[1981] OLRB Rep. February 129
1452-79-R Christian Labour Association of Canada, Applicant, v. Al Smith Plastering & Partition Co. Limited and Barrie Plastering, Drywall & Acoustics Co. Limited, Respondents, v. Carpenters District Council of Toronto and Vicinity, United Brotherhood of Carpenters and Joiners of America, Intervener.
BEFORE: Rory F. Egan, Vice-Chairman, and Board Members J. D. Bell and O. Hodges.
APPEARANCES: William R. Herridge, Q. C., Elizabeth J. Forster, E. Vanderkicet and John Adema for the applicant; Michael Gordon and Al Smith for the respondents; Douglas J. Wray and Torrance J. Ferrier for the intervener.
DECISION OF THE BOARD; February 6, 1981
1This is an application under subsection 4 of section 1 of The Labour Relations Act in which the applicant seeks a declaration that Al Smith Plastering & Partition Co. Limited (hereinafter referred to as "Al Smith") and Barrie Plastering, Drywall & Acoustics Co. Limited (hereinafter referred to as "Barrie") constitute one employer for the purposes of the Act and that they are bound by a collective agreement made between the applicant and Al Smith dated July 26, 1977, and effective from August 1, 1977 to July 31, 1979, and by memorandum of agreement between the same dated October 3, 1979, and effective from August 1, 1979 to April 30, 1982.
2Section 1(4) of The Labour Relations Act provides:
1(4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.
3The intervener submits that the applicant is not entitled to the relief claimed on the grounds that to grant it would substantially affect bargaining rights which it says exist between the respondent, Barrie, and the intervener. The intervener submits that these bargaining rights are evidenced by a collective agreement dated July 20, 1979, and the Carpenters Provincial Agreement.
4The intervener further submits that the Board ought not to exercise its discretion pursuant to section 1(4) to grant the relief requested by the applicant.
5Al Smith was incorporated on January 16, 1967. Barrie was incorporated on December 11, 1969. It is beyond dispute, having regard to the documentary evidence and the testimony of Mr. Al Smith, that the two corporations are associated or related activities or businesses in the construction field that they are carried on under common control and direction exercised by Mr. Al Smith.
6The question remains as to how the Board, in the circumstances dealt with below, ought to exercise its discretion under the provisions of section 1(4) of the Act.
7The applicant had been certified as bargaining agent for employees of Al Smith in Board areas 18, 28 and 7 in the years 1973, 1975 and 1975 respectively and at the date of the application, was bargaining agent for the employees of Al Smith under a collective agreement dated October 3, 1979 covering the relevant areas.
8The applicant was at no time certified as bargaining agent for employees of Barrie and no collective agreement has been made between the applicant and Barrie. The evidence of the respondent is that the "Al Smith" company was used on what were referred to as "union jobs" in the construction area while the "Barrie" company was used where it was seen that the work could be performed without the use of unionized employees. Barrie was used on small jobs, employing mostly people recruited in the area where the job was being performed.
9Employees of Al Smith, however, sometimes worked for Barrie. When they did, they were paid in accordance with the Al Smith collective agreement with CLAC. Persons who were not Al Smith employees would work beside the former on Barrie non-union jobs but would not necessarily be paid the same CLAC rates as those transferred from Al Smith.
10Barrie did not retain year-round employees but it served the purpose of providing some employment for persons normally employed by Al Smith at times when no work was available for that company.
11The present application has its roots in the fact that Al Smith made a successful bid on a subcontract job at Georgian College of Applied Arts and Technology in Orillia involving acoustic drywall and plaster work. The general contractor who awarded the contract was C. A. Smith Contracting Limited of Markham, Ontario. Despite the similarity of names, there is no connection between the general and the subcontractor except that arising out of the transaction with which we are dealing. Sometime in November 1978 C. A. Smith forwarded a contract for signature by Al Smith covering the work to be done at Georgian College.
12At that time and at all material times, the general contractor was bound by the Carpenters Provincial Agreement. This agreement provides that if a company, bound by the Provincial Agreement, subcontracts any carpenters' work, it must do so only with a company bound by a collective agreement with the Carpenters.
13The contract sent by C. A. Smith Contracting Limited to Al Smith contains a clause stipulating that the subcontractor will employ employees with union affiliation compatible with the conditions under which the contractor is carrying on his contract with the owner.
14On February 14, 1979, C. A. Smith Contracting Limited wrote to Al Smith requesting the latter to send in the executed contracts. The letter contained a paragraph in which the general contractor requested Al Smith to confirm that his company was "a member in good standing with the local carpenters union".
15On April 23, 1979, the general contractor again wrote to Al Smith advising that unless the contracts were executed and returned by April 30, 1979, the contract would be awarded to another contractor.
