[1980] OPRB Rep. April 516
1423-97-M Brotherhood of Carpenters and Joiners of America, Local 785, Applicant, v. Vic Starchuk & Associates Inc., Respondent, v. Employer Bargaining Agency, Intervener.
BEFORE: N. B. Satterfield, Vice-Chairman and Board Members J. D. Bell and C. Ballentine.
APPEARANCES: D. J. Wray, S. Koehler and E. Arsenault for the applicant; J. A. Ferenbach for the respondent; S. Harrington for the intervener.
DECISION OF THE BOARD; April 21, 1980
1The applicant has referred to the Board a grievance in the construction industry for arbitration under section 112a of The Labour Relations Act. The applicant is alleging that the respondent has violated certain clauses of the current provincial collective agreement between the carpenter’s employer bargaining agency and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America to which the applicant is bound. At the hearing the respondent denied that it was bound to that agreement or any other collective agreement with the applicant and claimed that the applicant did not hold any bargaining rights for employees of the respondent. Thus, before the Board has jurisdiction to hear the merits of the grievance, the applicant must establish that the respondent is bound to the provincial collective agreement. This decision deals with that threshold issue and the parties have agreed that, should the Board find the respondent to be bound to that agreement, they will meet and attempt to settle the grievance.
2The opposing positions of the two parties may be summarized as follows. The applicant contends that it entered into a collective agreement with the respondent in November 1974 and that the bargaining rights established thereby have continued uninterrupted to the date of this grievance. The applicant further contends that the respondent's actions since the signing of that agreement have affirmed the collective bargaining obligations between them. While the respondent denies that it ever entered into a collective agreement with the applicant, it acknowledges that from time to time for a period of approximately three years beginning in November 1974, it did hire members of the applicant by referral from it and, as directed by the applicant, did pay wage rates, deduct and remit union dues and make remittances to welfare trust funds and to the employers' association that was in a collective bargaining relationship with the applicant. The respondent's owner, Vic Starchuk, maintains that it was his understanding he could employ members of the applicant when he needed union carpenters, as long as he paid the wages, deducted union dues and made the remittances required by the applicant, and from other sources when he did not need union carpenters. Starchuk's understanding may, at first, appear naive. It is not unknown in the construction industry, however, for a trade union to supply members to an employer in the absence of any collective agreement or bargaining rights on just the conditions referred to by Starchuk. It is not uncommon for the Board to have a party before it relying on a practice of observing the terms of a collective agreement when attempting to establish that it is bound by or a party to a collective agreement. The Board has found that the mere observance by one party of the terms of a collective agreement does not bind that party to the agreement. See for example the Board's comments in Ecodyne Limited, [1979] OLRB Rep. July 629, particularly paragraph 28. The central issue before the Board in the instant case, then, is whether the document which the applicant states was executed between it and the respondent in November 1974 is a collective agreement as contended by the applicant. If it is, then the evidence before the Board would establish that the bargaining rights created at that time were still in existence at the date of this application. If it is not, the applicant has no bargaining rights for persons employed by the respondent.
3The Board heard a substantial amount of evidence from ten witnesses. While some of it was incidental to the central issue and while there were problems of credibility with some of the witnesses (in part a result of the five-year lapse of time between the critical event and the hearing into this application), the findings of fact herein reflect the Board's assessment of the witnesses' recall of events, their demeanor and relative credibility. In a few instances herein where the Board has noted contradictions in the evidence, the Board has set out in its conclusions how it has viewed those contradictions.
4The respondent has been in business since 1972, as a project manager in construction involved with designing, constructing and decorating buildings and their interiors from the acquisition of land until the property is turned over to the tenants. It was incorporated in its present name and form in 1976. Prior to that it operated as a registered proprietorship in the name of Vic Starchuk and Associates. This was its business format in November 1974 when the respondent was engaged in the design and installation of store interiors in Farmers' Market Square shopping mall in Kitchener, Ontario. It had finished three stores and was working on a fourth in November when Stephen Koehler, business representative of the applicant, visited that job on which two of the applicant's members were employed. The two carpenters had just been laid off by the general contractor on the job site and had been hired to work for the respondent for a week by Charles Brohman, the respondent's representative on the store job. Koehler testified that he told Brohman that it would be necessary for the respondent to sign an agreement with the applicant if the two members were to continue to work for the respondent on that project. When Brohman told him that would not be a problem, Koehler queried whether he had the authority to sign an agreement. Brohman said that he would check with his office. When Koehler returned half an hour later, he was advised by Brohman that he had authority to sign an agreement and if Koehler had one there he would sign it. Brohman and Koehler signed several copies of two documents which were:
(a) the collective agreement between the General Contractors Section of the Kitchener-Waterloo Construction Association and The Grand River Valley District Council of the United Brotherhood of Carpenters and Joiners of America; and
(b) a non-member participation agreement between the respondent and the trustees of the Vacation Pay Trust established under the collective agreement.
