[1980] OLRB Rep. December 1789
0161-79-R;0348-79U Labourer's International Union of North America, Local 183, Applicant, v. PHI International Inc., Farlo Associates Ltd., and East River Construction Limited, Respondents
BEFORE: R. 0. MacDowell, Vice-Chairman and Board Members O. Hodges and E. C. Went.
APPEARANCES: B. Fishbein and L. Castaldo for the applicant; A.M. Minsky and L. Castaldo for the complainant; G.J. Smith, Q. C., Jack D. Winberg and G. Farantatos for PHI International Inc. and East River Construction Limited; W.J. McNaughton, M. Brodigan and J. K. Guidolin for Farlo Associates Ltd..
DECISION OF R. 0. MACDO WELL, VICE-CHAIRMAN AND BOARD MEMBER E. C. WENT; December 15, 1980
The style of cause in this matter is hereby amended to reflect the addition of Farlo Associates Limited and East River Construction Limited as respondents in these proceedings.
This is an application for certification which is accompanied by a related complaint under section 79 of The Labour Relations Act and a request for a declaration that the respondents are one employer for the purposes of the Act. There are a number of issues in dispute between the parties. In order to understand the way in which these matters have developed, it may be useful to briefly review the course of proceedings to date.
On April 25, 1979, the applicant applied for certification as the bargaining agent for the employees of the respondent PHI, employed as labourers in residential construction. On May 3, 1979, PHI filed a reply indicating that there were 9 labourers affected by this application, but contending that they were employed by an unidentified independent contractor and not by PHI. The certification application came on for a hearing on May 14, 1979. At that hearing, counsel for PHI asserted that an entity known as "Farlo Engineering" was the true employer of the employees affected by the application. It was also suggested by the applicant that an entity know as East River Construction Limited might be affected by the application. By a decision dated May 14, 1979, the Board decided to adjourn the application so that these other potentially interested parties might be joined as respondents. In a letter dated May 17, 1979, the applicant indicated that it was uncertain as to the identity of the employer, but that in any event, it would agree that all three companies, or some combination of them, were engaged in related activities under common control and direction and that pursuant to section 1(4) they were "one employer" for the purposes of the Act.
On June 19, 1979, Farlo filed its own reply indicating that there were 13 employees employed in the bargaining unit. A further hearing was scheduled for June 29, 1979 to hear the parties' evidence and representation with respect to the outstanding matters in dispute. At that hearing, Farlo took the position that it was the employer for the purposes of the certification application, but not for the purposes of the complaint of a breach of the Act. Farlo submitted that another individual (then unidentified) was the employer of the employees for the purposes of the section 79 complaint. Subsequently, this individual was identified as one Mike Proestas. The parties were able to reach agreement on the description of the bargaining unit, but it was evident that there was a dispute between them as to the number of employees in the bargaining unit, and the parties advised the Board that it might expedite matters and make it unnecessary to pursue the application under section 1(4) if the employee list could be settled. Accordingly, the Board appointed a labour relations officer to inquire into the employer's list and the composition of the bargaining unit and, at the end of the day, after hearing some evidence, adjourned the section 1(4) aspect of the proceeding pending a resolution of this issue.
There followed an exchange of correspondence between the labour relations officer and the parties in which the officer sought to arrange mutually satisfactory hearing dates and secure from the respondent(s) employment records which would substantiate the claim that the employee list should include 13 individuals. The union argued that there were only 8 persons properly on the list, and challenged the inclusion of the other 5 on the grounds that they were:
a) not employed or not at work on the day of the application,
b) not employees of the respondent,
c) not employed as labourers,
d) not employed in construction work.
The officer convened a series of meetings to entertain the submissions of the parties with respect to these issues. Only the union and Farlo took active part in these meetings although PHI was also present and was represented by counsel.
The names of the five challenged individuals are as follows: Anthony DiLabio, Tony Ponte, S. Laber, B. Malinowski and M. Zalas. Counsel for Farlo initially advised the officer that only Ponte could be produced for examination because the company had no record of the whereabouts of the other four employees, and no employment records other than certain cheques and related documents to which we will refer infra. The union had no knowledge of any of these individuals, whom, it would appear, were working at sites other than the ones where the union supporters worked. The union denied that any of them were employees in the bargaining unit as at April 25, 1979 the date of the certification application.
