2213-98-U David Cini, William Cook and Peter Gonta, Applicants v. National Automobile, Aerospace, Transportation and General Workers Union of Canada, Local 222 (“CAW”), Responding Party v. General Motors of Canada Limited, Intervenor #1 v. Peregrine Oshawa, Inc., Intervenor #2.
BEFORE: Brian McLean, Vice-Chair.
APPEARANCES: Ian Werker, Werner Kurz, David Cini, William N. Cook, Donald J. Fleming, Mark Jorgensen, Joseph Matasic and Ivan Vrhovnik for the applicants; John Scanlan and John Graham for the responding party; Robert Verbuck and Randy Giroux for intervenor #1; David N. Corbett, Mary Gersht and Don Heath for intervenor #2.
DECISION OF THE BOARD; July 4, 2000
This is an application under section 96 of the Labour Relations Act, 1995 (“the Act”) in which it is alleged that the responding party violated section 74 of the Act when it revoked the settlement of a grievance which may have given a particular benefit to some or all of the applicants.
A consultation was held in this matter on August 31, 1999. At the conclusion of the consultation, the Board determined that a hearing ought to be held to permit the parties to adduce evidence with respect to the reasons why the union revoked the settlement which is in issue on this application. A hearing was held on April 19, 2000 to hear the evidence respecting that issue and the parties’ arguments.
Background Facts
The background facts to this application are complicated, but not largely in dispute. The applicants are (or were) all employees of General Motors of Canada Limited (“G.M.”) in its Oshawa facilities. They are represented in their employment relations by the responding party, National Automobile, Aerospace, Transportation and General Workers Union of Canada, Local 222, (“CAW”) (“Local 222”).
This application has its geneses in the decision made by G.M. in 1996 to increase the amount of contracting out which it does. This decision was strongly objected to by Local 222, particularly as G.M. was considering contracting out core manufacturing functions. In fact, G.M. was considering selling one of the two fabrication plants (the north and south plants) that it operates in Oshawa. The issue was largely responsible for a strike by Local 222 workers in October 1996.
The strike was settled. Local 222 was unsuccessful in its efforts to prevent the sale of the fabrication plant. Therefore, absent any collective provisions to the contrary, any employees who worked at the sold facility would have their employment with G.M. terminated and they would become employees of the purchaser, which was Intervenor #2, Peregrine Oshawa Inc. (“Peregrine”). However, Local 222 did obtain significant protection for employees transferred. The collective agreement which was concluded following the strike contained a clause protecting the rights of employees who might be transferred to Peregrine on the sale of the fabrication plant. A memorandum of understanding dated December 13, 1996 gave such employees, among other things, the absolute right to return to G.M. within six years of the sale of the fabrication plant. Employees could also apply to be transferred earlier.
On December 31, 1996 G.M. sold its Oshawa North fabrication plant to Peregrine.
The provisions of the collective agreement which dealt with the sale created some difficult seniority issues. If employees were laid off from Peregrine, they might obtain positions at G.M. However, employment with G.M. was much preferred over employment with Peregrine. Therefore, junior employees who were laid-off from Peregrine might obtain the benefit of working immediately for G.M. while more senior employees worked at Peregrine. In addition, employees laid off from G.M. would not have the right to obtain a position at Peregrine even if they had more seniority than employees working there.
In order to partially alleviate these problems, the union’s G.M. grievance committee, albeit not unanimously, sought to obtain the agreement of Peregrine to lay off senior tradespeople so that they would have the benefit of returning to G.M. earlier than the six-year period referred to in the collective agreement. Peregrine agreed to this proposal by memorandum of understanding dated December 5, 1997. However, this memorandum caused its own problems. The difficulty was that senior employees laid off from Peregrine to work at G.M. would cause bumping and lay-offs at G.M. Since there was no mechanism for laid-off G.M. employees to obtain work at Peregrine, those G.M. employees would be out of work. Meanwhile, less senior employees than those G.M. employees who were laid off might and likely would be working at Peregrine.
There was a protest among G.M. employees at the CAW’s national office. Local 222 sought to revoke the agreement with Peregrine. However, it appears Peregrine proceeded with the lay-offs of the high seniority tradespeople. Those tradespeople bumped into G.M. and caused lay-offs there. Those employees who were laid off could not bump into Peregrine.
On December 23, 1997, Tony Leah, the Skilled Trades Area Chairperson for G.M., filed two grievances on behalf of G.M. employees alleging that Peregrine had violated paragraph 28 of the Local Agreement by laying-off out of seniority.
Despite the obvious difficulties with G.M. employees filing a grievance against actions taken by Peregrine, a separate and different employer from G.M., Peregrine dealt with the grievance. Peregrine and Local 222 entered into a memorandum of settlement dated February 5, 1998. Under the settlement, 19 skilled trades workers could be returned to Peregrine if they were laid off at G.M. However, under the settlement such rights would only be triggered if G.M. closed its tool and die department and as a result, the 19 employees were indefinitely laid off.
