OUTSIDE CONTRACTOR MUST MATCH HOSPITAL WAGES FOR HOUSEKEEPING STAFF, ARBITRATOR DECIDES

When a hospital housekeeping contractor and the union could not agree on wages, the parties resorted to interest arbitration. Deciding that the best group for wage comparison was employees doing the same work in the same hospital, an Ontario arbitrator ordered that the contractor's wages for its housekeeping staff be brought almost in line with the hospital's own wages for housekeeping employees. Details below.

EMPLOYER'S LETTER TO EMPLOYEES DETAILING ITS OFFER NOT AN UNFAIR LABOUR PRACTICE, SAVE FOR ONE STATEMENT, BOARD RULES

When a union held off on communicating the details of management's latest collective bargaining proposal to employees until the day of the vote on the proposal, the employer sent a letter to all employees outlining the offer. The Alberta Labour Relations Board concluded that the employer had a right to send the letter, even though the union had not communicated with its members, but that a minor misrepresentation in the letter had interfered with the union's ability to represent its members, in breach of the Labour Relations Code. Since the misrepresentation did not affect the outcome of the vote, no remedy was ordered beyond a declaration that a breach of the Code had occurred. Details below.

OUTSIDE CONTRACTOR MUST MATCH HOSPITAL WAGES FOR HOUSEKEEPING STAFF, ARBITRATOR DECIDES

The Facts:

In September 2002, the Ottawa Hospital contracted out housekeeping services at two of its three campuses (Riverside and General) to Aramark Canada Ltd. Hospital employees performed housekeeping duties at the remaining campus (Civic). When Aramark and the bargaining agent for the Riverdale and General employees, the Canadian Union of Public Employees could not come to an agreement on their first collective agreement, the dispute was referred to interest arbitration under the Ontario Hospital Labour Disputes Arbitration Act.

Prior to Aramark's entry onto the scene, and CUPE's acquisition of bargaining rights, the housekeeping staff at Riverside and General were covered by a collective agreement between a different union and a previous private contractor. That agreement, whose terms continued to cover Aramark's staff, provided wages and benefits that were less favourable than the hospital's own agreement for the Civic campus housekeeping employees. The Civic employees were covered by a collective agreement between the hospital and the Canadian Union of Public Employees (CUPE), the terms of which reflected provincial norms for hospital housekeeping employees.

The Ottawa hospital contracted out the Riverside and General work prior to Arbitrator Mitchnick's June 1995 central interest award in Canadian Union of Public Employees v. Participating Hospitals. That award directed that hospitals, which contracted out bargaining unit work and laid off non-casual employees as a result, include provisions in the contract with the contractor that would require the contractor to enter into a collective agreement with the union matching the terms of the hospital's own collective agreement.

The main issue between the parties was the appropriate wage comparator group: other housekeeping staff employed by hospital cleaning contractors, or directly-employed hospital staff performing the same housekeeping duties.

The Arguments:

CUPE argued that the comparator group against which these employees should be measured was the housekeeping employees employed directly by hospitals province-wide. In particular, they should be compared with employees doing the same jobs at the Civic campus of the Ottawa Hospital, who worked directly for the hospital. In this regard, reliance was placed on an award by Arbitrator Russell Goodfellow in Canadian Union of Public Employees, Local 4266-04 v. Aramark Canada, unreported, November 9, 2005 (see Lancaster's Labour Law eNewsletter, Issue No. 123). The union took the position that the Mitchnick award, cited above, provided the context in which large-scale contracting out in public hospitals should take place, and that in these situations there should be no diminution of terms and conditions of employment.

Aramark responded that the appropriate comparator group was cleaners working for private contractors in various institutions province-wide, such as hospitals, long-term care facilities and hotels. It asked the board to follow the decision of Arbitrator Claude Foisy to that effect in Canadian Union of Public Employees, Local 4266 v. Aramark Canada (Elizabeth Bruyere Health Centre), unreported, December 20, 2001. Aramark submitted that, in the awards relied upon by the union, unlike here, the arbitration boards did not have a broad database of wage information to allow them to properly make a comparison to long-term care facilities and hotels. Aramark also argued that the collective agreement terms in Mitchnick's award, cited above, should apply only in the event of a layoff resulting from contracting out (which was not the case here), and that they did not constitute a provincial standard.

