FINISHING THE DEAL – RATIFYING SUCCESSFULLY AND
DRAFTING THE FINAL DOCUMENT
Gabriel M. Somjen
Partner
and
Roger A. McConchie
Associate
McCarthy Tétrault LLP
(Vancouver)
February 24, 2004
TABLE OF CONTENTS
INTRODUCTION .......................................................................................................................... 1
1.
THE MINUTES OF NEGOTIATING MEETINGS .......................................................... 1
2.
DURATION CLAUSE ....................................................................................................... 3
3.
APPENDING CHANGES TO THE LANGUAGE OF A COLLECTIVE AGREEMENT
............................................................................................................................................. 3
4.
MAKING PROPOSALS: WITH OR WITHOUT PREJUDICE?...................................... 4
(a)
(b)
(c)
Estoppel........................................................................................................................... 6
Grievances Withdrawn with the Settlement of a Collective Agreement ........................ 9
Summary ....................................................................................................................... 10
5.
LETTERS OF UNDERSTANDING: TERM? ................................................................. 11
6.
ANCILLARY DOCUMENTS: ARE THEY A PART OF THE COLLECTIVE
AGREEMENT? ................................................................................................................ 11
7.
RATIFICATION: PROCESS, TIMING AND NOTICE ................................................ 14
8.
WHETHER AGREEMENT REACHED: NEGOTIATIONS TO CONTINUE? ........... 15
9.
DETAILS OF THE COLLECTIVE AGREEMENT ITSELF.......................................... 16
10.
INDEX CHANGES TO COLLECTIVE AGREEMENT................................................. 16
11.
RETROACTIVITY........................................................................................................... 17
12.
REVIEWING THE FINAL DRAFT ................................................................................ 18
13.
SPECIAL CONSIDERATIONS IN THE EVENT OF A STRIKE, LOCKOUT OR
SPECIAL LEGISLATION ............................................................................................... 20
i
INTRODUCTION
This paper addresses issues which are important to consider when finalizing a collective
agreement. Why are the following issues so important? After a potentially long and arduous
bargaining process, where representatives of both the union and the employer may have spent
long and stressful days negotiating every little detail, both sides undoubtedly want to know with
certainty exactly what they have bargained for. Any ambiguity will cause uncertainty in the
agreement, resulting in an increased need for arbitration to resolve issues between the parties.
Arbitration is stressful, costly, time consuming and allows the arbitrator, an outside third party,
to determine the rights of the parties.
A careful consideration of the following issues prior to concluding the collective agreement
should help both parties avoid those traps and pitfalls which create uncertainty as to the bargain
struck, and should also lessen the need for arbitration.
1.
The Minutes of Negotiating Meetings
During negotiations, it is common for one of the parties to take minutes of what occurred and
what was discussed during the session or meeting. It is preferable that both parties have
reviewed the notes or minutes to ensure that they are accurate because if a dispute arises as to the
interpretation of the collective agreement, extrinsic evidence (evidence other than the language
of the collective agreement itself) such as the notes or minutes can only be referred to by an
arbitrator in interpreting a collective agreement if it reflects the “mutual intention of both
parties”. This means that the external evidence being relied upon to interpret the collective
agreement must reflect an agreement between both parties as to the meaning or effect of a
particular provision or term of the collective agreement. This is in contrast to evidence which
only reflects what one party intended or hoped the meaning or effect of a particular provision or
term of the collective agreement would be. The following quote by then chairman Weiler of the
British Columbia Labour Relations Board from the leading decision on the issue1 expresses this
point clearly:
1
University of British Columbia and Canadian Union of Public Employees, Local 116, BCLRB No. 42/76
“First – and most important – the arbitrator is looking for the
mutual agreement of both parties, not the unilateral intentions of
the one side. Without some reciprocal assent from the other side,
the fact that one party had an intention may indicate no more than
what it wished to achieve and it is questionbegging to conclude
from this evidence alone that its wish has been fulfilled.
An example of where bargaining session notes were relied upon to interpret a contractual
provision is Arbitrator Stephen Kelleher’s decision in Health Employers Assn. of British
Columbia v. Assn. of Unions.2 The case concerned a dispute about the effective date of certain
provisions of a letter of understanding. The employer took the position that such provisions
became effective no later than April 1, 1999. The employer’s spokesperson testified that when
the first version of the letter of understanding was put forward during bargaining, the parties had
discussed the date of April 1, 1999. The spokesperson testified that the union representative had
asked whether all provisions of the letter of understanding were to take effect on April 1, 1999
and that the employer’s reply had been “yes”. The employer’s spokesperson’s notes reflected
this exchange. He had written down in his notes the following entries:
Union: Effective April 1, 1999, all provisions apply?
