CITATION: Vito Tarantino Ltd. v. Labourers’ International Union of North America, 2013 ONSC 2968

DIVISIONAL COURT FILE NO.: 417/12

DATE: 2013/06/3

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Molloy, Hambly, Herman J.J.

BETWEEN:

Vito Tarantino Ltd. Applicant

– and –

Labourers’ International Union of North America, Ontario Provincial District Council and Ontario Labour Relations Board Respondents

Andrew Wray, Christian Vernon, for the Applicants

Eli Gedalof, for the Respondents, Labourers’ International Union of North American, Ontario Provincial District Council

Voy T. Stelmaszynski, for the Respondent, Ontario Labour Relations Board

HEARD: April 17, 2013

HERMAN J.

reasons for decision

[1] The applicant, Vito Tarantino Ltd. (“VTL”), brings this application for the judicial review of two decisions of the Ontario Labour Relations Board, dated July 12, 2012 and August 7, 2012. The Board refused VTL’s request to reconsider its previous decision to certify the Labourers’ International Union of North America, Ontario Provincial District Council (the “Union”) as the bargaining agent for VTL’s construction workers.

[2] VTL submits that the Board unreasonably denied its request to consider the allegation that the Union had provided a membership card that was not signed by one of VTL’s employees.

Background

[3] On May 4, 2012, the Union filed an application for certification. It sought to represent all the construction labourers employed by VTL.

[4] According to the Union, VTL employed two construction labourers at a particular work site. The Union’s application for certification included two signed membership cards, confirming that the Union represented more than 55% of the proposed bargaining unit.

[5] VTL was served with the application on May 9, 2012 but did not file a response or otherwise communicate with the Board.

[6] On the basis of the information before it, the Board was satisfied that it should certify the Union. It did so by decision dated May 14, 2012. VTL did nothing in response.

[7] According to VTL, the two employees in question left the worksite on May 5, 2012 and did not return.

[8] On June 21, 2012, Vito Tarantino, the owner and president of VTL, exchanged text messages with one of the two employees. The communication he received led Mr. Tarantino to believe that the employee had not, in fact, signed a membership card.

[9] On July 9, 2012, VTL served and filed a Notice of Request for Reconsideration on two grounds: VTL was not the employer of the two employees; and the Union provided a membership card that was not signed by one of its employees.

[10] By decision dated July 12, 2012, the Board denied VTL’s request for a reconsideration based on its allegation that the employee did not sign a membership card. However, the Board directed the Union to make submissions concerning the other ground, that is, that VTL was not the employer.

[11] The Union provided responding submissions with respect to the employer issue on July 25, 2012. In its reply submissions, VTL addressed both the employer issue and the allegation that one of the employees had not signed the membership card.

[12] In its decision, dated August 7, 2012, the Board addressed both issues and denied VTL’s request.

The Board’s decisions

July 12, 2012

[13] The Board denied VTL’s request with respect to the allegation that one of the employees had not signed a membership card. In its reasons, the Board noted VTL’s failure to respond to both the Union’s application, served on May 9, 2012, and the certification decision, issued on May 14, 2012. The Board no longer had the membership cards and did not have a copy or record of them, because it had sent them back to the Union on June 26, 2012, in accordance with its usual practice. It was impossible to deal with VTL’s allegation because of VTL’s delay.

[14] The Board asked the Union to respond to the other assertions raised by VTL.

August 7, 2012

[15] The Board denied VTL’s request to reconsider its certification decision.

[16] VTL’s request was based on two grounds: VTL was not the employer of the two employees; and the Union provided a membership card that was not in fact signed by one of its employees. It is only the second ground which is at issue in this application for judicial review.

[17] With respect to the allegation that one membership card had not been signed by the employee, the Board noted that it had already dismissed this ground for reconsideration, but “since the reasons were brief and VTL has argued the matter further, I propose to set out the reasons in more detail”.

