Ontario Labour Relations Board
[1981] OLRB Rep. August 1138
0571-81-M Local 18 United Brotherhood of Carpenters and Joiners of America, Applicant, v. Hussey Seating Company (Canada) Limited, Respondent.
BEFORE: Kevin M. Burkett, Vice-Chairman and Board Members C. A. Ballentine and E. J. Brady.
APPEARANCES: David M, McKee and Tom Fenwick for the applicant; G. Grossman and Nicholas Demy for the respondent.
DECISION OF THE BOARD; August 25, 1981
- This is a complaint filed under section 1 12a of The Labour Relations Act by Local 18 United Brotherhood of Carpenters and Joiners of America in which the applicant alleges that the respondent is in breach of the subsisting provincial agreement. The complainant relies on a "short form" agreement purportedly entered into by the respondent company and the United Brotherhood of Carpenters Local 1946 in 1975 in support of its claim that the respondent is now bound by the current provincial agreement under the provisions of section 132 of the Act. The "short form" agreement submitted in evidence before the Board was signed by a Dave Frankson on behalf of the company and is for a five year term with an automatic renewal from year to year thereafter should neither party seek to renegotiate. The respondent takes the position that Mr. Frankson did not have the authority to enter into a collective agreement on behalf of the company and denies, as well therefore, that it is bound by the current provincial agreement.
The relevant parts of section 132 are as follows:
132.(l) Subject to subsection 2, any collective agreement in operation upon the coming into force of this section in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in clause (e) of section 106 and represented by affiliated bargaining agents is enforceable by and binding on the parties thereto only for the remainder of the term of operation of the agreement, regardless of any provision respecting its renewal.
(2) Notwithstanding subsection 1 of section 44, every collective agreement in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in clause (e) of section 106 and represented by affiliated bargaining agents entered into after the 1st day of January, 1977 and before the 30th day of April, 1978 shall be deemed to expire not later than the 30th day of April, 1978, regardless of any provision respecting its term of operation or renewal.
(3) Where any collective agreement mentioned in subsection 1 ceases to operate, the affiliated bargaining agent, the employer and the employees for whom the affiliated bargaining agent holds bargaining rights shall be bound by the provincial agreement made between an employee bargaining agency representing the affiliated bargaining agent and the employer bargaining agency representing the employer.
The facts in this matter are relatively straightforward. The company is engaged in the business of installing bleacher seating. The company was retained to perform work in connection with the construction of a sports complex at the University of Western Ontario in January, 1975. Mr. Dave Frankson, one of four installers working for the company, was assigned to the job. He was being paid $4 per hour at the time. An installer is placed in charge of the physical erection of the bleacher seating on each job but maintains telephone contact with the company's assistant general manager located in Toronto. Mr. N. Demy occupies the position of assistant general manager and vice president operations as he did at the time of the University of Western Ontario job. He visited the site at the time the components were being unloaded and returned again during the latter part of the installation. It is his evidence that the work is not difficult in that the wood and metal components are pre cut to specification and need only be assembled and bolted together. Mr. Frankson had commenced work with the company only a few months before the University of Western Ontario job and had had no prior experience in this type of work so that a more experienced installer was assigned to assist from time to time. Where additional manpower is required it is the responsibility of the installer assigned to the job (Mr. Frankson in this case) to make the necessary arrangements. In most cases this involves a telephone call to the local office of Canada Manpower. Mr. Frankson was responsible for signing and issuing pay cheques to those hired locally. The company had paid those hired locally by cash but instituted a chequing system in January, 1975. Under this system the installer was required to maintain records and issue cheques drawn on a casual petty cash account established by the company.
Mr. Frankson left the employ of the respondent company in April30, 1975; at about the time the University of Western Ontario job was being completed. The company advised the Board that it is unaware of his current whereabouts and therefore, was unable to arrange for his attendance at the hearing in this matter.
Mr. Fred Culver, the business representative of Local 1946 since 1973 testified that he received a call from Mr. Frankson on January 21. 1975 inquiring about the assignment of men to the University of Western Ontario job. It is Mr. Culver's evidence that Mr. Frankson identified himself as the superintendent of the job and when asked if he had the authority to sign a collective agreement with the union replied in the affirmative. Mr. Culver visited the job site and observed that Mr. Frankson was the only person there and that he was not working "with the tools". Mr. Frankson signed the "short form" agreement referred to earlier on behalf of the company. Mr. Culver testified that he forwarded two signed copies to the company's head office the next day. He produced a copy of a letter addressed to "Hussey Seating Co., 20 Torlake Road, Toronto" dated January 23, 1975 enclosing "two signed and witnessed short form collective agreements for your files and reference." Mr. Demy testified that a search of the company's files did not turn up the letter. He denied ever seeing the letter. The union did not receive a reply.
