Hannam v. International Union of Painters and Allied Trades, 2017 ONSC 91
CITATION: Hannam v. International Union of Painters and Allied Trades, 2017 ONSC 91
DIVISIONAL COURT FILE NO.: 568/16
DATE: 20170111
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
RSJ MORAWETZ, LEDERMAN and STEWART JJ.
BETWEEN:
DARREN HANNAM, W.H.D. ACOUSTICS INC. 1873624 ONTARIO INC. and 1873624 ONTARIO INC. OPERATING AS W.H.D. 1873624 ONTARIO INC.
Applicants
– and –
INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES, LOCAL UNION 1891
Respondent
Nicola Circelli and Luigi Circelli, for the Applicants
Ronald Lebi, for the Respondent International Union of Painters and Allied Trades, Local Union 1891
Leonard Marvy, for the Ontario Labour Relations Board
HEARD: January 4, 2017
stewart, j.
REASONS FOR JUDGMENT
Nature of the Proceeding
[1] This is an application for judicial review of a decision of the Labour Relations Board of Ontario dated October 22, 2015 made pursuant to its authority under sections 1(4) and 69 of the Labour Relations Act, 1995, S.O. 1995 c.1. In its decision, the Board made a finding that the Applicants are associated and related businesses that constitute one employer. The Applicants are therefore bound by a collective agreement with the Respondent Union and are jointly and severally liable for damages awarded to the Union following a grievance arbitration proceeding.
[2] The Applicants request that the Board’s decision be set aside and request that a new hearing be held on the merits of the Union’s certification application which was originally decided by the Board on June 25, 2012.
[3] Although the Applicants concede that there are no grounds to interfere with the Board’s decision that there had been a “sale of a business” from W.H.D. Acoustics Inc. to 1873624 Ontario Inc. and 1873624 Ontario Inc. o/a W.H.D. 1873624 Ontario Inc. under section 69 of the Labour Relations Act and that the Applicants are therefore associated and related businesses that constitute one employer for the purposes of the legislation, they nevertheless seek to have the Board’s decision set aside.
[4] The Applicants assert, among other things, that:
(a) the decision granting certification in October 2012 was flawed;
(b) W.H.D. did not receive a reasonable opportunity to respond to the union certification application;
(c) W.H.D.’s owner, Darren Hannam, did not appreciate the strict time frame for response to the Union’s certification application;
(d) W.H.D. had no employees at the time that the Union was certified;
(e) W.H.D. did not receive a fair hearing of the evidence;
(f) the Union’s 2015 grievance referral was never received; and
(g) the calculation of damages owed to the Union was unfair.
[5] The Union takes the position that this application for judicial review of the Board’s 2015 decision is wholly without merit and should be dismissed. The Union argues that the application amounts to an improper collateral attack of the Board’s previous certification and grievance referral decisions.
[6] The Board has filed material on the application and was represented by counsel at the hearing of the application to address any issue of applicable standards of review.
Jurisdiction
[7] This Court has jurisdiction to hear this application pursuant to ss. 2 and 6(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 and may grant any relief that an applicant would be entitled to in proceedings by way of an action for a declaration or for an injunction, or both, in relation to the exercise, refusal to exercise or proposed or purported exercise of a statutory power.
Standard of Review
[8] It has been long established that a reasonableness standard applies to decisions of the Board such as the one sought to be judicially reviewed, as an application of its constituent statute within a specialized labour relations context is involved. Considerable judicial deference is therefore required (see: Greater Essex County District School Board v. IBEW Local 773, 2012 ONSC 229, aff’d 2012 ONCA 792).
[9] When considering any issues of procedural fairness, a reviewing court should conduct an assessment of the procedures and safeguards required in the particular situation (see: Moreau-Bérubé v. New Brunswick (Judicial Council), 2002 SCC 11, [2002] 1 S.C.R. 249 at para. 74).
2012 Decisions of the Board
[10] On June 15, 2012 the Union applied to the Board for certification as bargaining agent for employees of W.H.D. pursuant to s. 128.1 of the Labour Relations Act. Although Hannam was served with notice, no response to the application was filed by him on behalf of W.H.D. Accordingly, the certification application was granted by the Board on June 25, 2012.
