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HomeMy WebLinkAbout1997-0498UNION98_02_16 ONTARKJ EMPLOYI!cS DE LA COURONNE CROWN EMPLOYEES DE L'ONTARKJ 1111 GRIEVANCE COMMISSION DE , SEITLEMENT REGLEMENT BOARD DES GRIEFS 180 DUNDAS STREET WEST SUITE 800, TORONTO ON M5G fZ8 TELEPHONEITELEPHONE (416) 326-1388 180, RUE DUNDAS OUEST BUREAU 800, TORONTO (ON) M5G tZ8 FACSIMILEfrELI~COPIE (416) 326-13Q6 GSB # 0498/97, 0768/97 OPSEU# 97U073, 97U064 IN THE MATTER OF AN ARBITRATION Under THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT Before THE GRIEVANCE SETTLEMENT BOARD BETWEEN OPSEU(Union Grievance) Grievors - and - The Crown in Right of Ontario (Management Board Secretariat/ Ministry of Transportation) Employer BEFORE: R J ROBERTS Vice-Chair FOR THE UNION: Mr Gavin Leeb Grievance Officer Ontario Public Service Employees Union FOR THE EMPLOYER: Mr Len Marvy Counsel Legal Services Branch Management Board Secretariat HEARING: August 12, 1997 August 13, 1997 October 27, 1997 October 28, 1997 SUPPLEMENTAL WRITTEN " SUBMISSIONS: November 7, 1997 ~ December 2, 1997 "- . \ \ 1 AWARD I. Introduction ThIs case raises the questIOn whether the employer breached Its reasonable efforts" oblIgatIOn under artIcle 1 (a) of AppendIx 9 of the collectIve agreement when It chose to shIft Its roadway mamtenance operatlOns to the pnvate sector US111g Managed OUtSOurC111g (MO s) and Form A Contracts The UnIon submItted that there was a breach because the employer dId not gIve any weIght to thIS oblIgatIOn. The employer submItted that there wasn t a breach because ItS "reasonable efforts" oblIgatIOn under AppendIx A dId not commence untl! after the chOIce was made For reasons WhICh follow, I conclude that the employer's "reasonable efforts" oblIgatIOn commences as soon as the deCISIOn to dIvest IS made, and as a result must be gIven sIgmficant weIght In the chOIce b) the employer of ItS means of dIvestment. The gnevances are allowed to the extent mdlcated 111 the ConclusIOn of thIS A ward because the employer fal!ed to do thIS when It chose MO s and Form A contracts as Its means of dIvestment. II. Factual Background On March 31, 1996 a number of changes to the terms of the collectIve agreement came ~ - mto effect. One of these changes was AppendIx 9, whlch read, 111 pertment part, as follows 2 The Government IS aware that Its restructUrIng mltlatlves over the next two fiscal years (1996/97, 1997/98) could have a sIgmficant effect on employees, some of whom have served for a lengthy penod Accordmgly commencmg wIth the ratlficatIOn of the colleCtlve agreement and endlllg on December 31 1998 the Employer undertakes the followmg 1 (a) The Employer w1l1 make reasonable eff0l1s to ensure that, where there IS a dISposItIOn or any other transfer ofbargaInmg UnIt functIOns or Jobs to the pnvate or broader publIc sectors employees m the bargammg UnIt are offered pos11IOns WIth the new employer on terms and condItIOns that are as close as possIble to the then eXlstmg terms and condItIons of employment of the employees m the bargamlllg UnIt ThIS has become known as the "reasonable efforts' oblIgatlOn of the employer Where a bargalllmg UnIt functIOn or Job IS shIfted to the pnvate or broader publIc sectors, the employer must make reasonable efforts to ensure that (1) affected bargammg UnIt employees are offered pOSItIOns WIth the new employer; and, (2) the terms and condItIOns of employment offered to them are as close as possIble to theIr eXlstlllg terms and condItIOns of employment. By the tIme AppendIx 9 came mto effect, the emplover herem, the MInIstry of TransportatlOn, had already decIded that wlthm the next three years It would ShIft to the pnvate sector all of 11s roadway mamtenance work. ThIS reqUIred the transfer to the pnvate sector of a sIzeable amount of the work of Its bargammg UnIt employees Accordlllg to the eVIdence, at the tlme of thIS deCISIOn, bargammg UnIt employees In the Northwestern RegIon of the employer performed 50% of ItS summer mamtenance operatlOns and 30-40% of ItS wmter operatIOns The mamtenance work embraced a number of dIverse functIOns In the spnng and early \-- summer, It mcluded shoulder gradmg, pothole filhng, pavement markmg, and bndge washmg. - 3 As the summer progressed, the focus shIfted to pavement repair, guardraIl mamtenance and sIgn 1113l11tenance In the wlI1ter sandll1g, saltll1g and snowplowlI1g came to the fore year-round functIOns II1cluded electncal mall1tenance hIghway patrollIng, emergency response and supervlsmg the qualIty of work of outSIde contractors Needless to say, the short-term or seasonal nature of many of these functIOns reqUIred most full-tlme mamtenance employees to SWItch from performmg one Job to another as the months passed, The Mil1lstrv struck a commIttee called the Models Group to decIde whIch delIvery models It would adopt for shlftmg roadway mall1tenance work to the pnvate sector One of the representatIves on thIS commIttee was Mr Clarke McKercher, the RegIOnal OperatIOns Engmeer for the Northwestern RegIOn of