Chapter 13:  Other

13.1 Remedial powers of the Ontario Labour Relations Board

13.1.1 Interim orders

An interim order is an order made before a final disposition on the merits.

Background

Before 1993, the Labour Relations Act (LRA) expressly provided the Ontario Labour Relations Board (OLRB) with the power to grant interim orders in limited circumstances, such as jurisdictional disputes. Although the OLRB did not have the express power to make interim orders with respect to other substantive or procedural matters, it appears to have done so, on occasion, pursuant to its general powers.

Amendments in 1993 to the LRA provided the OLRB with a broad power to make substantive interim orders. Interim relief could be requested with respect to any “pending or intended proceeding” and was not limited to unfair labour practice complaints in the certification context. The OLRB was empowered to consider a variety of applications seeking interim relief with respect to hiring, workplace postings, union recognition, operation of a subcontracting clause, scheduling changes, permission to choose vacation time, prohibiting work stoppages, and other matters.

The 1993 amendments also introduced a provision for expedited hearings in cases where a worker was disciplined or terminated in the context of a union organizing drive. Upon request by the union, the OLRB was required to begin its inquiry into the complaint within fifteen days of the application, and to continue hearing the complaint on consecutive days from Mondays to Thursdays until the hearing was completed. The OLRB was then required to render its decision within two days.

In 1995, the 1993 provisions regarding interim orders and expedited hearings were repealed. The OLRB retained the power to make interim orders with respect to procedural matters, but was expressly prohibited from ordering the interim reinstatement of an employee.

In 1998, the LRA was further amended to provide that the provisions of the Statutory Powers Procedure Act (SPPA), permitting administrative tribunals to make interim decisions and orders, did not apply to the OLRB.

In 2005, the LRA was amended to restore the OLRB’s power to make interim orders where workers are terminated or disciplined during an organizing campaign.

Current provision of the LRA – section 98

The OLRB is empowered, under subsection 98 (1) of the LRA, to make interim orders with respect to procedural matters.

The OLRB is also empowered to make substantive interim orders under this subsection requiring an employer to reinstate an employee in employment on such terms as it considers appropriate.

Furthermore, the OLRB may make substantive interim orders respecting the terms and conditions of employment of an employee whose employment has not been terminated but whose terms and conditions of employment have been altered, or who has been subject to reprisal, penalty or discipline by the employer.

This power to make substantive interim orders may be exercised only if the OLRB determines that all of the following conditions are met: 1) the circumstances giving rise to the pending proceeding occurred at a time when a campaign to establish bargaining rights was underway; 2) there is a serious issue to be decided in the pending proceeding; 3) the interim relief is necessary to prevent irreparable harm or is necessary to achieve other significant labour relations objectives; and, 4) the balance of harm favours the granting of the interim relief pending a decision on the merits in the pending proceeding (subsection 98 (2)).

Under subsection 98 (3), the OLRB is prohibited from exercising its interim relief powers if it appears to the Board that the alteration of terms and conditions, dismissal, reprisal, penalty or discipline by the employer was unrelated to the exercise of rights under the LRA by the employee.

The LRA does not impose on the OLRB a specific timeframe for commencing proceedings in relation to interim orders or for rendering a decision. However, the OLRB has issued guidelines providing for the scheduling of hearings of applications for interim relief within four to six days after filing. Additional filing requirements and timelines are set out in the OLRB’s Rules of Procedure.

Apart from the specific powers granted under the LRA to make interim orders, the Act makes it clear in subsection 98 (5) that, “With respect to the Board, the power to make interim orders under this section applies instead of the power under section 16.1 (1) of the Statutory Powers Procedure Act”.

In addition, section 166 of the LRA provides the OLRB with jurisdiction to issue interim relief it considers appropriate in the construction industry, after consulting with the parties. Construction labour relations are outside the scope of this Review.

Other jurisdictions

In every jurisdiction where the labour relations board or commission is expressly provided with a general power to make interim or provisional orders (i.e., Alberta, British Columbia, Manitoba, New Brunswick, Quebec, Saskatchewan and the federal jurisdiction), the test for application has been developed by the board or commission rather than set out in legislation.

With the exception of Newfoundland and Labrador, all Canadian provinces and the federal jurisdiction expressly provide that labour relations boards have the power to make interim or provisional orders. The scope of this power varies depending on the jurisdiction and is not always restricted to circumstances where workers are terminated or disciplined during an organizing campaign.

In six provinces (Alberta, British Columbia, Manitoba, New Brunswick, Quebec, and Saskatchewan) and the federal jurisdiction, labour relations boards are expressly provided with a general power to make interim or provisional orders where there has been an alleged contravention of their labour legislation or unfair labour practice, or to protect the rights of a party.

In Nova Scotia and Prince Edward Island (as well as Ontario, as described above), the power of the labour relations board to provide interim relief is expressly limited to certain circumstances. In Nova Scotia, the board may make interim orders regarding ongoing and potential work stoppages caused by unlawful lock-outs or strikes or by jurisdictional disputes. In Prince Edward Island, the board may issue an interim order regarding the assignment of work in a jurisdictional dispute.

Courts and other administrative tribunals

The courts have a residual discretionary power to grant interlocutory relief, such as an injunction. This power flows both from various statutes and from the inherent jurisdiction of the courts over interlocutory matters.^{footnote 523[523]} One example is the ability of courts to make interim awards in family law matters with respect to such important matters as custody and access, child and spousal support and possession of the matrimonial home. These orders are commonly made to protect the best interests of children and dependent spouses. Likewise, administrative tribunals in Ontario are often granted the authority to provide interim relief, either by their enabling statutes or by virtue of section 16.1(1) of the SPPA (or by equivalent statutory provisions in other jurisdictions),^{footnote 524[524]} which gives tribunals the power to make interim decisions and orders. The Ontario Securities Commission (OSC) has a mandate to protect investors and foster fair and efficient markets by making and monitoring compliance with rules governing the securities industry in Ontario. The OSC has the authority to make interim orders under section 16.1(1) and does so to protect the public interest. For example, it can issue temporary cease trade orders (CTOs) against individuals and/or companies, prohibiting those individuals and/or companies from trading in specified securities over a certain period of time, and interim orders freezing assets such as bank accounts in order to protect investors and foster fair and efficient markets.

In summation, both courts and tribunals have jurisdiction to grant interim orders, which are an essential component of protecting important rights and interests.

Should the OLRB have an expanded jurisdiction to grant interim relief?

Our answer to this question is yes.

The OLRB is a tribunal with exclusive jurisdiction to administer the LRA. It is an expert tribunal with expertise in labour relations and in the interpretation and application of the LRA.

The exclusive jurisdiction of the LRA is established by section114 (1), which states:

The Board has exclusive jurisdiction to exercise the powers conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it, and the action or decision of the Board thereon is final and conclusive for all purposes, but nevertheless the Board may at any time, if it considers it advisable to do so, reconsider any decision, order, direction, declaration or ruling made by it and vary or revoke any such decision, order, direction, declaration or ruling.

In Canadian Union of Public Employees, Local 963 v. New Brunswick Liquor Corp.,^{footnote 525[525]} Justice Dickson, as he then was, described the Public Service Labour Relations Board in that case as: “… a specialized tribunal which administers a comprehensive statute regulating labour relations. In the administration of that regime, a board is called upon not only to find facts and decide questions of law, but also to exercise its understanding of the body of jurisprudence that has developed around the collective bargaining system, as understood in Canada, and its labour relations sense acquired from accumulated experience in the area.” This description is equally applicable to the OLRB.

