Fine line drawn between unlawful and ruthless negotiations hard to see
On July 8, 2010, the 3,000 employees of Vale in Sudbury and Port Colborne, both in Ontario, voted to accept a new collective agreement. That vote, which ended a bitter, year-long strike, very nearly didn’t take place because it was alleged the company bargained in bad faith.
When a union and an employer enter collective bargaining, they have a duty to bargain in good faith, to “make every reasonable effort to conclude a collective agreement,” in the words of several labour relations acts. The purpose of this requirement is to focus the attention of the parties on effectively reaching a compromise and to avoid strikes and lockouts.
While this appears to be an obvious goal, there are numerous ways the parties may fail.
Bad-faith tactics that can derail collective bargaining
Surface bargaining: This is where one party, more often the employer, goes through the motions of negotiating but presents only proposals it knows will be unacceptable to the union.
Sending unqualified reps: Equally, sending representatives to the bargaining table who are not able to speak authoritatively — to “bind” — for their parties is in bad faith.
Withholding relevant information: Failure to provide a union with information relevant to negotiations may be seen as bargaining in bad faith. Examples might include a planned layoff or closure of a department. An employer’s silence means the union cannot negotiate larger severance or pension benefits. However, in 2008 in U.S.W.A., Local 7135 v. National Steel Car Ltd., the Ontario Labour Relations Board (OLRB) held the union could not claim bad faith unless it had asked the company for the information. (In that case, the opening of another plant was announced by the employer after the agreement was ratified.)
Conduct away from the table: Actions that take place away from the bargaining table can also attract a charge of bad faith. Bargaining through the media, as was alleged by the Canadian Union of Public Employees (CUPE) in last year’s City of Windsor negotiations, and bargaining with individuals, of which Parks Canada was accused by the Public Service Alliance of Canada (PSAC) in 2007, are two examples. In these situations, it is the role and effectiveness of the union as bargaining agent for the employees that are at risk.
Bargaining to impasse: One of the more common examples of bad faith is bargaining to impasse — reaching a point where neither side will budge. There are certain non-economic demands that cannot be bargained to impasse, including illegal provisions where an employer tries to force a union to contract out of minimum legal protections, provisions that would undermine a union’s right to represent the bargaining unit and the return-to-work protocol. This last issue stood in the way of the Vale ratification vote.
The question of whether an economic demand has been bargained to impasse is much trickier. Generally, parties are not permitted to reduce their offers — unless they have been made with a time limit — or to take away portions of their offer as negotiations proceed. This is called backwards bargaining. Earlier this year, the Manitoba Government and General Employees Union charged Assiniboine Community College and Red River College had done this because they lowered their wage offer. However, the province had reduced funding to the colleges after negotiations commenced.
Repudiating an agreement: Repudiation of an agreement that has previously been made is considered bad faith. Occasionally, one side or the other will simply refuse to sign the completed agreement. This happened earlier this year at the Ottawa Hospital. Just two weeks after it agreed to a tentative deal with one of its unions that contained annual pay increases of two per cent, the province told all provincially funded employers, including hospitals, to make labour deals with no salary increases. The hospital board refused to sign off on the agreement and the union said it plans to take the matter to arbitration.
This case has not been adjudicated but labour boards have, in the past, been sympathetic to employers facing this dilemma.
Failing to offer better wages not bad faith…
There is a common perception among many union members, fostered by their representatives, that the failure of an employer to offer better wages and benefits in negotiations constitutes bad faith — this is not the case. There are times when employers can reasonably demand concessions in order to protect the economic viability of operations.
“Bargaining often is tough, especially in tough economic times,” says Jamie Knight, a partner at the Toronto offices of management-side law firm Filion Wakely Thorup Angeletti. “There is a fine line between unlawful bargaining that is in bad faith and bargaining that is hard or even ruthless, but still ‘onside.’” And, unlike some of the other examples of bad faith, where that fine line is drawn is not obvious.
…nor is hard bargaining
The duty to bargain in good faith is not the same thing as abandoning self-interest. It is, rather, the duty to take part in a reasonable discussion that is likely to end in a resolution. In practical terms, this is likely to be proven through give and take, and a common ground somewhere between the parties’ original positions.
But that is not always necessary.
“Hard bargaining, albeit ruthless, is not bad faith bargaining,” according to the OLRB in ONA v. Board of Health of Haliburton, Kawartha, et al, a 1977 ruling. Labour boards are less likely to intervene in situations where the economic prospects of the parties are at stake and not the integrity of the labour relations process.
However, an employer that is engaging in hard bargaining may be called upon to provide support for the necessity of its position in the form of financial statements, projects or industry surveys. A refusal to provide information that allows a union to assess its position may also result in a charge of bad faith.
A charge of bargaining in bad faith is made far more often than it is proven before a labour relations board.
“Drawing the line is made even more difficult by the practical reality that by the time a matter gets through adjudication, the underlying dispute often has been resolved,” says Knight.
This is because negotiation seldom stops pending the outcome of the challenge, so it becomes redundant. Even when a charge is eventually heard, as happened with the City of Windsor, the board is loath to open old wounds by making even a declaration. And, absent any clear monetary cost to the applicant, a board is limited in the remedies at its disposal.
During the United Steelworkers’ strike against Vale, several employees were fired for picket line activities. How these situations are dealt with is normally part of the return-to-work protocol. Vale, however, refused to rehire these employees, the “Fired Eight,” or even allow them to contest their terminations at arbitration, and refused to negotiate a protocol that included them. And Vale was prepared to bargain the issue to impasse. (One of the reasons the union was so adamant may be because one of the eight is reportedly on the bargaining committee.)
An allegation of bargaining in bad faith was heard by the OLRB, which at first refused to make a ruling and put the onus back on the parties to deal with the Fired Eight. However, when it became the only stumbling block remaining to a ratification vote, Vale agreed to allow the complaint to proceed and the offer was ratified.
The OLRB heard full arguments about the Fired Eight on July 13. At press time, no details on a decision were available.