the employer He testIfied that the Models Group mvestlgated the feasIbIlIty of alternatIve models for the outsourcmg of the employer s mamtenance actlvltles Another group, called the Contracts Group, prepared the genenc tender packages for the alternatIves that the Models Group finally selected. Accordmg to Mr McKercher, the Models Group ultlmateh selected two pnvatIzatIOn models for shlftll1g the roadway mamtenance work to the pnvate sector Area Mall1tenance Contracts (AMC's) and Managed Outsourcmg (MO s) In an AMC the employer would contract out to a general contractor all of ItS summer and wmter mall1tenance work for 300 to 500- kIlometre stretches of hIghway The contracts would extend over three (3) to five (5) vear pen ods - , 4 In an MO, the employer would act as Its own general contractor Its Dlstnct Offices would tender out to subcontractors small contracts for short-term work, hke snowplowmg or pothole fillmg MInIstry staff at the patrol sItes m each Dlstnct would contll1ue to patrol the hIghways to provIde quahty control supervIsIOn to the subcontractors The subcontracts would not be multI-year contracts hke AMC's. Many would only last for a few weeks None would provIde contmuous work for more than one year It seems that an MO was somethll1g hke a longer Form A contract, whIch was well- known to the employer's management. Mr McKercher explall1ed that the employer used Form A contracts In an admInIstratIVe procedure for dealIng WIth very short-term work that was dIfficult to pre-IdentIfy such as repair to a culvert that unexpectedly collapsed. When thIS happened, the employer would tender out a Form A contract for the short-term work Involved m makIng the necessary repair Upon cross-eXamInatIOn, Mr McKercher agreed that the chOIce of these two pnvatlzatIOn models was dnven by a SIngle obJectlve to get the work pnvatIzed In a way that would maXInllze cost saVIngs to the employer He Said that the "reasonable efforts" oblIgatIOn of the employer was dIscussed In the Models Group, but thIS dId not dnve the chOIce that was made As to requests for proposals for AMC's, It was deCIded bv the Models Group that the "reasonable efforts" oblIgatIOn of the employer could be satIsfied by IncludIng wlthm them the ~ - Ill-fated bId InCentIve called the Human Resources Factor (HRF) The HRF was later found to t 5 be an unreasonable means of satlsfymg the "reasonable efforts" obligatIOn In Re Union Gnevallce and Ministry of Transportation (1997), G S.B No 1344/96 (Kaplan, June 9, 1997), aff'd upon J.R. by DIV Ct. (Dec 1, 1997) With respect to the MO's, Mr McKercher stated that m the diSCUSSIons wlthm the Models Group, It was recogmzed that most would be unlikely to generate any full-tIme Job offers to affected members of the bargammg umt TheIr dlscontmuous or mtermIttent nature, short term and low dollar value likely would preclude thiS Accordmg to Mr McKercher, the only MO's that stood even a chance of generatmg full-tlme Job offers were those that dealt With the work of a partIcular group, such as electncIans As a result, the Models Group deCided that generally, requests for proposals on MO's would not contaIn any bId Incentlve to Induce Job offers to affected members of the bargammg umt. The only exceptIons to thIS were to be MO's for the work of groups such as electnclans The latter would mclude the HRF Instead, It was deCIded to take the followmg steps WIth respect to MO's (1) The package of matenals that the employer sent to each Interested subcontractor -- the employer called them "proponents" -- would mclude a form letter notlfymg the proponents of the employer's "reasonable efforts" obhgatIOns The form letter gave notlce that If the proponent were awarded the contract, It would be proVIded WIth "a lIstmg, by semonty of the number of [affected] employees, theIr salary, theIr pOSltlons and theIr work locatIOn" AccordIng to the form letter, a management representatIve would then contact the proponent "to " 6 explore opportul1ltles for offers of employment and the associated terms and workmg condltlons for affected MTO employees." (2) Affected employees would be notIfied Via another form letter of the above efforts by the employer on theIr behalf The form letter concluded WIth an expressIOn of confidence "that the skills, quahficatIOns and dedIcation of MTO employees wIll prove to be an asset to the orgal1lZatIOns of the successful bIdders. " (3) ResponsIble management of the employer would be provIded WIth a scnpt to go through m a telephone mterVle\\ WIth the successful bIdder after the MO was awarded The scnpt suggested posmg two mltlal questIOns to the successful bIdder -- whether It mtended to mcrease Its workforce as a result of bemg awarded the contract, and would It be makmg Job offers to MTO employees If the answers to these questIOns were "no" the manager was to ask the successful bIdder what the barners to hmng were If the successful bIdder answered "ves", the manager was to go on to determme how many Job offers were to be made and whether they quahfied