Pinetree Lodge is a residence for elderly individuals who can no longer live on their own. The Residence Employees Union (REU) represents the 80 workers employed at Pinetree. On June 10, as required by the relevant labour legislation, Pinetree provided the REU with 60 days’ written notice that it intended to reorganize its workforce, and stated that the reorganization could include contracting out some of the services performed by bargaining unit members. The reorganization was a result of Pinetree changing its operations to accommodate residents with complex medical problems. The notice said that a “signifi cant number” of employees would be affected by the proposed changes. At the same time, all 80 REU members received layoff notices effective August 9.

The parties met to discuss the notice on June 16. At that meeting, the REU representatives stated that they needed to know what Pinetree’s actual defi cit was and what Pinetree needed to achieve in cost savings to offset that defi cit. The REU also requested that Pinetree rescind the layoff notices. The Pinetree representatives at the meeting stated that there was a projected deficit of $450,000 for the current fiscal year, which would end on March 31 of next year. They stated that Pinetree was expecting to receive a onetime payment of $175,000 from the regional health authority, which would leave it with a shortfall of $275,000, and that it needed $200,000 in cost savings on an annual basis. 

The Pinetree representatives mentioned that the residence would have had those savings if the recent tentative collective agreement had been accepted by the REU members.

Last month, the members had voted against ratifying the agreement. The representatives said that the remaining $75,000 in savings could be obtained from other sources.

The lodge manager, Carlos Neiman, told the labour relations board that the $75,000 shortfall was worth it if it meant maintaining a stable relationship with the REU.

The REU wrote a letter to Pinetree on June 17 confirming the figures that had been discussed at the meeting and asking the provincial executive of the organization operating Pinetree to assist Pinetree in reducing its deficit.

However, the letter erroneously stated that the Pinetree representatives had said they hoped to obtain $200,000 in savings by contracting out services.

On the same day, Pinetree sent a letter to the union in which it said, among other things, that its terms for negotiating cost savings were, at a minimum, equivalent to the terms in the unratifi ed collective agreement.

The parties met again on June 23. At this meeting, the Pinetree representatives corrected the REU’s statement that Pinetree would save $200,000 by contracting out services.

They said that in fact the savings would be closer to $400,000, but reiterated that they hoped the REU would provide them with a sustainable plan to save $200,000. If Pinetree could not find $200,000 in savings from the REU, then it would proceed with contracting out.

The REU asked for Pinetree’s costing calculations so that it could have some basis for developing a proposal, but the Pinetree representatives refused to provide that information. Neiman’s explanation to the labour relations board regarding this refusal was that information being given to the media was creating a negative picture of events at Pinetree. He also said that in his opinion the REU was capable of doing its own costing calculations, and for this reason Pinetree was reluctant to share its costing figures or methodology.

The REU then asked Pinetree at least to provide its staffing estimates. The Pinetree representatives agreed to provide this information, and the REU agreed to prepare a proposal for the next meeting, which was scheduled for June 30.

The parties then discussed whether an agreement was possible at all and whether their respective parent organizations would sanction a specifi c local agreement. (Pinetree management bargained as part of a group of health facility employers; the Pinetree REU local was represented

in bargaining by the provincial REU negotiating team, which bargained for an agreement that would be shared by all REU locals.) The REU emphasized that it wanted the layoff notices rescinded, and the Pinetree representatives refused, saying they needed to be able to undertake layoffs to accomplish the reorganization.

On June 24, the REU confirmed the contents of the previous day’s meeting in a letter to Pinetree. Pinetree sent a letter in response on June 25, saying that some of the REU’s information in the June 24 letter was incorrect.

The parties met again on June 30. Pinetree asked the REU whether it was prepared to table a proposal that reflected $200,000 in sustainable cost savings. Pine tree then tabled draft job descriptions and schedules, which the parties discussed. The REU said it wanted more full-time and fewer part-time positions. The parties also discussed whether current employees would qualify for the new positions.

