Supreme Court of Canada

Canadian Union of Public Employees v. Labour Relations Board (N.S.) et al., [1983] 2 S.C.R. 311

Date: 1983-10-13

The Canadian Union of Public Employees Appellant;

and

The Labour Relations Board (Nova Scotia) and The Digby Municipal School Board Respondents;

and

The Nova Scotia Federation of Labour Intervener.

File No.: 17256.

1983: May 4 and 5; 1983: October 13.

Present: Laskin C.J. and Dickson, McIntyre, Chouinard and Wilson JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR NOVA SCOTIA

Labour law—Jurisdiction—Nova Scotia Labour Relations Board—Remedial powers—Employer in breach of statutory duty to make reasonable effort to conclude collective agreement—Whether or not remedial action ordered by Board within Board’s jurisdiction—Trade Union Act, 1972 (N.S.), c. 19, ss. 33, 34.

A long-standing and bitter labour dispute was referred to the Nova Scotia Labour Relations Board following a complaint that respondent School Board had failed to make every reasonable effort to conclude and sign a collective agreement as required by ss. 33 and 34 of the Trade Union Act. The Board held that the School Board had failed to bargain in good faith and ordered that the parties submit proposals and responses by specified dates, and set minimum requirements as to the content of the proposals and responses. When agreement was not reached, the Board submitted a stated case for the Nova Scotia Court of Appeal seeking its opinion on the Board’s jurisdiction to take remedial action. The broad issue here was the scope of the Board’s power under ss. 33 and 34 of the Act.

Held: The appeal should be dismissed.

Per Laskin C.J. and McIntyre and Chouinard JJ.: Sections 33(a) and 34(2) did not empower the Labour Board to require the employer to make the specified collective agreement proposals. The power to secure

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compliance with the duty to bargain in good faith could not be converted into one respecting reinstatement, restitution or compensation and legal costs. Section 33(a) merely obliged the bargaining parties to meet and bargain and to make every reasonable attempt to sign a collective agreement. Section 34(2) was limited to enforcing the obligations imposed on the parties under s. 33. The words “in the opinion of the Board” did not avoid this limitation, for the Board was only entitled to form such an opinion with respect to what was necessary for compliance with s. 33.

The Board had jurisdiction to order a complete proposal to be submitted and responded to, but could not stipulate that the proposal include a wage schedule with progressive increases or the modified Union security provisions. Both parties agreed that the employer would not contract out bus driving and that the Union would not strike or withdraw its services.

Per Dickson and Wilson JJ.: The Board was squarely within its power in holding that specific proposals were the reason for finding breach of duty to bargain in good faith under s. 33. The genuine intention to bargain and to reach agreement underlay this duty. Hard, tough bargaining could meet this criterion, unlike surface bargaining where the party pretended to bargain but in reality was intent on destroying the collective bargaining process. The Board, even though s. 33 did not impose a duty to reach a settlement, let alone a fair one, could make orders relating to the content of proposals necessary to “secure compliance”—a consequence flowing from the premise that the content of a proposal could form the basis of a finding of a breach of the duty to bargain in good faith. Such an order, made under s. 34(2), could take a positive form if it were the minimum required for this compliance with this duty.

Several of the Board’s orders were valid in that they fell within the power to secure compliance given in s. 33(a). The Board’s order that the School Board give an undertaking not to contract out was reasonably necessary to achieve an agreement having regard to the fact that the School Board had previously contracted out positions to get rid of the Union and that similar action in future would be tainted by this fact. This order did not affect the Union’s obligations. The order continuing

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the Union security clauses was the minimum required to demonstrate that the School Board was not trying to get rid of the Union, for those clauses underlay the viability of the Union itself. The Board, too, could order the reinstatement of workers. Since the replacement drivers had been hired to avoid a collective agreement, reinstatement would remove the very basis of this breach of good faith, and so secure compliance. The order that the Union respond to the School Board’s proposals within a set time frame was also valid in that s. 34(2) applied to “any party”, and it was natural to impose such limits on the negotiating parties.

The Court was not given adequate information in the stated case to declare several orders valid. The Board’s wage order could have been either a genuine effort to secure compliance or an attempt to impose an appropriate settlement. The order that the contract be renewed, even though it could in some circumstances be seen as within the power to secure compliance, was not supported with enough details to allow the Court to do other than speculate. Although the orders against the Union concerned the substance of negotiations and could conceivably have fallen under s. 34(2), they must be considered invalid in the absence of adequate details and in view of the fact that the Board made no finding of failure, on the Union’s part, to negotiate in good faith.

The Board did not have the power to order compensation or costs for a breach of s. 33(a). Section 34(2) allowed compensation only for a breach of s. 33(b); this was an additional remedy and not simply another element of securing compliance.

Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 30 O.R. (2d) 29, 80 C.L.L.C. ¶14,017, considered; Canadian Union of Public Employees v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227; Ontario Public Service Employees Union v. Cybermedix Ltd., [1981] O.L.R.B. Rep. 13; Graphic Arts International Union and Toronto Star Newspapers Ltd., [1979] 3 Can LRBR 306; Retail, Wholesale and Department Store Union and Morris Rod Weeder Co. Ltd., [1978] 2 Can LRBR 49; United

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Brotherhood of Carpenters and Joiners of America and Carpenters Employer Bargaining Agency, [1978] 2 Can LRBR 501; Board of School Trustees (Vancouver) and Canadian Union of Public Employees, [1977] 2 Can LRBR 201; Cyprus Anvil Mining Corporation and United Steelworkers of America, [1976] 2 Can LRBR 360; United Steelworkers of America and Radio Shack, [1980] 1 Can LRBR 99; Fotomat Canada Limited and United Steelworkers of America, [1981] 1 Can LRBR 381; Graphic Arts International Union v. Graphic Centre (Ontario) Inc., [1976] O.L.R.B. Rep. 221; Kamloops News Inc. and International Typographical Union, [1981] 2 Can LRBR 356; Wilson Automotive (Belleville) Ltd. and Retail Clerks International Union, [1981] 1 Can LRBR 318; Labourers International Union and Municipality of Casimir, Jennings and Appleby, [1978] 2 Can LRBR 284; United Electrical, Radio & Machine Workers of America and Westing-house Canada Limited, [1980] 2 Can LRBR 469, affirmed (1980), 80 C.L.L.C. ¶14,062, referred to.

APPEAL from a judgment of the Nova Scotia Court of Appeal (1982), 135 D.L.R. (3d) 582, 52 N.S.R. (2d) 181, 106 A.P.R. 181, amending an order made by the Labour Relations Board (Nova Scotia) and submitted by way of stated case. Appeal dismissed.

B.A. Crane, Q.C., and TV. Blaise MacDonald, for the appellant.

C. Peter McLellan and Brian Johnson, for the respondent Digby Municipal School Board.

Raymond Larkin and G.J. McConnell, for the intervener Nova Scotia Federation of Labour.

The judgment of Laskin C.J. and McIntyre and Chouinard JJ. was delivered by

THE CHIEF JUSTICE—Invoking s. 18(2) of the Trade Union Act, 1972 (N.S.), c. 19, the provincial Labour Relations Board stated a case for the Nova Scotia Court of Appeal, seeking its opinion on certain questions posed by the Board as a result of a complaint and ensuing proceedings arising from a dispute between the appellant Union and the respondent Digby Municipal School Board. The complaint, brought by the Union, was that the respondent employer had failed to make every

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reasonable effort to conclude and sign a collective agreement as required by s. 33 of the Act.

The parties had had collective bargaining relations under an agreement which expired on December 31, 1978 but when no renewal agreement was made the Union went on strike. The employer responded by contracting out the services of the striking employees. The first complaint of the Union, made on September 24, 1979, resulted in a decision by the Labour Board that the respondent had committed an unfair labour practice and the respondent was ordered to cease and desist from the practice. Thereafter, efforts were made by the Board, the Minister of Labour and the Government of Nova Scotia to have the parties bargain collectively to reach agreement, but negotiations repeatedly broke down. The matter was referred to the Minister of Labour on February 16, 1981, the allegation then being that the respondent had breached its obligation under ss. 33 and 34 of the Act, provisions to which I will come in some detail in due course. The Minister referred the matter to the Labour Relations Board under s. 34(1).

On July 31, 1981, after some thirteen days of hearings, the Board made an order requiring both parties to do certain things as set out in Schedule A to the order. Schedule A is in the following terms:

Requirements for the Digby Municipal School Board as a party to collective bargaining with Canadian Union of Public Employees, Local 1185, which must be done to secure compliance with the Order herein:

(1) The Board must draw up and present a complete set of proposals to the Union on or before August 10, 1981;

(2) A proposal to renew the previous contract with the Union, with amendments only in the following clauses:

(a) As to Union security—the former Union members at the time of the commencement of the strike who are now contract drivers may be employed if they so desire exempted from the Union security clause;

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(b) As to Union security—new employees may be employed if they so desire exempted from the previous Union security clause for the duration of the contract but must be subject to union dues;

(3) Such proposals shall include a proposal regarding wages of not less than

(a) An increase of not less than $48.00 per month to part-time drivers retroactive to January 1, 1979;

(b) A further increase of 9.2 % effective September 1, 1980;

(d) A further increase of 5.5 % effective January 1, 1982.