as "good Job offers wlthm the meal1lng of AppendIx 9 of the collectIVe agreement. \Vhen Mr McKercher was asked why the Models Group dId not try to make hmng affected staff more attractIve m the case ofMO s, he rephed that the members of the Models Group dId what they thought m the CIrcumstances would be reasonably expected to secure employment. They could not thmk of anythmg else that could reasonably be done Counsel for the Ul1lon then asked whether the Models Group consIdered makmg the hmng of affected staff more attractIve by gIvmg preferentIal treatment to those who hIred affected employees Mr McKercher rephed that thiS was not dIscussed. Mr McKercher responded m the same way to several further alternatIves posed by -' counsel for the Ul1lon, These alternatlves mcluded provldmg financIal mcentlves, automatIcally 7 awardmg a subcontractor an addItIonal MO If It lured affected staff, requlflng subcontractors who bId on MO's oyer a certall1 value to lure affected staff If they were successful and blendll1g MO s for summer and Wll1ter work to provIde the POSSibIlIty of contll1UOUS work for affected staff As to the latter, Mr McKercher pOInted out that a contract that blended together summer and Wll1ter work would not qualIfy as an MO He saId that It would not mmlmlze costs and would, m essence make the bIdder a general contractor He agreed, however that If the employer had blended summer and wmter work, It would have made It eaSIer to secure full-tIme employment for affected staff In October 1996, Mr McKercher Said, the Models Group deCIded that m the first phase of downslzmg, whIch was scheduled for the Spnng of 1997 each Dlstnct of the employer would ShIft part of Its roadway mamtenance work to the pnvate sector usmg 1 AMC and 2 MO s Because the Northwestern RegIOn had two Dlstncts -- Thunder Bay and Sault Ste Mane -- thIS meant that the RegIOn had to tender out 2 AMC sand 4 MO's Thereafter, the Northwestern RegIOn adyertlsed requests for proposals, i.e , tenders, on two AMC's These tenders closed m late January 1997 The RegIOn also mcluded In ItS ImplementatIOn plan the requlSlte 4 MO s -- two for stretches of hIghway m the Kenora and Dryden areas of the Thunder Bay Dlstnct, and, two for stretches of hIghway m the Bruce -\..- Mmes/Echo Bay and Goulms RIver areas of the Sault Ste Mane Dlstnct. Potentially affected - 8 staff were notlfied m October, 1996 that surplussmg was expected to tak.e place m May 1997 In Apnl 1997, after evaluatmg the AMC tenders that had been receIved the employer decIded not to award eIther of the AMC s Mr McKercher explamed that the bIds were too hIgh There were no saVIngs to be reahzed over usmg the employer s own staff The employer dId not, however, retam Its own staff to perform the work mvolved 111 the AMC s The employer remamed commItted to Shlft111g all of Its roadway mamtenance work to the pnvate sector wlthm a three-year penod, To keep the first phase of downslz111g on track and achIeve greater efficIency, the employer deCIded to resort to usmg MO s for contractmg out the work ongmally contemplated by the AMC s MeanwhIle, also m Apnl, 1997, the Northwestern RegIOn announced Its plans for Its second phase of downsIzmg, whIch was scheduled to take place m the Fall of 1997 It planned to advertIse requests for tenders for two more AMC's -- one m each of the Dlstncts It also plam1ed to outsource through MO's the mamtenance ofa 246 blometre stretch of hIghway m the Red Lake/Ear Falls area, and a 363 kllometre stretch of hIghway 111 the Bl111d RlverlThessalon area. Potentially affected staff were adVIsed that the employer antIcIpated sendmg out layoff notlces 111 early June, 1997 On May 1, 1997, the umon filed the first gnevance leadmg to thIS arbItratIOn It ~ complamed that the employer had faded to complv WIth, inter alia, AppendIx 9 of the collectIve - 9 agreement m contractmg out Its roadway mamtenance work through Its AMC sand MO s On June 9 1997 the Kaplan award, supra Issued. It concluded that the use of the Human Resources Factor (HRF) m requests for proposals for AMC s fell short of satlsfymg the employer s reasonable efforts" obhgatIOn under AppendIx 9 On June 12, 1997, the partIes essentlally agreed to freeze the tendenng process for all AMC s sought by the employer ll1c1udll1g those of the Northwestern RegIOn for roadway mamtenance The Northwestern ReglOn, however, contmued to proceed wIth outsourcmg Its roadway mamtenance work through Its MO's, mcludmg 3 MO s that !ncorporated the HRF for purposes of satIsfyll1g the employer s "reasonable efforts" oblIgatIOn, By letter dated June 10 1997 the emplover notlfied the umon that as a result of thIS outsourcmg, 70 affected emplovees would be gIven surplus notIces. The layoffs were formally announced on June 16 1997 Through an admmlstratIVe oversIght, the employer s letter of June 10 1997 enoneouslv stated that the layoffs were due to the outsourcmg of roadway mamtenance operatIOns "through Area Mamtenance Contracts [AMC s] and Managed Outsourcmg [MO s] " ThIS led the