.

62. The provisions of section 44 of the Act makes it mandatory that a collective agreement be for a term of operation of not less than one year from the date that it commenced to operate. The provision is not necessarily for the benefit of the parties to the collective agreement but is for the benefit of third parties and for the public at large. Third parties ought to be able to look at the provisions of a collective agreement and determine, subject to the provisions of The Labour Relations Act, the date that the agreement ceases to operate. While parties to a collective agreement may agree to amend most of the provisions of their agreement during its term of operation, section 44 prevents the parties from altering provisions relating to the term of operation of the collective agreement.

63. On the face of the document before us we find that the clear and unequivocal intent of the parties is that the agreement was to run for a period between and including April 24, 1972 to and including September 18, 1972. Since such period is less than one year, the provisions of section 44(1) of the Act must be given effect and the collective agreement must therefore be deemed to provide for its operation for a term of one year from April 24, 1972 and would therefore expire on April 23, 1973.

Although this case is not directly on point, in it the Board once again reiterates the point that in order to comply with section 58(1) a collective agreement must operate for one year. Despite the fact that the parties had made the wages retroactive, the Board declined to find that the collective agreement operated retroactively. In addition, the Board's comments with regard to the meaning and intent of what is now section 58(1) of the Act are also helpful.

61. In the Dad's Cookies Limited case, the Board, in the context of an application to terminate bargaining rights, dealt with the application of what now is section 58(1) of the Act. In this case, the union was certified on September 24, 1976 and negotiations ultimately resulted in the signing of a collective agreement between the parties on September 12, 1977. The collective agreement provided that its term was to be from January 1, 1977 to December 31, 1977. The collective agreement provided for wage retroactivity back to January 1, 1977. The union took the position that what now is section 58(1) of the Act required that the collective agreement have a term of operation of not less than one year. Because the collective agreement was not executed until September 20, 1977, the union argued that it only became operative at that point and should therefore run for 12 months from that date. In rejecting the union's argument, the Board stated:

62. In our opinion the collective agreement commenced to operate as of January 1, 1977 (as recited in the agreement) and the current application is proper and timely, made within the last two months of its first year's operation. To find otherwise would negate the clear intention of the parties as is evident on the face of the agreement (as referred to above and Article 19 thereof). The retroactive effect given to the agreement in respect of wages, and the respondent's own conduct in serving notice of desire for amendment are both consistent with and re-enforcing of this conclusion. The conclusion itself is also consistent with satisfying another important labour relations objective, namely, that the employees concerned are entitled from the face of the collective agreement to be able to determine what is appropriate statutory period at which the performance of their particular bargaining agent may be legally reviewed - by way of change of bargaining agents or by way of withdrawing from collective bargaining.

63. The difficulty with this decision is that it appears to come to a conclusion opposite to that reached by the Board in earlier decisions and yet no where in the brief analysis provided are these cases distinguished or even acknowledged. It appears that the Board in this case did not turn its mind to the meaning of the word "operate" in what is now section 58(1) of the Act. Instead, based on the conclusion that the duration clause in the collective agreement reflected the clear intention of the parties and the fact that the wages had been made retroactive the Board came to the conclusion that the collective agreement commenced to operate retroactively.

64. As was pointed out by counsel for the union there are differences between this case and the one currently before us. In the Dad's Cookies case there was wage retroactivity. Not so in our case. The union in the Dad's Cookies case treated the collective agreement as being operative until faced with a termination application. It was only at that point that the union raised any concerns with regard to the term of the collective agreement. In the case before us the union raised its concerns at the beginning and the termination application followed the unfair labour practice complaint by several months. Accordingly, the facts in the Dad's Cookies case are sufficiently different that the case is of limited assistance to us.