(4) That the School Board will provide a letter to the Union stating that it will not contract out the driving of buses in return for a letter from the Union that it will not strike or otherwise withdraw its services. (Such letters are to apply specifically to the term of this collective agreement.)

(5) To advise the Union immediately and in any event not later than noon of Tuesday, August 11, 1981, as to its proposals.

Requirements for the Canadian Union of Public Employees, Local 1158 [sic], which must be done to secure compliance with the order herein:

(1) The Union must draw up and present a complete response to each School Board proposal on or before August 20, 1981;

(2) Any response is not to include the tying in of wages to some area formula, unless such a proposal is made by the School Board;

(3) The Union must not seek to exclude bus drivers currently under contract with the Board to fill positions left vacant after the striking drivers so desiring have been reinstated to their former positions.

The July 31st order also required the parties to return to the Board on August 31, 1981 if a new collective agreement was not reached. None was, and following the August 31, 1981 hearing the Labour Board, having made certain findings of

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fact upon the hearings and evidence, laid the issues before the Nova Scotia Court of Appeal by way of a stated case. The Board’s findings of fact were included in a schedule appended to the stated case.

There are difficulties in the formulation of the stated case and of the attached schedule because of gaps in its exposition. It became necessary for counsel for the Union and for its supporting intervener, the Nova Scotia Federation of Labour (allowed to participate in the Court of Appeal proceedings as a friend of the Court), to rely heavily on the reasons of the Labour Relations Board given in its decision on July 31, 1981, which also included Schedule A. The decision and reasons of July 31, 1981 are not mentioned in the stated case (Schedule A apart) but I feel it open to this Court to rely on those reasons since they are, at least inferentially, included in the stated case.

It is desirable that I reproduce the entire case stated by the Board. Leaving aside certain immaterial recitals, it reads as follows:

On or about the 19th of April, 1974 the Canadian Union of Public Employees, hereinafter referred to as the Union, was certified as the appropriate bargaining agent for certain employees of the Digby Regional High School Board, hereinafter referred to as the School Board.
Prior to December 31, 1978 an undated collective agreement signed by the Union and the School Board was in force for the calendar year 1978.
The Union gave notice to commence collective bargaining in writing by letter dated September 12, 1978.
The Union and the School Board entered the year 1979 without any collective agreement but they operated under the provisions of the 1978 agreement during negotiations. On August 27, 1979 at a union meeting the membership voted to go on strike and a strike commenced on September 4, 1979, the start of a school year. On September 5, 1979 the School Board agreed to contract out the busing of students.
On September 24, 1979 a complaint was made to the Labour Relations Board (Nova Scotia) alleging that the School Board had committed unfair labour practices prohibited by the Trade Union Act. By a decision dated

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November 8, 1979 the Labour Relations Board (Nova Scotia) found that the School Board had committed an unfair labour practice and the employer was ordered to cease and desist from this practice.

A complaint was received by the Minister of Labour and Manpower from the Union by letter dated February 16, 1981 alleging that the School Board had failed to make every reasonable effort to conclude and sign a collective agreement pursuant to sections 33 and 34 of the Trade Union Act. The Minister of Labour and Manpower, pursuant to section 34(1) referred the complaint to the Labour Relations Board (Nova Scotia).
The Board conducted hearings and heard evidence on March 16; April 13, 14, 15, 16, 27 and 28; May 19 and 20; June 22, 23 and 24; and July 22, 1981. The Board issued an interim order dated July 31,1981 and reserved August 31, 1981 as a date for a further hearing in the event a new collective agreement was not concluded and signed by that date.
Subsequent to the August 31, 1981 hearing, the Labour Relations Board (Nova Scotia) advised that certain questions would be referred to the Appeal Division of the Supreme Court of Nova Scotia for determination as questions of law.
The Labour Relations Board (Nova Scotia) has made certain findings of fact based upon the hearings conducted and the evidence before it and the findings are attached hereto under the signature of the Chairman and seal of the Board as Schedule “A”.
The Labour Relations Board (Nova Scotia) respectfully requests the opinion of the Appeal Division of the Supreme Court of Nova Scotia on the following questions hereinafter outlined:

(a) Whether the Labour Relations Board (Nova Scotia) has the power to make any or all of its order of July 31, 1981 which requires both parties to do certain things which were set in the order so that there would be, in the opinion of the Board, compliance with section 33 of the Trade Union Act.

(b) Whether the Labour Relations Board (Nova Scotia) has the power to order the removal of an individual from the bargaining process where it is believed that he or she obstructs reasonable efforts to conclude and sign a collective agreement.

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employees as of a date from which the Board found that there has been a decision of the employer to avoid its obligation to “make every reasonable effort to conclude and sign a collective agreement”, i.e. a breach of section 33(a) of the Trade Union Act has occurred with respect to proper collective bargaining.

(d) Whether the Labour Relations Board (Nova Scotia) has the power to require an employer to pay salary, wages or other remuneration to an employee where the Labour Relations Board (Nova Scotia) finds that he or she has suffered a financial loss because of the employer’s breach of the provisions of the Trade Union Act.

(e) Whether the Labour Relations Board (Nova Scotia) has the power to award legal costs against the School Board to:

(i) the Union

(ii) the Employees.

I should note that it is agreed that s. 10(b) of the stated case is not in issue here. The broad issue raised by the remaining questions is the scope of the Board’s power under ss. 33 and 34 of the Trade Union Act. These sections have their origin in the Trade Union Act, 1947 (N.S.), c. 3, ss. 14 and 43(2), and are of considerable vintage having regard to developments in labour-management relations law in other provincial and in federal legislation. As they stand, they read as follows:

33 Where notice to commence collective bargaining has been given under Section 31 or Section 32 or in accordance with a collective agreement which provides for the revision of a provision of the agreement,

(a) the certified bargaining agent and the employer, or an employers’ organization representing the employer shall, without delay, but in any case within twenty clear days after the notice was given or such further time as the parties may agree, meet and commence or cause authorized representatives on their behalf to meet and commence to bargain collectively with one another and shall make every reasonable effort to conclude and sign a collective agreement; and

(b) the employer shall not, without consent by the certified or recognized bargaining agent or by the Board, increase or decrease rates of wages or alter any other term or condition of employment of employees

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in relation to whom notice to bargain has been given until

(i) a new collective agreement has been concluded; or

(ii) the bargaining agent and the employer or representatives authorized by them in that behalf, have bargained collectively and have failed to conclude a collective agreement, and either

(iii) a conciliation officer has been appointed and has failed to bring about an agreement between the parties and fourteen days have elapsed from the date on which the report of the conciliation officer was made to the Minister; or

(iv) a conciliation board has been appointed to endeavour to bring about agreement between them and seven days have elapsed from the date on which the report of the conciliation board was received by the Minister.

34 (1) Where the Minister receives a complaint in writing from a party to collective bargaining that any other party to the collective bargaining has failed to comply with Section 33 he may refer the complaint to the Board.

(2) Where a complaint from a party to collective bargaining is referred to the Board pursuant to subsection (1), the Board shall inquire into the complaint and may dismiss the complaint or may make an order requiring any party to the collective bargaining to do the things that in the opinion of the Board are necessary to secure compliance with Section 33, and may order an employer to pay to any employee compensation not exceeding a sum which, in the opinion of the Board, is equivalent to the remuneration that would, but for a failure to comply with clause (b) of Section 33, have been paid by the employer to the employee.

Although the dispute between the parties was settled in March, 1983, prior to the hearing before this Court, it was understood that the issues raised by the Union’s complaint and by the stated case would be dealt with by this Court as they were dealt with by the Nova Scotia Court of Appeal. Before turning to consider the ambit of ss. 33(a) and 34(2), I propose to set out the reasons and conclusions of the Nova Scotia Court of Appeal, given by Hart J.A., MacKeigan C.J.N.S., Cooper and Pace JJ.A. concurring, with Jones J.A. dissenting in part.

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Central to the opinion of Hart J.A. was the view that the Labour Board’s powers must be directed towards the advancement of collective bargaining but the Board cannot direct what the collective agreement shall contain. It is convenient to set out his views in the following paragraphs, at pp. 591-93, of his reasons.

It is difficult and perhaps inappropriate for this Court to determine in advance the actual types of order coming within the powers granted to the Board under the legislation. I will therefore simply consider the actual orders made in this case and express my opinion as to their validity.

I see no objection to the first order of the Board directing the school board to draw up and present a complete set of proposals to the union on or before a certain date.