16Under cover of June 7, 1979, Al Smith returned a signed and sealed copy of the contract to the general contractor. This brought a reply dated June 11th in which the general contractor stated that it was unable to execute the contract "due to the fact that your workmen are not members of Local 1617 of the carpenters union or affiliates thereto". The letter concludes with a reference to the clause in the contract referred to above.
17This brought a letter from Al Smith's solicitors to C. A. Smith advising the latter that they were instructed to take all necessary action in the event that Al Smith were not permitted to perform the work.
18The next significant correspondence was a letter from C. A. Smith, the general contractor, addressed to Al Smith but containing a contract between the general contractor and Barrie. The accompanying letter dated July 3, 1979 states that the contract is identical to that formerly issued to Al Smith but with a reduction on the monetary consideration. The latter fact has no hearing on this matter.
19Sometime in July Mr. Al Smith executed the contract on behalf of Barrie. The contract is dated November 14, 1978. Smith could not remember the date upon which he executed the contract but it would obviously be after July 3, 1979. The completed contract was then returned to Barrie under covering letter dated July 19, 1979, after which Barrie commenced to work on the Georgian College project under the collective agreement between the intervener and Barrie referred to earlier as the basis for the intervention in this application.
20The substitution of Barrie as the subcontractor was brought about not only through the refusal of the contractor to sign the contract with a firm which could not meet the union affiliation clause of the contract but also through the insistence of the United Brotherhood of Carpenters that the general contractor comply with the provisions of the collective agreement between the latter and the carpenters' union.
21Asked when he first became aware of a problem with the general contractor concerning the United Brotherhood of Carpenters involvement, Smith testified that he had heard only rumors of this prior to May 3, 1979. On that date Torrance Ferrier, Business Representative of Local 2480 of the Carpenters, wrote to C. A. Smith Contracting Limited as follows:
"May 3, 1979
C. A. Smith Contracting 12 Herritage Rd. Markham, Ontario.
Re- Georgian Collage Orillia
Dear Sirs,
This letter is to confirm the fact that Al Smith Drywall and Partitions is not under contractual relationship with this local union or district council. If C. A. Smith Contracting were to use this contractor as a subcontractor for the drywall and accoustics you would be in violation of Art. 4 of the current collective agreement and subject to grievance.
Yours truly
(Sgd.) Torrance Ferrier
Torrance Ferrier Business Representative"
This letter was brought to the personal attention of Mr. Al Smith. Mr. Al Smith stated that after receipt of the letter, he telephoned CLAC and indicated that a problem had arisen. He was not sure of the date upon which he was in touch with CLAC. It is apparent, however, that the conversation with CLAC occurred between May 3, 1979, and May 16, 1979, because on the latter date, Ed Vanderkloet, Executive Secretary for CLAC, wrote to the architect concerned suggesting that the latter try to arrange to have a direct contract for the work with Al Smith rather than having it done through C. A. Smith. It was suggested that in this way the union requirements in the Carpenters collective agreement could be avoided. It is to be observed that up to this point all parties appear to have been dealing with the matter on the understanding that Al Smith was the only subcontractor involved. Barrie had not entered the picture at this time.
22Al Smith became involved with the Brotherhood of Carpenters on another front when that firm made a successful bid for subcontract work on a General Tire Company project in Barrie on which the general contractor was Emery Contracting. The objection was raised that Emery Contracting had a collective agreement with the Carpenters containing subcontracting provisions requiring the use of carpenters. This situation arose before the signing of the subcontract between Barrie and C. A. Smith Contracting.
23The Emery situation resulted in a meeting between Al Smith, Emery, and the Brotherhood of Carpenters at which the union impasse was discussed. The Carpenters were represented by Mr. Ferrier. Ferrier made it clear to Smith that Al Smith would not be able to get any jobs where the Brotherhood of Carpenters were the bargaining agents. In his testimony Smith said that Ferrier told him his intent was to put Al Smith out of business. Ferrier's version was that Smith stated at the meeting that if he had to take the Carpenters agreement, it would put him out of business. Ferrier's reply to this was: "If that's the way you see it, then that's the way it is". He said that Smith had repeatedly protested during the meeting that if he signed an agreement with the Carpenters, he would be out of business. We accept Ferrier’s version of what was said and view it as a straightforward statement of the factual situation as the Carpenters saw it in view of the provisions governing subcontracting contained in the collective agreement between Emery and the Brotherhood of Carpenters.
24The Emery meeting did not resolve the matter involving that company and the problem with C. A. Smith and the Carpenters union also remained unresolved.
25A meeting was arranged at the Toronto Construction Association (T.C.A.) offices between representatives of T.C.A., Al Smith, the Brotherhood of Carpenters and C. A. Smith Contracting. This took place in the early days of July and was for the purpose of attempting to resolve the impasse.
