The International Association of Bridge, Structural and Ornamental Ironworkers Locals 721, 736, 759, 765, and 786, et al. v. The International Association of Bridge, Structural and Ornamental Ironworkers, et al., 1982 CanLII 1026

Ontario Labour Relations Board

[1982] OLRB Rep. October 1487

20282-81-U The International Association of Bridge, Structural and Ornamental Ironworkers Locals 721, 736, 759, 765, and 786, and Kenneth Childs, Allan MacIsaac, John Donaldson, Larry Baillie, Gordon Verdecchia, and Donald Melvin on their own behalf of each and every member of the aforementioned trade unions, and on behalf of the said local trade unions, Complainants, v. The International Association of Bridge, Structural and Ornamental Ironworkers, Norman Wilson, and James Phair, Respondents

BEFORE: R. D. Howe, Vice-Chairman, and Board Members J. Wilson and C. A. Ballentine.

APPEARANCES: James Hayes and David Bloom for the complainants; A. M. Minsky, N. A. Wilson, and J. Phair for the respondents.

DECISION OF THE BOARD; October 6, 1982

Decision

1. This is a complaint under section 89 of the Labour Relations Act in which the complainants allege that they have been dealt with by the respondents contrary to the provisions of sections 70 and 80(2) of the Act. The essence of the complaint is that by placing the Ironworkers District Council of Ontario (the "Council") under supervision and control ("trusteeship") of the International Association of Bridge, Structural and Ornamental Ironworkers (the "International") on or about December 10, 1981, and by various actions taken pursuant to that trusteeeship, the respondents have intimidated, coerced, and penalized the complainants because they filed, or were about to participate in another complaint (the "EPSCA complaint") under what is now section 89 of the Act, in Board File No. 2367-80-U.

2. In a decision dated February 17, 1982 in this matter (reported at [1982] OLRB Rep. Feb. 233), a panel of the Board comprised of the present Vice-Chairman and Board Members S. Cooke and J. Wilson, dismissed a motion for dismissal of this complaint without a hearing pursuant to section 71(1) of the Board's Rules of Procedure. In addition, for reasons set forth in paragraphs 8 and 9 of that decision, the Board declined to defer to the internal procedures contained in section 7 of Article XII of the Constitution of the International (the "Constitution"), which provides:

"The General Executive Board shall have the power to place any Local Union or other subordinate body of the Association under direct International supervision whenever in its judgment such action is necessary for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or duties of a bargaining agent, restoring democratic procedures, or otherwise carrying out the legitimate interests of the International Association; provided that such action shall be taken by the unanimous vote of the General Executive Board. The General Executive Board shall present to the next regular meeting of the General Executive Council its action in placing a Local Union under International supervision. At any time while a Local Union is under International supervision pursuant to this section, the General Executive Board may provide, at the expense of such Local Union, for liability insurance, protecting the International Association by virtue of any common law or statutory liability resulting from the act or omission of any officer, agent or employee while engaged in any activity pertaining to the business or affairs of such supervised Local Union. Within a reasonable time after the General Executive Board has placed a Local Union under International supervision, by the General Executive Board or its representative shall hold a full and fair hearing to determine the propriety of such action giving reasonable notice of such hearing."

(The Constitution also provides for an avenue of appeal to the General Executive Council from decisions of the General Executive Board, and a further appeal to the International Convention.)

3. Pursuant to Article XII, section 7, the General Executive Board (the "G.E.B.") scheduled a "trusteeship hearing" to be held in Toronto on March 17, 1982. During the continuation of hearing of this matter on March 10, 1982, counsel for the respondents advised the Board that the International was anxious to avoid any disrespect to the Board while this complaint was pending before it, and was also anxious to avoid any unfair advantage to any person or party that might possibly develop as a result of "parallel proceedings" under the Constitution. Accordingly, he indicated that if the Board was "in a position to venture any advice, opinion, or direction" with respect to whether the internal hearing scheduled for March 17, 1982 ought to be adjourned until the completion of the hearing of this complaint, the G.E.B. would be "inclined to pay very important heed to it". After hearing the submissions of counsel for the complainants and counsel for the respondents concerning that matter, and briefly recessing to consider those submissions, the Board made the following oral ruling (which has been incorporated into this decision at the request of counsel for the respondents):

"For reasons expressed in the Board's decision dated February 17, 1982 in this matter, the Board has declined to defer to the internal procedures set forth in the Constitution of the International. In the absence of agreement of the parties, we are not prepared to recess this matter and cancel the day of hearing already scheduled for Friday March 19, 1982. We wish to proceed expeditiously as possible to hear this matter. However, we do not wish to have our actions interpreted as an encouragement to defer the internal Union procedures. If the matter of the trusteeship can be resolved through that mechanism to the satisfaction of all of the parties hereto, that would be a very desirable situation from the point of view of this Board, which encourages parties to resolve their difficulties internally wherever possible."

(The Board was subsequently advised that the internal trusteeship hearing had been adjourned by the International pending completion of this case.)

4. The hearing of the merits of this matter commenced on March 8, 1982 and continued for a total of seventeen days in March, April, May, June, and July, including two days of final argument. The sole witness called by the complainants in support of their case in chief was the complainant Allan MacIsaac, who is the Business Manager and Financial Secretary of Local 721, another of the complainants in these proceedings. He was first elected as a full-time business agent for Local 721 in 1960 and has continuously occupied that position, or the more senior position of business manager, since that time. (Some of the larger local unions, such as Local 721, employ not only one or more business agents, but also a business manager. For ease of reference, those persons will be referred to compendiously as "business agents" or "business representatives" in this decision.) The complainants Kenneth Child, Larry Baillie, Donald Melvin, and Gordon Verdecchia are the elected business representatives of Locals 736, 759, 765, and 786 respectively. The complainant John Donaldson is the President of Local 721 and is also one of its three business agents.

5. During the course of his extensive examination in chief and cross-examination, Mr. MacIsaac provided the Board with a detailed exposition of circumstances which, it is alleged, give rise to an inescapable inference that the International placed the Council under trusteeship in order to penalize the complainants for filing and pursuing the EPSCA complaint, and in order to preclude or hamper the effective prosecution of that complaint.

6. The respondents' witnesses were John Lyons, Norman Wilson, and James Phair. Mr. Lyons has been the General President of the International since November of 1961. Prior to becoming General President, he was a General Vice-President for three years and a General Organizer for four years. He has been a member of the Ironworkers since 1937. He is also the Senior Vice-President of the A.F.L.-C.I.O. Mr. Wilson was appointed by the International in 1958 as an acting General Organizer in Canada and was subsequently confirmed as a General Organizer. He became the International's Director of Canadian Affairs in 1968. Mr. Wilson is responsible for coordinating all of the Ironworkers' Canadian activities, and reports directly to Mr. Lyons through frequent written reports and telephone conversations. Mr. Phair is another of the International's General Organizers in Canada. He was appointed as an acting General Organizer by Mr. Lyons in September of 1979, and was subsequently confirmed as a General Organizer. Mr. Phair reports directly to Mr. Lyons, but copies of his assignments and reports are forwarded to Mr. Wilson for his information.

7. Mr. MacIsaac was recalled by the complainants in reply. Peter Quinlan, the Recording Secretary of Local 736, was also called as a reply witness for the purpose of identifying and substantiating certain minutes.

8. There were a number of conflicts in the evidence that was adduced before the Board in these proceedings. The Board is of the view that many of those conflicts merely reflect natural weakening of memories with the passage of time, and the tendency of witnesses to recall events in the light most favourable to their present concerns, rather than a conscious attempt to mislead the Board. In making our findings of fact in this matter, the Board has considered a number of factors including the firmness of the witnesses' respective memories, their ability to resist the influence of interest to modify their recollections, the consistency of their evidence, their capacity to express their recollections clearly, and their demeanour. We have also assessed what is most probable in the circumstances of the case, and what inferences may reasonably be drawn from the totality of the evidence.

9. The officers of the International are General President Lyons, General Secretary Juel Drake, General Treasurer Charles Anding, and nine General Vice-Presidents. The G.E.B., which is the body that placed the Council under trusteeship, consists of the General President, General Secretary, and a General Officer (usually, as in the circumstances of the present case, the General Treasurer) selected from time to time as a temporary member of the G.E.B. by the General President. The G.E.B. acts on all matters concerning the policy of the International. The Constitution also provides for a General Executive Council which consists of all twelve of the International's General Officers. The General Executive Council meets three or four times a year to review the activities of the International.

10. The International has a total membership of approximately 183,000, of whom about 20,000 are in Canada. Its headquarters are located in Washington, D.C. Twenty-five of the International's 318 local unions are located in Canada, as are two of its twenty-two district councils. As might be expected from the size of the International, many of the responsibilities of the General President, the General Secretary, and the General Treasurer, are delegated to subordinates in various departments.

11. The Council was chartered in the summer of 1976 and received a constitution and bylaws from the International. (For ease of reference, the Constitution and Bylaws of the Council will be referred to in this decision as the "Bylaws".) The objects of the Council are set forth in Article I of the Bylaws as follows:

"The object of this District Council is to create a harmonious feeling between the Local Unions and to settle all differences arising between them, promote an apprentice training [sic] to create a higher standard of skill, to secure adequate compensation for our work, to cultivate better relations between this Council and the employers, to assist our members to secure employment and to protect our members by legal and proper methods against any injustice that may be done them; to improve the standard of living, the moral and intellectual conditions of relations with the employers coming under the jurisdiction of the various Local Unions affiliated with this Council."

12. Membership in the Council is comprised of the Ontario local unions chartered by the International, including Local 700 (Windsor), Local 721 (Toronto), Local 736 (Hamilton, Local 759 (Thunder Bay), Local 765 (Ottawa), and Local 786 (Sudbury). The approximate membership of those six local unions is 600, 1900, 1500, 350, 400, and 400 respectively. (Certain Ontario "shop" locals are also be eligible to participate in the affairs of the Council, but they have not generally been very active participants in the Council to date.)

13. The Council was preceded by the Ironworkers District Council of Eastern Canada (the "Eastern Council") which commenced operation in the late 1950's. Mr. MacIsaac testified that the Eastern Council was "generally a very effective body" from the time of its inception until the untimely death in 1967 of its President, Cliff Cooper, a General Organizer appointed by the General President of the International. Following Mr. Cooper's death there were long periods of time with no meetings officially called, although the business agents (of the local unions which made up the Eastern Council) continued to meet occasionally in an attempt to keep that body functioning. Although the business agents' efforts to have the Eastern Council "reactivated" were unsuccessful, their efforts appear to have been one of the factors that prompted the G.E.B. to reestablish district council operations in Ontario by chartering the Ontario District Council.

14. At the time of the installation of the (Ontario District) Council's charter, George Allen, an experienced District Representative, was appointed to the position of President of the Council by Mr. Lyons, who also appointed Mr. MacIsaac as First Vice-President of the Council, Donald Melvin as Second Vice-President, and Kenneth Childs as Financial Secretary-Treasurer. Other delegates to the meeting at which the charter was installed were appointed by the respective Presidents of the Local Unions on the authorization of Mr. Lyons.

15. Pursuant to what is now section 139(l)(a) of the Labour Relations Act, on March 31, 1978 the Minister designated the International and the Council as the employee bargaining agency to represent all ironworkers, except rodmen, represented by the International or Locals 700, 721, 736, 759, 765, and 786, in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario. The International and the Council were also designated at that time as the employee bargaining agency for rodmen. (Those designations were subsequently amended in a manner which is not material to the present proceedings.)

16. The Council has not functioned in the manner contemplated by its Bylaws in a number of respects. Although "regular meetings of the Business Agents" have been held monthly in accordance with Article IV, Section 1 of the Bylaws, regular meetings of the full Council have not been held semi-annually as required by that Section. Indeed, it is questionable whether a full Council meeting has ever been held since the inception of the Council. (Mr. MacIsaac testified that one full Council meeting had taken place on November 16, 1978, but the Minutes of that meeting, which identify it as "Meeting No. 9", cast some doubt upon that portion of his testimony. In any event, it is abundantly clear that full Council meetings were not held semi-annually as required by the Bylaws.) Thus, virtually all of the affairs of the Council have been administered by the business agents at their monthly meetings chaired by International Representative George Allen (or by Mr. MacIsaac in Mr. Allen's absence.) Mr. MacIsaac's explanation for the lack of full Council meetings was: "It was the responsibility of our President [George Allen] to set up full District Council meetings. He neglected to do so, but there were occasions when we requested permission of the International to have full District Council meetings and for one reason or another they were denied." (The only evidence of a formal request to the International for permission to hold such a meeting relates to a request made by Mr. MacIsaac in May of 1981. which will be dealt with in greater detail later in this decision.) During cross-examination, Mr. MacIsaac expressed the view that there was little necessity for calling full Council meetings since the same individuals would be involved "with the exception that the two other delegates [from each Local Union] would be in attendance".

17. Article VII, Paragraph A of the Bylaws provides that nomination and election of officers "shall be held every four years at the regular spring meeting of the Council ... during the even year in between the regular quadrennial convention of the International". No such election was ever held. Shortly after the Council was chartered, the Constitution of the International was amended so as to provide that the International Convention would be held every five years instead of every four years. Thus, Article VII of the Bylaws became "outdated" shortly after the Bylaws came into force. Pursuant to a motion passed at the January 19, 1978 business agents meeting, the following letter dated January 25, 1978 was sent on Council letterhead to the General Secretary of the International:

"Article VII – ‘Nomination and Election of Officers’ of the Ontario District Council states:

‘Nomination and election of officers shall be held every four years at the regular Spring meeting of the Council. This Spring meeting shall be during the even year in between the regular quadrennial convention of the International Association.’

Please advise as to when these elections should now be held as Article V ‘Conventions’ of the International constitution now states under section 1:

‘The regular Convention of this Association shall be held every fifth year between August 1st etc.’

