HomeMy WebLinkAbout1984-0047.Union.85-01-08, GRIEVANCE
;EH;bEMENT
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IN THE MATTER OF AN ARBITRATION
Under
THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT
Before
THE GRIEVANCE SETTLEMENT BOARD
Between: OPSEU (Union Grievance)
and
The Crown in Right of Ontario
(Ministry of Community and Social Services)
Crievor
Before: .~i;.
For the Grieior:
For the Employer:
Hearing: June 19, 1985and July 16, 1985
Y.~
P. M. Draper
Pi Craven
H. Roberts
Vice-Chairman
Member
Member
Employer
I. Thomas
CoumeI
Jack, Harris, Anand
Barristers Cc Solicitors
0. Bowlby
Coum el
Hicks Morley Hamilton Stewart Stori’e
Barristers & Solicitors
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DECISION
This is a union policy grievance in which the Union grieves the removal
from the bargaining unit (in labour relations parlance the contracting out) by the
Employer of certain’ work to do with the delivery of welfare. benefits formerly
performed by employees in the bargaining unit. ‘The Union submits that the means
by which the contracting out was accomplished, being the delegation of various
powers and duties.to non-bargaining unir persons, were illegal and that the illegality
constitutks a violation of the collective agreement between the parties. The
Union’s position calls for the interpretation of the powers ,of delegation of the
Minister under Section 5 of the ,Ministry of Community and Social Services Act and
of the Director of the Income Maintenance Branch of the Ministry under Section 3
of the Family Benefits Act.
It is not argued by the Unim that the contracting out was done for any
purpose related to collective bargaining.
-.
In response, the Employer submits that contracting out is reserved 10
the Employer as one of its exclusive managerial functions under Section 18 (1) (a) of.
the Crown Employees Collective Bargaining Act (the Act) and that the Board is
. therefore without jurisdiction to entertain the grievance,
For reasons which follow, we have concluded that we lack jurisdiction
in the matter.
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We note,. for the record, that the Divisional Court, in a decision dated
Januarj 19, 1985, found (in effect) that the Union did not have the requisite
standing,to challenge before the Court the decisions of the Employer to make the
delegations in question..
We note, as well, that the Ontario Public Service Labour Relations
Tribunal has ruled (File T/19/84) that contracting out is~ among the Employer’s
exclusive.managerial functions under Section 18 (1) (a) of the Act and that.it may
be the subject of collective bargaining only to the extent that the Union may
negotiate with the Employer fcr provisions intended to deal with its effects on
employees in the bargaining unit.
It seems to us beyond question that the Union must establish its right to
grieve under the collective agreement, there being no source of additional union
rights of grievance as is the case for employees under Section 18 (2) of the Act. It
is equally clear that there is no express provision in the collective agreement
prohibiting or restricting the right of the Employer to contract out.
Article 1 of the collective agreement recognizes the Union as the
exclusive collective bargaining agent fcr a bargaining unit consisting of (to
paraphrase) all public servants who are employees for the purposes of the Act. The
Union argues~ that by virtue of the recognition provision the grievance comes within
the scope of the collective agreement and consequently it is entitled to challenge
the delegations that resulted in the transfer of work from members to non-
members of the bargaining unit. In effect, the Board is asked to find in Article 1
an implicit restriction on the Employer’s right to contract out.
_. .~ The weight of arbitral jurisprudence supports the view that a union
recognition provision does not per preclude contracting out by an employer. See
Palmer, Collective Agreement Arbitration in Canada at pp. 4X-452. Such a
provision does’not guarantee that the original kin& of work, numbers of jots, and
complements of e,mployees will continue unchanged during the term of the.
collective agreement. While the words describing the bargaining unit remain, its
component parts are not fixed in their original state fw all time. Recognitiwr of a
union relates to the work and jobs which, and the employees who, consititute the
bargaining unit from time to time.
A recognition provision;“.by itself, thus cannot support a challenge to
the fact of contracting out. That seems to us to make an end of it. We do not see : -
how the provision can nevertheless be invoked to challenge the mechanics of
contracting out which is itself unassailable by the Union.
We adopt the reasoning of the ~Tribunal in the decision already
mentioned and find that the Employer was exercising an exclusive managerial
functim in respect of the contracting out that is the subject of the grievance.
In the result, we find that we lack jurisdiction to entertain the
grievance. This’proceeding is therefore terminated.
DATED at Toronto, Ontario this 8th day of Januar,y , 1985.