UnIon to conclude that the employer was m breach of the "freeze" agreement of June 12 regardmg AMC s. On June 27, 1997 the umon gneved, and thIS gnevance was consolIdated wIth the May 1 gnevance for purposes of thIS proceedmg At the hearmg, It became clear that none of the 70 employees referred to m the employer's letter was affected by outsourcmg VIa AMC s ThlS '- resolved the gnevance to the satIsfactIOn of the umon - 10 One other gnevance was consolIdated wIth the May 1 gnevance for purposes of thIS proceedll1g On June 25 1997 the umon essentlally gneved that the Northwestern RegIon of the employer breached AppendIx 9 of the collectIve agreement by resortll1g to the use of Fonll A contracts when It found that the bIds on Its MO s were too hIgh to provIde an) cost sa\ ll1gs to the employer The Mamtenance Engmeers for the Thunder Bay and Sault Ste Mane Dlstncts confirmed m theIr eVIdence that thIS had been done Mr Bob van Veen, the Mamtenance Engmeer for the ';ault Ste Mane Dlstnct, testIfied that when the pnces bId for MO s were hIgher that what It would have cost the Dlstnct to perform the work Itself, the Dlstnct broke the work up mto smaller Ul1lts and contracted It out Via Form A contracts \\Then asked why the Dlstnct dId not retall1 affected staff to perform the work, Mr van Veen responded m the same way as the employer dId, accordll1g to Mr McKercher upon decldmg to use MO's when the bIds on AMC s were too hIgh. He sald that It was more efficIent to contract the work out. Mr RIchard Bruneau, the Mamtenance Engmeer for the Thunder Bay DIstnct, testIfied to a sImIlar use of Form A contracts In cross-exammatIOn, counsel for the Ul1lon noted that the Thunder Bay Dlstnct had let out two separate Form A contracts for gUIderaIl repau work m the Kenora area. He asked whether these mvolved sIgl1lficant work. Mr Bruneau replIed that they dId, Each of the two subcontractors fielded five-man crews for a penod of 5 - 6 weeks . 11 Counsel then asked Mr Bruneau whether he d consIdered a process whereby the only people who were allowed to bId on Form A contracts hke these were those who Jmed affected staff to do the work. Mr Bruneau repl1ed that he had not. Upon reeXamll1atlon, Mr Bruneau added that thIS would have been contrary to the employer's tendenng pl1l10sophy and practlces III The SubmIssIOns of the PartIes (a) The Submission of the Employer Counsel for the employer, Mr Marvey, agreed to make hIS submIsSIOns first, so long as It was acknowledged that the burden of persuaSIOn m the matter rested wIth the umon, Counsel for the umon, Mr Leeb acknowledged that thIS was the case In hIS submIsSIOns, Mr Marvey suggested that there were two Issues to be decIded (1) The threshold Issue Whether AppendIx 9 of the collectIVe agreement hmlted m any way the nght of management to choose the method of dISpOSItIOn of ItS operatIOns and, (2) If not, whether the employer fulfilled ItS "reasonable efforts" obhgatIOn under AppendIX 9 after choosmg to dIspose of Its roadway mamtenance operatIOns through Managed Outsourcmg (MO s) On the second Issue, Mr Marvey mdlcated that the posItIOn of the employer was that. (1) Because of the nature ofMO's, no reasonable efforts could have generated "good" Job offers to 12 affected employees wIthm the meanIng of AppendIx 9, (11) If there were reasonable efforts that could have been made, the employer made them, and (Ill) If there were reasonable efforts that the employer dId not make the UnIon had faded to prove that they would have resulted m good .lob offers to affected employees Turnmg to the first Issue Mr Marvev noted that under artIcle 1 (a) of AppendIx 9 the reasonable efforts" oblIgatIOn of the employer only arose "where there IS a dISposItIOn or any other transfer ofbargall1ll1g UnIt functIOns or .lobs to the pnvate or broader publIc sectors." The provIsIOn dId not say that the employer wdl choose the dlspOSltlon that wIll gIVe employees the greatest pOSSIble chance to be offered "good" .lobs It also dId not say that the employer wdl only dIspose ofbargall1mg UnIt work m a way that wIll ensure affected employees Jobs as close as pOSSIble to theIr eXlstmg Jobs These thmgs, It was submItted, were not bargall1ed for As a result, Mr Marvey submItted, the management nght of the employer to contract out was not constrall1ed by AppendIx 9 The employer remall1ed free to contract out bargall1ll1g UnIt functIOns for good falth busmess purposes, such as ImproVll1g effiCIency The employer s "reasonable efforts" oblIgatIOn under AppendIx 9 only commenced once the employer had decIded upon the means of contractmg out that best sUIted Its legItImate busmess purposes ThIS It was submItted, was where a "dISposItIOn" occurred wlthll1 the meanIng of artIcle lea) of AppendIX 9 \, As to thIS propOSItIOn, conSIderable relIance was placed upon the Garages" case Re ~ 13 Union Grzevance and Ministry of Tramportation (1997), G S B No 1344A/96 (0 V Gray) In that case, the employer closed some of Its garages and contracted out certam vehIcle repaIr work that