3142-98-U Eugene Meikle, Applicant v. United Brotherhood of Retail Food, Industrial and Service Trades International Union, Responding Party v. 935772 Ontario Limited c.o.b. as “Royal Taxi”, Intervenor.
BEFORE: Anthony Brown, Vice-Chair.
APPEARANCES: Ian Outerbridge for the applicant; Mike McCreary for the responding party; Carl Peterson for the intervenor.
DECISION OF THE BOARD; December 6, 2001
1This is an application pursuant to section 96 of the Labour Relations Act, 1995 (“the Act”) alleging violation of section 74, section 79(8) and section 86.
2A consultation was held on November 20, 2001. The intervenor (“Royal Taxi” or “the employer”), made preliminary objections as to why the Board should dismiss the application without an inquiry into the merits. On November 20, 2001, the Board made an oral ruling in which it declined to inquire further into this application. These are the reasons for the Board’s decision.
3The Board notes that Vice-Chair R. Goodfellow was originally seized on this matter. Mr. Goodfellow’s appointment as Vice‑Chair expired during the summer of 2001. In the circumstances, the application was reassigned to this panel of the Board.
Background to the Memorandum of Settlement
4The responding party (“the union”) was the bargaining agent for a bargaining unit of employees that included the applicant, Mr. Meikle and other taxi drivers employed by Royal Taxi. The union was certified on October 17, 1997. After almost one year of negotiations for a first collective agreement, the union and Royal Taxi had agreed on the terms to be included in their first collective agreement, with the exception of two items. On September 1, 1998, the negotiating committees for the union and employer agreed in a Memorandum of Settlement (“the Memorandum”) that the outstanding items should be referred to an interest arbitrator under section 40 of the Act, who would decide the items in dispute and then issue an award that was also to incorporate all of the agreed terms.
5The Memorandum commenced by stating:
The Union and the Company’s Negotiating Committees agree to recommend the contents of this settlement to their respective principals.
(As discussed below, the applicant submits that this clause obligated the union to take the Memorandum to its general membership for ratification, and that the Memorandum was not, therefore, an irrevocable agreement for the purposes of section 40.)
6In the Memorandum the union and employer agreed that their collective agreement would be for a term of three years, and would include all items agreed to prior to the date of the Memorandum. In addition, some agreed items were specifically addressed in the Memorandum itself. These latter items dealt with a charge of $1.50 levied upon taxi drivers for each coupon that they obtained in payment from customers. (A coupon is essentially a “chit” that the customer gives to the driver in order to charge the taxi ride to an account.). They also agreed that drivers would be charged a processing fee of 40 cents for each coupon. Another agreed item pertained to payments of certain amounts from the employer to the union in trust each year for each dependent contractor employed by Royal Taxi under certain conditions. A further item dealt with dispatch fees to be charged by Royal Taxi.
7The Memorandum concluded by stating:
The parties agree to refer the issue of GST registration and the Company’s request for the dependent contractor’s GST number to arbitrator Mr. A. Heritage for determination. The parties agree that the arbitrator shall issue an award with respect to the GST issue and incorporate all items agreed to and attached hereto in the award which shall constitute a collective agreement in accordance with s.40 of the Labour Relations Act, 1995.
The collective agreement shall be effective upon the date of the arbitrator’s award. Nothing in this settlement is retroactive.
The Interest Arbitration
8On September 8, 1998, an interest arbitration hearing was held before Arbitrator A. J. Heritage and on October 1, 1998, Mr. Heritage issued an award which states in part:
On September 1, 1998, they [the union and employer] were able to reach an Agreement through that process [the negotiation process] on all matters with the exception of Articles 6.02 (c) (G.S.T.) and 19.01 (d) (G.S.T.). One of the terms of the Memorandum of Agreement was an irrevocable agreement by the parties, pursuant to section 40 of the Act, to refer all of the collective bargaining matters remaining in dispute between them i.e. Article 6.02 (c) and 19.01 (d) to arbitration for final and binding determination by myself. They further agreed that the duration of the Collective Agreement would be 3 years from the date of the Arbitrator’s award settling the Collective Agreement.
Subsequently, I was asked by the parties under section 40 of the Act to arbitrate Article 6.02(c) and 19.01(d) to conclude a first agreement. See Schedule “A” for balance of agreement which will become part of this award for a first contract.