Thanking you in advance for your cooperation, and anticipating an early reply, I remain,

Fraternally yours,

(signed)

Donald W. Melvin,

Recording Secretary."

Mr. Drake's letter of reply, dated February 7, 1978, reads:

"This will acknowledge receipt of your January 25, 1978 correspondence seeking guidance from this office with respect to Article VII of your Bylaws which is no longer applicable due to the change of our International Conventions from every four to five years by action of the delegates of the last Convention.

Since said section is no longer applicable, it should be amended. District Council officers should be elected at least every four years in accordance with the policy of this International Association."

The amendment suggested by Mr. Drake was never made. The only explanation offered by Mr. MacIsaac for the failure to amend the Bylaws in accordance with Mr. Drake's suggestion was that the Bylaws Committee (described later in this decision) was unable to reach agreement concerning Bylaws amendments pertaining to the financial structure of the Council; apparently the Committee's inability to achieve a consensus on the matter of finances rendered it unwilling or unable to recommend Bylaw changes concerning less controversial matters such as election of officers.

18. At a business agents meeting of the Council in October of 1980 which was chaired by Mr. MacIsaac due to the absence of Mr. Allen, a motion was passed that an election of officers of the Council be held in February 1981. Mr. Allen subsequently wrote to Mr. Drake to request a ruling on the proper procedure. In his reply dated January 7, 1981, Mr. Drake, after noting that the question had already been answered in his letter of February 7, 1978, observed that Article VII, Paragraph A of the Bylaws had become "meaningless" as a result of the Constitution having been changed to provide for an International Convention every five years instead of every four years. He also wrote:

“… Therefore, prior to holding any nomination and election of officers of the District Council of Ontario, it will be necessary that the By-Laws be amended in accordance with Article XIV, the Amendment section of the District Council By-Laws.

In view of the above election of officers for the Council should not be held in February 1981 and you should be guided accordingly.”

19. Another Council deficiency arose from the failure of the Local Unions to elect representatives of the Council in accordance with the Bylaws. Article III, Section 2 provides that each Local Union that is a member of the Council "shall be represented by not to exceed three (3) delegates; namely: the business agent and two elected members from each affiliated Local Union". Section 4 of that Article provides:

"Delegates shall be elected at the Regular election of their respective Local Unions and shall serve for a period of not to exceed three years, unless removed for cause as governed by the Constitution of the International Association of Bridge, Structural and Ornamental Iron Workers."

Despite that provision, none of the Local Unions in question elected delegates to the Council at their regular elections after the expiry of the terms of office of the delegates originally appointed by the respective Presidents of the Local Unions on the authorization of Mr. Lyons. Mr. MacIsaac testified that prior to 1981, the other two delegates from Local 721 were elected by the membership at a regular (monthly) membership meeting of the Local, rather than at the time of the Local's regular election. It was not until October of 1981 that Local 721's Council delegates were elected at the time of the Local's regular election. Mr. MacIsaac's explanation for that failure to comply with the Bylaws was that the "past practice" of Local 721 "going back to 1957" (during the time of the Eastern District Council) was to elect delegates at a regular membership meeting rather than at the time of the Local's regular election. (Article III, Section 4 of the Constitution arid Bylaws of the Eastern District Council also required that delegates "be elected at the regular election of their respective Local Unions".) Mr. MacIsaac further noted that "there is no provision under the International Constitution for the names of the delegates to the District Council to be included on the ballot, only the names of the regular [Local Union] officers”’ nor is there any provision in the election guidelines booklet published by the International. It was also his evidence that notwithstanding the fact that before each regular election Local 721 submitted to the International the names of all candidates and the positions for which they were running, the International "never questioned that the delegates to the District Council were not listed". He further testified that Mr. Allen, as a member of Local 721, was present at a regular meeting of that Local at which the Council delegates were nominated. Indeed, Mr. Allen himself was being considered as a possible nominee until he pointed out that he was already an officer of the Council. As President of the Council, Mr. Allen was also the person who reviewed the credentials presented by delegates who attended Council meetings. Thus, it is reasonable to infer that the International official who was appointed as President of the Council by Mr. Lyons, was aware that the delegates from Local 721 were not elected at Local 721's regular election as required by the Bylaws of the Council. However, there is no evidence which indicates that this failure to comply with the Bylaws came to the attention of Mr. Lyons or the other members of the G.E.B. prior to the investigations which immediately preceded the trusteeship.

20. One of the duties of the Financial Secretary-Treasurer of the Council specified in Article VI, Section 4 of the Bylaws, is to arrange for an audit of the Council's financial accounts to be made at the end of each quarter by a Certified Public Accountant. However, no such audits were carried out during the first years of the Council's operations. Mr. MacIsaac, who testified that he was aware that audits were not being performed as required by the Bylaws, candidly told the Board, "I find it difficult to justify why we didn't have an audit." However, he also testified that the “per capita fund was relatively easy to keep track of” and that he was satisfied that the funds were properly protected on behalf of the members. Although Financial Secretary-Treasurer Kenneth Childs attended the hearing of this matter, he was not called as a witness to explain why audits were not performed as required by the By-laws.

21. The Council has two sources of revenue. The only source specifically provided for in the Bylaws is a "per capita tax" paid monthly by each Local Union on the basis of a specified amount for each dues paying member during the previous month, pursuant to Article V of the Bylaws, which provides:

"Section 1. The revenue of this District Council shall be derived by a per capita tax as follows:

Ten cents (10¢) for each official monthly dues receipt sold (excluding retirees) the previous month from each Outside Erection Local Union affiliated with this District Council and Five cent (SC) for each official monthly dues receipt sold (excluding retirees) the previous month from each Shopmen’s Local Union affiliated with this District Council.

Section 2. All per capita tax shall be due the first of each month based on the total of official monthly dues receipts sold during the preceding month.

Section 3. Any Local Union thirty (30) days in arrears shall not be entitled to representation in this District Council or derive any benefits therefrom until same has been paid.

Section 4. The funds for the District Council shall not be used for any purpose other than the legitimate expenses required by this constitution.

Section 5. Under no circumstances shall funds of this District Council be expended for the purchase of tickets for balls, benefits, picnics, raffles, nor for donations or loans.

Section 6. No gift shall exceed the amount of $50.00."

Per capita tax contributions were kept in a Royal Bank account in Hamilton. However, since 1977 the major source of funding for the Council has been a one cent per hour (subsequently increased to two cents per hour) employer check-off to the "Ironworkers District Council Fund" hereinafter referred to as the "Council Fund") pursuant to the provincial "structural" agreement and the provincial "rod" agreement. For example, Article 30.5 of the May 1, 1980 to April 30, 1982 "structural agreement" provides:

“Each employer will contribute one cent (1¢) per hour for each hour earned by employees covered by this Agreement to the Ironworkers District Counci Fund Effective May 1, 1981, the contributions will be increased to two cents (2¢).”

Contributions to the Council Fund were transmitted by employers to Eckler, Brown, Segal & Company Ltd. ("Eckler, Brown"), the administrator of that Fund, along with various other employer contributions, including the Ironworkers Trade Improvement Plan, the Ironworkers Central Welfare Fund, and the Ironworkers Ontario Pension Fund. Council Fund contributions were deposited by Eckler, Brown into a Royal Trust account in Toronto, from which various "lump sums" were transferred to the Hamilton Royal Bank account from time to time by the administrator on the instructions of President Allen and Financial Secretary-Treasurer Childs.

22. Decisions concerning the use of the monies derived from the per capita tax and the Council Fund were made by the business agents at their monthly meetings. After the business agents had approved a particular payment (such as an account payable or a disbursement) by motion duly moved, seconded, and voted on at such meeting, a cheque would be drawn on the Hamilton (Royal Bank) account by Messrs. Allen and Childs, who had signing authority with respect to that account.

23. Mr. MacIsaac testified that the Council Fund was used to finance transportation and accommodation for delegates who had to travel to Council meetings, legal fees incurred in relation to problems affecting the Local Unions, Local Unions were in financial difficulty, educational programs, hospitality and entertainment at conventions, and transportation, accommodation, and other fees pertaining to negotiations. It was Mr. MacIsaac's evidence that business agents were continually aware of the fact that there was no provision for the Council Fund in the Bylaws and of the resultant need to amend those Bylaws since there was "a consensus that the one cent per hour should come properly under the Constitution and Bylaws of the District Council". Accordingly, in April of 1977 a committee including George Allen, Allan MacIsaac, and Patrick Doyle was struck for the purpose of recommending Bylaw changes concerning the Council Fund and other matters. When Patrick Doyle resigned as Business Agent of Local 700, he was replaced on the committee in August of 1978 by his successor, Donald Stewart. The member of the Committee were unable to reach agreement on Bylaws amendment proposals with respect to the Council Fund, primarily because Mr. Stewart was of the view that the one cent per hour contribution should be transmitted directly to the Local Unions rather than being held centrally. Although agreement was reached on the desirability of various other amendments, such as removing the power of the Council President to negotiate collective agreements and to hire and discharge employees of the Council without the approval of the Council delegates, those proposed amendments were never adopted by the Council, nor sent to the G.E.B. for approval, as required by Article XIV of the Bylaws.

24. After discussing the Council' revenues and financial structure at a number of business agents meetings of the Council, the business agents passed the following motion on November 20, 1980 (in the words of Mr. MacIsaac) "to properly look after the one cent her hour contribution funds":

"That financial committee [sic], consisting of a representative from each participating local, be established to supervise and control the use of the 1¢ per hour deduction earmarked as a District Council Fund as per the collective agreement."

That motion was passed in the presence of James Phair at a business agents meeting of the Council chaired by Mr. Allen.

25. The financial committee, without the knowledge and consent of the Interna­tional, contacted Dave Brown (of Eckler, Brown etc) and instructed him to prepare a draft trust document concerning the Council Fund. The committee also contacted the employer representatives who administered the "Industry Funds" to which employers were required to contribute under provincial agreements to provide a source of revenue for employer bargaining agencies. It was Mr. MacIsaac's evidence that the committee used the employers' procedures as a source of guidance in setting up procedures for handling the Council Fund. The committee also obtained legal advice with respect to the draft trust document. The committee's efforts culminated in the execution of a Memorandum of Agreement and Declaration of Trust (the "trust document") of July 23, 1981. That document was signed by all of the members of the financial committee: James Harrower (the business agent for Local 700) and the complainants Kenneth Childs, Allan MacIsaac, John Donaldson, Gordon Verdecchia, and Donald Melvin. They each signed in two capacities, namely, as representatives of the Local Unions (700, 721, 736, 759, 765, and 786), which are identified in the trust document as the parties "of the first part", and as trustees, who are identified therein as the parties "of the second part".

26. Before the trust document was signed, it was amended by deleting many of the references to the "District Council" and by substantially broadening the uses which could be made of the monies in the fund. The original draft had provided (in Article II, Section 1) that the trust was to be used "solely and exclusively for financing the activities of the District Council ... and the Local Unions in the negotiation and implementation of collective labour agreements and such other activities related thereto as the Trustees may from time to time approve" (emphasis added). That section was amended by deleting the underlined words; thus, the trustees gave themselves an extremely broad discretion to use the funds for any activities which met with their approval. The trust document also provided that questions concerning any action to be taken by the trustees would be decided by a majority of the votes cast by trustees present at a meeting attended by at least four of the six trustees.

27. Mr. MacIsaac testified that the trust document was executed to protect the funds in the interest of the membership. While that may well have been one of the purposes of establishing the trust fund, the Board finds that another purpose was to ensure that District Council funds would be available to provide financing for the EPSCA complaint (as will be discussed in greater detail later in this decision). The members of the financial committee also wished to have the money "outside of the District Council Bylaws" so that loans could be made to Local Unions that were experiencing financial difficulties.

28. Although it is highly probable that Mr. Allen was aware of the existence and operation of the trust fund, there is no evidence that he informed Mr. Wilson or anyone at the International's headquarters about it, nor was headquarters apprised of it prior to late November of 1981 by Mr. Wilson or Mr. Phair.

29. It is clear from the evidence that a number of differences of opinion have arisen over the years between officials of the International, including General President Lyons and Canadian Director Wilson, on the one hand, and Mr. MacIsaac and various other officials of Ironworkers Local Unions in Ontario, on the other hand. For example, the latter were of the view that it would be "desirable to hold periodic Canadian conferences to deal with problems facing the Canadian Ironworker", but the former rejected that view on the basis that a separate conference for Canadian Local Unions "would not merit the additional costs involved", and on the further basis that "differences between labour laws from province to province would negate the ability of a Canadian conference to deal effectively with that question". (The International holds regional conferences midway between International Conventions. Some Canadian Local Unions attend the eastern conference, while others attend the central conference or the western conference.)

30. Decisions by the International to withhold "per capita tax" payments to the Canadian Labour Congress (the "CLC") at various times (as a result of certain areas of disagreement between the international building trades, including the respondent International, and the CLC, which need not be detailed in this decision) were also the source of substantial controversy. The business representatives who were members of the Council generally supported the CLC's desire for higher standards of self-government within Canadian locals of international trade unions, and were generally opposed to the International's decisions concerning the withholding of per capita tax, although they shared the International's concern about some of the issues, such as the CLC voting structure and the CLC's acquiescence concerning building and construction trades activity by the Quebec Federation of Labour in direct competition with the established Building and Construction Trades Council in the Province of Quebec, in which the International was an active participant. The business representatives expressed their concern by supporting various motions (implemented by telegram and letter) urging Mr. Lyons to restore payment of the CLC per capita tax and maintain the Ironworkers' affiliation with that body.