@j$L.k%- I&Q&
P. M. Draper, Vice-Chairman
“P. Craven” (dissent attached)
P. Craven, Member
H. Roberts, Member
V
,,1 7
RE: GSB 47/84 (Union Grievance)
DISSENT
In this matter the Union alleges that the Employer has
unlawfully contracted out work that is reserved to members of the
bargaining unit. While the Union seeks to bring the matter
within the four corners of the Collective Agreement by referring.
to Article 1 (Recognition), the illegality consists not in the
breach of some express provision forbidding contracting out, buti
in the alleged contravention of statutory provisions which are
said by the Uni:on to require that the work in question be
performed by members of its bat-gaining unit. This grievance
raises some unusual and complex questions about the rights of the
parties and the jurisdiction of this Board.
Before 1982, the province operated a two-tiered social
welfa.re system. Short-term social benefits were administered by
municipalities under the General Welfare Assistance Act. Longer-
term benefits were administered by the provincial I'linistry of
Community and Social Services under the Family Benefits Act. .~~
Beginning in 1982, the government undertook to rationalize
service delivery in the social welfare field. It entered into
"integration projects" with seven municipalities, whereby
municipal social benefits workers take on a mixed caseload
comprising both general welfare and family benefits cases. In
two other municipalities it entered into "functionally integrated
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;]elivery system" (FIDS) projects, whereby municipal workers take
applications for family benefits, but provincial workers cirry
the family benefits cases after the application stage. The Union
_.~. led evidence showing that family benefits work formerly performed
by members of its bargaining unit is currently being performed by
munic,ipal employees.
The Union takes the position that the Family Benefits Act
prohibits municipal workers from taking family benefits
applications or carrying a,family benefits caseload, SO that the
integratioh'and FIDS projects are unlawful. .It seeks relief from
this Board.
The majority has determined tha~t it lacks jurisdiction to
entertain the grievance because in deciding to contract out the
work the Employer was exercising an exclusive managerial
func'tion. The majority rejects the Union's submissions abo'ut the
effect of the recognition clause, saying that the weight of
arbitral jurisprudence is to the effect that a prohibition
against contracting out cannot be read into a recognition
provision:
The weight of arbitral jurisprudence supports
the view that a Union recognition provision
.does not per se preclude contracting out by
an Employer. See Palmer, Collective
Aereement Arbitration in Canada, at pp. 450-
2. Such a provision does not guarantee that
the original kinds of work, numbers of jobs,
and complements of employees will continue
unchanged during the term of the collective
agreement. While the words describing the
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bargaining unit remain, its~component parts
are not fixed in their original state for all
time. Recognition of a union relates to the
work and jobs which, and the employees who,
are present in the bargaining unit from time
to time.
A recognition provision, by~itself, thus
cannot support a challenge to the fact of
contracting out. That seems to us to make an
end of'~it. We do not see how it can
nevertheless be invoked to challenge then'.'
mechanics of contracting out which is itself
unassailzble by the Union.
In my respectful opinion the majority has construed the
prevailing jurisprudence wrongly in the circumstances. MOreOVe,?,
in characterizing contracting out as "una&zsailable" the majority
has prejudged the very issue in dispute. I shall argue below
th2.t tl~de jul~~ispru;cllic in question cannot and was never- intind'id
to determine the issue where the bargaining unit is designated by ~..i
the legislature, or where the work in question is assigned by the
legislature to a particular class of employees. I shall argue
that the delegation of family benefits work to municipal
employees under the integration and F,IDS projects does not fall
within the exclusive functions of the Employer, set out in s. 16
(1) of the Crown Emplovees Collective Bargaining Act, and that
this Board's jurisdiction is not thereby barred.
1 . The BargaininK Unit and Recognition
In the private sector, a distinction has developed between
the bargaining unit for the purpose of certification, which is a
matter to be determined by the Labour Relations Board.on the
i .; submissions-of the parties, and the.bargaitiing unit for the .~
purpose of the collective agreement, which is a matter between
'~. the parties. -No such distinction is possible under the Crown
.' Employees Collective BarRaining Act, where the scope of the
bargaining unit is designated by statute rather than negotiated
between the part:ies. The words of the recognition clause
demonstrate that the parties clearly understand.the bargaining
unit to be determined by the legislation rather than by their
agreement: .-
Article 1 - Recognition
1.1 In accordance with The Crown Employees
Collective Bargaining Act, the Ontario
Public Service Employees Union is
recognized as the exclusive collective
bargaining agent for all public servants
fither t,han persons who are not employees
within the meaning of clause f of
subsection 1 of Section 1 o'f The Crown
Employees Collective Bat-gaining Act.