Employer: Yes.
Arbitrator Kelleher held that this exchange represented evidence of the mutual intention of both
parties that April 1, 1999 was to be the effective date of all the provisions of the letter of
understanding. He elaborated by stating:
where one party in collective bargaining puts forward a proposal
and the other party asks a question about its meaning or
application, the answer given by the other party is cogent evidence
of mutual intention where there are not further negotiations about
that aspect of the agreement.
Even if your minutes are not agreed upon, good minutes by your side are helpful.
2
[2000] B.C.C.A.A.A. No. 338 (Kelleher Q.C.)
2
2.
Duration Clause
It is good to provide in the memorandum of agreement an express duration clause stating when
the collective agreement is effective and what will trigger its termination. Absent such a clause,
it will be presumed that the re-negotiated collective agreement becomes effective on the date of
termination of the former collective agreement, and that it will remain effective through to the
settlement of a subsequent collective agreement.
One reason why a duration clause is important is that an employer can unilaterally change the
terms and conditions of employment once the collective agreement expires. This principle is
demonstrated in a decision involving the recent strike in the Coastal Forest industry.3 Forest
Industrial Relations (“FIR”) and the Provincial Negotiation Committee of Industrial Wood and
Allied Workers of Canada (the “IWA”) agreed to a continuation clause which provided for the
termination of their collective agreement if negotiations were discontinued. The Board held that
the IWA’s strike constituted the discontinuation of negotiations, ending the collective agreement,
and allowing the employer to unilaterally change the terms and conditions of employment.
3.
Appending Changes to the Language of a Collective Agreement
It is common for a memorandum of agreement to only contain general language describing the
modifications being made to the collective agreement. However, there is a danger in this
practice. The more general the language, the more likely the memorandum of agreement will be
open to interpretation, and thus, the more likely that disputes will arise regarding the rights and
obligations created by the memorandum of agreement which require arbitration to resolve.
In order to avoid these consequences, it is recommended that the actual language of the proposed
changes to the collective agreement be appended to the memorandum of agreement.
3
Forest Industrial Relations, BCLRB No. B400/2003
3
The arbitral decision in Web Press Graphics Ltd. v. Graphics Communications International
Union, Local 525-M,4 provides a good example of how overly general language in a
memorandum of agreement can create disputes as to the rights and obligations created by such a
document vis-à-vis the collective agreement. A dispute arose over language in the memorandum
of agreement which provided that a certain classification of employee “shall work under the
same terms and conditions” as another classification of employee. The union argued that “terms
and conditions” included wage rates, whereas the employer argued that the parties did not
negotiate wage rates when they had settled the terms of the memorandum of agreement; that the
general language of the memorandum did not prevail over the rates specifically prescribed by the
collective agreement.
This dispute could easily have been avoided had the parties carefully drafted new language to
implement the intended changes to the collective agreement.
4.
Making Proposals: With or Without Prejudice?
Parties often do not appreciate that withdrawing a proposal during negotiations can have legal
consequences which affect their rights and obligations under the collective agreement. Some
arbitrators have held that proposals made in the course of negotiations are without prejudice; that
since they are made for the purpose of finding a resolution, both sides are presumed to have
reserved the right to withdraw or change their positions.5
There is also another line of authority which holds that where parties are negotiating over an
existing policy, as established by an express policy or past practice, withdrawing a proposal
during bargaining which was intended to modify or cancel the policy will indicate a recognition
of the policy and tacit acceptance of the legitimacy of its terms as it stood at that time for the
duration of the agreement being negotiated.6
4
[1999] B.C.C.A.A.A. No. 366 (Germaine)
Health Labour Relations Assn. v. Hospital Employees’ Union, [1993] B.C.C.A.A.A. No. 305 (Kelleher Q.C.)
6
Kamloops (City) v. Canadian Union of Public Employees, Local 900 (Ferguson Grievance), [1995] B.C.C.A.A.A.
5
No. 334 (Ready)
4
Further, the arbitral jurisprudence distinguishes between bargaining proposals which are only
intended to clarify or even strengthen existing language and those bargaining proposals which
are intended to alter prior existing rights or obligations.