The arbitrator then dealt with the specific dispute over “G.S.T.” and concluded his award by stating:
I therefore wish to conclude the first Collective Agreement between the parties by deleting in Article 6.02 the words “G.S.T. numbers” and Article 19.01 by deleting all of Section (d). That concludes this award and Collective Agreement.
This resulted in a collective agreement with a term of October 1, 1998 to September 30, 2001.
The Applicant’s Pleadings
9The original application in this matter was dated December 8, 1998 and filed on December 9, 1998. The December 8, 1998 document alleged violations of section 74, 79(8) and 86. It requested an order to “cease and desist, an award of damages and interest and/or the Union Contract is null and void.” It alleged that the “contract between [the union] and Royal Taxi was not shown or made clear to the majority of drivers. The contract was never ratified. The drivers knew nothing of the contract until we were notified that the contract was signed by two Shop Stewards.”
10The December 8, 1998 application states that the applicants (one of which has subsequently withdrawn from this matter) object to the employer’s collection of a 40 cent processing fee on each coupon and to the charge of $1.50 per coupon, as agreed to between the union and employer.
11On February 3, 2000, the Board (differently constituted) made an oral ruling directing the applicant to file particulars in respect of the factual basis for his claim. The responding party and intervenor both assert that the Board, in its oral ruling, prohibited the applicant from expanding his claim.
12On February 17, 2000, the applicant filed an amended Schedule “A” to his application, dated February 15, 2000. In the February 15th submission, the applicant asserted, inter alia, that there was no consultation by the union with the membership and that the terms of “irrevocable agreement” to refer matters to an interest arbitrator “were made known to the membership only in December, 1999”. The applicant asserted that the union was in breach of section 44 of the Act by not seeking a ratification vote of its collective agreement with the employer, and that ratification was necessary before the agreement could have any effect. The application alleged that the “alleged Arbitration was merely a sham and subterfuge intended to mask the fact that the terms of the Minutes of Settlement had already been agreed to without membership input and the ‘Arbitration’ was a barefaced attempt to remove the agreement from Section 44 and bring it forward under Section 43 of the Labour Relations Act.” By way of relief, the applicant asked that the Board order a ratification vote.
13A consultation was held by the Board (Vice-Chair Goodfellow) in August, 2000. The Board described the issues before it at that consultation in paragraph 2 of its decision dated October 17, 2000, as follows:
- The essence of the alleged breach is a failure on the part of the union to place a proposed collective agreement before the membership for ratification. The union and the employer take the position that a collective agreement is in place, and that ratification was not required, because the agreement was settled by arbitration in accordance with section 40 of the Act. The applicant submits that the agreement to arbitrate was a “sham” that was designed to avoid the mandatory ratification provision of the Act and, further, that an agreement to arbitrate under section 40, unlike first contract arbitration under section 43, does not produce a collective agreement “settled by arbitration” within the meaning of the exception to the ratification requirement set out in section 44(2)(a). Hence, even if the agreement to arbitrate was legitimate, the exception was not available and ratification was still required. By way of remedy, the applicant requests an order directing the holding of a ratification vote.
14The Board decided the “ratification” issue on October 17, 2000. It decided that a final award by an interest arbitrator under section 40 is binding on the parties and the affected employees, and does not require a further step of employee ratification or approval. The Board left to be decided whether the union violated section 74 by agreeing to a section 40 interest arbitration and thus avoiding the need to present the collective agreement for ratification. The applicant’s specific allegations pertaining to the section 74 complaint are summarized by the Board at paragraphs 21 and 22 of its October 17, 2000 decision, as follows:
The union and employer do not challenge the legal premise of the applicant’s argument but they do challenge its factual underpinnings. It is unnecessary for the Board to review the facts pleaded by the applicant in detail. Suffice it to say that they include allegations of an almost complete failure by the trade union to communicate, consult with or be accessible to bargaining unit members from the commencement of the collective bargaining relationship, through the process of collective bargaining, and subsequently. Also included are alleged breaches of the union’s constitution. Of central importance, however, is the further assertion that the two items that formed the entire subject matter of the arbitration (proposed requirements that bargaining unit members obtain and provide a GST number to the company) were “throw away issues” of no importance to bargaining unit members one way or the other and in respect of which the employer had no real prospect of success.
