1085-99-U International Association of Machinists and Aerospace Workers, Applicant v. Hobart Food Equipment Group Canada (A Division of Premark Canada Inc.), Responding Party.

BEFORE: Harry Freedman, Vice-Chair.

APPEARANCES: Sean Fitzpatrick, Dick Foster, Ed Delaporte and Pat Babin for the applicant; L. Bertuzzi and Paul Stethem for the responding party.

DECISION OF THE BOARD; November 14, 2001

1. This application under section 96 of the Labour Relations Act, 1995, S.O. 1995, c. 1, as am. (the “Act”) alleging a violation of the duty to bargain in good faith raises the question of whether a trade union is obliged to ask for more information about the consequences of a decision taken to close a facility when the employer provides relevant factual information about the closure but does not go on to provide further details about the consequences of that closure. Or to put it another way, is an employer responsible for the mistaken, yet reasonable, assumptions made by a union as a result of the representations it received from the employer? The Chair of the Board authorized me pursuant to section 110(14)(a) of the Act to sit alone to hear and determine this matter.

Summary of the Facts and Issues

2. The responding party advised the applicant at the end of April 1998 when the parties were bargaining for the renewal of their collective agreement with a nominal expiry date of April 30, 1998 in respect of the responding party’s warehouse and maintenance operations at 190 Railside Drive, Toronto (the “Railside Collective Agreement”) that it was closing its National Parts Department and warehouse. The applicant understood that warehouse work done by the employees in the Railside Collective Agreement bargaining unit would no longer be carried out there, and as a result, entered into a closure agreement with the responding party rather than continue to bargain for the renewal of the Railside Collective Agreement.

3. The applicant was advised that the responding party’s Canadian Regional Service Centres would no longer receive their parts from the National Parts Department warehouse. Rather, some of those parts would be shipped to the Canadian Regional Service Centres from Ohio for distribution to the responding party’s technicians (who worked out of those Regional Service Centres) and retail customers. The Regional Service Centre for Ontario, the Ontario/Toronto Service Centre (“OTS”) had been moved from Richmond Hill to 190 Railside Drive in April 1997. Before moving to Railside Drive, the OTS employees (who were excluded from a technicians’ bargaining unit applicable to the OTS) performed some duties similar to the work performed by the National Parts Department warehouse employees, that is the stocking, picking, packing and shipping of parts. During the year the OTS was at Railside Drive, the Railside Collective Agreement bargaining unit employees did the work of stocking, picking, packing and shipping parts for the OTS with the OTS employees performing the associated clerical work. After the closure of the National Parts Department warehouse, the OTS employees continued doing their clerical work and began doing the stocking, picking, packing and shipping of parts for OTS customers and technicians. In November 2000, an arbitrator declared that the OTS employees assigned exclusively to do the stocking, picking, packing and shipping of parts were in the Railside Collective Agreement bargaining unit as of July 1999, when the duties of the OTS employees had been reorganized.

4. This application alleging a violation of section 17 of the Act (the duty to bargain in good faith) was filed in July 1999 before the reorganization of the employees’ duties within the OTS was carried out. The applicant claims that the responding party misled it during their collective bargaining in April 1998 for the renewal of the collective agreement between them. The applicant alleges that as a result of being misled, it entered into a closure agreement under which six employees in the bargaining unit under the Railside Collective Agreement were laid off indefinitely and received an enhanced severance and termination pay package rather than bargain for the renewal of the Railside Collective Agreement.

5. The essence of this application is the allegation that the responding party violated section 17 of the Act by what it said (and did not say) during the negotiations leading to the closure agreement. The applicant claims that the responding party should have specifically pointed out that the OTS would still be performing the parts distribution functions it had been doing before it had moved into Railside Drive. The responding party submits it disclosed the relevant facts about the closure of the National Parts Department warehouse and the shipment of parts to the Canadian Regional Service Centres. It submits it cannot be responsible if the applicant made an unwarranted assumption about what was taking place within the OTS at Railside Drive.

Statement of Agreed Facts

6. The parties were able to agree on all of the relevant facts. In order to appreciate and understand the parties’ respective positions, it is necessary to set out the facts introduced by the parties at the hearing of this matter. Most of those facts are contained in paragraphs 6 through 22 of an arbitration award (Hobart Food Equipment Group Canada, unreported decision dated November 17, 2000) that dealt with the parties’ dispute over the scope of the Railside Collective Agreement bargaining unit and made the declaration referred to earlier (the “Award”). (That arbitration proceeding was related to this application, and took place while this application was held in abeyance on agreement of the parties.) The parties agreed to some minor modification of those facts. In addition, the parties agreed to a number of factual allegations contained in the application and response, with certain clarifications, as well as to other facts that were stipulated during the parties’ representations at the hearing of this application. The parties therefore did not adduce any evidence at the hearing and their argument proceeded on the basis of the material facts on which they had reached agreement.

7. The background to the closure agreement and the context in which it was negotiated is set out in the following lengthy passage from the Award:

The Award

6. The Company is engaged in manufacturing, distributing, marketing and servicing of commercial and institutional food service equipment across Canada. Up until sometime in 1995, the Company’s head office and National Parts Department warehouse (from where parts were shipped to regional offices across the country) were located at 190 Railside Road. There was also a National Distribution Centre located in Malton which contained a finished goods warehouse from which the Company’s finished goods (as opposed to parts) were distributed, a training centre, an equipment display and conference facility and an equipment modification area. The National Parts Department warehouse received its parts from the Company’s parent company in the United States.

7. Up until about 1990, the Company also operated 19 branch offices or service centres across Canada, with the Toronto Service Centre located at 50 Mural Street in Richmond Hill. Each branch office was responsible for customer service in its area, including dispatching the service technicians who worked out of the branch office and parts distribution within its area. Each branch office received the parts it required from the National Parts Department warehouse at Railside Road and then distributed the parts to the service technicians working out of that office and sold parts “over the counter” to the Company’s customers directly.

8. The parts distribution work at the Toronto branch office in Richmond Hill required employees, who also worked on the service counter and did clerical work related to service orders and parts, to both receive and ship the parts. Those branch office employees were responsible for ordering parts for their office, receiving, unpacking, and stocking parts, and then picking, packing and shipping (or selling) parts to customers or providing them to service technicians. There were generally four but sometimes five customer service employees who worked at the Toronto Service Centre in the Richmond Hill branch office. While those four or five employees rotated between the stock room and service counter and performed all of the necessary clerical work, there were some Toronto branch employees who spent more of their time doing stock room and parts work, while the other Toronto branch employees spent more time doing the clerical and service counter work.