65. The remaining Board jurisprudence stands for the proposition that it does not meet the requirements of section 58(1) of the Act for the parties to merely agree to a duration clause which provides for the retroactive application of the collective agreement. With the exception of the Dad's Cookies case, it is also not enough to simply agree to wage retroactivity. What then must the parties do to meet the requirements of section 58(1)? It is helpful at this point to analyze the purpose of section 58(1).

66. In Cobalt Foundry Ltd. (1958), CLLC 1737 (OLRB), the Board indicated that the purpose of what is now section 58(1) of the Act is "not only to establish what has commonly be described as a 'minimum year of peace' but also to establish a clear terminal date which will facilitate the exercise by a rival union and by the employees in the appropriate bargaining unit of the rights made available to them" to terminate the union's bargaining rights. Therefore, section 58(1) has a two-fold purpose. It provides a period of time within which the two parties to the collective bargaining process, namely the union and the employer, can develop the collective bargaining agreement under which they will work together. It provides for a period of stability in which there can be no strikes or lock outs and gives the employer and union time to develop a relationship.

67. It is also intended to provide for at least a one year period of time in which employees have an opportunity to experience what it is like to be represented by a union and to assess whether they feel that they wish to continue to be represented by a trade union in their relationship with their employer. If in fact this experience is a positive one, then the employees will no doubt wish to continue to be represented by a trade union. If on the other hand, the experience provided by the one year period in section 58(1) is not a positive one, then section 58(1) also functions to make it clear when the terminal date for the collective agreement is. Thus, the second purpose noted in the Cobalt Foundry Ltd. case, is to ensure that the employees and any other rival trade union who may be seeking to displace the incumbent union know clearly the time frame under which they can apply to do so.

68. There is no dispute between the parties that the employer and the trade union can agree to make a collective agreement operative retroactively and meet the requirements of section 58(1). In other words, the parties can execute a collective agreement on a certain date and agree that it should commence to operate retroactively prior to the date of execution. Whether the parties have in fact done so depends on all of the circumstances present in each individual case. In the Peacock Lumber Ltd. (reconsideration decision), case, supra, the Board set out the following test:

69. Section 53(1) of the Act requires that a collective agreement must operate for a minimum period of one year. Since strikes and lock-outs are prohibited during the period of operation of an agreement and trade unions are statutorily free from competing applications for certification and from decertification applications except during the last two months of the agreement, the one year requirement affords a minimum period of industrial relations stability. The minimum one year requirement does not mean, however, that for a collective agreement to conform to section 53(1) it must have a full year left to run from the date of execution. It is open to the parties to provide for a period of retrospectivity in the formation of the one-year period. Whether the parties have done so is a question of fact, gleaned from all of the circumstances including the specified duration clause, the date the agreement was executed, the existence of any rights enforceable for the period prior to execution and the parties' subsequent conduct in the administration of the agreement.

In reviewing this test it is clear that there are two crucial aspects to it. First of all, there must be agreement of the parties that the collective agreement will operate retroactively and secondly, there must be some evidence that the collective agreement or some of its terms actually operated retroactively.

68. Although there is not a lot of it, there is arbitral jurisprudence dealing with the retroactive application of collective agreements. One of the early cases is a case called Re International Chemical Workers Local 412 and Penick Canada Limited (the "Penick case"), supra. In the Penick case, the parties attempted the re-negotiation of a collective agreement which had been effective from May 1, 1963 to April 30, 1965. These negotiations were unsuccessful and on September 10, 1965 the employees went on strike. It was agreed that it was a lawful strike. The parties ultimately reached agreement and the strike ended on October 3, 1965. The collective agreement was executed on October 13, 1965 and the duration clause provided for a term of operation from May 1, 1965 to April 30, 1967.