The second order to renew the previous contract with amendments to certain clauses is, in my opinion, beyond the powers of the Board. By this order the Board is determining the content of the collective agreement rather than directing the parties to bargain collectively.

The third order of the Board requiring the school board to include certain wage increases in the collective agreement is likewise, in my opinion, beyond the power of the Board.

The fourth order of the Board requiring the school board to provide a letter to the union stating that it will not contract out the driving of school buses in return for a letter from the Union that it will not strike or otherwise withdraw its services is beyond the power of the Board. The Board does not have the power to withdraw from the parties the fundamental rights granted to them under the legislation.

The first order of the Board against the union to draw up and present a complete response to each of the school board’s proposals on or before a certain date is, in my opinion, within the competence of the Board.

The second order requiring that the union not tie in its wage request to some area formula is, in my opinion, beyond the power of the Board as it affects the content of the agreement.

The third requirement of the Board that the Union must not seek to exclude bus drivers who drove under contract provided there are vacancies after the striking drivers so desiring have been reinstated is, in my opin-

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ion, directed towards the advancement of the negotiations between the parties and not towards the terms of the contract itself. It is, therefore, within the powers of the Board.

I turn now to the answers to the questions stated by the Board for the opinion of the Court.

Question (a):

Whether the Labour Relations Board (Nova Scotia) has the power to make any or all of its order of July 31, 1981 which requires both parties to do certain things which were set in the order so that there would be, in the opinion of the Board, compliance with section 33 of the Trade Union Act.

Answer: The Labour Relations Board (Nova Scotia) has the power to require the school board to do the things set forth in para. (1) of sch. “A” of its order of July 31, 1981, but does not have the power to order the things set forth in paras. (2), (3) and (4) of that order. The Board has the power to require the union to do the things set forth in (1) of its order of July 31, 1981, but does not have the power to require the things set forth in (2) of that order.

Question (b):

Whether the Labour Relations Board (Nova Scotia) has the power to order the removal of an individual from the bargaining process where it is believed that he or she obstructs reasonable efforts to conclude and sign a collective agreement.

Answer: The Board does not have power to remove an individual from the bargaining process as the parties have the right to determine who their representative shall be. The Board does, however, have the right to require an individual to cease and desist from any conduct directed to prevent the bargaining process from attaining a collective agreement.

Question (c):

Whether the Labour Relations Board (Nova Scotia) has the power to order reinstatement of the employees as of a date from which the Board found that there has been a decision of the employer to avoid its obligation to ‘make every reasonable effort to conclude and sign a collective agreement’, i.e. a breach of section 33(a) of the Trade Union Act has occurred with respect to proper collective bargaining.

Answer: The Board does not have power to order reinstatement of employees as of a date from which the Board found that there had been a decision of the

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employer to avoid its obligations to make every reasonable effort to conclude and sign a collective agreement. The employees, in the case at bar, had elected to commence a strike and there was therefore no offence against s. 33(b) of the Act during the period of negotiation.

Question (d):

Whether the Labour Relations Board (Nova Scotia) has the power to require an employer to pay salary, wages or other remuneration to an employee where the Labour Relations Board (Nova Scotia) finds that he or she has suffered a financial loss because of the employer’s breach of the provisions of the Trade Union Act.

Answer: The only right of the Board to direct compensation to employees for a breach of s. 33 of the Trade Union Act is pursuant to s. 34 and no such breach can be established here because of the fact that the employees were on strike. No other breach of the Act has been suggested in the stated case and the answer therefore relates only to a breach of s. 33.

Question (e):

Where the Labour Relations Board (Nova Scotia) has the power to award legal costs against the school board to:

(i) the Union

(ii) the Employees.

Answer: The Board does not have power to award legal costs against the school board to the union or the employees. Costs may be awarded by a legislative tribunal only to the extent that the enabling legislation so provides. I see no such authorization in the Trade Union Act of Nova Scotia.

I would therefore remit this matter to the Labour Relations Board (Nova Scotia) with appropriate answers to the questions stated for the opinion of the Court.

In his partial dissent, Jones J.A. agreed that the Labour Relations Board has no power to direct the terms of a collective agreement. However, he took a different view from the other members of the Court on various questions addressed to the Court. On question (a) of the stated case he said, at p. 620, that “While the Board cannot stipulate the terms it can require the parties to make proposals on all matters in issue. By the same token it can require the parties to withdraw a proposal where it

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finds that the proposal is unreasonable and not made in good faith”. Question (b) is a non‑issue here, and the Court as a whole agreed that there was no such power. Jones J.A. would answer questions (c) and (d) in the affirmative, and so too question (e). Thus, he supports reinstatement of employees, compensatory orders and costs.

In their respective reasons, Hart J.A. and Jones J.A. made extensive reference to the judgment of the Ontario Divisional Court in Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 30 O.R. (2d) 29, and this case was the pivot upon which the appellant Union and its supporting intervener based their submissions under ss. 33(a) and 34(2). Hart J.A. did not find the Tandy case supportive here, but Jones J.A. took a different view.

In addressing ss. 33(a) and 34(2), the appellant Union and the Nova Scotia Federation of Labour read the two provisions as providing scope for the Labour Relations Board to require the employer to make specific collective agreement proposals, almost to the point of imposing an agreement upon it. I cannot read ss. 33(a) and 34 in this way. Nor do I think that the Tandy case supports their position.

What is common to the decision of the Ontario Labour Relations Board in the Tandy case and that of the Nova Scotia Labour Relations Board in this case are findings in each case that the employer did not bargain in good faith to reach a collective agreement. Though that results in a breach of the relevant legislation in each case it does not give power to impose a collective agreement. In the Tandy case the Ontario Divisional Court was concerned with an order of the Ontario Board directing the employer to cease and desist from the bargaining position it had taken with respect to a union dues check-off clause. This order was upheld by the Court because the Board had specifically found that the employer’s position was aimed at fostering the demise of the Union and constituted

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one of the significant elements of bad faith in its bargaining conduct. In the instant case, Nova Scotia Board was not content to order the employer to cease and desist from pressing its position on a particular term. Its order required the employer to propose terms the content of which was fixed by the Board itself.

The Court in the Tandy case stated plainly that there was no statutory power to impose or direct the terms of a collective agreement. That is so here. However, it also asserted that the cease and desist order, which was within the authority of the Ontario Board, could have the indirect effect of imposing a term of the collective agreement upon the parties. I need not pursue this matter because there is no such issue in the present case, and I do not see how the appellant here and its supporting Nova Scotia Federation of Labour can convert the Ontario ruling into an analogical application of ss. 33(a) and 34 of the Nova Scotia statute.

Although the Nova Scotia Court of Appeal addressed itself mainly to the terms of the stated case, the submissions before this Court were under Schedule A. I turn therefore to the terms of the Schedule which prescribes what the Labour Relations Board exacts from the employer and the Union. There is obviously no difficulty in enforcing a requirement, the first term of the Schedule, that the employer draw up and present a complete set of proposals to the Union. This leaves it open to the parties to negotiate on them without, of course, binding the Union to their acceptance and, of course, leaving it to the employer to determine what it is prepared to agree to.

The second term, relating to Union security, is a direction to the employer to renew the previous collective agreement in this respect, subject to certain amendments set out in the Schedule. I do not find any authority in the Labour Relations Board to impose this term in a proposed agreement

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and I agree with Hart J.A. that it represented an excess of power by the Board.

Considerable argument was addressed to a requirement of the Board, under s. 3 of the Schedule, that the employer include in its proposal a certain wage schedule with progressive increases. This too is beyond the powers conferred by ss. 33(a) and 34 and cannot stand.

There is no difficulty in endorsing s. 4 of the Schedule which directs letters from the employer and from the Union respecting, from the former, a letter not to contract out the driving of buses and from the latter a letter that it will not strike or otherwise withdraw its services. Indeed, this provision was in effect agreed to by the parties and I need say nothing more about it.

The requirements from the Union under the Schedule are correlative to the proposals exacted from the employer and, again, present no difficulty.

This leaves for consideration issues of reinstatement, restitution or compensation and orders as to legal costs raised in the stated case. The attempt of the Union to convert the Board’s power to secure compliance with the duty to bargain in good faith into a power to order compensation and sanctions for a breach of this duty is not supportable even on the widest assessment of the terms of ss. 33(a) and 34. Reliance on the Tandy case involves an attempt to equate s. 34 of the Nova Scotia Act to s. 79(4) of the Ontario Act, and especially para. (c) of that provision which empowers the Ontario Board to make

(4) …

(c) an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate in lieu of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers’ organi-

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zation, trade union, council of trade unions employee or other person jointly or severally.

There is no comparable provision here for reinstatement and compensation as there was in the legislation in the Tandy case. Indeed, s. 34(2) provides for compensation only if there has been a failure to comply with s. 33(b) of the Act, relating to unauthorized alteration of wages, and there was no such issue raised in the present case. As Hart J.A. noted, the employees where on strike and there would be no breach of s. 33(b) when the strike was on foot; apart from this, it does not appear that there was an alteration of rates to support the invocation of s. 33(b).