31. Another major area of controversy between the International and officials of the Council was the matter of bargaining rights in respect of the Electrical Power Systems Construction Association ("EPSCA"). That employers' association, which was established in 1973, represents (for purposes of collective bargaining) Ontario Hydro and various contractors which perform work on Ontario Hydro sites. Although many of the other building trades negotiated with EPSCA prior to 1978, it was not until then that the Ironworkers negotiated with that Association. Prior to 1978, there was a series of collective agreements between the International and Ontario Hydro. (The degree to which officials of the Ontario Ironworkers Local Unions participated in those negotiations is a matter of dispute between the parties which need not be resolved in the present case.) However, in 1978 it became necessary (as a result of Ontario Hydro's insistence) for the Ironworkers to negotiate with EPSCA. This caused a great deal of concern on the part of the business agents who represented the Local Unions at the Council as they were of the view, not shared by officials of the International, that the Local Unions, and through them, the Council, had bargaining rights in the electrical power systems sector for some of the contractors which belonged to EPSCA, and that those bargaining rights might be lost as a result of negotiations between the International and EPSCA. Their concern was heightened by the fact that the first Ironworkers collective agreement with EPSCA bore only the signature of Mr. Lyons, and not the signatures of the Local Union officials who had signed the memorandum of settlement which preceded that collective agreement. (Whether the persons signed as representatives of the Local Unions or as representatives of the International is also a matter of dispute). Their concerns were consistently made known to various International officials including Messrs. Lyons, Wilson, and Allen, but despite repeated efforts they were unable to reach a mutually satisfactory resolution.

32. That contentious matter came to a head in 1980 during negotiations concerning the provincial (reinforcing) rod agreement between the Rodmen Employer Bargaining Agency and the Rodmen Employee Bargaining Agency (which consists of the Council and the International). After conciliation procedures had been exhausted and the employees were in a position to legally strike, Mr. MacIsaac and other business representatives became aware that the International and EPSCA had entered into a collective agreement which purported to cover rodmen employed on Ontario Hydro projects. The business representatives were very disturbed by that development, the impact of which Mr. MacIsaac described as follows: "It took away practically all of our bargaining power with the Rodmen Employer Bargaining Agency [because] the major part of our reinforcing rod work was done on Ontario Hydro projects." Mr. Wilson, on the other hand, testified that the signing of that agreement would not lessen the bargaining power of the Local Unions in provincial bargaining because "the provincial rod agreement doesn't cover the electrical power systems sector; it only covers the ICI sector". (It is unnecessary for the Board to determine in these proceedings whether Mr. Wilson's view is correct or incorrect. The scope of the bargaining rights in question is one of the major issues in the EPSCA case and must await resolution in the context of those proceedings.)

33. Mr. MacIsaac and other business representatives continued to vociferously complain to Messrs. Lyons, Wilson, and Allen about the EPSCA situation. They arranged to meet with Mr. Lyons on July 23, 1980 during an Ironworkers Northeastern Regional Conference in Toronto. At that meeting, they expressed their views concerning the history of the bargaining rights pertaining to work performed on Ontario Hydro projects. Since there were differences of opinion on that matter, Mr. Lyons requested them to forward their views to him in writing. Messrs. Childs and MacIsaac complied with that request by letter dated August 1, 1980. On August 15, 1980 Mr. Lyons made an interim reply to that correspondence, in which he advised that there were significant discrepancies and that a full investigation would be made on the subject. After spending several weekends reviewing "a three foot stack of papers" which he described as "the complete record of what [had] transpired in connection with Ontario Hydro's construction operations", Mr. Lyons forwarded to the business representatives a detailed, five page letter in which he set forth the basis for his conclusion that the International had maintained the same approach which it had historically adopted concerning Ontario Hydro negotiations. He also concluded that since bargaining rights in respect of work performed on Ontario Hydro projects had been vested in the International for 27 years, there was no logic in approaching Ontario Hydro or EPSCA for the purpose of seeking to substitute the Local Unions in place of the International, as parties to the EPSCA agreement.

34. In mid September of 1980, a telegram was sent to Mr. Lyons advising him of the District Council's intention to contest the legality of the agreements between the International and EPSCA. President Lyons responded through the following telegram on September 17, 1980:

"On the afternoon of 9/16/80 telegram from D. Melvin, Recording Secretary, Iron Workers District Council of Ontario, was received stating:

‘Further to direction perceived at the District Council meeting on September 11, 1980 I am advising you of the following. It is our intention to contest the legality of the agreements with E.P.S.C.A. which were signed by International Officers of this Association without the authority of the respective membership or the Locals concerned. We will be seeking recourse as per the provision [sic] of the Labour Relations Act of Ontario.’

The meeting identified in this telegram precedes the conclusion of my investigation into factual situation surrounding historical practices of Ontario Hydro agreements. A decision on the part of involved Local Unions to take imprudent actions during the course of an investigation of which the involved Local Unions were aware and which commenced July 23rd and concerning which all interim communications indicated would be completed in a reasonable time indeed raises serious questions. I have been advised the results of my investigation have been transmitted 9/15 and 9/16. 1980 to all involved Local Unions who are also affiliates of the District Council of Ontario. I must, therefore, assume that actions set forth in your telegram will not be undertaken since they are even more ill-advised now that the Local Unions have received a complete statement as to the historical facts of Ontario Hydro agreements. In any event, however, let me caution you and others whose decision was described in your telegram that any action of such nature would be in complete violation of the Constitution of this International Association in addition to being an effort contrary to the best interests of the membership in Ontario and, accordingly, will be considered an [sic] evaluated in that light."

The complainant business agents construed that telegram as a threat that trusteeship would be imposed by the International if they participated in a proceeding under the Labour Relaiions Act in relation to the EPSCA agreement. However, in his testimony before the Board, Mr. Lyons stated that the telegram was not intended to threaten trusteeship, but rather was merely calling to their attention the fact that their proposed action would be in violation of the Constitution. Nevertheless, he agreed in cross-examination that "the telegram would cause people some concern", and added, "That's why we sent it." It was also his evidence that the International sends about a hundred such telegrams per year.

35. On September 23, 1980 a complaint (Board File No. 1300-80-U) was filed under what is now section 89 of the Labour Relations Act against the International, Norman Wilson, Ontario Hydro, and EPSCA, in which the present complainants (excluding Gordon Verdecchia), the Council, the Rodmen Employee Bargaining Agency, Local 700, and one Jim Lajeunesse complained that they had been dealt with by the respondents therein contrary to the provisions of what are now sections 64, 67, and 68 of the Act in respect of the 1978-80 and 1980-82 "rod" collective agreements which the International entered into with EPSCA. By letter dated September 25, 1980 to the Registrar of the Board, Maurice A. Green of Golden, Levinson sought to expand that complaint as follows:

"We are instructed to complain to the Board of further and additional misconduct engaged in by the Respondent International.

In September, 1980, the complainant District Council advised the Respondent International by telegram that, in view of the conduct of the International and the other respondents, 'we will be seeking recourse as per provisions of the Labour Relations Act of Ontario'.

On or about September 16, 1980 the General President of the Respondent International replied to this advice by telegram stating inter alia that 'any action of such nature would be in complete violation of the constitution of this International Association'.

The complainants state and the fact is that this telegram constitutes a clear threat that trusteeship will be imposed upon the complainants for the sole reason that they are about to participate in a proceeding under the Labour Relations Act. This conduct violates Sections 56, 61, and 71 of the Act.

The complainants accordingly request that the Board direct the following additional relief:

1. Declaration that such conduct violates the Act;

2. Cease and desist order reaching the Respondent International and any officer, employee, agent and/or other person acting on behalf of the Respondent International from threatening any of the individual complaints or any member or employee of the union complainants or imposing or purporting to impose any of the complainants in trusteeship for the reason that they are about to or have exercised their statutory rights under the Labour Relations Act."

3. At a meeting in Washington on October 30, 1980 between the representatives of the parties to that complaint, it was agreed that the complaint would be withdrawn since Mr. MacIsaac and the other persons in attendance thought that the EPSCA situation had been satisfactorily resolved. Mr. MacIsaac's testimony (in chief) concern­ing the resolution of that dispute was:

“We thought that we had all our problems resolved. We reached an understanding on the membership having a right to vote on the collective agreement - that they had a right to do so. We reached an understanding that the agreement should not be signed until the members vote on it. There was agreement that the Local Unions would participate in negotiations; the Local Unions would submit proposals and they would select a bargaining committee. We were also instructed by our General President on our return to Ontario to contact Ontario Hydro officials, or EPSCA' in order to clear up some outstanding issues of the current collective agreement.”

Unfortunately, Mr. Lyons' understanding of the resolution was materially different from that of Mr. MacIsaac. Thus, relations between the complainants and the respondents with respect to EPSCA continued to fester due to substantial differences of opinion among the parties concerning the basis upon which the matter had been resolved.

37. By February of 1981, it had become apparent to Mr. MacIsaac and the other complainants in the EPSCA case that the matter had not in fact been resolved to their satisfaction. In particular, the meeting which they wished to have with EPSCA concerning revision of the "rod" collective agreement that was in force at that time did not materialize. Accordingly, a second section 89 complaint (File No. 2367-80-U) was filed with the Board on February 3, 1981 pertaining to the EPSCA situation. That complaint included all of the allegations that were contained in the first EPSCA complaint plus a number of allegations with respect to events which followed the filing of the first complaint. (For ease of reference, that second complaint (File No. 2367-80-U) will be referred to in the remainder of this decision as the "EPSCA complaint".)

38. Hearings in respect of the EPSCA complaint scheduled for March 17, 19, and 20, 1981, were adjourned until April 9, 1981 on the agreement of the parties. At the April 9th hearing, another panel of the Board heard submissions concerning a number of preliminary matters and reserved its decision on them. The gist of that complaint and counsels' preliminary submissions are reflected in the following passage from that panel's decision dated September 17, 1981 (reported at [1981] OLBR Rep. Sept. 1244):

“1. The complainants have complained that the complainants have been dealt with by the respondents contrary to the provisions of sections 56, 59(l)(2) and 60 of The Labour Relations Act. Briefly, the complainants have alleged that collective agreements have been concluded by the respondent International Association of Bridge, Structural and Ornamental Ironworkers (the 'International') through the respondent Norman Wilson without either consultation with the complainants or considering their proposals. The complainants have also alleged that the collective agreements with Ontario Hydro and the Electrical Power Systems Construction Association ('EP'SCA') which have been concluded have not been subject to the usual approval by the membership of each complainant local trade union.

2. The complainants have requested a declaration that the respondents have breached the provisions of the Act referred to in paragraph one and (i) a declaration that the purported collective agreements signed by the International encompassing ironworker rodmen are null and void and that the respondent (sic) be ordered to permit the complaints to participate in the process of negotiation including the requirement that the respondents place before the relevant employer association or Ontario Hydro each and every proposal agreed upon for inclusion in negotiations by the membership of the complainants and of the District Council, (ii) a declaration that the respondents make every reasonable effort to negotiate and support such proposals, (iii) a declaration that the respondent (sic) be ordered to permit the complainants to subsequently hold ratification meetings to either approve or reject the proposed collective agreements, (iv) a declaration that the International reinsert the 'signing page' of one of the collective agreements, as originally approved and ratified by the complainants, (v) a declaration that EPSCA and/or Ontario Hydro be ordered to cease and desist from requiring members of the Rodmen Employer Bargaining Agency to adhere to or agree to implement the terms of the collective agreement, if any, entered into between EPSCA and the International encompassing rodmen, when such members of the Rodmen Employer Bargaining Agency submit bids for work to be performed on projects of Ontario Hydro and that EPSCA and Ontario Hydro be ordered to bargain only with the International when a negotiating committee of the International is present and made up of representatives from each complainant local trade union or its approved delegates, (vi) a declaration that, if the Board declare null and void the said collective agreements as herein requested, the terms and conditions set out in such agreements be frozen pursuant to the provisions of the Act until the parties have met and negotiated and the requirements of the Act have been satisfied before such terms and conditions can be altered, (vii) a declaration that, if the International, Ontario Hydro and EPSCA be ordered to pay all damages arising out of their illegal actions and which give rise to loss of income and benefits to each member of the complainants who have been forced to work under agreements which they had no opportunity to authorize or ratify, such monies be paid with interest from the date at which they should have been received, and (viii) an order that the respondents be ordered to pay all legal costs of the complainants arising out of this complaint.

3. At the commencement of the hearing in this complaint, counsel for the International and Norman Wilson made a motion to strike out the names of the International Association of Bridge, Structural and Ornamental Ironworkers District Council of Ontario (the ‘Council’), the Rodmen Employee Bargaining Agency (the ‘Agency’) and the International Association of Bridge, Structural and Ornamental Ironworkers, Local 700 ('Local 700') from the list of complainants in the style of cause. Counsel informed the Board that it was his information and understanding that the Council had not authorized the making or filing of a complaint and that such a complaint had not been authorized under the constitution of the Council in that there had not been a duly convened meeting as required under the constitution. Counsel pointed out that the Agency pursuant to a designation by the Minister of Labour dated March 21, 1978, consisted of the International and the Council. It was the position of counsel that his client the International had neither been asked for its approval nor given its consent to any proceeding against itself. It was his position that, in the absence of any constitution and by-laws for the Agency, the consent of the International and the Council is required in order to commence any proceeding under the Act in the name of the Agency. Counsel informed the Board that he had been advised by James Harrower, the business agent of Local 700, that Local 700 did not wish to be part of these proceedings and that Mr. Harrower would so inform counsel for the complainants.