[11] On August 2, 2012 W.H.D. filed a request for reconsideration of the certification decision, asserting that it had never done work at the job site identified in the application for certification and that it was a "one man operation".
[12] On September 10, 2012 the Union responded to the reconsideration request with submissions. Although W.H.D. was then invited by the Board to reply to those submissions, no reply was delivered by it.
[13] W.H.D.’s reconsideration request was dismissed by the Board, which stated:
The applicant correctly notes, however, that the Board's Rules of Procedure require a request for reconsideration to be filed within 20 business days of the date of the decision. In this case, the deadline for the filing of a request for reconsideration was July 25, 2012. Accordingly, the request for reconsideration, having been filed on August 2, 2012 at 11:39 pm was not filed in a timely manner. No explanation has been provided for the delay nor has an extension of time been requested.
The applicant also notes that the issue that the responding party now seeks to raise by way of the request for reconsideration could have been and ought to have been raised by the responding party in a response to the application. The responding party failed to file a response. The responding party is attempting to use the guide (guise) of a request for reconsideration to file a grossly untimely response.
For the foregoing reasons, the request for reconsideration is hereby denied.
[14] We note that no affidavit from Hannam or anyone on behalf of the Applicants addressing these factual findings has been filed by the Applicants on this application.
2015 Decisions of the Board
[15] On January 23, 2015 the Union referred a grievance against W.H.D. to the Board for final and binding adjudication pursuant to s. 133 of the Labour Relations Act. The grievance alleged that W.H.D. had performed work at a particular project using non-union workers contrary to the terms of the collective agreement. W.H.D. did not a file a Notice of Intent to Defend the grievance. Accordingly, and pursuant to ss. 133(7) and (8) of the Act and Rule 36 of the Board's Rules of Procedure, the Board proceeded on the basis that the facts as asserted stated by the Union in the referral and grievance material had been accepted by W.H.D.
[16] In its determination of the grievance, the Board concluded that the applicant Union grievor and the responding party W.H.D. are bound to the Provincial Collective Agreement between the Ontario Painting Contractors Association, Acoustical Association Ontario, Interior Systems Contractors Association of Ontario and the International Union of Painters and Allied Trades and the Ontario Council of the International Union of Painters and Allied Trades, effective May 1, 2013 and that W.H.D had violated the collective agreement by failing to employ persons who were members of the Union on its project at Upper James Road and Stone Church West. The Board accepted the calculations of damages advanced by Don Benoit on behalf of Union grievor as correct and found that the damages suffered by the applicant are $60,878.00. The Board therefore ordered W.H.D. Acoustics Inc. to pay to the Union the sum of $60,878.00.
[17] On March 24, 2015 the Union applied to the Board under sections 69 and 1(4) of the Labour Relations Act and asked that W.H.D. Acoustics Inc., 1873624 Ontario Inc., and 1873624 Ontario Inc. o/a W.H.D. 1873624 Ontario Inc. be declared a “single employer” for purposes of the Labour Relations Act. It also requested that the Board find and declare 1873624 Ontario Inc. and 1873624 Ontario Inc. o/a W.H.D. 1873624 Ontario Inc. to be successor employers to W.H.D.
[18] On April 19, 2015 a Response was filed by these Applicants. The Response again raised issues about the validity of the Union's bargaining rights obtained pursuant to its application in 2012 for certification. As a consequence, and notwithstanding its dismissal of the previous request for reconsideration, the Board issued a decision directing the Union to file submissions on the issues raised. The Union filed submissions as directed.
[19] In a decision dated June 24, 2015 the Board declined to set aside or vary its earlier decisions certifying the Union and allowing the Union's grievance referral to proceed, stating:
- The Board is satisfied having considered all of the submissions and materials before it that there is no merit to the positions advanced by WHD in the April 3, 2015 submissions. The Board therefore makes no order to vary or change … the February 4, 2015 decision of the Board in Board File No. 3151-14-G.
[20] On September 28, 2015 a hearing was convened to deal with the Union’s s. 69 request. Hannam attended the hearing on behalf of the Applicants. The Union was represented by counsel.
