Ontario Labour Relations Board
[1982] OLRB Rep. April 631
1635-80-M United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local Union 527, Applicant, v. Twin City Plumbing and Heating and Groff Plumbing & Heating Limited, Respondents
BEFORE: R. A. Furness, Vice-Chairman, and Board Members H. J. F. Ade and H. Kobryn.
APPEARANCES: Stanley Simpson, Tom Crystal and Jack Porter for the applicant; D. L Wakely, Robert Groff and A. Talvila for the respondents.
DECISION OF R. A. FURNESS, VICE-CHAIRMAN, AND BOARD MEMBER H. J. F. ADE; April 27, 1982
The applicant has referred a grievance concerning the interpretation, application, administration or alleged violation of a collective agreement to the Board for final and binding determination.
In making this referral the applicant also relied on the provisions of sections 1(4) and 63 of the Act with respect to an alleged relationship between the respondents.
At the conclusion of the evidence, the applicant announced that it now was proceeding with argument with respect to sections 1(4) and 63.
In order for the applicant to succeed in this referral it is necessary to establish whether or not there is a collective agreement in effect between Twin City Plumbing and Heating ("Twin City") and the applicant.
The applicant and Groff Plumbing & Heating Limited ("Groff Plumbing") are bound by a provincial collective agreement in the industrial, commercial and institutional sector of the construction industry. Groff Plumbing was founded in 1945 by Howard Groff and was incorporated in 1957. It operates from premises on University Avenue in Waterloo. At that time the shareholders were Howard Groff and his three sons William Groff, Arthur Groff and Robert Groff and Florabel Groff. The latter remained as a shareholder until 1974 when she sold her shares to the other shareholders. Howard Groff ceased to have any financial interest in Groff Plumbing in 1970. On April 30, 1980, Robert Groff and Arthur Groff resigned as directors and they sold their shares to their brother William Groff, William's son Brian and Donald MacDonald. At the time of the resignations of Robert Groff and Arthur Groff, all contracts and jobs in progress remained with Groff Plumbing.
The genesis of Twin City commenced in the late nineteen thirties when Wilfred Kerr purchased Twin City and carried on a repair business at 56 John Street East in Waterloo. Mr. Kerr carried on business there for about seventeen years. In 1970, Mr. Kerr's business was sold to Howard Groff. At that time no change was made in the name, business location or telephone number. Babcon of Waterloo Limited ("Babcon") was incorporated to carry on the business of Twin City and Howard Groff was the sole beneficial owner of the shares in this company. Carl Noe was hired as a plumber, gasfitter and steamfitter by Twin City in 1970. Mr. Noe and his family lived in the premises of Twin City on John Street East and subsequently Mr. Noe purchased the premises from a holding company and also enlarged the premises. These premises, however, continued to be used by Twin City in its business and Twin City paid a rental to Mr. Noe for the use of part of the premises. In 1975, John Griffin was hired as an estimator by Twin City. In May of 1980, Robert Groff, Arthur Groff, Mr. Noe and Mr. Griffin became directors and officers of Babcon. On May 1, 1980, the common shares previously held by Howard Groff were sold to the four directors and officers and preferred shares were also purchased to inject funds into Babcon so that Howard Groff could withdraw his money from the company.
The approximate annual sales for Babcon were as follows:
1971 $ 31,000
1972 $105,000
1973 $126,000
1974 $281,000
1975 $200,000
1976 $375,000
1977 $477,000
1978 $441,000
1979 $632,000
The projected sales figures for 1980 were almost one million dollars. Although Twin City began as a service operation, by 1973 Twin City was performing ninety-five per cent new construction work and only five per cent new service work. Between 1970 and 1975, Twin City was hiring approximately one additional employee each year. By the end of 1975, Twin City had six full-time employees. After 1975, the number of employees increased by one to three additional employees each year. Between 1975 and 1980, Twin City has owned an average of five vehicles. There are only four unionized mechanical contractors in the Kitchener-Waterloo area who are larger than Twin City. Groff Plumbing and Twin City often compete for the same work and Twin City submits tenders and bids through the bid depository system. Twin City is in competition with union and non-union contractors.
