L.T. DISABILITY ISSUE
Document No.:
116828
February 21, 2000
CIRB Letter Decision no. 184
Priority Post
Mr. Craig F. Brown
19307 Hammond Rd.
Pitt Meadows, British Columbia V3Y 1C3
Mr. Gary R. Starling
127B Peterson Dr.
P.O. Box 3030
Revelstoke, British Columbia VOE 2SO
Mr. Anthony Edward Rolfe
12186 238A Street
Maple Ridge, British Columbia V4R 1N2
Mr. Terry G. Jorgenson
20901, 125th Avenue
Maple Ridge, British Columbia V3Z 1C5
Shields & Hunt
Barristers and Solicitors
Central Park Offices
68 Chamberlain Avenue
Ottawa, Ontario K1S 1V9
Attention: Mr. James L. Shields
Canadian Pacific Railway Company
Suite 600, Gulf Square
401 - 9th Avenue S.W.
Calgary, Alberta T2P 4Z4
Attention: Mr. M.E. Keiran
Director. Labour Relations
Caley & Wray
Barristers & Solicitors
111 Richmond Street West
Suite 1205
Toronto, Ontario MSH 2G4
Attention: Mr. Harold F. Calev
Dear Sirs:
In the matter of the Canada Labour
Code (Part I - Industrial Relations) and
a complaint of unfair labour practice filed pursuant to section
97(1)
thereof by Craig F. Brown, complainant, alleging violation of
sections 37
and 95(b) of the Code by the International Brotherhood of Locomotive
Engineers and the Canadian Council of Railway Operating Unions,
respondents,
and of sections 50(b), 94(1)(b) and 94(3)(g) by the Canadian Pacific
Railway
Company, respondent. (20560-C)
In the matter of the Canada Labour
Code (Part I - Industrial Relations) and
a complaint of unfair labour practice filed pursuant to section
97(1)
thereof by Gary R. Starling, complainant, alleging violation of
sections 37
and 95(b) of the Code by the International Brotherhood of Locomotive
Engineers and the Canadian Council of Railway Operating Unions,
respondents,
and of sections 50(b), 94(1)(b) and 94(3)(g) by the Canadian Pacific
Railway
Company, respondent. (20561 -C)
In the matter of the Canada Labour
Code (Part I - Industrial Relations) and
a complaint of unfair labour practice filed pursuant to section
97(1)
thereof by Anthony Edward Rolfe, complainant, alleging violation
of
sections 37 and 95(b) of the Code by the International Brotherhood
of
Locomotive Engineers and the Canadian Council of Railway Operating
Unions,
respondents, and of sections 50(b), 94(1)(b) and 94(3)(g) by the
Canadian
Pacific Railway Company, respondent. (20562-C)
In the matter of the Canada Labour
Code (Part I - Industrial Relations) and
a complaint of unfair labour practice filed pursuant to section
97(1)
thereof by Terry G. Jorgenson, complainant, alleging violation
of sections
37 and 95 (b) of the Code by the International Brotherhood of
Locomotive
Engineers and the Canadian Council of Railway Operating Unions,
respondents,
and of sections 50(b) 94(1)(b) and 94(3)(g) by the Canadian Pacific
Railway
Company, respondent. (20613-C)
A panel consisting of Mr. Edmund
Tobin, Vice-Chairperson, and Mr. David
Gourdeau and Ms. Karen S. Brennan, Members, examined the above-mentioned
complaint filed pursuant to section 37 of the Canada Labour Code
(Part I -
Industrial Relations).
Section 37 describes a trade union's duty of fair representation as follows:
37. A trade union or representative
of a trade union that is the bargaining
unit shall not act in a manner that is arbitrary, discriminatory
or in bad
faith in the representation of any of the employees in the unit
with respect
to their rights under the collective agreement that is applicable
to them.
The complaints were filed respectively
on August 27, 1999, August 31, 1999,
and September 27, 1999 with the Canada Industrial Relations Board.
The
complainants allege that the respondent union (BLE) breached section
37 of
the Canada Labour Code when it failed to ratify properly an amended
long-term disability (LTD) plan as per the Canadian Council of
Railway
Operating Unions (CCROU) constitution, the International Brotherhood
of
Locomotive Engineers (BLE) constitution, and the collective agreement
between BLE and the Canadian Pacific Railway Company (CPR). The
complainants
claim that the union has not represented its membership in a responsible
manner, as evidenced by the previous short-term disability (STD)
and LTD
plans, having accumulated significant deficits. The complainants
also allege
that CPR and the BLE violated sections 50(b), 94(1)(b), 94(3)(g)
and 95(b)
of the Code because they "bargained collectively without
authorization or
certification."