While both documents bear signing dates of May 1, 1974, it is undisputed that they were not signed on that (late but were, instead, signed during November 1974. Since the Association had been accredited on May 21, 1974 by the Board in respect of its bargaining relations with the Council, any employer in respect of which the Council or one of its affiliates obtained bargaining rights after that date would become bound pursuant to section 116(4) of the Act to the collective agreement between the Association and the Council, the reason for dating the document May 1, 1974 is not relevant to the central issue with which the Board is dealing. The first document is the collective agreement which the applicant contends established its bargaining rights in respect of carpenter employees of the respondent and on which it is relying for its right to pursue the grievance which is before the Board. The second document is an agreement; to pay into a vacation pay trust fund established by the collective agreement which employers who are bound to the latter agreement and are not members of the Association are requited to sign.
5Brohman recalls the signing of the documents but stated that he thought he was just signing an agreement that the two carpenters would be paid the proper wages and benefits while on the store job. Brohman claims that Koehler told him everything would be satisfactory if that was done and if he signed an agreement right then, the two carpenters could stay on the job. He maintains that he did not read the documents before signing them. He testified that Koehler produced legal-sized pieces of paper, not bound or attached together, to be signed. He could not recall how many pieces were produced or how many times he signed. Koehler told the Board that they signed five sets of the agreement and five of the other document which was only a single page. He explained that he always got five sets signed and what distribution was made of them, including one for his office, one for the employer and one for the collective agreements library of the Ministry of Labour (proof of filing of which was given to the Board). Although the testimony of Brohman and Starchuk contained allusions that what Brohman signed was either not a complete collective agreement or was some other document, not a collective agreement, there is no evidence to support these allusions. The Board is convinced on the evidence before it that the documents submitted to it and bearing Brohman's signature are the ones which he signed in November 1974 and there is no evidence whatsoever before the Board which would substantiate that these documents were misrepresented to Brohman.
6The one which is in the form of a collective agreement between the Association and the Council would only fail to satisfy the definition of a collective agreement in section 1(1)(e) of the Act if Brohman lacked the actual or apparent authority to sign it. Brohman was unable to contact Starchuk before signing the document, but had contacted the store owner. He told the owner that it was going to be necessary for him to sign a document agreeing to wages and benefits to be paid to the carpenters. The owner told Brohman he had no objection as long as the rates were within the limits of those on which the job had been bid. He returned to the store and told Koehler that he had the authority to sign. Bromine told Starchuk no later than the following day that he had signed a document with the applicant. Koehler states that he gave Brohman a copy of each of the two documents signed, but Brohman does not recall this and Starchuk denies that he ever saw the collective agreement which Brohman is alleged to have signed until the first hearing into this grievance. There is no evidence that Starchuk ever received copies of the succeeding collective agreements between the Council and the Association. Because of the accreditation order, the Council was obligated to bargain with the Association and was under no obligation to provide the respondent with copies of any resulting agreements; that was the Association's obligation. Starchuk did not discuss the document with Brohman at any time until after this application was filed with the Board, although he stated that he became aware in December 1977 that Brohman had signed something which the applicant claimed was a collective agreement. Early in December the applicant had filed two grievances with the respondent claiming that the respondent had violated a collective agreement between the applicant and the Grand Valley Construction Association ("the G.V.C. Association"). The G.V.C. Association and the applicant are the successor organizations to the Association and the Council, respectively, named on the documents signed by Brohman. At a meeting about the grievances with Koehler and Carl Ball, another representative of the applicant, Starchuk claims that reference was made to a document which Brohman was supposed to have signed in November 1974. Since Starchuk knew that neither he nor his wife, the only persons who had signing authority for the respondent, had signed any collective agreement, he neither affirmed nor denied at that meeting that the respondent was bound to a collective agreement. Koehler and Ball deny that there was any reference at the meeting to the "Brohman" incident, although Koehler stated that he asked Starchuk for a letter agreeing that the respondent was bound to the current collective agreement and would abide in future by the hiring provisions (since one of the grievances involved an alleged infraction of those provisions). One grievance was settled and one was dropped because the job involved was at an end. The respondent claims that the one which was settled was settlement of a complaint under The Employment Standards Act. The applicant claims it was the settlement of a claim for unpaid wages earned under the collective agreement.