It is possible to accept the union’s submission that the level of contact between a trade union and its members does not ordinarily receive close scrutiny under section 74 without dismissing the application. The facts pleaded here go well beyond, for example, a mere failure on the part of the union to keep a member updated as to the status of his grievance and include an almost complete abdication of the union’s obligation to act in a truly representative capacity. While this may, perhaps, be to overstate allegations which themselves border on the hyperbolic, it captures the gist. In addition, as previously stated, at the root of the application is the assertion that the central reason for the arbitration was to avoid the requirements of section 44.
15By decision dated December 1, 2000, the Board dismissed the applicant’s request for reconsideration of the October 17, 2000 decision.
16On December 28, 2000, two years after filing the original application, the applicant asked the intervenor for a copy of the above-referenced Memorandum of Settlement by which the union and employer agreed to a section 40 arbitration. This was provided on January 4, 2001.
17On May 10, 2001, the applicant filed “new” amended pleadings in which 12 new paragraphs were inserted into Schedule “A” and in which the applicant made new assertions that there was no irrevocable agreement to refer to voluntary interest arbitration under section 40 and that the collective agreement was therefore null and void.
18The responding party’s right to represent the employees of Royal Taxi was terminated by the Board on October 11, 2001 following a vote held in accordance with section 63 of the Act.
The Preliminary Submissions
19I turn now to the intervenor’s preliminary submissions.
20The intervenor submits that the amended pleadings filed on May 10, 2001 are an attempt to broaden the application beyond the February 15, 2000 complaint. The intervenor points out that between February 15, 2000 and May 2001, the parties herein have litigated the complaint as set out in the February 15th document. This is made clear by the fact that the Board issued a decision on October 17, 2000 specifically addressing the ratification issue. In other words, some water had already passed under the bridge before the applicant purported to file his “new” amended pleadings citing new remedies and new arguments. The intervenor submits that the expanded claim contravenes the Board’s oral ruling which directed the applicant to file particulars in February, 2000 and which, according to the intervenor and responding party, specifically prohibited the applicant from expanding his claim.
21The intervenor also submits there was undue delay in filing the May 10, 2001 amended pleadings. They were filed approximately 29 months after the original application in December, 1998 and about 15 months after the amended Schedule “A” was filed in February, 2000. In addition, the intervenor submits that the applicant has contravened Rules 38 and 42 of the Board’s Rules of Procedure by failing to diligently seek out facts in support of his claim and failing to set those facts out promptly. The intervenor asserts that the applicant is guilty of abuse of process by attempting to renew his attack on the agreement to refer matters to arbitration under section 40. The applicant should not be permitted to raise new arguments incrementally with successive pleadings. Had the applicant exercised due diligence, his new argument based on the Memorandum of Settlement could have been argued before Vice-Chair Goodfellow when the Board dealt with the ratification issue. The new argument is simply an attempt to dress the ratification issue in another costume.
22The intervenor also points to a decision of arbitrator T.E. Armstrong in 1999 dealing with a policy grievance referred to him under the collective agreement, in which he decided that Royal Taxi was obliged to suspend drivers who did not pay union dues. The applicant seeks to attack the validity of the collective agreement under which Mr. Armstrong made his decision.
23The intervenor asserts that the only remedy sought in this application is that a ratification vote be ordered, as set out in the February 15, 2000 pleading. It asserts that there is no purpose in holding a ratification vote, even if the applicant were successful in this application, because the responding party was terminated as bargaining agent on October 11, 2001. There is no collective agreement to ratify, making the application moot.
24The intervenor referred the Board to the following decisions in which applications or pleadings have been dismissed or struck by the Board: United Steelworkers of America Local 4605, Hayes-Dana Inc., Filter Division [1994] O.L.R.D. No. 4141; The Peelle Company of Canada Limited [1994] O.L.R.D. No. 3791; S.S.T. Contracting Ltd. [1998] O.L.R.D. No. 2817; Sentinel Plumbing Inc. (unreported decision in Board File No. 0356-97-U dated May 23, 1997); Sirch Holdings Inc. (c.o.b. as The Ridout Tavern) (Unreported decision in Board Files 2583-97-U and 2262-97-R dated October 28, 1997 upheld on judicial review by Ontario Superior Court, decision dated February 23, 2000, Court File No. 815/98).