69. On October 4, 1965, immediately after the strike ended, the company started to recall employees. This recall was not in accordance with any seniority provisions. The union took the position that employees should have been recalled in accordance with the applicable clause in the collective agreement. The company objected on the basis that the collective agreement did not apply since in the company's submission there was no collective agreement in effect at that time. The company argued that although the current collective agreement now states that it shall be effective from May 1, 1965 to April 30, 1967 it was not in fact in effect on October 4th when the employee recall commenced. It was argued by the company that it would be absurd to conclude that the agreement applied to the recall since by the same reasoning it would be necessary to conclude that the agreement was in effect at the time the employees were on strike. This would have the effect of retroactively characterizing the strike as illegal.

70. In determining the dispute between the parties' the board of arbitration stated:

This board, of course, was established pursuant to the provisions of the current collective agreement. Since the former agreement was clearly not in existence at the time of the events complained of, and since the present agreement did not come into existence until after these events, it would appear that there was then no agreement to be violated and that the grievances must fail. However, the provision in the duration clause that the current agreement "shall be effective from May 1, 1965 to April 30, 1967" must be considered.

The purposes of the duration clause would appear to be several, and to include (a) the establishment of continuity as between successive agreements; (b) the establishment of equally spaced termination dates and hence of equally spaced periods of negotiation; and (c) the provision of retroactivity for the negotiated wage increase. (For a somewhat analogous situation where an employer was required to pay increased overtime rates on a retroactive basis, see Re U.A. W and Duplicate Canada Ltd. (1952), L.A.C. 1779). It cannot, however, be said that the effect of the duration clause is to render the collective agreement retroactive for all purposes. While it is clear enough that the provision was intended to make "monetary" items retroactive, it would require the clearest language to transform the legal effect of things done by the parties during the time when there was in fact no collective agreement in effect. To conclude, for instance, that by virtue of the duration clause, the collective agreement should be considered as being in effect during the time employees were on strike, would necessarily involve the conclusion that the strike was unlawful and would subject the union to a possibility in damages to the company for its loss of production. It would be impossible, however, in the absence of plain language to such effect, to separate this absurd conclusion from the conclusion that other "non-monetary" provisions of the collective agreement may be considered as being in effect during the period prior to October 13th. There is no such language in the collective agreement.

Therefore, despite a duration clause providing that the collective agreement was to operate retroactively to May 1, 1965, the board of arbitration concluded that this duration clause did not render the collective agreement retroactive for all purposes. To do so would require the clearest of language, which was not present in that case.

71. In Corporation for City of Sarnia (the "Sarnia case"), supra, an arbitrator was once again dealing with the effect of a duration clause which provided for the retroactive operation of the collective agreement. On September 1, 1979 what was section 37(a) of the Labour Relations Act (it provided for expedited arbitration) came into force. Section 37a (11) provided that thesection did not apply to a collective agreement in operation on the day the section came into force but applied to every collective agreement that was renewed or made after that date.

72. In the Sarnia case, the company raised an objection to the arbitrability of the grievance on the basis that the collective agreement between the parties was operating on September 1, 1979. The collective agreement in effect between the parties was executed on September 12, 1979 and provided a duration clause which indicated that the term of the collective agreement was to run from November 8, 1977 until November 7, 1979. Therefore, the company argued that due to the retroactive duration clause the collective agreement was actually in operation on September 1, 1979 the date that section 37(a) of the Act came into force.

