What is Bad Faith Bargaining?
Bad Faith Bargaining is a term not easily defined however, a great starting point is, of course, the Labour Relations Act.
Unfortunately, there is no mention of Bad Faith Bargaining. Don’t fret, as there is a definition of good faith bargaining… which is the antithesis of bad faith bargaining, so let’s take a look at this marvelous definition:
17 …they shall bargain in good faith and make every reasonable effort to make a collective agreement.
Admittedly, this does not offer much clarity. In fact, other than making reasonable effort to make a collective agreement, the definition is void of any specifics. Fortunately for us, the legislature has crafted the Act in such a way to allow the courts and arbitrators to interpret and provide a proper definition. Let’s take a dive.
Bad Faith bargaining can be found in a multitude of circumstances and is heavily fact driven. I will quickly cover the most common tactics taken by Employer’s which the Ontario Labour Board may consider a failure to bargain in good faith.
The five most common examples of bad faith bargaining that I have witnessed are the following:
- Surface Bargaining;
- Sending Unauthorized Representatives;
- Knowingly Misleading the Union;
- Reneging on Bargaining Positions; and,
- Refusing to Recognize the Union as Bargaining Agent;
Surface bargaining describes a bargaining technique, when a party creates an illusion of bargaining by going through the motions, however, does not actually intend to conclude a collective agreement.
Although it is accepted that hard bargaining is not bad faith bargaining, maintaining a rigid position on key bargaining issues without providing a reasonable explanation for such rigidity may be considered to “surface bargaining” in breach of good faith duty. In such a case, presenting offers that are bound to be rejected by the other party or failure to seriously consider the other party’s proposal may be particularly revealing of the party’s real intentions.
Sending Unauthorized Representatives
Another tactic that is clearly disruptive to the collective bargaining process, having similar as surface bargaining, is sending representatives who do not have the authority to make bargaining decisions. Since negotiating with such representatives is unlikely to result in the formation of a collective agreement, tribunals have ruled that it may breach section 17 of the Act.
Recently, the Supreme Court of Canada ruled that parties to a contract shall not lie or knowingly mislead the other party about matters directly linked to performance or execution of the contract.
In that case the respondent continued negotiations about the renewal of the contract and accepted the “freebie” work done by the claimant, which created a misapprehension of the claimant that the contract would be renewed. However, the respondent terminated the contract yet failed to correct the claimant’s misapprehension, which was found to be a breach of the good faith obligation. The court specifically noted that the party did not have a positive obligation to disclose their intent to terminate the contract, but they did have an obligation to refrain from misleading the claimant in terminating the contract.
In collective bargaining, there are circumstances where the Employer has a positive obligation to disclose its decision, particularly decisions which impact the Union. The Employer may be held liable for failing to disclose a decision that “has already been made which will have a significant impact on terms and conditions of employment”. That being said, this duty to disclose without the other party requesting the information has been seen as “exceptional”, and applicable only in “extreme cases… of fundamental importance” (such as plant closure or decision to relocate). Moreover, the Employer is not required to disclose possible plans, ideas, or proposals, which have not yet crystallized into actual decisions.
Reneging on the Previously Agreed Position
Another form of bad faith conduct is where the Employer reneges on previously agreed position made during bargaining. As seen in U.F.C.W., Local 175 v. K & Son Maintenance Co.,  O.L.R.B. Rep. 1121 (Whitaker):
“once a position has been taken during bargaining, the party taking the position cannot renege from that position once the opposing party changes its position based on the representation made by the party taking the position. If this were to be permitted, no party could assume that the other’s position was a serious proposal even at the point of deciding on whether to accept or reject it.”
The tribunals are especially strict with Employers, who renege on the terms already agreed upon in collective bargaining and ratified by the union members. It has also been recognized to be a breach to refuse to sign a formal copy of the collective agreement after the parties finalized its draft.
Refusing to Recognize the Union and Attend the Meetings
Another recognized bad faith strategy is for the Employer to refuse to recognize the Union as a bargaining agent and to refuse to attend scheduled bargaining meetings. Such behavior, without a reasonable explanation, constitutes a breach of section 17 of the Labour Relations Act.
As you can see, it is not a simple question and there is no easy answer. Please contact us for a personalized assessment if you believe your Employer has acted in Bad Faith.
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