25The intervenor asks the Board to disregard the May, 2001 amendments to the pleadings and the amended request for relief, and to dismiss the application as being moot.
26The responding party union adopts the arguments put forth by the intervenor. It asserts that no labour relations purpose would be served by the Board proceeding to hear this application when there is no live controversy. The union was decertified. In addition, arbitrator Heritage awarded a “collective agreement” and the Board does not have jurisdiction to change that result and decide that Mr. Heritage was wrong. The responding party referred the Board to Roy Somir v. United Brotherhood of Carpenters and Joiners of America Local 1072 (unreported decision in Board File No. 0252-95-U dated July 28, 1995 dismissing an application under section 91 [now 96] for mootness).
27The applicant asserts that the Memorandum of Settlement was not a valid contract because it contained a condition precedent requiring that it be ratified. There was no “irrevocable agreement in writing” between the union and Royal Taxi to refer their dispute to voluntary binding arbitration in accordance with section 40. The applicant further asserts that the effort to represent the Memorandum as an irrevocable agreement was a “fraud” upon interest arbitrator Heritage and, later, upon grievance arbitrator Armstrong.
28The applicant further asserts that the Heritage award could not bring a collective agreement into existence because Mr. Heritage had no jurisdiction, inasmuch as he proceeded on the basis of the Memorandum which was never ratified by the principals of the union or employer. Moreover, until the applicant saw the Memorandum in January, 2001, he was not aware that it was subject to ratification. He presumed it was a valid irrevocable agreement. The applicant also asserts that the Memorandum violated the Statute of Frauds.
29The applicant explains that the remedy requested in the February 15, 2000 pleading sought ratification by the affected employees because, at the time, the union was still the bargaining agent, and the applicant had expected the application to be heard while that was still the case. In the May 10, 2001 document, the applicant seeks a declaration that the Memorandum of Settlement was not an “irrevocable agreement” for the purpose of section 40 of the Act, that section 40 was inoperable, and that there was never any collective agreement between the parties. He submits that this would establish that the employer did not have the right to deduct the charges from the members’ pay. He requests that the dues collected on behalf of the union be paid to a receiver for the affected employees. The applicant points out that his December 8, 1998 application did seek relief against the 40 cent processing fee and the $1.50 coupon charge.
Decision
30The decision of the Board dated October 17, 2000 outlined the issues remaining to be decided after the Board rejected the applicant’s contention that the Act required ratification of the collective agreement awarded by Mr. Heritage. The complaint under section 79(8) that the collective agreement was not ratified has thus been decided. The “section 86” (the “freeze” provision) complaint rests on whether the union and employer had a valid collective agreement. It is clear from the Board’s decision of October 17, 2000 that as, of that date, the Board understood the remaining issues in this application to pertain to the duty under section 74, and particularly to the circumstances under which the union agreed to proceed under section 40.
31The preliminary issue before the Board is whether it should exercise its discretion not to inquire further into this complaint.
32Section 96 of the Act confers discretion on the Board to determine whether it will inquire into any complaint alleging a violation of the Act. In Brant Haldimand-Norfolk Catholic District School Board, [2001] OLRB Rep. March/April 292 the Board stated its approach to the exercise of that discretion, at page 301:
Under section 96(1) of the Labour Relations Act, the Labour Relations Board has a discretion whether or not to inquire into any application or complaint (see generally Dhanota v. UAW Local 1285 and Sheller Globe of Canada Ltd. (1983), 83 CLLC ¶14,052 (Ontario Div. Ct.)). The fact that a complaint is filed, does not mean that the Board is obliged to enquire into it. Rather, the Legislature has given the Board a discretion in this regard; and in the exercise of that discretion, the Board looks at such factors as: any delay in filing the complaint; whether the case makes out an arguable case for a breach of the provisions of the Act relied upon by the complainant; the likelihood of success; the nature and utility of any remedy that might flow; the cost implications for the parties and the public; whether, overall, some statutory or labour relations purpose would be served by the litigation exercise; and so on. It is important for the Board to expend its limited resources in a manner that is consistent with the objects of the statute (see section 2 of the Act), and that is sensitive to labour relations realities.