4. Counsel for the International and Mr. Wilson argued that the onus of establishing authority or competence to act lies on he who asserts an authority or competence to act. Counsel further argued that the Agency is a statutory creation under section 127)l)(a) of the Act and consists of the International and the Council. Counsel stressed that an entity such as the Agency which had neither a constitution, by-laws or officers could not only act by consensus and that in the circumstances consensus meant unanimity. It was the position of counsel that the International had never authorized this proceeding and that the Council had never held a meeting where it had been determined that this complaint should be brought before the Board. Counsel characterized any meeting of business agents who are representatives on the Council as merely a meeting of these business agents and not a meeting under the constitution and bylaws of the Council. Counsel further argued that, in any event, none of the complainants may make a complaint under section 60 because none of the complainants are employeed and that none of the business agents named as complainants may make a complaint under section 59(2)."

(emphasis added)

39. In an effort to have a full counsel meeting held, Mr. MacIsaac sent the following telegram on May 6, 1981 to Mr. Allen:

"Respectfully request that business agent meeting of Iron Workers District Council of Ontario scheduled Thursday May 21 81 be declared a full District Council Meeting. This request meets with the approval of Business Agent [sic] of Locals 721 736 759 765 and 786. Each Local is prepared to have these [sic] delegates in attendance.

You should be advised that we have not held a full District Council Meeting under our charter which was issued in June 1976.

Business Manager Local 721 and Vice President of District Council Allen MacIsaac on behalf of Locals."

Under the circumstances, it is reasonable to infer that one of the major reasons why Mr. MacIsaac wished such a meeting to be held was to enable the Full Council to pass a motion authorizing the filing of the EPSCA complaint on behalf of Council and retaining Golden, Levinson as its counsel in respect of that complaint. It is also reasonable to infer that officials of the International were aware that this was one of the major reasons why such a meeting was desired.

40. Mr Allen sent a copy of that telegram to Mr. Lyons and asked what he should do. That request prompted Mr. Lyons to cause a check to be made of the Council records on file at the International's headquarters. Having discovered that those records verified Mr. MacIsaac's assertion that there had never been a full Council meeting, Mr. Lyons asked his staff to find out who were the delegates who had "sat back for five years, never held a meeting, and never said a word". A check of the ballots filed by the Local Unions in respect of their elections revealed that no delegates had been elected. Mr. Lyons then "scanned some of the files" himself and discovered a letter from Mr. Allen to Mr. Childs requesting an audit. When a review of the General Treasurer's records revealed that no audits had been filed by the Council, Mr. Lyons directed the General Treasurer to assign a member of his staff to further investigate the matter.

41. Mr. Lyons' response to Mr. Allen's telegram is set forth in the following letter, dated June 12, 1981, to Mr. Allen, a copy of.which was sent to Mr. MacIsaac for his information:

“In your report of May 7, 1981 you attached a copy of a telegram from Allen [sic] MacIsaac, Business Agent of Local Union No. 721, in which he requested the May 21, 1981 Business Agents meeting be declared a full District Council meeting. In that telegram, in support of that request he stated, 'You should be advised that we have not held a full District Council meeting under our charter which was issued in June 1976.'

I was quite surprised to see that comment and immediately commenced an investigation which investigation is still continuing. It was quickly established that in accordance with our records the above statements is correct. The investigation then established that of the nine (9) Local Unions eligible to be affiliated with the Ontario District Council eight (8) of these Local Unions did not in their last election place on the ballot or elect the two (2) additional delegates to the District Council that the By Laws of the District Council requires. These two delegates are in addition to the Business Agent who in accordance with the By Laws of each Local Union is a delegate to the District Council by virtue of office. Local Union No. 834 is the only Local Union that nominated and elected its full delegation.

Therefore, not only has the District Council not held meetings, but also sixteen (16) of the potential twenty-seven (27) Local Union delegates have never been elected. Under this set of circumstances, a meeting of the District Council to conduct any form of business is totally inappropriate. Therefore, no meeting should be scheduled until the General Executive Board has met to discuss and determine what course of action would be appropriate under the existing circumstance.

The investigation of the District Council that I commenced for the reasons described above will continue and you will be further advised."

Consequently, the full council meeting that had been scheduled to be held on June 18, 1981 by Mr. Allen pursuant to Mr. MacIsaac's request, did not take place. However, a business agents meeting was held that day at which an account pertaining to the EPSCA case was presented for payment. When Mr. Allen advised the business agents that he had been instructed by Mr. Lyons not to approve or to sign any cheques on behalf of the Council, Mr. Childs stated that since it was apparent that they would be unable to properly conduct any further business, he was making a motion to adjourn. That motion was seconded and carried. In a discussion which took place in a coffee shop after that meeting, some of the business agents questioned why Mr. Lyons would instruct Mr. Allen not to sign any further cheques. In response to that question, Mr. Allen informed them that the Council money was really money belonging to the International and that they were not going to use it against the International by paying legal fees concerning the EPSCA complaint.

42. It appears from the evidence adduced before the Board in these proceedings that Mr. Allen misinterpreted Mr. Lyons' instructions concerning the signing of cheques. Rather than directing that no cheques be signed, Mr. Lyons had intended only to stop "unusual" expenditures, such as payment of legal fees and other expenses in respect of actions against the International, since he was of the view that such expenditures were not a proper use of Council funds. He had not intended to preclude reimbursement of "normal" expenses in connection with meetings of the business representatives. When he became aware of that misunderstanding, he sent a clarifying letter to Mr. Childs and Mr. Allen. Despite that misunderstanding, we are satisfied on the basis of all the evidence before us, that the purpose of Mr. Lyons' instructions to Mr. Allen concerning the signing of cheques was to remove the Council as a source of financing for the EPSCA case. The subsequent clarification of his instructions did nothing to modify the realization of that objective.

43. On June 19, 1981, Mr. MacIsaac wrote to Mr. Lyons to express his grave concern that the latter had ordered what he perceived to be a suspension of the operations o~ the Council. Mr. MacIsaac also noted that Canadian Director Norman Wilson, International Representative George Allen, and General Organizer James Phair had attended "many regular monthly meetings of the District Council over the [preceding] five years" and had never voiced any objection to the composition of the Council. In his response dated July 7 at that year, Mr. Lyons noted that he had not suspended the operations of the Council as alleged by Mr. MacIsaac, but rather had merely suspended "its first regular meeting" in view of the International's knowledge (as a result of the investigation triggered by Mr. MacIsaac's telegram of May 6th) that the Council was not in a position to meet the requirements set forth in the Bylaws for regular Council meetings. In what appears to be a veiled reference to the EPSCA complaint and counsel's preliminary argument with respect to the Council as a party to that complaint, Mr. Lyons also expressed the view that "any actions which may have been taken in [meetings of the Council Executive Board or Business Agents] which require approval through or by a District Council regular meeting or vote are clearly subject to challenge as being unconstitutional".

44. From July of 1981 until December of that year when the trusteeship that gave rise to this complaint was imposed, the Council's operations were financed by the trust fund that was established pursuant to the aforementioned trust document. Payment of various bills was approved at the regular business representatives' meetings at which International representatives Phair and Allen were generally present. After those meetings, the trustees met and took the necessary steps to instruct the administrator of the trust fund to pay the bills which had been approved for payment. Neither Mr. Phair nor Mr. Allen attended any of the trustees' meetings.

45. At the initial meeting of the trustees on July 29, 1981, Mr. MacIsaac was elected chairman of the trustees, with Mr. Harrower as vice-chairman and Mr. Baillie as recording secretary. In addition to the payment of routine expense reimbursements for business representatives, the trustees passed a motion "that the trust fund advance $20,000 U.S. to Ken Childs re: hospitality expenses at the Convention of the International Union". (It was noted in connection with that motion, that the Western District Council had agreed to cover half of the actual hospitality expenses.) The second meeting of the trustees was held on September 17, 1981. At that meeting, in addition to payment of normal expenses, the trustees, after noting that Local 765 was having financial difficulties which made it very difficult to maintain essential services to its membership, approved a loan to that Local of $10,000, "to be repaid without interest when the Local is financially secure". As noted by counsel for the respondents, Section 5 of Article V of the Bylaws (quoted above) precludes Council funds from being expended for loans under any circumstances. Thus, the trustees used the trust fund for a purpose that was not permitted by the Council's Bylaws.

46. The third and final meeting of the trustees was held on November 3, 1981. At that meeting bills concerning business agents' meeting expenses were presented, discussed, and approved, as were accounts from Golden, Levinson for legal fees pertaining to several certification applications. Following a discussion concerning legal fees, the trustees "agreed that as a general rule, the [the trust] fund would only be billed for legal costs resulting from Ontario Labour Relations Board Hearings.”

47. The decision of the Board (differently constituted) concerning the preliminary submissions of counsel in relation to the EPSCA complaint was issued on September 17, 1981, (after the Board had provided the parties to that complaint with an extensive opportunity to pursue settlement discussions). In that decision (reported at [1981] OLRB Rep. Sept. 1244), the Board wrote, in part, as follows:

“10. With the deletion of Local 700 from the complainants [on the agreement of the parties] it appears to the Board that there is no longer a question that counsel for the complainants has been authorized to act for at least some of the complainants. The question of whether counsel for the complainants has been authorized to represent all of the complainants depends upon various questions of fact and law. Since there has not been any agreement on the facts in dispute, it is necessary for the Board to hear the evidence on the issues in dispute from all of the parties. It appears to the Board that the complainants are relying on the performance of certain alleged conduct as authorizing the making of this complaint and that this alleged conduct is peculiarly within the knowledge of the complainants. In these circumstances, the Board determines that the complainants bear the evidential burden of introducing this evidence before the Board. [The Board's review of the law concerning the evidential burden and 'the legal burden' has been omitted.]

12. The Board is of the opinion that the views expressed in A. V Halltum [(1973) OLRB Rep. Nov. 599)], apply to the instant coin-plaint. The legal burden rests with the International and Norman Wilson to establish what they are alleging, namely, that the coinplainints do not have the authority or competence to make certain complaints within this proceeding.

13. The Board agrees with the International and Norman Wilson that none of the complainants may make a complaint under section 60 because none of the complainants are employees in a bargaining unit....

14. The matter is referred to the Registrar to be listed for continuation of hearing .”

A further decision dated October 27, 1981 was prompted by a request for reconsideration of that decision. In his request, counsel for the complainants asked the Board to deal with the issue of whether a "representative action" could be filed on behalf of employees in the bargaining unit or, in the alternative, to permit employees in the bargaining unit to be added as parties. After noting that the complainants had not made an actual request to amend the style of cause, the Board directed the complainants "to inform the Board and the respondents in writing of the precise terms of the amendments to the style of cause and content of the complaint which they appear to be seeking" and indicated that the parties would be permitted to "make representations on any request with respect to an amendment by the complainants at the commencement of the next hearing". In response to that direction, counsel for the EPSCA complainants requested in a letter dated November 12, 1981 that the style of cause be amended so as to add a large number of individually named complainants.

48. During the fall of 1981, representatives of the parties to the EPSCA case continued their efforts to resolve their differences. Although the Board was not provided with the details of those discussions because counsel (quite properly) were of the view that evidence concerning the particulars of settlement discussions should not be adduced before the Board, it is clear that the parties made extensive efforts to avoid litigation of that complaint. Indeed, it appears that in October or November of 1981, the differences between the International and the EPSCA complainants were thought to be close to being resolved. Unfortunately, those discussions did not result in a settlement of the EPSCA complaint.

49. The aforementioned investigation into the financial affairs of the Council was delayed by a number of factors, including the extensive preparations necessary for the International Convention (that was held in Florida from August 10 to 14, 1981), and a major court case concerning racial discrimination. After the Convention, Mr. Lyons asked General Treasurer Anding about the investigation and was told that Mr. Anding's staff "had been busy and hadn't gotten around to it". Mr. Lyons asked him "to get going", but unfortunately the General Organizer assigned to the matter suffered a fatal heart attack. After further delay, responsibility for the investigation was transferred to Robert Pfister, another General Organizer assigned to the General Treasurer's office.

50. Mr. Pfister commenced his investigation in Toronto on or about November 16, 1981. After meeting with Mr. Wilson, he telephoned Mr. Childs who confirmed that the funds of the Council had not been audited as required by the Bylaws. Mr. Childs also informed him of the existence of the trust fund. When Mr. Pfister subsequently asked Mr. Wilson about the trust fund, Mr. Wilson told him that he was unaware of it. Mr. Wilson then made inquiries of James Harrower, a business representative of Local 700 (the Local Union which had been removed from the style of cause in the EPSCA complaint at the request of Mr. Harrower, because that Local did not wish to be part of those proceedings) and was advised that such a trust did in fact exist. After Mr. Wilson had requested and obtained a copy of the trust document from Mr. Harrower, he telephoned Mr. Pfister and told him that he would forward it to him immediately.

51. Mr. Pfister's "special report" on the Council is contained in the following memorandum dated November 23, 1981 to Mr. Lyons:

“I arrived in Toronto, Canada, on Monday, November 16, 1981, in compliance with your instructions to investigate the financial affairs of the District Council of Ontario, Canada.

In checking the By-Laws of the district council, the source of revenue comes from each outside local union paying Per Capita Tax of $.l0 per month for each member from the outside local unions. While checking the agreements for the Province of Ontario, I found there is a check-off of $.0l per hour into a District Council fund and effective in May 1981, $.02 per hour for each employee will be deducted for the District Council fund.

In talking to Kenneth Childs, the Financial Secretary/Treasurer of the district council, he informed me this was not district council money and that the money was put into a trust agreement and can be spent by the Business Agents of the district council. In checking the minutes of the council, I found on several occasions, that money was withdrawn from this fund and put into the fund that the Per Capita Tax money was in. At the present time there is approximately $200,000 in this trust fund. It appears that this trust fund was established so that this money could be spent by the Business Agents without being affected by the District Council By-Laws. As of this date no audit reports have been received by International Headquarters since the District Council was chartered in 1976.

I have instructed Kenneth Childs to have both the District Council fund and the trust fund audited and he told me he would have the audits by the middle of December 1981. In checking the district council files, there are several communications by the president of the council, George Allen, to Kenneth Childs, to have the funds audited. But this was never done. It seems the only way the District

Council of Ontario can function properly is to be put under International supervision.”