The Decision:

Arbitrator Loretta Mikus, chairing an interest arbitration board, looked at four previous awards involving Aramark and Ottawa-area hospitals, each of which determined the appropriate comparator group. These decisions made what Mikus called an "extreme turn", favouring Aramark at the outset of the journey but coming closer to the union's position by the end. She decided that the appropriate comparator was employees doing the same work within the hospital: "We agree with arbitrator Goodfellow's conclusion that the appropriate comparator is those employees working within the same institution, performing the same work – in this case the Hospital's own housekeeping employees at the Civic campus."

Beginning the chain was the award relied upon by Aramark. In Canadian Union of Public Employees, Local 4255 v. Aramark (Elizabeth Bruyere Health Centre), Arbitrator Claude Foisy dealt with the terms and conditions of employment for housekeeping employees at an Ottawa hospital. The union argued that the employees should be compared to the housekeepers at another site of the same hospital, who were directly employed by the hospital. Arbitrator Foisy, however, adopted Aramark's approach, concluding that Aramark would never have agreed to the standard hospital sector terms and conditions, and that the hospital's purpose in contracting out was to avoid those terms. The appropriate comparator group, Foisy held, was the employees of cleaning contractors working in hospitals.

The three following decisions moved progressively further away from Foisy. In January 2004, Arbitrator William Kaplan declined to follow Foisy's approach. In Canadian Union of Public Employees (Hôpital Montfort) v. Aramark Canada Ltd., [2004] O.L.A.A. No. 24 (QL), Kaplan dealt with Aramark's housekeeping employees at another Ottawa hospital. Unlike in Foisy's award, there were no internal housekeeping employees available for comparison. Nonetheless, Kaplan awarded a wage based largely on rates in place at another, similarly-sized local hospital that directly employed its housekeeping staff.

In Toronto, Aramark employed the dietary staff at yet another hospital. In the May 2005 award of Service Employees International Union, Local 1 v. Aramark Canada Facility Services Ltd. (Runnymede Hospital), [2005] O.L.A.A. No. 506 (QL), Arbitrator Kevin Burkett also rejected Foisy's approach, which he concluded had been influenced "by what he saw as the purposes of contracting out, i.e., to lower costs, and the untenable economic position into which Aramark would have been put if it had agreed to hospital rates." Burkett held that the Mitchnick contracting out language in the SEIU and CUPE central hospital agreements set the rules for contracting out in the hospital sector, and that "[t]he fundamental parameter thus established is that contracting out is not an acceptable device to reduce wage and ongoing benefit costs."

The fourth award happened to arise out of the very same bargaining unit dealt with in the first award by Arbitrator Foisy. In November 2005, Arbitrator Russell Goodfellow, in Canadian Union of Public Employees, Local 4266-04 v. Aramark Canada, cited above, wrote that, in the Burkett and Kaplan awards, "the idea was that the best comparator of employees working in hospitals are other employees working in hospitals. We agree with that approach and would apply it here."

Arbitrator Mikus adopted the reasoning of Arbitrators Kaplan, Burkett and Goodfellow. She did not share Aramark's view that Burkett had misunderstood the meaning of Mitchnick's award: "[W]e have not been provided with evidence of sufficient contracting out of housekeeping services subsequent to the introduction of the central contracting out provisions, which would cause us to believe that arbitrator Burkett was incorrect as to the consequences of those provisions. On the other hand, we have been provided with the examples ... which conform to the contracting out context suggested in arbitrator Burkett's analysis."