On November4, 1974, the Board issued a certificate to the applicant with respect to a bargaining unit of "all plumbers and plumbers' apprentices, steamfitters and steamfitters' apprentices in the employ of Twin City Plumbing and Heating in the Regional Municipality of Waterloo except part of Beverly Township annexed by North Dumfries Township, save and except non-working foremen and persons above the rank of non-working foreman". Notice to bargain was given by the applicant on November 6, 1974, and two meetings were held. The appointment of a conciliation officer was requested and granted on December 10, 1974. The conciliation officer held a meeting on December 30, 1974, and on January 20, 1975, the Minister advised the parties that he did not consider it advisable to appoint a conciliation board. Twin City and the applicant have never signed a collective agreement and the applicant has not called or authorized either a strike or a picket line with respect to Twin City and has not filed a grievance until the instant grievance was filed. No meetings have been held between the applicant and Twin City since December 30, 1974.
Twin City contended that the applicant has abandoned the bargaining rights which it acquired in 1974. The applicant argued that it had not abandoned its bargaining rights and that Twin City was bound by the current provincial collective agreement in the industrial, commercial and institutional sector of the construction industry. After the letter from the Minister of Labour dated January 20, 1975, the next contact between the applicant and Twin City was a telephone call in the middle part of 1975 from Jack Porter, the business manager of the applicant, and Mr. Griffin. The evidence on the contents of the conversation is in dispute. Mr. Porter's recollection of the contents of this conversation differs from the recollection of Mr. Griffin and the recollection of Mr. Noe as he recalls Mr. Griffin's contemporary reference to the contents of the conversation. Having regard to the demeanour of the witnesses and to the searching cross‑examination of counsel, we accept the recollection of Mr. Giffin as being an accurate recollection of what was said during this telephone conversation. During this conversation, Mr. Porter said that he knew Mr. Griffin was working for Twin City and asked if it was intended to operate Twin City as a union company. Mr. Griffin advised Mr. Porter that Twin City would be operated as a non-union company whereupon Mr. Porter reply that this meant war.
In our view, the evidence before the Board indicates that Mr. Porter knew that Mr. Noe and Mr. Griffin were working in the office of Twin City and that Twin City was operating as a non-union mechanical contractor from its premises in Waterloo. Mr. Porter and his assistant, Mr. Crystal, observed Twin City's trucks from time to time. In 1979, the applicant wrote a letter to the president of zone 7 of the Mechanical Contractors' Association protesting the conduct of individuals who operated both union and non-union companies. The applicant apparently regarded Twin City and Groff Plumbing as being one employer for the purposes of section 1(4) and/or being successor employers under section 63 up to the time of the hearing of this reference. Mr. Porter was aware of Mr. Griffin's background in estimating and it is not open to the applicant to claim that Twin City was engaged in service work rather than in construction work in the industrial, commercial and institutional sector. The name of Twin City appeared in trade directories and bulletins and the applicant caused one of Twin City's projects at the University of Waterloo to be picketed in 1980 after a union mechanical contractor had complained to the applicant. Between 1975 and 1980, virtually all of the work performed by Twin City was within the geographical jurisdiction of the applicant.
Until 1977 a large sign with the name of Twin City on it appeared outside its premises in Waterloo. After that time a smaller sign measuring two feet by eight inches was displayed on the building. The applicant was aware of a job being performed by Twin Cityata restaurant but did not investigate the matter. While the applicant was negotiating collective agreements, the name of Twin City did not appear as an employer bound by a collective agreement which was in force between 1975 and 1977. Similarly, the name of Twin City did not appear on a memorandum of settlement which was signed in 1977.
The applicant was aware of the continued existence of Twin City since 1974. It was unable to sign a collective agreement with Twin City and deployed its resources in policing its collective agreements over its considerable geographic area. The evidence of Mr. Porter and Mr. Crystal make it clear that the applicant was reluctant to spend time and money in pursuing employers where collective agreements were unlikely to be concluded.