(Neither Mr. Ffister nor Mr. Childs testified before the Board.)

52. Counsel for the complainants argued that Mr. Pfister's investigation was so superficial as to justify the Board in drawing the inference that it was a foregone conclusion that he would recommend that the Council be placed in trusteeship. However, we Jo not find that submission to be persuasive. Although Mr. Pfister could have conducted a more extensive investigation, the investigation that he did conduct confirmed the lack of audits and disclosed the existence of the trust fund. Mr. Pfister spoke with Mr. Wilson and with Mr. Childs, who was the Financial Secretary Treasurer of the Council. Given that he was investigating the finances of the Council, Mr. Pfister's approach appears to have been quite methodical and logical. He also followed up on the information that he received by obtaining a copy of the trust document through Mr. Wilson.

53. Mr. Lyons' evidence in chief concerning his knowledge of the report was, "I think I first saw that report around Thanksgiving. It was typed at headquarters. I'm sure within a couple of days." He also testified (in chief), "I could have read [Pfister's] report before [the [December 3rd] meeting but the report doesn't mention anyting about the trust fund, does it?" After being given an opportunity to review the third paragraph of the Pfister report (quoted above), Mr. Lyons acknowledged that it did contain a specific reference to that "trust agreement" and the "trust fund". He also confirmed in cross-examination that he had seen Mr. Pfister's report before December 3rd. However, in reexamination be told the Board that although Mr. Pfister's report had been on his desk for some time, he did not actually read it until the day that counsel (Mr. Minsky) came to Washington to report on the settlement discussions concerning EPSCA. Although Mr. Lyons was unable to recall the date of that meeting, it is clear from the evidence of Mr. Wilson that it was December 3, 1981, when Mr. Lyons met with Mr. Minsky, Mr. Wilson, Mr. Pfister, Mr. Drake, and some other officials of the International in Washington. During the course of that day, they discussed a number of matters including the EPSCA case and settlement efforts concerning that case, Mr. Pfister's financial investigation concerning the Council, the trust document, and the desirability of placing the Council under trusteeship. On the morning of December 3rd, Mr. Minsky reported on the EPSCA case and the progress of settlement discussions concerning that case. The discussion of the EPSCA case lasted for over an hour, with some interruptions due to Mr. Lyons being called away from time to time to deal with other matters. After lunch there was a discussion of "working assessments" (an unrelated matter), followed by a discussion of the operations of the Council and the Pfister report.

54. Thus, Mr. Lyons ultimately told the Board that it was not until late in the day on December 3rd that he first saw the Pfister report and the trust document. His reaction to he trust document, and in particular to the extremely broad latitude which it gave to the trustees concerning the purposes for which the monies could be used, was one of "outrage". He testified: "I remember saying to Pfister, what the hell were we doing all day if this is in existence." He also told the Board:

"Here is a very substantial amount of money under the protection of the Constitution of the International, the Bylaws of the District Council, and the Bylaws of each Local Union. It was the members' money, money withheld from their pay, taken out of the umbrella of protection of the Constitution and By-laws where it was protected by bonding, the requirement of audits, and charges and trials.... It was removed out of that umbrella of protection and placed in a trust fund under the auspices of six individuals, with no protection to the members other than their own potential liability to properly carry out the trust."

It was also his evidence that "as soon as [he] got to the bottom of page two of the trust document on December 3rd [and read that the trust could be used for 'financing the activities of the signatory Local Unions in the negotiation and implementation of collective labour agreements and such other activities as the Trustees may from time to time approve'] is when [he] decided to recommend trusteeship to the G.E.B." He expressed the view that the International would have been susceptible to legal action if it had failed to act to protect the interests of the membership once it became aware of the trust document. In cross-examination Mr. Lyons agreed with counsel for the complainants that the Bylaws of the Council make no provision for the Council Fund. (Indeed he went so far as to speculate: "It may be that they illegally collected it and that it probably should be returned to the membership.") However, we accept his evidence that at the time the Council was put under trusteeship, he did not know whether the Council had a proper Bylaw to collect the Council Fund, but rather knew only that the business representatives had transferred it to the trust fund. We also accept his evidence that he believed at the time that the fund would not be protected by the Union's bond coverage. (It is unnecessary for the Board to determine, for the purpose of these proceedings, whether or not that belief was correct.)

55. On December 4, 1981, President Lyons caused the following telegram to be sent to Mr. MacIsaac and to each of the other trustees:

“I have learned this date that you as an officer of your local union in Ontario, Canada and as an individual member of this International Association became a trustee under a Memorandum of Agreement and Declaration of Trust dated July 23, 1981 identifying as trustees six members of this International Association; namely, Lawrence Baillie, Kenneth Childs, James Harrower, Allan MacIsaac, Donald Melvin and Gordon Verdecchia.

Your action together with the action of your five (5) co-trustees is in fact a diversion of funds belonging to the Ontario District Council, International Association of Bridge, Structural and Ornamental Iron Workers, the custody and disposal of which is protected for the benefit of the membership of this International Association by the constitution of this International Association.

You should immediately comply with the following instructions which are first you should notify whoever has been designated to hold the monies contained in this trust that he is to take no action in dispensing such funds other than in accordance with instructions that I will issue for the return of those funds to the constitutionally established body to which original contributions were made; specifically. The Ontario District Council, International Association of Bridge, Structural and Ornamental Ironworkers. [sic]

Secondly, you should instruct the same parties currently holding these funds to give full cooperation to instructions which will be issued by me as General President of this International Association and be ready to provide all books and records relating to the trust as it now exists and further you should notify Eckler, Brown, Segal Co. Ltd. who heretofore and possible [sic] currently receives and distributes all monies received from collective bargaining contributions designated for the Ontario District Council to anticipate and cooperate with similar instructions.

Finally, you should advise me by return telegram within two (2) working days after receipt of this telegram that you have taken the necessary steps to comply with the instructions issued herein and I call your attention to Article IX, Section 13 found on page 24 of the constitution of this International Association.”

(Mr. Lyons also sent a telegram to Eckler, Brown to urge their cooperation and to ascertain the location of the funds covered by the trust document.) Each of the six trustees, including Mr. MacIsaac, sent the following telegraphic response to Mr. Lyons:

“At an emergency meeting of the Business Agents this afternoon, we reviewed the very surprising contents of your December 4th wire. We do not understand the inferences in the wire but, in the interest of the membership are very reluctantly prepared to comply with your instructions. We strongly deny that any improper activity has occured [sic] and deny specifically that there has been any improper diversion of funds. In fact, the funds referred to are used exclusively for the benefit of the membership in exactly the same manner as they have been used in the past. We point out that we are on the threshhold of 1982 provincial wide bargaining for which we are legally accountable to the membership, as the Government designated bargaining agency. Ready access to these funds is essential to prepare for that bargaining on behalf of vertually [sic] all our Ontario members. Any interference can only operate to the detriment of our membership. We note that the trust agreement referred to, executed by officers of the six Ontario Local Unions, provides the International Union and the membership with more legal protection for the funds than has ever existed in the past. We ask that you attend a meeting of Business Agents in Ontario at your earliest convenience in order to explain to us your concerns and the allegations contained in the telegram. In the meantime we have instructed the holder of the funds to freeze same until further notice. Your unfortunate reference to possible suspension under the Constitution has caused considerable alarm in Ontario not only among the Business Agents, but among those members in Ontario presently apprised of the situation. This reply is forwarded to you without the approval of the membership of the six Local Unions, and your telegram will be placed before the members at the next scheduled monthly general meetings for their consideration and possible action.”

56. On December 10, 1982 at an afternoon G.E.B. meeting called for the purpose of considering the operations and activities of the Council, Mr. Lyons reviewed the results of the International's investigation. (December 10th was the earliest date following December 3rd on which the members of the G.E.B. were available for a meeting.) After discussing the matter at some length, the G.E.B. decided to place the Council under International supervision and control effective Monday December 14, 1981. In reaching that decision, the G.E.B. considered Mr. Pfister's report, the trust document, and information provided by Mr. Lyons concerning the other irregularities in the operation of the Council. (It is unclear from the evidence whether the G.E.B. was made aware that the business representatives had agreed to effectively freeze the monies in the trust fund. However, despite Mr. Hayes' able argument to the contrary, we are of the view that nothing turns on whether or not they had that information before them.

57. Following its decision to impose trusteeship, the G.E.B. caused the following letter dated December 10, 1981 to be forwarded to the officers of the Council and the President of each Local Union affiliated with the Council, with instructions that it be read to the membership of each Local:

“This is to advise that the General Executive Board of this International Association has received a report concerning the investigation of activities and operations of the Ontario District Council, International Association of Bridge, Structural and Ornamental Iron Workers, Ontario, Canada.

After a prolonged discussion of all of the above, the General Executive Board found that:

1. The District Council of Ontario has failed to comply with Articles III, IV, V, VI and VII of its Constitution and By‑Laws.

2. The officers and in particular the Financial Secretary-Treasurer of the District Council have acted irresponsibly and failed to discharge their duties as prescribed in the applicable sections of the Constitution and By-Laws of the Ontario District Council.

3. Funds belonging to the Ontario District Council have been held contrary to the District Council's Constitution and By‑Laws including more recently improperly diverted from the Council by the Memorandum of Agreement and Declaration of Trust dated July 23, 1981 between International Association of Bridge, Structural and Ornamental Ironworkers Local Unions 700, 721, 736, 759, 765 and 786 of the First Part and L. Baillie, K. Childs, J. Harrower, A. MacIsaac, D. Melvin, and G. Verdicchia [sic] of the Second Part.

4. The Ontario District Council as currently constituted and operated has placed in jeopardy its responsibilities and duties as the designated bargaining agent in a legal manner.

The General Executive Board, after careful consideration and deliberation, and in order to:

1. Protect the interest of the Ontario District Council and the membership of the affiliated local unions which comprise said Ontario District Council,

2. Assure that the Ontario District Council will comply with the provisions of its Constitution and By-Laws,

3. Correct the financial malpractice of the Ontario District Council,

4. Assure the performance of the Ontario District Council as a bargaining agent,

5. Restore democratic procedures in the Ontario District Council,

6. Otherwise carry out the legitimate interest of the Ontario District Council and this International Association,

unanimously decided, pursuant to and in accordance with the provisions of Article XII, Section 7 of the International Constitution, to place the Ontario District Council, International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO, under International supervision and control effective as of Monday, December 14, 1981. The General Executive Board further decided that beginning as of such date and until further notice, the following shall prevail:

1. All offices of the Ontario District Council shall be and are hereby declared vacant.

2. All business and affairs of the Ontario District Council shall be administered by James Phair, who is hereby designated as Administrator of the Ontario District Council.

3. All officers of the Ontario District Council are hereby instructed to surrender and deliver immediately upon being notified by this letter dated December 10, 1981 to the above-named Administrator, all funds, assets, property, records and other documents they have in their possession belonging to said Ontario District Council. James Phair, in his capacity as Administrator, is authorized to obtain the possession of the aforementioned. All of the aforementioned shall remain the property of the Ontario District Council and shall be administered by the named Administrator in accordance with the applicable provisions of the International Constitution and for the benefit and protection of the members of the affiliated local unions of said Ontario District Council.

The imposition of trusteeship by the International Association at this time pursuant to Article XII, Section 7 of the International Constitution is an emergency measure and the General Executive Board within forty-five (45) days after the completion of an audit of the Ontario District Council will hold or cause to be held a full and fair hearing to determine the propriety of its action in placing the Ontario District Council under International supervision, notice of which hearing will be given to you.”

(That letter parallels the findings, purposes, and decision set forth in the Minutes of the December 10th meeting of the G.E.B.)

58. By letter dated December 14, 1981, the Registrar of the Board forwarded Notice of Continuation of Hearing with respect to the EPSCA complaint, which was scheduled to be heard on Tuesday February 9th, Wednesday February 10th, and Friday February 26th, 1982. (Those hearings were subsequently cancelled by the Board to permit the instant complaint to be dealt with prior to the EPSCA complaint.) As contended by counsel for the complainant, the scheduling of that matter for continuation of hearing reflects the fact that settlement discussions among the parties had not met with success.

59. In support of their complaint, the complainants also drew the Board's attention to the following letter dated January 5, 1982 which Mr. Phair, in his capacity as Administrator of the Council, caused to be delivered to Golden, Levinson, counsel for the complainants in these proceedings and in the EPSCA complaints, on or about that day:

“As you know, I was appointed by the General Executive Board ('the G.E.B.') of the International Association of Bridge, Structural and Ornamental Iron Workers, which was placed under International supervision effective December 14, 1981. I understand that you are purporting to act on behalf of or in the name of the District Council in certain proceedings before the Ontario Labour Relations Board.

By letter dated December 10, 1981, the G.E.B. informed the officers of the District Council and its affiliated Local Unions of the District Cou:ricil of such International supervision and of my appointment as Administrator. The G.E.B. specifically instructed the District Council's officers, including Mr. Donald Melvin, its Recording Secretary, to surrender and immediately deliver to me all funds, assets, property, records and other documents which they might have in their possession belonging to the District Council. I repeated this request to Mr. Melvin in telegrams which I sent to him on December 21 and December 23, 1981 and requested his compliance by December 30, 1981. As of this date, Mr. Melvin has still not complied with my request but rather, by telegram dated December 24, 1981, informed me that he could not obtain the release from your office of documents belonging to the District Council despite his apparent attempt to do so.

In addition, by my letter dated December 23, 1981 to Mr. Melvin, I requested that he provide me with information concerning any legal proceedings in which the District Council might be involved and as well, the name or names of the law firms purporting to act on behalf or in the name of the District Council.