Mikus did not accept Aramark's contention that the decisions against them by Kaplan, Burkett and Goodfellow turned on the number of external comparators available to them. She noted that Burkett had found his comparator in hospital sector collective agreements even though "he had been provided with examples from the broader health sector." In addition, she concluded that, while Foisy looked to privately employed cleaners in other area hospitals, "in this case those comparators no longer support the employer's position, having regard to the terms and conditions at the Royal Ottawa Hospital, the SCO (Sisters of Charity) and the Hôpital Montfort."

In the result, Mikus held that the appropriate comparator group was the hospital's directly-employed housekeeping employees. She wrote: "[T]he most recent decision of arbitrator Goodfellow ... seems directly on point. In that case, like here, the employees concerned were employed by Aramark while the employees at another campus were directly employed by the hospital. Like here, the terms and conditions of employment of the hospital's own employees generally match provincial norms for the hospital sector while those of the contractor lagged a considerable distance behind. We agree with arbitrator Goodfellow's conclusion that the appropriate comparator is to employees working within the same institution, performing the same work – in this case the Hospital's own housekeeping employees at the Civic campus."

Mikus made an order that the parties enter into a collective agreement providing increased wages and benefits, staged to take effect towards the end of the agreement. She recognised the importance for Aramark of making a profit, and not losing its contracts, and noted that "the transition to hospital-sector terms and conditions of employment will not occur overnight." Mikus agreed in principle that the collective agreement should reflect the hospital central agreement as much as possible, but observed that this was a "first collective agreement" and that "in some circumstances we do not feel the full context of the Hospital Agreement is necessary or applicable." She concluded: "Our goal in this agreement is to leave the parties with a collective agreement that contains most of the 'basics' (wages, health and welfare/pension benefits, premiums) by the end of the four-year term.... Other benefits, including 'upper-level' vacations and benefits for retirees, for example, are left to the parties' future bargaining."

Comment:

Interest arbitrators in Ontario's health care sector have made it clear that, in the presence of language restricting contracting out of bargaining unit work, they are not prepared to allow wages to be reduced by such arrangements, even in those instances where the contracting out does not fall within the precise language of the collective agreement, and is therefore lawful. This approach has been applied not only to hospitals, but also to long-term care nursing homes: see Service Employees' International Union, Local 1 v. Aramark (Thomson House Food Services), [2005] O.L.A.A. No. 614 (QL) (Burkett). In British Columbia, the government passed legislation stripping hospital collective agreements of contracting-out restrictions, thereby precipitating the layoff of 11,000 non-clinical support staff. In this regard, a challenge has been brought by B.C. unions to the validity of the legislation, based on the Charter of Rights' guarantee of freedom of association, and a decision by the Supreme Court of Canada is pending: see Health Services and Support-Facilities Subsector Bargaining Association v. British Columbia, [2004] S.C.C.A. No. 587 (QL).

Case Name: Canadian Union of Public Employees, Local 4000 v. Aramark Canada Ltd.
Jurisdiction: Ontario
Proceeding: Interest Arbitration
Arbitrator: Loretta Mikus, Chair
Date: September 18, 2006
Full Text: http://www.lancasterhouse.com/decisions/2006/sep/Mikus-Aramark.pdf

EMPLOYER'S LETTER TO EMPLOYEES DETAILING ITS OFFER NOT AN UNFAIR LABOUR PRACTICE, SAVE FOR ONE STATEMENT, BOARD RULES

The Facts:

At a meeting on July 28, 2006, after several months of bargaining over a renewal collective agreement, Gateway Casinos made a wage proposal as part of a comprehensive offer to its casino employees represented by the United Food and Commercial Workers Union, Local 401. The parties agreed that the employees would vote on the offer on August 9, although the union told Gateway that the offer was inadequate and that it would recommend rejection. After the meeting, the union placed a message to employees on its website that provided no details of Gateway's offer, but stated that the union did not endorse the offer and recommended rejection at the August 9 vote. While Gateway expected that the union would provide details of the offer to its members before the vote, the union decided to provide the details of the offer only on the day of the vote, as a strategy to increase attendance. As managers were being asked repeatedly by employees for details about the offer, and management saw no indication that the union had apprised its membership of the offer in detail, Gateway's vice-president Howard Worrell decided to write a letter to employees communicating the main points of the offer.

