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The Government

Is not here to help you

The recent decision of the BC Labour Relations Board in the dispute between UFCW Local 1518 and Loman Distribution has left union officials and workers angry and disappointed. Darryl Gehlen, a worker at Loman's warehouse, wrote to his brothers urging them to put the decision in perspective and to look at other options in their fight to keep their jobs which are about to be sacrificed on the altar of corporate greed.

"...there are some fundamentals that we need to get back to. The power of unionism has always been people based. Now it is more like a top down governance. We are expected to remain united, "in solidarity", while all the real decision-making power lies elsewhere, our ability to influence it minimized. And the clock keeps ticking. One of the biggest obstacles is the lack of decision-making power our warehouse committee has. This battle cannot be fought by generals behind a desk with a timetable strategy. The battle itself will dictate what is required and where. To be effective we need to be able to make decisions. Success will not come from any one great idea. It will be pursuing every avenue and tying them together. Instead we feel hamstrung."

That's good advice. The Loman decision, disappointing though it is, isn't all that surprising. Why? MFD offers up its own analysis and some words to the wise about the gatekeepers of the labour relations system.

MFD Analysis:

The Loman Decision

On June 21st, the BC Labour Relations Board issued a decision in a case involving UFCW Local 1518 and Loman Distribution, a company that handles warehousing for Overwaitea Food Group stores in western Canada. Loman and Local 1518 are in the last year of a 10-year collective agreement. The company recently announced that when that agreement expires it will be laying off the 250 members of Local 1518 at its warehouse in Langley BC.

Last month, relying on a Memorandum of Understanding signed off in 1995, UFCW Local 1518 asserted that it had the right to cancel the 10 year deal with Loman, reopen negotiations and strike if it negotiations broke down. The union's premise was that this would put pressure on Loman and OFG - which it believes has a very close relationship with the warehousing company - to either rescind the layoff notices, offer the workers jobs at the new warehouse that will service OFG or, in the very least, provided enhanced severance packages for the workers.

Workers were asked to give the union the go-ahead to cancel their collective agreement, bargain and strike if necessary. They voted unanimously in favor of doing so. Reports received from workers who attended the meeting where the vote was held were that union officials were confident that this was a viable strategy and that the MOU on which they were pinning their hopes would withstand a legal challenge.

Notice canceling the agreement was served on Loman and OFG by Local 1518 shortly thereafter. OFG refused to have any part of any negotiations with Local 1518. Loman appears to have entered into some kind of discussions where company officials tried to get concessions in the hopes of rescuing their service contract with OFG. The discussions - whatever they were - went nowhere and Local 1518 served the company with notice of its intent to strike. The company appealed to the BC Labour Relations Board for an injunction prohibiting a strike until the expiry of the collective agreement.

On June 21st, the LRB ruled in favor of the company. The workers and their union met the decision with disappointment and anger. Some questioned the Board's motives and speculating on why it seemed quick to accept the company officials' version of events. Union officials say they are infuriated and are considering an appeal. Some of the workers feel let down and confused, having been told little more than a month ago that the prospects for a victory on this issue were good.

What your mama won't tell you about the LRB's

The LRB's decision is disappointing but - for those who are familiar with the labour relations system - it is also highly predictable. As some of our forum contributors have pointed out, the role of the LRB's in Canada is misunderstood by most workers and by many union representatives. The conventional wisdom is that the LRB's provide for justice in the workplace. The LRB's are where workers can go if their rights have been violated or if they have been treated unfairly. That's just not the way it is. The LRB's exist mainly to regulate relations between employers and unions. There are some limited circumstances where the rights of workers themselves can become LRB issues (such as workers who are penalized for supporting a union during an organizing drive), but the LRB's main role is to resolve disputes between the workplace parties - the employer and the union. The purpose of the LRBs' regulatory role is to maintain order - not justice - in the workplace so that disruption to the economy (from work stoppages) is kept to a minimum. The need for order was fundamentally important to the legislators who implemented the laws that brought us the labour relations system over half a century ago. Strikes during the term of collective agreements were and continue to be strictly prohibited. Once a collective agreement is ratified and in place, it's in place and the workplace parties are expected to live with it. That's really important to the LRB people who maintain the system.