In .J. S. Mechanical [1979] OLRB Rep. Feb. 110, the Board referred to the assessment of a bargaining relationship in order to determine whether a trade union has abandoned its bargaining rights and looked at certain indicators. The Board in that case considered the length of the trade union's inactivity and whether it had made attempts to negotiate or renew a collective agreement. In the instant reference, the applicant has made no attempt to negotiate a collective agreement since 1975. The question is whether the applicant abandoned its bargaining rights before the introduction of the scheme of provincial bargaining which came into effect in 1978. In the instant reference, the applicant allowed more than three years to elapse in the industrial, commercial and institutional sector since it acquired its bargaining rights and an even greater period of time to elapse in the residential sector when a collective agreement was not in effect. The facts in the instant reference are similar to the facts in John Entwistle Construction Limited [1979] OLRB Rep. Nov. 1096 where the Board held that the trade union had abandoned its bargaining rights.
Having regard to the evidence and representations before it, we find that the applicant by not actively pursuing its bargaining rights abandoned its bargaining rights with respect to the bargaining unit of employees set forth in paragraph eight before the coming into force of provincial bargaining and provincial collective agreements in the industrial, commercial and institutional sector of the construction industry. It follows that Twin City is not bound by either the provincial collective agreement in the industrial, commercial and institutional sector of the construction industry or by any other collective agreement with the applicant.
Accordingly, this reference is dismissed.
DECISION OF BOARD MEMBER H. KOBRYN;
The facts in this case must be viewed against the background that exists in the Kitchener-Waterloo area where both the applicant and the respondent do business. This background, which is detailed below, is of common knowledge within the industry.
Unionized general contractors, who have successfully bid on construction projects, would then request bids for specialized work not normally performed by their own forces. The requests for bids would go to both union and non-union subcontractors, although the successfully bid project would be considered a union project by the building trades unions who service this area because the successful bidder is a fair general contractor.
The above situation does not exist in any other major manpower centre in this Province. Building trades unions in these other centres can assume that once a unionized general contrator successfully bids on a project, he will generally seek bids from unionized building trades subcontractors. This procedure is considered good labour relations as it will prevent any unnecessary labour problems once the project gets underway. This is analogous to an industrial plant setting wherein you are certified and serviced by one union.
In the Kitchener-Waterloo area many of the major general contractors based there, such as Ball Bros. Construction (who is mentioned in the evidence of this case) take the position that they only sign collective agreements with the Carpenters' and Labourers unions and not with the rest of the building trades unions because the general contractors do not hire employees from these unions. Thus, they have no contractual obligations to these other trades to subcontract their respective work to unionized subcontractors.
For the same reasons, these other trade unions who are not signatories to a collective agreement with the general contractors, only with their respective trade contractor, cannot legally stop this hideous practice which creates so much instability in the area's construction industry.
This practice threatens the very existence of the unionized subcontractors and the building trades unions who represent their employees. Consequently, this encourages unionized subcontractors to establish second or dual companies within their family or business grouping so that one company can operate unionized and the other non-unionized. This destructive situation has existed for a number of years and still continues even though provincial bargaining has replaced area bargaining for all the building trades unions.
The facts in this case are as follows:
Mr. Howard Groff founded Groff Plumbing & Heating Limited in 1945. He had the company incorporated in 1957 with the shareholders being Mr. Howard Groff and sons Messrs. William Groff, Robert Groff, Arthur Groff and daughter Miss Florabel Groff.
On October 15, 1970, Mr. Howard Groff resigned as president and director of Groff Plumbing & Heating Limited and bought Twin City Plumbing and Heating through a holding company - Babcon of Waterloo Limited. He then became president of Twin City Plumbing and Heating.
On April 30, 1980 directors Messrs. Robert Groff and Arthur Groff resigned from Groff Plumbing & Heating Limited and joined the firm of Twin City Plumbing and Heating on May 1, 1980, where Carl Noe and John Griffon were already directors. Mr. Robert Groff had been doing the books of Twin City Plumbing and Heating on a monthly basis since 1970, when Mr. Howard Groff bought this company. Mr. Carl Noe has been general manager of Twin City since he was hired in 1970.