The parties to these complaints
were advised that the Board may refuse to
hold a public hearing in the matter of a section 37 complaint.
Section 16(1)
states:
16.1 The Board may decide any
matter before it without holding an oral
hearing.
Having reviewed the parties'
submissions and the investigating officer's
report, the Board decided against holding a public hearing in
these
complaints.
1
Following is a more detailed description of the complaints and
the parties'
respective versions thereof, as well as the Board's decision.
The Canadian Council of Railway
Operating Unions (CCROU) is the certified
bargaining agent for running trade employees at CPR. The CCROU
consists of
two unions: the BLE and the United Transportation Union (UTU).
As of December 1998, there were
three disability plans for locomotive
engineers at CPR, namely a weekly indemnity plan (WIP) commonly
referred to
as short-term disability, which was funded by the employer; a
top-up plan in
the amount of $200 per week funded by the members, with National
Life
Assurance Company of Canada (National Life) acting as the insurer;
and an
LTD plan funded by the members, with the Great West Life Assurance
Company
(Great West Life) acting as insurer.
The sequence of events giving
rise to these complaints, as set out in the
investigating officer's report, is reproduced hereunder.
March 1, 1999 National Life advises
the CCROU that the weekly top-up
benefit plan would be terminated as of March 21, 1999, as the
plan had
accumulated significant deficits.
March 4, 1999 Great West Life
advises the CCROU that it would be
terminating the LTD plan, retroactive to December 1, 1998, as
the plan had
accumulated significant deficits.
March 19, 1999 An "Information
Bulletin and Ratification Notice" dated March
19, 1999 is sent to all CCROU members. The purpose of the notice
was to
provide BLE and UTU members with current information relating
to the status
of the STD and LTD plans and to present a proposal designed to
remedy the
problems of the LTD plan. The Notice indicated that Great West
Life would
renew the LTD policy retroactively to December 1, 1998, provided
that
certain amendments were made. Among the proposed changes to the
LTD was an
increase in the premium. The members were requested to vote on
the CCROU
proposal and return the ratification ballot by mail. BLE members
approved
the proposal while UTU members rejected it.
April, May, June 1999 BLE members
had $21 per month deducted from their pay
in April, May and June 1999 for LTD premiums.
June 1999 There have been several
letters from local BLE officials to the
BLE national executive. The letters identified concerns/questions
relating
to the previous STD and LTD plans, the amended LTD plan, and the
way the
ratification vote was conducted.
July 1999 Several BLE members
had 1.5% deducted from their gross pay in July
1999 for LTD premiums.
August 27, 1999 Complainant Craig
F. Brown filed his complaint with the
Board.
August 31, 1999 Complainants
Gary R. Starling and Anthony Edward Rolfe filed
complaints with the Board.
September 27, 1999 Complainant
Terry G. Jorgenson filed a complaint with
the Board.
II
The complainants allege that
the BLE violated section 37 of the Canada
Labour Code in the following manner:
- The BLE acted improperly when
it negotiated and finalized an amended LTD
plan. The amended plan was not properly ratified pursuant to the
CCROU
constitution and the collective agreement between CPR and the
CCROU (BLE).
In support of this allegation, the complainants refer to Article
VI of the
CCROU constitution, which provides that "A collective agreement
will only be
entered into by the Executive Board with the railway(s) after
it has been
ratified by each of the constituent unions pursuant to their respective
constitutions and by-laws." Moreover, Article 27.6 of the
collective
agreement states: "Subject to a ratification by the membership
of the
Canadian Council of Railway Operating Unions (Council) initiated
by the
Council, a Long Term Disability Plan will be initiated. The Plan
will be
administered by the Company and all costs associated with such
plan will be
borne by the individual Council members." In this case, the
LTD proposal was
ratified only by BLE members, while UTU members defeated it. According
to
the CCROU constitution, UTU members must also ratify the LTD proposal.
The
BLE acted unilaterally to bargain on behalf of the locomotive
engineers
working for CPR.