[21] Despite the Applicants’ failure to comply with the Board’s interlocutory order for production of documents and other incidents of lack of compliance by them with the Board’s procedures, the Board exercised its discretion to allow them to tender evidence and to make arguments at the hearing.
[22] The Board emphasized that the successor rights/related employer proceeding did not present an opportunity to the Applicants to seek to re-litigate the certification application, the grievance referral or the reconsideration requests that had already been dismissed by the Board.
[23] As explained in the Board’s decision, the Applicants’ Response contained no material facts that were relevant to the issues on the application before it. The Board nevertheless indicated it would allow the Applicants to tender relevant evidence and make arguments at the hearing that had been scheduled to deal with the sale of business/successor employer issues only. The Board advised the Applicants that the hearing would not involve a reconsideration of the certification application or the grievance referral.
[24] At the hearing, and despite the Board’s specific direction, the Applicants’ submissions largely addressed their challenge to the certification application and the grievance referral decisions. The Board again noted that, as it had already dealt with both issues on previous occasions, it would make no further comment on them as they were not properly before the Board on the hearing.
[25] Ultimately, the Board rejected the Applicants’ submission that the Applicants were not bound by the collective agreement.
[26] On October 22, 2015 the Board allowed the Union's application and granted the relief sought. It its reasons, the Board described the background to the application in detail, including the Union's 2012 certification application, the request for reconsideration of that decision, the Union grievance referral in 2015, the pre-hearing production order in the related employer/successor employer application and the failure by the Applicants to comply with that order, the Applicants’ pre-hearing adjournment request, and the eleventh-hour allegations of fraud levied by the Applicants against the Union.
[27] The Board concluded as follows:
(a) pursuant to the statutory scheme governing collective bargaining by accredited employers' organization and designated employee bargaining agencies, the effect of the certification of the Union in respect of W.H.D. Acoustics Inc. was to automatically bind W.H.D. to the Painters' Provincial Collective Agreement in the ICI sector of the construction industry and to the accredited agreement in the residential sector of the construction industry in Lambton County;
(b) Hannam was the sole owner, guiding mind and "key person" of both W.H.D., 1873624 Ontario Inc., and 1873624 Ontario Inc. o/a as W.H.D. 1873624 Ontario Inc.;
(c) the transfer of Hannam's contracting efforts and all other dynamic elements of W.H.D.’s business (in the form of customer contacts, goodwill, business knowledge, employee contacts, and all other tangible and intangible assets) to 1873624 Ontario Inc. and/or 1873624 Ontario Inc. o/a W.H.D. 1873624 Ontario Inc. amounted to a disposition of "part" of W.H.D's business to the numbered company within the meaning of section 69 of the Labour Relations Act;
(d) at the same time, Hannam operated both businesses in the same sector with the same employees performing the same type of work under the same control such that it was appropriate to treat W.H.D., 187364 Ontario Inc. and 1873624 Ontario Inc. o/a W.H.D. 1873624 Ontario Inc. as a single employer under the Act.
[28] Accordingly, the Board affirmed the outcome of the grievance and the award of damages to the Union.
Should the 2015 Decision of the Board Be Set Aside?
[29] As referred to above, the Applicants take no issue with the Board’s determination of the “single employer” issue advanced by the Union.
[30] We agree with the position of the Union that the other arguments raised in this application are, in substance, an improper collateral attack on the previous decisions of the Board made in 2012 and the application should fail on that ground alone.
[31] The Applicants submit that the 2015 decision was not procedurally fair because W.H.D. was not allowed to challenge the Board’s 2012 certification and reconsideration decisions. They argue that, upon receiving the request for reconsideration, the Board should have granted W.H.D. an opportunity to provide evidence that it should not have been certified because it never had any employees and subcontracted all its work. Significantly, the Applicants do not deny that Hannam had been served with certification application. However, they argue that the fact that he “didn’t appreciate the strict time frame that the Union was operating under” should not have precluded the Board from reconsidering its decision and deciding in favour of the Applicants to reopen the issue.