73. In dealing with this issue the arbitrator stated:

Retroactive duration clauses such as the one under consideration are quite common in collective agreements and the wording of this clause appears to be standard. The obvious purpose of these duration clauses is to establish a fixed anniversary date for the negotiation and renegotiation of successive collective agreements as well as providing legal continuity in the rights and obligations of the employer, the union and the employees. Taken at face value these retroactivity clauses would appear to dictate the application of the entire new agreement to all events occurring after the fixed expiry date of the last contract. None the less, arbitrators dealing with particular situations have recognized the difficulties that would result in adopting such a literal interpretation. Accordingly, it is well settled among arbitrators "that a gloss must be placed on the surface wording of such clauses in order to provide for some exceptions to the rule of total retroactivity": Re Penticton & District Retirement Service and Hospital Employees' Union, Local 180 (1977) 16. L.A.C. (2d) 97 (Weiler) at p. 100. In most cases retroactivity clauses provide for retroactivity of the negotiated wage increase as is the case in this particular agreement. However, it cannot be said that the effect of the duration clause is to render the collective agreement retroactive for all purposes: Re Int'l Chemical Workers, Local 412, and Penick Canada Ltd. (1966), 1966 CanLII 811 (CA LA), 17 L.A.C. 296 (Weatherill). In examining the collective agreement a number of examples can be found of language which could not be expected to be applied in a wholly retroactive way as it would be irrational to expect either party to comply to obligations not yet assumed.... It is well established that parties to a collective agreement are free to make provisions of that collective agreement retroactively operative and this would be the effect of art. 19.01. "Duration of Agreement" and, indeed, art. 20.01 "Retroactivity of Salary Scales" in the collective agreement under consideration. However, on September 1, 1979, when s. 47a came into force the current collective agreement was not in operation as the signatures witnessing the execution of the agreement were not present until September 12, 1979. The fact that certain provisions became retroactive in operation, because of the effect of the agreement entered into subsequent to September 1, 1979, cannot have the effect of making this agreement one that was "in operation" on September 1, 1979.

74. Therefore, the Board's jurisprudence as well as the arbitral jurisprudence makes it clear that for us to conclude that a collective agreement operated retroactively there must be more than a mere duration clause providing for retroactivity.

75. It is also important to keep in mind the purpose of section 58(1). If one of the purposes of section 58(1) is to provide the employees with an opportunity to assess and understand the potential benefit of collective bargaining then they must have an opportunity to actually experience what it is like to live under a collective agreement. For example, there must be an opportunity to evaluate the usefulness of a grievance procedure or a job posting procedure. It is difficult to do this if there is a retroactive duration clause and the collective agreement only actually operates for a few months.

76. As was noted in the Peacock Lumber decision No. 2, whether or not the parties have succeeded in creating a collective agreement that operates retroactively is a question of fact which must be answered after reviewing all of the circumstances. Therefore, was there an agreement between the trade union and the employer that this agreement would operate retroactively? On October 14, 1998, the employer proposed a term for the collective agreement which commenced on the date of certification, April 22, 1998. Mr. Pound, the staff representative of the union indicated to the employer that he "doubted the legality of the employer's proposed term since the term would in effect only run for six months from the earliest that it could be ratified". Therefore, on October 14, 1998, the union put the employer on notice that it felt that the term clause which had been proposed was potentially illegal. On October 19, 1998, the employer requested a final offer vote. This letter and the final offer was copied to the union. On October 26, 1998, counsel for the union wrote to the Minister of Labour requesting that the Minister defer the final offer vote and argued that the term clause proposed by the employer was inappropriate and illegal. This letter was not copied to the employer. The Minister declined to delay the final offer vote and indicated that it would be held on November 3, 1998. This letter also was not copied to the employer. On November 3, 1998, the final offer vote was held and the employees voted to accept the employer's final offer.

77. It appears that shortly after the final offer vote, the employer provided the union with a copy of a draft collective agreement which contained the agreed to items and the employer's final offer. The union responded by letter dated November 20, 1998 indicating that they had reviewed the draft collective agreement, and found no problems and requested that the employer provide them with six copies of the collective agreement for signature. The exact wording in the letter was:

Be advised that I have reviewed the draft Collective Agreement regarding the above and found no problems. The Union will require six (6) signed copies of the above.

On November 25, 1998, counsel for the employer sent the union six copies of the collective agreement which had been executed by the employer on that date. By letter dated December 23, 1998, the union wrote to the employer indicating that it would be filing the application currently before us and that it was taking the position that the term of the collective agreement violated section 58 of the Act. In addition, the union indicated that it felt that the employer had violated various other sections of the Act, including the duty to bargain required by section 17, when it insisted upon putting to a final offer vote a collective agreement with a term that violated section 58 of the Act. As the union also included an executed collective agreement, it appears that it executed the collective agreement around the same time.