The Union and the Nova Scotia Federation of Labour have based themselves throughout this appeal on a wide, indeed extrapolated view of s 34(2) under its assignment of power to the Labour Board to “make an order requiring any party to the collective bargaining to do the things that in the opinion of the Board are necessary to secure compliance with Section 33”. The Board’s powers under s. 34(2) are limited to enforcing the obligations imposed on the parties under s. 33 and this limitation is not avoided by the use of the words “in the opinion of the Board”. The Board is entitled to form an opinion only with respect to what is “necessary to secure compliance with Section 33.”

The direction under s. 33(a) is simply to oblige the bargaining parties to meet and bargain collectively with one another and make every reasonable attempt to conclude and sign a collective agreement. Section 33(a) is a long way from justifying the kind of orders that are being sought in this case. Since it is recognized, although the Union and especially the Nova Scotia Federation of Labour are seeking a much wider appreciation that ss. 33(a) and 34 do not permit the imposition of terms of a collective agreement by a Labour Board order, the appeal fails in its main thrust and must be dismissed with costs against the appellant Union. There will be no costs against the Nova Scotia Federation of Labour.

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The reasons of Dickson and Wilson JJ. were delivered by

DICKSON J.—The issue is the extent of the remedial authority of the Nova Scotia Labour Relations Board in relation to a “failure to bargain” complaint.

I The Facts and the History of the Proceedings

The Canadian Union of Public Employees (“the union”) has been the certified bargaining agent of school bus drivers employed by the Digby Municipal School Board (“the school board”) since April 19, 1974. In 1978 the union and the school board were parties to a collective agreement which expired on December 31, 1978. The union gave a notice to bargain on September 12, 1978.

No agreement being forthcoming, the union commenced a legal strike on September 4, 1979. The next day the school board agreed to contract out its busing. On September 24, 1979 the union made a complaint to the Nova Scotia Labour Relations Board (“the Board”) alleging unfair labour practices on the part of the school board. By decision dated November 8, 1979, the Board concluded the school board had committed an unfair labour practice by offering union members contracts if they would leave their union. The school board was ordered to cease and desist. Those proceedings are not directly in issue in the present appeal.

The proceedings that do give rise to this appeal arose considerably later. In February, 1981, the strike was still in progress and the school board was continuing to supply busing services by use of contract drivers. On February 16, 1981, the Minister of Labour referred to the Board the union’s complaint that the school board had failed to comply with the duty to bargain contained in s. 33(a) of the Trade Union Act, 1972 (N.S.), c. 19:

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33 Where notice to commence collective bargaining has been given…

(a) the certified bargaining agent and the employer… shall… meet and commence or cause authorized representatives on their behalf to meet and commence to bargain collectively with one another and shall make every reasonable effort to conclude and sign a collective agreement…

After extensive hearings the Board, in a decision dated July 31, 1981, concluded the school board had breached s. 33(a). That finding is not at issue. What is at issue is the remedial consequences, which eventually became the subject of a stated case. The factual basis on which the school board was held to have contravened s. 33(a) is essential background in determining the scope of the Board’s remedial powers. Unfortunately, the record from the Board is sparse. The following findings of fact, taken from the Board’s July 31, 1981 reasons and from additional findings of fact appended to the stated case, are of particular interest:

We specifically find that the Respondent School Board did not “make every reasonable effort to conclude and sign a collective agreement” and it is our opinion based upon their past conduct that unfettered they will not make the effort required in the opinion of the Board to fulfill the requirements of section 33 of the Trade Union Act.

We find that the School Board’s behaviour throughout the collective bargaining can be characterized as a charade of appearing to engage in proper bargaining when it had no intention of concluding any agreement. We find that the School Board in all its proposals attempted to destroy the security of the union.

We find that the purpose of the School Board in contracting out the normal work of the bus drivers was to avoid reaching a collective agreement.

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their insistance that the Union lose all rights to Union security enjoyed over the whole period that the parties have been under contracts. Nor can it consider reasonable that the School Board should require the Union to “earn” the right to any Union security in the future.

Just prior to the conclusion of the hearings it was understood that the representatives of the parties individually agreed to recommend a common proposal worked out in the presence of the Board to their respective groups for acceptance. The School Board negotiating committee materially altered this proposal in their own consideration and agreement was not accomplished.

During hearings which commenced in March, 1981, and which were adjourned on several occasions to permit negotiations between the parties, the settlement of the strike at many times appeared to be within reach. The Labour Relations Board now concludes that the School Board was deliberately using the approval of the Labour Relations Board to buy time and to continue its tactics of using contract drivers. This conclusion comes from:

(i) observing the demeanour and behaviour of the witnesses;

(ii) finding that the chairman of the School Board, Richard Daley, presented slightly different proposals to his Board than the proposals he undertook to present;

(iii) learning that the School Board advertised for the sale of nine of their buses conditional upon the purchasers contracting to provide service for nine school bus routes, such advertising occurring before an important date set by the Labour Relations Board in its order of July 31, 1981.

It seems apparent that in the Board’s view the school board’s conduct amounted to flagrant violation of the Act, necessitating an extraordinary remedy. The Board ordered the parties to do the things set out in Schedule “A”, appended to its July 31, 1981 decision (“the Schedule A orders”):

Schedule “A”

Requirements for the Digby Municipal School Board as a party to a collective bargaining with Canadian

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Union of Public Employees, Local 1185, which must be done to secure compliance with the Order herein:

(1) The Board must draw up and present a complete set of proposals to the Union on or before August 10, 1981;

(2) A proposal to renew the previous contract with the Union, with amendments only in the following clauses:

(b) As to Union security—new employees may be employed if they so desire exempted from the previous Union security clause for the duration of the contract but must be subject to union dues;

(3) Such proposals shall include a proposal regarding wages of not less than

(a) An increase of not less than $48.00 per month to part-time drivers retroactive to January 1, 1979;

(b) A further increase of 9.2 % effective September 1, 1980;

(d) A further increase of 5.5 % effective January 1, 1982.

(5) To advise the Union immediately and in any event not later than noon of Tuesday, August 11, 1981, as to its proposals.

Requirements for the Canadian Union of Public Employees, Local 1158 [sic], which must be done to secure compliance with the order herein:

(1) The Union must draw up and present a complete response to each School Board proposal on or before August 20, 1981;

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(2) Any response is not to include the tying in of wages to some area formula, unless such a proposal is made by the School Board;

The Union had sought as part of the remedy an order of compensation and an order for costs. In its July 31, 1981 decision the Board expressed some doubts that it had jurisdiction to make such orders, but reserved decision. It proposed to deal with the matter only if the Schedule A orders failed to produce an agreement. The parties were ordered to return to the Board on August 31, 1981 if no agreement had yet been reached. No agreement was reached by August 31, 1981, whereupon the Board decided to submit a stated case under s. 18(2) of the Trade Union Act:

18 …

(2) The Board may of its own motion state a case in writing for the opinion of the Appeal Division of the Supreme Court upon any question that, in the opinion of the Board, is a question of law.

The stated case contained the following:

The Labour Relations Board (Nova Scotia) respectfully requests the opinion of the Appeal Division of the Supreme Court of Nova Scotia on the following questions hereinafter outlined:

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(c) Whether the Labour Relations Board (Nova Scotia) has the power to order reinstatement of the employees as of a date from which the Board found that there has been a decision of the employer to avoid its obligation to “make every reasonable effort to conclude and sign a collective agreement”, i.e. a breach of section 33(a) of the Trade Union Act has occurred with respect to proper collective bargaining.

(e) Whether the Labour Relations Board (Nova Scotia) has the power to award legal costs against the School Board to:

(i) the Union,

(ii) the Employees.

The union and the school board made submissions before the Appeal Division, the Board did not. The Nova Scotia Federation of Labour (“the Federation”) was granted status to intervene in the Appeal Division.

Hart J.A. (MacKeigan C.J.N.S., Cooper and Pace JJ.A. concurring) wrote the majority judgment in the Appeal Division. Hart J.A. answered “no” to all of the questions except the following provisions of the Schedule A orders, which he concluded were within the Board’s powers:

(1) The Board must draw up and present a complete set of proposals to the Union on or before August 10, 1981;

(5) To advise the Union immediately and in any event not later than noon of Tuesday, August 11, 1981, as to its proposals.

Requirements for the Canadian Union of Public Employees, Local 1158 [sic], which must be done to secure compliance with the order herein:

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(1) The Union must draw up and present a complete response to each School Board proposal on or before August 20, 1981;

Jones J.A., dissenting, did not specifically answer the Schedule A questions, answered “no” to question (b), and “yes” to questions (c), (d), and (e).