- The BLE failed to comply with
the CCROU constitution and the BLE
constitution and bylaws by not conducting a secret ballot to ratify
the
amended LTD plan. The LTD vote in April 1999 was not a secret
ballot. When
the BLE sent the ratification ballots to its members, it did not
provide a
second envelope for members to put their ratification ballots
inside. The
purpose of a second envelope is to ensure the secrecy of the ballot.
- The BLE deducted LTD premiums
before the amended LTD plan had been
finalized or signed with the carrier, Great West Life.
- The BLE only deducted premiums
for the amended LTD plan from some members.
This demonstrates a bias towards one class of the BLE membership
(working
locomotive engineers), but deprives non-working locomotive engineers
of the
opportunity of being covered by the plan.
- The BLE did not represent its
membership in a responsible manner, as
evidenced by the previous STD and LTD plans becoming so indebted.
The STD
plan was in debt for 1.5 million dollars, while the LTD plan was
under-funded by 4 million dollars.
- The BLE did not disclose information
to the general membership regarding
the demise and indebtedness of the past STD and LTD plans.
- In addition, Gary Starling
alleges that premiums for the STD plan were
collected by way of payroll deductions in the amount of $24.78
up to and
including the month of May 1999, and these amounts were never
returned. He
also alleges that he sustained an STD eligible injury from May
22, 1999 to
August 16, 1999, but was denied payment under the STD plan. He
states that
the total compensation under this plan would have been $2400.
The complainants also allege
that the actions of CPR and the BLE violate the
following sections because they "bargained collectively without
authorization or certification.":
50. Where notice to bargain collectively
has been given under this Part,
...
(b) the employer shall not alter
the rates of pay or any other term or
condition of employment or any right or privilege of the employees
in the
bargaining unit, or any right or privilege of the bargaining agent,
until
the requirements of paragraphs 89(1)(a) to (d) have been met,
unless the
bargaining agent consents to the alteration of such a term or
condition, or
such a right or privilege.
94.(1 ) No employer or person
acting on behalf of an employer shall
...
(b) contribute financial or other support to a trade union.
94.(3) No employer or person
acting on behalf of an employer shall
...
(g) bargain collectively for
the purpose of entering into a collective
agreement or enter into a collective agreement with a trade union
in respect
of a bargaining unit, if another trade union is the bargaining
agent for
that bargaining unit.
95. No trade union or person
acting on behalf of a trade union shall
...
(b) bargain collectively for
the purpose of entering into a collective
agreement or enter into a collective agreement with an employer
in respect
of a bargaining unit, if that trade union or person knows or,
in the opinion
of the Board, ought to know that another trade union is the bargaining
agent
for that bargaining unit; ...
III
In reply, the BLE requests that
the Board dismiss the complaints without a
hearing since the complainants did not make any allegation that
would
constitute a breach of section 37. The union denies all allegations
made by
the complainants. It submits that at all times it exercised its
discretion
in good faith, objectively, honestly, and only after a thorough
investigation of the interests of the members concerned. The BLE
disputes
the complainants' claim that its decisions with respect to the
STD and LTD
plans were arbitrary, discriminatory, or made in bad faith. The
BLE states
that it acted on the advice of its advisors and in accordance
with the
results of the ratification vote of its membership. The BLE maintains
that
its actions are in accordance with the constitutions of the CCROU
and the
BLE.
In support of its position, the BLE advised the Board of the following:
- As a result of the termination
notices from National Life and Great West
Life, the constituent unions of the CCROU (UTU and BLE) sought
advice from
expert advisors. Based on the recommendations of the expert advisors,
the
representatives of the CCROU drafted certain amendments to the
LTD plan.
- Further, during these negotiations
with the advisors and Great West Life,
the UTU and BLE bargained together as the bargaining agent for
the employees
of CPR. There was no unilateral action taken by the BLE. Both
constituent
unions decided that they would conduct a ratification vote among
their
members. The CCROU Executive decided that both constituent unions
did not
have to approve or reject the proposed amendments. In the event
that one
constituent union approved the amendments, that constituent union
was
authorized to proceed with the implementation of the plan in accordance
with
the ratification vote. All members were advised in the Information
Bulletin
and Ratification Notice of this CCROU decision.
- At no time was the LTD plan
with Great West Life terminated. There was
always an LTD plan in place with Great West Life. The only change
to the LTD
plan was the amendment that had been approved by the ratification
vote.
- The complainants referred to
the deduction of $21 for LTD premiums from
their payroll until July 8, 1999, when the deduction became 1.5
% of the
gross pay. The premiums for LTD were increased in accordance with
the
amendment that had been passed through the ratification vote by
the BLE
membership.