After several requests Farlo produced an address for Anthony DiLabio, who subsequently answered a subpoena served at that address. DiLabio's address and telephone number are included on the PHI personnel records which were filed on behalf of most of the employees on the employer's list; and it is not clear why his address, at least, could not have been produced earlier. In any event, Ponte and DiLabio were eventually produced for examination before the labour relations officer, along with what counsel for the respondent Farlo submitted were all of the employment records relating to all of the employees in the bargaining unit - including the five challenged individuals.
The two persons produced were duly examined and cross-examined. At the end of these examinations, counsel for the respondent Farlo indicated that he had a further (unidentified) managerial person who might be in a position to give evidence with respect to the matters at issue; but he declined to identify or call such individual, asserting that it was the "Board's inquiry" and that therefore, it should be the Board, and not the respondent(s), which should procure the evidence of the individual in question. The Board officer, of course, had no knowledge of the identity of the subject individual, nor his position with PHI or Farlo, nor the nature of the evidence which he might give. All of these matters were within the exclusive knowledge of one or both of the respondents. In the circumstances, the Board officer ruled that he would not call the unidentified management person, but that the respondents would be fully entitled to call him, as well as any other evidence which they wished to lead concerning the matters in dispute. At this point, Farlo took the position that it would not call the management person, but purported to reserve its right to do so, if the Board upheld the officer's ruling. The reason for taking this position is difficult to discern, for the witness was readily available, and, having regard to the relative informality of the proceedings before an officer, the respondent(s) would not have been prejudiced if the evidence had been tendered. Indeed it is difficult to resist the conclusion (urged by the applicant) that the purpose of the respondent(s) was merely to bifurcate and delay the proceedings. The officer completed his report, together with the exhibits filed and the submissions of the parties, and submitted it to the parties for their comment. A further hearing was then scheduled so that the parties could make representations with respect to the labour relations officer's report and all other outstanding issues. This hearing was scheduled for September 2, 1980, and at the hearing, the parties repeated the submissions which they had made before the officer.
At the hearing of September 2, 1980, the union reviewed the course of proceedings, its alleged difficulties in obtaining employment records or other confirmatory evidence of the status of the challenged employees, and what it characterized as the respondent's willful obstruction of the proceedings. It was admitted, moreover, that in respect of the five challenged individuals whom the respondent claims were "casual" employees, the documentary evidence is sketchy and makes it very difficult to reach any conclusion concerning their employer or their status. There are no income tax or unemployment insurance documents, employee payroll records, separation certificates, etc. of the kind normally available for employees - which, counsel explained, by the casual and short term basis upon which the individuals were employed. The union asserted that it had no information with respect to any of these individuals and if, as the respondent(s) asserted, there were witnesses, or evidence within their knowledge and control which might shed light on the matters in dispute, it was incumbent upon them to call it or risk the possibility of an adverse inference. The union urged the Board to uphold the officer's ruling, and argued further that the Board should not now hear any more evidence and, in particular, the testimony of the unidentified witness. He had been available to give evidence before the officer but the respondent(s) declined to identify or call him at that time - a position which was characterized by the applicant as but another attempt to delay the proceedings. The applicant argued that the respondents had been given a full opportunity to present their evidence, and having chosen not to call the witness, were foreclosed from doing so now. The respondent argued, in reply, that the unidentified witness should have been called as a "Board witness" and that in the alternative, if the Board chose to uphold the officer's ruling, the respondent should be given the opportunity to call the witness before the Board itself. The respondent advised that the witness was then in the hearing room and available for examination.