The REU then asked Pinetree to provide a list of regular employees, current schedules, copies of the layoff notices, the current number of staffing hours, copies of all job descriptions, and copies of the current job postings for activity aides. The REU claimed that Pinetree had agreed to provide this information. Pinetree denied this, stating that it had agreed to provide only the number of staffi ng hours. Neiman told the board that he did not want to provide copies of the layoff notices because everyone had received them and the REU knew that everyone had received them.

He also said that the REU already had copies of current job descriptions and that drafts of the new ones were provided at the meeting. He added that the REU had a copy of the seniority list and could reconstruct a list of employees on its own. He acknowledged that the collective agreement required him to provide copies of the layoff notices.

Chuck Young, the REU business representative who was at the June 30 meeting, told the board that some members had informed him that they had not received layoff notices and that the REU was entitled to copies of the notices for purposes of verifi cation. He also said that the “current” job descriptions that the REU had were outdated and that the union needed accurate ones to understand the changes that Pinetree was proposing. He added that the REU could not construct a proposal without information on the current number of staffi ng hours.

The REU wrote to Pinetree on July 2 to confirm the content of the June 30 meeting and to reiterate that it was unable to provide a proposal until it had the current number of staffing hours. The union also confirmed that Pinetree had said that its bargaining group was not receptive to the

idea of a local agreement but might reconsider if it received a “substantial” proposal from the REU.

On July 4, Pinetree wrote to the REU imposing a July 9 deadline for receiving a cost-savings proposal. The REU responded by letter the same day, stating that it had not yet received the information on staffi ng hours and that without that information it could not assemble a proposal.

On July 7, Pinetree faxed the information on staffi ng hours to the REU. A handwritten note on the fax indicated that the fax had been sent once before, on July 2. The REU denied receiving the fax until the transmission on July 7.

Upon examining the number of staffing hours provided by Pinetree, the REU concluded that the number was underestimated, and alerted Pinetree to this fact.

The parties met again on July 10. At this meeting, the REU tabled an 11-point proposal. It offered a wage reduction of $1.25 per hour in all job classifications and offered to forego wage premiums for weekend work. In return, the REU wanted Pinetree to not contract out any services provided by the REU bargaining unit members. The union also wanted Pinetree to accomplish its reorganization through the staffing provisions in the collective agreement and not through “cherry picking” by laying off and rehiring employees. The REU proposed that employees be given an opportunity to qualify for the new job positions on the basis of their accumulated experience and seniority. It reiterated that it also wanted more full-time and fewer part-time positions. The proposal, if accepted, would expire on March 30 of the following year.

The REU valued its proposal at just under $200,000 but felt it was close enough to that amount to make the plan viable.

The Pinetree representatives at the meeting left the meeting room briefl y for a private discussion, and then returned and asked for more time to consider the union’s proposal. They said they needed direction from their board of directors and their bargaining group, and offered to arrange another meeting to consider and discuss the proposal.

The parties did agree to a joint review of the issue of full-time and part-time positions.

The next day, the REU sent a letter to Pinetree confirming the content of the meeting and emphasizing that some of the information it requested had still not been provided.

The parties met again on July 16. The day before, Pinetree had posted some part-time positions. At the start of the meeting, the issue of part-time and full-time positions was raised and discussed. The Pinetree representatives agreed to create more full-time positions if the REU bargaining unit members were willing to work shifts over nine hours, not including lunch breaks. The REU representatives said they would have to ask the membership about this proposal because the current collective agreement allowed only eight-hour shifts. If the membership agreed to waive this limitation, then Pinetree could move to ninehour shifts. At the time of the hearing, the REU had not yet canvassed its membership on this issue.

The discussion at the meeting then turned to the REU’s cost-savings proposal. The Pinetree representatives said that the proposal fell short of the $200,000 target and would produce savings of only $80,000 to $120,000 for the eight months the plan would be in effect. They then stated that their bargaining group was not willing to sanction local agreements and thus Pinetree would be proceeding with its contracting-out plans. They said that Pinetree needed savings over at least the next three years if it was not going to contract out work currently performed by bargaining unit members.

In response, the REU representatives stated that their proposal had not been a fi nal offer. They asked for a brief recess, and after returning to the meeting, expressed concern about Pinetree’s attitude in the talks. They pointed out that both parties had agreed to discuss the issue of parttime and full-time positions but that Pinetree had gone ahead and posted part-time positions.