had been performed by mechamcs In the bargaInIng umt The contractIng-out was made on an ad hoc basIs As the need arose for a partlcular type of repau the employer would select an appropnate serVIce provIder from a lIst of those who had made standmg offers to the employer ThIs made It VIrtually ImpoSSIble to obtam from any of the serVIce proVIders on the lIst "good Job offers for the Mlmstry mechamcs who were laid off as a result of the garage closures The umon argued therem that under AppendIx 14 (now AppendIX 9) the employer was oblIgated to contract out the repair work In a way that encouraged the serVIce proVIders to lme laid-off Mmlstry mechamcs The employer submItted that It was wlthm Its exclUSIve management nghts to choose the means by whIch It dIsposed of Its vehIcle repair work. It was only after the chOIce was made that ItS "reasonable efforts" oblIgatIOn arose under AppendIx 9 After consldenng the eVIdence and arguments of the partIes, V Ice Chair Gray dIsmIssed the gnevance It was submItted by Mr Marvey that thIS case stood for the propOSItIOn that, as a matter of exerclsmg ItS exclUSIve management nghts, the employer was entItled to choose to contract out m such a way that "reasonable efforts" could not be made to generate "good Job offers to affected employees In the course of thIS submISSIOn, conSIderable emphaSIS was placed upon the followmg observatIOn by VIce Chair Gray "I do not thmk that one can start wIth the premIse that for any occurrence to WhICh the 'dISposItIOn language bears applIcatIOn there must be some 14 correspondmg effort that paragraph 1 of AppendIx 9 obhges the employer to make ld, at 12 It was further submItted that the exerCIse of the employer's exclusIve management nghts was only revIewable for bad fmth. Reference was made to Sisters of St Joseph of the DlOcese of London in Ontario, Operating St Joseph s Hospital, Chatham v Service Employees UnlOn, Local 210 97 CLLC 143,636 (On1. C A.) In that case, the Ontano Court of Appeal upheld the quashmg of an arbItratIOn award that ruled agaInst an employer because It could not proVIde relevent and convmcIng, or cogent" reasons for eXerCISll1g Its management rIghts to fill a vacancy WIth an RN rather than an RNA. The court stated, In pertInent part. The managers of the hospItal are experts In theIr field, Just as the Board IS expert In ItS field. GIven the clear management nghts clause In thIS case, and gIven no allegatIOn of bad faith, the Board should not have made Its own management deCISIOns and Imposed them on the hospItal [T]he Board was actmg In excess of Its JUrISdIctIOn. ld at 143 639 In the absence of an allegatIOn of bad faith, the court Said, the board exceeded ItS JunsdlctIOn when It revIewed the exerCIse of an exclusIve management rIght. In the present case, Mr Marvey submItted, the exerCIse of management s exclUSIve nght to choose the means by WhICh It dIsposed of ItS roadway maIntenence work was sImllarly unrevIewable The UnIon dId not make any allegatIOn of bad faIth or llnproper motIve In makmg 15 thIS decIsIOn The management nghts clause m the present collectlve agreement was at least as strong at that In St Joseph's Hospital, supra In lIght of thIS, Mr Marvey urged, the Board was WIthout J unsdlctIOn and the gnevances herem should be dIsmIssed (b) The Submissions of the Union Upon the first Issue, Mr Leeb submItted that the management nght of the employer to contract out was constramed by ItS "reasonable efforts" obhgatIOn under artIcle 1 (a) of AppendIx 9 In fact, he said, the Issue had already been decIded by the Gnevance Settlement Board m Re Union Grievance and Management Board Secretariat (1997), G S B No 2294/96 (Kaplan) In that case the UnIon gneved a polIcy under whIch the government proposed to contract out ItS reqmrements for translatIOn serVIces. Apparently translators who were currently employed by the government were InvIted to bId on these serVIces so long as they accepted that, as a matter of government pohcy, successful bIdders would have to resIgn before commencmg theIr contracts and would not be entItled to the benefit of the surplus prOVISIOns of the collectIve agreement, IncludIng enhanced severance The UnIon claimed, inter alia that the ImposItIon of these condItIOns breached the employer's "reasonable efforts" oblIgatIOn under AppendIx 14 (now AppendIx 9) of the collectlve agreement. The employer claImed that the Board dId not have JunsdlctIOn because the condItIOns were Imposed In the exerCIse of Its exclusIve management nghts - 16 VIce Chair Kaplan ImplIcItly reJected the JunsdIctIOnal challenge of the employer and concluded that the gnevance should be allowed. He mdlcated that, m hIS VIew the polIcy Imposed by the employer breached, inter alia, AppendIx 9 He said FIrst of all, the employer m AppendIx 14 [now AppendIx 9], makes It very clear that ItS restructunng InltIatlves could have a sIgnIficant effect on employees, many of whom have served for a lengthy penod. As a result of thIS recogmtIOn, the employer commItted Itself to