78. Counsel for the employer argued strongly that the letter dated November 20, 1998 represented agreement by the union to the retroactive term of the collective agreement. The letter did not say "subject to our position with regard to the effect of section 58(1) on the term clause" or qualify the union's acceptance of or agreement to the collective agreement. The union argued that all the November 20, 1998 letter did was to indicate that the union had reviewed the draft agreement and found that it was consistent with what it knew to be the agreed to items and the final offer that was put to the employees.

79. In order for us to reach the conclusion that there is an agreement between the parties to apply a collective agreement retroactively so that it does not run afoul of section 58(1) of the Act, there must be evidence of an explicit and clear agreement between the parties. In this case, the employer is asking us to conclude, based on the November 20, 1998 letter, that the union has abandoned the position it took with the employer on October 14, 1998 and with the Minister of Labour on October 26, 1998, that the term clause proposed by the employer was illegal and to conclude that the union has agreed to a retroactive term for the collective agreement. However, that is not what the letter says. It does not constitute clear evidence that the employer and the union agreed to a retroactive term in the collective agreement. At most, the letter is ambiguous and we have no extrinsic evidence to explain it.

80. However, prior to executing the collective agreement or at approximately the same time, the union made it clear to the employer that it was continuing to take the position that the term in the collective agreement violated section 58(1) of the Act. It did so in its letter dated December 23, 1998. Therefore, this is not a case where the union simply signed the collective agreement and then only raised its concerns with regard to the duration clause in the face of a termination application (as in the Dad's Cookies case).

81. Counsel for the employer relied on the fact that the union gave notice to bargain in March, 1999 and applied for conciliation at that time, as indicative of the union's acceptance of the April, 1998 to April, 1999 term of the collective agreement. Neither of these letters were written subject to any potential litigation over the meaning of section 58(1) of the Act.

82. Given that the notice to bargain and request for conciliation followed the union's letter of December 23rd and the unfair labour practice complaint which was filed around the same time, we are prepared to infer that the union was merely seeking to protect itself from an additional termination application when it issued the notice to bargain and applied for conciliation.

83. There is no clear evidence or agreed to fact that establishes that the union ever actually agreed to the term clause in the collective agreement. As we noted above, at most the union did not continue to object to and was silent in its position regarding the term clause for a period of approximately two months before again making it clear to the employer that it was going to be pursuing the position that a term clause which ran from April, 1998 to April, 1999 was illegal and contrary to section 58(1) of the Act. Accordingly, we cannot conclude that there was an agreement between the employer and the trade union that the collective agreement would operate retroactively.

84. However, let us assume that we have come to the wrong conclusion above and that the union's conduct did constitute agreement to the retroactive duration clause in the collective agreement. Did the collective agreement actually operate retroactively during the period it was intended to do so?

85. It is clear that on the facts before us none of the terms of the collective agreement were applied retroactively. Other than the words of Article 29.01 providing that the collective agreement would run from April, 1998 to April, 1999, there is nothing before us to indicate that the parties agreed that any of the provisions of the collective agreement would operate retroactively or that any provision actually did. The collective agreement did not "operate" from April, 1998 to April, 1999 as that term is used in section 58(1) of the Act.

86. Therefore, leaving aside our conclusion that the trade union did not agree to a retroactive duration clause, a mere agreement on retroactivity is not sufficient to constitute compliance with section 58(1) of the Act. There must be something to indicate that the collective agreement actually operated during the period of retroactivity. In this case there is no evidence that any provision in the collective agreement operated retroactively, not even the wage provisions. Accordingly, the parties have not met the requirements of section 58(1) of the Act.

87. The union has taken the position that by taking a termination clause that was contrary to section 58(1) of the Act to a final offer vote, the employer has taken to impasse an illegal duration clause contrary to section 17 of the Act. Before assessing the employer's conduct, it is appropriate to review the conduct of the union in the critical period from October to December, 1998.