The REU representatives then tabled a new costsavings proposal. They now offered a wage reduction of $1.50 per hour in all job classifi cations. All other proposals remained the same, except that the expiry date had been removed. The union representatives suggested that the plan would remain in effect until the parties negotiated something different. They estimated that the plan would save $221,000 per year.

The Pinetree representatives left the meeting briefly.

When they returned, they advised the REU representatives that their bargaining group disagreed with the proposal and felt that the savings were not substantial enough.

Then, for the first time, they advised the REU representatives that in addition to the $200,000 savings from reduced wages, they expected the members of the bargaining unit to forego the cost-of-living allowance increases and the pay equity increases included in the last ratified collective agreement. Neiman told the board that these increases were expected to cost $107,000 per year. Also, for the first time, the Pinetree representatives stated that Pinetree was using a staffing figure of 140,000 paid staff hours per year as the basis for its estimates. Neiman told the board that the exact figure was 141,000 paid staff hours per year.

The REU representatives responded to these demands by telling the Pinetree representatives to table a counterproposal in writing. Neiman claimed that the REU representatives invited him to table the tentative collective agreement that the bargaining unit members had voted to reject.

On July 17, the REU faxed a confirmation to Pinetree of the parties’ agreement to create more full-time positions in one job category. On the same day, Pinetree faxed the REU, tabling the terms of the rejected collective agreement as its cost-savings proposal. This proposal was valued by Pinetree at just under $400,000. Neiman told the board that despite that proposal, Pinetree was still seeking only $200,000 in payroll savings in addition to the waiver of the cost-of-living increases and the pay equity increases, for a total of $307,000 in savings. He admitted that he had not informed the REU of this when he faxed the proposal. The REU estimated the cost savings of Pinetree’s proposal at over $400,000.

On July 18, the REU sent two letters to Pinetree: one confirming the content of the July 16 meeting and the second rejecting the July 17 proposal. The next weekend, the bargaining unit members engaged in an unlawful work stoppage at Pinetree.

The Union’s Position

The union argued that the employer had reneged on its promise to create more full-time positions when it posted the part-time positions. The union stated that the employer undertook this action before the parties had an opportunity to jointly address the question of part-time and full-time positions.

The union also argued that the employer had failed to bargain in good faith when it refused to provide the information the union needed to prepare its cost-savings proposal, and that some of the information it provided was inaccurate. The union stated that the employer had also refused to provide the methodology it used to arrive at the amount of cost savings it required, and that the union had found it difficult to develop a proposal to meet the employer’s targets when it did not know how those targets had been calculated.

The union further argued that the employer had engaged in surface bargaining when it changed its bargaining position at the July 16 meeting and made new demands for concessions.

The Employer’s Position The employer argued that it had not bargained in bad faith because it regularly met with the union as requested, it exchanged proposals with the union and altered those proposals in response to bargaining discussions, and it had endeavored to conclude an agreement. The employer stated that bargaining in bad faith cannot be declared simply because parties do not agree in negotiations.

The employer stated that its bargaining position had always been clear and had been communicated to the union:

It wanted to achieve the terms in the collective agreement that the union membership rejected. The employer pointed out that this objective was clearly stated to the union in its letter of June 17. The employer also stated that it realized only at the July 16 meeting that the union was fixated on the $200,000 figure and that the union did not realize that more was required. The employer indicated that it was willing to continue negotiations even after July 17.

The employer further argued that the union was capable of performing its own calculations to develop a proposal and that the employer had supplied the union with enough information to develop a proposal. It argued that accuracy of some of the information provided was irrelevant because the union’s costing figures were close to the employer’s own, which proves that the information was ultimately unnecessary.

The employer argued that changing positions in bargaining is not evidence of surface bargaining and that whenever it changed its bargaining position, it had reasonable and rational explanations for doing so. The employer argued that its conduct must be assessed as a whole and that the overall pattern of the negotiations, with proposals being exchanged and with changes in one party’s proposals in response to the other party’s suggestions, showed that the employer had bargained in good faith and had not engaged in surface bargaining.