makmg reasonable efforts to ensure that where there IS a dISposItIOn or transfer of bargammg umt functIOns that employees In the bargaInIng UnIt obtaIn employment. In thIS case, the most dIrect effect of the contested polley IS not to aSSIst the employees In obtaInIng employment but to depnve them of the nghts provIded for In the collectIve agreement that have been negotIated on theIr behalf. ThIS, surely cannot constItute a "reasonable effort." And thIS reason alone would have been a suffiCient one for findIng for the UnIon, Jd., at 6 Mr Leeb urged that the ImplICIt rejectIOn of the employer's JunsdlctIOnal challenge and the stnkmg down of the employer s polIcy on the ground that It was not a "reasonable effort" clearly demonstrated that the Gnevance Settlement Board had already establIshed that the management nght of the employer to contract out was constraIned by Its "reasonable efforts obhgatlOn under AppendIX 9 Reference was also made to another deCISIOn of V Ice ChaIr Kaplan, Re Union Grzevance and Ministry of Community & SocIal Services (1997) G S B Nos. 2779/96, 0141/97 (Kaplan) That case addressed the reasonableness of the efforts of the employer when It deCIded to close down several faclhtles for the developmentally dIsabled In the course of rendenng the deCISIOn of the Board, the learned V Ice ChaIr Said, "I.t-.lB my VIew that the reasonable efforts obhgatIOn 17 begms as soon as the decIsIOn to dIvest IS made ld , at 19 ThIs, It was submItted, further demonstrated the estabhshed posItIOn of the Gnevance Settlement Board that the phrase "where there IS a dISposItIOn or any other transfer of bargammg umt functIOns," as used In artIcle 1 (a) of AppendIx 9, meant "as soon as the decIsIOn to dIvest IS made" so as to Invoke the employer's reasonable efforts oblIgatIOn at the earhest pOSSIble moment. Turnmg to the ments of the management nghts argument of the employer, Mr Leeb further submmed that even If the employer were correct m saymg that Its "reasonable efforts" obhgatIOn under AppendIX 9 dId not anse untIl after It chose the means of divestment, It stIll was barred from exerclsmg ItS management nghts to choose a means that would undermme the nghts of emplovees under AppendIX 9 The exclUSIve management nghts of the employer It was submItted, cannot be exercIsed m a manner that would undermme and nulhfv Important employee nghts that were negotIated mto the collectIve agreement. In support of thIS contentIOn, Mr Leeb referred to Municipality of Metropolitan Toronto v Canadian Union of Public Employees Local 43 (1990), 69 D L R. (4th) 268 (Ont. C A.) In that case the court upheld an arbItratIOn award that concluded that the exclUSIve management nght of the employer to claSSIfy employees had to be exerCIsed reasonably to aVOId senously affectmg semonty nghts under the collectIve agreement. "- . 18 The court Said In other words, It IS not patently unreasonable for an arbItrator to obhge management to exerCIse ItS dIscretIOn reasonably where to do so unreasonably would be to create a conflIct WIth or undermme the nghts conferred b) some other provIsIOn of the collectlye agreement. [I]t does not seem patentl) unreasonable to VIew the collectIve agreement m a hohstIC manner, where even management nghts may be clrcumscnbed to aVOId negatmg or unduly lImltmg the scope of other prOVISIons Id at 285-86 If the employer s posItIOn on management nghts were allowed to prevail m thIS case Mr Leeb submItted, It would undermme and nullIfy a very Important protectIOn for employees that the partIes negotIated as part of an agreement to end the 1996 stnke As to the questIOn whether, m any event, the employer satIsfied ItS "reasonable efforts obhgatlOn m the case of ItS MO s and ItS later use of Form A contracts, Mr Leeb noted that even the employer s WItnesses agreed that the short term, seasonal or mtermlttent nature and low dollar value of these contracts VIrtually guaranteed that no reasonable efforts could generate "good Job offers to any of the affected employees. In fact, the eVIdence was uncontradIcted that not one good Job offer resulted from the efforts that the employer dId make Mr Leeb also noted that the employer dId not even follow the Guidelines of Management Board ofCabznet on the Transfer of Employees With Their Jobs or Function. These gUIdelmes, he submItted, mdlcated at the relevant tlme that there were onlv two ways of satlsfymg the emplover s "reasonable efforts" obhgatIOn m tender cases use ofthe HRF, or negotiatIOn wIth the new employer Here, he stressed. the HRF was used to a mlmmal degree In the vast maJonty , 19 of the MO s there wasn't even any negotlatIOn All that the employer dId was to notIfy bIdders of Its reasonable efforts oblIgatIOn and make brIef telephone mqUIrIes of the successful bIdder after the MO had already been awarded Cltmg Re Rupert and Mznistry a/Correctional Services (1985), G S.B No 372/84, at 18 (Gorsky), Mr Leeb submItted that fallure of the employer to follow Its own dIrectIOn mdlcated that the employer behaved In an