During a certification proceeding a question often arises concerning the status of an individual claimed to be an employee in the bargaining unit. The practice of the Board in such cases is to appoint a labour relations officer pursuant to section 92 of The Labour Relations Act to inquire into that issue. Frequently, all that will be necessary is a check of the employer's records which will usually contain sufficient information to resolve the question. If the records are inadequate or do not provide enough information on the particular issue in dispute (for example whether a person is managerial" or employed in a particular capacity) the person can be examined directly. If the individual is not currently employed by the employer, and is not, therefore, readily available to the parties the Board will normally issue a subpoena so that he can be present for examination. As a convenience to the parties, this subpoena will generally be served by an employee of the Board. Likewise, when an individual has been subpoenaed, the Board officer will generally begin the inquiry by asking a number of fairly standard questions which in most circumstances will throw some light on the employee’s status. When the questioning is completed, the parties are then permitted to cross-examine the witness, as well as call such other evidence as they consider relevant to the matter in dispute. The employee status question remains an issue in dispute between the parties, but the officer will usually conduct this preliminary inquiry, and then leave it to the parties to fill out the evidence as they deem necessary. That evidence, of course, must be relevant to the issues in dispute, and the officer may occasionally find it necessary to limit an examination which is unduly repetitious or involves extraneous matters. In this way, the officer is controlling the proceeding before him in much the same way as the Board would.
This procedure has proved useful over the years in accomplishing an expeditious resolution of employee status disputes; but it does not relieve the parties of all responsibility for adducing evidence in support of their respective positions, nor does it shift that responsibility to the Board. It is the parties themselves who are in the best position to understand the business or factual context in which the employee status dispute arises, and it is the parties, therefore, who must bear the primary burden of adducing evidence to support their positions, or risk the possibility that if they do not lead such evidence, the Board will draw inferences adverse to their position from the evidence which is available. We do not think the officer has any obligation to "call" any evidence or ask any particular questions although frequently he will do so in order to clarify and expedite matters, and ensure that relevant evidence is before the Board. Certainly, he has no obligation to conduct an examination of a witness of which he knows nothing whatsoever. The present circumstances provide a case in point, for here, neither the union, nor the Board officer, had any knowledge of the background of the witness, or the evidence which the respondent Farlo claimed might be material. These facts were exclusively within the knowledge of the respondent itself, and in our view it was entirely appropriate for the officer to turn to the respondent to call that evidence.
The Board, by majority, upheld the officer's ruling and affirmed that since the identity of the witness and his evidence were entirely within the knowledge of the respondent, it was the respondent, not the Board which should call him. The fact that as a convenience to the parties, and in order to expedite matters, a Board employee endeavors to effect service of a subpoena, and a Board officer addresses preliminary questions to the witness does not make the individual a "Board witness" or create any obligation to call him. Moreover, in the ordinary course, a respondent who fails to call a witness before an officer will not be given a second opportunity to call this evidence before the Board. If it fails to call all of its evidence when given an opportunity to do so, it cannot be heard to complain if the Board later makes an adverse finding on the evidence which is available. On the other hand, in the circumstances of this case, the Board, by a majority, rejected the union's contention that the evidence should not be entertained at all. The witness was readily available, his evidence would not be protracted, and in view of the inadequacy of the other viva voce and documentary, it appeared as if this evidence might be helpful in resolving the issues before us. While the applicant may well have been prejudiced by the procedural wrangling preceding the hearing, we did not think that hearing the witness would contribute to that prejudice, and the evidence of the witness might well assist the Board in resolving the issues before it. Accordingly the Board ruled that it would hear the evidence of the witness (who was still unidentified) and thereafter entertain the parties' submissions with respect to the union's challenges — having regard to the evidence in the officer's report, and the viva voce evidence of the respondent's witness. The evidence in the officer's report includes a transcript of the viva voce evidence of Tony Ponte and Anthony DiLabio, as well as certain documents which the respondents submit demonstrate or explain the status of the five challenged individuals.