Therefore, the danger in not stating that a proposal has been made without prejudice is that, if it
is later withdrawn, the effect of its withdrawal will not always be clear and will be open to
interpretation, potentially changing the rights and obligations between the parties as represented
by the written terms of the collective agreement. For example, a proposal may be advanced for
clarification purposes. The other party may resist the change, assuring the other party that the
clarification is unnecessary, resulting in the party that advanced the proposal being satisfied with
the existing provisions; the legal effect of the existing provision will likely not have been altered
by the withdrawal. In contrast, if the making of a proposal is interpreted as intending to modify
legal rights and obligations between the parties, its withdrawal may be interpreted as evidence
that the party who advanced the proposal had not achieved the position represented by the
proposal.
The arbitration decision in Timberwest Forest Ltd. (Re),7 provides a good illustration of the
pitfalls of failing to make a proposal expressly without prejudice. The union filed a grievance
alleging that the employer was in breach of the collective agreement by restricting the range of
meals available to employees working overtime. The union argued that its member were entitled
to an unrestricted choice of meals from the take out menu of a local restaurant. The employer’s
argument was that the language of the collective agreement, which stated that “the Company
shall provide a hot meal . . .”, only obligated the employer to provide a reasonable choice of
meals.
During a subsequent round of collective bargaining, the employer sought to limit its exposure to
what it considered to be excessive meal costs. As a result, the employer made a proposal which
sought to limit meal selection to three meals. The proposal was rejected by the union. In its
“final position”, the employer made a proposal which provided that “The Company will
endeavour to provide a basic selection of meals”. This proposal was also rejected by the union.
7
[1996] B.C.C.A.A.A. No. 214 (Greyell)
5
In the arbitrator’s view, the employer’s proposals went past simply clarifying rights the employer
thought it already had. In the context of the position the employer was taking on meals, the
arbitrator found that the proposals represented an enhancement of rights beyond those which
already existed. Further, and of importance, the arbitrator also found that at no time during the
course of bargaining had the employer taken the position that it had an existing right to limit
meal selection. As a result, the arbitrator held that the withdrawal of the proposals by the
employer during bargaining was interpreted by the union as meaning that the status quo
pertaining to unrestricted meal selection would continue.
(a)
Estoppel
The equitable remedy of estoppel provides a powerful means of changing the legal relationship
between parties to a collective agreement, even where such changes are inconsistent with the
plain language of the collective agreement. Therefore, it is very important for a party engaged in
collective bargaining to avoid making statements or engaging in conduct which may
inadvertently modify, alter or change its rights or obligations under a collective agreement.
To establish an estoppel, a party must demonstrate that:
1.
There has been a representation, promise or assurance by the other party through words
or conduct (including silence);
2.
The representation was relied upon; and
3.
There has been a detriment or prejudice to the side who relied on the representation.8
The representation must be unequivocal.9 If there is any ambiguity as to the representation’s
meaning, it will not be sufficient to establish an estoppel. However, a party seeking to establish
an estoppel does not have to demonstrate that the representation relied upon was intentionally
made to be relied upon.10
8
Fording Coal Ltd. v. United Steelworkers of America, Local 7884, [2002] B.C.C.A.A.A. No. 205 (Lanyon)
Supra note 7
10
Litwin Construction (1973) Ltd., (1988), 29 B.C.L.R. (2d) 88 (B.C. C.A.)
9
6
The arbitral decision in Fording Coal Ltd.,11 provides a good illustration of where one party
attempted to establish an estoppel to modify its rights under the collective agreement. However,
the decision is also useful because it demonstrates how a claim for estoppel may fail.
In the decision, the employer had a practice of making a flat payment of one or two weeks
vacation pay to new employees, whereas the collective agreement provided that the employer
was only obligated to pay the employees vacation pay in the amount of four percent (4%) of their
total earnings for the year in which the vacation was earned. Upon discovering its error, the
employer indicated to the union that it would change the practice to comply with the collective
agreement.
The union argued that the employer was estopped from changing its practice; that the employer
should have dealt with the past practice in previous rounds of collective bargaining and was now
estopped from changing it until the next round of collective bargaining. The employer argued
that it had not made an unequivocal representation to the union that the practice would continue;
nor had the union relied on the practice to its detriment. The employer argued that the past
practice was simply an incorrect application of the collective agreement, one that senior
management was not aware of, and that the employer immediately discontinued the past practice
upon discovering that it had been paying more than it was contractually obligated to.
The arbitrator held that the employer was not estopped from discontinuing the past practice.