A member of the Carpenters' Union Local 1946 was assigned to the job commencing January 23, 1975 and at least one or two Carpenters' members worked on the job until the end of February, 1975. The job was completed sometime in late May, 1975. These men were paid a rate of $7.95 per hour as required under the purported collective agreement. It is not disputed that these men would have been supervised by Mr. Frankson.
Mr. Demy testified that Mr. Frankson, as an installer, did not have authority to sign a collective agreement on behalf of the company. He acknowledged, however, that he (Mr. Demy) would have knowledge of the fact that certain local employees were being paid $7.95 per hour (at a time when labourers referred by Manpower could be employed for $3 per hour). He testified that Mr. Frankson would have checked with him and he would have given the OK to pay this rate to the carpenters assigned from Local 1946. Mr. Demy was asked if Mr. Frankson was in charge of the job and replied that he would have been to the extent of making sure that the work was progressing but that he would have been expected to call Mr. Demy in the event of delays or any other unusual happenings.
In the period from the completion of the University of Western Ontario job to the present the company has worked on four projects within the London area. The company worked at the Alymer Police College in November, 1975 and employed two members of the Carpenters' Local 1946 The company also performed work at Cleardale Public School and Westmount Public School in London in 1975 and at the Glendale High School in Tillsonburg, Ontario in October, 1976. These were relatively small jobs each with a gross billing value of less than $1,704. In contrast, the University of Western Ontario job had a gross billing in excess of $30,000. Union members were not used in connection with these jobs and grievances were not filed. Local 1946 denied knowledge of these jobs. The Company performed a number of other jobs (29) in the period January, 1975 to the present in the "counties of Elgin, Middlesex, Perth, Huron, Grey, Bruce, Oxford, Lambton, Kent and Essex" — within the scope of the purported short form collective agreement. Union members were not used in connection with any of these 29 jobs and grievances were not filed by the union in respect of any of these jobs.
The union identifies the two issues which must be dealt with as firstly whether the document filed with the Board is a binding collective agreement and secondly, if it is, whether it can be found that the collective bargaining rights established under the agreement have been abandoned. The union argues that on the undisputed evidence of Mr. Culver the Board must find that Mr. Frankson said he had the authority to sign a collective agreement. It is the union's position that this fact, considered in conjunction with the position occupied by Mr. Frankson on the job site, must cause the Board to conclude that the agreement which he signed is a collective agreement which binds the company. In support of its contention that Mr. Frankson had the apparent authority to bind the company, the union relies on the fact that Mr. Frankson was the senior company person on the job, that he was responsible for hiring the labour required for the job, supervising the work of those hired and paying those hired. The union argues further that when reference is made to the failure of any senior company official to reply or respond to Mr. Culver's letter enclosing a copy of the signed agreement or to take issue with the wage rates being paid, the company is now stopped from denying the existence of the collective agreement. Given the small size of the projects carried out by the company in the London area following the University of Western Ontario job, the union argues that nothing can be made of its failure to grieve the company's use of non-union labour. In the face of the automatic renewal of the agreement and the lack of company activity which could reasonably have altered it to the need to make contact, the union argues that it cannot be found that it has abandoned its bargaining rights. Rather, the union asks the Board to find that the company entered into a collective agreement with Local 1946 and that under the provisions of section 132(2) it is now bound by the provincial agreement.
The company argues that Mr. Frankson who was at best a working foreman responsible to Mr. Demy, did not have the authority to sign a collective agreement on behalf of the company. The company argues that no express or ostensible agency was created in that Mr. Demy as a principal of the company, by his acts or representations did not lead the union to believe that Mr. Frankson had the authority to bind the company to a collective agreement. It is the company's position that it would be very unusual indeed for someone in Mr. Frankson's position to have such authority. The company argues further that in the absence of any change in its operating practices following the time when the union claims it became bound to the purported collective agreement, as in re Vic Starchuk [1980] OLRB Rep. Apr. 516, the Board should not make the finding that the company was aware of what Mr. Frankson had done or in any way accepted what he had done. The company asks the Board to accept the evidence of Mr. Demy that there is nothing in the company records to suggest the existence of such an agreement. The company maintains that because the agreement extends to work performed in the Windsor area the union cannot take the position that the agreement is abandoned outside London. The union must take the agreement as a whole and in light of its failure to respond to the company's disregard for the purported agreement it cannot argue that the company bound itself to the agreement. Furthermore, the company argues that the Board must find that the union did not consider itself party to a binding collective agreement with the company or alternatively, that it abandoned its bargaining rights. The company, citing Traders Finance Corporation 1967 CanLII 153 (ON HCJ), [1967] 2 O.R. 112, argues that the onus is on the union to establish the ostensible authority of Mr. Frankson to bind the company to a collective agreement. The company argues that the union has failed in this regard and asks the Board to find that it is not bound by the current provincial agreement or alternatively that if a collective agreement was entered into in 1975 that the union subsequently abandoned its bargaining rights.