Having exclusive jurisdiction over labour matters means that the courts are not available to grant any interim relief in labour matters within the jurisdiction of the OLRB. If the tribunal has no power to make interim orders, complainants are left to wait for the final disposition of complaints of unfair labour practices before any relief can be obtained.

There is little doubt that unfair labour practices committed by employers in the context of a union organizing campaign can cause irreparable harm to the campaign and interfere with and frustrate the exercise of the employees’ constitutional rights to join a union and engage in collective bargaining.

Dr. Sara Slinn^{footnote 526[526]} reports on the research and commentary regarding the utility of interim relief power:

…the Bill 40 interim relief power significantly increased parties’ ability to enforce OLRA rights, and this was most apparent regarding organizing and first contract negotiations…Overall, the authors concluded that the interim relief power substantially reduced the advantages to employers of engaging in ULPs [unfair labour practices]…

The constitutional jurisprudence relating to freedom of association is replete with references to the superior power of management and to the vulnerability of employees to the unilateral exercise of power by employers. The unfair labour practice provisions of the LRA also recognize this imbalance of power by, among other things, prohibiting any employer speech that amounts to coercion, intimidation, threats, promises or undue influence and by prohibiting any intimidation or coercion to compel any person to refrain from becoming or to cease to be a member of a trade union or to refrain from exercising any other rights under the LRA. The termination of employees for exercising rights under the LRA is only one way that employers can try to snuff out an organizing campaign. There are many more.

One of the purposes of the LRA is to facilitate collective bargaining between employers and trade unions that are the freely-designated representatives of the employees. The OLRB is the protector of the constitutional rights of employees to organize and participate in collective bargaining. The OLRB is a tribunal with specialized labour relations expertise in Ontario and a sophisticated understanding of the impacts of action or inaction in a particular case. It has a long history of excellence and adjudicative fairness, which is vital to its effective and independent role in labour relations.

It is trite to observe that the adverse impact of employer unfair labour practices on union organizing can be profound. In our view, it is imperative that the OLRB be granted the power to issue interim relief in order to protect the constitutional rights of employees to organize and form a trade union and participate in its lawful activities. These rights are of fundamental importance to individuals in our society and the OLRB requires the power to make interim orders in order to fulfill its mandate as the protector of the constitutional rights of employees to organize and participate in collective bargaining.

Section 16.1(1) of the SPPA is designed to give broad authority to administrative tribunals to deal with matters on an interim basis before a final decision is made. Such authority is vital to the rule of law in order to effectively protect the rights of all parties in litigation while a decision is being made on the merits. Absent such a power, the system of justice in the labour relations community is much diminished. There is no justification for the legislature to dictate to the board the legal test it should apply and the circumstances in which it can apply. The LRA establishes an expert, experienced and independent tribunal to adjudicate matters. The timing and substance of an interim order are matters best left to the OLRB to determine on a case by case basis.

Before turning to our recommendation, it is appropriate to acknowledge the special role of the courts in granting relief in cases of legal strikes and picketing activity related to such strikes.

Picketing and section 102 of the Courts of Justice Act

“Picketing is a crucial form of collective action in the arena of labour relations. A picket line is designed to publicize the labour dispute in which the striking workers are embroiled and to mount a show of solidarity of the workers to their goal. It is an essential component of a labour relations regime founded on the right to bargain collectively and to take collective action. It represents a highly important and now constitutionally recognized form of expression in all contemporary labour disputes. All of that is beyond dispute.”^{footnote 527[527]}

In this constitutional context, section102 of the Courts of Justice Act sets out requirements to be met before the Superior Court of Justice will grant interim relief by way of an injunction to restrain a person from an act in connection with a labour dispute.

Our recommendations do not seek to encroach on, diminish, interfere with, supplant or conflict with the injunctive authority of the Superior Court of Justice as established by section 102 of the Courts of Justice Act.

Recommendations

162. We recommend that section 98 of the Labour Relations Act, 1995 be repealed, and;
163. We recommend that the power of the Ontario Labour Relations Board to issue interim orders and decisions pursuant to section 16.1(1) of the Statutory Powers Procedure Act be restored.
      

     For purposes of clarification, our Recommendations are intended to augment the jurisdiction of the OLRB to issue interim orders. The recommended repeal of section 98 is not intended in any way to interfere with or diminish the OLRB’s jurisdiction to make interim orders requiring an employer to reinstate an employee in employment on such terms as it considers appropriate. Furthermore, it is not intended to interfere with or diminish the jurisdiction of the OLRB to make interim orders respecting the terms and conditions of employment of an employee whose employment has not been terminated but whose terms and conditions of employment have been altered, or who has been subject to reprisal, penalty or discipline by the employer.

13.1.2 Prosecutions and penalties

In Ontario, anyone who contravenes the LRA may be subject to OLRB orders and prosecution before the provincial courts. A contravention of the LRA is an offence under the LRA and the Provincial Offences Act.

A prosecution for a violation of the LRA may be commenced before the Ontario Court of Justice but only with the prior written consent of the OLRB. If the OLRB grants consent, the applicant may initiate a private prosecution in the Provincial Court of Justice against the alleged wrongdoer. The applicant has a heavy onus to persuade the OLRB that nothing else would resolve the issue and that prosecution is consistent with the promotion of good labour relations in the province.^{footnote 528[528]}

Upon conviction of an offence, individuals can be fined up to $2,000 and corporations and unions can be fined up to $25,000. Each day that a contravention continues may constitute a separate offence.

Prosecutions under the LRA are very rare. In the period from 2004-2014, the OLRB dealt with thousands of unfair labour practice complaints but only received 29 applications for consent to prosecute, and only three were granted.

The question is whether these provisions act as a sufficient deterrent for unlawful activity and, if the answer is no, should the OLRB be given jurisdiction to impose monetary administrative penalties for non-compliance with the LRA?

Other jurisdictions

All Canadian provinces and the federal jurisdiction have taken a similar approach. Labour relations boards or commissions have general remedial powers and offences are prosecuted before the courts. However, there are some differences.

In Manitoba, the Labour Board is expressly permitted to order monetary awards of up to $2,000 for an unfair labour practice, even where the unlawful activity has not resulted in any monetary damages or loss. Consent to prosecute is not required in British Columbia and Quebec, whereas all other jurisdictions require some form of consent unless an exemption applies.^{footnote 529[529]}

The maximum fines for conviction of a general offence also vary depending on the jurisdiction, ranging from $100 to $5,000 for individuals and $500 to $100,000 for employers, corporations, and unions. Prince Edward Island also mandates minimum fines.^{footnote 530[530]} Many jurisdictions, such as Quebec, set out different fines for certain types of contraventions, such as unlawful work stoppages.

In the United States, the approach under the National Labor Relations Act (NLRA) is similar to Ontario. The National Labor Relations Board (NLRB) has broad remedial powers but the prosecution of offenses is before the courts. The right of an individual to initiate a private prosecution in the courts was removed following a 1981 decision by the United States Supreme Court.^{footnote 531[531]}

Should the LRA be amended to allow the OLRB to impose administrative penalties for contraventions of the LRA?