9. The International Association of Machinists and Aerospace Workers (District Lodge 78)(“Lodge 78") and the Company were parties to a collective agreement (which had a term of operation commencing August 11, 1995 and expiring August 10, 1998) that covered the Toronto Branch office in Richmond Hill and applied to the service technicians, but did not apply to the employees who were engaged in parts distribution, service counter and clerical work (the “Service Collective Agreement”). Section 2.01 of the 1995-1998 Service Collective Agreement provided:

The Company recognizes and accepts the Union as the sole collective bargaining agency for all its employees at 50 Mural Street, Richmond Hill, the Regional Municipality of Sudbury and the counties of Algoma, Sudbury, Cochrane, Temiskaming, Nipissing and Parry Sound (only includes employees working north of highway 124 between Parry Sound and Sundridge), save and except Shop Managers, Field Service Supervisors, persons above the rank of Shop Manager or Field Service Supervisors and office and sales staff.

The parties agreed that the Toronto branch office employees who performed all of the work associated with parts distribution, including receiving, stocking, picking, packing and shipping parts from that branch office, as well as the service counter and clerical work were excluded from the bargaining unit in the Service Collective Agreement.

8. In order to understand the subsequent issues between the parties, it is important to set out the description of the bargaining unit in the Railside Collective Agreement. Article 2, section 2.01 of the Railside Collective Agreement provided:

The Company recognizes and accepts the Union as the sole collective bargaining agency for all its employees at 190 Railside Road, North York, save and except foreman [sic], those above the rank of foreman, office and sales staff and service trainees.

9. The Award continues:

10. The Company began reducing the number of branch offices in the early ‘90's so that as each of the smaller branch offices closed, the zones of the remaining branch offices grew larger. By 1994, there were three branch offices remaining in Ontario; Ottawa, Toronto (Richmond Hill) and Hamilton. Those offices serviced much larger areas then they had before, but serviced them in the same way; that is parts required by the service technicians or the customers were shipped to the branch offices from the National Parts Department warehouse which in turn received all of the parts destined for Canada from Troy, Ohio.

11. At some point between 1994 and December 31, 1995 the Hamilton and Ottawa branch offices were closed, and the Toronto (Richmond Hill) branch office became responsible for most of Ontario, with the exception of the northwest part of the province which was serviced out of the Winnipeg branch office and the Ottawa area which was serviced by the Montreal branch office. It became the Ontario/Toronto Service Centre.

12. At the time the 1995-1998 Service Collective Agreement was negotiated, the excluded employees working at the Toronto (Richmond Hill) office or OTS were engaged in ordering, receiving, stocking, picking, packing and shipping parts to technicians working in the Ontario region for which it was responsible and the Company’s customers in that region, in addition to their service counter and clerical work. As of December 31, 1995, the company’s nineteen regional offices had been reduced to seven regional offices across Canada from Halifax, Nova Scotia to Victoria, British Columbia including the Toronto (Richmond Hill) office or the OTS. The National Parts Department warehouse continued to ship parts to those seven regional offices, including the OTS.

13. In April, 1997, the Company closed the Richmond Hill location of the OTS and moved the OTS operations to discrete vacant space at 190 Railside Road in Toronto. The OTS continued to function as a branch office within the Company’s premises at 190 Railside Road, adjacent to but separate from the National Parts Department warehouse, servicing the same area as before. After the closure of the branch office in Richmond Hill in April 1997 until April 1998 when the National Parts Department, including the warehouse, was closed, the National Parts Department warehouse staff (who were in the bargaining unit described in the Railside Collective Agreement) continued to perform the same functions they had performed before the OTS moved into 190 Railside except that they no longer shipped parts to the OTS. Rather, the physical movement of parts from the National Parts Department warehouse (including picking, packing and shipping) to technicians and customers of the OTS was done directly by the National Parts Department warehouse employees, while the paperwork for those OTS parts was done by the OTS employees. The National Parts Department warehouse stocked and shipped the parts used by the OTS. The employees of the OTS who moved from Richmond Hill to 190 Railside Road no longer received, stocked, picked, packed or shipped parts. They continued to perform the balance of their previous duties, including the ordering of parts for their technicians and customers and the service counter and clerical work.

14. The parties were engaged in bargaining for the renewal of the Railside Collective Agreement in April 1998 when Mr. Stethem, who in addition to being the Company’s Director, Human Resources, was also the Company’s chief negotiator, was advised of the Company’s decision to close the National Parts Department and warehouse. Larry Orton, the Company’s Special Projects Manager and Gil Moreau, the Company’s President, met with Mr. Stethem in mid April, following the second bargaining meeting with the Union, to inform Mr. Stethem of the decision that the Company had made about the warehouse. Mr. Stethem had not been consulted prior to the decision. As a result, Mr. Stethem prepared a closure agreement to present to the Union at the next bargaining meeting.

15. The Company explained to the Union that the National Parts Department and warehouse were to be closed. The regional offices with their own parts departments were to receive parts directly from Ohio, eliminating the need for the national parts warehouse. As a result of the closure, the six full time employees in the National Parts Department warehouse were to be laid off because their positions had been eliminated. Mr. Stethem explained that there would be a transition over the next several months, with the National Parts Department warehouse packing and shipping its parts back to the United States and the regional offices being supplied with parts from Ohio in stages. Mr. Stethem understood from Mr. Orton and advised Dick Foster, the chief negotiator for the Union, that the transition would be completed by the end of July. The parties negotiated over the closure arrangements and ultimately agreed to a closure agreement under which the six full time bargaining unit employees would be laid off immediately, would be paid severance pay and pay in lieu of notice, and would have certain of their insurance benefits continued for a specified period of time.

16. The Company and the Union also agreed that temporary employees who had been working in the warehouse (and came within the bargaining unit under the Railside Collective Agreement) would carry out the necessary transition work. During the transition period, the National Parts Department warehouse, now staffed by temporary bargaining unit employees, continued to send parts to regional offices (until those regional offices began to receive parts directly from Ohio) and provide parts to the OTS customers and technicians, but also began packing and shipping parts for return to the United States. Although the entire transition was to have been completed by July, difficulties with customs and duty issues that arose with returning parts to the United States resulted in the transition not being completed until late September. Those temporary employees, in addition to dealing with the parts, were also required to dismantle the racks and shelving that had been located in the national parts warehouse. A small portion of those racks and shelving was moved to the OTS area where it was assembled and installed to use for stocking parts in the OTS, which was to begin receiving parts from the United States once the transition was completed. The temporary employees, except for two who transferred to the OTS effective October 1, 1998, were laid off at the end of September. As of October 1, 1998, there was only one employee remaining in the bargaining unit under the Railside Collective Agreement, the maintenance person.

17. As part of the consolidation of the Company’s operations, the equipment modification and showroom areas that had been located at the National Distribution Centre in Malton were moved to 190 Railside Road. The Company accepted that an employee who moved to Railside Road who had been performing equipment modification work in Malton and continued to perform that work at Railside Road was in the Railside Collective Agreement bargaining unit. There were two employees in that bargaining unit in the summer of 1999 after those two areas had moved from Malton to Railside Road.