[18] The Board summarized its decision as follows:

The request for reconsideration on the basis of a challenge to the membership evidence is denied. VTL simply delayed too long to begin its inquiries into this matter or to communicate with the Board one (sic) it had the information. The Board has lost possession of the membership evidence originally submitted, and the delay has caused the Union some degree of prejudice. The evidence offered is ambiguous, and there may be a perfectly innocent explanation for the fact that the employee did not sign a card, assuming he did not do so. In all of these circumstances, the Board declines to exercise its discretion to open an inquiry into a weak allegation that might, if correct, lead the Board to reconsider a matter that is now complete. (para. 29)

The parties’ positions

[19] The parties agree that the standard of review of the Board’s two decisions is reasonableness.

[20] VTL submits that the Board unreasonably imposed a deadline on the request for reconsideration, the Board misapprehended the evidence and the Board unreasonably refused the request for reconsideration based on its own practice of returning membership cards to the union.

[21] The Union submits that the Board exercised its discretion reasonably.

Statutory Framework

[22] Section 128.1 of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, deals with applications for certification without a vote. Subsection 128.1(5), addresses the Board’s ability to consider evidence and submissions where there is an allegation of fraud or misrepresentation.

[23] It is useful to consider other subsections of s. 128.1 in order to give context to the Board’s exercise of its authority under subsection (5):

128.1 (1) A trade union applying for certification as bargaining agent of the employees of an employer may elect to have its application dealt with under this section rather than under section 8.

(2) The trade union shall give written notice of the election,

(a) to the Board, on the date the trade union files the application; and

(b) to the employer, on the date the trade union delivers a copy of the application to the employer.

(3) Within two days (excluding Saturdays, Sundays and holidays) after receiving notice under subsection (2), the employer shall provide the Board with,

(a) the names of the employees in the bargaining unit proposed in the application, as of the date the application is filed; and

(b) if the employer gives the Board a written description of the bargaining unit that the employer proposes, in accordance with subsection 8(14), the names of the employees in that proposed bargaining unit, as of the date the application is filed.

(4) On receiving an application for certification from a trade union that has elected to have its application dealt with under this section, the Board shall determine, as of the date the application is filed and on the basis of the information provided in or with the application and under subsection (3),

(a) the bargaining unit; and

(b) the percentage of employees in the bargaining unit who are members of the trade union.

(5) Nothing in subsection (4) prevents the Board from considering evidence and submissions relating to any allegation that section 70, 72 or 76 has been contravened or that there has been fraud or misrepresentation, if the Board considers it appropriate to consider the evidence and submissions in making a decision under this section.

(6) The Board may hold a hearing if it considers it necessary in order to make a decision under this section.

(13) If the Board is satisfied that more than 55 per cent of the employees in the bargaining unit are members of the trade union on the date the application is filed, it may,

(a) certify the trade union as the bargaining agent of the employees in the bargaining unit; or

(b) direct that a representation vote be taken.

Did the Board unreasonably impose deadlines?

[24] VTL submits that the Board unreasonably read a time limitation into s. 128.1(5) where none exists.

[25] In support of its submission, VTL points to paragraph 23 of the Board’s reasons. In that paragraph, the Board indicated that s. 128.1(5) is not a free-standing section that negates any consideration of timeliness. The Board noted that s. 128.1(3) contains a requirement that the information be filed within two days. However, an allegation of fraud will not be defeated solely because the information has not been filed within two days.

[26] There is a difference between imposing a deadline and taking delay and timeliness into consideration. The Board did not impose a deadline on VTL’s request under s. 128.1(5). Rather, it properly and reasonably took delay into consideration as one of the factors in deciding whether to exercise its discretion.

Did the Board misapprehend the evidence?

[27] VTL’s primary submission on this point is that the Board mischaracterized the delay. The Board considered the period of delay to begin when VTL first received the Union’s application, that is, May 9, 2012. In VTL’s submission, the Board should only have considered the period of time after June 21, 2012, when VTL first learned that an employee might not have signed the membership card.

[28] The Board’s consideration of VTL’s delay was made within the context of the importance of finality in certification applications. It was, in my opinion, reasonable for the Board to consider the entire period of VTL’s lack of response and communication.

[29] Considerable deference should be given to the Board’s consideration of what constitutes a reasonable delay in the circumstances. While a two and a half-week delay between learning of the alleged fraud on June 21, 2012 and filing the request for reconsideration may well not seem lengthy in other contexts, the delay in this case should be seen within the context of the importance of finality in certification decisions and a statutory scheme which otherwise provides for a two-day time limit.

