United Brotherhood of Carpenters and Joiners of America, Local 2679 v. Contempoform Incorporated, 1981 CanLII 850

[1981] OLRB Rep. May 512

1826-80-R; 2705-80-U United Brotherhood of Carpenters and Joiners of America, Local 2679, Applicant, V. Contempoform Incorporated and CTF Construction Ltd., CTF Contracting, Respondents and CTF Construction Ltd., Re Carpenters Union, Local 2679

BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members B. Armstrong and F.W. Murray.

APPEARANCES: F. Rotter and W Oliveira for the applicant; A. Torchia andJ. Gallo for the respondents.

DECISION OF THE BOARD; May 21, 1981

1. This is an application under section 1(4) of The Labour Relations Act which was heard together with a section 79 complaint involving the same parties. The respondents, in both cases, were Contempoform Incorporated and an entity which was variously described in the evidence as CTF Construction Ltd., CTF Contracting, and CTF Contracting Ltd. It appears that the correct corporate name of the respondent is CTF Construction Ltd. but, for reasons which will become apparent infra, the Board hereby adds CTF Contracting as a party respondent in the section 1(4) proceeding.

2. The respondents have filed no reply in either of these matters. The section 1(4) application was filed on November 20, 1980. The Board has already fixed two previous hearing dates in that matter, and on neither occasion did the respondents appear — although duly notified of both the proceeding, and the obligation to adduce evidence pursuant to section 1(5) of the Act. It appears that the respondents have simply disregarded the entire proceeding. While the Board was of the view that the respondents would benefit from a serious consideration of their position, and further that, had they done so earlier, this litiga­tion might have been avoided, in view of the delay already occasioned, and the prejudice to the applicant/complainant, we did not think this proceeding should be delayed further. In consequence, the Board did not accede to the respondent's request (made part way through the presentation of their case) to adjourn so they could seek a solicitor's advice.

3. The section 79 complaint concerns the termination of one Frank Basso, who was discharged on or about March 3, 1981. The union contends that Mr. Basso was discharged because of his trade union activity contrary to sections 56, 58(a) and 61 of The Labour Relations Act. The section 1(4) application involves the union's contention that Contempo­form Incorporated, CTF Construction Ltd. and CTF Contracting are one employer for the purposes of the Act. Section 1(4) reads as follows:

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.

It will be convenient to deal first with the related employer issue; then consider the merits of the unfair labour practice complaint.

4. Contempoform Incorporated is a small wood-working shop engaged in the manufacture and installation of prefabricated store fixtures, office furniture and institutional and commercial interiors. The company has a small factory and warehouse at 5 Kenhar Drive in Toronto, and employs four or five shop employees. John Gallo is the company's owner and general manager.

5. CTF Construction Limited ("CTF") was described as a general contractor, engaged on a small scale, in all phases of construction — including walls, partitions, roof work, plumbing, electrical, mechanical and so on. John Gallo is a fifty per cent owner and an officer of CTF. The other "partner" in the business is Angelo Torchia who is the president of the company and (through his wife) effectively controls the other fifty per cent of the shares. Torchia has no ownership interest in Contempoform, but is employed as a salesman and occasional site supervisor when Contempoform is engaged in the on-site installation of its products (i.e. counters, cabinets, etc.) Some fifty to sixty per cent of Contempoform's business is linked to CTF. Contempoform acts as the carpentry subcontractor for any projects in which CTF is engaged.

6. Prior to the summer of 1980, Contempoform had acted as a subcontractor for other general contractors but its functions had-been restricted to the fabrication and installation of wood structures. In the summer of 1980, Torchia and Gallo began to discuss the possibility of developing a general contracting business. As Torchia explained it, he and Gallo decided to become "their own" general contractor, which would continue to maintain a carpentry subcontracting relationship with Contempoform. CTF Construction Ltd., the corporate vehicle through which this activity was to be pursued, was incorporated on or about October 23, 1980.

7. The Board heard a considerable amount of evidence concerning the relationship between Contmpoform and CTF, and the circumstances surrounding the discharge of Frank Basso. Much of this evidence was contradictory. Having regard to the manner in which the various witnesses gave their evidence, the Board prefers the evidence of Frank Basso and Walter Oliveixa wherever it is in conflict with that of John Gallo or Angelo Torchia.