18. The two temporary employees who moved to the OTS on October 1, 1998 ceased paying union dues as of that date. After that date, parts destined to OTS customers and technicians were sent from Ohio to the OTS at the Company’s Railside Road premises where those parts were stocked, picked, and packed by the OTS employees who had been treated as being excluded from the Railside Collective Agreement bargaining unit. The receiving function was performed by one and later two employees in the Railside Collective Agreement bargaining unit. There is no dispute that the work done by the OTS employees since October 1, 1998 was part of the work that the National Parts Department warehouse employees had been doing from the closure of the Richmond Hill location of the OTS until they were laid off in April 1998.

19. The Company and Lodge 78 were also engaged in collective bargaining in the summer of 1998 with respect to the renewal of the Service Collective Agreement. Mr. Foster was also the chief negotiator for Lodge 78 while Mr. Stethem had that role on behalf of the Company. Mr. Stethem testified that Mr. Foster had asked about the warehouse work many times over the summer and fall of 1998. They were also negotiating over the description of the bargaining unit in the Service Collective Agreement since the Richmond Hill office (which was specifically referred to in the bargaining unit description) had closed. Mr. Stethem testified that in August 1998, to alleviate the Company’s concern that the Union (or Lodge 78) was seeking to sweep in the OTS employees with the change to the bargaining unit description Mr. Foster was proposing, Mr. Foster said to Mr. Stethem: “I’m not trying to grab those parts guys, you know, the area near Sam’s office.” Mr. Stethem testified that the reference to “Sam’s office” was the area in which the OTS was being set up and where the OTS employees were working. Mr. Stethem also testified that Mr. Foster at that time also joked that if he got 50% of those guys to sign cards, it would be a different story.

20. The parties were unable to agree upon the renewal of the Service Collective Agreement with the result that the service technicians were locked out on December 10, 1998. At the end of December, 1998, Mr. Foster wrote to Mr. Stethem expressing his views about the work that had been and was going to be moved to 190 Railside Road. The second and third paragraphs of that letter stated:

The union wishes to make clear that it is its position that it has bargaining rights for all work performed at that location under either of the two collective agreements, which the union has with the company. This includes work of the OTS (including the warehousing) and also any work which the company chooses to relocate from its Mississauga location.

The union further wishes to reiterate to you that it was misled when last April 30, 1998 you advised the union that the warehouse would be closing within 8-10 weeks. Union members accepted a severance package only to discover that work was in fact available for several months and that, now it appears, work will be returning to the warehouse. The Union reserves all of its rights in the circumstances.

Mr. Stethem had many discussions with Mr. Foster after receiving that letter, principally about the technician labour dispute, but did explain to Mr. Foster that there would not be a national parts function at Railside Road, and that if work was moved back to Railside Road from the National Distribution Centre that had been subject to the Railside Collective Agreement bargaining unit in the past, it would once again be work of that bargaining unit. Mr. Foster wanted to know whether any national parts function or work was going on at Railside Road and was assured by Mr. Stethem that there was not. Mr. Stethem advised Mr. Foster that the parts work was limited to the parts work relating to the OTS. No other regional office in Canada received parts from Railside Road.

21. The labour dispute with the technicians was settled in June 1999 with the renewal of the Service Collective Agreement between Lodge 78 and the Company. Section 2.01 of the Service Collective Agreement, which was effective June 29, 1999 and expires on June 28, 2002 was amended to read:

The Company recognizes and accepts the Union as the sole collective bargaining agency for all its employees at 190 Railside Road, save and except, foremen, office and sales staff, service trainees, shop managers, field supervisors, managers and those above the rank of manager.

The amendment to the Service Collective Agreement was not relied on by either party in asserting their position. Furthermore, the Railside Collective Agreement had not been the subject of negotiations by the time the hearings in this matter were completed; thus the Railside Collective Agreement which expired on April 30, 1998 remained in effect.

22. Mr. Stethem testified in cross-examination that in late July, 1999, the Company divided up the OTS work among the employees performing that work, with two employees performing exclusively the service counter, clerical, dispatching and order taking work while the other OTS employees did the stocking, picking, packing and shipping work. In other words, the Company reassigned the work functions of the OTS employees with some employees exclusively doing the parts work that was quite similar, if not identical, to the work that had been done by the National Parts Department employees before they were laid off, albeit on a smaller scale, and only in respect of customers and technicians serviced by the OTS, while two employees did what was essentially the clerical elements of the OTS work.

The parties agreed that in paragraph 14 of the award the reference to Mr. Stethem preparing the closure agreement before the bargaining meeting with the Union was incorrect. Mr. Stethem had in fact prepared a draft closure agreement following discussions with the Union at that bargaining meeting. In paragraph 17, the award referred to two employees being in the bargaining unit. The parties agreed that there were at least two employees as the applicant asserted there were more than those two employees in the bargaining unit. With respect to paragraph 22, there were six employees doing OTS work, four of whom were doing the service counter, clerical, dispatching and order taking work while two were doing the stocking, picking, packing and shipping work. The parties also agreed that the receiving aspect of the OTS was done by another employee.

10. The parties also agreed to the following facts in the application and in the response:

Application:

2. The Union is the bargaining agent for two bargaining units of Hobart employees, one of service technician employees and one of warehouse employees. IAM has represented these employees for approximately 20 years.

3. Hobart manufactures, sells and services restaurant and institutional food service equipment and scales.

4. The term of the most recent warehouse collective agreement between the parties was May 1, 1995 to April 30, 1998.

5. Collective bargaining for purposes of renewing the collective agreement took place on April 15, 16 and 30, 1998. Chief spokespersons for the Union were Business Agent G. R. (Dick) Foster, along with members Ross Crisp and Pat Babin. Chief spokespersons for the Employer were Paul Stethem, Director of Human Resources, his assistant Brigid Marques, and Michael Iannantuono, the warehouse supervisor.

6. On April 15 and 16, 1998, the parties engaged in a conventional exchange of collective bargaining proposals and responses.

7. Ross Crisp asked why the Company did not want the work available during the twelve week phase out prior to the closure to be done by permanent employees. Paul Stethem answered that the Company felt permanent employees’ hearts would not been in the work and therefore the Company would prefer to have this limited work done by non-permanent staff.

8. Paul Stethem said that the Company would be shutting down its warehouse after a phase out period, and wanted to do better for employees than the Employment Standards Act with regard to severance payments. He said that the Company wanted to negotiate a closure agreement with the Union.

9. During this discussion, Stethem described the phase out as the Company needing time to empty the warehouse and send parts to the United States. He said that the Company would continue to do some shipping of parts from the warehouse to technicians during the phase out.

10. Based on these representations, the Union agreed to negotiate a closure agreement rather than a conventional renewal of the collective agreement. By that afternoon, April 30, the parties had reached an agreement which the Company then typed up. The typed closure agreement was then presented to employees that same afternoon.

11. Paragraphs 1 and 2 of the closure agreement state:

12. Full time employees will cease work effectively today, April 30, 1998.

13. The company will continue to operate parts department in order to facilitate a smooth transition to its U.S. based warehouse’s. Part time employees will be engaged to complete this transition and its agreed that these employees will pay union dues.