The union appeals to this Court by leave. Subsequent to the granting of leave, but prior to the hearing of the appeal in this Court, the union and the school board signed a collective agreement. The settlement included the right of striking bus drivers to return to work. The settlement was based on the assumption that the union’s appeal to this Court would proceed. It was agreed, however, that if this Court decided the Board had jurisdiction to award compensation or costs, and the Board found it appropriate to make such an order, that order would only be enforced to the extent of $1,000.

In this Court the union and the school board made submissions; the Board did not; the Federation intervened.

The appellant union did not quarrel with the unanimous negative answer given by the Appeal Division to question (b)—the power of the Board to order the removal of a particular individual from the bargaining process. The matters still at issue are therefore question (a) (the Schedule A orders) and questions (c), (d), and (e), (regarding reinstatement, compensation, and costs).

II The Nature of the Review

The disposition in this case depends on the interpretation to be given to s. 34(2) of the Trade Union Act:

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The Court is not faced with a typical judicial review of a labour board decision. In the first place, s. 34(2) is not covered by s. 18(1), the Act’s privative clause. Section 18(1) gives the Board exclusive jurisdiction over a list of matters, not including a remedial order respecting a breach of s. 33(a). In the second place, this appeal is before the courts by way of a stated case. The customary judicial deference to specialized administrative tribunals, expressed in Canadian Union of Public Employees v. New Brunswick Liquor Corporation, [1979] 2 S.C.R. 227, would not seem to apply when the tribunal itself specifically seeks judicial opinion. Finally, on some of the matters included in the stated case the Board never arrived at a decision. In respect of reinstatement, compensation, and costs, therefore, there is no decision of an expert tribunal to which a court might show deference. On the other hand, there is one factor which does point to judicial restraint. Section 34(2) specifically states that orders under it depend on “the opinion of the Board”. It is not open to the courts to interfere with the Board’s exercise of its discretion.

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III The Statutory Language of Remedial Powers

In respect of a breach of s. 33(a), the relevant portion of s. 34(2) empowers the Board to:

…make an order requiring any party to the collective bargaining to do the things that in the opinion of the Board are necessary to secure compliance with Section 33… [Emphasis added.]

None of the cases on remedies referred to by the parties arises under this wording or similar wording. All of the Canadian cases arose in Ontario, in British Columbia, or in the federal sector.

In the Ontario Labour Relations Act, R.S.O. 1980, c. 228, s. 89(4), the relevant wording is that the Board “shall determine what, if anything,” the contravening party “shall do or refrain from doing with respect thereto and such determination, without limiting the generality of the foregoing may include, …(a) an order… to cease doing the act or acts complained of; (b)… to rectify the act or acts complained of; or (c)… to reinstate… with or without compensation. …” The British Columbia Labour Code, R.S.B.C. 1979, c. 212, s. 28, includes the authority to order “(a)… a person to do any thing for the purpose of complying with this Act… (b)… to rectify a contravention of this Act… (c)… make an order determining and fixing the monetary value of an injury or loss suffered… (e)… to reinstate” or to “(f) make another order or proceed in another manner… consistent with” the purposes or objects of the Act. The Canada Labour Code, R.S.C. 1970, c. L-1, s. 189, am. by 1977-78 (Can.), c. 27, s. 68(2) empowers the Board to make an order “to remedy or counteract any consequence of such failure to comply”.

In his dissenting opinion in the Appeal Division, Jones J.A. expressed the view that, in a failure to bargain situation, the Nova Scotia Board has as full remedial authority as do other labour boards, notably those in Ontario, British Columbia, and

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the Canada Board. I do not agree. In my view there are significant differences in wording between s. 34(2) of the Nova Scotia statute and the provisions in other jurisdictions. In Nova Scotia there is only the one concept—secure compliance. While I would think that the other statutes are broadly enough worded to encompass anything that falls within “secure compliance” I do not think the reverse is necessarily true. The remedial authority in the other jurisdictions is broader. Accordingly, great care must be taken when relying on cases from these other jurisdictions when interpreting s. 34(2).

That does not mean, however, that s. 34(2) need be construed as a narrow power. Section 34(2) should be contrasted with s. 55 of the Nova Scotia Act, the remedial section for unfair labour practices. Apart from specific remedies for specific breaches, s. 55 contains, as its general grant of power, the wording:

…require the party to comply with the said appropriate Section…

Section 34(2) reads in part:

…may make an order requiring any party to the collective bargaining to do the things that in the opinion of the Board are necessary to secure compliance…

It is plain s. 34(2) contemplates more than a simple declaration that the party comply with the statute. The “in the opinion of the Board” gives wide discretion to decide “the things that are necessary”. There must be a range of options from which the Board can choose. The key element is to “secure compliance” with s. 33(a), i.e. make every reasonable effort to conclude and sign a collective agreement.

To know what may be entailed in securing compliance, it is obviously necessary to know what duty is imposed by s. 33(a). Accordingly, even though the Board’s finding of a breach of s. 33(a) is not challenged in this appeal, it is essential to

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understand precisely the content of s. 33(a) as it applies to this case.

IV The Duty to Bargain in Good Faith

The words “good faith” do not appear in the Nova Scotia statute, but the duty imposed by s. 33(a) is commonly referred to as the duty to bargain in good faith. The “good faith” label is derived from express language in similar statutory provisions elsewhere. Duty to bargain provisions are found in labour statutes in all other jurisdictions in Canada. In defining the scope of the duty, as distinct from the scope of the remedy, cases or academic comment on other statutory provisions are directly relevant. I do not agree with the submission of counsel for the Federation that the Nova Scotia statute imposes a larger onus upon the parties because it includes the words “and sign” while other statutes do not. A collective agreement cannot be effectively concluded without a signature since, by definition, (s.1(1)(e)), a collective agreement must be signed. I do not attribute any particular significance to the inclusion of the words “and sign”.

The duty to bargain in good faith in Canada dates back to the 1944 Wartime Labour Relations Regulations, P.C. 1003, s. 10. It is only recently, however, that a substantial body of case law has developed. This is in part due to the fact that in most jurisdictions (Nova Scotia being an exception) labour boards until the last decade had no power to enforce the duty to bargain in good faith; prosecution was the only remedy.

The early cases on the duty to bargain in good faith abstained from dealing with the content of bargaining proposals. They focussed instead on the mechanics of bargaining, in recognition of freedom of contract. Although labour statutes impose a collective bargaining regime, and typically a few minimum terms, the general thrust of the legislation is to leave it to the parties to find their own

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bargain, if they can. The relationship between the general right of freedom of contract and the duty to bargain in good faith has always been uneasy. Recently, labour boards have been more willing to acknowledge that the duty to bargain in good faith does in some significant ways detract from the notion of freedom of contract. Labour boards have embraced what D.D. Carter, former Chairman of the Ontario Labour Relations Board, calls the doctrine of illegality; “Duty to Bargain in Good Faith: Does it Affect the Content of Bargaining?” in Swan & Swinton (eds.), Studies in Labour Law (1983), pp. 35-53.

By “doctrine of illegality” Carter means that a specific bargaining proposal may be held to constitute a breach of the duty to bargain in good faith. Some of the cases involve instances in which the bargaining proposal, on its face, is inconsistent with the statutory scheme of labour relations or otherwise illegal: Ontario Public Service Employees Union v. Cybermedix Ltd., [1981] O.L.R.B. Rep. 13; Graphic Arts International Union and Toronto Star Newspapers Ltd., [1979] 3 Can LRBR 306 (Ont.); Retail, Wholesale and Department Store Union and Morris Rod Weeder Co. Ltd., [1978] 2 Can LRBR 49 (Sask.); United Brotherhood of Carpenters and Joiners of America and Carpenters Employer Bargaining Agency, [1978] 2 Can LRBR 501 (Ont.); Board of School Trustees (Vancouver) and Canadian Union of Public Employees, [1977] 2 Can LRBR 201 (B.C.); Cyprus Anvil Mining Corporation and United Steelworkers of America, [1976] 2 Can LRBR 360 (Can.)

The doctrine was taken one step further in United Steelworkers of America and Radio Shack, [1980] 1 Can LRBR 99 (Ont.), affirmed in Re Tandy Electronics Ltd. and United Steelworkers of America (1980), 30 O.R. (2d) 29, 80 C.L.L.C. ¶14,017 (Ont. Div. Ct.) In Radio Shack the employer’s offer of union security was a voluntary check-off provision in conformity with the then minimum provision regarding union security under the Ontario Act. On its face, therefore,

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Radio Shack’s proposal appeared legal. The Ontario Labour Relations Board nevertheless found the employer was using the particular proposal, among others, to undermine the position of the union in order to avoid reaching a collective agreement and to foster the union’s early demise. Although the duty to bargain in good faith does not impose an obligation to reach an agreement, it does impose an obligation to intend to reach a collective agreement and make every reasonable effort to that end. The Board’s conclusion in Radio Shack was this: if a particular bargaining proposal, even if lawful on its face, is being used to avoid reaching a collective agreement or ultimately to destroy the collective bargaining relationship, a breach of the duty to bargain in good faith has been committed.