Here the parties are not in a position to negotiate the
shape of the bargaining unit. The bargaining unit and bargaining
agent are designated by statute. The Crown Employees Collective
Barpaininx Act provides in s. 3 (2) that, "The bargaining units
designated in the regulations are appropriate units for
..,. collective bargaining purposes under this Act," and in s. 2 (5)
that, "Every employee organization designated by the regulations
shall be deemed to have been granted representation rights under
this Act on the 29th day of December, 1972 in r-elation to such
bargaining unit or usits as are designated by the regulations."
Pursuant to these provisions, s. 11 of Regulation 232 under the
,.
“A& provides as fOlloWs:
11. All public'servants other than,
(a) the persons who are not employees
within the meaning of clause 1 (1)
(f) of the Act; and
(b) the pet-sons in the classifications
~.:oi- positidns set out in column 2 of
Schedule 2,
are designated as a unit of employees that is
an appropriate unit for collective bargaining
purposes under the Act, and The Ontario
Public Service Employees' Union is designated
as the employee organization that shall have
representation rights in relation to such
bargaining unit. .:
The exceptions in (a) and (b) of the~regulation are not
2. Effect of the Family Benefits Act
Certain terms are defined'in the interpretation section of
The Family Benefits Act. In particular:
1 . In this Act,
(h) "Director" means the Director of the
Income Haintenance Branch of the
Ministry of Community and Social
~Services ;
(i) "field worker" means a person employed
as such by the Ministry of Community
-and Social Services OI- any other
employee of the Ministry whom the
Minister designates as such;
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Cj) '*Minister" means the Minister of
Community and Social ~S~ervices;
I . . .
(m) "regional administrator" means a
regional welfare administrator or- any
other employee of the Hinistry of
Community and Social Services whom the
Minister designates 'as such for the
purposes of this Act;
. . .
The powers of the Director are set out in s. 3 of
.the As:
3. (1) The Director shall perform such duties
and exercise such powers under this
Act as are conferred OY imposed by
this Act and the regulations..
(2) Where the Director is absent or there
is a vacancy in the office, his powers
and duties shall be exercised and
performed by such civil servant as the
Minister may designate.
(3) The Director, with the consent in
writing of the,Deputy Minister of
Community and Social Services, may
.~ authorize any employee or class of
employee of the Ministry of Community
and Social Services to exercise,and
discharge any of the powers conferred
or the duties imposed upon him under
this Act.
(4) Any decision made by a person
performing duties or- exercising powers
of the Director under subsection (2)
OF (3) shall be deemed to be a
decision of the Director for the
purposes of this Act.
With respect to the receipt of applications and the
determination of eligibility, Section 11 of,the& provides as
follows:
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11. The Director shall,
(a) receive applications for benefits; and
(b) in accordance with this Act and the
regulations,
(i) determine whether any person is
entitled to.or eligible to receive;
a benefit,
(ii) where an applicant is so entitled
cr eligible, determine the amount,
,' of the alloranca or other benefit
and direct provision thereof, and
(iii) from time to t.ime vary the amount
or- benefit .so deter-mined.
The function &f "intake authority" under the Family Benefits
A& is set.out in s. 18 of Regulation 318:
18 (1) In this section "intake authority"
means a fielh worker or any other person
designated by the Director.
(2) An intake authority shall ensure that
the application is filled out and completed
by or on behalf of the applicant and the
applicant, subject to ~subsection 17 (6),
shall sign the application in the presence of
the intake authority. ._
(3) The intake authority shall,
immediately send the completed application
and any supporting material to the Director.
(4) An intake authority shall, at the
request of the Director,
(a) make a visit to the home of an
applicant for the purpose of
inquiring into the living conditions
and financial and other
circumstances of the applicant and
any dependants of the applicant;
(h) verify any statements in an
application for the benefit;
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(~1 where any child Or an applicant Or
recipient iS receiving Or may
receive a benefit, review the
circumstances under which.the child
is being cared for;
Cd) review::the capacity of an applicant
Or recipient to manage an allowance;
(~2 make a visit to the home Of a
recipient for the purpose Of
! preparing a report on any
circumst,ances of the r2cipierrt that~
might affect then eligibility of the
recipient for the amount of Or
continuance of a benefit or any _, other matter related thereto; and
(f) counsel and assist any applicant Or ? .
recipient assigned to the intake
authority in any matter relating to
a benefit.
(5j kn intake authority shall not charge any
fee to or receive any remuneration from Or On
behalf of any beneficiary or applicant in
respect Of any duty that he performs Or
service that he renders under the Act or the
regulations.