It has been suggested that one of the advantages of giving the OLRB such jurisdiction to impose significant monetary sanctions for violation of employment standards law would not only underscore the important public policy objectives of compliance but would also act as a deterrent to employers and unions and individuals from engaging in violations of the LRA.

In our opinion, the appropriate starting point in attempting an answer to this question is the tribunal’s expert view on the subject of administrative penalties. Former Chairman George Adams, in United Steelworkers of America v. Radio Shack, stated:

If deterrence was all that the Board had to keep in mind, it would be a simple matter to set up a system of penalties which would achieve this end. There is little doubt that penalties could be devised which would provide second thoughts to anyone intent on violating The Labour Relations Act. But the Legislature did not provide the Board with this role and probably with good reason. See Little Bos. (Weston) Limited [1975] OLRB Rep. Jan. 83, at 91. Section 85 of the Act is a section that sets out penalties for contraventions of the legislation and allocates the role of applying these penalties to the Provincial Court. Additional penalties may exist elsewhere in appropriate situations. See Criminal Code, R.S.C. 1970, c. C-34, s. 5, 423(2)(a); Re Regina v. Gralewicz et al (1979), 45 C.C.C. (2d) 188 (Ont.C.A.) By implication, and by the absence of punitive language elsewhere in the statute, it is reasonable to conclude that the Board should not fashion its remedies under section 79 with the primary view of penalizing parties. This is not to deny that effective remedies will likely have a deterrent effect, but the primary purpose of a remedy should not be punishment. If it were otherwise, the Board’s accommodative and settlement role under section 79 and more generally would be a most difficult one to maintain. Offenders would be wary of compromise lest their candor be subsequently met by stiff penalties issued by the very agency that encouraged an informal and early resolution of a complaint. Indeed, settlement and compromise might have to give way to a public clamor for a more tangible enforcement of the legislation not unlike the current concern over plea-bargaining in the criminal law context. Labour law has historically been more interested in accommodation than "two-fisted" enforcement. But of course, the failure to comply with a Board order can result in the application of penalties by the Court in the exercise of the Court’s contempt jurisdiction.^{footnote 532[532]}

The OLRB has also made it clear that, in its expert opinion, consent to prosecute, which can result in the imposition of monetary penalties, should be granted in exceptional circumstances. In Ontario Hospital Assn. v. Ontario Public Service Employees’ Union, former Chair Kevin Whitaker (now Justice Whitaker) stated:

Since 1975 there have been only a small handful of cases where the Board has granted consent to prosecute (less than half a dozen). Given the vast range of unfair labour practices and otherwise illegal activity that the Board has been called upon to remedy in the last twenty nine years, the small number of cases where the Board has resorted to prosecution underscores the use to which the Board has confined this device – as an instrument of last instance, to be used when all else has failed.

It is fair to say that in 2004, the Board will require an applicant to shoulder the very heavy burden of persuading us that nothing else will “work” to “fix” a labour relations “problem”, except the prosecution of the respondent – and that this must be done for the purpose of assisting labour relations not only between the parties, but in the province more generally. It must be remembered that the prosecution of a provincial offence – even if maintained privately – is not strictly speaking, a private piece of litigation. Such a prosecution engages the broader public interest.^{footnote 533[533]}

In another case, where consent to prosecute was granted, the OLRB recognized that there is “a useful labour relations principle to be served in deterring parties from acting as if they are simply free to ‘opt out’ of the collective bargaining regime and the [LRA] and its provisions.”^{footnote 534[534]}

The reluctance of the OLRB to grant consent to prosecute, unless it is satisfied “that nothing else will ‘work’ to ‘fix’ a labour relations ‘problem’”^{footnote 535[535]} and its view that deterrence is necessary, is consistent with its view of the efficacy and advisability of the imposition of deterrent monetary penalties in labour disputes, as stated in Radio Shack, above.

We think that the approach taken by the OLRB to deterrent penalties and to consent to prosecute is deserving of substantial deference.

In considering whether to recommend an amendment to the LRA to permit the OLRB to impose administrative monetary penalties, we also think it important to recognize that it has broad general remedial powers to provide monetary and other compensatory relief where there has been unlawful activity under the LRA.

Section 96 (4) of the LRA currently provides:

• (4) Where a labour relations officer is unable to effect a settlement of the matter complained of or where the Board in its discretion considers it advisable to dispense with an inquiry by a labour relations officer, the Board may inquire into the complaint of a contravention of this Act and where the Board is satisfied that an employer, employers’ organization, trade union, council of trade unions, person or employee has acted contrary to this Act it shall determine what, if anything, the employer, employers’ organization, trade union, council of trade unions, person or employee shall do or refrain from doing with respect thereto and such determination, without limiting the generality of the foregoing may include, despite the provisions of any collective agreement, any one or more of,
  1. an order directing the employer, employers’ organization, trade union, council of trade unions, employee or other person to cease doing the act or acts complained of;
  2. an order directing the employer, employers’ organization, trade union, council of trade unions, employee or other person to rectify the act or acts complained of; or
  3. an order to reinstate in employment or hire the person or employee concerned, with or without compensation, or to compensate instead of hiring or reinstatement for loss of earnings or other employment benefits in an amount that may be assessed by the Board against the employer, employers’ organization, trade union, council of trade unions, employee or other person jointly or severally.

In the exercise of its general remedial authority, the OLRB has ordered awards for damages, benefits, interest, organizing and negotiating costs, harassment and indignity, and prospective losses. As Kevin Whitaker stated in Ontario Hospital Assn. v. Ontario Public Service Employees’ Union, above:

Since 1975 however, the Board has been granted a much broader range of remedial authority. Over time, the Board has in exercising this authority, constructed and refined a broad array of remedial devices designed to further the aims and goals of the statute.With these in hand, the Board has repeatedly (as the parties agree), sought to craft its own remedies to support collective bargaining, rather than resort to prosecution in the courts.^{footnote 536[536]}

The OLRB does not make orders that are primarily intended to punish the wrongdoer, although, as George Adams said in Radio Shack: “effective remedies will likely have a deterrent effect.”^{footnote 537[537]}

In considering this question, it is also important to note that orders of the OLRB are enforceable as orders of the court. Section 96 (6) provides:

• (6) A trade union, council of trade unions, employer, employers’ organization or person affected by the determination may file the determination, excluding the reasons, in the prescribed form in the Superior Court of Justice and it shall be entered in the same way as an order of that court and is enforceable as such.

Non-compliance with OLRB orders filed in the Superior Court of Justice can result in a finding of contempt resulting in the imposition of fines and/or imprisonment. For example, engaging in an illegal strike has been and is still regarded as one of the most serious illegal activities. If unions or employees engage in illegal strikes, especially in essential services such as health care, or in sensitive areas such as transportation, there is a risk of severe consequences. Where public safety is threatened, the consequence to unions and their members of defying legislation or court orders, prohibiting illegal strike activity or directing employees to return to work, can and has resulted in both the imposition of fines and imprisonment.

On the other hand, deterrence by the imposition of monetary penalties through granting consent to prosecute is recognized by the OLRB as an appropriate response to unlawful activity when it is satisfied “that nothing else will ‘work’ to ‘fix’ a labour relations problem”^{footnote 538[538]} or that deterrence is necessary because of flagrant disregard of the provisions of the LRA. In such cases, consent to prosecute may be a necessary and appropriate response to unlawful conduct. We think the OLRB is in the best position to assess whether to grant consent to prosecute on a case by case basis.