A similar type of analysis has been applied to cases in which bargaining proposals have been withdrawn, Fotomat Canada Limited and United Steelworkers of America, [1981] 1 Can LRBR 381 (Ont.), or where new proposals have been placed on the bargaining table at the eleventh hour, Graphic Arts International Union v. Graphic Centre (Ontario) Inc., [1976] O.L.R.B. Rep. 221. Although such practices are not per se a breach of the duty to bargain in good faith, they will be held to violate the statute if undertaken to avoid reaching a collective agreement. The same rationale has been applied where the reason for failing to agree to a proposal from the other party is to avoid reaching a collective agreement; see Kamloops News Inc. and International Typographical Union, [1981] 2 Can LRBR 356 (B.C.) Similarly, a breach of the duty to bargain in good faith has been found where there has been refusal to execute a collective agreement despite agreement on all terms; Wilson Automotive (Belleville) Ltd. and Retail Clerks International Union, [1981] 1 Can LRBR 318 (Ont.); Labourers International Union and Municipality of Casimir, Jennings and Appleby, [1978] 2 Can LRBR 284 (Ont.)

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It is often difficult to determine whether a breach of the duty to bargain in good faith has been committed. Parties to collective bargaining rarely proclaim that their aim is to avoid reaching a collective agreement. The jurisprudence recognizes a crucial distinction between “hard bargaining” and “surface bargaining”; see Radio Shack at pp. 119 and 121. Hard bargaining is not a violation of the duty to bargain in good faith. It is the adoption of a tough position in the hope and expectation of being able to force the other side to agree to one’s terms. Hard bargaining is not a violation of the duty because there is a genuine intention to continue collective bargaining and to reach agreement. On the other hand, one is said to engage in “surface bargaining” when one pretends to want to reach agreement, but in reality has no intention of signing a collective agreement and hopes to destroy the collective bargaining relationship. It is the improper objectives which make surface bargaining a violation of the Act. The dividing line between hard bargaining and surface bargaining can be a fine one.

The statutory insistence that the parties to collective bargaining intend to reach a collective agreement intend to reach a collective agreement and intend to continue the collective bargaining process reinforces the obligation of the employer to recognize the union. Once the union has become the certified bargaining agent, the employer must negotiate with the union. The union has a legitimate right, and the exclusive right, with the employer, to be at the bargaining table. If the employer attempts to get rid of the union through its bargaining tactics, the employer is in breach of the duty to bargain in good faith.

The Board’s finding in the present case that the school board had contravened s. 33(a) falls squarely within the analysis just described. The content of the school board proposals formed the basis of the finding. It does not appear that any of the proposals was illegal on its face. Rather, the Board found all of the proposals were being used to destroy the security of the union and avoid reaching a collective agreement. The Board held such to

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be the purpose of the contracting out. The Board rejected the school board’s contention that it was engaging in hard bargaining, noting particularly the union security proposals. In short, the Board applied the doctrine of illegality in the present case. The Board’s finding of a breach on that basis is not challenged.

The determination of the scope of the duty to bargain in good faith is within the exclusive jurisdiction of labour boards. In Nova Scotia, s. 18(1)(f) of the Trade Union Act provides as follows:

18 (1) If in any proceeding before the Board a question arises under this Act as to whether

(f) any party to collective bargaining has failed to comply with Section 33;

the Board shall decide the question and the decision or order of the Board is final and conclusive and not open to question, or review, but the Board may, if it considers it advisable so to do, reconsider any decision or order made by it under this Act, and may vary or revoke any decision or order made by it under this Act.

Furthermore, the finding that a party has not bargained in good faith and has not made every reasonable effort to conclude and sign a collective agreement is essentially a finding of fact. I therefore approach the remedies question on the basis that the Board was squarely within its power in holding that specific bargaining proposals were the reason for finding breach of the duty to bargain in good faith imposed by s. 33(a).

V The Schedule A Orders—Requirements for the School Board

The Appeal Division and all of the parties before this Court agree the Board had the authority to make the following two orders against the school board:

(1) The Board must draw up and present a complete set of proposals to the Union on or before August 10, 1981;

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(5) To advise the Union immediately and in any event not later than noon of Tuesday, August 11, 1981, as to its proposals.

These orders simply serve to get the negotiations started again. The imposition of a time limit is not objectionable; it is only aimed at preventing the negotiations from becoming stalled. The duty to present proposals is a preliminary aspect of the duty imposed by s. 33(a). Orders (1) and (5) against the school board therefore fall easily within the scope of “secure compliance” found in s. 34(2).

The area of dispute concerns the three other orders against the school board. These are the orders that the previous contract be proposed with amendments only to union security and to wages, orders respecting minimum proposals with respect to union security and wages, and the undertaking not to contract out. What these orders have in common is that they all concern the specific content of bargaining proposals. Their validity is supported by the union and the Federation, but opposed by the school board.

The majority of the Appeal Division found these orders beyond the powers of the Board because they determined or affected the content of the collective agreement. Hart J.A. expressed this position in the following terms:

In my opinion the powers of the Board under s. 33 [sic] [s. 34] should be broadly interpreted, but those powers must be exercised in such a way as to create a climate wherein the parties can themselves determine the various clauses to be included in their collective agreement. It is not for the Board to dictate these terms but for the parties to decide whether they can or cannot reach agreement…

The Board must be resourceful in determining what things should be done by the parties to enable the process of collective bargaining to proceed and must be careful not to overstep its powers under the Act. Any order it grants must be directed towards the advancement of the collective bargaining process, but cannot direct what the agreement shall contain. The old saying, “You can lead a horse to water but you can’t make him

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drink” is, in my opinion, an appropriate guide for the Board to follow.

Counsel for the school board adopts essentially the same position. The Appeal Division seemed to assume this was sufficient to dispose of the arguments, and render invalid the Board orders related to the context of the proposals. I cannot agree that the analysis ends there.

I accept the general proposition that it is not open to the Board under s. 34(2) to impose a collective agreement on the parties. The Board is not entitled to engage in interest arbitration. The Board cannot order a party to make a proposal simply because it thinks that would be a fair settlement of the dispute. Section 33(a) does not impose an obligation to reach any collective agreement; a fortiori, it does not impose an obligation to reach a collective agreement on what objectively might be considered to be fair terms.

That does not mean, however, that the Board is precluded from making orders which specifically relate to the content of the proposals. Once it is assumed, as I have said it must be, that the content of the proposals can form the basis for a finding of a breach of the duty to bargain in good faith, it should follow that the remedy can make reference to the content of proposals in order to ‘secure compliance’ with s. 33(a).

In Radio Shack, supra, the Ontario Labour Relations Board found, as I have indicated, that the employer had failed to bargain in good faith partly on the basis that it was using its union security proposal to try to avoid reaching a collective agreement. As one of the remedial orders, Radio Shack was ordered to cease and desist from making its previous union security offer of voluntary check-off. This order was upheld on judicial review in the Ontario Divisional Court in Tandy Electronics, supra. Cory J., speaking for the Court, said the following at p. 92:

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It was the position of the applicant that the Board by the imposition of the cease and desist order imposed a term of a collective bargaining agreement upon the company. It was said that an essential element of the Labour Relations Act is that the parties must be free to voluntarily reach a collective agreement. Thus to impose a term of the collective agreement was contrary to the scheme of the Act and constituted a substantial and grievous error in law of such a nature that the Board lost the protection of the privative clause. It was pointed out that the company was maintaining a position that was recognized as appropriate under the Act by s. 36a…

Section 14 of the Act imposes an obligation upon the union and the company that they “shall bargain in good faith and make every reasonable effort to make a collective agreement”. It is apparent that the duty to bargain in good faith is imperative but that there is no obligation to reach agreement. There can be no doubt that the Board cannot impose a collective bargaining agreement upon the parties and should not, in the usual course of events, impose a term of a collective agreement upon the parties.

…in this case, the Board specifically found that the rigid position of Radio Shack on union security, and certain other items central to the negotiations, had the purpose of avoiding a collective agreement. It was part and parcel of the company’s earlier conduct aimed at undermining the union in the eyes of the employees in order to foster its early demise.

The company’s position on union security clearly constituted one of the significant elements of bad faith in the bargaining conduct of Radio Shack. This is underscored by the company’s attitude before the Board that it had no objections to union dues check‑off on the basis of economic grounds. Rather, the company’s position was based solely on its opinion of the relatively weak position of the union among the employees.

In light of the specific finding of the Board, that the company’s position on union security was aimed at avoiding a collective agreement, and undermine the union, it would seem reasonable, rather than patently unreasonable, for the Board to make the cease and desist order. This is so even if the order has the indirect effect of imposing a term of a collective bargaining agreement upon the parties. There is no doubt that the Board should strive to avoid the imposition of terms of a collective agreement upon the parties. The Board has

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recognized this in its reasons in this very case, but, in light of its findings, the order is appropriate.