On the face of the& and Regulation, we may conclude the
following:
1 . An "intake authority" is either:
(i) a field worker; Or
(ii) a person designated by the Director.
2. A "field worker" is either:
(i) a person employed as such by the Ministry; or
(ii) another Ministry employee specially designated.
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3. A "person designated by the Director" (Reg., s. 18 (1))
must be an employee of the fiinistry c&L, s. 3 (3)).
It follows that the legislattire intended that only' ernplo~eeS
of the Ministry qf Community and Social Services may perform the
job functions in question here. Subject to the noted
exclusions, these employees are public servants within'the
meaning of s. 11 of Regulation 232 under The Crown Employees
Collective Eiaraainina Act, and are therefore members of the
bargaining unit
3. The Integration Projects Delenations
The Union placed in evidence four instruments,.dated in
December 1982 and January 1983, bye which the Employer delegated
certain powers under the legislation.
-.
1: The first is an instrument pursuant to s. 3 (3) of the
Family Benefits Act authorizing "all persons employed by the
Ministry of Community and Social Services as Income Maintenance
Field Workers" to exercise certain powers conferred upon the
Director of Income Maintenance by the A& and Regulation 318. It
is signed by the Director of Income Maintenance and countersigned
by the Deputy Minister. Inasmuch as this instrumerrt does not
purport to authorize anyone who was not a member of the
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-'bargaining unit to do anything, it need concern us no further.
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2. By the second instrument, the Minister of Community and
Social Services appoints "all persons employed as Field Workers
for the purposes of the General Welfare Assistance Act" in
certain specified mupicipalities to exercise certain powers of
the Director of Income Haintenance under the: Fami~lv Benefits Act.
These include the powers in s. .ll of the latter Act. The General
Welfare Assistance Act provides, in s. 1 cd), that "'field
worker' means a person employed as such by the Hinistry of
Community and Social Services or any other employee of the
Kinistry whom the Plinister designates as such." The effect of
this second instrument, therefore, would appear to Li simil&r to
that oi the first: it delegates powers under the Familv Benefits
Act to Ministry employees. Inasmuch as this instrument does not
purport to authorize anyone who was not a member of the
bargaining unit to do anything, it need concern us no further.'
v 3. The ,third instrument, again over the signature of the
rlinister of Community and Social Services, appoints "all persons
who are appointed pursuant to section 4 (1) of the General
t The Employer argued before us that "field worker" is a
generic term, intended here to include municipal welfare
workers generally. Inasmuch as both the Family Benefits
A& and the General Welfare Assistance Act define the term
specifically, this argument must be rejected. The Minister
must be deemed to have meant what he said, no more and no
less.
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Welfare Assistance Act, as a Hunicipal Welfare Administrator" in
certain specified municipalities, to exercisq~certain powers of
the Director of Income Haintenance under the Family Benefit* Act.
These include the powers in s. 11 of the latter Act. The General .
Welfare Assistance Act provides, in s. 4 (l>,.that "The council
of a municipality may, with the, approval of the Ninister, appoint
a municipal.welfare administrator." The instrument does not give
Municipal Welfare Administrators the authority of the Director in
s. 3 of the A&to delegate his power’s, but in any event, as we
22
have Seen, the power to delegate is limited in that the delegatea
must be an employee of the Ministry. The instrument would seem
to have the effect of putting the Municipal Welfare Admin+strator
ir, ti,e place oi ti,e Diilectol- for receiving applications and
determining eligibility. But the Welfare Administrator is
neither made an "intake authority," nor empowered to delegate
these functions to anyone else. Inasmuch as the Director is
powerless to delegate his functions to persons other than
Ministry employee*, the Administrator to whom a portion of the
Director's powers are delegated by the Ninister~can have no
greater pdiiers of delegation. The third instrument does transfer !
work from within the Plinistry to the municipality, hut it does
not transfer the "intake authority" function, and it transfers a
portion of the Director's responsibilities to a single individual
in each #of the municipalit iesr with no further power-s #of
delegation. This instrument, then, would not appear to have the
effect of transferring family benefits work formerly performed by
I
provincial field workers to municipal employees.
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4. .The fourth instrument, signed by the Minister, appoints
"all persons employed as Supervisors for the ~ur~o*e* of the
General Welfare Assistance Act" in cert$i& specified
municipallties,.to exercise certain powers of the Director of
Income Maintenance under the Familv Benefits Act. The powers and
responsibilities assigned to Supervisors are essentially the same
as those assigned to Municipal Welfare Administrators by the
third instrument. The same comments apply. It should be noted,
however, that neither the General Welfare Assistance Act nor the
Regulation* 44l.:,and 442 under that A& appear to make any
reference to "Supervisors."
