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The Swiss Chalet Workers: Part 2

Sweetheart or Biz-Union?

William von Ferst organized 31 Swiss Chalet Restaurants and negotiated collective agreements for each of them in a period of less than two years from 1978 to 1980. He established a union with a nationwide presence and some 1500 members in the restaurant industry. Then he disappeared. Nothing more is known about him and his name has never again come up in connection with CURRE or any other union.

A Cutting-Edge Biz-Unionist?

His replacement arrived in April of 1980. His name was William R. (Bill) Whyte. Like von Ferst, Whyte had no known connection with the labour community or with labour relations in general. As in the case of von Ferst, we don't know how it was exactly that he found his way into the General Manager's job at CURRE, but there is a lot that we do know.

Whyte was an enterprising kind of guy who had a lot going on. Prior to landing with CURRE, he was a police officer with York Regional Police north of Toronto. Going back at least to 1979, Whyte was also involved in a business venture - an armoured courier business called Cache Courier Services - with Foodcorp's Industrial Relations Manager, Kevin Boyd (another ex-copper) and a Toronto labour relations lawyer, Steven McCormack (this was revealed in a decision of the Ontario Court in 1996). McCormack practiced with Toronto law firm, Stikeman, Elliott, Robarts and Bowman, among whose clients was Foodcorp Limited. His name appears as counsel of record for the company on some of CURRE's applications for certification during the period 1979 - 1980.

Staking Out a Turf

The early years of Whyte's association with CURRE were a period of consolidation for the little union that almost overnight became the major labour player in Canada's restaurant industry. Having carved out a significant turf in the restaurant industry, CURRE's focus shifted from organizing to looking after and protecting its turf.

Whyte would have been with CURRE for only a couple of months when Boyd, the company's Industrial Relations Manager and Whyte's business associate in Cache Courier, died in June 1980. Boyd's replacement, Allen Morrow, was hired in the fall of 1980 as Foodcorp's Director of Industrial Relations. A former OLRB officer and conciliation officer with Labour Canada (the federal LRB), Morrow was far more experienced in labour relations than Boyd had ever been. >From what we can gather of his first few years at Foodcorp, he moved quickly forward with a labour relations strategy focused on protecting CURRE's and the company's interests.

A Master Agreement, Voluntary Rec & One Big Bargaining Unit

Most of the collective agreements von Ferst negotiated in 1979 were coming due for renewal in 1982. In 1981, however, Foodcorp and CURRE applied to the OLRB and were granted early termination of all of these agreements. A new province-wide master agreement between CURRE and an organization called the Swiss Chalet Employers' Association (SCEA) was negotiated effective November 9, 1981 for a three-year term. The creation of the SCEA would have been necessitated by a franchising program initiated by Foodcorp during this period. This program would see most of its stores "franchised" to owner-operators, a concept that has become fairly common in the food service and retail industries. Since each "franchisee" would operate as a separate employer, an umbrella organization (like an employers' association) would be needed to keep everyone under the same collective agreement.

According to article 2.03 of the 1981 - 1984 master agreement the "Association" meant "those employers, collectively and individually entitled to carry on business under the name and style of Swiss Chalet Bar B. Q. in the Province of Ontario, and who were members in good standing of the Employers' Association at the time of the signing of this Agreement or who may become members of the Employers' Association during the lifetime of this Agreement." If membership in the SCEA was mandatory for Swiss Chalet Ontario franchisees, and it is believed that it was, this arrangement would have the effect of giving CURRE voluntary recognition for new Ontario locations. It appears that is exactly what happened. After 1981, no more certificates were issued for Swiss Chalet locations in Ontario for a number of years, however, between 1981 and 1984 CURRE acquired bargaining rights for approximately 14 more stores by way of its province-wide master agreement with the SCEA.

Raid Avoidance

Apart from giving CURRE voluntary recognition for new stores, the master contract-SCEA arrangement also gave it a great deal of protection from raiding. Under the separate agreements that existed prior to 1981, all of the stores were separate bargaining units and so, could be picked off by a raiding union or unions one at a time as their agreements expired. The master agreement created one large province-wide unit. A raiding union would have to sign up the majority of employees at stores scattered all over Ontario in order to be successful - logistically a very difficult thing to do.