First, a long-standing practice did not in itself create an estoppel. Second, the employer did not
make an unequivocal representation that the past practice would continue. Rather, upon
discovering that the past practice did not comply with the collective agreement, the employer had
immediately indicated to the union that the past practice would have to change. Third, there was
no evidence that the past practice had ever arisen in collective bargaining. And fourth, a bare
assertion by the union that it would have raised the matter in collective bargaining had it known
the practice would change is insufficient to establish a prejudice or detrimental reliance. The
union was also not found to have surrendered any position or made any concession in collective
bargaining in exchange for the practice to continue. And because the practice had been
11
Supra note 8
7
implemented unilaterally by the employer, mistakenly, the employer was also free to unilaterally
change the practice.
As alluded to in the decision in Fording Coal Ltd.,12 an employer may be estopped from
changing a past practice if it fails to give notice to the union during bargaining of a planned
upcoming change to the practice. For example, in Kelowna General Hospital v. Health Sciences
Assn. of British Columbia,13 the employer proposed changes to the termination date for health
and welfare benefits coverage. The employer had a longstanding practice of ceasing such
benefits at the end of the month in which an employee terminated his or her employment. The
employer changed this practice so that coverage would instead end upon the termination of an
employee’s employment.
The union argued that there was no agreement reached at the bargaining table regarding a change
to the benefits’ termination date; that no such proposal had been made by the employer, nor had
the union accepted such a proposal. The union further argued that the employer had had ample
opportunity to clarify during bargaining whether it thought the issue was included in the
collective agreement, but had not done so. In addition, the union argued that the employer had
given no indication at the bargaining table that the practice was about to change, resulting in the
union relying on the employer’s silence on the issue, to its detriment, resulting in the union
believing that the past practice would continue.
The arbitrator held that the employer was estopped from changing the practice because it had
failed to notify the union at the bargaining table that it intended to change the practice, denying
the union an opportunity to negotiate the issue.
However, it is possible for a party to cancel an estoppel if it gives the party relying on the
estoppel reasonable notice, which typically is the period between the party giving the notice and
the time the collective agreement is renegotiated.14 The following statement from Arbitrator
12
Supra note 8
[2002] B.C.C.A.A.A. No. 362 (Ready)
14
B.C.G.E.U. v. British Columbia (1986), 4 B.C.L.R. (2d) 232 (C.A.)
13
8
John Kinzie’s decision in Hacker Press Ltd and Communication, Energy and Paperworkers
Union, Local 226,15 concisely explains this principle and its reasoning:
The question is whether the party against whom the estoppel
applies has given reasonable notice to the other party to bring the
estoppel to an end. If notice is given during the term of a
collective agreement and the party against whom the estoppel
applies is correct in its interpretation of the strict terms of that
agreement, then the party relying on the estoppel is denied the
opportunity of negotiating different arrangements to maintain the
current practice. It is because of this denied opportunity to address
the matter in bargaining that the courts and arbitrators have
concluded that it would be unfair and unreasonable to find the
estoppel terminated as of the date of giving such notice. Instead,
they have said that the estoppel will continue until such time as the
opportunity to address the matter in bargaining arises.
Any form of notice which makes a party aware that the other party intends to abandon a practice
will be effective to cancel an estoppel. The notice does not have to be in writing, nor does it
have to be express; the notice can be implied so long as the message is clear. And where notice
is given, if the side receiving the notice wants to continue the benefit gained by the estoppel, it
must negotiate language into the collective agreement for that purpose or seek a specific
commitment that the benefit will be continued. However, if the notice is ambiguous or is
conditional on an event occurring, it likely will not be sufficient to communicate to the other
party that it will lose the benefit if it does not negotiate a formal contractual commitment.16
(b)
Grievances Withdrawn with the Settlement of a Collective Agreement
Sometimes as part of the settlement of a collective agreement, the parties to the agreement will
also agree to settle any outstanding grievances. However, it is important that an employer
obtains sufficient documentation that the parties intended to settle a grievance because arbitrators
have found that the mere withdrawal of a grievance by a union may not be sufficient evidence of
a union’s intention to settle a particular issue.
15
[1995] B.C.D.L.A. 260-01
Cominco Ltd. and United Steelworkers of America, Local 480 (Jorgenson Grievance), [1996] B.C.A.A.A. No.
409 (Larson)
16
9
A succinct summary of the law with respect to this issue is found in Arbitrator Dalton Larson’s
decision in Fording Coal Limited and United Steelworkers of American, Local 7884 (Hamar
Grievance),17 where he stated:
a mere withdrawal of a grievance will not, in and of itself, bar a
refiling of that same grievance or even a different grievance
involving substantially the same issue. What must be shown is that
the circumstances of the withdrawal were such that an actual
agreement was reached or there was a representation to the other
side by which one could conclude that, by the act of withdrawal,
the union intended the issue to be settled.