33The preliminary issues before the Board can be briefly summarized as follows. Should the May 10, 2001 amended pleading be disallowed because it expands the original pleadings, and because it was filed after undue delay and after the application had already been litigated before the Board? Did the applicant exercise due diligence to discover the contents of the Memorandum of Settlement? Does the Board have jurisdiction to declare that the collective agreement is null and void because the Memorandum of Settlement was not approved by the “principals” of the union and employer? Is there a labour relations purpose in inquiring into this matter?
34In the Board’s view, the applicant’s attempt to amend his Schedule “A” by filing new allegations and requests for relief constitutes an attempt to significantly expand the scope of the claim as it stood on February 15, 2000. The Board specifically directed the applicant in February, 2000 to file a properly particularized application. The applicant, with the assistance of counsel, filed an amended Schedule to his application setting out in some detail the nature of his complaint, and seeking a ratification vote. This is the claim that the responding party and intervenor expected to meet. The parties proceeded to litigate the application before the Board in August, 2000 and the Board issued a decision on October 17. 2000. As I have indicated, the October 17, 2000 decision described the issues that remained before the Board at that time. The applicant had not alleged at the time that the union had failed to fulfill a condition precedent requiring ratification of the Memorandum of Settlement.
35The applicant asserts that he only saw the actual Memorandum in January, 2001, after requesting a copy of it in December, 2000. However, the applicant was clearly aware of the Memorandum’s existence throughout these proceedings, and he knew that the other parties relied upon the Memorandum as being an “irrevocable agreement” for the purpose of section 40. (For example, the Memorandum is specifically referred to in the union’s original response filed in January, 1999.) In my view, it would be prejudicial to the responding party and intervenor to permit the applicant to significantly alter his pleadings by creating a new argument based on the Memorandum. This would, in effect, create a moving target for the union and intervenor. The May 10, 2001 new Schedule “A” was filed fifteen months after the February, 2000 pleading, and this is contrary to the intent of Rule 38 of the Board’s Rules of Procedure which requires that allegations of improper conduct be made promptly. Therefore, the Board disallows the May 10, 2001 amendments to the applicant’s Schedule “A” and the new requests for relief.
36It therefore remains that the applicant’s request is for “ratification” of the collective agreement, should he succeed on the merits. In its decision dated October 17, 2000, the Board explained that ratification of a collective agreement awarded by an interest arbitrator is not required by the Act. Moreover, there is no longer a collective agreement, the union having been decertified, and there is no sensible labour relations purpose to be achieved in asking the bargaining unit membership to ratify a now-expired agreement which, during its currency, governed the working conditions of the affected employees (including salary and benefits) for three years.
37However, even if the Board were to permit the May 10, 2001 pleadings and requests for relief and if the applicant could prove a violation of section 74, I would decline to make the declarations requested by the applicant. I would decline for two reasons. First, the requested declarations would essentially state that the collective agreement was not operable because there was no irrevocable agreement under section 40. In my view, the Board does not have jurisdiction under the Act to make a declaration to the effect that the proceeding before arbitrator Heritage was legally flawed or fraudulent and that the resultant collective agreement was inoperable.
38Secondly, even if such a declaration were within the Board’s jurisdiction, the Board is not satisfied that a labour relations purpose would be served by inquiring into the merits of this complaint. This application is an attack on the process by which a collective agreement was made, particularly the lack of consultation and prior approval of the general membership. It is also an attack on certain terms of the agreement, especially upon the obligation to pay dues. But even if these attacks had merit, what labour relations rationale is there in pursuing the matter now? As stated above, the union is no longer the bargaining agent, and no collective agreement is in force. The employer and union clearly believed they had a valid collective agreement, and their entire conduct vis-à-vis each other for three years was predicated upon that agreement. Indeed, the grievance award of Arbitrator Armstrong under the collective agreement was filed in court for enforcement. There is no labour relations purpose to be served in conducting a hearing where the applicant seeks to unravel this now-expired three-year relationship.
39For the above reasons, the Board declined on November 20, 2001 to inquire further into this application.
“Anthony Brown”
for the Board