In response to complaints raised by unionized mechanical contractors in this area about Twin City operating as a non-union company, the union representatives of the Plumbers' Local 527 took action and organized this company. An application for certification was made to the Ontario Labour Relations Board in 1974 and after the taking of a representation vote, the union was certified with respect to the employees of Twin City. This certificate was issued prior to the time provincial bargaining began, so it covered all sectors of the construction industry. It may be noted that to date, no application has been made by the employees of this company to terminate the union's bargaining rights.
Notice to bargain was served upon the employer on November 6, 1974 and a meeting was held without any results. On November 15, 1974, the union was informed by letter (exhibit #21) that Mr. Carl Noe had been authorized to bargain on behalf of the company, but that any agreement must be ratified and signed by Mr. Howard Groff.
On November 28, 1974, the union made application for the appointment of a conciliation officer (exhibit #1) and on December 1, 1974, the appointment was made (exhibit #3). The conciliation officer called a meeting of the parties on December 30, 1974 with Mr. Carl Noe and Mr. Jack Porter, business manager of Plumbers' Local 527 being present. Mr. Porter asked Mr. Noe to sign a collective agreement, to which Mr. Noe replied, "I have to take this up with Poppa Groff whether to maintain two union shops or just close up Twin City. There is no reason to sign agreement because we will not be around in six months if forced to sign an agreement. We will just close shop". This conversation is confirmed by a note written by Mr. Porter in his log book which is here before us as exhibit #26. This statement is not denied by Mr. Noe.
The next contact between the union and the company was the conversation between Mr. Porter and Mr. Noe of February 17, 1975. Mr. Noe informed Mr. Porter that he had no employees and that he was finishing a job by himself. Furthermore, Noe stated that the amount of work being done did not justify his $2,000.00 a month salary with no work coming up. Mr. Noe denies the February 17, 1975 conversation with Mr. Porter, yet in his own evidence he indicates that at that time there were no employees but himself and that things looked bad.
In March 1974, Mr. John Griffon was hired by Twin City. He has been in the industry for many years and has worked for unionized and non-unionized companies. He negotiated with Mr. Howard Groff for his job and stated that the only reason he wanted this particular job was because this was a non-union company and he did not want to be involved with a unionized company.
Mr. Griffon had contacts in the Universities of Waterloo and Guelph when he worked for Nelco, which was a unionized company. It was his view that Nelco was losing the University work to non-union companies because it could not compete. Although Mr. Griffon told the employer that he wanted to operate on a non-union basis, no mention was made to him about the union being certified as bargaining agent in a representation vote just a few months earlier.
In May 1975, there was a conversation between Mr. Porter and Mr. Griffon over which there is conflict. According to Mr. Griffon, this conversation lasted only twelve seconds, and he made no written notation of it. Mr. Porter states that the reason for phoning was that after a short strike he had concluded a collective agreement for the years 1975 to 1977, and he wanted to speak with Mr. Noe about signing it. Mr. Griffon answered the phone and Mr. Porter was surprised to learn that Griffon was working with Twin City, as he thought that Griffon was still working for Black MacDonald. Griffon told Porter that Mr. Noe was not in, and Porter asked him to tell Mr. Noe to return the call. Mr. Noe did not call back. Mr. Griffon said Mr. Porter recognized him as soon as he answered the phone and seemed to know that he was working there. Griffon recalls that Porter asked him if we were going to be union or non union, to which he replied non-union. Mr. Porter then said something like, this means war.
I am of the opinion that Mr. Porter's version is more plausible because the call took place soon after the new collective agreement was settled and it would have been logical for the union to call the employer about having same signed. At the time, this conversation would have no real meaning to Mr. Griffon and he made no notation of it; yet six years later he can remember the conversation vividly. I believe no further comment on this matter is necessary.
Twin City started picking up work from both Waterloo and Guelph Universities and, according to Mr. Griffon, this amounted to forty percent of the company's work between the years of 1975 and 1979. Mr. Noe thought this work was closer to sixty per cent of its total volume.