8. There is no doubt that Contempoform and CTF are engaged in associated or related activities or businesses carried on under common control or direction. We have already mentioned the functional relationship between the two firms and the key role played by Gallo in each. We might also note that Torchia plays at least a limited managerial role with respect to the on-site employees of Contempoform. Although it was contended by the respondents that the employees were working for CTF when they were installing the fixtures made by Contempoform, Frank Basso, the only employees who gave evidence, testified that he considered himself to be working for Contempoform whether in the shop or on the side. He had never been told he was working for a different company and it was admitted that there were no separate pay cheques issued by CTF for the installation work. The Contempoform employees co ritinue to perform the installation work and be paid by that company as they were before CTF came into existence. Torchia testified that there was an invoicing or "charge back" relationship (which was not elaborated), and that CTF would occasionally transfer money to Ccntempoform so that salaries would be covered. Torchia told the Board he considered it irrelevant which bank account was actually used.

9. CTF has no office staff or equipment of its own. The operations of CTF are conducted from the offices of Contempoform at 5 Kenhar Drive. There is only one telephone number for bth businesses. The only sign identifying the premises is that of Contempoform. The Contemroform secretary does the clerical work for both companies, and we do not think that the simil.irity between the name ConTempoForm and CTF is merely a coincidence as the respondents contended.

10. The union's bargaining rights are based upon a collective agreement entered into on September 26, 1980, and signed by John Gallo. This form of agreement is commonly known as a "shop" or "plant" agreement, and must be distinguished from the general construction industry agreements between the carpenters' union and various construction contractors. The "shop agreement" applies to about twenty-six wood-working shops in the Metropolitan Toronto area Articles 2 and 3 of that agreement, when read together; clearly indicate the scope of the union's bargaining rights and the type of work which the agreement is intended to cover:

Article 2 — Area covered by Agreement

2.01 This Agreement shall apply to all manufacturing of Store Fixtures and Display Units, performed by the Employer in its plant and/or plants in the following area:

"Counties of Halton, Peel, Ontario and York which includes

the area known as Metropolitan Toronto".

Article 3 Recognition and Relationship

3.01 The union is recognized as the sole exclusive bargaining agent for the employees in the bargaining unit described as follows:

"All employees of the Employer save and except non-working foremen, persons above the rank of non-working foremen, and the office and sales staff"

In addition, article 21 of the collective agreement permits an employer to use some of its own "shop employees" to install "on-site" the prefabricated wood structures which the firm has contracted to produce.

11. The collective agreement on which the union bases its bargaining rights does not bear the name of either Contempoform or CTF Construction Ltd. The name of the "employer" appearing on the agreement is "CTF Contracting". Thus, if one looks only at the collective agreement, it appears that the union has bargaining rights for neither Contempoform nor CTF, but rather a non existant or unincorporated entity known as "CTF Contracting". The reason for this apparent anomaly was much disputed; but we prefer the version of events given by Walter Oliveira.

12. In or about September 1980, Contempoform, which was then a non-union subcontractor, was engaged in installing counters in a Canada Trust Building then under construction in Mississauga. This project was a "union job" — that is, the contractual arrangements between the general and prime subcontractors required that all work be done by union members or unionized subcontractors. Such arrangements are common in the construction industry but posed a problem for Contempoform which at that time was not "unionized". To resolve this problem, John Gallo approached the carpenters' union to establish the necessary contractual relationship. At this point in time, CTF Construction Ltd. did not exist as a separate legal entity.

13. When Walter Oliveira, a business agent for the union, was contacted early in September, he delivered two copies of the shop agreement for Gallo's consideration. This agreement, as we have already noted, is the standard agreement which is in general use in the Toronto area. Even a cursory glance at the first page reveals its nature, and we simply cannot accept Gallo's assertion that he had no idea that the agreement applied to his plant employees. Moreover, this was not the first time that Mr. Gallo had had a relationship with a trade union. Some years ago, he had been associated with a company called "Domus" which was also a wood-working shop and was bound by an earlier version of the same shop agreement. Oliveira testified, and we accept, that he made it clear to Gallo that the agreement applied to both the shop and installation work, and that it was not unlike the agreement by which Domus had been bound two or three years before.