I therefore request that you release and remit to me by no later than January 7, 1982, all documents in your possession which are the property of the District Council and to advise me by that date of any legal proceedings in which your law firm may be purporting to act for or in the name of the District Council, including the nature of such cases and the District Council's interest in same.

I am of course aware of the Complaint dated February 3, 1981, under Section 79 of The Labour Relations Act (Board File No.: 2367-80-U) and of the fact that application was made at the commencement of the hearing before the Board on behalf of the International Association of Bridge, Structural and Ornamental Iron Workers and Mr. Wilson to strike out the names of the District Council and the Rodmen Employee Bargaining Agency from the list of complainants in the style of cause. Since, in my view, the District Council and the Rodmen Employee Bargaining Agency never properly retained your firm in such Complaint and since, in any event, I do riot wish the District Council to be involved in these proceedings either as a complainant or as part of the Rodmen Employee Bargaining Agency, I request that you cease to act on behalf of the District Council in this regard. Further, I request that you immediately ask the Board to remove the names of the District Council and the Rodmen Employee Bargaining Agency from the style of cause in these proceedings .”

(The parties advised the Board that they had satisfactorily resolved the matter of custody of documents.) Mr. Phair told the Board that the main object of that letter was "to get the Council's name off any and all actions pertaining to the International". He also expressed the view that the Council was "set up as a co-ordinating body to coordinate activities and problems between the Locals and the International; it was not set up to sue the International". During cross-examination he emphasized that view by stating, "I don't believe it (the Council) was set up to kick the International in the teeth."

60. Before further considering the factual context in which this case arose and the inferences which can properly be drawn concerning the reasons why the Council was placed under trusteeship, the Board will consider the labour law principles to be applied in this matter.

61. "Trusteeships" are dealt with as follows in section 82 of the Act:

“(1) A provincial, national or international trade union that assumes supervision or control over a subordinate trade union, whereby the autonomy of such subordinate trade union, under the constitution or by-laws of the provincial, national or international trade union is suspended, shall, within sixty days after it has assumed supervision or control over the subordinate trade union, file with the Board a statement in the prescribed form, verified by the affidavit of its principal officers, setting out the terms under which supervision or control is to be exercised and it shall, upon the direction of the Board, file such additional information concerning such supervision and control as the Minister may from time to time require.

(2) Where a provincial, national or international trade union has assumed supervision or control over a subordinate trade union, such supervision or control shall not continue for more than twelve months from the date of such assumption, but such supervision or control may be continued for a further period of twelve months with the consent of the Board.”

As noted by counsel for the respondents, section 82 imposes no impediments or constraints on an international union which places a subordinate union under trusteeship, other than the requirement of filing certain information with the Board. As observed by the Board in Operative Plasterers' and Cement Masons' International Association of the U.S.A. and Canada, [1978] OLRB Rep. March 23, at paragraphs 10 and 11:

"10. ... This lack of impediments or constraints would appear to reflect a recognition on the part of the Legislature that most trusteeships are imposed as a result of real and legitimate concerns on the part of the union involved. For example, a trusteeship may be imposed because of mismanagement or dishonest use of local funds, because a local has become so torn by dissent that it cannot function properly, or perhaps to remove officers who have either become dictatorial or who have failed to administer the local in a responsible manner. At times, particularly with small locals, a trusteeship may be imposed simply because none of the members of the local are willing to assume the responsibilities of elected office.

11. The Legislation recognizes that trusteeships generally have a legitimate purpose, but also places restrictions on their duration. Trusteeship is inevitably accompanied by a restriction on the ability of the local's membership to participate in the government of the local or to have a say in the policies adopted by the local will [be] the likelihood that the policies and practices adopted by the local will not be reflective of the wishes of the local's membership.”

12. Counsel for the respondents argued that reading subsections (1) and (2) of section 82 together makes it clear that the Board has no power at all to inquire into the validity of the first year of operation of a trusteeship. He contended that the Board's jurisdiction is triggered only if and when the parent body wishes to prolong the trusteeship beyond its first twelve months. Although it is clear that under section 82 an international union does not need the Board's consent to impose a trusteeship on a subordinate union for a period of up to twelve months, there is nothing in section 82 which in any way precludes the Board from exercising its broad remedial powers under section 89(4) 10 direct such union to cease supervision or control over the subordinate body, or to modify its supervision or control in such manner as directed by the Board in order to rectify the act or acts complained of, if the Board is satisfied that the imposition or continuation of the trusteeship constitutes an unfair labour practice in violation of a substantive provision of the Act, such as section 70 or 80(2). Section 82(1) of the Act merely stipulates a requirement (namely, the filing of certain documents within sixty days) which must be met with respect to all trusteeships, regardless of the purpose for which they are imposed. If that requirement is not satisfied, a violation of the Act will clearly have occurred. However, compliance with that requirement by the International does not preclude a finding that the Act has otherwise been violated by imposing or continuing the trusteeship. Furthermore, the fact that section 82(2) gives the Board plenary jurisdiction concerning the continuance of a trusteeship beyond its first twelve months of operation does not prevent the Board from determining, in a section 89 complaint, whether or not the initial imposition of a trusteeship, or its continuance for a period of up to twelve months, was itself an unfair labour practice. The Board's jurisprudence is replete with examples of actions which may be either lawful or unlawful, depending upon the motivation of the actor. For example, sect ion 77 provides that nothing in the Act "prohibits any suspension or discontinuance for cause of an employer's operations". Nevertheless, in Academy of Medicine, [1977] OLRB Rep. Dec. 783, the Board found contraventions of sections 64, 66, and 70 of the Act where the closure of the employer's Call Answering Service Division "was motivated in whole, or in substantial part by anti-union considerations." (See also DeVilbiss (Canada) Limited, [1976] OLRB Rep. Mar. 49, at paragraph 17, and Westroc Industries Limited, [1981] OLRB Rep. Mar. 381, at paragraph 24.) Thus, we are of the view that nothing in section 82 of the Act precludes the Board from determining under section 89 whether the imposition of the impugned trusteeship contravened section 70 or section 80(2) as alleged by the complainants.

13. Counsel for the respondents argued that the complainants have no status to bring this complaint since a breach of sections 70 and 80(2) can only be committed against a "person", not a "trade union" or "council of trade unions". In support of that contention, he noted that by virtue of the Board's finding in Zimmcor Company, [19781 OLRB Rep. Nov. 1056, the Council is "a certified council of trade unions" and, therefore, is a "trade union" within the meaning of section l(l)(p) of the Act. Thus, he submitted that neither the Council nor the complainant Locals are within the ambit of protection provided by sections 70 and 80(2) since none of them is a "person" within the meaning of those provisions. He further contended that the individual complainants have no status to maintain this complaint because the trusteeship was imposed on the Council (which, as a certified Council, could not be the victim of an alleged breach of sections 70 and 80(2) since it is not a "person"). Thus, it was his position that even if the imposition of the trusteeship can be construed to be "intimidation or coercion" within the meaning of section 70, or a "penalty" within the meaning of section 80(2), it is the Council that has been penalized, not the individual complainants. Accordingly, he submitted that the complaint must be dismissed because the Council is not (and could not be) a complainant in respect of a violation of those provisions, and because the complainants who are before the Board in this matter have no status to complain on behalf of the Council.

14. In response to those submissions, counsel for the complainants contended that although the Council may be a victim without a protected right under sections 70 and 80(2), the individuals whom the International intended to intimidate, coerce, or penalize through the imposition of a trusteeship on the Council do have status to complain since each of them is a "person" within the meaning of those sections. He further submitted that the people affected by the trusteeship are the members of the complainant Locals, and the individual complainants who, as the respective Locals' business agents, are entitled under the Bylaws to represent the Locals at meetings of business agents of the Council, and who, with the acquiescence of officials of the International, have carried out the effective management and control of the Council since its inception.

15. As contended by counsel for the respondents, sections 70 and 80(2), and a number of other sections of the Act (including sections 67(2), 89(4), 96(1), and 135(1, clearly distinguish between "person" and "trade union" (see, for example, Woodall Construction Company Limited, [1979] OLRB Rep. June 597; DeVilbiss (Canada) Limited, [1976] OLRB Rep. March 49; and Rapid Typesetting Company Limited, [1969] OLRB Rep. Oct. 875). Although the complaint Locals have status to pursue a section 89 complaint on behalf of members who are victims of an unfair labour practice, we are of the view that there is considerable merit in Mr. Minsky's contention that imposition of the trusteeship on the Council does not have a sufficiently direct effect on the rank and file members on whose behalf the Locals purport to bring this complaint, to make those members "victims" of the trusteeship which is alleged to constitute intimidation, coercion, or the imposition of a penalty on them. However, if imposition of the trusteeship on the Council can be said to be too remote from the individual rank and file members of the Locals to raise any question of intimidation, coercion, or penalizing of them by means of placing the Council under trusteeship, the same is not true of the individually named business representatives. The evidence clearly establishes that since the inception of the Council in 1976, its effective management and control has been carried out through regular meetings of those business representatives whose power to conduct at least some of the affairs of the Council is evident from the Bylaws. Section 14 of Article XXI of the Constitution provides that when a subordinate body of the International is placed under International supervision, all offices of the subordinate body "shall automatically become vacant". That this was the effect of the impugned trusteeship on the complainant business representatives is evident from the G.E.B.'s letter dated December 10, 1981 and from the evidence concerning the subsequent operations of the Council under the supervision of Mr. Phair. Thus, the imposition of supervision by the International had a very tangible and direct effect on the complainant business representatives, since it was intended to, and did in fact deprive them of their positions on the Council and prevent them from continuing to administer affairs of the Council as representatives of the Locals. Accordingly, we find that the individually named complainants have status to maintain the complaint on their own behalf as "persons" who could be (intentionally) intimidated, coerced, or penalized by the imposition of the trusteeship on the Council. Therefore, the respondents' submission that none of the complainants have status to bring this complaint cannot be accepted.

16. If the Board is satisfied that the respondents or any of them placed the Council under trusteeship for purposes which included penalizing the complainant business agents because they filed the EPSCA complaint, or were about to participate in it, our remedial authority under section 89(4) would empower us to direct the respondents to remedy the situation by removing or modifying the trusteeship. Such remedy would be directed to the complainant business representatives and their pursuit of the EPSCA complaint, and would only incidentally benefit the Council which is beyond the purview of sections 70 and 80(2). In applying a somewhat analogous approach in the case of a member of management discharged for her involvement in a union organizational drive, the Board wrote as follows in A.A. S. Telecommunications Ltd. and Zipall Ltd., [1976] OLRB Rep. Dec. 751:

“34. Our finding that the conduct of the respondents, including the dismissal of Bird, constituted a violation of section 56 [now section 64] brings us to the question of the appropriate way to remedy the violation. The complainant argued that the wrong to the union was best redressed by reinstating Bird in the position that she held prior to her dismissal. An important question, however, is whether a remedy that indirectly benefits a managerial employee is in conflict with the recognized principle that a managerial employee has no protectable right to join a trade union.

35. It is clear to us that, if Bird is a managerial employee, she would not be entitled in her own right to relief under either section 58 [now section 66] or 61 [now section 70]. The relief in this case, however, is sought by the complainant, not on behalf of an individual, but on behalf of itself. The remedy granted, therefore, must be a remedy that, in the circumstances, is appropriate for the union. This is not to say that relief that benefits an individual is not appropriate where a union is seeking relief on its own behalf, but only that it must be shown to be appropriate before it will be granted. Once it is established that such relief is appropriate for a union, however, then there would appear to be no direct conflict with the statutory exclusion of managerial employees. The remedial protection is directed to the union, and not to the individual managerial employee who benefits only incidentally. The individual managerial employee, therefore, is still given no guarantee of protection.

36. The lack of any guaranteed protection for the managerial employee does not flow only from the requirement that the remedy be appropriate to the circumstances of the case. The fact is that the right being asserted belongs to the union. The complaint must be brought by the union, and cannot be asserted by the managerial employee alone. The union, if it brings the complaint, must establish that the acts in respect of the managerial employee resulted in the kind of interference prohibited by section 56. The causal relationship between the dismissal and the adverse consequences for the union must be clearly established. The reverse burden of proof, moreover, would not assist the union in establishing its case, since the essence of the complaint is conduct directed at a trade union rather than at a person. All of these considerations make it clear that, even if a remedy for the violation of section 56 may benefit indirectly a managerial employee, the availability of this remedy does not provide the managerial employee with anything resembling a guaranteed protection.

37. Our conclusion is that a union remedy may benefit indirectly a managerial employee and yet not be in conflict with the general principle that a managerial employee has no protectable right to join a union. Provided that a union can establish that the relief it requests is appropriate in the circumstances, then that relief must be regarded as a remedy for the union, and not as a remedy for the individual managerial employee...”

Similarly, if the complainant business representatives can establish that the relief they request in relation to the trusteeship is appropriate as a remedy against a wrong which they have suffered contrary to the Act, the fact that the Council might also incidentally benefit from such remedy would not dissuade the Board from granting such relief to them.