- The STD (top-up) plan was terminated
by National Life effective March 21,
1999. Based on the advice received, the CCROU informed its members
at CPR of
the plan's termination in the Information Bulletin dated March
19, 1999. BLE
members approved this action in the ratification vote. As a result
of the
termination of the top-up plan, BLE members who were on weekly
indemnity
benefits continued to receive the weekly indemnity benefits, according
to
the collective agreement, up to a maximum of $500 per week, but
did not
receive the top-up in the amount of a maximum of $200 per week,
after March
21, 1999.
Finally, the BLE denies that
it did not disclose information to the general
membership regarding the demise and indebtedness of the past STD
and LTD
plans. It submits that the membership received full particulars
of all
changes to the LTD plan and the cancellation of the top-up benefits.
In his complaint, Gary Starling
referred to the payroll deductions of $24.78
for the STD (top-up) plan. The BLE had been advised by the employer
that
there were indeed payroll deductions made for this top-up plan
after the
termination of the plan. All such deductions are either in the
process of
being returned to the employees or have in fact been returned.
In response to Gary Starling's
claim that he was denied $2400 of benefits
under the STD plan, the BLE indicates that the employee was on
the weekly
indemnity benefits (WIP) from May 22 to August 16, 1999 and did
receive all
benefits under that plan. He did not receive the $200 per week
from the
top-up plan with National Life, as that plan had been terminated
in
accordance with the advice given and the directions received from
the
membership as a result of the ratification vote.
IV
Decision
The applicable principles in
respect of the duty of fair representation are
well established. An employee does not have an absolute right
to
arbitration. For its part, a union, which has considerable discretion,
must
in good faith give due and thoughtful consideration to the merits
of the
grievance; in so doing, it may take into account not only the
significance
of the grievance, but also the legitimate interests of the union
membership.
In Canadian Merchant Service
Guild v. Guy Gagnon et al., [ 1984] 1 S .C.R.
509, the Supreme Court enunciated what are now the standard rules
governing
the application of section 37 of the Code:
The following principles, concerning
a union's duty of representation in
respect of a grievance, emerge from the case law and academic
opinion
consulted.
1. The exclusive power conferred
on a union to act as spokesman for the
employees in a bargaining unit entails a corresponding obligation
on the
union to fairly represent all employees comprised in the unit.
2. When, as is true here and
is generally the case, the right to take a
grievance to arbitration is reserved to the union, the employee
does not
have an absolute right to arbitration and the union enjoys considerable
discretion.
3. This discretion must be exercised
in good faith, objectively and
honestly, after a thorough study of the grievance and the case,
taking into
account the significance of the grievance and of its consequences
for the
employee on the one hand and the legitimate interests of the union
on the
other.
4. The union's decision must
not be arbitrary, capricious, discriminatory or
wrongful.
5. The representation by the
union must be fair, genuine and not merely
apparent, undertaken with integrity and competence, without serious
or major
negligence, and without hostility towards the employee.
(pages 527)
In essence, these complaints
raise the question of whether the BLE breached
its duty of fair representation by renegotiating the STD and LTD
agreements.
However, before dealing with this question, the Board must first
determine
if bargaining can be the subject of a section 37 complaint.
This question has been the subject
of numerous Board decisions. These
decisions fall into one of two periods: the period before 1984,
when the old
text of this section applied, and the period since 1984, when
the present
text was initially enacted.
Until 1984, the Board repeatedly
held that the duty of fair representation
set out in the Code extended to collective bargaining: Luis Rivera
et al.
(1982), 49 di 86 (CLRB no. 379); Captain William J. Lamore etal.
(1982), 51
di 67 (CLRB no. 384); Stanley Warner (1982), 51 di 146 (CLRB no.
403);
Dennis Dohm (1983), 52 di 160 (CLRB no. 439); Claude Latremouille
(1983), 53
di 178 (CLRB no. 433); Buddy Lee (1984), 56 di 128; and 7 CLRBR
(NS) 56
(CLRB no. 467); and Nelson G. Burrows et al. (1984), 57 di 205
(CLRB no.
488).
Then, in the summer of 1984,
Parliament amended the Code and enacted a new
wording of section 136.1 (which became section 37 during the 1985
revision).
