Separate but not outside of collective agreement

Employer and union intended for employees converted into “separate unit” to remain within bargaining unit

Thomas Seul was a registered distribution operator for the Brandon and Winkler, Man., operations of Dairywood Foods. Dairywood processes dairy products, and distributes and sells dairy and other food products. Mr. Seul’s job was to pick up product at the plant and distribute it to stores and restaurants.

The position of registered distribution operator (RDO) did not exist until 1996 when Dairywood decided to restructure its distribution system in Manitoba. At that time the company used both non-union independent contractors and hourly paid bargaining-unit employees to deliver and sell its products to retail stores and restaurants.

In 1996 Dairywood decided to convert its employees to dependent contractors who would be called RDOs and who would be paid on a commission basis. Mr. Seul was one of these employees.

Discussions were held with Retail Wholesale Canada, Canadian Service Sector Division of the United Steelworkers of America, and its Local 765 (the “union”) who ultimately agreed to the introduction of the RDO system. Dairywood agreed that the RDOs would be union members and pay union dues. A letter of understanding between Dairywood and the union was incorporated into the Brandon and Winkler collective agreement during the 1997 negotiations.

Despite this agreement Dairywood inadvertently stopped remitting dues to the union on behalf of Mr. Seul and the other six former employees who were converted to RDOs. The company notified these RDOs in August 1997 that it would begin deducting union dues.

Mr. Seul filed an application with the labour board in January 1998 requesting declarations that the collective agreement had no force and effect in relation to the RDOs and that no certification covering the RDOs existed or a cancellation of same if it did exist. In support of the application, two petitions were filed stating that the signatories did not wish to be members of, or represented by, the union, nor pay union dues.

Mr. Seul’s main argument was that the RDOs compose separate units and are not covered under the existing collective agreement. The agreement reached by Dairywood and the union set up the RDOs as separate entities. Nothing in the collective agreement applied to them and the terms and conditions of their employment were governed differently and set out in other documents independent of the collective agreements. The RDOs were being forced to pay dues and received no benefit in return.

The employer and the union argued that the RDOs were members of the bargaining units and covered by the current collective agreements and certification. The RDOs had been established as separate units, but not for the purposes of bargaining rights or certification.

The union took the position that, while the terms and conditions of employment of the RDOs were different from other employees in the unit, this in itself did not bring them outside the unit. It is not unusual for collective agreements to contain different terms and conditions of employment for different groups of employees in the same unit. The union did not agree that the collective agreement was of no benefit to the RDOs. The agreement established an opportunity for senior drivers to move into the RDO positions without having to compete for them.

The board was not persuaded by the application that the RDOs were not members of the bargaining unit. They continued to be members of the unit regardless of the change in their status and the terms and conditions of their employment.

Although the documentation clearly provided that the RDOs were subject to very different terms and conditions of employment, it was equally clear that it was the intention of both the employer and the union for the RDOs to remain within the bargaining unit. The fact that the letters of understanding referred to the RDOs as part of a “separate unit” was not determinative of this issue. From the documentation and the evidence of the employer and the union, it was clear that the parties intended to include the RDOs in the larger units.

The board was not prepared to interfere and impose a different view when the employer and union had agreed on the description of the bargaining unit. The application of Mr. Seul was denied.

For more information:

Seul v. Retail Wholesale Canada, Local 765.

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