14. By letter dated December 28, 1998, Union business representative Dick Foster wrote to Paul Stethem to express the Union’s concern over the continuing operation of the 190 Railside warehouse:

The union further wishes to reiterate to you that it was misled when last April 30, 1998 you advised the union that the warehouse would be closing within 8-10 weeks. Union members accepted a severance package only to discover that work was in fact available for several months and that now it appears, work will be returning to the warehouse. The union reserves all of its rights in the circumstances.

Response:

9. Collective bargaining for the purpose of renewing the warehouse collective agreement with an April 30, 1998 expiry date took place on April 15, 16 and 30, 1998. Chief Spokespersons for IAM were Business Agent G. R. (Dick) Foster, along with Bargaining Unit Members Ross Crisp and Pat Babin. Chief Spokespersons for Hobart were Paul Stethem, Director of Human Resources, his Assistant, Brigitte Marquis and Michael Iannantuono, the Warehouse Supervisor.

10. On April 15 and 16, 1998, the parties engaged in a conventional exchange of collective bargaining proposals and responses.

11. Hobart proposed that the work available during the twelve week phase out period prior to the closure be performed by “non-permanent” employees. IAM agreed with this proposal.

12. The parties negotiated and signed a Closure Agreement on April 30, 1998.

13. The Closure Agreement provides for better notice and severance payments than the “permanent” employees would be entitled to under the Employment Standards Act.

14. The Closure Agreement does not pertain to the part-time maintenance employee. The part-time maintenance employee continues to date to be employed in the Head Office location in accordance with the terms of the Warehouse Collective Agreement, which has an April 30, 1998 expiry date. IAM was fully aware that the maintenance function was not being eliminated and that the maintenance position would continue.

15. There were certain facts to which the parties could not agree, but the disagreement over those facts was not material to the issue before me. The parties acknowledged that Mr. Stethem advised Mr. Foster in a one on one discussion at some time before the negotiation meeting on April 30, 1998 commenced that the National Parts Department warehouse was to be closed. The parties disagreed over whether Mr. Foster had been advised on the previous Saturday or on the morning of April 30^th, prior to the start of the meeting. The applicant had alleged that when Mr. Stethem had told Mr. Foster that Larry Orton had informed him (Mr. Stethem) that the National Parts Department warehouse was to be closed, Mr. Foster requested that Mr. Orton attend the meeting. The responding party asserted that there was no need for Mr. Foster to have requested that Mr. Orton attend. The parties did agree that Mr. Orton was present at the meeting and that the meeting opened with Mr. Orton making the announcement about the closure.

16. The parties also asked me to consider, and read together certain paragraphs of the application and response that dealt with the bargaining meeting on April 30, 1998 and the closure agreement. They did not agree with each other’s drafting of the facts, but were content to have me deal with the matter on my reading of the allegations as the differences were not material. I set out below the relevant paragraphs from the application and response relating to the April 30, 1998 meeting and to the closure agreement.

April 30, 1998 Meeting

9. At 11:15 a.m., Larry Orton attended the meeting and told the Union Bargaining Committee that the Company was closing the warehouse and that parts were going to be shipped back to Company’s facilities in Ohio. Orton told the Committee that the phasing out of the warehouse would be completed within twelve weeks by the end of July 1998, and that the Company wanted to do have “non-permanent” employees do the phase out. Orton said that all parts would be out of the 190 Railside facility no later than mid to late July. Orton said that this was now notice of termination to the bargaining unit employees. [Application]

10. Both Larry Orton and Paul Stethem attended the April 30, 1998 negotiations session. Dick Foster did not have to request that Larry Orton attend the meeting, as is stated in paragraph 8 of the Application. Larry Orton, a Senior Hobart Manager, informed IAM that the national parts department would be closing at the Head Office location and that these functions would be provided at Hobart facilities in Ohio. Orton told the Committee that the phasing out of the national parts department should be completed within approximately twelve weeks, by the end of July, 1998, and that Hobart wanted to have “non-permanent” employees do the phase out. [Response]

11. Hobart proposed that the work available during the twelve week phase out period prior to the closure be performed by “non-permanent” employees. IAM agreed with this proposal. [Response]

12. Dick Foster asked the Company if parts were going to be sent to Hobart’s National Distribution Centre (NDC) in Mississauga. Paul Stethem said no and that in the future all parts would be sent directly by overnight courier from Ohio to customer’s premises or service technician’s houses. Stethem said that the Company would no longer be warehousing and reshipping parts in Canada. [Application]

13. Dick Foster asked if the national parts department was going to be sent to Hobart NDC. Paul Stethem said that parts would not be shipped to NDC and that the Ontario parts department would continue to operate out of the Head Office location. Paul Stethem said that, in the future, parts for national distribution would be sent directly by overnight courier from Ohio to Hobart branch offices or to service technician’s houses. Paul Stethem said that Hobart would no longer be warehousing and shipping parts for national distribution throughout Canada. Hobart specifically denies the suggestion contained in paragraph 10, 13 and 15 of the Application that Hobart stated, on April 30, 1998, that no parts, including Ontario parts, would be stored or distributed out of the Head Office location after the national parts department had been phased out. [Response]

14. During this discussion, Stethem described the phase out as the Company needing time to empty the warehouse and send parts to the United States. He said that the Company would continue to do some shipping of parts from the warehouse to technicians during the phase out. [Application]

The parties agreed that paragraph 13 of the application was accurate as far as it went. They also pointed out that there was no specific mention made of the OTS during the negotiations leading to the closure agreement, but referred me to paragraph 15 of the Award in which they agreed:

The Company explained to the Union that the National Parts Department and warehouse were to be closed. The regional offices with their own parts departments were to receive parts directly from Ohio, eliminating the need for the national parts warehouse.

The Closure Agreement

With respect to the closure agreement, the parties agreed to a modification of paragraph 15 of the application. Paragraph 15 of the application stated:

Based on the Company’s representations, and in particular its representations that all jobs were being eliminated because no more parts were to be shipped into the Railside Drive warehouse and that all the remaining parts were to be shipped back to Ohio by middle to late July 1998, the Union and employees agreed to the terms of the closure agreement.

They agreed that the following modification of paragraph 15 would accurately reflect what had occurred in respect of the closure agreement:

Based on the Company’s representations and the Union’s understanding of those representations, that is that all jobs were being eliminated because no more parts were to be shipped into the Railside Drive warehouse and that all the remaining parts were to be shipped back to Ohio by middle to late July 1998, the Union and employees agreed to the terms of the closure agreement.

The parties also referred me to paragraphs 15 and 18 of the response in relation to the closure agreement:

15. The parties negotiated and signed a Closure Agreement on April 30, 1998.

16. Paragraph 2 of the Closure Agreement states that:

“The Company will continue to operate parts department in order to facilitate a smooth transition to its U.S. based warehouses). Part time employees will be engaged to complete this transition and it is agreed that these employees will pay union dues”.