4. The flinisterial Power
The second, third and fourth delegations were all issued
over the Minister's signature, and pursuant to s. 5 of the
flinistrv of Communitv and Social Services Act, whi<J provide*:
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5. Where, under this or any other Act, a
power is conferred or a duty is imposed upon
the Hinister or upon another officer or an
employee of the Ministry, such power or duty
may be exercised and discharged by any other
person or class of persons whom the Ninister
appoints in writing, subject to such :
limitation*, restriction*, : conditions and L
requirements as the llinister may set out in
his appointment.
It was argued before us that this power of appointment
entitled the Minister to assign the functions of receiving
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applications and determining eligibility under the Familv
Benefits Act to persons other than members of the bargaining
unit. The power provided by this section is, of course,.a very
broad power, although I doubt that the legislature intended it tc
\
sweep aside the specific provisions about appointment set out in
the Family Benefits.Act and other legislation.
Nevertheless, i,t is not necessary for the determination of
this matter that we weigh this provision against the more
specific provisions in the latter Act. For as we have already
seen, the instruments of delegation do not purport, on their
face, to have the effect the Employer apparently takes th.am.to
have. None of the instruments delegates the "intake authority"
functions to anyone outside the employ of the Ninistry. The
third and fourth instruments delegate the functions of receiving
applications and determining eligibility to municipally-employed
managers in the general welfare system, but not to welfare
~workers. The second instrument, upon which the Employer
apparently relies in~transferring these functio,ns from its own
em.ployees to employees of the municipalities, fails in terms to
accomplish that purpose, for the delegatees~ are themselves
defined in the statutes referred to as Ninistry employees.
Accordingly, whether or not s. 5 of the Ministry of
Communitv and Social Services Act empowers the Minister to
transfer these functions from Ministry employees to municipal
employees, the instruments produced before us do not have this
'effect.
Where the legislature has determined that Certain fUnCtionS
are to be performed by a particular class of persons, and where
the flinister has not clearly and lawfully empowered others to
perform those functions, the~performance of the functions by
other than the authorized class must surely be unlawful.
. .
5. The FIDS Designations
The Union 'placed in evidence a series of letters written by
the Director of Income Claintenance to municipal employees. All
are dated in January, lP84, and have the same text:
I hereby designate you as an Intake Authority
for the purpose of The Family Benefits Act, .,
R.S.O. 1980, c. 151 and the Regulation
thereunder, with effect from the first day of
February, 1984 until such date as the
Director may determine.
The de~signation is pursuant to Subsection 1
of Section 18 of Regulation 318 of Revised
Regulations of Ontario 1980, made under T&
Family Benefits Act. j
As we have seen, the Director's power of designation under
the A& and Regulation is restricted to ninistry employees. The
purported designations to municipal employees in these letters
must therefore be unlawful.
6. Jurisdiction of the Grievance Settlement Board
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I have made out the case that the Family Benefits Act
requires that "intake," the receipt of applications~and the
determination of eligibility be performed by Ministry emp~o,yees.
Leaving aside the managerial and related exclusions, these
~employees are members of_the bargaining unit for which the Union
is the exclusive bargaining agent. I have sketched the argument
that if, as is alleged, the Employer has transferred these
functions to municipal welfare uorkers, it has done so .~
.ufilawfully. The Employer argues that this Board lacks
jurisdiction to determine the grievance in these circumstances
;*
Ihere are three branches to the Employer's argument, rjhictr i
shall consider seriatim. First, the Employer argues that
contracting out of work is an exclusive management right that is
excluded from the jurisdiction of this Board. Second, the
Employer argues that there is no express limitatidn in the
collective agreement upon which a grievance may be founded.
u Third, the-Employer argues that then recognition provision in the
collective agreement does not imply a limitation on contracting
out.
The Cr&n Employees Collective Bargaining Act provides, in
s. 18:
(1) Every collective agreement shall be
deemed to provide that it is the exclusive
function of the Employer to manage, which
function, without limiting the generality of
: f
the foregoing, includes the right to
determine,
,a) employment, appointment, complement,
organization, assignment, discipline,
dismissal, suspension, work methods and
procedures, kinds and locations of
equipment and classification of
positions; and
(b);met-it system, training and development,,
appraisal and superannuation, the
governing principles of which are
subject to review by the Employer with
the bargaining agent,
and such matters will not be the subject.of
collective bargaining nor come within the
jurisdiction of a.board.