There is nothing inherent in the act of withdrawal, of itself, that
would constitute a representation that the claim should be
considered to be settled.
In that decision, the grievor was terminated. On the same day as her termination, a grievance
was filed on her behalf by the union. Within a few hours of being filed, the grievance was
withdrawn by the union on request of the grievor. Four days later the union sought to refile the
same grievance.
The employer argued that once the grievance had been withdrawn, the matter must be regarded
as having been settled. Arbitrator Larson disagreed, and instead held that there must be more
than the mere act of withdrawal to evidence a mutual intention between the parties that the
matter giving rise to the grievance has been conclusively settled.
(c)
Summary
It is therefore important to address the following issues in the minutes of settlement:
17
(i)
the effect of withdrawing of a proposal;
(ii)
whether an estoppel has been created by the employer delivering a
proposal or when not negotiating an item; and
(iii)
whether the union’s withdrawal of a grievance represents a settlement of
the issue
[1994] B.C.C.A.A.A. No. 461 (Larson)
10
5.
Letters of Understanding: Term?
Parties to a collective agreement will often negotiate a letter of understanding which clarifies or
modifies the terms of the collective agreement. However, when parties enter into a letter of
understanding, they often do not turn their minds to its duration. Specifically, they fail to
address whether the letter of understanding is to have binding effect through the succession of
collective agreements that are settled over the years, or whether it is to terminate on a particular
date.
When determining whether or not a letter of understanding will survive the expiry and renegotiation of the collective agreement to which it was appended, a distinction is drawn between
those that simply guide the interpretation of a provision, and those which create new obligations
or alter or amend the collective agreement. A letter of understanding in the first category may
continue to be used as an aid to interpretation if the provisions to which it applies continue
unchanged from one agreement to the next. However, where the letter alters the rights and
obligations under the collective agreement, there is a presumption that it continues in force until
the parties mutually agree to abandon it or until either party gives notice to the other that they
wish to rescind or re-negotiate the letter upon the expiry of the subsisting collective agreement.18
However, if the letter of understanding contains mutual commitments, it can only be terminated
though negotiations in the same manner as if it were a provision in the main body of the
collective agreement.19
6.
Ancillary Documents: Are they a Part of the Collective Agreement?
A subtle issue which is often not considered when finalizing a collective agreement is whether an
ancillary document referred to in the collective agreement is part of the collective agreement.
For example, if the collective agreement makes reference to an insurance plan, has the employer
merely agreed to pay for its premiums on behalf of the employees, or has the employer assumed
primary responsibility for the payment of the benefits?
18
Eurocan Pulp & Paper Co. and Communications, energy and Paperworkers, and Canada Local 298, [1998]
B.C.C.A.A.A. No. 107 (Munroe Q.C.)
19
Supra note 18
11
If an insurance plan has become part of the collective agreement, a failure by the insurer to pay
insurance benefits to an employee may become an arbitrable issue, potentially rendering the
employer liable for the insurance benefits under the plan to an employee. 20 In the case of such
benefits as long term disability insurance, the employer’s potential liability can be quite costly.
However, if the employer has merely agreed to pay the insurance plan premiums on behalf of its
employees, the failure of an insurer to pay insurance benefits to an employee will only give an
employee a cause of action against the insurer which must be pursued in a civil court.21
In determining whether the parties intended the employer to be primarily liable for insurance
benefits, arbitrators employ what is commonly referred to as “Brown & Beatty’s four
categories”. The four categories are as follows:
1.
The Plan or policy is not mentioned in the collective agreement;
2.
The collective agreement specifically provides for certain benefits;
3.
The collective agreement clearly only provides for the payment of premiums; or
4.