The master agreement that the SCEA and CURRE signed contained basic provisions similar to those of the first agreements, giving management broad discretion in most workplace decisions. But it also included a health and welfare plan to be administered by the union and a benefit called a "seniority bonus", a service recognition reward that paid out at the end of the second and third years of the agreement. Oddly, the payout for the third year was several days after the expiry of the contract. Quite possibly, the delayed payout was another feature designed to protect CURRE from raiding: If the members decertified CURRE, they would forfeit their entitlement to the bonus in the third year.

For Other Unions: Hard Bargaining & Undercover Agents

Basic as it was, the CURRE master contract was considerably better than the agreement that was negotiated for the Eglinton Ave. store in Toronto's east end where HERE had been certified amid much apparent opposition from CURRE in the fall of 1979. Negotiations for a first collective agreement at the Eglinton Ave. store were difficult and protracted. In testimony at OLRB proceedings in 1984, Kevin Boyd's assistant, Sharman Fullerton, in charge of labour relations for several months after his death, acknowledged that she went so far as to install undercover operatives in the store to get an idea of what the workers were so hung up about. An agreement was finally concluded in September 1980 by Foodcorp's new Labour Relations Director, Allen Morrow. The future would not be bright for HERE at the east end store however. Despite what seemed to be significant support from the workers at the time of its certification, HERE would lose its bargaining rights at this store to an apparent CURRE "raid" in 1983.

Just Like a Biz-Union

With a province-wide master agreement in the bag and voluntary recognition for new locations, CURRE settled into administrative mode. It filed grievances, raised general concerns about collective agreement compliance with the company, engaged in a limited amount of organizing of Swiss Chalet's, although on a much smaller scale than von Ferst's massive campaign (seven certificates were issued to CURRE for stores in Ontario, Alberta and Nova Scotia in from the summer of 1980 through 1981). All was going well for CURRE. On a certain level, it looked and acted a lot like a union. It could even claim to be in a better position to represent service industry workers than some of the larger, better-established unions. It had a large province-wide bargaining unit of about 3,000 members, covered by one collective agreement. This would certainly provide it with leverage when it came to future negotiations with the company and its franchisees. Its collective agreement, although basic, nonetheless included a benefit plan and a bonus scheme that few other restaurant contracts of that era (or the current era for that matter) could boast. From this vantage point, CURRE was a union with good potential. From another vantage point, however, it was hard to tell just what CURRE was. A biz-union just slightly ahead of its time? Maybe.

Rule by Presidential Directive

By mid-1980 CURRE had an executive board consisting of a President, Vice President and Secretary Treasurer. Whyte was its General Manager. The President and VP position were filled by two Swiss Chalet workers and the Secretary Treasurer by another ex-police officer named David Brooks. The worker representatives would stay in their positions for a number of years while the Secretary-Treasurer's position would be filled by a freelance accountant who did work for Whyte's armoured car business and later by Whyte's brother. At OLRB proceedings in 1984, the composition of CURRE's executive board and its internal operations came under considerable scrutiny. From the testimony of various CURRE officials, it is unclear whether, after 1979, any CURRE executive board members were ever elected. From their testimony, it appears that from 1980 onwards, executive positions were filled by something called "Presidential Directive". When questioned during the course of those proceedings about the lack of elections for a particular executive position, one CURRE official responded simply, "We didn't think we needed a new one."

Fixing the Constitution

Throughout much of 1980, the CURRE exec appears to have been preoccupied with the union's constitution, especially those parts of it that made mergers with other unions almost impossible (the constitution called for approval of 75% or 95% - depending on who you listened to - of the total membership before a merger or amalgamation with another union could be effected). A complicated series of meetings and motions held later that year, ostensibly on the advice of a labour relations consultant named Tony Michaels, led to a constitutional amendment that would allow for much speedier and hassle-free merger (based on a vote of the exec board rather than a vote of the membership).

The validity of these constitutional amendments would later be subject to a legal challenge. Just as the original constitution contained nearly impossible criteria for merger, constitutional amendments also required near unanimous approval of the entire membership. The architects of the original constitution, whoever they were, did not leave much of a margin for flexibility - but Whyte and his exec board did what they could.