The company presented to the Board a list of the jobs the company bid on and was successful in getting during the years 1975 to 1979 (exhibit #19). Before a proper analysis can be made of this list, I want to refer to the evidence presented by the parties in regards to the size of the jobs and the costs involved as split between labour and material. Mr. Tom Crystal, the union representative, gave undisputed evidence that from thirty to sixty per cent of the cost of any mechanical job is for material and equipment. Furthermore, he stated that a job worth $50,000.00 as a straight mechanical job would be quite substantial.
While on this subject, Mr. Noe gave a breakdown regarding the company's sales figures for 1978. Of $441,000.00, twenty per cent of the cost was for labour ($91,800.00), and twenty per cent for subcontracted out work ($82,000.00). These figures indicate that the remainder of the costs was sixty per cent for material and equipment.
It is enlightening to note the above breakdown when considering the list of jobs which Twin City successfully bid (exhibit #19). Of the seventeen jobs listed for 1975, only two were for $50,000.00 or more:
(1) University of Waterloo, Chilled Water System - $54,000.00, six tradesmen and three to four trucks were used. It took a year to complete the job.
(2) Great West Restaurant - $86,000.00, three tradesmen were used over a ten-month period. There were two jobs of $20,000.00 or more:
(a) Addition to Lutherwood Village - $24,000.00; and
(b) Westmount Golf Course - $28,000.00.
For the year 1976, out of thirty-one jobs listed, only one job was for over $50,000.00:
(1) Marsdale Nursing Home in Cambridge - $85,000.00, which had three tradesmen on it. There were only two jobs over $20,000.00:
(a) Marsland Bldg. University of Waterloo - $28,000.00; and
(b) University of Waterloo - Condensate - $20,000.00.
For the year 1977, out of thirty-four jobs listed, only one job was for over $50,000.00:
(1) University of Guelph - alteration to piping - $54,000.00- four to five tradesmen used.
There were five jobs over $20,000.00:
(a) St. Mary's Hospital - $20,000.00;
(b) Toronto-Dominion Bank - 34,300.00;
(c) University of Guelph Swimmers Treadmill Bldg. 33 -$28,000.00;
(d) C. N. R. - $24,000.00; and
(e) Computer Science Bldg. 26 - $24,000.00.
For the year 1978, out of the twenty-six jobs listed, none were for more than $50,000.00. Only one came close:
(1) University of Guelph, Animal Science Bldg. 70 - $48,000.00.
In addition, there were four others for more than $20,000.00:
(a) Conestoga College - $23,000.00;
(b) Lutherwood Village - $22,800.00;
(c) Zellars Store - Guelph - $17,400.00; and
(d) Ontario Die Co. - $21,300.00.
For the year 1979, three jobs were listed. None were for over $50,000.00; only two jobs have the amount listed:
(1) Duke Restaurant - Guelph - $32,000.00; and
(2) Conestoga College - $24,600.00.
Of the one hundred and eleven jobs listed for the above years, only 3.6 per cent of these jobs were for $50,000.00 or more, for a total of four jobs. Thirteen per cent of the listed jobs were $20,000.00 or over, for a total of fifteen jobs. Also interesting to note is that there were no $50,000.00 or over jobs in 1978 or 1979, and only one in 1977. The remainder of the one hundred and eleven listed jobs were very samll and insignificant, especially when you apply the stated formula that twenty per cent of the cost of a job is for labour.
When one adds the increase in costs brought in by our present inflation (which has increased the cost of jobs at an average of at least ten per cent for the last number of years), this tends to make these jobs appear even smaller, relegating the majority of them to nothing more than service jobs. As an example as to what inflation has done to construction costs, one can refer to the cost of housing. In 1970, the price range of the average new home had been~between $30,000 to $50,000. Identically-sized homes being built now are in the price range from $130,000 to $170,000. It is also common knowledge in the industry that a million dollar project around 1970 was considered a large construction project. Now a million dollar mechanical subcontract is not considered very large by the larger contractors in the business. Is it any wonder that the representatives of the union and this company have not run into each other in all that time on jobs between the years 1975 and 1979.