I accept the majority's finding that this provision bars the
parties from including a prohibition against contracting out i".~"
their collective agreement. I also agree that the effect of
decisions by the Ontario Public Service Labour Relations tribunal
is, to permit the parties to negotiate provisions which may
moderate the adverse effects of contracting out on employees, but
to disallow proposed provisions which would limit the Employer's
right to contract out work. And of course, I agree that there is
no provision in the collective agreement expressly~prohibiting
contracting out. In my submission, though, "one of these
considerations relieves this Board of jurisdiction over the
2 The reference to "the jurisdiction of a board" at the end of
s. 18 (1) is clearly a reference to an interest arbitration
boar-d, and not to the Grievance Settlement Board. The
interpretation section, in s. 1 Cc), defines "board" as "a
board of arbitration established under this Act," and by 9.
10 such a board is empowered to determine matters in dispute
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The Union does not claim to have negotiated a Provision
against contracting out, which the Employer has~'violated. It
argues instead that in the special and unusual circumstances of
this case, it may seek a, remedy through a grievance founded in
~ the recognition provision where the Employer contracts out,~,work
in violation of the statute. Section 18 (1) of the Crowns
Emplovees Collective BarRaining Act does not deny us jurisdiction
in this matter, nor does it provide that it is an unreviewable
management function to violate the Family Benefits Act.
The remaining issue may properi'y b& stated in these narrow
terms: 1s a grievance alleging that the Employer violated the
recognition provision of the collective agreement by assigning
family benefits work to municipal employees, contrary to the
Familv Benefits Act, arbitrable before this Board?
"within the scope of collective bargaining under this Act,"
which is clearly consonant with the provision in s. 18 (1).
This Board, on the .other hand, is consistently referred to
as the Grievance Settlement Board throughout the A&, and
unlike interest arbitration boards we are given jurisdiction
to determine disputes over some.at least of the matters set
out in s. 18 (1) -- see s:l8 (2). Moreover, the Grievance,
Settlement Board is given some~.powers of a board of
arbitration (s. 19 (2)) but these do not include the powers
in s. 10 that are limited by "the scope of collective
bargaining."
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; . .7. Contractinn Out and Recognition
It is a well-known proposition in labour arbitration that a
prohibition against contracting out is not ~to be read into the,
recognition provision of a cdl;.eFtive agreement. AS authority
for the .propositioti, the Employer supplied the Board with four
decisions. They deserve close consideration.
-. In B.0.A.C.3 the termination of an entire bargaining unit
due to the contracticg out of work was upheld in the absence of
express language forbidding contracting out. Arbitrator Lande
expressed himself in these terms:
The Employer who signs a collective agreement
sets out the conditions under'which the
employees shall work for him when there is
uork. He is not bound to provide work. He
only gives up such of his pouer.s as he
expressly assigns in the contract, retaining
all of his inherent, pristine rights. Unless
the contract has a prohibition to
subcontract, as many labour contracts do,
this right has not been removed from the
Employer. Many contracts also provide for
~*successor obligations," that is, the
Employer undertakes that its successor in a
contract will assume all of the obligations
of the original labour contract. Barring the
f'orrg:oiqg, management has the inherent right
to contract out.. (291-Z)
. . .
3 Re United Automobile Workers & B.O.A.C. 10 LAC 286 (1960)
Lande.
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It should be pointed,out that in the
exercise of its rights to contract out, the
Employer must be ,in good faith and be
actuated by sound business principles.
(292-3)
Similarly in Cooper h Beattvq the termination bf an entire~
bargaining unit due to contrac,ting out was sustained where the
contracting out was for "sound busin.ess reasons" and there was nc
provision in the agreement preventing'contr,acting out.
In Dare Foods5 a board of arbitration followed Russelst&l
(to be discussed presently) and determined that in the absence of
an explicit collective agreement restriction on contracting out,
or a clause "imposing a restriction b,y clear or necessary
implication," a restriction on contracting out is not to be read
into a recognition provision. Ads in the other cases referred to,
this board considered whether the contracting out ~was in good
faith. In dismissing the grievance, the majority of the board
stated:
We wish to make it clear that we are not of
the,~view that where (as here) there is an
agreement that is silent on contracting out,
a company may contract out bargaining unit
Re International Brotherhood of Bookbinders, Local 20. and
the Council of Printine. Industries of Ontario on behalf of
Cooper & Beattv Ltd. 20 LAC 365 (1969) Brown..