7Notwithstanding Starchuk's protestations that the respondent was not bound at any time to a collective agreement with the applicant, beginning in January 1975 and continuing through until December 1977, the respondent employed members of the applicant on referral from it, paid the wage rates and made remittances to welfare trust funds and to the appropriate Association as directed by the applicant. Starchuk personally placed the orders with the applicant and the carpenters were supervised by him or his foreman. Prior to November 1974 the respondent had not hired members of the applicant in this manner and it may be reasonably inferred from the evidence that the respondent was unaware of directly employing any members of the applicant at all prior to that date. On the three stores in the Farmers' Market Square project which the respondent had completed prior to November 1974, it had obtained its labour from contractors and paid the contractors, on whose payrolls the workers remained, for this service. The evidence indicates that this has been the principal source of labour on the projects managed by the respondent. While Starchuk maintains that, after November 1974, he was of the understanding that he could obtain union carpenters from the applicant whenever he needed them as long as the respondent paid the proper wage rates and other remittances, he admits no one from the applicant ever told him that and he was not aware of any other contractors who had such an arrangement. The understanding came from Brohman telling him after the November 1974 incident with Koehler that the respondent would have access to men through the applicant as long as it paid the proper wages and benefits.
8The respondent did not make the correct remittances for the two carpenters who worked for it in November 1974. This ultimately led to Koehler visiting the respondent's office in June 1975 and providing the respondent with a work sheet explaining how to calculate them correctly. After that remittances were made without evidence of further incident. The last remittances of the respondent were made for members of the applicant employed during December 1977. From then until July 1978 the respondent was not engaged with any on-site work. In July, it was engaged to do the interiors of some stores in the Conestoga Mall in Kitchener and Starchuk asked Koehler for carpenters. There was a province-wide strike of carpenters in effect at the time and Koehler refused to supply them. Koehler states also that he told Starchuk that he would not supply the respondent with any more carpenters until the respondent gave the applicant the letter which it had requested in December 1977. Starchuk alleges that Koehler was demanding that he sign a collective agreement before Koehler would supply the respondent with carpenters. The stores in question were finished by the owners hiring carpenters and since that time the respondent has not hired carpenters through the applicant. Starchuk maintains that he decided not to use union carpenters whenever he was doing "non-union" projects. After July 1978 and until the filing of this grievance, the applicant had been unable to identify the respondent on any projects within the geographical agreement until he observed the respondent on the Industrial Plaza project in Kitchener.
9It is clear on the evidence that Starchuk did not give Brohman the specific authority to sign a collective agreement for the respondent. On the other hand, Brohman was seen clearly to have authority greater than that of the carpenters and other labourers employed by the respondent. The owner of the store for which the two carpenters were employed by Brohman for the respondent told the Board that he was on the job constantly at the time. He referred to Brohman in terms of the job-co-ordinator and supervisor for the respondent. Mrs. Starchuk, who is an officer of the respondent, referred to Brohman as a supervisor. Starchuk had arranged originally with a contractor to supply carpenters for the store in question. When Brohman told him that he could get carpenters who were being laid off on another part of the project, Starchuk authorized Brohman to hire them. When one of them who was the applicant's job steward on the site was told by Brohman what the wage terms were the steward told Brohman that these were not acceptable and called Koehler. That call led to Koehler’s visit to the job and the signing by Brohman and Koehler of the documents referred to in paragraph 4 above.