67. Counsel for the complainants readily conceded that the "reverse onus" imposed by section 89(5) of the Act has no application in the circumstances of this case. Thus, the complainants have the burden of proving their case on the balance of probabilities. However, counsel submitted that in determining what the complainants must prove concerning the respondents' motivation for imposing the "penalty" of trusteeship, the Board should apply the "taint" theory which it has traditionally applied in the context of employer unfair labour practices, including section 89 complaints in which it is alleged that an employer or person acting on behalf of an employer has contravened section 80 of the Act. (See Westinghouse Canada Limited, [1980] OLRB Rep. April 577, at paragraphs 44 to 57, for a thorough discussion of the legal and policy considerations which underlie that approach.) Counsel for the respondents, on the other hand, argued that the taint theory should not be applied in a case alleging a breach of section 80 by a union or person acting on behalf of a union. In support of that position, he submitted that the taint theory finds its justification in the "reverse onus" provisions of section 89(5). However, we agree with counsel for the complainants that the taint theory is conceptually quite distinct from the matter of burden of proof (or "onus" as it is sometimes rather loosely described). The legal burden of proof is "the obligation of a party to meet the requirement of a rule of law that a fact in issue be proved [or disproved] either by a preponderance of evidence or beyond reasonable doubt as the case may be" (see I. C.B. Warehousing Division of Alar-Anson, [1976] OLRB Rep. Oct. 621, at paragraph 8). Thus, it determines which party has the burden of establishing the essential elements of the case. The taint theory, on the other hand, defines one of those elements, namMy, what the party who bears the legal burden must prove in order to establish the requisite motivation. The distinctness of these concepts is confirmed by the fact that the Board applied the taint theory long before the enactment in 1975 of what is now section 89(5). (For a review of the Board's jurisprudence, see Delhi Metal Products Ltd., [1974] OLRB Rep. July 450, at paragraphs 14 and 15.)

68. Under the "taint" theory, if any of the reasons for the discharge, lay-off, or other penalization of an employee by an employer was the fact that he was a member of a union or was exercising any other rights under the Act, the employer's action will be found to be a contravention of the Act. Similarly, in the context of section 80(1), if any of the reasons for an employer's imposition of a pecuniary or other penalty on a person is the fact that the person has made an application or filed a complaint under the Act, or has participated in or is about to participate in a proceeding under the Act, the employer will be found to have contravened the Act, notwithstanding the co-existence of a "bona fide" reason (or reasons) for the imposition of that penalty.

69. Neither the arguments of counsel nor the Board's own research disclosed any Canadian jurisprudence with respect to the applicability of the taint theory in the context of penalization of a complainant by the imposition of a trusteeship. In the different but somewhat related context of direct challenges to the validity of trustee-ships, the Courts in the United States have generally ruled that a trusteeship is valid and will not be dissolved if the parent body can show that at least one of the reasons for the imposition of a trusteeship was a valid purpose within section 302 of the Landrum-Griffin Act of 1959, which provides:

"Trusteeships shall be established and administered by a labor organization over a subordinate body only in accordance with the constitution and bylaws of the organization which has assumed trusteeship over the subordinate body and for the purpose of correcting corruption or financial malpractice, assuring the performance of collective bargaining agreements or other duties of a bargaining representative, restoring democratic procedures, or otherwise carrying out the legitimate objects of such labor organization."

However, that approach, which is in diametric opposition to the taint theory, appears to be based upon section 304(c) of that Act which provides (in part) that a trusteeship established by a labour organization in conformity with its constitution and authorized or ratified after a fair hearing "shall be presumed valid for a period of eighteen months from the date of its establishment and shall not be subject to attack during such period except upon clear and convincing proof that the trusteeship was not established or maintained in good faith for a purpose allowable under section 302.” In the absence of a similar legislative provision, or compelling policy reasons for adopting so restrictive an approach in the context of the important task of protecting persons who seek to vindicate their rights through proceedings before this Board, we are not disposed to adopt such an approach in this context.

70. The statutory language contained in the Labour Relations Act supports the application of the taint theory not only in relation to alleged employer unfair labour practices under provisions such as sections 66 and 80(1), but also in the context of alleged union unfair labour practices under the provisions such as section 80(2).

"No employer, employers' organization or person acting on behalf or an employer or an employers' organization,

(a) shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act".

(emphasis added)

Similarly, section 80 provides:

“(1) No employer, employers' organization or person acting on behalf of an employer or employers' organization shall,

(a) refuse to employ or continue to employ a person;

(b) threaten dismissal or otherwise threaten a person;

(c) discriminate against a person in regard to employment or a term or condition or employment; or

(d) intimidate or coerce or impose a pecuniary or other penalty on a person,

because of a belief that he may testify in a proceeding under this Act or because he has made or is about to make a disclosure that may be required of him in a proceeding under this Act or because he has made an application or filed a complaint under this Act or because he has participated or is about to participate in a proceeding under this Act.

(2) No trade union, council of trade unions or person acting on behalf of a trade union or council of trade unions shall,

(a) discriminate against a person in regard to employment or a term or condition of employment; or

(b) intimidate or coerce or impose a pecuniary or other penalty on a person, because of a belief that he may testify in a proceeding under this Act or because he has made or is about to make a disclosure that may be required of him in a proceeding under this Act or because he has made an application or filed a complaint under this Act or because he has participated or is about to participate in a proceeding under this Act."

(emphasis added)

The use of the word "because" in this context is quite significant. To paraphrase the judgment of Hughes J. in R. v. Bushnell Communications et al. (1973), 45 D.L.R. (3d) 218 (in which the Ontario High Court was dealing with the provision of the Canada Labour Code substantially similar to section 66 of the Labour Relations Act, in considering an enactment such as section 80(2) which is devoid of the words "sole reason" or "for the reason only" and resting only on the word "because", the Board may legitimately take an expanded view of its application. If the evidence satisfies it that the fact that the penalized person (or persons) filed a complaint under the Act, or participated in or was about to participate in a proceeding under the Act, was present in the mind of the union, or person(s) acting on behalf of the union, as a motivating factor in reaching the decision to impose a pecuniary or other penalty on that person, either as a main reason or one incidental to it, or as one of many reasons regardless of priority, section 80(2) of the Act has been transgressed. The decision of the High Court was upheld "in substance" on appeal by the Ontario Court of Appeal (1974 CanLII 559 (ON CA), 47 D.L.R. (3d) 668). In delivering the judgment of the Court, Evans J.A. indicated that if the proscribed motivation was a "proximate cause" of the impugned action, there would be a contravention of the provision in question even though other proximate causes were also present.

71. There are sound labour relations policy reasons for applying the taint theory in determining whether section 80(2) has been breached. As in the case of dismissals from employment or imposition of pecuniary or other penalties by an employer, the reasons for the imposition of a "pecuniary or other penalty" by a union, or persons acting on behalf of a union, are generally known only by the union officials who decide to impose it. Furthermore, as in the case of employer actions, there exists the distinct possibility that "legitimate" reasons for imposing a "pecuniary or other penalty" such as a trusteeship will co-exist with "illegitimate reasons" and will present the Board with the perplexing and rather artificial task of attempting to determine which of those constituted the "true" or "predominant" motivation for the impugned action, unless the taint theory is applied. Moreover, unimpeded access to the Board's processes through freedom to file and pursue complaints without fear of recrimination by an employer, union, or person acting on behalf of an employer or union, is essential to the preservation of the rights and freedoms enshrined in the Act, and is also essential to the effective administration of the Act by this Board. As stated by the Board in United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local 46, [1974] OLRB Rep. Aug. 569, at paragraph 10:

“The legislature under section 71(2) [now section 80(2)] of the Act has attempted to remove any impediments to parties utilizing this Board for the purposes contained within The Labour Relations Act. It is the intent that there be complete freedom for persons who wish to avail themselves of the benefits and remedies contained in The Labour Relations Act.”

See also paragraph 13 of that case in which the Board wrote:

"If employees are made to fear some form of retaliation for exercising their rights under this Act, either by the trade unions or by the employers, then the purposes of the Act will not be accomplished.

72. For the foregoing reasons, we do not interpret section 80(2) as permitting a union or person acting on behalf of a union to impose a penalty on a person even in part because he has filed a complaint under the Labour Relations Act or because he is about to participate in a proceeding under the Act. To adopt the "predominant motive" or "true motive" approach advocated by counsel for the respondents would weaken the protections afforded to complainants under the Act, and would create an indefensible distinction between the Board's treatment of employers and unions in the context of section 80. Accordingly, we are of the view that although the co-existence of lawful motivation for imposing such penalty can be taken into account in an appropriate case in determining a suitable remedial response by the Board to a violation of the Act (see, for example, Westinghouse Canada Limited, supra, and FAG Bearings Limited, [1978] OLRB Rep. Jan. 76), the co-existence of such motivation along with motivation proscribed by section 80 does not preclude the Board from finding a contravention of that provision in proceedings under section 89, be it by an employer, a union, or a person acting on behalf of an employer or a union.

73. Having regard to that legal framework, the Board must now consider whether the complainants have established a breach of section 70 or 80(2) of the Act.

74. Counsel for the complainants argued that the International must have been aware of the defects in the operation of the Council long before June of 1981. Accordingly, he asked us to infer that the complainant business representatives' involvement in the EPSCA complaint, and not those defects, prompted the International to penalize those complainants by imposing a trusteeship on the Council. Although the International had the means of knowing about the lack of full Council meetings, election of delegates, and election of officers, through documents such as minutes, ballots, and correspondence on file at its Washington headquarters, we accept Mr. Lyons' evidence that in the absence of a specific question or concern about the operation of the Council, such documents are merely filed along with the multitude of others routinely sent to headquarters by local unions and district councils throughout North America. It was also his uncontradicted evidence that the position of delegate to a district council can be combined with another office. Thus, even if a clerk at headquarters had noted the absence of Council delegates on the ballots submitted by the Ontario Local Unions, the clerk might well have assumed that those positions were combined with other offices since clerks do not "check the ballots against the Bylaws". We also accept Mr. Lyons' credible evidence that when local officers or business representatives write to headquarters to ask a question, such as the question posed to Mr. Drake by Mr. Melvin in his letter of January 25, 1978 concerning when nomination and election of Council officers should take place in view of the change in frequency of International Conventions, they are given an answer but the International does not generally "follow up" on such matters to determine whether the advice from headquarters has been followed, as it is assumed to have been implemented when nothing further is heard to be contrary.

75. Counsel further contended that the International must have been advised of the irregularities by Mr. Allen, Mr. Wilson, or Mr. Phair. (Although testimony from Mr. Allen might have assisted the Board in reaching its decision concerning this complaint, the parties were in agreement that Mr. Allen was unable to give evidence due to serious health problems, and that under the circumstances the Board should proceed to dispose of this matter on the basis of the available evidence.) As a District Representative appointed by the International, Mr. Allen submitted a weekly report of his activities to headquarters, with a copy to Mr. Wilson, whose office was located in the same suite of offices as Mr. Allen's. He was the International representative assigned by Mr. Wilson to negotiate and service collective agreements with Ontario Hydro (and EPSCA). In early December of 1981, Mr. Allen resigned as President of the Council following several months of increasingly debilitating illness. Prior to that, Mr. Phair had replaced him as the International official responsible for servicing the EPSCA agreements. Mr. Phair was also responsible for servicing three of the Ontario Locals involved in the Council. Accordingly, he began attending Council meetings in September of 1980, but his presence was not well received by the business representatives. They felt that he should not be entitled to vote but rather should merely be present as a "guest". Thus, it took many months for him to establish, with the assistance of a letter from headquarters, his right to fully participate in Council proceedings. Although Mr. Phair was present when the "financial committee" was established, he was unaware of the establishment of the trust fund to which the Council Fund was transferred. His primary interest appears to have been other matters such as jurisdictional disputes.

76. It is unnecessary to determine the precise point at which Mr. Wilson and Mr. Phair became aware of the failure to hold full Council meetings, to elect delegates, to elect officers, and to carry out audits, because we are satisfied that they did not in any event relay any such information to anyone at the International's headquarters prior to the investigation prompted by Mr. MacIsaac's telegram. Moreover, Mr. Allen's knowledge of those failures to comply with the Bylaws of the Council was also not conveyed to Mr. Lyons or to anyone else in Washington (with the exception of Mr. Drake, to whom Mr. Allen wrote to obtain guidance concerning the proper procedure for election of Council officers). This is not surprising in view of the fact that, as noted by Mr. MacIsaac and Mr. Lyons, Mr. Allen was at least partly responsible for many of the Council's deficiencies and, accordingly, would not likely have been anxious to draw attention to them.

77. Mr. MacIsaac testified that "Phair and Allen are not stupid people" and that "they certainly knew what was going on" in relation to the trust fund. While it may be reasonable to infer that Mr. Allen was aware of the trust document, there is no direct evidence or circumstances from which it can reasonably be inferred that he informed Mr. Lyons, or any other official of the International, of its existence. Moreover, we accept the credible evidence of Mr. Phair that, as a relatively new member of the Council who had great difficulty in convincing the business representatives that he was entitled to vote at such meetings, and who had no particular interest in the finances of the Council, he was unaware of the trust document and the related financial transactions prior to Mr. Pfister's investigation. Following a heated discussion of the EPSCA situation at a business representatives meeting of the Council on November 20, 1980, Mr. Phair did hear Mr. MacIsaac say that "they [the business representatives] ought to put the Council's money in a different account because if the International could come in and sign collective agreements over their heads, there would be nothing to stop them [the International officials] from coming in and taking the Council's money". Mr. Phair interpreted that comment as "a shot at [him] because [he] represented the International", and "reported it to the International". However, he was unaware that the busines representatives acted on that statement by executing a trust document.

78. We are also satisfied that Mr. Wilson was unaware of the existence of the trust fund as he did not have any specific assignment to or relationship with the District Council, apart from briefly attending some meetings to report on particular matters of interest to the business representatives, such as negotiations and legislative developments. Moreover, we are satisfied that Mr. Lyons and the other members of the G.E.B. were unaware of the existence of the trust document and the trust fund to which it related, until such time as it was revealed to them as a result of Mr. Pfister's financial investigation.

79. Mr. Lyons testified that the International very rarely imposes trusteeship for "punitive reasons" (i.e., "to correct improper practices", as opposed to situations in which a local is placed under trusteeship because of lack of officers or financial resources). He estimated that in "twenty some odd years it's been less than fifteen times" that the International has imposed trusteeship for "punitive reasons". He also testified that "it's a very careful step-by-step process" which the G.E.B. is very loath to implement unless it is the only step left. The impugned trusteeship is the first "punitive" trusteeship which has ever been imposed on a district council during Mr. Lyons' tenure as General President.