[30] Furthermore, the Board not only considered the length of the delay, but also considered VTL’s inadequate explanation for the delay, including the delay after June 21.

[31] VTL submits that the Board further misapprehended the evidence when it stated that “VTL simply waited too long to begin its inquiries”. VTL maintains that it did not begin any inquiries. Rather, it was the employee who contacted Mr. Tarantino. However, the affidavit of Mr. Tarantino, dated July 31, 2012, is ambiguous in this regard. It simply states that “I exchanged text messages” with the employee on June 21, 2012. It gives no indication as to who initiated the communication.

[32] VTL further submits that the Board was unreasonable in stating that it had waited too long to begin its inquiries given the fact that the two employees were no longer at the work site after May 5, 2012. However, VTL did not indicate in either its initial or its reply submissions that it would not have been possible to communicate with the employees after May 5, 2012.

[33] If the Board misapprehended the situation with respect to VTL’s inquiries, it was due to the quality of evidence provided by VTL.

Did the Board unreasonably deny VTL’s request on the basis of its return of the membership cards?

[34] VTL submits that the Board unreasonably fettered its discretion by relying on the Board’s return of the membership cards as the basis for denying VTL’s request. VTL had no control or notice of the Board’s practice of returning cards. It is therefore unreasonable of the Board, in VTL’s submission, to refuse to address an allegation of fraud on this basis.

[35] In its brief reasons of July 12, 2012, the Board referred to the fact that it no longer had the membership cards.

[36] The Board considered the issue in greater detail in its decision of August 7, 2012. It noted that “VTL’s delay makes it impossible to follow the Board’s normal practice”. The Board went on to describe the “normal practice” in dealing with an allegation of a forged card. It stressed the importance of having the original membership cards available and the difficulties that arise in addressing fraud allegations where continuity of possession has been lost.

[37] It would, in my opinion, be unreasonable for the Board to hold that the fact that it no longer had the cards in its possession, precluded any possibility of a consideration of an allegation of fraud. One can well imagine situations in which there was strong evidence of fraud and a justifiable delay, in which the Board would want to consider the allegations, notwithstanding the return of the membership cards.

[38] At the same time, where a party has delayed, the availability of evidence is a valid consideration in deciding whether to reconsider a decision. It would therefore be reasonable for the Board to consider the fact that continuity of the central piece of evidence, the membership card, has been lost as one of the factors in deciding whether to exercise its discretion.

[39] VTL points to the following in support of its proposition that the lack of possession of the cards was the sole basis for the Board’s decision: the decision on July 12, 2012 only referred to the return of the cards; and in the decision of August 7, 2012, the Board stated: “Had the allegation been made in a timely fashion, the Board would likely have scheduled a hearing if in fact it had a card for that employee in the file, despite the slender evidence offered” (at para. 16).

[40] If the July 12, 2012 reasons are read on their own, it would appear that the Board’s primary concern was that it no longer had possession of the membership cards. The issue arises, therefore, whether these reasons can properly be read with the reasons on August 7, 2012.

[41] In Jacobs Catalytic Ltd. v. International Brotherhood of Electrical Workers, Local 353 2009 ONCA 749, [2009] O.J. No. 4501 (C.A.), the Court of Appeal considered whether the Labour Relations Board could issue supplementary reasons for its decision. In its first decision, the Board upheld the union’s grievance, with reasons. The union then asked the Board for “fuller reasons for its decision”. The Board provided a second set of reasons in the face of objections from the employer that it lacked jurisdiction to do so.

[42] Epstein J.A., writing for the majority, held that the Board had no power to issue supplementary reasons designed to repair deficiencies in an earlier set of reasons and the common law doctrine of functus applied. In concurring reasons, Simmons J. concluded that the question of whether supplementary reasons could be considered on a judicial review application was a fairness issue, not a jurisdictional one.

[43] The reasons of August 7, 2012 do more than supplement the earlier reasons. The Board also considered VTL’s further submissions and evidence. In these circumstances, it is my opinion that the reasons of August 7, 2012 can properly be considered in determining the reasonableness of the Board’s decision.

