1960-00-U Kevin Carter, Applicant v. Service Employees International Union, Local 220, and London Health Sciences Centre, Responding Party.

BEFORE: Anthony Brown, Vice-Chair.

APPEARANCES: John Watson for the applicant; Denis Ellikson for Service Employees International Union, Local 220; Patrick Gannon and Clive Girvan for London Health Sciences Centre.

DECISION OF THE BOARD; May 11, 2001

1This is an application pursuant to section 96 of the Labour Relations Act, 1995 (the "Act") alleging violation of section 74.

2In June, 1997, the Victoria Hospital (now part of London Health Sciences Centre in London, Ontario) entered into a contract with Canadian Waste Services Energy Technologies Ltd. (“CWS”) to operate its “Energy From Waste” (“EFW”) plant. As a result, the applicant and other employees at the plant became employees of CWS and SEIU Local 220 remained as their bargaining agent under the sale of business provisions in the Act. Article 12.9(g) of the contract between the hospital and CWS provided that in the event of its termination, the hospital would offer employment to all union members employed at the plant.

3In September, 1999, the hospital and CWS agreed to terminate the contract and the hospital resumed control of the plant. CWS laid off the majority of its plant workers effective October 31, 1999. The hospital also determined that it did not want to continue operating the waste incineration part of the plant but would continue to operate the turbine power plant. The hospital advised Local 220 that it would re-employ six stationary engineers.

4On October 13, 1999, the plant workers occupied the EFW plant. Meetings took place among SEIU Local 220, CWS and the hospital to discuss the matter and on October 14, 1999, a memorandum of settlement was agreed to by those parties, which was subsequently approved by a majority of the affected employees. The settlement provided as follows:

Minutes of Settlement between:

The Service Employees International Union (S.E.I.U.) Local 220

And

Canadian Waste Services Inc.

And

London Health Sciences Centre

SEIU 220 is the bargaining agent for all employees at the Canadian Waste Services Inc. – Energy from Waste Plant (“E.F.W.”) and for the LHSC – Victoria Campus Bargaining Units and LHSC – University Campus Bargaining Units; and

Whereas “EFW” will no longer operate its facility effective October 31, 1999; and

Whereas lay-off notices have been given on or around September 24, 1999 to all bargaining unit employees at “EFW”; and

Whereas Local 220, “EFW:, and LHSC wish to minimize any adverse effects on the bargaining unit employees resulting from the layoffs; and

Whereas it is the intention of the parties to have layoff as a last resort. Therefore the parties agree and acknowledge as follows:

LHSC upon assuming responsibility for “EFW” will continue to employ the six most senior Licensed 2^nd class Engineers (current working in this capacity) with full recognition of service and seniority as within the current “EFW” collective agreement.

Laid off “EFW” employees can accept the severance package contained in the “EFW” collective agreement or fill a vacancy created by a LHSC employee accepting an appendix “A”: severance package with full recognition of service and seniority as within the current “EFW” collective agreement or bump into the LHSC bargaining unit with full recognition of service and seniority as within the current “EFW” collective agreement.

It is understood that appendix “A” severance packages will be offered to LHSC employees to the extent that they are funded from severance pay not taken by “EFW” employees.

Employees of “EFW” with less than two years service who accept the lay off will remain employed until October 31, 1999 at which point they will receive $2,000.00 severance pay, with such monies to be paid as instructed by SEIU Local 220.

No grievances will be filed as a result of the implementation of this agreement. There will be no reprisals what so ever for any job actions taken on or around October 13 and 14, 1999 by employees of “EFW”/LHSC.

SEIU Local 220 and LHSC and “EFW”, agree to meet weekly to monitor the operation of this agreement.

Agreement on a dispute resolutions mechanism in the event that the parties disagree with the implementation of the agreement.

5On October 14, 1999, the hospital posted an announcement describing the settlement and summarizing the terms as follows:

• Six LHSC second class engineers will be required to operate the gas turbine operations at the plant. These positions will be filled by the transfer of six Canadian Waste employees.

• Under the terms of the settlement, money to be used by Canadian Waste for severances can now by [sic] used by LHSC to create new employment opportunities for those affected by the closure of the plant. Such new vacancies created, and other vacancies, may be offered to qualified Canadian Waste employees.

• Canadian Waste employees who choose not to become employees of LHSC will continue to be entitled to notice and severance packages as per their collective agreement.

• Any employees remaining following the above incentives, and who have chosen to pursue re-employment opportunities with LHSC, will have the right to bump a Local 220 SEIU employee with less seniority at any of LHSC’s three sites.)

6On October 20, 1999, the responding party issued a letter to the hospital and CWS clarifying the intent of the settlement. The letter stated in part:

1. the six most senior 2^nd class engineers from Canada Waste (based on members who are currently working as 2^nd class engineers at EFW) shall be given the six remaining positions at EFW

2. Employees with les than 2 years seniority will be paid $2000 and will sever employment.

3. Voluntary exit packages will be offered across London Health Sciences Centre and Canada Waste

4. Members from Canada Waste who have not received a position at EFW, or have not elected to voluntarily exit will be offered vacancies created by members at London Health Sciences Centre in order of seniority. Displaced members from EFW must take vacancies offered before exercising any bump options.