As noted above, on conviction of an offence for a violation of the LRA, individuals can be fined up to $2,000 and corporations and unions can be fined up to $25,000. Each day that a contravention continues may constitute a separate offence.

These maximum amounts have not changed since 1990.

It is appropriate, in our view, to increase the amount of the maximum fine that can be imposed by the Ontario Court of Justice where consent to prosecute is granted and a conviction is obtained. This change more accurately reflects both the engagement of the public interest where consent to prosecute is granted and the seriousness of the alleged misconduct. Furthermore, increasing the maximum penalties is more likely to act as a punishment and a deterrent and it recognizes that the passage of time has, to a substantial degree, eroded the punitive impact of the maximum fines currently allowed.

Recommendation

164. We recommend that the provisions of the Labour Relations Act, 1995 relating to prosecutions and offences remain unchanged except for section 104 (1) of the Act where it is recommended that the maximum amount of fines potentially imposed on conviction be increased as follows:
      

     Every person, trade union, council of trade unions or employers’ organization that contravenes any provision of this Act or of any decision, determination, interim order, order, direction, declaration or ruling made under this Act is guilty of an offence and on conviction is liable:

     1. if an individual, to a fine of not more than $5,000; or
     2. if a corporation, trade union, council of trade unions or employers’ organization, to a fine of not more than $100,000.

Our Recommendation should be seen in the context of and as an integral part of other recommendations in this report relating to the remedial jurisdiction of the Ontario Labour Relations Board, including giving the Board additional authority to order arbitration of collective bargaining disputes as well as the authority to make interim orders so as to be able to better protect the exercise of rights by employees under the Labour Relations Act, 1995.

13.2 Right of striking employees to return to work

We recommend making a change to the rights of employees in the following circumstances:

1. where an employee, engaged in a legal strike, makes an application to return to work after the expiration of the six-month period following the beginning of the strike;
2. where an employee is disciplined during the course of a strike/lock-out; and
3. where an employee is disciplined following the expiry of a collective agreement.

13.2.1 The right to return to work after six months from the beginning of a legal strike

The current provisions of the LRA relating to an employee’s right to return to work after the commencement of a legal strike are:

• 80. (1) Where an employee engaging in a lawful strike makes an unconditional application in writing to the employee’s employer within six months from the commencement of the lawful strike to return to work, the employer shall, subject to subsection (2), reinstate the employee in the employee’s former employment, on such terms as the employer and employee may agree upon, and the employer in offering terms of employment shall not discriminate against the employee for exercising or have exercised any rights under this Act.
• Exceptions
• (2) An employer is not required to reinstate an employee who has made an application to return to work in accordance with subsection (1),
  • (a) where the employer no longer has persons engaged in performing work of the same or similar nature to work which the employee performed prior to the employee’s cessation of work; or
  • (b) where there has been a suspension or discontinuance for cause of an employer’s operations, or any part thereof, but, if the employer resumes such operations, the employer shall first reinstate those employees who have made an application under subsection (1).

As can be seen from a review of section 80, the LRA provides, subject to certain conditions, that an employee engaging in a legal strike may make an unconditional application to return to work within six months of the commencement of the strike. If the employee does apply to return to work within the six-month period, the employer is required to reinstate the employee in the employee’s former employment on such terms as the employer and employee may agree upon and the employer, in offering terms of employment, is prohibited from discriminating against the employee for exercising or having exercised any rights under the LRA.

The employer is not obligated to reinstate a striking employee if the employer no longer has persons engaged in work that is the same or similar to that which the employee performed before the strike, or where there has been a suspension or discontinuance for cause of an employer’s operations or any part of the operations. If the employer resumes operations, the employer is required to reinstate the employees who have made an application within the six-month period.

Other jurisdictions

Legislation in the federal jurisdiction, Alberta, Manitoba, Ontario, Prince Edward Island, Quebec and Saskatchewan include provisions dealing with the reinstatement of employees following a work stoppage.

Similar to the LRA in Ontario, legislation in Alberta and Prince Edward Island provides that employers are not required to reinstate employees in circumstances where the employer no longer has persons engaged in performing the same or similar work that the employee performed prior to the work stoppage, or the employer’s operations, or some part of them, have been suspended or discontinued (but if the employer resumes such operations, the employer will reinstate those employees who wish to return to their jobs).

Legislation in Manitoba and Saskatchewan requires that seniority be considered in reinstatement protocols in circumstances where no agreement respecting the reinstatement of employees is reached between the employer and the union.

The federal, Quebec and Prince Edward Island legislation also specifically gives striking employees priority over replacement workers hired during the strike.

Ontario is the only jurisdiction in Canada that mandates a time period within which a striking employee must make an application to return to work while a strike is ongoing.

Should the right to return to work be limited to striking employees who make unconditional application to return to work within six months from the commencement of a strike?

In our experience, striking employees who make an application to return to work typically do so when they conclude that the strike in which they are engaged is not likely to settle or where there is no end in sight or because of lack of financial resources. Applications by striking employees to return to work during the currency of a strike also often occur when an employer continues to operate during the course of a legal strike by using replacement workers.

We are in favour of eliminating the six-month time limit for a number of reasons.

1. Elimination of the six-month period would protect the ability of a striking employee to make an application to return to work at any time during the currency of a legal strike. This is a valid public policy objective.
2. Elimination of the six-month period means a strike can continue without potential job loss to striking employees for the sole reason that they engaged in a strike of that duration. To protect jobs when people engage in lawful strike activity is also a valid public policy objective.
3. A well-established fundamental protection for employees exercising their constitutional rights to freely associate is contained in the LRA:
   72. No employer, employers’ organization or person acting on behalf of an employer or an employers’ organization,
       1. shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;
       2. shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or
       3. shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to compel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

   The statutory obligation on striking employees to apply for their jobs within six months of the commencement of a strike or risk losing their employment is fundamentally inconsistent with the basic protections granted in section 72 of the LRA. Subsection 72 (a) prohibits employers from refusing to “continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was exercising rights under this Act.” However, the current provision of the LRA allows an employer to refuse to continue to employ an employee who exercises the right to engage in lawful strike activity, a right under the LRA.

   The threat of job loss if no application is made within the six-month period is also inconsistent with subsection 72(c) of the LRA, which prohibits an employer from seeking, by threat of dismissal, to compel an employee to cease “to exercise any other rights under this Act”. The requirement that an employee engaging in a strike must apply to return to work within six months is a threat that the employee may have no right to reinstatement otherwise. It is a threat of dismissal. Of course, the six-month requirement is not a requirement established by employers but by the LRA. If such a requirement were to be established unilaterally by an employer in the course of a labour dispute, without the sanction of section 80 of the LRA, there is little doubt that it would be found by the OLRB to be an unfair labour practice. As a matter of policy, the government should not legitimize threats to employment where employees exercise their legal rights to engage in a lawful strike under the LRA.