26At the meeting at T.C.A. Smith revealed the existence of Barrie. It was agreed that Barrie would be used as the subcontractor instead of Al Smith and that a collective agreement would be made between the Carpenters union and Barrie. Mr. Smith represented both Al Smith and Barrie. His explanation for agreeing to sign the collective agreement on behalf of Barrie was that he had had a gun placed to his head and that it was necessary to sign the collective agreement if he was to be able to do the jobs on which Al Smith had been the successful bidder. Agreement was reached on the adjustment of wage rates and a document to that effect was signed on July 5, 1979 by Smith on behalf of Barrie, and Ferrier for the Carpenters. The agreement stated:
It is hereby agreed that on the signing of the current collective agreement between the Carpenters District Council of Toronto and Vicinity and the Employers Bargening [sic] Agency on behalf of Barrie Plastering Drywall and Acoustics Co. Limited that the Union will waive the current rate of wages for the two named projects only Georgian College in Orillia and General Tire Barrie Ontario. The rate of wages for these projects only shall be $9.00 per hour for a journeyman carpenter and $9.25 for a working foreman.
This was a concession by the Carpenters since the successful bids had been based on rates below those in the Carpenters' collective agreement.
27On July 20th Ferrier presented Barrie with two further documents. One of these is an agreement between Barrie and The Carpenters District Council of Toronto and Vicinity on behalf of a number of Locals of the United Brotherhood of Carpenters and Joiners of America. The agreement states that the employer, Barrie, acknowledges that on the 20th day of July, 1979, Gary Greaves and Paul Eenhoorn were employees of Barrie. The agreement is dated July 20, 1979, and is signed by Mr. Al Smith for Barrie and Torrance J. Ferrier for the union.
28The second document is also dated the 20th day of July, 1979, and is an agreement between United Brotherhood of Carpenters and Joiners of America, Carpenters District Council of Toronto and Vicinity, United Brotherhood of Carpenters and Joiners of America and The Ontario Provincial Council of the United Brotherhood of Carpenters and Joiners of America (the latter two being an employee bargaining agency designated under The Ontario Labour Relation Act by the Minister of labour) and Barrie.
29The document recites that the union has demonstrated to the Employer that it has as members a majority of the employees of the employer engaged in work coming within the scope of the provincial agreement and that the parties have agreed that the union is entitled to represent such employees. The parties then agree that the document constitutes a voluntary recognition agreement and that pursuant to section 132(4) of The Labour Relations Act of Ontario, the Employer shall be bound by a provincial agreement.
30At the hearing the intervener filed application for membership cards signed Gary Greaves and Paul Eenhoorn. Each of these membership cards bears the date of July 6, 1979.
31These cards were signed after Ferrier had explained to the two employees that only persons who were members of the Brotherhood of Carpenters would be allowed on the Georgian College job and after he had indicated that an initiation fee of $150.00 was paid. There was no evidence heard from the two employees concerned but Mr. Smith testified that the sum was $250.00. On that understanding he agreed with the two employees but quite unknown to Ferrier or the Carpenters, to pay the employees an extra 75~ per hour to help defray the expense of the initiation fee.
32It was Ferrier's evidence that the two cards were signed on July 6th while the men were working in the Al Smith shop in Barrie. They were, however, gathering supplies to take to the job at Orillia and signed the cards while in or beside the truck in the presence of Smith. It had been Smith's request to Ferrier that these men be permitted to work on the job. It must have been clear to everyone that this involved joining the Carpenters or not getting on the site. Ferrier had made that abundantly clear.
33It was argued over the objections of counsel for the intervener although no charges were filed that the Carpenters, through Ferrier, had used coercion and intimidation in its dealings with the two employees who signed cards. In our view, Ferrier's conduct does not fall into that category of cases where the Board has said that threat of the loss of a job unless an employee signs a membership card is coercive or intimidatory. In the circumstances present here, there was the existing collective agreement between C. A. Smith the general contractor, and the Carpenters alluded to earlier, requiring Carpenters membership by employees of the subcontractor. That agreement was reflected, as we have seen, in the commercial contract originally offered to Al Smith and subsequently signed with Barrie which contained the union's affiliation clause with which C. A. Smith required Al Smith to comply. Ferrier and C. A. Smith were, in their insistence, simply relying upon those pre-existing requirements of the agreement and explaining the compulsion arising out of that agreement for the employment of Carpenters members. The restrictive clause is common in construction industry contracts and was in no way produced for this particular situation.
34The same type of consideration applies to the conduct of the employer whom the applicant, in its argument, suggested had improperly supported the intervener. Again, the pre-existing conditions were there and were none of the respondent's making. He responded to the factual, and legal, realities of the situation. Certainly he resisted the intrusion of the Carpenters for as long as he could without losing the job for himself and the employees involved.