This paragraph contains two ambiguities. First, the term “part-time” employees is used here in the same way that the term “non-permanent” is used in the IAM Application and in this Response. Second, the term “parts” department is used. The Closure Agreement does not actually state what department is to be closed. The parties knew that the national parts department was to be closed. The Closure Agreement states only that “The Company will continue to operate the parts department in order to facilitate a smooth transition to its US based warehouses”. The parties understood that the national parts department would continue to operate until the transition to the US warehouses was complete, at which time the national parts department would be closed. However, the Ontario parts department would continue to operate, non-union, as it did before April, 1998.

13. Although the application relates to the closure agreement and what representations were made (or not made) in the negotiations that resulted in that agreement, the subsequent events were also referred to by the parties. In particular, the decision that was taken in July 1999 to divide the OTS work among the employees who were performing that work (that is, the service counter, clerical, dispatching and order taking work on the one hand and the stocking, picking, packing and shipping work on the other) was made by Glen Beamish, the OTS Parts Manager. Mr. Beamish was appointed OTS Parts Manager in May 1999. Prior to that date, he had been a Technical Coordinator for National Service in the Head Office. Mr. Beamish had not been involved in the closure of the National Parts Department warehouse. When Mr. Beamish took over as OTS Parts Manager in May 1999, he saw six employees rotating through all of the duties of the OTS. He made the decision to split up the work between the “front” or service and clerical work and the “back” or warehouse work in July 1999. At the time he made the decision, he was not aware that this unfair labour practice application had been filed. (The application was filed on July 9, 1999 and the responding party had notice of it at about that time.) Mr. Beamish did not consult with anyone prior to making the decision and the responding party had no knowledge or plans to implement such a decision prior to June 1999. In particular, Mr. Beamish did not follow a mandate or directive in making his decision. He went to his immediate supervisor (Gene Hahn, the OTS Service Manager) for approval of the decision and then consulted with Mr. Stethem to discuss the classifications and rates for the new positions he had created. Finally, the responding party was always of the view that the warehouse work done in connection with the OTS was outside of the Railside Collective Agreement bargaining unit (as well as outside of the OTS service technician bargaining unit) and continued to act on that belief until the Award of November 17, 2000 which declared that the employees who, since July 1999 had been principally engaged in stocking, picking, packing and shipping parts and whose duties did not normally include service counter and clerical work, are employees who come within the bargaining unit described in the Railside Collective Agreement.

14. The applicant had been engaged in negotiations with the responding party in the summer of 1998 in respect of the OTS service technicians bargaining unit. No issue was raised about the OTS parts work in those negotiations and applicant had not sought to resume negotiations to effect a collective agreement after the April 30, 1998 meeting. No grievance had ever been filed with respect to the parts work being done by the OTS employees (the arbitration proceeding that resulted in the Award did not arise from a grievance). The applicant had not made any complaint (other than the letter and subsequent exchange referred to in paragraph 20 of the Award) about the parts work being done at Railside Road. Between October and December, 1998, the service technicians attended at the Railside Road OTS facility to pick up parts and order parts. Approximately 50% of the parts sold across the service counter were purchased by walk-in customers.

Argument

15. Counsel for the applicant argued that determining whether the applicant had established a violation of section 17 of the Act revolved around what the applicant had understood from what the responding party had said during bargaining. He referred to the parties’ agreement about the bargaining of the closure agreement:

Based on the Company’s representations and the Union’s understanding of those representations, that is that all jobs were being eliminated because no more parts were to be shipped into the Railside Drive warehouse and that all the remaining parts were to be shipped back to Ohio by middle to late July 1998, the Union and employees agreed to the terms of the closure agreement.

He also referred to a number of the other agreed facts to support the reasonableness of the applicant’s understanding of those representations, and in particular to the following agreed facts:

Orton told the Committee that the phasing out of the national parts department should be completed within approximately twelve weeks, by the end of July, 1998, and that Hobart wanted to have “non-permanent” employees do the phase out.

Orton told the Committee that the phasing out of the warehouse would be completed within twelve weeks by the end of July 1998, and that the Company wanted to do have “non-permanent” employees do the phase out. Orton said that all parts would be out of the 190 Railside facility no later than mid to late July. Orton said that this was now notice of termination to the bargaining unit employees.

Dick Foster asked the Company if parts were going to be sent to Hobart’s National Distribution Centre (NDC) in Mississauga. Paul Stethem said no and that in the future all parts would be sent directly by overnight courier from Ohio to customer’s premises or service technician’s houses. Stethem said that the Company would no longer be warehousing and reshipping parts in Canada.

Ross Crisp asked why the Company did not want the work available during the twelve week phase out prior to the closure to be done by permanent employees. Paul Stethem answered that the Company felt permanent employees’ hearts would not been in the work and therefore the Company would prefer to have this limited work done by non-permanent staff.

Paul Stethem said that the Company would be shutting down its warehouse after a phase out period, and wanted to do better for employees than the Employment Standards Act with regard to severance payments. He said that the Company wanted to negotiate a closure agreement with the Union.

Counsel argued that the circumstances faced by the applicant led to the assumption that all of the parts distribution work that had taken place at the Railside Drive premises was disappearing. He submitted that the applicant’s bargaining committee was told that their work was going back to the United States and that all of their jobs, but for the maintenance work, were being eliminated. Counsel did acknowledge that the applicant was told that once the transition was done, the parts needed in Canada would be shipped from Ohio to the service technicians directly and to the Company’s Regional Service Centres. (See paragraph 15 of the Award and in particular the following statement in that paragraph to which the parties agreed:

The Company explained to the Union that the National Parts Department and warehouse were to be closed. The regional offices with their own parts departments were to receive parts directly from Ohio, eliminating the need for the national parts warehouse. As a result of the closure, the six full time employees in the National Parts Department warehouse were to be laid off because their positions had been eliminated. Mr. Stethem explained that there would be a transition over the next several months, with the National Parts Department warehouse packing and shipping its parts back to the United States and the regional offices being supplied with parts from Ohio in stages.)

Counsel argued that the representations about the closure of the parts department, together with the offer of an enhanced severance package for the full time members of the affected bargaining unit, was a deliberate enticement on the part of the responding party to negotiate a closure agreement rather than the renewal of the collective agreement.

16. Counsel for the applicant further submitted that the responding party knew that the OTS would continue to operate at the Railside Drive location following the completion of the closure of the National Parts Department warehouse in the same way it had operated in Richmond Hill so it knew that there would be some parts work continuing at the location but said nothing about that during the discussions leading to the closure agreement. He argued that the representations about all of the bargaining unit work, but for some maintenance work, disappearing was misleading as there was going to be some warehousing work associated with the OTS functions that would continue to be carried out there.