umeasonable manner Moreover, Mr Leeb noted, when the HRF wa'3 cast Into doubt by the Kaplan award, supra, the employer contInued to tender the MO's that relled on the HRF factor to satIsfy the employer s reasonable efforts oblIgatIOns The only contracts that were "frozen" after the Kaplan award were the AMC's. ContInuIng to tender these MO S after the Kaplan award, It was submItted, was a patent breach of the employer s reasonable efforts oblIgatIOn. Mr Leeb also made other submISSIOns upon the Issue of reasonable efforts, however m lIght of the conclUSIOn reached In thIS case, It does not appear to be necessarv to recIte them. (3) The Reply of the Employer- In reply Mr Marvey essentially reIterated the employer s posItIOn that under a proper mterpretatIOn of the collectlve agreement, management had the absolute rIght to dIspose of ItS operatIOns for good faith busmess purposes Its "reasonable efforts oblIgatIOn under AppendIX 9 dId not commence untIl after thIS dISpOSItIOn, To conclude otherWIse, he submItted, the Board would have to Impute that AppendIX 9 reqmred the employer to dIspose of the prIvatlzed , 20 operatIOns In a reasonable manner He suggested that thIS would be a tremendous leap m the mterpretatIOn of AppendIx 9, and would Involve the Board In a forbIdden alteratIOn of the collectlve agreement. IV ConsideratIOn of the Issues At the conclusIOn of the submIssIOns, I requested counsel for addItIOnal authontIes on the revIewabIlIty of management nghts I am grateful to both counsel that they more than comphed wIth my request and provIded me wIth several addItIOnal authontles by December 2, 1997 These authontles mcluded, for my mformatIOn, no doubt, the deCISIOn of the DIVIsIOnal Court upholdIng the award of VIce ChaIr Kaplan In G S B No 1344/96, supra, WhICh InvalIdated the use of the HRF as a means of satlsfymg the employer s "reasonable efforts" oblIgatIOn. I requested these addItIonal authontles because my InltlallmpresssIOn was that thIS case mIght have to be decIded upon the slIppery slope of management nghts After careful study of the eVIdence and argument of the partIes, however I find that thIS IS not so The case turns on the proper InterpretatIOn of the vague phrase, "where there IS a dIspOSltlon or any other transfer ,. as used m artIcle l(a) of AppendIx 9 of the agreement. Does It mean "after the means of dISposItIOn or transfer IS chosen, as contended by the employer? Or does It mean once the deCISIOn to dIspose-of or transfer IS made," as contended bv the unIOn') As a matter of constructIOn, I find that the latter IS the most appropnate InterpretatIOn of the phrase - . , . 21 In my opmIOn, It seems mconcelvable that, m the context of settlmg a bItter and prolonged stnke, the partIes mtended to negotIate an Important protectIOn for employees that could easlly be turned mto a nulhty by the employer Yet that would be the result If the mterpretatIOn proffered by the employer were to prevall The facts of the present case bear thIS out In early 1996, the employer made Its decIsIon to ShIft ItS roadway mamtenance operatIOns to the pnvate sector over the next three years There were several ways m whIch It could accomphsh thIS transfer That was why the Models Group was struck. to come up wIth the most appropnate models for reachmg thIS goal It came up wIth AMC's and MO's. Everyone agreed that AMC s, bemg long-term, contmuous and of hIgh dollar value, had the potential for satlsfymg the employer's "reasonable efforts" obhgatIOn. They also recogmzed that MO s bemg Just the OpposIte m nature, lacked that potential. There was httle doubt that If the employer shIfted ItS operatIOns VIa MO's, It essentIally would nullIfy the hard-won "reasonable efforts protectIOn for employees In AppendIx 9 Yet It went forward wIth a mIX of AMC's and MO's As Mr McKercher testlfied, thIS declSlon was "dnven by" the goal of maxlmlZlng cost savmgs to the emplover No weIght was gIven to the employer's "reasonable efforts" oblIgatIOn. When the bIds for the Northwestern RegIOn s first two AMC s came m too hIgh, the employer shredded them mto smaller bItS and tendered them out as MO s ThIS destroyed any potentlal these AMC s mIght have had for satlsfymg the employer's "reasonable efforts" obhgatIOns Yet, accordmg to the mterpretatIOn of AppendIx 9 proffered by the employer that - . . 