13 Ponte testified that he was employed to do general repair, maintenance and cleanup on the "159 Townhouse — Mississauga Meadows Project." His time sheet for the week ending April 28, 1979 confirms that he was employed throughout that week doing a number of minor jobs in and about the condominium units. Some of the units had then been sold, and others had been completed and were awaiting either final decoration or sale. Ponte's job involved cleaning the garages and basements of the houses recently built, cleaning the floors prior to laying of the carpet by a subcontractor, and doing minor repair work on cupboards, lighting fixtures, entrance ways, steps, tiles and so on. As Ponte explained it, he was to "clean up the mess left from the construction", do any minor repairs which were necessary prior to the units being sold, and respond to the complaints of minor construction defects. DiLabio performed similar functions and, like Ponte, his time sheet confirms that he was employed on the application date at the "Mississauga Meadows — 159 Townhouse Project". DiLabio also did minor repairs prior to, or shortly after, the sale of the units. He repaired locks, adjusted windows which were not properly fitted, did clean up work generally and in preparation for the laying of carpet, checked screens, and patched minor cracks in the walls. It is clear that the functions of both of these employees were closely connected with the construction project, and can either be characterized as part of the finishing or decorating phase, or alternatively, as the repair of equipment or fixtures which were defective or improperly installed. In either case, we are satisfied that the employees' functions are properly characterized as construction labourer's work.
There is much more uncertainty concerning the identity of their employer. Ponte testified that he understood himself to be working for Farlo although after the first couple of weeks he said he was paid by cheques emanating from PHI. He testified that as late as the date of the examination, he still considered himself to be working for Farlo; but that firm's name does not appear on any of the documents respecting any of the employees, and there were no income tax, unemployment insurance or other "official documentation" respecting Ponte. Bruno Orticello was identified as a construction supervisor with Farlo and Ponte believed that G. L. Guidolin, the President of Farlo, could discipline or discharge him. However, Ponte also indicated that Michael Brodigan worked for PHI, while in the evidence adduced before the Board on June 29, Mr. Brodigan himself testified that he was an assistant to G. L. Guidolin. The "Remittance Advice" document recording Ponte's overtime at the Mississauga Meadows Project and a cheque (numbered 7505) payable to Ponte in respect of such overtime both indicate a direct payment from PHI to Ponte for services rendered. Similar documents were filed for the eight construction labourers whose status as such the union has not challenged. These remittance advice documents also bear the name of PHI, and indicate a cheque number and payment to the order of the employees. In addition, for Ponte, DiLabio and the unchallenged employees, there are corresponding personnel records entitled "personnel change notice" and bearing the name PHI, and various items of personal information concerning each employee. There is no mention of the name Farlo.
DiLabio's evidence was equally equivocal. His pay cheques and time statements took the same form as those of Ponte and, like Ponte, he indicated that he had been hired and supervised by Bruno Orticello as well as an individual named Tony Pellegrin. Orticello delivered his cheques, however, he described Orticello as a general supervisor for PHI. Orticello himself did not give evidence, nor did Pellegrin. DiLabio also testified that he had filled in a TD-l income tax form, and filled in his social insurance number on some company document. No tax documents were produced, and the only document with DiLabio's social insurance number is the personnel record mentioned above with the name of "PHI Property Management" and the PHI International Inc. logo. DiLabio said he had never heard of Farlo Engineering. He believed that he worked for PHI. No one told him he worked for Farlo —although it seems that he worked with Ponte on at least one occasion, and it is admitted that the two companies do share the same location and have a close business relationship. DiLabio's perception was that PHI occupied two floors at 160 Dundas Street with the "senior bosses" on the upper floor, and the payroll department downstairs.
The evidence respecting M. Zalas, B. Malinowski and S. Laber is even less satisfactory and consists of the viva voce evidence of Mario Pikula, a supervisor of Farlo who allegedly hired them, together with certain documents concerning their work and the payment. Before turning to the viva voce evidence, it will be convenient to refer briefly to the documentary evidence.
For these three individuals there are not even the minimal employment records which are available for Ponte, DiLabio and the other employees on the list. There are no unemployment insurance records, TD-l forms or separation certificates. There is only an unsigned typewritten document dated April 25, 1979 indicating that work was done by the three persons at 220 and 230 Woolner Road. However, although this document was produced, no one from the respondent(s) came forward to explain what it was, whether it is the kind of document which is kept in the ordinary course of business, whether this is the way the respondent(s) document casual labourers, why the space for a signature is not filled in, who prepared the document, who keeps documents of this kind and from what record or sequence of records it has been extracted. All of these things might have been of some assistance to the Board in determining what weight to be ascribed to this document. As it is, in the absence of such information, the Board is satisfied it should give this particular document no weight.