[32] In addition, the Applicants argue that there was a further breach of procedural fairness because the referral of grievance arbitration was sent to the wrong address. The address, found by the Union through a Google search, belonged to a relative of Hannam’s who allegedly did not give the documents to him. It is claimed that, as a result of this error, no request for a hearing or notice of intent to defend/participate was delivered and the Applicants therefore were not able to resurrect their arguments against the “unilateral unionization” in 2012. The Union, however, points out that Hannam evidently was aware of the proceeding as he showed up at the grievance arbitration hearing to seek to adjourn it.
[33] Contrary to the Applicants’ submissions, the Board gave the Applicants numerous indulgences throughout the hearing process to address all relevant issues despite their failure to comply with the Act, the Rules of Procedures and the Board Orders.
[34] In short, W.H.D. was served with the certification application and had an opportunity to file a response but chose not to do so. On its request for reconsideration, the onus to establish why the Board’s certification decision should be set aside was on W.H.D. It failed to explain why it did not respond to the certification application and provided no evidentiary support for its claim that it had no employees. Even as of now, no affidavit evidence was proffered in an effort to establish those claims.
[35] Accordingly, even if we were not of the view that this application seeks to revisit past Board decisions that are no longer the proper subject matter for judicial review, we would nevertheless dismiss the application. The procedures adopted by the Board were, in all the circumstances, fair.
[36] We see no basis upon which it may be concluded that there was any procedural unfairness involved in the hearing that resulted in the impugned decision of the Board, or that its conclusions were unreasonable.
Damages
[37] Should the Board’s determination of the damages to be paid by the Applicants to the Union be set aside or interfered with?
[38] The Applicants submit that the Board incorrectly assessed damages by not taking into consideration the amount of money W.H.D. had paid to its “subcontractors” and calculated damages based on the difference in wages between a subcontractor and a Union employee. The Applicants submit that, by doing so, the Board ordered it to pay twice for the same work. There is no issue taken with the arithmetical calculation, but only the theory upon which the calculation is based.
[39] Typically, collective agreements in the construction industry secure work opportunities for union members by obliging employers to either hire only members of the union to perform bargaining unit work, or to sub-contract the work to another unionized contractor who will correspondingly employ only members of the union. Thus, when an employer controls certain work, a union should be able to assert the same work jurisdiction claim against the sub-contractor. It has been long accepted in the applicable jurisprudence that damages for breaches of union security provisions in the construction industry are to be an amount equal to what the Union’s unemployed members would have earned had they been employed on the project involved, including required payments to various funds and plans, union dues and administrative dues (see: Blouin Drywall Contractors Ltd. V. CJA, Local 2486 (1975), 1975 707 (ON CA), 57 DLR (3d) 199 at paras. 23 and 26 (Ont. C.A.)). We are satisfied that damages were assessed by the Board in a manner consistent with the principles as set out in Blouin Drywall.
[40] In our view, the Board’s reliance on the long established approach set out in Blouin Drywall for calculation of damages was reasonable. We therefore see no basis upon which interference by this Court with that aspect of the decision would be justified.
Conclusion
[41] For these reasons, the application is dismissed.
Costs
[42] The parties have agreed that, in this result, the Respondent shall have its costs fixed at $10,000.00, inclusive of all disbursements and applicable taxes, and payable by the Applicants jointly and severally. The Board does not seek costs.
Stewart, J.
I agree _______________________________
Morawetz RSJ.
I agree _______________________________
Lederman, J.
Released: January 11, 2017
CITATION: Hannam v. International Union of Painters and Allied Trades, 2017 ONSC 91
DIVISIONAL COURT FILE NO.: 568/16
DATE: 20170111
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
RSJ MORAWETZ, LEDERMAN and STEWART JJ.
BETWEEN:
DARREN HANNAM, W.H.D. ACOUSTICS INC. 1873624 ONTARIO INC. and 1873624 ONTARIO INC. OPERATING AS W.H.D. 1873624 ONTARIO INC.
Applicants
– and –
INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES, LOCAL UNION 1891
Respondent
REASONS FOR JUDGMENT
Released: January 11, 2017