Specific plans or policies, in whole or in part are incorporated by reference into the
agreement.22
Disputes arising out of categories one and three are not arbitrable. Arbitrators will take
jurisdiction over disputes arising out of category two. Such disputes typically arise where a
union believes that the employer has purchased insurance benefits which fall short of those
negotiated in the collective agreement. The fourth category applies where the terms of a
particular plan or policy are incorporated into the collective agreement, which occurs either when
the plan or policy is physically appended to the collective agreement, or where the collective
agreement makes express reference to a particular plan or policy, or its terms.23
20
Prima Enterprises Ltd. v. British Columbia Government and Service Employees Union (Csercsics Grievance),
[2001] B.C.C.A.A.A. No. 320 (Chertkow); see also Alcan Smelters & Chemicals Ltd. v. Canadian Auto Workers,
Local 2301, [2003] B.C.C.A.A.A. No. 27 (Hope)
21
Supra note 20
22
Brown & Beatty, Canadian Labour Arbitration, 3d ed. (Aurora, Ont.: Canada Law Book, 1988) (loose leaf)
23
Supra note 20
12
The issue of an employer’s liability for insurance benefits under the collective agreement was
addressed in Prima Enterprises Ltd.24 The grievor had applied for long term disability insurance
benefits under the insurance plan provided by the employer, but her application was turned down
by the insurer. The union filed a grievance on behalf of the grievor claiming that the employer
was liable for the long term disability insurance benefits. The employer raised the issue of
arbitrability, taking the position that it had no liability under the insurance policy with respect to
the grievor’s claim; that the grievor’s remedy, if any, was in civil court against the insurer, and
not before a board of arbitration.
The union argued that where the terms of an insurance policy are incorporated into a collective
agreement, any alleged breaches can be arbitrated. In support of its argument that the insurance
plan provided by the employer had been incorporated into the collective agreement, the union
relied on a sentence in a memorandum of agreement which stated that the insurance plan to be
provided by the employer would be as provided in the memorandum attached to the collective
agreement. However, the plan was never attached to the memorandum, nor to subsequent
renewals of the memorandum and the collective agreement.
The arbitrator held that there was no evidence that it was the intention of the parties that the
employer would be primarily liable for long term disability benefits, citing as a reason that the
collective agreement did not make reference to any terms of an insurance plan apart from the
vague reference to an insurance plan in the memorandum of agreement. Further, the union did
not offer a logical reason as to why an insurance plan had never been attached to either the
memorandum of agreement or the collective agreement, despite the fact there had been
subsequent renewals of the memorandum of agreement and collective agreement.
This decision demonstrates that an employer will only be held primarily responsible for
insurance benefits if the collective agreement makes specific reference to the terms of an
insurance plan, or the insurance plan is physically attached to the collective agreement or another
external document which modifies the collective agreement.
24
Supra note 20
13
However, employers have been found to be liable for insurance benefits in some cases.
Therefore, it is important to address this issue in the memorandum of settlement.
7.
Ratification: Process, Timing and Notice
British Columbia’s Labour Relations Code does not require that in order for a collective
agreement to be valid, it be ratified by the union membership or by the bargaining unit members,
nor does the Code require that the union comply with its constitution when ratifying a collective
agreement.25 Therefore, subject to a contractual agreement providing for a particular process of
ratification, a union has full discretion as to how and when they will conduct a ratification vote.
Therefore, if the parties have communicated to one another that ratification is a condition
precedent to a settlement becoming a binding collective agreement, it is important that an
employer obtains the union’s agreement as to a particular ratification process to be followed.
Otherwise, an employer may mistakenly believe it has concluded a settled collective agreement,
but instead has only reached a tentative agreement with the union because the union fails to ratify
the memorandum of settlement. 26
In a decision of the British Columbia Labour Relations Board,27 a tentative agreement had been
reached between the employer and the union. However, the agreement was subject to ratification
by the members of the bargaining unit. The union planned to hold the ratification vote at its hall
the next day. The employer was asked to provide notice of the meeting to its employees that
morning at the workplace, which it did by way of its public address system. The employer
announced that there was a union meeting at the hall at lunch break that day. However, the
reason for the meeting was not announced. Of the 174 ballots cast, 104 were for and 69 votes
were against the agreement. Approximately 60 to 70 bargaining unit members did not attend the
meeting and did not vote.
25
Supra note 5
John Inglis Co. Ltd., BCLRB No. 92/74
27
SRI Home Inc., Winfield Division (the “Employer”), and IWA-Canada, CLC, Local Union Number 1-423 (the
“Union”), and Certain Employees of SRI Homes Inc., Winfield Division (“Certain Employees”), BCLRB No.
B495/94
26
14
Certain employees who missed the meeting brought a complaint to the Board, arguing that there
had been inadequate notice of the ratification vote and thus were denied an adequate opportunity
to vote. And as the outcome was determined by a difference of only 35 votes, the number of
employees who did not attend the meeting and did not vote could easily have been enough to
change the outcome of the vote. In addition, a union meeting had been previously scheduled for
the following week with the negotiating committee, resulting in some of the employees assuming
that if a vote was to be taken, that it would be taken at that time.