I agree with this reasoning, and would say that it applies equally to the Nova Scotia wording of “secure compliance”.

In Radio Shack the order in question was a cease and desist order, that is to say it was in negative form. I do not think it is necessary that an order be so framed. In Radio Shack, once the employer was ordered to cease and desist from offering voluntary check-off, the only option open was to offer a Rand formula or better (and it obviously was not going to offer better). In other words, the effect would have been exactly the same if Radio Shack had been ordered to offer at least a Rand formula. To say an order would be objectionable in positive form, but unobjectionable in negative form, would let form prevail over substance. I think it is open to a labour board to order a party to make a specific proposal, or better, or do a specific thing if that is the minimum that would comply with the duty to bargain in good faith in the circumstances. The language of s. 34(2) is not restricted to orders in negative form. It expressly encompasses more: “to do the things that… are necessary to secure compliance”.

In light of this general approach, I now turn to the specific orders in the present case. I find it convenient to deal with the orders out of sequence.

A) The Undertaking

The Board made the following order with respect to contracting out:

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Counsel for the school board agrees with the conclusion of the majority of the Appeal Division that the order was beyond the powers of the Board. Counsel for the union and for the Federation argue the contrary. The only comment that Hart J.A. made with specific reference to this order is:

The Board does not have the power to withdraw from the parties the fundamental rights granted to them under the legislation.

With respect, I cannot agree that this is an appropriate characterization of the situation.

The union’s part of the undertaking is essentially that it will not strike during the life of the collective agreement, which would be illegal in any event. From the union’s perspective, the undertaking does not withdraw any fundamental rights; it simply reinforces the union’s obligations under the Act.

The same conclusion applies to the school board. It is true that there is no general prohibition against an employer contracting out. That does not mean, however, that contracting out can never be illegal. The present case is an instance in which it is. The school board’s practice of contracting out was a major element in the Board’s finding of a breach of s. 33(a).

We find that the purpose of the School Board in contracting out the normal work of the bus drivers was to avoid reaching a collective agreement.

I recognize that after a collective agreement is signed, but before notice to bargain for the subsequent agreement is given, contracting out for the purpose of getting rid of a union would not be a breach of the duty to bargain in good faith because there is no such duty during that period. Contracting out for this purpose would, however, constitute an unfair labour practice. By way of example, the following provisions could apply:

51 (1) No employer and no person acting on behalf of an employer shall

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(a) participate in or interfere with the formation or administration of a trade union or the representation of employees by a trade union; or

(3) No employer and no person acting on behalf of an employer shall

(a) refuse to employ or to continue to employ any person or otherwise discriminate against any person in regard to employment or any term or condition of employment, because the person

(i) is or was a member of a trade union,…

See United Electrical, Radio & Machine Workers of America and Westinghouse Canada Limited, [1980] 2 Can LRBR 469 (Ont.), affirmed in (1980), 80 C.L.L.C. ¶14,062 (Ont. Div. Ct.) I make no comment on the question in Westing-house whether the desire to get rid of the union need be the predominant purpose. It is therefore not correct to say generally that contracting out is a fundamental right of an employer under the Act.

At the time the order was made in the present case the school board had been contracting out, in order to get rid of the union, for almost two years. Any contracting out in the immediate future would be tainted. Could the union be expected to sign a collective agreement anticipating that the school board could effectively frustrate it by contracting out? The school board could not be making a reasonable effort to conclude and sign a collective agreement without giving an assurance there would be no contracting out during the life of the agreement. I therefore conclude the order that the school board give an undertaking not to contract out did not go beyond an order to secure compliance with s. 33(a), and was within the Board’s powers under s. 34(2).

B) Union Security

The Board’s second order, repeated for ease of reference, was as follows:

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(2) A proposal to renew the previous contract with the Union, with amendments only in the following clauses:

(a) As to Union security - the former Union members at the time of the commencement of the strike who are now contract drivers may be employed if they so desire exempted from the Union security clause;

(b) As to Union security - new employees may be employed if they so desire exempted from the previous Union security clause for the duration of the contract but must be subject to union dues;

I will deal later with the stipulation that the school board propose to renew the previous agreement with amendments only respecting union security and wages. For the moment I will deal only with the proposal on union security. The judgments in the Appeal Division did not specifically discuss this aspect of the order.

The Board singled out the position of the school board on union security as an element of its failure to comply with s. 33(a).

In the opinion of the Board, although the School Board and particularly its negotiator, Robert Street, put forth that the actions of the School Board fell within the area of “hard bargaining” it cannot consider as reasonable their insistance that the Union lose all rights to Union security enjoyed over the whole period that the parties have been under contracts. Nor can it consider reasonable that the School Board should require the Union to “earn” the right to any Union security in the future.

Although the record does not reveal full detail, the order of the Board is clearly related to the breach in respect of the school board’s proposals on union security.

Union security clauses can determine the viability of a union, and are therefore obvious targets for an employer attempting ultimately to escape the

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process of collective bargaining. The minimum proposal that the school board was directed to make was clearly, in the opinion of the Board, the minimum that would demonstrate the school board was no longer trying to get rid of the union. The Board was defining the minimum proposal that would constitute hard bargaining, as opposed to surface bargaining, in the circumstances. This is a Tandy type case, the only difference being that the order is in positive rather than in negative terms. I therefore conclude the Board was acting within its powers to secure compliance with s. 33(a) when it made the order respecting union security contained in its second order against the school board.

C) Wages

The Board’s third order against the school board directed minimum wage proposals. The record is completely lacking in detail as to the wage negotiations. The only relevant finding is this general conclusion:

At the hearing counsel for the Federation asked the Court to infer that the third order was simply requiring the school board to resubmit a matter already agreed to by the parties. He relied on the following passage of the Board’s reasons:

Just prior to the conclusion of the hearing it was understood that the representatives of the parties individually agreed to recommend a common proposal worked out in the presence of the Board to their respective groups for acceptance. The School Board negotiating committee materially altered this proposal in their own consideration and agreement was not accomplished.

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Even if the third order does reflect the “common proposal” the passage does not say the parties reached agreement. It says only that it was agreed the negotiators would recommend a common proposal to their principals. The passage relied on does not in my view help in sustaining the Board’s wage order.

I can conceive of circumstances in which the Board’s wage order could constitute securing compliance with s. 33(a). If the school board had made a wage proposal and had withdrawn it, and if the Board found such withdrawal was for the purpose of avoiding a collective agreement, the Board’s wage order could be supported. It is impossible to tell from the record whether this type of situation or other proper foundation for a wage order existed in this case. It is not clear whether the Board was genuinely trying to secure compliance with s. 33(a) or whether it was instead imposing what it considered to be an appropriate settlement. I do not think it is proper for this Court to speculate. Where, as here, the Board is making an extraordinary order, and on a stated case, it is incumbent upon the Board to give the requisite factual underpinning.

I therefore conclude, on the basis of the record, it cannot be said the Board acted within its powers in making the wage order.

D) The Proposal to Renew

The Board’s second order, as I have indicated, included a stipulation that the school board propose a renewal of the previous agreement with amendments only to wages and union security. In my view this aspect of the second order raises the same question as the wage order. Once again the record is completely lacking in detail.

As with the wage order, I can conceive of circumstances in which the proposal to renew could be supported. If the parties had themselves agreed

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to everything except wages and union security, or if the school board had introduced new issues late in the negotiations in order to avoid reaching a collective agreement, such an order might be within the Board’s power. But, as I have said, I am not prepared to speculate. I conclude, on the basis of the record, it cannot be said the Board acted within its powers in ordering the proposals to renew.

VI The Schedule A Orders—Requirements for the Union

The Board’s first order against the union is accepted as valid by the majority of the Appeal Division and by all parties before this Court:

(1) The Union must draw up and present a complete response to each School Board proposal on or before August 20, 1981;

This is analogous to orders (1) and (5) against the school board which I have already said fall within Board powers. There is one additional point, however, worthy of comment.

There was never any complaint that the union had breached s. 33(a) nor any finding to that effect. How can the Board make any order against the union? The answer is that s. 34(2) applies to “any party”; it is not restricted to the party in breach. Since it takes two to negotiate, it is not unnatural to impose time limits on both parties in establishing a timetable for negotiations. I therefore agree that the first order against the union is within the Board’s powers.

The second and third orders against the union concern the substance of negotiations.

(2) Any response is not to include the tying in of wages to some area formula, unless such a proposal is made by the School Board;

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The same absence of factual findings noted in respect of the wage order and proposal to renew order against the school board applies here. That by itself would be sufficient to dispose of the questions.