80. Although Mr. Lyons described the lack of Council meetings and the failure to elect delegates and officers as "pretty incredible", he candidly told the Board that those matters, by themselves, would not warrant imposition of trusteeship. He also testified (in chief) that the lack of audits was "very significant" since it could jeopardize the blanket bond which covers all local union and district council officers. However, in cross-examination he sought to justify the International's failure to take earlier steps to remedy the lack of audits by stating that "an audit for a district council isn't the most important thing in the world" because "almost all of the district councils have very little money". On the whole, Mr. Lyons evidence concerning the significance of the lack of audits was rather equivocal and somewhat contradictory. However, it appears from his evidence as a whole that trusteeship would not have been the International's reaction to a lack of audits, since that deficiency could have been corrected by less drastic action, such as a "letter of instructions" from President, or the temporary provision by the International of assistance from an experienced financial secretary.

81. Mr. Lyons testified that "the major by far cause" of the trusteeship was the "diversion of Council funds" into the trust document, but that once the G.E.B. "decided [they] had to act because of the knowledge of the diversion of funds, all of these improper actions were included so as to cover everything and make sure everything was cleared up." He conceded that there was nothing to indicate that the Council funds had actually been used improperly and that he had no reason to believe that the six business representatives who signed the trust document were anything but honest men who may have made mistakes; however, he also expressed concern that the funds could be used improperly because of the aforementioned lack of protection.

82. Mr. Lyons agreed in cross-examination that by December 9, 1981 he knew from the trustees' response to his telegram of December 4th that the funds in question were secure. When asked why he nevertheless followed through on his decision to recommend trusteeship, he stated that although the International knew where the money was and knew that it was frozen as a result of those telegrams, it still had to do something to "clean up" the situation and "untangle the problems" the Council was having. He also expressed the opinion that trusteeship was "the nicest and cheapest way to go" and the "simplest, most efficient way to clean it up". He explained that although the matter might have been dealt with my filing charges against the business representatives under the Constitution, trials and appeals of such charges can take a very lengthy period of time and trusteeship stops all meetings and transactions, and allows the International to come in and correct the situation without specifically accusing anyone of wrongdoing where "as a group" a subordinate body is "going in a wrong direction".

83. Although Mr. Lyons dismissed as "totally ridiculous" the complainants' allegation that the trusteeship was imposed because of the EPSCA complaint, he conceded that he disagrees with the concept of a member or subordinate body launching proceedings against the International. He also expressed the view that the EPSCA complaint "was on hold" at the time the trusteeship was imposed and testified (near the conclusion of this lengthy examination in chief) that "absolutely nothing" was happening concerning the EPSCA case in October, November, and December of 1981. However, that statement was contradicted by the evidence of other witnesses and by Mr. Lyons' own subsequent evidence. The Board issued two interim decisions concerning EPSCA during that period and counsel sought to amend the complaint so as to add hundreds of additional complainants. Moreover, settlement discussions were occurring with a view to resolving that complaint.

84. Our careful review of all the evidence in this matter convinces us that officials of the International, including Mr. Lyons and Mr. Wilson, found the EPSCA complaint to be of substantially greater importance than they were willing to concede in their evidence before the Board. Thus, we are unable to give credence to Mr. Wilson's testimony that he viewed the EPSCA complaint as a "nuisance" action, or to the evidence of Mr. Lyons that he "didn't really give great value to the on-going [EPSCA] litigation" because "it wasn't that important to [him]". The considerable importance which Mr. Lyons in fact attached to the EPSCA situation is evident from the substantial time and effort which he devoted to personally researching the matter and reviewing the pertinent documentation before the initial EPSCA complaint had even been filed. There is nothing in the evidence which convinces the Board that Mr. Lyons' interest in the matter subsequently waned. Indeed, his continued interest is evidenced by the fact that he devoted further time and effort to settlement discussions and consultation with counsel concerning the EPSCA proceedings, and took action to prevent Council funds from being used to finance that litigation. Mr. Lyons' lack of candour concerning the importance which he attributed to the EPSCA case reduces the weight which we are prepared to give to the totality of his evidence concerning motivation for imposition of the trusteeship.

85. The officials of the International who testified before the Board were uniformly of the view that filing Board proceedings against the International was not a proper action for the Council or its representatives to take. They were also of the view that payment of costs incurred by the Council in relation to Board proceedings in which the International was included as a respondent was not a proper use of Council funds. However, that view is not supported by the Bylaws of the Council, the International Constitution or the provisions of the Labour Relations Act. Although the Council was chartered by the International, the Council is a separate legal entity for purposes of the Labour Relations Act. The Council has its own sources of revenue, the proceeds of which can legitimately be used for such purposes, consistent with its Bylaws and the International Constitution, as may be determined at meetings of the full Council or, as evidenced by the manner in which the Council functioned prior to the trusteeship with the acquiescence of at least one International official, at meetings of the business agents of the Council. The objects of the Council (as set forth above) include protecting members "by legal and proper methods against any injustice that may be done them". It cannot be doubted that filing a section 89 complaint with this Board is a "legal and proper means" by which the Council may seek to protect its members against a perceived injustice. (Whether or not such an injustice has in fact occurred is a matter to be resolved in the EPSCA complaint itself, and not in the instant proceedings.) Moreover, the Constitution (of the International) implicitly acknowledges (in Article XIX, Section 4, read in conjunction with Article XXII, Section 3) the legitimacy of a local union or district council initiating proceedings against the International before an administrative agency after internal union remedies have been exhausted, or resorted to for a specified period of time. (For an exposition of some of the considerations which the Board takes into account in deciding whether or not to defer to such internal procedures, see paragraphs 8 and 9 of the Board's preliminary decision in this matter (reported at [1982] OLRB Rep. Feb. 233), and the authorities referred to in that passage.)

86. The business representatives who were delegates to the Council have acted on behalf of the Council in retaining and instructing counsel, commencing proceedings before this Board, and using Council funds to finance such proceedings on a number of previous occasions. All of this was done without objection by George Allen or any other official of the International. It was only after the business representatives commenced Board proceedings in the name of the Council against respondents which included the International, that Mr. Allen, on the instructions of Mr. Lyons, sought to prevent the business representatives from using Council funds as a source of financing those proceedings on behalf of the Council and its members whose perceived rights the business representatives sought to protect. In the totality of the circumstances of this case, including the significant role played by the Council as a co-ordinating vehicle in relation to the EPSCA complaint; the great importance which the complainant business representatives, to the knowledge of Mr. Lyons, attached to those proceedings; the obvious difficulty which at least one of the business agents would have had in attempting to finance those proceedings through his impecunious Local Union; and, most importantly, the nature of the allegations against the International that are contained in the EPSCA complaint (i.e., allegations that the International, and the other respondents, committed a number of serious unfair labour practices by interfering with bargaining rights of the complainant Local Unions and the complainant Council), it appears to the Board that Mr. Lyons was seeking to penalize the complainant business agents by impairing their effective prosecution of the EPSCA complaint, when he instructed Mr. Allen in June of 1981 not to sign cheques for legal or other expenses pertaining to that case. Thus, that action might itself have been the subject of a section 89 complaint alleging a breach of section 80(2) of the Act. However, instead of coming to this Board, the complainant business representatives misguidedly and improperly sought a "self help" remedy by executing the trust document. When Mr. Lyons became aware that his direction to Mr. Allen had not served to effectively cut off the funding of that case, Mr. Lyons effectively recommended the imposition of trusteeship on the Council and gave specific instructions to Mr. Phair that no expenditures were to be made in support of the EPSCA case.

87. After carefully assessing all of the evidence, we have come to the conclusion that the trusteeship was imposed on the Council at least in part for the purpose of penalizing the complainant business representatives by depriving them of their Council positions (which were vacated by the trusteeship), because they had filed, or were about to participate in the EPSCA complaint. We also find that officials of the International sought to penalize the complainant business representatives by imposing a trusteeship on the Council, in an attempt to impair their prosecution of that complaint as representatives of the Council and its members.

88. The significance of the Council as a source of funding of the EPSCA complaint has already been discussed, as have the inferences which may properly be drawn from Mr. Lyons' actions concerning the use of Council funds in support of that complaint. Mr. Phair's letter of January 5, 1982 to Golden, Levinson provides further support for the inference that the International intended the trusteeship to be a vehicle through which it could penalize the complainant business representatives by impairing the effective prosecution of the EPSCA complaint through the removal of the Council as a complainant therein, irrespective of the validity or invalidity of the commencement of those proceedings by the business agents on behalf of the Council. Although counsel for the respondents contended that removal of the Council was essentially irrelevant since the other complainants could presumably proceed with it in any event, as noted by counsel for the complainant, the vigour with which the respondents pursued (through counsel) their preliminary objection concerning the inclusion of the Council as a complainant in the EPSCA complaint provides a clear indication that the presence or absence of the Council as a complainant in those proceedings does indeed "matter" to the respondents for legal, political, or other reasons. Moreover, as noted above, it is apparent that the monthly Council meetings of the business agents provided an effective forum for co-ordinating activities in respect of that complaint, which forum was effectively eliminated by the trusteeship.

89. For the foregoing reasons, the Board finds that by placing the Council under trusteeship for purposes that included imposing a penalty on the complainant business representatives because they filed or were about to participate in a proceeding under this Act, namely, the EPSCA complaint, the International contravened section 80(2) of the Act. In view of that finding, it is unnecessary to determine whether the International also contravened section 70 of the Act by imposing the trusteeship.

90. It may be appropriate to add, for the guidance of these and other parties, that the Board does not interpet section 80(2) as giving local union or district council officials an unqualified licence to use local union or district council funds to finance proceedings before this Board, or to use their positions to engage in activities which are in conflict with the duties and responsibilities of their offices. While each case must, of course, be considered on the basis of its particular facts, it appears to us that the Board would be unlikely to find the requisite motivation for a breach of section 80(2) to be present where, for example, an international union removed from office (whether by means of a trusteeship or other action) an official of a local union or district council who had used the local's or district council's funds to support an application to the Board for termination of the local's or district council's bargaining rights, or had persuaded employees to join a rival union and participated in certification proceedings initiated by that union. (See, for example, Canadian Textile and Chemical Union, ([1971] OLRB Rep. Aug. 469, in which the Board found that a local union president was not removed from office by the international for any reason that would violate (what is now) section 80(2) where he engaged in activities that were contrary to the interests of his local by initiating discussions with a rival union to raid his local, and signing up members of his local as members of the raiding union.) However, where the proceedings in question allege a significant unfair labour practice on the part of the international union itself, such as where pursuant to section 151(1) of the Act, a local union which is an affiliated bargaining agent alleges that its international, as part of a designated bargaining agency, has acted in a manner that is arbitrary, discriminatory or in bad faith, or where, as in the instant case, it is alleged that the international, together with other respondents, has substantially interfered with local union or district council bargaining rights, the requisite motivation may (depending on the circumstances) more readily be inferred.

91. Although we have found a contravention of section 80(2) of the Act, the existence of circumstances, and in particular the existence of the trust document, which could justify some intervention by the International into the affairs of the Council, has led the Board to conclude that it would not be appropriate to direct the International to rescind the trusteeship, as advocated by the complainants. Under the circumstances, the Board, in the exercise of its broad remedial discretion under section 89(4) of the Act, is of the view that it is more appropriate to restrain the manner in which the trusteeship is exercised so as to ensure that the imposition of the trusteeship does not in fact penalize the complainant business representatives by interfering with the pursuit of the EPSCA complaint. This can be accomplished by restoring the conditions which existed in respect of that complaint prior to the trusteeship, i.e., the availability of Council funds as a source of payment of legal and other legitimate costs pertaining to that complaint, incurred by the Council, or by the complainant business representatives on behalf of the Council; the presence of the Council as one of the complainants in that matter; and the power of the complainant business agents to continue to instruct counsel on behalf of the Council with respect to the EPSCA complaint, notwithstanding the trusteeship.

92. We recognize that the remedy which we find to be appropriate in this case does not totally remove the penalty which the International has imposed on the complainant business agents. However, it does eradicate the principal means by which the International has sought to penalize them by impeding the effective prosecution of the EPSCA complaint. The Board's refusal to order the recission of the trusteeship as requested by the complainants, reflects not only our unwillingness to interfere with internal trade union matters any further than is necessary to ensure unimpeded access to the Board's procedures for vindication of the rights guaranteed by the Labour Relations Act, but also a recognition on our part that the complainant business agents, by entering into the trust agreement in question and by otherwise failing to operate the Council in accordance with its Bylaws, have engaged in conduct which is not undeserving of some element of penalization, and have created a situation which justifies some degree of temporary control of the Council by the International.

93. The Board therefore orders:

(1) that the respondent International cease and desist from exercising supervision and control over the Ironworkers District Council of Ontario (the "Council") in such manner as to:

(i) deny the complainant business representatives (Kenneth Childs, Allan MacIsaac, John Donaldson, Larry Baillie, Gordon Verdecchia, and Donald Melvin) access to Council funds for the purpose of paying legal accounts which have been duly taxed under the Solicitors Act, and other legitimate invoiced or vouchered expenses pertaining to the EPSCA complaint, incurred by the Council, or by the complainant business representatives on behalf of the Council;

(ii) remove the name of the Council as a complainant in the EPSCA complaint; and

(iii) prevent the complainant business representatives from continuing to instruct counsel on behalf of the Council with respect to the EPSCA complaint; and

(2) that the respondent International take all reasonable steps to ensure that the irregularities and deficiencies in respect of the operation of the Council are corrected expeditiously, and that the supervision or control of the Council by the International is terminated as quickly thereafter as practicable.

94. The Board remains seized of this matter in the event that a dispute arises concerning implementation of the Board's order.