10The Board draws the following conclusions from its assessment of the evidence and the witnesses as previously noted herein:
(a) Brohman held himself out to Koehler as having the authority to sign a collective agreement on behalf of the respondent, both before and after Koehler queried his authority;
(b) Koehler, who was aware that it was Brohman who had hired the two members of the applicant, did not accept Brohman's first statement that he was willing to sign an agreement with the applicant; rather, he took the precaution of querying that authority and only proceeded with the signing after Brohman, having first told Koehler that he would call the respondent's office, later told Koehler that he had authority to sign an agreement if Koehler had one there to sign;
(c) Brohman signed a document which is in the common format of a collective agreement and, although he testified that he did so without reading it, his testimony reveals that he was quite sufficiently literate to be able to understand the nature of the document which he was signing had he taken the trouble to read it;
(d) furthermore, while there is no evidence that Koehler represented the documents to be a simple undertaking that the respondent should pay the proper wages and benefits to the two carpenters, even if he had done so, Brohman was competent enough to recognize the misrepresentation if he had read the documents;
(e) Brohman could not remember how many times he signed, how many copies of documents he signed, how many pages there were to the documents or being given a copy by Koehler; Koehler on the other hand clearly and unequivocally testified that five copies of each had been signed and what the distribution of the copies had been; therefore the Board, as well as being satisfied that the document filed in evidence was the one which Brohman signed, is satisfied that Brohman was given a copy of the document immediately following the signing as testified by Koehler;
(f) the respondent's practice of getting union carpenters from the applicant whenever it had need of them is evidence of a significant change in the respondent's conduct dating from Brohman's signing of the collective agreement; the respondent continued to avail itself of this accommodation until the end of 1977 and attempted to do so again in July 1978 when it next needed union carpenters and when Starchuk clearly expected the applicant to provide them; the least that the Board can conclude from these circumstances is that the change in conduct was a response by Starchuk to what Brohman told him about signing a document with Koehler and the respondent's acts were a conscious utilization by it of the hiring referral system in the collective agreement signed by Brohman and in the succeeding ones;
(g) the applicant by referring members for hire by the respondent, directing and accepting remittances of union dues and contributions to the various funds established under collective agreements, taking corrective steps when these were not properly made and by filing grievances alleging violation of a collective agreement (regardless of why and how they were disposed of) was conducting itself as though it was bound together with the respondent to a collective agreement;
(h) although Starchuk was made aware by Brohman the day after he signed the collective agreement that he had signed a document with Koehler, Starchuk made no move to identify its nature and repudiate it; Starchuk did not inform the applicant formally at any time that he was not bound by any document which Brohman may have signed on behalf of the respondent; and, whether or not the Board accepts Starchuk's testimony that he came to realize in December 1977 that Brohman may have signed a collective agreement, that testimony reveals that a conscious decision was made not to repudiate Brohman's act.
11The critical question for the Board in this case is whether the document which Brohman signed can be found by the Board to be binding on the respondent since Brohman had no actual authority to sign it. The Board has previously found a valid and binding collective agreement to exist in such circumstances where one party held himself out as having the authority to sign and the other party reasonably believed him to have that authority. In inspiration Limited, [1967] OLRB Rep. Sept. 261, the Board found a binding collective agreement to have been made when a building superintendent who had hired two carpenters signed an agreement with a union representative even though the superintendent was not authorized by the employer to sign an agreement. In its decision, the Board held the superintendent to have the apparent authority to sign the agreement because he had indicated his willingness to do so and did not indicate that the agreement would be subject to approval by a higher authority in the company. The Board found his conduct to be consistent with his actual authority to hire employees through the union to work on the job which he was supervising. The Board found the opposite situation in Collegiate Sports Ltd., [1977] OLRB Rep. Aug. 487 when it determined that a handyman employed by the employer did not have the authority to sign a collective agreement on behalf of the employer. The employee did not read English with any degree of comprehension, did not understand that he was signing a collective agreement but thought he was signing documents in order to obtain union carpenters from the applicant in that case. He had not held himself out as having authority to sign a collective agreement and the union representative thought it strange that he would have such authority. Moreover, the Board found there had been no ratification by conduct of the employer since it acted to repudiate the purported agreement immediately the employer became aware of it. The Board's decision in Sentinel Reliance Products Limited, [1973] OLRB Rep. Jan. 7, deals with the ratification of a collective agreement by the later conduct of a party which purports not to be bound by the agreement. In that case a senior officer of an international union had been given written authorization by the international president to sign a collective agreement with an employers' association on behalf of several locals of the international. Subsequently, one of the locals contended that it was not bound to the collective agreement because, in part, it had neither authorized the officer to sign on its behalf nor been advised by the officer that he intended to do so. The Board found that the local had insisted on its rights under the agreement and accepted its benefits by supplying a check off authorization, supplying men and accepting check off pursuant to new provisions of the agreement. The Board stated also that "It is highly significant that the applicant [i.e. the local union] never formally informed the [employers'] Association that this collective agreement did not apply to it.". The Board went on to conclude that the international officer's … act of executing the collective agreement... on behalf of the [local union] became the act of the [local union] when subsequently ratified by the immediate conduct of the [local union] and its membership.". The Board further concluded that".., once ratification has taken place in these circumstances, the effect of such ratification is to put all parties concerned in the same position as that in which they would have been if the act ratified had been previously authorized by the [local union].".