In the Appeal Division, Hart J.A., for the majority, held that the second order against the union was beyond the powers of the Board because “it affects the content of the agreement”. However, he sustained the third order:

The third requirement of the Board that the union must not seek to exclude bus drivers who drove under contract provided there are vacancies after the striking drivers so desiring have been reinstated is, in my opinion, directed towards the advancement of the negotiations between the parties and not towards the terms of the contract itself. It is, therefore, within the powers of the Board.

I find it difficult to discern any distinction between (2) and (3). They both concern terms of the collective agreement.

I have earlier said that orders affecting the content of a proposal may fall within s. 34(2) because the content of a proposal may be the basis for a finding of a breach of s. 33(a). Since the Board made no finding of a breach by the union, I do not think it was within the powers of the Board to direct the union as to the content of its proposals. I therefore conclude that the second and third orders against the union were outside Board powers.

VII Reinstatement, Compensation, and Costs

In the stated case questions of reinstatement, compensation, and costs are posed more or less in the abstract. The Board did not decide whether such remedies would be appropriate in the present case, nor did the Board express a firm opinion whether it thought it had power to impose such an order.

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A) Reinstatement

The question posed in relation to reinstatement is:

The effective date of reinstatement has to do with back-pay and therefore raises a question of compensation. I prefer to deal with the compensation question separately. For the moment I will deal only with reinstatement. The majority of the Appeal Division did not treat this as a separate issue.

The union had not asked for reinstatement in the present case, presumably because of s. 13 of the Trade Union Act:

13 No person ceases to be an employee within the meaning of this Act by reason of his ceasing to work for his employer as the result of a lockout or strike or by reason only of dismissal by his employer contrary to this Act or to a collective agreement.

Since the bus drivers were on lawful strike, they never ceased to be employees and did not, as such, need to be reinstated.

The word “reinstatement” in the stated case seems to be used rather broadly. I note that s. 55(a)(i) of the Act says the Board may “reinstate” a “former employee” dismissed for union activity although s. 13 also says that person does not cease to be an employee. I will therefore approach the reinstatement question on the basis that it means the right of a striking (or locked out) employee to return to work and perform the job he used to perform.

In the context of failure to bargain in good faith during a strike, the question of reinstatement

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would normally arise when the employer had used replacement workers, such as contract drivers in the present case, during the course of the strike. The question is whether there can be an order that the striking workers return to work after the strike when there may be a contest with the replacement workers.

Where, as in this case, replacement workers are hired in order to avoid reaching a collective agreement and this forms the basis of a breach of the duty to bargain in good faith, any obstacle to the striking workers returning to work is directly attributable to the breach. An order of “reinstatement” would remove the breach and directly “secure compliance” with s. 33(a).

I therefore conclude that an order of “reinstatement” is within Board powers.

B) Compensation and Costs

The questions on compensation and costs are as follows:

(e) Whether the Labour Relations Board (Nova Scotia) has the power to award legal costs against the School Board to:

(i) the Union

(ii) the Employees.

We are concerned with the power of the Board to issue a “make whole” order of compensation which would, as far as possible, put the affected party, in this case the union, in the position it would have been in had there been no breach. This includes lost salaries and benefits the employees would have earned if the employer had bargained in good faith and a collective agreement signed earlier. It also would include damages for loss of opportunity to reach a collective agreement (see

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Radio Shack, supra) and reimbursement of expenses that would not have been incurred but for the breach, such as litigation costs or extra negotiating costs. It is argued that the make whole order is the only truly effective remedy, because otherwise the offending party profits from its breach.

I can readily see how a make whole order might fall within statutory language such as “rectifying” (Ontario, British Columbia) or “remedy or counteract any consequence” (Canada). The cases relied upon by the union and the Federation, and by Jones J.A. dissenting in the Appeal Division, all arose under this type of wording. In my opinion, however, the make whole order falls much less easily into the language of “secure compliance”.

The Federation made the following submission in its factum:

These types of orders attempt to put the employees in the position of bargaining strength they would have enjoyed if their employer had recognized and bargained with them as required by the Act. They prevent the employer from reaping the benefit of refusal to comply with the law and the continuing benefit after a board order to bargain when the union is too weak to bargain effectively. The purpose of the Act includes the safeguarding of the rights of employees to collective bargaining. Seen in this light, a requirement that a party restore the bargaining position of the other is clearly a requirement to secure compliance with Section 33.

The argument seems primarily to make the case that a make whole order counteracts the consequence of a breach rather than to secure compliance. The above argument is not without difficulty, particularly by reason of the latter portion of s. 34(2):

34 …

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things that in the opinion of the Board are necessary to secure compliance with Section 33, and may order an employer to pay to any employee compensation not exceeding a sum which, in the opinion of the Board, is equivalent to the remuneration that would, but for a failure to comply with clause (b) of Section 33, have been paid by the employer to the empoyee. [Emphasis added]

I agree with the majority of the Appeal Division that the closing language of s. 34(2) is decisive against the union.

Section 33(b) is the provision dealing with the statutory freeze on terms and conditions of employment from the time notice to bargain is given until the time it is legal to strike or lockout. Section 33(b) is not at issue in this appeal, but the reference to s. 33(b) is important because of the implication it has for the availability of compensation for a breach of s. 33(a).

The structure of s. 34(2) is such that compensation for a breach of s. 33(b) seems to be an additional remedial authority (“and may order …”) rather than an instance of securing compliance. There is no wording such as “without restricting the generality of the foregoing” which would suggest compensation as simply one element of securing compliance. The majority of the Appeal Division interpreted s. 34(2) as imposing an upper limit on the amount of compensation which, in circumstances like those of the present case, would amount to nil compensation because there had been no breach of s. 33(b). There is also the expressio unius est exclusio alterius argument, that the specification of a compensation remedy for s. 33(b) violations implies absence in other situations. The combination of these arguments convinces me the legislature did not contemplate an order of compensation for a breach of s. 33(a).

I therefore conclude the Board is without power to make an order of compensation or costs.

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VIII Conclusion

I would allow the appeal in part. I would answer the question in the stated case as follows:

Schedule “A”

(1) The Board must draw up and present a complete set of proposals to the Union on or before August 10, 1981;

Answer: yes.

(2) A proposal to renew the previous contract with the Union, with amendments only in the following clauses:

(b) As to Union security—new employees may be employed if they so desire exempted from the previous Union security clause for the duration of the contract but must be subject to union dues;

Answer: (1) With respect to the proposal to renew with amendments only to union security and wage—not on the basis of the record in this case.

(2) With respect to the proposal on union security—yes.

(3) Such proposals shall include a proposal regarding wages of not less than

(a) An increase of not less than $48.00 per month to part-time drivers retroactive to January 1, 1979;

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(b) A further increase of 9.2 % effective September 1, 1980;

(d) A further increase of 5.5 % effective January 1, 1982.

Answer: not on the basis of the record in this case.

Answer: yes.

(5) To advise the Union immediately and in any event not later than noon of Tuesday, August 11, 1981, as to its proposals.

Answer: yes.

Requirements for the Canadian Union of Public Employees, Local 1158 [sic] [1185], which must be done to secure compliance with the order herein:

(1) The Union must draw up and present a complete response to each School Board proposal on or before August 20, 1981;

Answer: yes.

(2) Any response is not to include the tying in of wages to some area formula, unless such a proposal is made by the School Board;

Answer: not on the basis of the record in this case.

(b)—not at issue in this appeal.

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Answer: (1) with reference to reinstatement—yes.

(2) With reference to the effective date—not if meant to give a right of compensation.

Answer: no.

(e) Whether the Labour Relations Board (Nova Scotia) has the power to award legal costs against the School Board to:

(i) the Union

(ii) the Employees.

Answer: no.

Since both the appellant and respondent have had some success, each party should bear its own costs, as should the intervener.

Appeal dismissed with costs.

Solicitor for the appellant: N. Blaise Mac-Donald, Halifax.

Solicitor for the respondent Labour Relations Board (Nova Scotia): Gordon Gillis, Halifax.

Solicitors for the respondent Digby Municipal School Board: Mclnnes, Cooper & Robertson, Halifax.

Solicitors for the intervener Nova Scotia Federation of Labour: Kitz, Matheson, Green & MacIsaac, Halifax.

Canadian Union of Public Employees v. Labour Relations Board (N.S.) et al., 1983 SCC 162

Case Summary

Supreme Court of Canada

I The Facts and the History of the Proceedings

II The Nature of the Review

III The Statutory Language of Remedial Powers

IV The Duty to Bargain in Good Faith

V The Schedule A Orders—Requirements for the School Board

A) The Undertaking

B) Union Security

C) Wages

D) The Proposal to Renew

VI The Schedule A Orders—Requirements for the Union

VII Reinstatement, Compensation, and Costs

A) Reinstatement

B) Compensation and Costs

VIII Conclusion

Judges

Counsel

Parties

Areas of Law

Fact Patterns

Issues

Statutory Provisions 2

Legal Tests 1

Legislation 5