4. The Supreme Court stated in Health Services and Support — Facilities Subsector Bargaining Assn. v. British Columbia, “One of the fundamental achievements of collective bargaining is to palliate the historical inequality between employers and employees”^{footnote 539[539]} and in Mounted Police Association of Ontario v. Canada (Attorney General), “A process that substantially interferes with a meaningful process of collective bargaining by reducing employees’ negotiating power is therefore inconsistent with the guarantee of freedom of association enshrined in s. 2(d).”^{footnote 540[540]} On some occasions, the existence of the six-month time limit may, as a practical matter, undermine the effectiveness of a legal strike in that it discourages employees from pursuing their collective bargaining goals by means of continuing a strike action, and has the effect of reducing the negotiating power of employee bargaining agents in those unfortunate circumstances where the outcome of a lengthy strike is uncertain. It should not be government policy to enact legislation that erodes and undermines collective action by putting a time limit on the rights of striking employees to apply to return to work.
5. In Saskatchewan Federation of Labour v. Saskatchewan, the Supreme Court clarified that the right to strike embodied in section 2(d) of the Charter, which also protects the workers’ right to collective bargaining and “is an essential part of a meaningful collective bargaining process in our system of labour relations is supported by history, by jurisprudence, and by Canada’s international obligations.”^{footnote 541[541]} The time limit for striking employees to make an application to return to work is a limit on the constitutional right to strike.
6. As noted elsewhere in this report, section 1 of the Charter directs a comparison of how other democratic governments limit freedom of association, by stating that the rights guaranteed are subject only to “such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”. It is, therefore, significant that Ontario is the only jurisdiction in Canada that mandates a time period within which a striking employee must make an application to return to work during the currency of a legal strike. (See: “Other Jurisdictions”, below).

Recommendation

165. Section 80 of the Labour Relations Act, 1995 should be amended by eliminating the six-month time period for striking employees to make an application to return to work. The section should otherwise remain unchanged.

13.2.2 Should employees engaged in a lawful strike or lock-out, who are disciplined or discharged for strike- or lock-out- related misconduct, have access to arbitration?

A very contentious issue in the resolution of some labour disputes can be the refusal by the employer to reinstate employees terminated during a strike or lock-out, or to remove lesser discipline imposed on employees during a strike or lock-out. Often the discipline imposed is based on alleged misconduct on the picket line or on other misconduct by the employee related to the labour dispute.

Since no collective agreement is in operation during a legal strike and/or lock-out, employees who the employer wishes to discipline or who have been disciplined because of alleged misconduct during the strike and/or lock-out, have no access to a grievance and arbitration procedure. When employers refuse to reinstate employees for strike-related misconduct and refuse to submit such disputes to arbitration where just cause for discipline is disputed by the union, problems in the resolution of the labour dispute are often created that are very difficult to resolve. Typically, unions are not prepared to agree to the settlement of a labour dispute where the employer refuses to reinstate some employees for reasons of misconduct and where just cause for termination (or lesser discipline) is in dispute. Disagreement about employees who have been disciplined by the employer for alleged cause may prolong a labour dispute even though the parties have agreed to all terms of a collective agreement or a renewal collective agreement.

Other jurisdictions

In Manitoba, the law requires the employer, at the conclusion of a strike or lock-out, to reinstate employees in accordance with the agreement reached between the union and the employer or, where no agreement is reached, in accordance with the seniority of the employee at the time the strike or lock-out commenced. The refusal to reinstate an employee is an unfair labour practice unless the Labour Board is satisfied that the employer refused to reinstate the employee because the employee’s strike- or lock-out-related conduct resulted in a conviction for an offence under the Criminal Code (Canada) and, in the opinion of the Labour Board, would be considered just cause for dismissal of the employee even in the context of a strike or lock-out.

In Saskatchewan, the legislation provides that striking employees are entitled to replace replacement workers at the conclusion of the labour dispute and it provides for a return-to-work protocol in the event that the union and the employer are unable to agree. The Saskatchewan legislation also provides for arbitration of the discipline or discharge of any employee when there is no collective bargaining agreement in force after certification of the union. Since a refusal to reinstate is tantamount to a discharge, employees who are refused reinstatement have protection against unjust dismissal through arbitration.

In British Columbia, striking or locked-out employees, who are terminated or disciplined by the employer for activities during a strike or lock-out, have access to arbitration in order to determine whether the termination or other discipline is for just cause.

As was said by the Supreme Court of Canada in the Saskatchewan Federation of Labour case, above, a strike enables workers to “come together to participate directly in the process of determining their wages, working conditions and the rules that will govern their working lives.”^{footnote 542[542]} Lawful strikes operate to guarantee the right of employees to associate meaningfully in pursuit of collective workplace goals. Similarly, a lawful lock-out of employees is available to employers for the purposes of trying to compel or induce employees to agree to provisions or changes in provisions respecting terms or conditions of employment or the rights, privileges or duties of the employer, an employers’ organization, the trade union, or the employees. In summation, strikes and lock-outs under the LRA are permitted and recognized as actions designed to put pressure on the other party to agree to the terms and conditions of a collective agreement. In other words, strikes and lock-outs are designed to allow workplace parties to advance their workplace goals relating to the terms and conditions of the employment of employees.

The status of a person as an employee does not cease because of a strike or lock-out, but employees may engage in conduct during a lawful strike or lock-out that warrants termination or other discipline for cause by the employer.

However, we are of the view that providing for independent third-party dispute resolution in the manner of the British Columbia legislation is appropriate. In British Columbia, striking or locked-out employees who are terminated or disciplined by the employer for activities during a lawful strike or lock-out have access to the grievance and arbitration process in order to determine whether the termination or other discipline is for just cause.

In our view, if a similar provision were to be included in the LRA, it would be beneficial to the efficient resolution of disputes and be good public policy for a number of reasons, some of which are set out below.