17. Counsel conceded that the applicant did not ask the responding party about where the parts destined for Ontario customers and technicians would be shipped. He argues that it was not unreasonable for the applicant to assume that however the Ontario customers and technicians would receive the parts they required, it would not involve the facilities at Railside Drive since the responding party had made it clear that the parts warehouse was closing. He submitted that the message the responding party was sending was that all warehouse employees, all bargaining unit work and all warehousing was disappearing from Railside Drive. Under those circumstances, it was incumbent on the responding party, who the applicant agrees did indicate that the Canadian Regional Centres would continue to receive parts from the United States, to inform the applicant specifically that the OTS facility was remaining in Toronto at Railside Drive. Counsel argues that the responding party’s failure to draw the applicant’s attention to the continuing operation of the OTS at Railside Drive (and that such an operation would involve work that had been done by the Railside Drive bargaining unit employees) was a misrepresentation by omission and deprived the applicant of the opportunity to bargain for a renewal of the Railside Collective Agreement or to seek some continuing job security for some of the employees in the Railside Collective Agreement bargaining unit.

18. Counsel for the applicant pointed out that if the responding party had referred to the OTS continuing to operate at Railside Drive, the applicant could have asserted that once the National Parts Department warehouse closure was completed the parts work being done by the OTS employees was bargaining unit work. The failure of the responding party to refer specifically to the OTS work deprived the applicant of the opportunity to bargain over that work as two of the six employees (as it now turns out) would have been able to claim that work had they been told it was going to continue. He says that the responding party had combined the information about the Company’s Regional Service Centres continuing to receive parts from the United States together with the information about the warehouse closing at Railside Drive so naturally the applicant assumed all warehouse work would cease at Railside Drive, including any warehouse work associated with the OTS.

19. This application was filed in July 1999, some 15 months after the alleged misrepresentations occurred. Counsel for the applicant explained the delay by pointing out the applicant had been focussed on the bargaining in respect of the technicians as the Railside Drive bargaining had been finished with the closure agreement in place. He also argued that no prejudice had resulted from the delay in filing the application since any remedial order could take that into account. He submitted that it was clear following the release of the Award that there were two Railside Collective Agreement bargaining unit positions that had remained and therefore the assumptions underlying the closure agreement (i.e., the elimination of all bargaining unit warehouse work) were incorrect. As it was the responding party that was responsible for failing to mention the continuation of the OTS function at Railside Drive, that omission amounted to a material misrepresentation during bargaining and therefore was a violation of section 17 of the Act. Counsel also submitted that if the applicant had been told that the OTS function was going to continue at Railside Drive, the applicant would have been in a position to assert that any estoppel that might have prevented it from claiming bargaining rights for that work under the Service Collective Agreement would not have been applicable to its claim of bargaining rights for the employees performing that work under the Railside Collective Agreement.

20. Counsel for the applicant referred to Sunnycrest Nursing Homes Limited, [1981] OLRB Rep. February 261. In that case, the employer subcontracted the work and terminated the employment of about 25% of the bargaining unit. The employer’s action had been taken while the parties were in the midst of negotiating their first collective agreement and without advising the union. The Board’s comments on an employer’s obligation to provide information to a union during bargaining are found page 273 of Sunnycrest Nursing Homes Limited, where the Board wrote:

…an employer is under an obligation, on its own initiative, to reveal those decisions which will significantly impact its employees so that their union can respond to them at the only time when bargaining is legally required. In the Board’s view, the union should not be “kept in the dark” on matters of fundamental importance to the employees it represents. In the Board’s opinion, it would be tantamount to a misrepresentation and not conducive to orderly industrial relations if a union were induced to enter into an irrevocable agreement for a fixed term without being advised of matters which could fundamentally alter the content of that bargain.

The Board later at page 274 comments on the discussion element of the duty to bargain in good faith in the following way:

The duty to bargain is not an obligation to agree. It is a requirement to engage in a full and frank discussion with the employees’ representative, and make a bona fide effort to explore alternatives, if any, that may achieve a mutually satisfactory accommodation of the interests of both the employer and his employees. If such efforts fail, the employer remains free (absent other unfair labour practice considerations based on anti-union animus) to go forward with his decision. But experience has shown that candid discussion about mutual problems by labour and management frequently result in their resolution with attendant benefit to both sides. A union confronted by a proposed loss of jobs can often make a useful contribution to the decision-making process.

Counsel for the applicant therefore argued that the responding party’s failure to disclose that the OTS facility would continue at Railside Drive was a failure on the part of the responding party to engage in the kind of “full and frank discussions” required by the Act. The responding party’s failure to make that disclosure deprived the applicant of the opportunity to either bargain over that work or at the very least, assert a claim over that work. That loss of opportunity would give rise to a remedial response that could be fashioned to meet the existing circumstances as was done by the Board in Consolidated Bathurst Packaging Ltd., [1984] OLRB Rep. March 422.

21. Counsel for the responding party took no issue with the legal principles cited by counsel for the applicant. Indeed, counsel for the responding party submitted that it was precisely because the responding party was aware of its obligation under section 17 of the Act to disclose information that the parties engaged in the negotiation of the closure agreement. He submitted that accepting the applicant’s argument would set an unreasonable standard for parties engaged in collective bargaining to meet. Counsel for the responding party suggested that the applicant would have the responding party assume that the applicant had no knowledge whatsoever about the responding party’s business or organization even though they had had a mature collective bargaining relationship spanning some 20 years. He submitted that the applicant had made assumptions based on what had been said, did not advise the responding party what assumptions it was relying on in their bargaining session on April 30^th and then when those assumptions later turned out to be incorrect, sought to lay the blame for its errors on the responding party. Counsel submitted that the applicant’s position in this case is that the responding party was obliged as a matter of law to have inquired about what facts or assumptions the applicant was relying on to negotiate the closure agreement and then advise the applicant that some of its assumptions were incorrect. He submitted that there was nothing that precluded the applicant from asking for clarification of what the responding party was planning for its Railside Drive location. Counsel for the responding party argued that if the applicant’s position were to be accepted, the Board would be imposing impractical and unrealistic collective bargaining obligations on both employers and trade unions.

22. Counsel for the responding party pointed out that experienced and sophisticated professionals who had conducted collective bargaining many times represented the two parties in the April 1998 negotiations. He submitted that the responding party outlined what was going to happen with the National Parts Department warehouse and, more importantly, advised the applicant’s bargaining team that the parts needed in Canada would be sent from the United States to the Canadian Regional Service Centres. Counsel for the responding party pointed to both paragraph 15 of the Award and to the following statement to which the applicant did not take issue in the response:

Dick Foster asked if the national parts department was going to be sent to Hobart NDC. Paul Stethem said that parts would not be shipped to NDC and that the Ontario parts department would continue to operate out of the Head Office location. Paul Stethem said that, in the future, parts for national distribution would be sent directly by overnight courier from Ohio to Hobart branch offices or to service technician’s houses. Paul Stethem said that Hobart would no longer be warehousing and shipping parts for national distribution throughout Canada.

The relevant portion of paragraph 15 of the Award to which the parties had agreed stated:

The Company explained to the Union that the National Parts Department and warehouse were to be closed. The regional offices with their own parts departments were to receive parts directly from Ohio, eliminating the need for the national parts warehouse.