In this case, the employer supported dismissing the application because it would have been
prejudiced by the collective agreement being held invalid as it had already begun to conduct its
business on the basis on the new collective agreement. The application by the certain employees
was ultimately dismissed, the Board citing that the Code does not mandate how a ratification
vote should be conducted.
However, this case demonstrates how, absent a contractual agreement with the union binding it
to conduct the ratification in a certain manner, a union will have complete discretion with respect
to how a ratification vote is conducted. And although in this case the employer was satisfied
with the result, in the majority of cases it will be the employer arguing about the ratification
process employed by the union; arguing how it has concluded negotiations and begun to conduct
itself in the belief that it has reached a binding agreement with the union, only to see the
agreement fail for want of ratification..
8.
Whether Agreement Reached: Negotiations to Continue?
An interesting related issue is determining whether a binding agreement has been reached, apart
from those circumstances where ratification is a condition precedent. Often one of the parties
believes that an agreement has been settled, when in fact, the parties have merely reached an
interim agreement on certain issues. The Board has stated that an agreement will only be
considered an interim agreement, and not a concluded collective agreement, if there is evidence
that the parties contemplated that negotiations would continue.28 One of the clearest indications
28
Zeller’s Inc. v. United Food and Commercial Workers International Union, Local 1518, [2001] B.C.C.A.A.A. No.
77 (Thompson)
15
that no additional bargaining is contemplated is when the memorandum of agreement is
submitted to be ratified.29
9.
Details Of The Collective Agreement Itself
Some relatively minor, but, sometimes expensive, details should be agreed upon, either in the
Memorandum of Settlement or in a separate agreement, in particular:
10.
(a)
Who actually types the collective agreement? Will it be on a disc or just a hard
copy?
(b)
Who bears the cost of typing and writing copies of the Collective Agreement?
Will copies be provided to all employees?
(c)
Who will proofread the changes, etc.?
Index changes to Collective Agreement
When parties have been engaged in a collective bargaining relationship for a number of years, it
is likely that successive collective agreements settled over the years merely build upon or modify
previously settled agreements, and do not contain completely new language each and every time
a new agreement is settled.
An often overlooked consequence of this practice is that clauses in the collective agreement may
conflict over time; newly agreed to provisions may conflict with provisions negotiated in earlier
agreements. There is a general principle of interpretation that holds that where there is conflict
between clauses, and one clause applies generally, and another applies specifically, the clause of
specific application overrides.30
The solution to such conflicts is to index the changes made to the collective agreement over time.
This will enable parties negotiating a new agreement to anticipate potential conflicts between
existing and proposed provisions, and negotiate the collective agreement and draft its provisions
so as to avoid such conflicts.
29
Supra note 26
VSA Highway Maintenance Ltd. v. British Columbia Government & Service Employees’ Union, [2002]
B.C.C.A.A.A. No. 200 (Blasina)
30
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11.
Retroactivity
There often is a gap in time between the expiry of a subsisting collective agreement and the
settlement of a subsequent agreement unless the parties agree to extend the current subsisting
agreement, or are able to settle a new agreement during the life of the subsisting agreement. An
issue which arises with respect to this gap in time is whether benefits conferred by the newly
settled agreement apply retroactively? This issue can arise where a collective agreement has a
“duration” clause which specifies the date upon which the new agreement becomes effective,
certain employees work past the date upon which the agreement is specified as effective, but are
no longer employed on the date upon which the agreement is actually settled. A typical duration
clause will have language which reads as follows:
“This Agreement shall be effective as from the 1st day of January,
2004, and shall remain and be binding upon the Parties until the
31st day of December, 2004.”
The presumption is that the agreement as a whole is made retroactive by operation of the
duration clause. But specific exceptions will be read into this standard retroactive principle,
excluding certain terms of the agreement from the clause, if full retroactivity would appear to
lead to impractical and unintended results, or there is language in the collective agreement
expressly excluding certain benefits from having retroactive effect.
Therefore, to avoid the determination that certain results are impractical or unintended being
made at the discretion of an outside third party, the collective agreement should contain language
that expressly states which benefits are and are not intended to apply retroactively.