1. Lawful strikes and lock-outs are permissible economic sanctions designed to allow workplace parties to advance their workplace goals relating to the terms and conditions of employment of employees. A dispute over the termination/discipline of an individual employee for strike- or lock-out-related conduct is not, in any meaningful sense, a dispute about the terms and conditions of employment of all employees affected by the imposition of economic sanctions. Indeed, it is sometimes the case that all disputes related to terms and conditions of employment have been resolved by the parties and the only remaining disputes relate to the parties’ failure to agree on the appropriateness of termination/discipline of employees that occurred during the course of a strike or lock-out. This usually means the continuance of economic sanctions, which continues economic harm to both employees and the employer’s business, because of the inability to resolve an issue that is not relevant to the terms and conditions of a new collective agreement for all employees. Providing a dispute resolution mechanism for cases of termination/discipline of employees in relation to conduct during the strike or lock-out will not interfere with free collective bargaining, which is focused on the terms and conditions of employment of all employees in the bargaining unit. Such a provision should operate to facilitate the resolution of the more difficult labour disputes because contentious issues relating to termination/discipline that are not relevant to the resolution of the terms or conditions of employment for all employees in the bargaining unit can be resolved outside collective bargaining.
2. To provide a dispute resolution mechanism for cases of termination/discipline of employees in relation to conduct during the strike or lock-out would not prevent unions and employers from agreeing on the appropriate discipline of employees during collective bargaining but, as a practical matter, would mean that disagreements about the discipline of employees in relation to conduct during the strike or lock-out could not be taken to impasse by either party. Removing an issue from the bargaining table that has, or should have, no bearing on the resolution of differences related to the terms and conditions of employment of all employees in the bargaining unit, is consistent with the existing duty on both parties to bargain in good faith and make reasonable efforts to reach a collective agreement.
3. Providing for arbitration of such cases should reduce the length of some labour disputes where resort has been made to economic sanctions. Currently, there is no mandatory dispute resolution mechanism for these cases. The fact that the parties can now voluntarily agree to submit discipline cases to arbitration is not sufficient. Either party may have a case that they do not wish adjudicated for numerous reasons, one of which may be that they think they are unlikely to be successful. Ontario has had several lengthy labour disputes in recent years that were prolonged as a result of these issues.
4. There are often disputed facts and significant disagreement about whether cause for termination or other lesser discipline exists. As a practical matter, a provision permitting arbitration would make employers and unions assess their actions against a standard of just cause, including making a careful assessment of the reliability and the substance of the evidence available to be tendered in support of their position at arbitration.
5. Such a provision would also eliminate or reduce the potential risk that employers will penalize an employee for exercising the right to strike where no cause exists or where the discipline imposed is too harsh or is inconsistent with the treatment of other employees who, to the knowledge of the employer, engaged in similar conduct.
6. While most employers probably act in good faith, such a provision will prevent any employers from using a strike or a lock-out as an opportunity to “clean house” by refusing to reinstate employees it unilaterally decides should not return to the workplace.
7. A union having a view of the facts that is significantly different from that of the employer, or who views the discipline meted out as excessive, is currently in a difficult position in collective bargaining. In addition to the duty to bargain in good faith, the union has an on-going duty of fair representation “so long as it continues to be entitled to represent employees in a bargaining unit” and is required not to act “in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the unit, whether or not members of the trade union” (section 74 of the LRA). The availability to an employee of an arbitration process for challenging discipline imposed by an employer during a strike or lock-out will reduce the union’s vulnerability to complaints that it has abrogated its duty of fair representation by not pursuing the cases of discharged or disciplined strikers. It is unfair for a union to be placed in a position of conflict where its duty to fairly represent one employee has the effect of prolonging a labour dispute affecting all employees.
8. It is unfair for an employer that terminates/disciplines an employee where there is just cause, to then be required to resolve that issue in collective bargaining because the union is prepared neither to resolve the case nor to agree, on a voluntary basis, to submit the dispute to arbitration. A prolonged labour dispute with continuing economic sanctions is the result.
    

   We conclude that to provide for independent adjudication of disputes regarding the discipline of employees during the course of a lawful strike or lock-out will facilitate the resolution of labour disputes and, at the same time, respect the rights of employees and employers to strike and lock-out over terms and conditions of employment. If implemented, the recommendation should help focus collective bargaining on the terms and conditions of employment of all employees while, at the same time, lead to less protracted labour disputes. Access to justice for both parties will be enhanced if there is the right to obtain a decision from a neutral third party adjudicator.

   We recognize that, in some circumstances, the discipline of a striking employee could amount to an unfair labour practice. For example, if the termination of an employee by an employer, allegedly for just cause, was motivated by the exercise of rights by the employee that are protected under the LRA, the employer’s conduct would amount to an unfair labour practice. Some have submitted to us that the OLRB is in the best position to determine whether a refusal to reinstate an employee, terminated based on alleged misconduct during the labour dispute, is an unfair labour practice. On the other hand, in determining whether just cause exists, an arbitrator is required to take into account and apply the relevant law and legal principles. There is no compelling reason to require arbitration by the OLRB, nor do we have strong views about the appropriate forum for dispute resolution in such cases.

Should employees who are disciplined after the expiry of a collective agreement have access to arbitration?

Where a union and an employer are bargaining for the renewal of a collective agreement, there is no just cause protection for employees after the “freeze” period ends (subsection 79(2) of the LRA), even if there is no strike or lock-out. During the currency of the collective agreement, and prior to the expiry of the statutory freeze period, the grievance and arbitration provisions of the collective agreement remain in effect. After expiry of the “freeze” period, concomitant with the right of employees to strike and the right of the employer to lock-out, employers are legally entitled to unilaterally change terms and conditions of employment and to continue to operate. The right to change terms and conditions of employment means that the arbitration provisions of the expired collective agreement are not required to be maintained by the parties prior to entering into a renewal agreement. Employers (and unions) are not bound to recognize and/or allow grievances relating to discipline to proceed to arbitration.

The end of the freeze period should not provide the employer with an opportunity to discipline employees where no cause exists. Neither should it provide a trade union the opportunity to insist on reinstatement of an employee, who has been dismissed for cause, as a pre-condition of a renewal collective agreement. Without access to arbitration, the practical reality is that the good faith efforts of both parties to reach agreement on the terms and conditions of a renewal collective agreement can be adversely affected by disputes about whether there is just cause for discipline in a particular case. As noted above, these disagreements are not related in any meaningful sense to the negotiation of the renewal collective agreement but can prove difficult to resolve in the context of bargaining and, without a mandated dispute resolution process, may lead to protracted labour disputes.

Recommendation

166. The Labour Relations Act, 1995 should be amended to provide for arbitration, by the Ontario Labour Relations Board or by an arbitrator, of:
     1. the refusal to reinstate an employee at the conclusion of a strike or lock-out;
     2. any discipline of an employee by an employer during the course of a legal strike or lock-out; and
     3. any discipline of an employee by an employer after the expiry of a collective agreement.

13.3 “Just cause” protection from certification to date of first collective agreement

The issue that was raised in our consultations and in the Interim Report is whether there should be protection against unjust termination of employees from the time a union is certified or voluntarily recognized until the effective date of the first collective agreement. In first contract negotiations, this protection would extend to employees who are engaged in a strike or who are locked out by the employer before implementation of the first collective agreement.

Statutory “just cause” protection for employees generally provides protection for employees from unjust discharge by an employer. Commonly, such statutory protection allows an employee who asserts that there was no cause for termination to bring a complaint of unjust dismissal before a neutral third party adjudicator with jurisdiction to determine the issue. In such proceedings, the legal burden to prove just cause falls on the employer who must prove, on a balance of probabilities, that such action was justified. The adjudicator has jurisdiction to decide whether just cause exists and the dismissal is warranted and, where no cause is proven, to order an appropriate remedy (including damages and reinstatement) or to substitute a lesser penalty if there was wrongdoing by the employee but the discipline imposed by the employer was excessive.

The goal of a just cause provision is to ensure that employees are not treated unjustly by the exercise of management’s authority to terminate employees.

We note that a similar issue may arise after the expiry of a collective agreement during negotiations for a renewal collective agreement, when the union is in a legal strike position and the employer is entitled to lock out employees. Under the current LRA, employees are vulnerable to termination without cause by an employer unless such termination is an unfair labour practice. We have made a recommendation with respect to the termination of employees engaged in a legal strike in section 13.3.

In practical terms, under the current law, after certification, but before a first collective agreement is in place, an employee has no protection against unjust termination by the employer unless the termination is motivated in whole or in part by the employee’s exercise of rights under the LRA.

Unions generally support the introduction of a provision for just cause protection during the period subsequent to certification and prior to the first collective agreement to protect employees where cause for termination does not exist. Unions assert that not only can the termination of employees erode the confidence of employees in the newly certified bargaining agent but it will likely also create issues that are difficult to resolve in collective bargaining. Access to just cause protection will help to ensure stability in the workplace during the critical period following certification until implementation of a first contract.