The other documents produced in respect of these three employees were likewise unidentified but, contained certain information which, arguably, speaks for itself. The cheques bear the name of PHI International, are dated April 27, 1979, and are drawn on the bank of Nova Scotia at 165 Dundas Street West, Mississauga (the address of both PHI and Farlo). Typed on each cheque is the phrase "re: clean all areas and repair to garage door". The cheque also bears the printed words "Yellow Sun in trust 220 Woolner". The cheques appear to be signed by Vy Nesdale who, the Board was advised on June 29, 1980, is a bookkeeper employed by, and working 98 per cent of the time for, PHI, but doing occasional work for Farlo. Ms. Nesdale was described as the secretary-treasurer of Farlo although she holds her one share in trust for Mr. Guidolin, its president. The other signature for whom Ms. Nesdale is apparently signing was not identified. The respondent led no evidence in this regard.
At best, these cheques indicate that three employees were paid the sum of $56.00 on April 27. They do not demonstrate that they were employed on April25, the application date, nor can one conclude that the words "re: clean all areas and repair to garage door" mean that the employees performed work properly characterized as being in the construction industry. While the definition of construction in section 1(f) of the Act includes the word "repair", we do not think that every minor clean up or maintenance job in or about a long completed building can be regarded as work within the construction industry. If such were the case, resident superintendents of apartment buildings could be characterized as construction labourers. We do not think that the document is very helpful in resolving the character of the employee's work; however, in this respect, the evidence of Mr. Pikula was more enlightening.
Pikula told the Board that he had arranged for a subcontractor to install architectural block in the lobby at 220 - 230 Wooltier Road, but after making these arrangements was subsequently told by the contractor that the dry wall would have to be removed before he could start. Pikula had no persons on hand to undertake this task, and went to a restaurant to see if he could find some casual labour. At the restaurant, he met Mr. Malinowski who was told to come the next day with a couple of friends to perform the required work. The individuals were to remove the stripping and dry wall at Woolner Road, and clean the wall underneath. While there, they also performed some general cleaning, and repaired a garage door. The building itself is 12 to 15 years old. The employees performed three days work in all: two days in Hamilton and one in Toronto. The witness could not recall which days they worked in Toronto (and would therefore have been employees in the bargaining unit) and which days they worked in Hamilton. No cheques in respect of the Hamilton work were put before the Board. However, Mr. Pikula twice testified that he recalled giving the employees the above mentioned cheques on the day that they performed the work. If Mr. Pikula is correct in his recollection, and if the cheques were issued on April 27, as indicated, then the individuals would not have been employees in the bargaining unit on the date of the application. Mr. Pikula's recollection however was hazy, and he candidly admitted that, but for the typed, unidentified, and unsigned document indicating that the employees had worked on April 25, he would have no clear memory of the event. He explained that his practice was to write out a memorandum to the secretary explaining what the employees had done, and designating what they should be paid, but he could not recall precisely when this had been done. No such memorandum was produced. The person preparing or authorizing the cheques did not give evidence nor, as we have already mentioned, was the sequence of cheques produced (which might have pinpointed the date the work was done or given some indication of the dates that work was done in Hamilton). In the result, we are left with no evidence other than the respondent's assertion that the three casual employees were employed in the bargaining unit on April 25, 1979; and the viva voce evidence of Mr. Pikula, together with the cheques suggests the contrary. The applicant union, of course, has no knowledge of any of these relationships, and asserts that in circumstances it is the respondent employer(s) which must satisfy the Board that the employees are properly included on the list. An employer's employment relationships are matters entirely within its own knowledge and, in the union s submission, if an employer puts forward a list of employees said to be in the bargaining unit, it must be able to affirmatively demonstrate that this is the case.