Pacific Newspaper Group Inc. v. Communications, Energy and Paperworkers Union of Canada,
Local 2000,31 illustrates how the issue of retroactivity can arise from departed employees and the
operation of a duration clause. The union grieved the employer’s failure to pay retroactive pay
to employees who ceased to be employed between December 1, 2001, and the commencement of
a labour dispute at the beginning of July, 2002. The employer argued that any individual whose
employment ended before the commencement of the labour dispute was not entitled to
31
[2003] B.C.C.A.A.A. No. 43 (Pekeles)
17
retroactive pay because the return to work agreement negotiated between the parties, which
addressed the issue of retroactivity, only applied to employees whose employment was
terminated during the strike or who were employees at the commencement of the strike but who
did not return after the strike was over. Further, the previous collective agreement between the
parties had expired on November 30, 2001. The parties’ collective bargaining had resulted in a
strike which began on approximately July 1, 2002. The parties’ new collective agreement was
settled on July 18, 2002, and contained a duration clause which read in part: “This Agreement
shall be in effect from December 1, 2001 to November 30, 2004.”
The arbitrator held that the individuals who ceased to be employed between December 1, 2001
and July 1, 2002 were entitled to retroactive pay. Although the return to work agreement dealt
with the issue of retroactivity, the arbitrator found that this was not sufficient to rebut the
presumption of retroactivity which arose from the duration clause; that retroactively would apply
to individuals employed as of December 1, 2001. This finding rested on what the arbitrator
found to be a lack of clear words restricting the entitlement to retroactive pay for those
individuals whose employment had been terminated prior to the commencement of the strike,
and the employer’s failure to establish that there would be absurd, impractical, unintended or
unfair results from applying the payment terms of the collective agreement retroactively to the
disputed employees.
12.
Reviewing the Final Draft
It is important to review and edit the final draft of an agreement for errors and omissions before
finalizing the agreement. Small typos, spelling mistakes, and accidental misprints can
substantially affect the parties’ rights and obligations under the collective agreement, and
increase the likelihood that arbitration will be necessary to determine the proper interpretation of
what the parties had agreed.
A good example of the trouble which can be caused where an error goes unnoticed until after the
collective agreement has been concluded, and the parties to the agreement have ordered their
affairs based on a mistaken belief of what was agreed to, is a decision which involved a
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collective agreement with an inconsistency between the language of one of its provisions and a
table which was included to illustrate the provision.32
The provision at issue stated that all employees who were promoted for at least three years, and
who completed a number of required courses, would be eligible to receive 125% of their current
rate of pay. The provision also stated that all employees who had been promoted for at least six
years, and who also completed a number of required courses, would become eligible to receive
130% of their current rate of pay.
However, the table which was included in the collective agreement to illustrate the provision
provided that all employees would be eligible to receive 130% of their current rate of pay after
only being promoted for three years. The table read as follows:
Year Promoted
Year Eligible for Increment to
130% Rate
Courses Required for
Increment
1997
2000
3
1998
2001
3
1999
2002
3
2000
2003
3
2001
2004
3
Five employees who had been promoted for three years and who had completed the required
courses applied for a salary increase at the 130% increment rate based on the figures outlined in
the table. They applied based on a notice sent out by their employer which contained the table.
Their applications were processed and approved by two of their managers, resulting in the
employees being paid at the 130% rate.
Several months later, the employer’s Human Resources department discovered that the
employees were being paid the 130% rate after only three years, whereas the employer took the
position that the employees were only entitled to be paid the 125% rate under the language of the
32
Vancouver Police Board and Vancouver Police Union, September 16, 2003, unreported expedited award (Glasner
Q.C.)
19
collective agreement. The employer subsequently reduced the employees’ pay to the 125% rate
and demanded that they repay the 5% difference each was mistakenly paid. Although “catching”
its own mistake, and attempting to rectify it, the employer was prevented at arbitration from
recovering the full amount of the overpayments.
13.
Special Considerations in the Event of a Strike, Lockout or Special Legislation
Most collective agreements are reached without a strike or a lockout or special legislation
dealing with the collective agreement. However, in some circumstances, if there has been a
strike or a lockout or if the dispute is significant enough that the Government has passed return
to work legislation or a particular legislation detailing the method of resolution of the dispute,
then certain issues should be addressed in these circumstances in addition to all of the issues set
out above:
(a)
Address the return to work. Who returns to work; is it all employees or just
some? In what sequence do they return to work; is it by seniority, skills or a
certain number of employees at a time?
(b)
What are the rights of employees during the time between the return to work
commencing, and full operation?
(c)
Has there been any discipline of employees during the strike or lockout and is the
discipline resolved in the context of the memorandum of settlement? Have any
employees been terminated during the strike or lockout and what is their status in
respect of returning to work?
(d)
If there is special legislation, pay particular attention to the wording in the
legislation with respect to cooling off periods, who is to return to work and when,
is there any liability between the Union and the Employer in respect of what
happened during the strike or lockout. Are there any third party claims against
either the Union or the Employer?
20