We deal firstly with the question of whether Mr. Frankson had the actual authority to bind the company to a collective agreement. We accept the evidence of Mr. Demy that Mr. Frankson was not given express authority in this regard. Mr. Frankson, who was classified and paid as an installer, had no management responsibility except to hire local help, and to supervise and pay the persons so hired. His express authority was circumscribed and did not extend to recognizing trade unions and signing collective agreements on behalf of the company. Furthermore, the Board is unable to find on the evidence before it that Mr. Frankson was impliedly given such authority. In the absence of any evidence to suggest that in the construction industry on-site supervisors and managers, who are not principals of a company, are normally cloathed with such authority, we are unable to find that the assignment of Mr. Frankson to "supervise" the University of Western Ontario job implicity constituted the granting of such authority. Given the nature of the legal rights and obligations which flow from the signing of a collective agreement, the lack of evidence in this regard is not surprising. Indeed, it is to be noted that Mr. Culver (as with the union representatives in the reported case on point) did not accept, without first inquiring, that Mr. Frankson, whom he considered to be the job superintendent, had the authority to sign a collective agreement. It is our finding that Mr. Frankson did not have the actual authority to recognize the union or sign a collective agreement on behalf of the company.
This is not to say that a job superintendent or other on-site representative who lacks actual authority cannot bind the company. The on-site representative is in a position analogous to an agent of the company. If apparent or ostensible authority can be proven, or if apparent or ostensible authority cannot be proven but the principal, through his subsequent conduct, ratifies the prior action of his on-site representative, the company is bound by his undertakings.
The doctrine of apparent or express authority has been analyzed in Freeman and Lockyer v. Buckhurst Park Properties (Magnal Ltd.,) [1964] 2 Q.B. 480 (C.A.), the leading case on the subject. In that case a group of four formed a limited company in order to purchase an estate with the intention of reselling it for development. While the four had the power to appoint a managing director, they never did so. Nevertheless, one of the four assumed the duties of a managing director with the knowledge and approval of the others. Without express approval of the others the same person hired a firm of architects and surveyors to prepare an application for planning. The company refused to pay the architects' fees on the grounds that the "agent" had no authority to enter such a contract. In his reasons for finding that the company was bound by the contract, Diplock, L.J. defined apparent or ostensible authority, in contrast to actual authority as:
a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the "apparent" authority so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although be generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.
Diplock, L. J. cautioned:
... that where the agent upon whose "apparent" authority the contractor relies has no "actual" authority from the corporation to enter into a particular kind of contract with the contractor on behalf of the corporation, the contractor cannot rely upon the agent's own representation as to his actual authority. He can rely only upon a representation by a person or persons who have actual authority to manage or conduct that part of the business of the corporation to which the contract relates.
Four conditions which must be fulfilled in order to allow a contractor to enforce a contract entered into on behalf of the company by an agent who has no actual authority to bind the company are set down. These are:
(1) that a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor;
(2) that such representation was made by a person who had "actual" authority to manage the business of the company either generally or in respect of those matters to which the contract relates;
(3) that the (the contractor) was induced by such representation to enter into the contract, that is, that he in fact relied upon it; and
(4) that under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent.
In the recent case of Rockland Industries Inc. v. Amerada Minerals Corporation (1980) 1980 CanLII 188 (SCC), 31 N.R. 393, the Supreme Court of Canada referred to Diplock's reasons in Freeman and Lockyer, supra, with the approval in accepting his interpretation of the doctrine of apparent authority.
- This Board has dealt with the apparent or ostensible authority of an on-site representative to bind his employer to a collective agreement in three cases (see Vic Starchuk & Associates Inc., supra, Collegiate Sports Ltd., [1977] OLRB Rep. August 487 and Inspiration Ltd., [1967] OLRB Rep. Sept. 562). In Inspiration Ltd., supra, the earliest of the three cases, the Board described the issue before it as determining whether or not the company's on-site supervisor had the apparent authority to sign a collective agreement on behalf of the respondent company. The Board went on to state that:
"this (whether the representative had apparent authority) in turn is dependent on two factors, namely, whether David held himself out as having such authority, and whether Ouellette reasonably believed that he had such authority."