[44] VTL points to the Board’s statement in the August 7, 2012 reasons that it would have considered VTL’s allegation if it still had the membership card. In my opinion, this statement only indicates that this factor tipped the balance. It does not indicate that the Board did not consider other factors. Had the evidence been stronger and the delay shorter, the Board might well have decided that the balance was tipped in the other direction.

[45] Reasons should be read as a whole, not by parsing individual statements. The concluding paragraph of the Board’s reasons on this issue indicates that the Board weighed several factors in reaching its decision: the Board had lost possession of the membership evidence; VTL had delayed too long, without an adequate explanation; the delay had caused the Union some degree of prejudice; and the evidence of fraud was ambiguous. These are reasonable factors for the Board to consider when deciding whether to exercise its discretion under s. 128.1(5).

[46] When read as a whole, the Board’s reasons are justifiable, transparent and intelligible. The Board’s decision not to exercise its discretion to consider VTL’s allegation was reasonable, falling within the range of possible, acceptable outcomes, defensible both in respect of the facts and the law (see Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] S.C.J. No. 9, at para. 47).

Conclusion

[47] For the reasons given above, the application for judicial review is dismissed.

[48] The parties agreed that the successful party should receive costs of $7,500. Costs of $7,500, inclusive of disbursements and HST, are therefore awarded to the Union.

[49] The Ontario Labour Relations Board does not seek any costs.

HERMAN J.

HAMBLY J.

MOLLOY J. (in dissent)

Introduction

[50] I agree with much of what my colleagues have determined. However, with the greatest of respect, I cannot agree with their conclusion that the Board’s refusal to consider the employer’s application with respect to the membership card issue was reasonable. In my view, the fact that the Board had returned the membership cards to the Union was the cornerstone of the Board’s ultimate decision and renders that decision unreasonable. I am therefore unable to agree with my colleagues’ conclusion that the application for judicial review should be dismissed. I would have allowed the application, and remitted the matter to the Board with a direction to subpoena the membership cards from the Union and then reconsider its decision in light of this evidence.

Points upon which I Agree with the Majority

[51] I agree that the applicable standard of review is reasonableness.

[52] I also agree with the majority that the Board did not read a limitation period into s. 128.1(5) of the Act and that the Board correctly held that delay is a factor it may take into account in deciding whether to exercise its discretion (as stated in paras. 24-26 above).

[53] I agree that it is open to the Board to consider delay as running from the time the employer first receives notice of the application for certification. To take an extreme example for purposes of illustration, suppose a certification order was made in January 1993, an employer discovered evidence on January 1, 2013 that there may have been fraud in respect of the membership cards, and the employer applied on January 2, 2013 to set aside the certification. It would be open to the Board to refuse to reopen the matter based on this 20-year delay, notwithstanding the fact that the employer did not delay at all upon discovering the fraud. Whether or not to do so, would be a matter for the Board’s discretion. In this case, therefore, it was relevant for the Board to consider the period of time from May 9, 2012 to July 9, 2012 when VTL made its application to the Board. On this point, I agree with my colleagues.

[54] That said, the Board must also consider delay in relation to the time it took the employer to do something after receiving information pointing to the possibility of fraud. That period of time in this case was relatively short, a matter of 18 days. While delay generally, regardless of the cause, is relevant to the exercise of the discretion, it is not reasonable to consider blameworthiness for the delay, except in relation to the point in time at which the employer knew, or ought reasonable to have known, the facts giving rise to its application. I do not see this as an issue upon which there is any disagreement between me and the majority decision.

[55] At paragraph 37, the majority held that it would be unreasonable for the Board to conclude that the fact it no longer had the membership cards in its possession precluded any possibility of a consideration of the allegation of fraud. I agree with that statement of principle. Where I part company with the majority is with respect to the extent that this unreasonable conclusion formed the underpinning of both of the Board’s decisions on this issue.

[56] As to the second set of reasons from the Board dated August 12, 2012, I agree with the majority that as a general principle this would normally not be permissible. I also agree with their conclusion that when the applicant filed further material and made further submissions to the Board on this point, notwithstanding the July 12, 2012 decision dismissing its application on the issue, it was open to the Board to either refuse to reconsider the point, or to hear the further submissions and render a further decision. In these limited circumstances, I agree with my colleagues that it is appropriate to consider the August 7, 2012 reasons along with the July 12, 2012 reasons in determining the overall reasonableness of the Board’s decision. However, in my view, the subsequent reasons cannot be read in isolation, but rather must be considered in light of the decision the Board had already made on the point.