When one examines exhibit #19 closely, it is apparent that the vast majority of the jobs listed are very small in size. This only confirms the point made by counsel for the union that the company wanted to keep a low profile in order to avoid confrontation with the union in those years up to May 1, 1980, when Messrs. Robert and Arthur Groff joined Twin City. Then, and then only, did the company start to do business in a big way and start to bid on any and all jobs that were available. That is when they were able to outbid the unionized subcontractors with their non-union rates of wages. This change in management procedure and method of operation was confirmed by the statements of Mr. Robert Groff when questioned by his own counsel about his and Arthur's departure from Groff Plumbing & Heating Limited, the unionized company run by Mr. William Groff. He stated:
"We reached a point where we differed on how to run the business, we just disagreed - objectives were different - not getting co-operation. Company seemed to be in a rut - profits were low - I wanted to see more sophisticated management procedures and methods of operating. William disagreed with these concepts - the offer to purchase came as a surprise, I thought that this was an opportune time to bail out."
Sometime after May 1, 1980, Twin City, under the management of Messrs. Robert and Arthur Groff, bid the University of Waterloo, Environmental Studies Bldg. to general contractor Ball Bros. Construction. This was the first large mechanical job they were successful in obtaining. Immediately thereafter, Ryan Mechanical complained to the union that they were outbid by Twin City. The union took immediate action, and went out to the job site. They found a Twin City construction shack and trucks on the project and they immediately set up a picket line. This happened in the second week of September, 1980. This action became a subject matter in a case before the Board under Board File No. 1219-80-U, which was settled on agreement of the parties.
During the period of 1975 to 1980, Mr. Tom Crystal, the business representative of the union, said he would call Mr. Howard Groff annually and ask him to sign the agreement. He stated that on most occasions Mr. Howard Groff would hang up on him. During this same period, Twin City was located in a single family residence on John Street where Mr. Carl Noe lived with his wife and two children. There was a sign on the house which was changed in 1977. This change made the sign less noticeable. During this time, according to company evidence, they acquired "eight" trucks, one each driven by Messrs. Noe and Griffon. These trucks gathered at the office at 8:00 a.m. and were dispersed by 8:30 a.m., although Mr. Noe's truck might have been there at other times.
On June 1978, the union requested that the Ministry of Labour appoint a conciliation officer in regard to residential sector negotiations. The name Twin City appeared on the attached list of contractors involved. Separate negotiations were required for the residential sector in 1978, as this sector was excluded from the provincial bargaining which covered only the industrial, commercial and institutional sector. Twin City denied receiving a copy of this list.
On May 1, 1978, provincial bargaining came into existence in the industrial, commercial and institutional sector of the construction industry with the designation of employer and employee bargaining agencies. The United Association and its Locals formed the Employee Bargaining Agency ("E.B.A.") binding all its employees for whom the union had bargaining rights through signed collective agreements or through certification by the Ontario Labour Relations Board.
There is evidence to support the union's accusation that Mr. Robert Groff of Groff Plumbing & Heating Limited, who was serving on the Mechanical Contractors' Association Negotiating Committee, was running a double-breasted operation during this time. Mr. Porter's evidence is that at the time the union had nothing specific - Groff Plumbing and Twin City were father and sons related companies. At any time Twin City, which was supposed to be dormant, could suddenly mushroom and start taking union jobs. In answer to these accusations, Mr. Robert Groff said that the father has one company and the sons have the other company. The union did not appear to accept this explanation.
It was also at this time that the complaints from unionized contractors to the union were very sketchy about Twin City. This was because during this time the Mechanical Contractors' Association had in membership both unionized and non-unionized contractors and were very tight-lipped about the activities of their non-union members. There was no specific complaint about Twin City until Ryan Mechanical complained about the job Twin City successfully bid for (the University of Waterloo) which was the biggest job undertaken by the University for some time.