On an application for certification, the Board is required to ascertain both the number of employees in the bargaining unit employed on the application date, and the number of employees who were members of the union on the "terminal date" fixed pursuant to section 92(2)(j) of the Act. An employer is required to file, in Form 51, a list of his employees. This list must be prepared under the instruction of a responsible company official who signs the list to verify its accuracy. In determing the number of employees in the bargaining unit the Board places primary reliance on this material, for the number and nature of an employer's employment relationships are matters which are often within its exclusive knowledge. The trade union seldom has detailed information in this regard, even though its right to certification will ultimately turn on establishing majority support among these employees. This is especially so in the construction industry where employment relationships are transitory, employment levels can fluctuate on a day-to-day basis, and an employer may be engaged on a number independent and geographically separate construction sites. Unless there is an interchange of employees, or functional interdependence among construction sites, the union may not have specific knowledge of the employer's employee complement. In these circumstances, we do not think it is unreasonable to require an employer to come forward and substantiate its claim that certain individuals were, indeed, "employees" on the application date. Frequently, a simple check of the employer's records will be all that is required. Sometimes, it may be necessary to entertain oral evidence. In either, case, however, we are satisfied that when an employer submits a list of individuals whom it claims are employees in the bargaining unit on the application date, it must be prepared to come forward, if challenged, and demonstrate that its list is accurate.
In the case of Zalas, Malinowski, and Laber, the employer is asserting the existence of an employment relationship on April 25, 1979; but there are none of the usual documents available to support such claim, nor are the documents which are available similar to those available in respect of the other employees. While it would be tempting to explain this difference by reference to the casual nature of the individuals' employment, it might be noted that DiLabio was also employed on a casual basis, working only a few days, and there was fuller documentation in his case. We are satisfied that the work done by the three challenged persons, in preparation for the arrival of a masonry subcontractor is construction work; but we are not satisfied on the basis of the evidence before us that they were employed by the employer to do that work on the application date. In the result, therefore, the Board is satisfied that insofar as the character of the challenged employees' work is concerned, Ponte and DiLabio are properly regarded as construction labourers employed on the application date, and the other three challenged individuals cannot be regarded as employees on the application date. Accordingly, the names of Zalas, Malinowski and Laber should not be included on the list of employees.
We do not think it necessary at this stage of the proceeding to decide precisely who is the employer of Ponte and DiLabio. As we have already pointed out, the evidence in this regard is equivocal, although, on balance the evidence suggests an employment relationship with PHI which bears the burden of remuneration. However, this issue is closely connected to the status of the other eight individuals affected by this application (whom the applicant contends were employed by one or some combination of the respondents but about whom the officer did not enquire) and also to the section 1(4) application which, if successful, would make the entire issue academic. The determination of the identity of the "true employer" can often be a difficult one (see for example Sutton Place Hotel, [1980] OLRB Rep. Oct. 1538) and the Board is reluctant to make such determination on a piecemeal basis or further bifurcate these proceedings. Accordingly, the Board has determined that this matter should be relisted for hearing so that the Board can entertain the evidence and submissions of the parties with respect to all outstanding issues — and in particular, the union's application under section 1(4). Since the Board has already begun to hear evidence on the section 1(4) question, we have decided that the parties should address themselves initially to the remaining evidence with respect to that issue. If it becomes necessary to do so, we will then address the issue of the identity of the employer.
The Registrar is directed to relist this matter for hearing. At that hearing the respondents must be prepared to comply with their joint obligation under section 1(5) of the Act to adduce evidence within their knowledge concerning the section 1(4) issue, and if necessary, all other matters in dispute.
DISSENT, IN PART, OF BOARD MEMBER OLIVER HODGES:
I have had the opportunity to read the decision of the majority in this matter and concur with the conclusions which my colleagues have reached. I wish to indicate however, that I could not agree with the majority decision to entertain the evidence of Mr. Pikula, the witness whom the respondent did not identify and refused to call before the Board Officer. In my view this tactic was designed solely for the purpose of delaying the proceedings, and having failed to call its evidence when given an opportunity to do so, the respondent is not entitled to, and should not have been given, a second opportunity.