14. The collective agreement was executed on September 26, 1980, and as we have already mentioned bore the name "CTF Contracting". Oliveira asked Gallo why he was not using the name "Contempoform" — the name in which the shop and the installation work had traditionally been done, and the only name appearing on the sign on the premises. Gallo assured Oliveira that CTF Contracting and Contempoform were "the same thing", and when asked to affix an appropriate corporate seal, told Oliveira that the business had recently moved and that the corporate seal had been misplaced. There was no suggestion that CTF Contracting was a separate business or entity — as it probably was not at that time since CTF was not incorporated until almost a month later.

15. Following the execution of the collective agreement, Oliveira spoke to the employees in the shop to outline the benefits established in the collective agreement. There was no indicator from Gallo that the agreement did not apply to shop work or was restricted to installation, nor was there any indication that the installation phase of the business would henceforth be done by CTF. As far as the employees were concerned, they worked for; and were paid by Contempoform. Subsequently, the union received membership dues and health and welfare payments in respect of the Contempoform employees paid by cheque over the signature of Gallo and bearing the contempoform Incorporated name. It was only in or about January 1981, that the union became aware of Contempoform's position that it did not have to apply the terms of the agreement to its shop employees, and that when the employees were doing on-site installation work, they were doing it as employees of CTF rather than Con­tempoform.

16. It was this dispute concerning the role of the union in Contempoform, and the company's obligation to pay the benefits established in the collective agreement, which led to Frank Basso's discharge. Basso took the view, (not unreasonably in the circumstances) that the company was obligated to abide by the collective agreement. His "mistake" was in expressing that view to the company and contacting the union to see what might be done. Gallo was quite candid with the Board in admitting that he was concerned and annoyed that, as he put it, Basso was always "talking about the union", or talking about his "rights". On or about March 3, 1981, Gallo received a letter designating Basso as the local shop steward. Basso was fired on the same day and it is difficult to accept that his was merely a coincidence. Basso had worked for Contempoform for over a year, had been hired by Gallo, and had been previously employed by other businesses with which Gallo was associated. There were no serious complaints about his work, yet Gallo told the Board that Basso was fired because his work was unsatisfactory. This is not what Gallo told Basso at the time of his discharge. Basso was told that there was no work for him because the firm was short of jobs — yet subsequently some of the employees were working overtime, and Gallo admitted offering to re-employ Basso if he was prepared to work with no union at a lower wage.

17. On the basis of the evidence before us, the Board is satisfied that Frank Basso was discharged from employment at Contempoform by reason of his trade union activity contrary to sections 56, 58(a) and (c) and 61 of The Labour Relations Act. The Board therefore directs that:

(a) Frank Basso be reinstated in employment forthwith;

(b) Frank Basso be compensated for all wages and benefits lost by reason of the unlawful discharge, and that the monetary compensa­tion payable to him shall include interest calculated in the manner set out by the Board in HallowellHouse[1980] OLRB Rep. Jan. 35.

Furthermore, in order to dispel the chilling effect which Basso's discharge may have on other members of the union in Contempoform's employ, the Board hereby directs that the respondent Contempoform post copies of the attached notice marked "Appendix", after being duly signed by the respondent's representative, in conspicuous places on its premises where it is likely to come to the attention of the employees, and keep the notices posted for sixty consecutive working days. Reasonable steps shall be taken by the respondent to insure that the said notices are not altered, defaced or covered by any other material. Reasonable physical access to the premises shall be given by the respondent to a representative of the complainant so that the complainant can satisfy itself that this posting requirement is being complied with.