The July 12, 2012 Decision

[57] On July 9, 2012, VTL filed a request for reconsideration in relation to the Board’s certification decision dated May 14, 2012. VTL advanced two grounds for its request: (1) the certification order named the wrong employer; and (2) VTL had received new evidence on June 21, 2012 indicating that one of the only two employees on site had not signed a membership card. VTL requested a status hearing on both issues.

[58] The delay in raising the first issue (wrong employer) was either from May 9 (when VTL received notice of the certification application) or May 14 (when VTL received notice of the certification decision). That is a delay of 61 to 66 days.

[59] The delay in raising the second issue (employee not signing card) was 18 actual days (June 21 to July 9), or 13 business days excluding weekends.

[60] In its decision dated July 12, 2012, the Board ordered a status hearing with respect to the first issue (wrong employer), notwithstanding the lapse in time. However the Board refused to consider the second issue, directing that the Union need not respond to it.

[61] It is clear from the Board’s decision in respect of the membership card issue that the sole reason for refusing to deal with it was that the Board had returned the membership cards to the Union. The Board stated that it was “impossible to deal with the assertions made by the responding party because of its own delay.” However, the Board had no problem dealing with the other issue in which the delay by the employer had been significantly longer. The only difference between the two issues was the fact that the Board had returned the membership cards to the Union on June 26, 2012, and did not keep any copy or record of them. It is obvious that the Board’s conclusion that it was “impossible” to deal with the application was because the cards had been returned, and not because of the 19-day delay by the respondent, nor the approximately two months that had elapsed since the Union certification application had been launched.

[62] In my opinion, the July 12, 2012 decision, looked at in isolation, is completely unreasonable. The mindset of the Board seems to have been that once the membership cards are gone, that is the end of the matter. The implications of such a rigid position are profound given the fact that allegations of fraud may go to the very integrity of the labour relations regime in the province. Quite simply it is not “impossible” to consider the issue, even if the cards themselves are completely missing and cannot be recovered. However, here there is no evidence that the cards are even missing. They had been returned to the Union, but there is no suggestion that the Union did not still have them.

[63] If the Board is of the view that the cards themselves are vital to the establishment of an issue (such as fraud) going to the root of the certification process, it is incumbent on the Board to put procedures in place to ensure that such evidence continues to be available. It is within the power of the Board to retain copies of the membership cards, even if only electronically. Further, it is within the authority of the Board to subpoena the documents from the Union. The Board did neither.

[64] In these circumstances, I find the Board’s refusal to even entertain the request for reconsideration to be arbitrary and unreasonable.

[65] As I understand the reasoning of the majority, there is no substantial difference of opinion between us on this issue. The pivotal question, then, is the extent to which the Board’s decision can be “saved” as a result of its supplementary reasons set out in its August 12, 2012 decision.

The August 12, 2012 Decision

[66] The stance taken by the Board in its August 12, 2012 reasons is essentially the same. The Board stated some additional factors that it took into account: “inordinate delay” by the employer; “some degree of prejudice” to the Union; ambiguous evidence of fraud; the possibility that the two cards the Union had signed were from two “employees” who did not include the one now claiming he had not signed (such that there would not be a fraud, but merely a dispute as to whether this person was an employee). However, it is clear from the Board’s reasons that if it still had the membership cards, it would have at least considered the employer’s application on this ground and directed a hearing.

[67] On this issue of delay, the Board repeatedly referred to the delay being from May 9, which I find to be unreasonable. The evidence before the Board was clear that the employer had no basis for being concerned that there was anything amiss until June 21, 2012. Mr. Tarantino (the principal of VTL), had two employees on the worksite on May 4, 2012, the date upon which the membership cards were signed. He was advised that two employees at that worksite had signed membership cards that day. Coincidentally, both employees (who were brothers) left the job, and the area, the very next day due to an urgent family matter, and never returned. In these circumstances it was perfectly reasonable for Mr. Tarantino believe that the two employees who were on the site had signed membership cards, as alleged by the Union. There was no reason for him to make any inquiries as a result of this information. Indeed, it would not be consistent with good labour/management principles to encourage employers in such circumstances to cause inquiries to be made of all employees to see if they all acknowledge signing membership cards. On the contrary, such inquiries by an employer could well be regarded as inappropriate, or even oppressive.