22 was alnght because Its reasonable efforts obhgatIOn under the AMC's dIsappeared when It abandoned them. It dId not reappear untIl after the employer had "re-chosen" to shred the AMC s Into MO's By then, of course, Its "reasonable efforts" obhgatIOn essentlally had been nulhfied by vIrtue of Its choIce There was even more post-chOIce shreddmg performed bv the employer When the bIds for certam MO's In the Northwestern RegIOn came m too hIgh, the employer shredded them Into even smaller bIts and tendered them out as Form A contracts ThIs surely extmgUIshed any glImmer of hope that mIght have remamed for the survIval of even mInImal "reasonable efforts" protectIOn under AppendIx 9 I do not thmk that the partIes mtended to let the employer choose and re-choose Its means of dISposItIOn lIke thIS wIthout gIvmg any weIght to Its "reasonable efforts" obhgatIOn, As was observed by VIce ChaIr Kaplan m G S B No 1344/96 supra, "[t]hIS [reasonable efforts] obhgatIOn IS an extreme Iv Important one, and It IS one that cannot be taken hghtly "ld. at 29 The partIes could not have mtended It to be a chImera, a fancIful IllusIOn of protectIOn that the employer could extmgUIsh m a moment under the rubnc of efficIency I am convInced that the vague phrase m AppendIx 9, "where there IS a dISposItIOn or other transfer" properly construed, means "once the decIsIOn to dIspose-of or transfer IS made" ThIS IS the same conclusIOn that VIce Chalr Kaplan reached m G S.B Nos 2779/96 0141/97 supra, where he sald, "[I]t IS my VIew that the reasonable efforts obhgatIOn begms as , , 23 soon as the decIsIOn to dIvest IS made" ld, at 19 It seems to me that It IS also the conclUSIOn that the learned VIce chair reached m G S.B No 2294/96, supra at 6, where he ImplICItly reJected the employer S challenge to JunsdlctIOn based upon a claim of exclUSIve exerCIse of Its management nghts I do not regard the deCISIOn of VIce Chair Gray m the "Garages" case, G S B No 1344N96, supra, as bemg at odds WIth thIS conclusIOn. That was a case of ImpossIbIlIty V Ice ChaIr Gray concluded that once the deCISIOn to close some of the employer's garages was made It was ImpossIble to make any "reasonab1e-efforts " 11 was ImpOSSIble to determme whether the work that was contracted out "would not have been contracted out anyway If the garages had remamed open, Id, at 11 11 was lIkewIse Impossible to pre-IdentIfy the employees who mIght be affected by the contractmg out. In VIew of thIS ImpoSSIbIlIty, the learned VIce ChaIr concluded, "there were no 'reasonable efforts' of the sort contemplated by AppendIx 14 [now AppendIx 9] that the employer could have made m the CIrcumstances" Jd at 15 I also note that VIce Chair Gray dId not accept the employer's mterpretatIOn of when ItS reasonable efforts" oblIgatIOn arose In that case, as here, the employer took the pOSItIOn that It IS onl) after the form of a transactIOn IS determmed that the questIOn anses whether reasonable efforts are reqUIred under AppendIx 9 " Jd , at 5 The learned V Ice Chair SIde-stepped thIS Issue findmg that at the tIme of the employer S deCISIOn, the commIttee struck bv the employer to reVIew ItS garage operatIons "had consIdered AppendIx 14 [now AppendIx 9] and, partIcularly -- had consIdered whether there were any reasonable efforts' that the mInIstry could pOSSIbly " I I r . 24 make" Jd , at 8 (emphasIs m ongmal) He then proceeded to reVIew the matter on thIS basIs. Here there was no ImpossIbIlIty At the tlme of the deCISIon to dIvest there were several dIfferent ways m WhICh It could have been accomplIshed. That was why the Models CommIttee was struck to select the most appropnate ways m whIch to ShIft roadway mamtenance operatIOns to the pnvate sector The decIsIOn of the commIttee however, was "dnven" by on1\ one conSIderatIOn. cost-effectIveness or efficlencv No weIght was gIven to the emplover s reasonable efforts" oblIgatIOn under AppendIx 9 The same thmg happened when the employer decIded to shred AMC's mto MO's, and later, MO s mto Form A contracts ThIs was a breach of the employer s "reasonable efforts" oblIgatIOn, The employer's "reasonable efforts" oblIgatIOn under AppendIx 9 IS a verv Importar~t protectIOn for the members ofthe bargammg umt. In choosmg whIch way to dIvest, the employer cannot Ignore It. The employer must gIve It sIgmficant weIght m determmmg the chOIce It makes Other conSIderatIOns, such as cost effectIveness or effiCIency may also be gIven sIgmficant weIght but they cannot be permItted to extmgUIsh or margmalIze the "reasonable efforts" oblIgatIOn. IV Conclusion The gnevances are allowed to the followmg extent - 25 A declaratIOn IS hereby entered that In choosmg and re-choosll1g Its means of divestIng Its roadway maIntenance operatIons wIthout gIVIng sIgmficant weIght to ItS "reasonable efforts obhgatIOn under AppendIx 9, the employer breached the collectlve agreement. ThIs declaratIOn extends to all roadway mamtenance operatIOns that the employer sought to shIft to the pnvate sector as a result of ItS pnvatlzatIOn ll1Itlatlve It does not extend to those operatIOns that the employer tradltlonally contracted out before the effective date of AppendIx 9 The employer and the umon are dIrected to meet forthwIth to dISCUSS how best to dIvest the employer's roadway mamtenance operatIOns whIle gIvmg sIgmficant weIght to the employer's "reasonable efforts" obhgatIOn. The partIes may, Ifthev wIsh, request the assIstance of a medIator The Board WIll retam JunsdIctIOn pendmg thIS determInatIOn. The matter IS remItted to the partIes m thIS posture for the determmatIOn of any further remedIes Once agaIn, the Board WIll retaIn JunsdlctIOn pendmg thIS determmatIOn. Dated at Toronto Ontano, thIS 16th day of February 1998 -