35We now turn to a consideration of the position of the applicant throughout the activities described above, the local representation of CLAC in the area is John Adema. He organized the employees of Al Smith in 1973 in Board Area 18 and obtained the subsequent certificates referred to earlier in this decision. He has negotiated and signed collective agreements with Al Smith throughout the intervening years.
36It was Adema's testimony that CLAC became aware in May 1979 that Al Smith had been successful in its bid with respect to the Georgian College project. He was aware of the difficulty that developed between Al Smith and the general contractor with respect to the carpenters and this resulted in the letter of May 16th to the architect in charge of the project already referred to in this decision.
37It was Adema's testimony that he was not aware of the existence of Barrie until late in August of 1979. He testified that all cheques covering check off of CLAC union dues were always issued by A. L. Smith and that he was unaware of any of CLAC's members having performed work for Barrie at any time in the past. Mr. Smith testified that he had not told anyone in CLAC about Barrie until after the completion of the deal with the Carpenters. The evidence indicates that Barrie had not been as active by any means as Al Smith and that the "Al Smith" labelled truck had always been used on Barrie jobs. Also, as indicated earlier, the CLAC contractual rates had always been paid on Barrie jobs. We are satisfied that Adema and CLAC were in fact not aware of Barrie until advised by Mr. Smith of its existence and use in the Georgian College project.
38A question was raised with respect to the lapse in time which CLAC allowed between the date on which it became aware of Barrie and the date upon which it commenced this application. The evidence is that Adema told Mr. Smith as soon as he became aware of the situation that CLAC would consider its remedies under the Act. He was requested by Smith to have patience since he had arranged for a meeting with the Minister of Labour to take place in mid-September concerning the matter. Mr. Smith invited Adema to attend that meeting. It was Adema's testimony that the Minister had suggested at the meeting that further meetings be conducted concerning the matter.
39It was obviously with the expectation of obtaining riddance of the Carpenters that Mr. Smith arranged the meeting. That he was disappointed in not obtaining the result he had hoped for is patent from his statement that the meeting did not solve anything and was a waste of time, intelligence and money. Nothing further developed from the meeting with the Minister and after waiting in vain for further steps to develop, CLAC launched these proceedings.
40In our view CLAC's promptness or lack thereof in commencing section 1(4) proceedings in the circumstances of this case does not take on the importance usually attached by the Board to such a factor in section 1(4) situations, the reason for that being that the voluntary recognition of the Carpenters was a fait accompli before CLAC became aware of the existence of Barrie. It is thus not a question of leaving bargaining rights exposed. The real question here is whether, assuming for the moment that the voluntary recognition and resultant collective agreement are proper, the Board ought to grant the applicant's request for revocation of bargaining rights, if any, purported to be held by the Carpenters.
41It was the intervener's position that the Board lacks the jurisdiction under section 1(4) of the Act to revoke a collective agreement or bargaining rights properly acquired under the Act. Leaving the question of jurisdiction to revoke aside for the moment, the Board has expressed the view that it is desirable that section 1(4) be applied when the situation is fresh and not after bargaining rights have been acquired by another union (see D. L. Stephens Contracting Niagara Limited, [1978] OLRB Rep. June 531). In Industrial-Mine Installations Limited, [1972] OLRB Rep. Dec. 1029, the Board stated at page 1033, paragraph 18:
Further, we do not think that section 1(4) was intended to be used by one trade union as a bar to another trade union obtaining bargaining rights in a company where the first trade union held no existing bargaining rights whatsoever.
42In the present case we find that the insistence by the Carpenters' union on its rights under its agreement with the general contractor and the similar insistence by the general contractor that the sub-contract be carried out by a company whose employees were in the Carpenters together with Ferrier's explanations to the employees concerned that only members of the Carpenters could work on the job, were all based upon pre-existing legal obligations and do not involved improper conduct under the Act. The voluntary recognition agreement and the subsequent collective agreements are accordingly valid.
43It is perhaps unfortunate from CLAC's point of view that its knowledge of the existence of Barrie came only after the creation of the Carpenters' bargaining rights but that is not a circumstance which enables the Board, if it were so inclined, to grante CLAC the relief it seeks. This would have been the case even if CLAC had brought its application immediately upon learning about Barrie since, as already indicated, the Carpenters had already acquired bargaining rights.
44The Board, in the present instance, adopts the views set out in the cases cited above and declines to revoke the bargaining rights of the Brotherhood of Carpenters. The Board accordingly declares that the intervener is the bargaining agent for the employees of Barrie described in the recognition agreement and the subsequent collective agreements. CLAC, of course, retains its bargaining rights for the employees of Al Smith.