This agreement itself sparked substantial discontent. Meanwhile, at about the same time, there were elections for a new Local 222 executive. Mr. Leah, who had been instrumental in reaching the February 5 agreement, lost his position on the executive in the elections. He was replaced by John Scanlon as skilled tradesperson area chairperson. Shortly after his election, Mr. Scanlon sought Peregrine’s consent to cancel the February 5 settlement and replace it with a new agreement.
It was Local 222’s decision to seek cancellation of the February 5 settlement which was the basis for this application. Mr. Scanlon was the only witness to testify at the hearing.
Mr. Scanlon testified that when he was elected, the February 5 settlement quickly came to his attention. It was causing a substantial amount of discord on the plant floor. Mr. Scanlon testified that he felt it was a bad agreement because it gave an advantage to 19 employees in one classification that other employees in other classifications did not have. Mr. Scanlon had discussions with the committee and among management of Peregrine with a view to replacing it with something better.
By letter dated May 26, 1998, Peregrine advised Local 222 that it would not discuss a replacement to the February 5 settlement while that agreement was still in place. Mr. Scanlon testified that this left him with no choice, given his belief that the February 5 settlement was a bad settlement. The union therefore requested, by letter dated June 22, 1998 that Peregrine cancel the February 5 settlement. By letter dated July 22, 1998, Peregrine consented to do this.
Eventually on March 16, 1999, G.M. and Local 222 entered into a new settlement of the issue. Under that agreement, G.M. was to ask skilled trades (Machine Repair and Tool and Die Maker) who were subject to lay-off whether they wished to be employed by Peregrine. If Peregrine offered employment to one of those laid-off employees and such offer was accepted, such employees, to a maximum of 24, would be entitled to a severance package from G.M.
The applicants, all or some of whom comprise the 19 employees who stood to benefit from the February 5 settlement which was revoked, then brought this application.
Decision
- Section 74 of the Act states:
- A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.
In their application, the applicants made certain allegations that the responding party had revoked the February 5 settlement so as to benefit relatives of the union executive. These allegations were not pursued. Therefore, the only issue before the Board was whether the union acted arbitrarily under the circumstances by cancelling the settlement, particularly without consultation with the employees who stood to benefit by the settlement.
It is important to recognize the relevant legal context in which trade unions, like Local 222, represent employees. In this regard, section 45(1) states:
- (1) Every collective agreement shall be deemed to provide that the trade union that is a party thereto is recognized as the exclusive bargaining agent of the employees in the bargaining unit defined therein.
Generally, the union has the right to decide whether to take a case to arbitration and to determine whether and on what basis such a case can be settled (see Catherine Syme, [1983] OLRB Rep. May 775 at para. 120). In doing so, the union enjoys considerable discretion.
It is also useful to note that under the Act a union and an employer are apparently free to agree to amend any provision of a collective agreement, except its term, without the requirement that employees ratify such changes (see section 58(5) of the Act). This right of the workplace parties to adopt to changes is also reflected in the purposes of the Act as set out in section 2 of the Act. It would be surprising that the settlement of a grievance enjoys greater protection against change than does the collective agreement which must be ratified by the employees at the time it is entered into.
The applicants’ argument was that it was improper, and contrary to section 74 of the Act, for a trade union to cancel a settlement without obtaining consideration for such cancellation in advance, particularly without any consultation with the employees who stood to benefit from the settlement. The applicants did not cite any authority for this proposition.
The Board disagrees with the applicants’ contention. In my view, a trade union is permitted to, with employer consent, change any term of a collective agreement and any term of any settlement of a grievance so long as it does not act in a manner that is arbitrary, discriminatory or in bad faith. As a practical matter, it is highly unusual for a union to revoke the settlement of a grievance, and therefore the Board will carefully scrutinize its explanation for its conduct in such circumstances to determine if it is arbitrary, discriminatory or in bad faith. But ultimately, the union is in no different legal position vis a vis its ability to deal with a grievance when it decides to settle a grievance and when it decides to revoke that settlement.
The applicants argued, by way of example, that it would be arbitrary for a union to revoke the settlement of a discharge grievance which obliges the employer to pay an employee money after the employee resigns. It must be arbitrary for a union to revoke such a settlement, thereby leaving the employee with nothing.
The Board disagrees. There is little doubt that it would be unusual for a union to revoke the settlement of a discharged employee and the Board would closely examine the trade union’s explanation for its conduct. However, in my view, there is fundamentally nothing to stop it from doing so, as long as it does not act arbitrarily, discriminatorily or in bad faith. On the other hand it is true that it would be difficult, although not impossible, to conceive of circumstances where such conduct would not violate section 74. In any event, the significant difference between the applicants’ example and the facts before the Board is that the applicants in this case have not yet received any benefit from the settlement and accordingly, were deprived of nothing by the union’s actions other than the possibility they might get a benefit in the future.
More importantly, in the circumstances of this case, I am satisfied that the union considered relevant factors in determining that the settlement ought to be overturned. I am satisfied that Local 222 believed the February 5 settlement to be a bad agreement and that was its sole reason for seeking cancellation of the settlement. In fact, it believed it was so bad that it was willing to cancel the settlement without assurances that it could get something better. While such conduct is certainly unusual, it does not by itself violate section 74 of the Act.
This application is dismissed.
“Brian McLean”
for the Board