Given the purpose the system serves and the important role the LRB's play in supporting the system, the result in the Loman case is not all that surprising: The LRB had to decide whether to issue a ruling that might promote increased strike activity (since it would be a precedent that other unions could use) or hand down a ruling that would discourage strike activity. No surprises here.

Whatever our feelings about the decision, it's always informative to see how the LRB got to it. This can give us a sense of what works and what doesn't, which factors can make or break a case and how seemingly insignificant events can play a big role in the outcome of a case. Let's take a look at the Loman decision and see what happened:

Background

On March 1993, Loman and Local 1518 signed a tentative collective agreement. The agreement would cover a period of 10 years. The company had just signed a 10-year service contract with its only customer Overwaitea Food Group and appears to have used the length of that deal to persuade the union to sign a correspondingly long collective agreement.

Concerned that the company could pull up stakes and move on at some point during the 10 years, Local 1518 demanded some reassurance. Shortly after the tentative agreement was signed, the union told company officials that they would need to meet a couple of conditions before the final agreement could be signed off.

These conditions were spelled out in a Tentative Memorandum of Agreement dated March 12. 1993.

These were:

  1. Ratification of the agreement no later than March 19, 1993; and
  2. That Loman sign a 10 year service contract with OFG and that the service contract be provided to the union's lawyer for verification; and
  3. That Loman secure a 10-year lease on the warehouse or purchase the property and register the lease or the property with the land title office.

Failure to make good on these conditions would result in the union having "the sole right to terminate this tentative agreement immediately".

The March 12, 1993 MOU was signed by Ivan Limpright, Secretary-Treasurer of Local 1518 and Jeff Allen, VP of Operations for Loman.

The tentative collective agreement was ratified and implemented as of April 1, 1993 but the company never met the other two conditions. OFG refused to release the service contract to the union's lawyer and would not permit the registration of the lease agreement for the warehouse property (OFG was the landlord). Loman's CEO, Julian Smith did, however, swear an affidavit stating that Loman and OFG had a service contract that was good up to September 28, 2002 and that Loman's lease on the warehouse was good to September 30, 1997. Smith sent Limpright the affidavit at the end of April 1993.

In August 1993, Limpright and Local 1518 President Brooke Sundin signed the collective agreement with the MOU attached as Memorandum I. Everything would have been OK except that Connie Smith, VP and Corporate Secretary of Loman (who outranked Jeff Allen), refused to sign the Agreement with the MOU attached. Smith believed that, with Julian Smith's affidavit, Loman had met the MOU's conditions - for the most part. OFG had clearly indicated that it would not turn over the service contract or allow registration of the lease so there was no point in pursuing either of these two issues. In addition, Smith did not much care for the idea of living with a clause that would allow the union to dump the agreement any time it pleased.

Local 1518 insisted that the company sign the collective agreement MOU and all. In 1994, Limpright filed two grievances over the issue but put the grievances in abeyance on the same day as he filed them stating that "there is not a sound reason to proceed to arbitration at this time". An LRB complaint was also filed requesting that the company be ordered to sign the collective agreement with the MOU. The complaint does not appear to have been pursued very far and was eventually withdrawn.

Eventually, the company representatives made some commitments to try to pursue the disclosure of the service agreement with OFG and the Union agreed to be patient but nothing ever came of the company's efforts.

Finally in May 1995, after a discussion between Jeff Allen and Ivan Limpright, Allen signed MOU I. He did so after Limpright persuaded him that the union would not publicize the document and that only the two of them would keep copies. As fate would have it, the very day that Allen signed on the dotted line, Connie Smith wrote to him directing that he do no such thing. Rather than telling Connie it was too late, the deed was done, several days later Allen and Limpright presented Connie Smith with the collective agreement minus the MOU for signature. Smith signed off as did Local 1518 President Brooke Sundin. Smith did not know that Allen had signed the MOU behind her back until May of this year.