Twin City had a reputation prior to its sale to Mr. Howard Groff of being a small residential service contractor. This small operation was operated by Mr. Kerr from his house on John Street, and Mr. Carl Noe appeared to continue to operate it in the same vein. In fact, Mr. Noe made some improvements to the house in 1977 to make it more of a home than a business office. There was a reorganization of the operations of the company on May 1, 1980, when Messrs. Robert and Arthur Groffjoined the firm with Messrs. Noe and Griff on. At this time, Messrs. Noe and Griffon became directors and shareholders of the company for the first time. Less than five months after the reorganization there was a confrontation with the union. In the meantime, Mr. Robert Groff had resigned from the Negotiating Committee of the Mechanical Contractors' Association because it became obvious that there would be a conflict of interest.
There is no evidence before this Board that the applicant had any intentions to abandon its bargaining rights with Twin City Plumbing and Heating, either by its own actions or by the acknowledgement of this fact to any employer or employee. In the past, the Board has dealt with the question of abandonment. Initially there was some doubt as to whether or not the Board had power to declare abandonment, as was outlined in Frid Construction Ltd. [1975] OLRB Rep. March 150. At paragraph 22, the Board stated:
"Counsel's third argument is that in the very least there ought to be a representation vote with respect to reinforcing rodmen. Counsel reasoned that intervener #2 was awarded bargaining rights for reinforcing rodmen twenty years ago and that since the Board no longer may find abandonment of bargaining rights since the decision of the Ontario Court of Appeal in Shopmen's Local Union No. 743 of the International Association of Bridge, Structural and Ornamental Iron Workers v. Brayshaw Steel Ltd. and United Steelworkers of America 71 CLLC ¶114,084; the Board ought to acknowledge the existence of outstanding bargaining rights with respect to reinforcing rodmen."
And a paragraph 28 it continued:
"There remains for consideration the question of whether intervener #2 currently holds bargaining rights for reinforcing rodmen quite apart from the provisions of the collective agreement referred to in paragraph 22 herein. The Board has not terminated the bargaining rights of intervener #2 with respect to reinforcing rodmen and since the decision of the Ontario Court of Appeal which was referred to in paragraph 22 herein, there is some considerable doubt concerning whether the Board may find abandonment of bargaining rights in this application. In the result, the Board finds that intervener #2 still possesses bargaining rights for reinforcing rodmen within the geographic area defined in the certificate issued by the Board on February 10, 1955."
- Since then we have John Entwistle Construction Ltd. [1979] OLRB Rep. March 211 (application for judicial review dismissed) in which the Board found abandonment on the particular facts of that case. At paragraph 11, the Board stated:
"The issue of whether a trade union has abandoned its bargaining rights must be determined on the particular facts of each case. The Board has looked to a variety of factors in the bargaining relationship as indicators of whether bargaining rights have been abandoned. Some of these are canvassed in paragraph 5 of J. S. Mechanical [Board File No. 1 677-78-R (as yet unreported)] and include: the length of the union's inactivity; whether it has made attempts to negotiate a collective agreement or sought to administer an existing collective agreement; whether terms and conditions of employment have been changed by the employer without objection from the bargaining agent; and whether there are any extenuating circumstances which might explain an apparent failure to assert bargaining rights."
On the matter of intent, there must be an animus wherein the party has demonstrated its intent to abandon its bargaining rights through the termination sections of the Labour Relations Act, which section also allows the employer and the employees to apply for termination of bargaining rights. No such actions have taken place in this case.
The time period involved, by itself, is not conclusive as was stated in Dravo of Canada Limited [1977] OLRB Rep. Sept. 569. At paragraph 5, the Board stated:
"The parties agreed that the collective agreement had expired on August 31, 1973, and that on June 21, 1977, the trade union had given the employer written notice to bargain with a view to making a collective agreement. From the currency of the collective agreement which expired on August 21, 1973, until June21, 1977, there was no contact between the parties. Since 1973 the employer has not employed carpenters in the area until the summer of this year."