Employers generally did not comment on this specific LRA issue in their submissions.

Background

Amendments to the LRA, introduced in 1993, provided that a just cause provision was deemed to be in effect during:

1. the interval following certification or voluntary recognition and before a first collective agreement was entered into;
2. the course of the collective agreement;
3. strikes and lock-outs; and
4. the open period before a new collective agreement was in operation or until the union was decertified.

The 1993 amendments to the legislation also allowed for a lesser standard for “cause” to apply during an employee’s probationary period. These provisions were repealed in 1995.

Other jurisdictions

Three Canadian labour relations statutes contain just cause protections during periods where no collective agreement is in force. The federal jurisdiction provides just cause protection during the period from the date of certification to the date when a first collective agreement is implemented. British Columbia’s legislation provides that an employer may not discharge, suspend, transfer, lay-off or discipline an employee except for proper cause when a union is conducting a certification campaign. Saskatchewan’s law states that, in circumstances where no collective agreement is in force, the board has certified a union, and an employee is terminated or suspended for a cause other than a shortage of work, an arbitrator may determine whether there is just cause for the termination.

Should “just cause” protection be extended to all employees in a bargaining unit from certification to the date of the first collective agreement?

Pursuant to the provisions of the LRA, an employer is prohibited from dismissing, threatening to dismiss or imposing any other penalty if the purpose is to prevent an employee from joining a union or from exercising any rights under the Act. As a result, the OLRB has jurisdiction to protect employees from unjust discipline or discharge if they are discharged or disciplined for exercising their rights under the LRA, (e.g., because they have joined a union or participated in other lawful activities related to organizing or certification of a union, including participating in collective bargaining and/or in a lawful strike). If the OLRB finds an employer has terminated or disciplined an employee because of the exercise by the employee of his or her rights under the LRA, it has jurisdiction to reinstate the employee and to award damages in cases of termination. In such cases, the burden of proving that the employer did not act contrary to the LRA lies on the employer.

Once the first collective bargaining agreement is effective, employees will have protection against unjust dismissal or discipline because of the just cause provisions that are almost always contained in collective agreements. Virtually without exception, collective agreements in Ontario contain provisions permitting the grievance and arbitration of employee discipline cases. Arbitrators have the authority to determine whether an employee has been discharged or otherwise disciplined for cause and may substitute another penalty for the discharge or discipline that the arbitrator deems just and reasonable.

Even after the expiry of a collective agreement, employees in the bargaining unit will have protection against unjust dismissal or discipline because the terms and conditions of employment are frozen until the union and the employer are in a position to engage in a legal strike or lock-out.

We are not inclined to recommend any general just cause protection for employees in the LRA from the date of certification of a trade union to the date of the commencement of a first collective agreement.

The LRA protects employeesagainst termination by an employer that is motivated in whole or in part by the exercise of rights under the LRA.

The purpose of the LRA is not to curtail the employers’ authority to terminate an employee upon giving notice or where there is cause unrelated to the exercise of rights by the employee under the LRA. If insufficient notice is given under the Employment Standards Act, 2000 (ESA) or at common law, the employee has other remedies available. Similarly, if cause is successfully challenged and no ESA or common law notice is given, the employee has other remedies available.

We do not advise extending the LRA to protect employees from employer action unrelated to the exercise by employees of rights under the LRA.

Recommendation

167. It is our recommendation that “just cause” protection should not be extended to all employees in a bargaining unit from the date of certification to the date of the first collective agreement.
      

     Our Recommendation should be seen in the context of, and as an integral part of, other recommendations in this Report.

     In particular, it should be seen in the context of our recommendation on the Right of Striking Employees to Return to Work, above.

13.4 Successor rights

The issue here is whether and how to address the precariousness that exists for vulnerable workers when services such as security, food services, cleaning and others are contracted out and retendered.

Where a union has bargaining rights, the successor rights provision of the LRA protects employee and union bargaining rights where there is a sale of a business. The law provides that bargaining rights and collective agreement obligations of the original employer flow through to the new successor to whom the business is sold or transferred. Although the term “sale” is very broadly defined and applied, the contracting out and re-tendering of contracts have generally not been considered by the OLRB to be included in that term and, therefore, the successor rights have not applied to those situations.

In these situations, the employees in question simply lose the protection of the rights under their collective agreement, and their union loses its bargaining rights to act on their behalf. Unionization could be expected to improve terms and conditions of employment over time, but this potential for improvement is undermined by the fact and the threat of re-tendering.

To understand the contrast between the protection available to employees in a sale of a business and contract re-tendering, consider the example of a manufacturer whose workforce is unionized but whose building security for the factory is contracted out. Assume that the union representing the workers in the plant also represents the security workers who are covered by a separate collective agreement with a security firm. If the manufacturing business is sold, the new purchaser is, by application of the successor rights provisions of the LRA, bound to the existing collective agreement with the union, and the plant workers continue to have the same protections. The plant employees cannot be terminated or replaced, except in accordance with the terms of that agreement, and their negotiated terms and conditions of employment are protected and preserved. Of course, the new purchaser can renegotiate an agreement when the current one expires.

The situation is very different with the unionized security guards at the same manufacturing facility. If we assume that the new owner of the manufacturing business re-tenders the security contract and the contract is awarded to a new security firm, the old collective agreement with the former security firm employer is no longer applicable. The union no longer has bargaining rights at that plant for security guards. The new security provider company that wins the tender is not obligated to offer the existing employees jobs, can terminate some or all of the workers if it so chooses, and can unilaterally determine rates of pay and working conditions. There is an incentive for the new security provider to maintain the employment of the security guards because the new provider is, in most cases, liable to pay termination and severance pay if it doesn’t, but it is not obliged to offer or to continue their employment.^{footnote 543[543]} Indeed, the new security provider can be selective in who it wishes to retain, so long as it complies with legal requirements not to discriminate. If a union (typically the same union that has previously organized and bargained for the same group of security guards) organizes the employees of the new security provider, it will be negotiating a first agreement. The union and the employees will have to start the bargaining process with a new employer all over again.

The basis for this difference in treatment is that contracting out is generally not considered to constitute a sale of a business. Whether or not this is just a technical distinction or a substantive one, there are reasons to allow for the efficiencies that can be achieved through contracting out and to not have a rule of general application providing that a collective agreement is binding on a new contractor. Certainly, in the case of a contracting out by a lead employer for some parts of its business, perhaps there is justification, from time to time, for the difference in treatment between contracting out and a permanent sale. We are not suggesting, as part of this review, that this general approach should change.

We do conclude, however, that in industries mostly populated by vulnerable and largely unskilled workers, the constant re-tendering of contracts is, in many cases, not a mechanism aimed at achieving efficiencies through acquiring greater expertise or different methods of production but, rather, a mechanism to reduce costs by substituting a cheaper, non-union contractor for a unionized one. The social cost and impact of this “efficiency” is borne by those least able to bear it, namely, the vulnerable and the precarious employees in that industry. If a union in collective bargaining negotiates improvements in the working conditions for the unskilled and vulnerable people it represents, these gains are negated by re-tendering. The effect of constant re-tendering is not only to keep compensation low but also to eliminate improvements achieved through collective bargaining.

