Canada: The Duty To Bargain In Good Faith Revisited

Last Updated: May 29 2015
Article by Hugh R. Dyer

The decision of the Ontario Labour Relations Board (the "Board") in United Food & Commercial Workers, Local 175 and WHL Management Limited Partnership, 2014 CanLII 76990 (ON LRB) considers and, arguably, modifies the jurisprudence concerning the duty to bargain in good faith. While this duty is of fundamental importance in collective bargaining relationships, decided cases concerning the duty are relatively rare. Therefore, cases of significance like WHL Management are worthy of careful consideration by those who are directly engaged in collective bargaining and by organizations who are subject to collective agreements.

By way of background, WHL Management ("WHL") is in the food processing business. The United Food & Commercial Workers, Local 175 (the "Union") was certified to represent its production employees in August 2008. WHL and the Union negotiated a four year first collective agreement. The relationship between the parties during the term of that agreement was difficult. Before the commencement of bargaining for the renewal of the agreement, the Union warned WHL that a strike was very likely. The parties were unable to agree on a renewed collective agreement and a strike commenced in August, 2013. The strike was still ongoing when the Board issued its decision in December, 2014. During the strike, WHL used replacement workers and some of the employees who were on strike returned to their positions despite the continuation of the strike. There were difficulties on the picket line. Nine striking workers were discharged as a result of picket line issues.

Both WHL and the Union alleged the other party was bargaining in bad faith. After the Board hearing commenced, there were several attempts at mediation. The outstanding issues were categorized at various times as major and less important. Some of the issues which were identified as "major" were resolved through mediation. The Board found that when major issues were resolved, other issues were elevated in importance, particularly by WHL.

The relevant statutory provision is s.17 of the Labour Relations Act, which provides, "The parties shall meet ... and they shall bargain in good faith and make every reasonable effort to make a collective agreement." The Board commented that, in assessing an application based on the duty to bargain in good faith, it focuses on the process of bargaining and not the content of bargaining. It further commented that, in assessing the process of bargaining, it considers a subjective element and an objective element. The subjective element relates primarily to whether "the employer is acknowledging the status of the union as the exclusive bargaining agent entitled to represent employees in the bargaining unit." The objective measure relates to the "labour relations integrity of the very proposals made in the bargaining process." Based on this objective element of the test and despite the Board's earlier statement that it was focusing on process and not content, the Board very carefully analyzed the content of all of the outstanding issues and evaluated the merits of the positions taken by each party.

By the time the Board issued its decision, many critical issues, including wages and benefits, were settled. Nine "impasse issues" were dealt with by the Board in its decision. Those issues included: the process by which the justness of the discharge of the nine employees fired for picket line misconduct would be adjudicated, WHL's proposals concerning ratification process, a picket line protocol for future strikes, the grievance process, a proposal for a specific disciplinary penalty clause, a return to work protocol, and modifications to the layoff procedure.

The Board took a dim view of WHL's behaviour and bargaining strategy. In particular, the Board indicated WHL was engaging in "receding horizon" or "faux impasse" bargaining.  These were references to the fact that when there was some progress through bargaining or mediation concerning issues that had been identified as "major", WHL elevated a formerly secondary issue to the status of a major concern. The Board concluded that this behaviour was evidence of a failure on the part of WHL to make every reasonable effort to make a renewed collective agreement.

WHL's behaviour during bargaining may also have coloured the Board's decision concerning the various outstanding issues. More troubling is the fact that the Board adopted a standard in assessing WHL's outstanding proposals that can be distilled down to "what would a reasonable union accept?" The Board reasoned that, if WHL was insisting on certain proposals which no reasonable union would accept, this amounted to an attempt to prevent the settlement of a collective agreement and was therefore in violation of s.17 of the Labour Relations Act.

With all due respect, despite the Board's undertaking to the contrary, it intervened extensively in the content of bargaining in its WHL decision. For example, one of the outstanding issues was a WHL proposal to specify in the agreement that discharge was the appropriate penalty for acts of violence and threats of violence. The Board concluded this was a proposal the Union "could never accept" and that WHL's insistence on the proposal was a breach of the obligation to make every reasonable effort to make a collective agreement. In reaching that conclusion, the Board made the following statement:

The specific penalty of discharge for employee misconduct without recourse to the just cause standard at arbitration, although statutorily permissible... has long been held to be incompatible with the rule of law at the workplace rather than that of men, which the collective bargaining regime heralded.

This should be a startling proposition for many employers who have specific penalty clauses in their collective agreements, some of which have been negotiated recently or, at the very least, renewed in recent collective agreements. It is also a surprisingly strong reaction to a proposal relating to workplace violence, which is of increasing concern to employees, employers and society as a whole. Finally, the comment was made in the context of a collective bargaining relationship in which the Board anticipated there would be significant difficulties in integrating striking workers, strikers who had returned to work and replacement workers after the strike is over. In that kind of environment, the deterrence of workplace violence would be a legitimate concern. The Board's intervention concerning this proposal seems to be unjustified interference in the content of bargaining.

In its remedial order, the Board directed the Union to withdraw two of its outstanding proposals, directed the WHL to withdraw four of its six outstanding proposals and directed the parties to resume bargaining on three issues relating to the collective agreement and concerning the return to work protocol.

Comment

The Board's decision in WHL Management is undoubtedly driven by its concerns about the duration of the dispute, the behaviour of the parties and, in particular, the behaviour of WHL. However, in our view, the Board has overstepped its self-stated goal of regulating the process of bargaining and has engaged in the regulation of the content of bargaining. This is of concern because it limits the degree of flexibility available in collective bargaining to address issues that may be of critical importance to a particular employer. To judge an individual employer's positions by standards in the industry or on the basis of what would "a reasonable union accept" limits the options available to an employer. In our opinion, this forced uniformity between collective agreements will prevent employers from adjusting to changing circumstances, which is a significant concern in a rapidly evolving world.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Hugh R. Dyer
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