Merger-mania

CURRE's obsessing over the merger clause of its constitution was not without good reason. Although no other unions (with the exception of HERE) sought to organize the Swiss Chalet workers during von Ferst's whirlwind campaign in 1979, by 1981, potential suitors were lining up to talk merger with CURRE. According to Whyte in his 1984 testimony before the OLRB, the line up included HERE, the RW, the Teamsters and the UFCW, which, Whyte claimed, proposed that the Swiss Chalet workers be folded into its Local 1000a.

Dues Went Up

An increase in union dues also appears to have effected during the 1980 CURRE exec board meetings, one of a number of dues hikes that would take place over the next couple of years. During the period 1979 to 1983, CURRE's dues increased from 4 cents to 12 cents per hour - a three-fold increase over a period of 3 years.

Taking Care of Business

Despite all this activity, Whyte continued his involvement in the armoured courier business. He would continue to be involved in various armoured ventures throughout his association with CURRE. By the end of 1980, the CURRE office was relocated from an accessible location on the subway line in west end Toronto, to a remote industrial park north of the city, where Cache Courier's operations were based. In addition to the armoured courier biz, however, various other biz's sprang up in connection with CURRE.

The Benefits Administration Biz

The CURRE health and welfare plan offered a limited range of basic coverage provided by an insurance company. Eligibility was restricted to full time employees and was voluntary. A company called Naduff Consultants handled administration of the health and welfare plan for CURRE. Naduff was operated by Sharman Fullerton (who up to 1983 was Foodcorp's Industrial Relations Officer and with whom Whyte was involved in a personal relationship by that time). Fullerton's family would also become involved in Whyte's armoured courier business. Naduff charged CURRE an administration fee for doing whatever it did for the health and welfare plan. CURRE's financial statements for 1983 show payments some $17,000.00 to Naduff for its services.

The Consulting Biz

In addition to Naduff, a consulting company appeared on the scene sometime in the early 80's. McNab Consultants was owned by Whyte and his wife and provided "labour advice and administrative services" to CURRE. During 1982 and 1983, CURRE's financial statements show total fees paid to McNab of $110, 528.00 for 1983 and $112,400.00 for 1982. These were by far the largest single source of expenditures by the union in both years - surpassing even the total salaries paid to it business agents. What advice and administrative services McNab provided to CURRE for that money is anybody's guess.

Where the cash was flowing

CURRE's annual dues almost doubled from $189,555 in 1981 to $330,207 in 1982. During this period, salaries and employee benefits decreased by almost two-thirds and other operating expenses remained relatively static. Consulting fees jumped almost 400% (from $38,108 in '81 to $159,321 in '82) and professional fees doubled (from $7,719 to $13,453). The following year, 1983, dues revenue stayed roughly the same as did the consulting and admin fee expenditures.

Times Were Good for the Company too - Concessions Were Needed

For Foodcorp the early 80's were a prosperous time as well. Despite the recessionary climate, Cara's restaurant operations were shoring up a flat period for its other operations. An expansion of operations was under way and new restaurant locations were opening. The franchising program would have reduced the company's overhead expenses. Things were looking good for Foodcorp, so good that it asked CURRE for wages concessions. With the master contract set to go into its third year, a wage increase of about 8% would have to be implemented. The company asked that this increase be deferred for a period of 6 months (a "wage pause" was the term the company used) mainly because.... the competition was paying less. The wage pause never materialized, however, and the company's efforts at getting it were overtaken by other events.

Coming up next: A Raid of Monolithic Proportions

Sources for this article:

Lloyd's London, Non-Marine Underwriters v. National Armoured Ltd., Ontario Court General Division, November 18, 1996

United Food and Commercial Workers International Union v. Cabral Foods Ltd. et al, OLRB File No. 2628-83-R, September 12, 1984, February 25, 1985

Where's the loot from biggest ever robbery? Toronto Star, November 29, 1997

Cara to rely on food strengths as it bolsters weak operations, Globe and Mail, July 15, 1983

Cara's profit bolstered by fast food, Globe and Mail, November 1992

Collective Agreement between Swiss Chalet Employers' Association and Canadian Union of Restaurant and Related Employees, November 9,1981 - November 8, 1984. This is believed to be an authentic copy of CURRE's Ontario master agreement for this period.

CURRE Financial Statements for 1982 and 1983 are believed to be true copies of statements provided to a CURRE member in 1984.

Other information from confidential sources with direct knowledge of the events described.

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