On August 4, 2006, Gateway began to distribute letters to each employee. The letter stated that an offer had been made and that Gateway recommended that employees attend the August 9 vote. It cast the offer in a positive light, and noted particularly that (1) the wage offer would be retroactive and it would provide "average back pay entitlements of up to $1,114.00 for each staff member;" and (2) "the current proposal also includes one extra statutory holiday each year and extra holiday weeks for years worked."

The union learned about the letter on Monday, August 7, and filed an unfair labour practice complaint on August 8. The vote took place on August 9 and Gateway's proposal was rejected by 88 percent of the members voting (about half of the bargaining unit voted). At a post-vote bargaining session on August 10, Gateway pressed the union to reveal its position on wages, but the meeting degenerated quickly into insults and was cut short. The union added allegations concerning the meeting's breakdown to its complaint. After the meeting, Gateway stated that the parties were at an impasse on wages, and that it would not meet with the union until the union communicated a monetary position that would warrant a return to the table.

The Arguments:

The union argued that Gateway's letter interfered with its representation of employees contrary to s.148(1)(a)(ii) of the Alberta Labour Relations Code. It also submitted that the letter, the meeting, and Gateway's refusal to meet until the union came up with a new monetary proposal, demonstrated a failure to bargain in good faith and to make reasonable efforts to conclude a collective agreement, contrary to s.60(3) of the Code. The union took issue with the timing of the letter, arguing that the employer had purposely and unfairly taken advantage of its alleged knowledge that the union was not going to communicate the offer to its members until August 9. The August 4 letter also caused confusion among members of the bargaining unit. It was unclear from the wording whether the back pay would be limited by a cap of $1,144.00. The reference to an "extra" statutory holiday and "extra" holiday weeks was also confusing, the union argued, as Gateway's proposal contained no mention of any vacation entitlements in addition to those contained in an earlier monetary proposal or the existing collective agreement.

Gateway responded that the reference to "extra" holiday entitlements was meant to convey that the offer exceeded the minimum entitlements in the Alberta Employment Standards Code, not that any additional holidays were being offered.

The Decision:

Alberta Labour Relations Board Vice-Chair J. Leslie Wallace concluded that the reference to "extra" holidays in Gateway's letter to employees had breached the Labour Relations Code as it was a misrepresentation that interfered with the ability of the union to represent its members. However, he did not order any remedy other than a declaration of the breach, as he found that it had not affected the vote on the agreement. The letter did not otherwise breach the Code, Wallace held, dismissing the complaint that Gateway had failed to bargain in good faith or make reasonable efforts to conclude a collective agreement.

Wallace turned first to the sending and timing of the letter. He held that Gateway had not broken the law by sending the letter when it did, and that there was nothing wrong with Gateway communicating with employees before the union about the contents of the offer: "The law is clear that an employer is not compelled to remain silent to its employees when an offer is presented to the trade union. There is nothing inherently unfair in communicating to employees when this employer did. It was the union's choice not to communicate details of the offer to employees until the last minute, and a trade union cannot effectively deprive the employer of its right to speak to employees by the simple expedient of remaining silent itself until the date of the vote."

Turning to the substance of the letter, Wallace found it to be "mostly unobjectionable", even given the high level of scrutiny applied to employer communications at such a sensitive time in collective bargaining. He concluded: "The letter is factual, though it predictably emphasizes the aspects of the offer that present it in its most favourable light. The passage about retroactivity payments of 'up to' $1,144.00 is not a misrepresentation, but only an innocent ambiguity. Similarly, the imprecision about whether first-year increases are contained within the market adjustments offered is only an innocent ambiguity."