18. With respect to section 1(4) application, we have already reviewed the factual basis for declaring that Contempoform and CTF is "one employer". John Gallo is a principal in both; the two firms are functionally interrelated; there is an interchange of employees in respect of installation work; and the firms share the same premises, telephone, office equipment and staff. Nevertheless, section 1(4) gives the Board discretion to "grant such relief by way of declaration or otherwise as it may deem appropriate". In the present case, however, we see no reason why we should not exercise our discretion to grant the declaration sought by the applicant. At the time the collective agreement was signed, Contempoform was the only legal entity to which it could have applied. CTF Construction Ltd. had not yet been incorporated. If CTF Contracting was a trading name, it was a trading name for Contempoform. The only employees involved were employees of Contempoform. The only work in question was being performed by Contempoform and its employees. The terms of the shop agreement could only be applied to the kind of work done by Contempoform. And Gallo told the union that Contempoform and CTF Contracting was the same thing. The purpose of section 1(4) is to protect a union's bargaining rights from erosion if an employer chooses to carry on all or part of its business or functions through a separate corporate vehicle. In this case, those bargaining rights attach to the manufacture and installation of prefabricated wood structures, and should continue regardless of whether those activities are carried out through Comtempoform or CTF.

19. Accordingly, the Board declares that Contempoform Incorporated, CTF Con­tracting and CTF Construction Ltd. are one employer and that all three are therefore bound by the "shop agreement" entered into on September 26, 1980. We wish to make it clear however that the effect of this declaration is to be limited to binding these corporate entities to the shop agreement and does not extend the union's bargaining rights to the general contracting activities in which CTF Construction Ltd. might be engaged from time to time. In our view, the union is entitled to bargaining rights in respect of manufacturing and on-site installation of prefabricated wood structures, whether that activity is being performed by Contempoform, CTF Contracting or CTF Construction Ltd. This is the basis on which the agreement was entered into, and which the union could reasonably expect to be honored. We do not think the union could expect, nor do we intend this declaration to extend, bargaining rights for other activities of CTF Construction Limited. With this qualification, therefore, the Board hereby declares Contempoform Incorporated, CTF Contracting, and CTF Construction Ltd. to be one employer, and in consequence, Contempoform has been bound by the shop agreement since it was first executed, and CTF Construction Ltd. has been bound by it since it (CTF) came into existence as a separate corporate entity.

Appendix

The Labour Relations Act

NOTICE TO EMPLOYEES

Posted by Order of the Ontario Labour Relations Board

WE HAVE ISSUED THIS NOTICE IN COMPLIANCE WITH AN ORDER OF THE ONTARIO LABOUR PEATIONS BOARD ISSUED AFTER A HEARING IN WHICH BOTH THE COMPANY AND THE UNION HAD THE OPPORTUNITY TO PRESENT EVIDENCE. THE ONTARIO LABOUR RELATIONS BOARD FOUND THAT WE VIOLATED THE ONTARIO LABOUR RELATIONS ACT ANO HAS ORDERED US TO INFORM OUR EMPLOYEES OF THEIR RIGHTS.

THE ACT GIVES ALL EMPLOYEES THESE RIGHTS:

To ORGANIZE THEMSELVES;

To FORM, JOIN OR HELP UNIONS TO BARGAIN AS A GROUP,

THROUGH A REPRESENTATIVE OF THEIR OWN CHOOSING;

To ACT TOGETHER FOR COLLECTIVE BARGAINING;

To REFUSE TO DO ANY AND ALL OF THESE THINGS,

WE ASSURE ALL OF OUR EMPLOYEES THAT:

WE WILL NOT DO ANYTHING TO INTERFERE WITH THESE LAWFUL RIGHTS THAT ALL EMPLOYEEI ENJOY,

WE WILL NOT DISCRIMINATE AGAINST ANY EMPLOYEES FOR PARTICIPATING IN THE LAWFUL ACTIVITIES OF THE TRADE UNION

WE WILL OFFER TO RE—INSTATE FRANK PASSO TO HIS FORMER POSITION, AND SHALL COMPENSAE HIM FOR ANY EARNINGS HE LOST AS A RESULT OF HIS DISCHARGE, PLUS INTEREST.

CONTENPOFORM INC.

PER: _____________________________

JOHN GALLO

This is an official notice of the Board and must not be removed or defaced.

This notice must remain posted for 60 consecutive working days.

DATED this 21th day of MAY 1981