This test was applied by the Board in both Collegiate Sports Limited, supra, and Vic Starchuk, supra. In the Inspiration case, supra, the Board found that the on-site representative was the only member of management on the job from its commencement to the time that the agreement was signed, that this representative was responsible for hiring and that he made a representations to the union that he had authority to sign an agreement on behalf of the company. In these circumstances the Board found that both aspects of the test had been satisfied. In Collegiate Sports Limited the Board found that it was not reasonable for the union to conclude that the on-site employee with whom contact had been made had the authority to sign a collective agreement on behalf of the company. In the Vic Starchuk and Associates Inc. decision, supra, the Board came to the opposite conclusion. However, in that case the respondent company made the proper remittances to the union trust funds and to the appropriate association and altered its practice with respect to obtaining carpenters after the purported collective agreement had been entered into. The Board stated that there is "evidence of a significant change in the respondent's conduct dating from Brohman's signing of the collective agreement". In our view the Vic Starchuk decision is based on conduct by the respondent which ratified the prior action of the on-site representative. As we have stated, even if ostensible authority cannot be established the subsequent conduct of the principal may nevertheless serve to ratify the agreement and create an estoppel.
The test used by the Board in its reported decisions requires the union seeking to rely on a collective agreement signed by a job supervisor to establish that it was reasonable for it to believe that the on-site employee who signed the agreement on behalf of the company had the authority to do so. In the absence of convincing evidence to establish that it is normal practice in the construction industry for a job supervisor to be eloathed with the authority to recognize a trade union and enter into a collective agreement on behalf of a company, we do not accept that it is reasonable for a union to rely solely on the representations of the job supervisor. It follows that if the union is to establish that it was reasonable to believe that the company's on-site representative had the authority to sign a collective agreement it must establish the ostensible or apparent authority of the individual. The union must establish that representations, either by word or by conduct, to the effect that the company's on-site supervisor has the authority to sign a collective agreement, were made to it by an owner of the company or by a person with actual authority to manage the business of the company either generally or in respect of labour relations. It is these representations which, at one and the same time, make it reasonable for the union to conclude that the job supervisor has the necessary authority, and stop the company from later denying the existence of this authority.
In this case there were no such representations made by the principals or senior managers of Hussey Seating. Mr. Culver, the union representative, relied on the representation of Mr. Frankson who, although an installer, had clearly defined and limited responsibilities in the area of hiring, paying and supervising workers hired locally to assist with the erection of the bleacher seating. He did not have the authority to bind the company to a collective agreement. Mr. Culver did not seek out the principals of Hussey Seating or any of its senior managers but instead relied upon the representations of Mr. Frankson. In these circumstances we are unable to find that Mr. Frankson had the apparent or ostensible authority to bind the company to a collective agreement.
The issue that remains to be determined is whether the company by its actions following the signing of the purported collective agreement, ratified the actions of Mr. Frankson in signing the document on its behalf. The fact that the company paid the wage rate stipulated in the agreement does not, in and of itself, establish that the company considered itself bound by the collective agreement. It is not uncommon in the construction industry for a company to pay union rates without entering into a collective agreement. (See Ecodyne Limited, [1979] OLRB Rep. July 629 at para. 28.) There is no evidence in this case, in contrast to the Vic Starchuk case, that the company made remittances to union health and welfare funds in accord with the agreement or altered its hiring practices to conform with the agreement as would suggest that it considered itself bound by the agreement. Although the company performed a large number of jobs within the geographic scope of the union s purported recognition, with the exception of the small Alymer Police College job, it did not in any way alter its method of operation to conform to the purported collective agreement. The union seeks to rely on the letter which Mr. Culver testified was sent to the company enclosing two signed copies of the agreement, and the failure of the company to respond. Mr. Demy testified that he never received the letter and could not find a copy of it in the company files. If it could be established that the company received signed copies of the collective agreement and took no action to repudiate the document, a tacit ratification could be inferred. The onus, however, is upon the union to establish that the agreements were received. It was open to the union to forward the documents by registered mail, to hand deliver them or to follow up with a phone call or other direct contact with the company when no reply was received. The union did none of these things. We have no reason to discount the testimony of Mr. Demy and accordingly, we must find that the union has failed to establish that the company even received the letter upon which it relies. There is insufficient evidence before the Board to support the conclusion that the company by its conduct ratified the purported agreement signed by Mr. Frankson on its behalf.
Having regard to all of the foregoing, we have not been satisfied that Mr. Frankson had apparent or ostensible authority to bind the company to a collective agreement. Furthermore, we have not been satisfied that the company ratified the agreement signed by Mr. Frankson by its conduct following his signing of the agreement. Accordingly, we hereby find that the company is not bound by the purported collective agreement put in evidence by the complainant union, nor is it bound by the provisions of the current provincial agreement. This grievance is hereby dismissed.