The reference to "extra" holidays, however, was another matter. Wallace held that this passage in the letter was a misrepresentation, and interfered with the union's representation of its employees contrary to s.148(1)(a)(ii) of the Code. Rejecting Gateway's position, he wrote: "We do not accept the argument that this passage accurately portrayed these entitlements as being superior to Employment Standards Code minimums. There is nothing in the context of the letter to convey that, and a bargaining unit employee of ordinary intelligence would take the sentence in question to mean that the employer was offering holiday and vacation improvements over the previous collective agreement. It was not. Whether innocent, negligent or intentional, this misrepresentation had the predictable effect of confusing employees and the union bargaining committee, none of whom would have been able to find anything in the employer's offer to reflect that these items were being improved over the previous agreement. It would have tended to paint the union committee as being unfamiliar with the employer's offer, and to divert the attention of both union and employees from the real issues presented by the offer."

Wallace concluded that the letter interfered with the union's ability to represent its members, in violation of s.148(1)(a)(ii) of the Code, but did not constitute bargaining in bad faith under s.60 of the Code. Wallace stated: "The breach involved one isolated comment in the otherwise unobjectionable employer letter of August 4. The misrepresentation, though real, involved a minor element of the employer's offer. The breach was entirely unsuccessful in influencing employee opinion. We see no serious prospect that such a breach will be repeated." As a result, the only remedy ordered was a declaration that Gateway's letter was in breach of the Code.

Wallace similarly concluded that the breakdown of the August 10 meeting did not stem from a breach of Gateway's duty to bargain in good faith. He held that both parties were to blame for the meeting's breakdown, and observed that "[c]ollective bargaining is a difficult, stressful and often emotion-laden process. This Board will not intervene in every bargaining breakdown. We will intervene only where the breakdown appears so arbitrary, unreasonable or marked by ulterior purpose that it discloses an intention to avoid a collective agreement or that it amounts to a complete failure of reasonable efforts by one or both parties. The evidence does not establish any such thing."

Finally, Wallace turned to Gateway's refusal to return to the table in the absence of a new wage offer from the union. He stated that Gateway's position that it needed some movement from the union on wages was a rational position that it could have taken, based on the events that had occurred. Wallace observed: "The Code does not require parties to meet and collectively bargain if there is no realistic prospect of progress. Nor will the Board lightly substitute its opinion for that of a party on whether there is a realistic prospect of progress.... In our view it would be entirely too intrusive upon free collective bargaining for this Board to find a breach of s.60 and direct the parties back to bargaining at this point in the process. This is not a case of an outright refusal to meet by the employer. If the union desires a return to the bargaining table, it is within its power to bring that about. The union no longer requires any clarification of the offer or of the points raised in the employer's August 4 letter; the hearing has resolved the outstanding questions. There are no longer any impediments to the union altering its monetary position if it wishes to."

Comment:

Other decisions confirm that it is not improper for an employer to provide information about proposals directly to union members prior to a vote. In Canadian Union of Public Employees, Local 2128 v. Board of Education of Biggar School Division No. 50, Saskatchewan Labour Relations Board Chair Owen Gray held that the employer could send a letter to employees outlining its proposal, but that it was obliged to ensure that the information was fair, accurate, and not misleading. Gray found that the letter had misrepresented the employer's bargaining position. Employers communicating directly with union members about matters related to bargaining must be careful not to attempt to bypass the union, or undermine the union's exclusive right to bargain on behalf of employees.

For more information on the law related to employer interference with union bargaining rights, see Lancaster's Collective Bargaining Reporter, January/February 2003.

Case Name: United Food and Commercial Workers Union, Local No. 401 v. Gateway Casinos G.P. Inc.
Jurisdiction: Alberta
Tribunal: Labour Relations Board
Adjudicator: J. Leslie Wallace, Vice-Chair
Date: August 30, 2006
Citation: [2006] A.L.R.B.D. No. 52 (QL)
Full Text: http://www.lancasterhouse.com/decisions/2006/aug/ALRB-GatewayCasinos.pdf

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