5. Any bumping that takes place will be in accordance with the receiving Collective Agreement.

7The hospital replied to the union on October 29, 1999 and the union confirmed its understanding of the settlement by letter dated November 1, 1999. The applicant was not entitled to one of the six protected engineering positions but he was offered the choice between severance benefits or a position that was created through attrition at the hospital, i.e. by a hospital employee accepting a severance package. However, the resultant vacancy was at a lower classification than the applicant’s former position at CWS and he accepted severance instead.

8The applicant interprets the memorandum of settlement as giving him the right to bump into the hospital bargaining unit and displace an existing employee on the basis of seniority. He asserts that the union effectively changed the interpretation of the settlement after it was approved by employees, and thereby showed bad faith by misleading its members. He also asserts that the union should have grieved on his behalf to permit him to bump into the hospital unit, and was thereby guilty of conduct that was uncaring and capricious.

9The union responds that its correspondence after October 14, 1999 merely clarified what the parties understood by their settlement. That settlement was concluded on an urgent basis after hours of tense negotiations. In particular, the union’s letter clarified that employees such as the applicant were to choose between severance or a vacancy created at the hospital through attrition. It states that Option 3 (bumping into a junior position) did not apply to the applicant because he was one of four employees having special rights under Option 2 (attrition vacancy). In any event, the union denies that Option 2 or 3 of the settlement afforded the applicant the opportunity to bump an existing employee out of a job on the basis of seniority.

10The union states that it represented the hospital workers as well as the laid-off CWS workers, and the union could not reasonably have agreed that its hospital members would lose jobs to the CWS workers. The CWS employees had no right to work under any collective agreement. Why, then, would they be permitted to bump hospital employees who were in a separate unit at a different employer?

11The union states that as a result of the settlement, the applicant, who had been laid off, now at least had the offer of a position. Once in the hospital bargaining unit, his right to bump within the unit would be governed by the collective agreement between the intervenor and Local 220. The union also asserts, and there is no real dispute, that the hospital’s contract with CWS in 1997 (in which it indicated it would rehire employees from CWS) was not enforceable by the union, which was not a party to the contract, and is therefore immaterial to this section 74 application. The union also responds that it could not have grieved on the applicant’s behalf because there was no collective agreement under which it could file a grievance and, furthermore, the settlement expressly prohibited grievances.

12The union asserts that the applicant is upset with his decision to accept severance and wishes to renege, some months later, on his choice. The union submits that it did not violate section 74 and, secondly that this application should be dismissed on the ground of undue delay.

Decision

13The issue before the Board is whether the union violated section 74 of the Act. (Because the Board is satisfied that no such violation has been proved, it is not necessary to determine the “delay” issue.)

14Section 74 states:

74. A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union or of any constituent union of the council of trade unions, as the case may be.

15In Savage Shoes Ltd., [1983] OLRB Rep. Dec. 2067, the Board described a union’s duty under section 74 [then section 68] in this way:

36. Section 68 requires that each trade union decision be grounded on a consideration of relevant matters, free from the influence of irrelevant considerations. The requirement that a trade union not act in a manner which is in bad faith protects the legitimate expectation that an individual employee’s bargaining agent will act honestly and free of any personal animosity toward him. The requirement that a trade union not act in a discriminatory manner protects against the making of distinctions between employees and groups of employees on bases which have no relevance to legitimate collective bargaining concerns. “Bad faith” and “discriminatory”, therefore, test for the presence, in the process or results of union decision-making, of factors which should not be present. “Arbitrary”, on the other hand, describes the absence in decision-making of those things which should be present. A decision will be arbitrary if it is not the result of a process of reasoning applied to relevant considerations. The duty not to act arbitrarily requires a trade union to turn its mind to the matter at hand.

16There is insufficient evidence that the union misled its members as to the terms of the settlement or changed the terms after the members approved them. The parties made the deal after hours of tense negotiations and it is not surprising that they needed to clarify it in the “cold light of day”. In particular, the parties clarified the order in which the options were to be exercised. This interpretation is not at odds with the memorandum of settlement, and, even if it were incorrect, there is no evidence that it was motivated by bad faith or capriciousness on the part of the union. In my view, the union had the right, as the bargaining agent, to clarify how the agreement would operate without going back to the affected employees for further ratification. Whether or not it should have taken this step, there is no evidence that its failure to do so was arbitrary, discriminatory or in bad faith. The protest occupation enabled the union to negotiate some protection for the CWS employees. But, at the same time, Local 220 had responsibilities to the members of its bargaining unit at the hospital.

17The applicant’s interpretation of the settlement is, by comparison, less tenable, as it is unlikely that the parties would have agreed that CWS workers could use their seniority to displace workers in the hospital unit.

18The union’s refusal to grieve is understandable. There was no collective agreement that gave the applicant any right to a position with the hospital. Secondly, no grievance could be filed under the settlement – that was a term under which the parties signed it.

19Accordingly, the Board finds that the union did not act in manner that was arbitrary, discriminatory or in bad faith and therefore did not violate section 74. Having stated the foregoing, the Board can understand the applicant’s expectation of being rehired by the hospital. He was caught in the hospital’s decision to contract with CWS and then by CWS’s decision to terminate the contract. I offer no opinion on whether the applicant’s expectation was valid or even reasonable but it existed nevertheless, and I suspect that it lies at the heart of this complaint. Nevertheless, the union had no means of enforcing the contract, not being a party.

20For the foregoing reasons, the application is dismissed.

“Anthony Brown”

for the Board