Subsequent Board decisions initially appear to remove completely
and
unequivocally collective bargaining per se from the ambit of section
37 (see
Gordon Parsley et al. (1986), 64 di 60; 12 CLRBR (NS) 272; and
86 CLLC
16,018 (CLRB no. 555)). Then, nuances appeared in the wake of
the warning
issued in Claude Paquet (1985), 59 di 149; and 85 CLLC 16,053
(CLRB no.
496). In Peter G. Reynolds et al. (1987), 68 di 116; and 87 CLLC
16,011
(CLRB no. 607), the Board distanced itself from the narrow approach
taken in
Gordon Parsley et al., supra. Certainly, recourse under section
37
presupposes the existence of a collective agreement, but there
is nothing in
the text to warrant the categorical statement that there could
never be any
recourse against the actual cause of the discrimination or bad
faith.
It was held initially that section
37 applied to the renewal of a collective
agreement, but not to the conclusion of a first agreement (see
George Harris
etal. (1986), 68 di 1; 15 CLRBR (NS) 328; and 86 CLLC 16,059 (CLRB
no. 597);
and Peter G. Reynolds et al., supra).
This initial opening was essentially
based on the decisions in George Harris
et al. and Peter G. Reynolds et al., supra. The Board said the
following:
There is no doubt that there
is a collective agreement already applying to
the employees and that the issues negotiated are part of the administration
of the applicable collective agreement. On that very basis, the
negotiation
of the July 26 Memorandum would not be excluded from the ambit
of section
136.1.
Equally important, however, is
the rationale for the exclusion of section
136.1. It is clear that what was intended by Parliament was to
ensure that a
collective agreement negotiated freely between the parties would
not be put
at risk by a section 136.1 complaint; what the legislators were
intending to
protect was the integrity of the collective bargaining process.
There had to
be some assurance that a freely negotiated collective agreement
applying to
a bargaining agent and an employer could not be annulled by a
section 136.1
complaint.
In the instant case, where the
negotiations resulted in the currency of a
collective agreement, that same risk does not exist. Should the
Board find a
violation of section 136.1 with regard to the negotiation of the
Memorandum.
all that is at risk is the Memorandum itself. The status quo,
that is the
collective agreement as originally negotiated, would continue
to remain in
full force and effect until its expiry. The danger of the Board
annulling
the whole of the collective agreement does not exist.
(George Harris et al., supra, pages 9; 337; and 14,523; emphasis added)
... Once employee rights have
been established in a first collective
agreement it is not a big step to construe that thereafter a bargaining
agent is representing employees in the bargaining unit, 'with
respect to
their rights under the collective agreement that is applicable
to them,'
each time those rights are up for renewal.... It requires a very
narrow
interpretation of the wording of section 136.1 to say that in
those
circumstances the bargaining agent is not representing the employees
in the
bargaining unit with respect to their rights under the collective
agreement
that is applicable to them.
(Peter G. Reynolds et al., supra, pages 126-127; and 14,107)
In summary, according to this
interpretation, section 37 could apply to the
negotiation of a memorandum of understanding, an appendix, as
well as the
renewal of a collective agreement.
In this instant case, what is
being disputed through section 37 of the Code
is the renegotiation and ratification of the STD and LTD agreements.
Indeed,
a decision in which the Board cancelled these agreements and ordered
them
void would not affect the validity of the collective agreement
as a whole.
However, even if such negotiations
can be the subject matter of a section 37
complaint, it does not mean that such a complaint will succeed.
The role of the Board is to look
at the manner in which the union handled
the negotiation and to ascertain that the union does not exercise
its
exclusive authority to bargain unfairly, discriminatorily or in
bad faith.
In the present case, the union
was made aware of a negative situation,
consulted experts, engaged in extensive negotiations with the
employer, and
subsequently submitted the agreements to ratification.
Based on the foregoing, the Board
is of the view that there is no evidence
that the BLE acted in a manner that can be construed as arbitrary,
discriminatory or motivated by bad faith.
Thus, the Board finds that BLE
did not breach section 37 of the Code in
regard to the renegotiation of the STD and LTD agreements and,
therefore,
dismisses the complaints.
(signed)
David Goudreau
Board Member
c.c. Ken Chiang, (CIRB-Vancouver)
Mr. Dennis Curtis, International Brotherhood of Locomotive Engineers
Mr. Gilles Halle, International Brotherhood of Locomotive Engineers
Mr. Guy Scarrow, Canadian Council of Railway Operating
Mr. Louis O. Schillaci, General Committee of Adjustment
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