12While the facts in this case are different in detail from those in the Inspiration and Sentinel decisions, supra, they are analagous in substance. Brohman who lacked the actual authority to bind the respondent to a collective agreement, held himself out to the applicant as having the authority to do so and the applicant's acceptance of that apparent authority was reasonable in that it was consistent with the fact that Brohman had hired the two carpenters who were members of the applicant and furthermore had led the applicant to believe that he had been given the specific authority to sign an agreement by his statement that he would telephone the respondent's office and then, without advising Koehler that he had not spoken to anyone in authority for the respondent, told Koehler that he had authority to sign an agreement and proceeded to do so. Brohman's act was immediately ratified by the later acts of the respondent by retaining the two carpenters for the balance of the period for which Brohman had hired them and by Starchuk, during the next three years, obtaining carpenters from the applicant and paying their wages and making remittances to the applicant and the employers' association as a result of their employment with the respondent. On the other hand, this case is distinguishable on its facts from Collegiate, supra, for, while Brohman's real authority may appear similar in nature to that of Collegiate's handyman, Brohman was not lacking in comprehension of the English language and the respondent not only failed to repudiate Brohman's acts but by its conduct affirmed them.
13The Board, therefore, adopts the reasoning in Inspiration and Sentinel, supra, and finds that the respondent, through Brohman's act of signing the collective agreement referred to in paragraph 4 herein, became bound by the collective agreement which then was in effect between the Association and the Council. Since the bargaining rights created by that act have not been declared terminated by the Board, the respondent has continued to be bound by the succeeding collective agreements between the Association and the Council and their successors. Accordingly, the Board finds that the respondent is bound to the provincial collective agreement (as is the applicant), which was in effect at the time this application was filed, between the carpenters employer bargaining agency and The Ontario Provincial Council of the United Brotherhood of Carpenters and Joiners of America.
14Respondent counsel advances two alternative arguments which the Board has considered and rejected in reaching the above conclusions and also requested reasons in writing for one of the Board's procedural rulings, all of which the Board wishes to deal with before leaving this matter. During respondent counsel's cross-examination of Koehler he posed a question to Keohler about statements he was alleged to have made during efforts of the parties to settle the dispute prior to the hearing. Upon objection from applicant counsel, the Board ruled that it would not allow examination into settlement attempts on the ground that such discussions are undertaken without prejudice to either party. To allow examination into such discussions would have the effect of removing the "without prejudice" protection and might undermine future attempts at consent agreements. This is a position commonly taken by arbitrators. Later in the cross-examination, while counsel was challenging Koehler's testimony on the central issue of the document which Brohman had signed, he asked the Board's leave to examine Koehler on the parties' settlement efforts. The Board withheld its consent on the same grounds and on the additional grounds that cross-examination allowed sufficient scope to test the credibility of a witness and the Board was not convinced that what the parties may have been prepared to agree to during consent bargaining would be sufficiently dispositive of the credibility issue so as to warrant, on balance, the risk of prejudicing the settlement process. The two alternative arguments raised by respondent counsel were that the applicant had abandoned its bargaining rights between December 1977 and this application by failing to diligently pursue them and that the respondent was not the employer of the two carpenters whom Brohman had hired, or of the union carpenters subsequently hired through the applicant because the respondent was only agent for its clients and not the real employer. In respect of the first argument, the evidence before the Board shows that the applicant was persistent and diligent in the pursuit of its bargaining rights within the limitations presented by the nature of the work and the employment relationships in the construction industry. In respect of the second argument, the evidence is unequivocal that, except when the respondent arranges for another contractor to supply Labour to the projects which it is managing, the Labour employed is hired by Starchuk, supervised by him or a foreman on his payroll and paid by the respondent on its own cherubs, with all statutory deductions and remittances made by the respondent. On that evidence the respondent is clearly the party who controls their employment and, for purposes of the Act, is their employer.
15The Board remains seized of this matter should the parties be unable to settle the grievance referred to herein.