Counsel goes on to argue that there was no suggestion by the applicant that it had been told that the OTS facility would also be leaving Railside Drive. Indeed, counsel argued that the actions of the applicant in the summer and fall of 1998 made it clear that the applicant knew about the ongoing work being done in the OTS. Counsel argued that the applicant knew or, more accurately, ought to have known, that warehousing type work was and would be going on at the OTS by reason of its knowledge and experience with the responding party. Counsel submitted that the representations made about the closing of the National Parts Department warehouse and about the parts being shipped back to the United States cannot be divorced from the comments that parts would be shipped to Canada after the transition to each of the Regional Service Centres. The largest Regional Service Centre in Canada was the OTS at Railside Drive but, counsel argued, the applicant made an assumption about parts work at the OTS because it did not ask the responding party any questions about the OTS during their negotiation of the closure agreement.

23. Counsel submitted that the applicant knew or at least recognized that the responding party would take the position that the OTS work was not within the scope of the Railside Collective Agreement bargaining unit if it had sought to have its members assigned to that work after the transition and closing of the National Parts Department warehouse. He argued that the employees themselves were content to take the enhanced severance package and give up their employment. He submitted that that the applicant did not raise the issue about the OTS in bargaining because it would have required the applicant to trade the certainty of an enhanced severance package for the uncertainty and delay associated with litigation over the issue of the scope of the bargaining unit. He pointed out that it is wrong to assess what had taken place in April 1998 with the benefit of hindsight. Rather, he said that the suggestion that the applicant had been misled was raised for the first time in Mr. Foster’s letter to Mr. Stethem in December 1998 which was well after Mr. Foster knew that the OTS was functioning and that parts were being distributed by OTS employees not in the bargaining unit throughout the fall of 1998.

24. Counsel submitted that there was not really a clear picture facing either party in April 1998. The applicant’s claim to the OTS work was at best uncertain and as far as the responding party knew, it gave the applicant all of the information it had about the closing of the National Parts Department warehouse. Counsel pointed out that it was the closing of that department that was the parties’ focus at the time of bargaining. The applicant had the same information as the responding party about what work was leaving and what work was staying. Counsel further submitted that the delay in bringing this application forward must, at the very least, raise considerable doubt about the legitimacy of the applicant’s claim. Counsel referred to University of Windsor, [1988] OLRB Rep. Nov. 1351 and The Journal Publishing Company of Ottawa Limited, [1977] OLRB Rep. Nov. 748.

25. In reply, counsel for the applicant asked rhetorically, should the applicant have known that parts would be shipped to Railside Drive after the closure of the National Parts Department warehouse? He answers no because the applicant was told that the parts warehouse was closing. When the applicant asked whether parts would be shipped to the National Distribution Centre, the applicant was told no, the parts would be going to the Regional Centres. As far as the applicant knew, the OTS facility at Railside Drive involved the service counter work only as the Railside Collective Agreement bargaining unit employees had been doing the stocking, picking, packing and shipping after the OTS had moved to Railside Drive from Richmond Hill. When the applicant was told that the Regional Service Centres were going to be receiving parts, it was plausible for the applicant to have assumed that such work would only involve the service counter and no warehouse work. He argued that the responding party had undergone significant closures and this closure affected the warehouse at Railside Drive. Again, he asked rhetorically, why would the union think about the OTS involving warehouse work in the face of the announcement of the closure of the warehouse there? He argued that the responding party had failed to bring the warehouse aspect of the OTS to the attention of the applicant during the negotiations over the closure and that such failure amounted to a misrepresentation that was contrary to section 17 of the Act.

Decision

26. The responding party told the applicant, on April 30, 1998 that it was closing its National Parts Department warehouse and that all parts required in Canada would be shipped from the United States to the Regional Service Centres in Canada or directly to technicians or customers. Those statements were true. As the parties agreed, the applicant understood from the responding party’s representations that there would no longer be any warehouse work taking place at Railside Drive. In fact, some “warehouse-type” work continued uninterrupted at Railside Drive from April 30, 1998 up to the date of the filing of this application in July 1999 and thereafter. That warehouse work after April 30, 1998 initially involved shipping parts from the National Parts Department warehouse back to the United States and to the various Regional Service Centres until such time as those Service Centres began receiving parts from the United States, as well as filling the orders required by the OTS, up to the end of September 1998. Beginning October, 1998, the warehouse type work going on at Railside Drive related exclusively to stocking, picking, packing and shipping parts for the customers (and technicians) serviced by the OTS. The question that this application raises is who, between the applicant and the responding party, was responsible for specifically raising the issue of the warehouse type work that would be going on at Railside Drive after the closure of the National Parts Department warehouse? The applicant submits that the responding party, by not drawing that to the applicant’s attention, had withheld important information and thereby misled the applicant into entering into the closure agreement. The responding party submits that it was both forthcoming and truthful with the information it provided but cannot be responsible if the applicant chose to ignore the context in which the information was provided or made assumptions about what the responding party was doing without first asking for clarification.

27. It is not for the Board to second-guess the choices the parties make in negotiations when they decide what they will raise and not raise at the bargaining table so long as they do not refuse to disclose or remain silent with respect material facts that will significantly affect the bargaining. In this regard the comments made by the Board in Westinghouse Canada Limited, [1980] OLRB Rep. April 577 remain applicable today. There the Board wrote at paragraph 39:

Having regard to the…requirement for full and open discussion, the scope of matters open to bargaining and the statutory framework which binds the parties to the terms of their agreement for its full term, can there be any doubt that the section 14 [now 17] duty requires an employer to respond honestly when asked in bargaining if he is contemplating initiatives of the type which have a real likelihood of significantly impacting on the bargaining unit. Similarly, can there be any doubt that an employer is under a section 14 obligation to reveal to the union on his own initiative those decisions already made which may have a major impact on the bargaining unit. Without this information a trade union is effectively put in the dark. The union cannot realistically assess its priorities or formulate a meaningful bargaining response to matters of fundamental importance to the employees it represents. Failure to inform in these circumstances may properly be characterized as an attempt to secure agreement of the trade union for a fixed term on the basis of a misrepresentation in respect of matters which could fundamentally alter the content of the bargain.

But as the Board was careful to point out in that case, there is an obligation on a trade union to ask for information from the employer where an employer has not made a “de facto” decision of the magnitude that must be disclosed without being prompted by a question from the union. The Board at paragraph 41 of Westinghouse Canada Ltd. also wrote:

For one reason or another, plans are often discarded in the conceptual stage or are later abandoned because of changing environment factors. The company’s initiation of an open-ended discussion of such imprecise matters at the bargaining table could have serious industrial relations consequences. The employer would be required to decide in every bargaining situation at what point in his planning process he must make an announcement to the trade union in order to comply with section 14 [now 17]. Because the announcement would be employer initiated and because plans are often not transformed into decisions, the possibility of the union viewing the employer’s announcement as a threat (with attendant litigation) would be created. If not seen as a threat the possibility of employee overreaction to a company initiated announcement would exist. A company initiated announcement, as distinct from a company response to a union inquiry may carry with it an unjustified perception of certainty. The collective bargaining process thrusts the parties into a delicate and often difficult interface. Given the requirement upon the company to respond honestly at the bargaining table to union inquiries with respect to company plans which may have a significant impact on the bargaining unit, the effect of requiring the employer to initiate discussion on matters which are not yet decided within his organization would be of marginal benefit to the trade union and could serve to distort the bargaining process and create the potential for additional litigation between the parties. The section 14 duty, therefore, does not require an employer to reveal on his own initiative plans which have not become at least de facto decisions.