[68] In this context, I find it unreasonable for the Board to criticize the employer because it “delayed too long to begin its inquiries” (as stated at para. 29 of the reasons), nor is it fair to characterize the delay in bringing this issue before the Board as being more than two months. In fact, it was 13 business days, during which time the employer was required to obtain and instruct counsel familiar with these issues and for counsel to prepare material to file with the Board. In these circumstances, I do not see it as reasonable to characterize the case as one in which finality principles are raised, and no support is found for that in the evidence or the reasons.

[69] Although the Board refers to prejudice to the Union, there was no evidence of prejudice whatsoever. The sole possible evidence of prejudice raised was the fact that the Board had returned the original membership cards to the Union. There was no evidence that the original membership cards were not still in the possession of the Union and the Board made no attempt to obtain or examine them. Although the Board asserted that continuity of the cards could no longer be established, there was no evidence before it upon which such a conclusion could be based. The cards were initially obtained by the Union and given to the Board. They were then given back to the Union. That is only one additional step in the chain of continuity. There is no magic in the card still being in the hands of the Board at the time the allegation of irregularity is made.

[70] At para. 11 of its reasons, the Board stated, “In the absence of those cards, the Board is unable to determine whether the Union did submit a card on behalf of the employee identified by VTL.” I find this to be unreasonable. It was within the power of the Board to require the Union to return the cards, and then the Board would know whether or not there was a card which purported to be signed by this employee. In my view, the Board is creating a problem that may not exist in reality.

[71] I accept that the strength of the employer’s evidence of fraud is a relevant consideration for the Board. However, on my reading of the Board’s reasons, it is clear that the determinative issue for the Board was the fact that it no longer had the membership cards. At para. 16, the Board stated, “Had the allegation been made in a timely fashion the Board would likely have scheduled a hearing if in fact it had a card for that employee on file, despite the slender evidence offered.” This is precisely the position taken by the Board in its initial reasons. Because the employer “delayed” past the date when the Board no longer had the membership cards, the Board refused to consider the membership issue.

[72] Finally, the Board offered a further concern (in para. 17) that if it did order the Union to return the card, this “will lead to a further suspicion on the employer’s part that a second fraud has been committed” and “that this raises the potential for further speculative allegations and further requests for litigation.” I find this to be an irrational consideration. If anybody is being speculative here, it is the Board. There is no foundation in the evidence to support the conjecture that if the Union produced an original membership card signed by the employee in question, there would be any basis for further allegations of fraud. Whether or not the card produced by the Union was an original document and whether or not it was signed by the employee in question would be provable by the same kind of expert and other evidence that the Board indicates it hears in the normal course when an application is made while it is still itself in possession of the originally submitted material.

[73] I recognize the Board’s concerns about finality and the need for expedition in labour matters, as noted by my colleagues, and I also agree with the majority’s concerns about deference to the Board in such matters. However, I remain of the view that it was simply unreasonable of the Board to have refused to even consider the matter without first ascertaining if the original evidence is still available or if there is any actual prejudice arising from the delay. In these circumstances, I would have granted the application and remitted the matter to the Board with a direction to seek production of the membership cards from the Union and to then reconsider its decision based on any such evidence obtained from the Union, and any further evidence or submissions it might elect to receive from the parties.

MOLLOY J.

Released: June 3, 2013

CITATION: Vito Tarantino Ltd. v. Labourers’ International Union of North America, 2013 ONSC 2968

DIVISIONAL COURT FILE NO.: 417/12

DATE: 2013/06/3

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

Vito Tarantino Ltd. Applicant

– and –

Labourers’ International Union of North America, Ontario Provincial District Council and Ontario Labour Relations Board Respondents

REASONS FOR DECISION

Molloy, Hambly, Herman J.J.

Released: June 3, 2013