Limpright would eventually receive a copy of the Loman-OFG service agreement from Allen later in 1995. A 1997 bulletin from Local 1518 to the workers at the warehouse implied that the company had confirmed the conditions around the 10-year lease and the 10-year service agreement by way of Julian Smith's 1993 affidavit. All seemed to be well for a long time after that - right up a month or so ago when the MOU resurfaced and company and union officials trooped off to the LRB to argue about just how enforceable the contract cancellation clause really was.

The Arguments

At the LRB, the company argued that Jeff Allen did not have the authority to sign the MOU, that it had a valid collective agreement that could not be terminated, that it was never the intent of the parties to give the union an ongoing right to terminate the collective agreement, that the terms of the MOU had been substantially met and finally - and very importantly - that the union, having lived with the alleged violation of the MOU for a number of years without doing much of anything about it, was now estopped* from relying on it.

*Estoppel (the shortest definition we could find):

... where one person ('the representor') has made a representation to another person ('the representee') in words, or by acts and conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the representee at the proper time, and in the proper manner, objects thereto. (Pannenbecker v. Dominion of Canada General Ins. Co. (1977), 76 D.L.R. (3d) 132 at pp. 139 (Alta. S.C.T.D.), revd on other grounds 93 D.L.R. (3d) 450 (S.C. App. Div.)

The Union argued that it had every reason to believe Allen, who had signed off on various agreements with the union in the past and who was the spokesperson at the 1993 round of bargaining, was empowered to sign off the MOU, that the company had failed to establish a basis for its estoppel argument, and that the union never gave up its right to terminate the collective agreement.

The Decision

The LRB found that:

The MOU I was a transition document covering the period between the tentative collective agreement in April 1993 and the signing of the ratified agreement in 1995.

Despite the fact that Jeff Allen had signed off on other labour relations documents with the union in the past, the union - in these circumstances - had reason to question Allen's authority to sign the MOU and should have done so. The company's steadfast refusal to sign the collective agreement with the MOU attached should have been its first clue. Ivan Limpright's testimony that he knew Allen didn't have Connie Smith's approval to sign off when he did, didn't help matters and neither did the fact that MOU I was not attached to the agreement that was signed in 1995.

The union's failure to act on the company's non-compliance with the MOU for a period of several years created an estoppel and now prevented it from relying on the MOU to terminate the collective agreement.

The heart of the issue, from the LRB's perspective, is articulated in this statement at paragraph 36 of its decision:

The Employer, relying on the Union's conduct and representation, lived under the collective agreement for almost 10 years and took no further steps to try to comply with the March 12, 1993 Attachment and/or memorandum I. I must now decide if allowing the Union to exercise its rights under Memorandum I to terminate the collective agreement at this point "would... be contrary to a sound sense of the equities, rights and conduct of the parties"... In other words would it be "unfair or unjust" to now allow the Union to rely on Memorandum I to terminate the collective agreement four months before the expiry date. It is undisputed that the collective agreement has been in force since April 1, 1993 and that the Union has enjoyed the benefits of the collective agreement for close to 10 years while knowing all along that the Employer was unable to meet the conditions in Memorandum I. In these circumstances, I am satisfied that the Union should be estopped from relying on its right in Memorandum I to terminate the collective agreement.

Note the highlighted phrase: What this case is about is what is fair in the context of the relationship between the workplace parties. What is fair to the workers is not even a consideration. This is the labour relations system in high gear, doing what it was intended to do: Maintaining order and preventing strikes. Feel disempowered? You're supposed to.

For workers, the moral of this story is: The government is not here to help you. Proceeding before the LRB may be an appropriate strategy depending on the issue. Some issues are more likely to result in favorable rulings for unions than others. If the issue your union is bringing forward is one that may require the Board to stray from its mission, prepare to be disappointed.

The good news? There are always alternative strategies and other options you can explore.

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