88. While there is no evidence before us that the union intentionally misled either the employer or the employees with regard to its position on the duration clause contained in the proposed collective agreement, it could have made its position clearer with the other parties. For example, after the October 14, 1998 bargaining session, the union could have confirmed in writing the position that it took at the meeting. The union representative could have written to the employer indicating that in the union’ s view a duration clause running from April, 1998 to April, 1999 was illegal. At the very least, the union should have provided a copy of the letter to the Minister of Labour dated October 26, 1998 to the employer. Or, the union could have filed an unfair labour practice complaint immediately after the employer wrote to the Minister requesting a final offer vote if it felt that the employer's actions violated section 17 of the Act. The union did none of these things.

89. After the final offer vote had been held and the union representatives had had an opportunity to review the proposed collective agreement, they should have taken the position in the letter dated November 20, 1998 that they were requesting copies of the collective agreement to be provided to them without prejudice to their position that the duration clause proposed by the employer did not meet the requirements of section 58(1) of the Act. Again they did not do so.

90. The above facts become very important when one is assessing the conduct of the employer in requesting that a final offer vote be held. The union asserts now that the employer took to a final offer vote or bargained to impasse, an illegal duration clause. The difficulty with this allegation, is that the employer would not have been taking to impasse an illegal duration clause if in fact the union had agreed to its retroactive application and there was some evidence that the collective agreement was operating retroactively. Therefore, if in fact the employer's assessment of the conduct of the union was accurate, in that they thought that the union had agreed to a retroactive duration clause and that this was sufficient to cause the collective agreement to operate retroactively, then there is nothing illegal whatsoever about their actions. A term of April, 1998 to April, 1999 is not in fact illegal if the employer believes that the union has agreed to this duration clause and the employer believes that the parties have made the collective agreement retroactively operational.

91. Therefore, we have concerns with regard to the message the union may have unintentionally given the employer, although we are not saying that the union deliberately withheld its position or tried to mislead the employer. Based on the interpretation placed by the employer on the union's conduct, the employer conducted itself in a certain manner. In our view it is not fair or equitable to evaluate or assess the employer's conduct at the time they requested a final offer vote, in light of what we now know. The aspect of the union's case alleging that a violation of section 17 of the Act has occurred is hereby dismissed.

92. The union at the commencement of the hearing questioned whether the employer's conduct violated section 70 or section 72 of the Act. As this allegation was not actively pursued and for many of the same reasons set out above, these allegations are dismissed.

93. The final matter to be determined is the duration of the collective agreement. As we concluded earlier, the current term does not meet the requirements of section 58(1) of the Act. Various dates were suggested by the parties. After giving this matter careful consideration we have concluded that the most logical date to use for the commencement of the collective agreement is either the date upon which the final offer vote was held, November 3, 1998, or November 25, 1998. The employer executed the collective agreement on November 25, 1998 and we do not know exactly when the union signed the agreement. The signature page in the collective agreement only indicates the date November 25, 1998. The signatures of the union's representatives appear under that date as do those of the employer. No matter which date we choose, the termination application is untimely. However, on balance we prefer the November 25, 1998, date as it appears on the face of the collective agreement to be the date upon which it was executed by the parties. Therefore, the collective agreement shall run from November 25, 1998 to November 26, 1999.

94. As the termination application was filed in March, 1999, it is untimely and is hereby dismissed.

95. The Registrar will destroy the ballots cast in the representation vote taken in this matter following the expiration of 30 days from the date of this decision unless a statement requesting that the ballots should not be destroyed is received by the Board from one of the parties before the expiration of such 30 day period.

DECISION OF BOARD MEMBER JAMES A. RONSON; September 21, 1999

My focus in this case would be on the agreement made by the parties, and thus I cannot agree with the findings and conclusions of the majority.