Re United Brewer-v Workers, Local 173. and Dare Foods Ltd. 20
LAC 166 (1969) Adell.
work without BRY restriction. In . . r
Russelsteel, Professor Arthurs perhaps goes
too far in saying that, given such an
agreement,, there is a "strong probability
than an arbitrator would not find~any
implicit limitation owmanagement's right to
contract out :' Many Canadian and American
arbitration cases acknowledge that there are
implicit limits beyond which a company may
not go. see Wallen, "How Issues of
Subcontracting~and Plant Removal are Handled
by Arbitrators" (1966), 19 Ind. & L.R. Rev.,
265 at pp 266-7:
"It is axiomatic that a contracting party
is not privileged to engage in a course
of conduct designed to nullify its
agreement . . . A labor contract may not
guarantee job security or hold out a
promise that a13 the work to be done for
the.Employer will be done by people under
its coverage. But it would be worthy of
scant respect if it tier, construed to be
a promise to recognize the Union and to
apply its standards only if the Employer,
in his sole discretion, decides to have
the work done by Union members and not by
others. This would be akin to saying
that the Employer's undertaking to meet
the contract's terms ,involves no real
commitment whereas the Union's
undertaking to abide by its terms is
enforceable."
It will be seen that the thrust of these decisions is to
permit contracting out where it is done in good faith and there
'1s no express prohibition in the collective agreement.
The Employer also supplied the decision of this Board in
Whitehead et ~1.6, where this Board's-jurisdiction to entertain
6 File #198/82, 199182, 200/82, 201/82, 202/82 (Roberts).
grievances alleging impropriety in the Employer's exercise of its
exclusive management functions was considered. The function in
question was that of allocating employees to work schedules,
which the Boat-d found to be an exclusive management right. The
Board-found that "unless fettered by the Collective Agreement the
Employer- is free unilaterally" to perform this function, "so long
as it acts in good faith and does not jeopardize the integrity of :
the bargaining unit." (9)
8. The Reasonin? in Russelsteel
The leading authority for the proposition that contracting
out is pirmitte:.. i, tki absence of specific language to the
contrary, notwithstanding the recognition provision, is of course
Russelstee27, decided by Professor Arthurs~ (as he then was). in
1966. This was a case of four truck drivers who lost their job3
when their Employer contracted out its trucking to an independent
firm. The collective agreementcontained no express prohibition
of contracting out. The grievance cited the recognition clause
and a provision stipulating that non-members of the bargaining
unit were not to perform bargaining unit work. It was, as Prof.
Arthurs put it, .a classic case of contracting out.
7 He United Steelworkers of America and Russelsteel Ltd. 17
LAC 253 (1966).
=22=
U
r‘ .
At the time, the arbitral jurispridence about contracting
out was divided between two quite. fundamentally different
theories of.~ the collective agreement. On the one side were those
arbitrators who adopted a strict "residual rights" theory,
holding that management retained its unilateral common law rights
in all respects except those that were expressly "surrendered" in
the agreement. (The B.O.A.C. deci.sion quoted above is a~ case in
point.) 0h"the other~side were those, admittedly fewer in
number, who followed Professor Laskin (as he then was) in his
'viei; that rights and obligations under collective bargaining were
wholly distinct from the common law presumptions of master and
servant.
Prof~. Arthurs refused to enter this debate. He expressly .,~. i
took no position on the reserved rights controversy (259). Opting
for "pragmatic and realistic solutions" rather~than "over-broad
philosophical considerations," he urged that the very fact that a
substantial majority of arbitrators had permitted contracting out
L. in the absence of express language prohibiting it created a
presumption that the parties, in negotiating their agreement,
were *'aware, as a practical matter, of the need'to specifically
prohibit contracting out if they are to persuade an arbitrator of
their intention to do SO.- (257) The operative principle was the
"climate" of collective bargaining -- the context of expectations
and assumptions that participants in the process were entitled to
hold about each other. In essence, Prof. Arthur-s said that
arbitrators would give effect to the expectations that the
parties were entitled to hold. In the circumstances,.the
contracting out of the truck drivers' work was not prohibited
because-the Employer was entitled to rely upon the presumption
that arbitrators would not find a" intention to prohibit it in
the absence of express language in the agreement. That
presumption was less a matter of law than of collective
bargaining experience.
In saying this, Prof. Arthur-s expressly limited his findings
to the interpretation of the particular agreement before him
(259) and acknowledged that bad faith cases might call for a
different approach (260).
9. Application to the Present Case
I stated above that in my opinion the majority of this Board
applied the existing jurisprudence wrongly. I think the
following: considerations must be taken into account in
determining the jurisdictional question.