Clearly the responding party’s disclosure of the decision to close the National Parts Department warehouse was precisely the kind of disclosure contemplated by the Westinghouse Canada Ltd. decision. Was the responding party, in addition to making that disclosure, obliged to initiate a discussion about all the possible consequences that might flow from that decision? Or, to put it another way, to what extent was the responding party required to point out to the applicant the possibility that there might be more warehouse type work going on at Railside Drive coming within the scope of the Railside Collective Agreement bargaining unit? In my view, in order to assess the responding party’s alleged omission, it is necessary to look at the entire context in which the disclosure and the bargaining took place.

28. The applicant and the responding party had engaged in collective in bargaining with one another over the course of some 20 years. The parties were discussing the ramifications of the closure of the National Parts Department warehouse. The responding party had viewed the work done by the OTS employees, rightly or wrongly, as being excluded from the Railside Collective Agreement bargaining unit since the arrival of the OTS at Railside Drive The responding party indicated to the applicant that the once the transition from a Canadian based parts warehouse distributing parts to the Regional Service Centres in Canada to an American facility distributing parts directly to those Canadian Regional Service Centres was completed, the National Parts Department warehouse would close. That was accurate.

29. It is important, in my view, to understand that the parties during their April 30^th bargaining meeting were focussed on the closure of the National Parts Department warehouse. The responding party was addressing itself to the issues arising from the closure. The warehousing element of the OTS, which it viewed as being outside of the applicant’s purview, was not a part of those discussions. What was a part of those discussions though was the advice that parts would be coming from the United States to all of the Regional Service Centres.

30. One of the Canadian Regional Service Centres was the OTS. In my view, the applicant knew or should have known that the OTS facility was operating and would continue to operate at the Railside Drive location after the closure of the National Parts Department warehouse. The applicant was aware of the existence of the OTS facility at Railside Drive since the bargaining unit warehouse employees provided parts to it from the time it had moved to Railside Drive from Richmond Hill. The responding party did not advise the applicant that the OTS would close or move.

31. The responding party did say in response to a question from the applicant that parts would not be sent from the United States to the National Distribution Centre and that too was accurate. It said nothing about the OTS, which was, in my opinion, certainly understandable since the OTS employees (other than the technicians) were never a matter of interest for the applicant, at least up to the fall of 1998 and well after the closure agreement had been settled. That view is reinforced by the comments Mr. Foster had made to Mr. Stethem, referred to in paragraph 19 of the Award:

Mr. Stethem testified that Mr. Foster had asked about the warehouse work many times over the summer and fall of 1998. They were also negotiating over the description of the bargaining unit in the Service Collective Agreement since the Richmond Hill office (which was specifically referred to in the bargaining unit description) had closed. Mr. Stethem testified that in August 1998, to alleviate the Company’s concern that the Union (or Lodge 78) was seeking to sweep in the OTS employees with the change to the bargaining unit description Mr. Foster was proposing, Mr. Foster said to Mr. Stethem: “I’m not trying to grab those parts guys, you know, the area near Sam’s office.” Mr. Stethem testified that the reference to “Sam’s office” was the area in which the OTS was being set up and where the OTS employees were working. Mr. Stethem also testified that Mr. Foster at that time also joked that if he got 50% of those guys to sign cards, it would be a different story.

It seems to me that the burden was on the applicant to make inquiries about what how the OTS was going to deal with the parts it received since it was the applicant who asserted that the work of dealing with those parts came within the scope of the Railside Collective Agreement bargaining unit. The responding party saw that work at that time as having nothing to do with the applicant so understandably did not raise with the applicant the fact that there would be warehouse type work being undertaken by the OTS employees.

32. More importantly, it was by no means clear that the work performed by the OTS employees between October 1998 and July 1999 was work coming within the scope of the Railside Collective Agreement bargaining unit. The reorganization of that work was undertaken after a new OTS parts manager was appointed in May 1999. The responding party had not decided (or even planned) to have the work of the OTS divided into clerical and counter work on the one hand and warehouse type work on the other prior to June 1999. Therefore, there was no obligation on it to initiate a discussion about the OTS division of work at the time of the closure agreement. (See Westinghouse Canada Ltd., supra.) It was the Award issued in November 2000 that determined two of the employees working in the OTS came within the Railside Collective Agreement bargaining unit.

33. The applicant secured a closure agreement with an enhanced severance and termination package for six of the seven bargaining unit employees it represented when the National Parts Department warehouse was closed. The applicant’s focus was on securing the best arrangement it could get for its members who were going to lose their jobs. It is by no means certain that even if the responding party had specifically pointed out that the OTS would continue to operate in the Railside Drive premises anything would have been different. Indeed, the applicant might well have recognized the possibility (as I have some serious doubt that the existence of the OTS would never have crossed the minds of any of the members of the applicant’s bargaining team, given their experience with the responding party) that at some point some of the OTS work might arguably come within the scope of the Railside Collective Agreement bargaining unit. It is just as likely that the applicant did not raise that possibility with the responding party during their bargaining as it might well have affected the responding party’s position on the closure agreement. That is, the responding party may have been reluctant to agree to an enhanced severance and termination arrangement if there were going to be litigation over whether bargaining unit work would continue. It could simply have relied on its rights under the expired Railside Collective Agreement and the Employment Standards Act to give the affected employees their statutory notice and at some future time, severance pay when those employees waived their right to recall under that collective agreement.

34. I am satisfied that the applicant was not misled by the responding party during the negotiations of April 30, 1998 that led to the closure agreement. The responding party provided the applicant with all of the necessary information it needed to make an informed decision about its bargaining position. In my view, given the context in which the bargaining took place, the applicant might have chosen not to probe into the representations the responding party was making because it may not have wanted to risk jeopardizing the deal it sought to achieve for the employees it represented. Had the applicant asked, the answer it would have received might well have made the agreement it did reach more difficult, if not impossible to secure. The responding party satisfied its obligations under section 17 of the Act. It did not mislead the applicant. The applicant’s understanding of what was going to take place was based on an assumption that turned out to be mistaken. The responding party is not responsible for that mistaken assumption as it could have been easily corrected had the applicant chosen to seek clarification or more information. The fact that the applicant did not to do so does not give rise to a violation of the Act by the responding party.

35. This application is dismissed.

“Harry Freedman”

for the Board