It should be clear, however, that our recommendation is not intended to be a rule of general application applying to all re-tendering or contracting out. Our recommendation is confined to a few sectors where employees are particularly vulnerable and, in those sectors, we recommend that existing bargaining rights and collective agreements be binding on the new “successor” employer when contracting out and re-tendering occur. Of course, while the new contractor is bound to the old collective agreement, it can negotiate the terms of a new agreement when the old one is set to expire, or earlier if the union agrees.

This situation of contracting out and re-tendering is perhaps one of the best examples of a fissured workplace, creating competition among suppliers of low-skilled services on a constant basis to keep wages and benefits as low as possible. Clearly, this is a major contributor to the continued presence of vulnerable workers in precarious work in some sectors. Stability and advancement through meaningful collective bargaining is not sustainable when the workers are unskilled and the lead employer can reduce costs, keeping them at rock-bottom through an endless series of re-tendering.

As noted above, an intrusion into the contracting out process, where all contracting out or re-tendering would be subject to the successor employer rule, is an unwarranted and unwise step. However, in a few sectors, it is important to take steps that benefit society and help reduce the precarious nature of employment for employees by protecting the improvements achieved through collective bargaining and the stability and the security of employment.

Currently, the ESA recognizes the particular vulnerability of workers in the building services sector by providing that the new employer will be liable in most cases for termination and severance pay if it does not maintain the employment of the employees of the old firm.^{footnote 544[544]} In addition, when a new contractor wins a contract, the ESA protects the length of employment with the former contractor by including that time when determining any rights and benefits that are based on length or period of employment the employee has with the new contractor, such as, termination notice/pay, severance pay, and vacation entitlement.^{footnote 545[545]} These are important protections for workers, but successor rights are more valuable in the case of unionized employees because they would protect the job security of the employees and all their existing compensation, benefits and other collective agreement rights until the next agreement is negotiated.

The law currently protects the bargaining rights of unions and the terms and conditions of employment of employees when businesses are sold. In the building service sector, contracting out and re-tendering is the equivalent of a sale and should be treated in the same way. Accordingly, we recommend – in the interests of protecting negotiated gains, stability and security for employees – that successor rights should be applied to the building services industry.^{footnote 546[546]} Whether this recommendation should apply to other sectors is discussed below.

In what sectors of the economy should successor rights pass to a new employer on re-tendering or contracting out? Certainly, they should apply to building services where cleaning, food services and security contracts are commonly performed by third parties. We would add to building services home care funded by the government, where there appear to be approximately 25,000 unionized employees. Presently, approximately 30% of the sector is unionized. Although wages in this sector have increased substantially in the last three years, employment in the sector remains precarious. In home care, employees have small pension and benefit entitlements, split shift work often creates hardship, and employees are mostly female. It is a growing and important area of publicly-funded health care. For the moment, government has limited contract re-tendering in this sector for some years but it is likely to be permitted again. Whatever the merits, an end to union-negotiated terms and conditions of employment in the home care sector resulting from re-tendering should not be permitted and successor rights ought to apply.

There are likely unskilled and vulnerable workers performing precarious work in other areas, such as bus drivers working for school boards where constant re-tendering produced such low wages that, last year, employers apparently had difficulty finding sufficient employees to perform the work. We recommend further examination to determine whether the same approach recommended for building services and the home care sector should apply to other sectors as well.

There are likely other areas of the economy comprised of unskilled, vulnerable workers in precarious work where successor rights should apply in cases of re-tendering to preserve existing collective agreements, either now or in the future. We recommend that the legislation should provide government with the flexibility to apply this same provision by regulation, where necessary.

We make the following Recommendations.

Recommendations

168. Successor rights should be applied to the building services industries (security, food services, cleaning) and home care funded by the government.
169. A regulation-making authority should be added to the Labour Relations Act, 1995 to allow for the possible expansion of coverage to other services or sectors in the future.

13.5 Ability of arbitrators to extend arbitration time limits in the arbitration procedure

The issue

Prior to 1992, the legislation allowing arbitrators to relieve against time limits was very similar to what it currently is today, that is, the legislation extended the ability to relieve against time limits with respect to the grievance procedure, and did not include the words “arbitration procedure”. However, there were some decisions of arbitrators extending time-limits when referrals to arbitration were missed, when there were reasonable grounds for the extension and there was no substantial prejudice.^{footnote 547[547]} In 1992, Bill 40 included a provision stating explicitly that an arbitrator “may extend the time for any step in the grievance or arbitration procedure under a collective agreement” if the arbitrator believed that there were reasonable grounds for the extension and the opposite party would not be substantially prejudiced (emphasis added). As part of amendments under Bill 7 to the LRA in 1995, the legislation was amended to remove the words “arbitration procedure”. As a result, courts have held that arbitrators no longer have the authority to extend time limits that were missed in referring a case to arbitration.^{footnote 548[548]} Some stakeholders assert that the result of this situation is that potentially meritorious grievances can be defeated on technical grounds.

Analysis

The purpose of this section of the LRA is to relieve against missed time limits, when appropriate. Objections to arbitrability based on missed time limits were very common in labour arbitration proceedings for a long period of time. These objections, when upheld, prevented a dispute from being heard on its merits because a time limit had been missed. The section allowing arbitrators to extend time limits was originally introduced because of a concern that technical objections were preventing issues from being addressed on their merits when there were reasonable grounds for an extension of time and there was no substantial prejudice to the party making the objection.

Most legal systems have a device to relieve against time limits when it is in the interests of justice to do so. In the labour arbitration context, it is now universally accepted that arbitrators should have the ability to relieve against time limits in the grievance procedure if the arbitrator believes that there are reasonable grounds for an extension and the opposite party will not be substantially prejudiced. As indicated above, prior to 1992, some arbitrators applied the existing provision to extend the time limits where referrals to arbitration were out of time.

We can see no justifiable policy reason for differentiating between a missed time limit in referring the grievance to arbitration and a missed time limit in the grievance process itself. Grievance arbitration is a statutorily-mandated process designed to promote expeditious and effective dispute resolution during the currency of a collective agreement. If in the case of the grievance procedure, an arbitrator has the authority to determine whether there are reasonable grounds for an extension and no substantial prejudice, there is no reason for the same power not to apply to the arbitration procedure, which is the critical element of the dispute resolution process. Permitting technical objections to prevent dispute resolution when an extension would be appropriate serves no policy purpose and discredits the system of labour relations in the province.

Recommendation

170. We recommend that section 48 (16) of the Labour Relations Act, 1995 be amended to include the arbitration procedure, as well as the grievance procedure, so that an arbitrator has the power to relieve against time limits if he or she is satisfied that there are reasonable grounds for the extension and the opposite party will not be substantially prejudiced.

13.6 Conciliation boards

Under the LRA, parties must go through the conciliation process before a strike or lock-out would be legal. If a conciliation officer is unable to effect a collective agreement, the Minister has the option of either appointing a conciliation board or issuing a notice in writing, informing each of the parties that he or she does not consider it advisable to appoint a conciliation board. This is known as a “no board” report. In practice, conciliation boards are never appointed and have not been for decades. It is not clear when this mechanism fell generally into disuse. From the perspective of labour relations practitioners, there is no purpose in having detailed procedures set out in the legislation that are simply not used in practice. There is no opposition in the labour relations community to the removal from legislation of what has effectively already disappeared in fact.

Recommendation

171. We recommend that the Labour Relations Act, 1995 be amended to remove the conciliation board provisions.