1 . The rule in Russelsteel, underlying the current approach
to this issue, is not that contracting out is permitted in the
absence of express language to the contrary. The rule is that
arbitrators will give effect to the expectations that parties to
.
collective bargaining are entitled to hold. Russelsteel does not
decide the substantive issue of contracting out: instead, it
offers a rule of construction or interpretation.
=24=
; . f
2. The private sector jurisprudence is founded on the
assumption that the parties are.free to negotiate rhatever
language they please. If the absence of specific Language
forbidding contracting out means that contracting out is:
permitted, it is not because of some theoreti~cal "residual right" ,.,.
but because the parties' decision not to include such language in
their agreement raises the presumption that they did not intend
to restrict contracting out.
3. Where the parties have no choice in the matter (as here)
the presumption does not arise. Here the legislature has decreed
that certain matters inciuding complement, organization and
assignment are not to be the subjects of collective bargaining.
The absence of language in the collective agreement in such
circumstances can give rise to no presumption about the intention
of the parti~es.
4. Whether one considers the reserved rights cases, the
cases that follow Russelsteel, or this Board's own jurisprudence
about exclusive management functions (e.g. Whitehead et al.,
above), there is a consensus that the Employer must be in good
~faith in exercising its discretion. -This consensus flows from
general contractual principles rather than from any special
considerations about contracting out. I note that the majority
neglects to consider this factor.
.._,~
5. Here, unlike in the private sect~~,~-.t,h~;~.parties are not
free to renegotiate the definition of the bargaining unit. This
presumably is the foundation of Vice-Chairman Robert's view,
expressed in Whitehead et al., that in exercising its exclusive
functions the Employer must not "jeopardize the integrity of the
bargaining unit."
10. Conclusions
As suggested earlier, I believe that on analysis the
question of the Board's jurisdiction to determine the grievance
resolves ~itself into the question Hhethrr in the special
circumstances of.~this case the recognition provi
basis for the grievance. There are, in my view,
barriers to arbitrability.
sion can be the
no other
The analysis reveals three distinct grounds' for th&
grievance in the recognition provision.
First, I agree with Vice-Chairman Roberts that in exercising
its exclusive functions the Employer may not jeopardize the
integrity of the bargaining unit. Inasmuch as the bargaining
unit consists of public servants, an attempt by the Employer to
transfer work that the legislature has reserved to public
servants to others who are not public servants jeopardizes the
integrity of the bargaining unit. Complaints about violations of
;
=26=
4
the integrity of the bargaining unit are properly founded in the
i ,T :r
recognition provision.
Second, fol&G:ng the reasoning in Russelsteel, I would give z.
effect to the expectations that parties to collective bargaining
are entitled to hold. It ought to be beyond dispute that. the
parties are entitled to expect one another to obey the law. In
my view, this presumption is a stronger presumption than the
presumption that if the parties intended to restrict contracting
out they would have said so explicitly, and in any event; k-1
have argued, the latter presumption does not arise where the
parties are forbidden to negotiate such a provision. Since I an
morally certain that in stipulating the exclusive management
functions in 5. 18 (1) of the Crown Employees Collective
Baraainina Act the legislature did not intend to give the
Employer the right to flout the law, I would be prepared in the
circumstances to read a provision against unlawful contracting
out into the recognition provision of the collective agreement.
Indeed, such a provision is a necessary implication in all the
circumstances.
Third, Russelsteel aside, I submit that unlawful conduct is
prima facie in bad faith. The recognition provision of a
collective agreement is a provision whereby the Employer engages
tqo deal in good faith with the bargaining agent as representative
of the employees in the bargai,ning unit. A grievance alleging
that contracting out is in bad faith, is appropriately grounded
+ the recognition p&vision. d
For all these reasons, I ,.,ould have ruled the grievance to
be arbitrable.
The Board reserved its decision on the preliminary objection
to arbitrability and proceeded-to hear the merits as the9 bore on
the question whether the Emploier had acted unlawfully,in
.assigning the family benefits work, to municipal employees. The
Union reserved the right to introduce evidence going to the
quantum of damages pending our'decision on the merits.
As indicated above, I am satisfied on the evidence that the
Employer acted unlawfully in assigning the family benefits work
to municipal employees. In so doing, I am satisfied that the
Employer was in violation of its obligations to the Union under
the,recognition provision of the collective agreement.
Accordingly, I would have sustained the grievance and required
._ the parities to make their submissions as to remedy.
(Professor) Paul Craven, flember