And at paragraph 13:
"The Board now considers the third ground which was advanced by the employer. The employer referred to several decisions of the Board which enunciated the proposition of abandonment of bargaining rights by trade unions. Some of these decisions were written before (and some after) the decision of the Ontario Court of Appeal in Brayshaws Steel Ltd. (1971), 1971 CanLII 364 (ON CA), 26 D.L.R. (3d) 153, where Jessup, J.A. stated at p. 159:
The question therefore is whether the Board had the power to make the vitiating declaration that it did. No such express power is asserted but it is said that such a power is to be implied from the words in s. 5(1) of the statute, 'are not bound by a collective agreement’. These words are said to empower the Board not only to find whether there is in existence a collective agreement within the meaning of s. 1(1)(c) and to find the employees affected by it but also to find, on the application of such equitable principles as the Board may think proper, whether the agreement is operative for any purposes. Clearly the Board has no inherent jurisdiction. Since its powers are statutory they must be found in clear language of necessary intention. In my opinion the only powers confered on the Board by s. 5(1) are to ascertain whether a collective agreement within the meaning of s. 5(1) exists and to determine the persons such agreement affects: the words ‘bound by’ in s. 5(1) simply express the legal result of s. 37 of the statute. That section binds the Board as well as the parties to a collective agreement. In my view, the quoted words from s. 5(1) could read, in the same sense, ‘are not included in (or affected by) a collective agreement’. Where the Legislature has deemed it expedient for the Board to have power to render a collective agreement inoperative, it has granted the power by express words as in s. 45a(4) [enacted 1964, c. 53,s. 5; rep. & sub. 1970, c. 85; s. 20(2) (now s. 52(4))], an express grant of power which would be redundant if the Board has the equitable jurisdiction contended for. It is also significant that ss. 39, 42, 43 and 44 [now ss. 44, 48, 49 and 50] also expressly provide that, upon certain findings by the Board, collective agreements cease to operate."
The only indirect reference to abandonment in the Act is found in section 49(5) [now section 57(5)] where a trade union may inform the Board that it does not desire to continue to represent employees in the bargaining unit. However, even assuming for the purpose of argument that the Board does have power under the Labour Relations Act to find abandonment of bargaining rights, the Board is of the view that the facts set forth in the reference would not support a finding of abandonment of bargaining rights by the trade union. Where there has been an absence of employees (as is common in the construction industry) who would be covered by successive collective agreements, the lack of contact by the bargaining agent with the employer during the period of such absence would not support a finding of abandonment of bargaining rights by the trade union. In this regard see Dominion Bridge [1971] OLRB Rep. Apr. 201.
In this case there was no obvious presence or opportunity to observe the employer as in the case above. For five years the employer kept a low profile and the parties did not run into each other on any of the projects in the area. This is confirmed by the employer's evidence. Thus, the time factor alone is not a decisive factor in this case. Furthermore, although the onus is on the employer to prove that the union has abandoned its bargaining rights, there was no such evidence put forth by the employer.
Counsel for the applicant argued that there must be a distinction between waiver or estoppel on the one hand, and abandonment by which some conclusion can be reached. If a party has knowledge of something and choses not to exercise its rights or take a course of action, it may be faced with waiver or estoppel of rights, and thus it cannot claim damages based on the other party's actions. It is necessary to weigh that against having knowledge of the violations and having to give up one's rights for all time. At most, a party should be faced with waiver or estoppel from asking for damages beyond the date of the filing of a grievance, unless unusual circumstances are proven.
Did the union know of its rights and do nothing? Is it simply estopped from seeking damages based on its rights or did it give up its right for all time? One must look to the difference between the industrial, commercial and institutional sector and residential sector bargaining. Was the notice to bargain in the residential sector given on June, 1978, some evidence that the union knew or ought to have know that Twin City was doing service work in that sector? As to the industrial commercial and institutional sector, provincial bargaining came into effect on May 1, 1978 and became binding on all employees in the industrial, commercial and institutional sector with whom the union had bargaining rights, either through their collective agreements or certificates issued by the Board.
There is no evidence in law that the union intended to abandon its bargaining rights in the industrial, commercial and institutional sector in either period of time prior to the inception of provincial bargaining or subsequent to provincial bargaining. Primarily, the union assumed that the employer was only engaged in residential service work. There is also evidence by union representative that they did not encounter the company on any of the union projects and this is confirmed by the employer's evidence. This is supported by their assumption that the company was doing only residential sector work. The union did not act on this assumed knowledge of residential service work and, therefore, they may have waived their right of action in this sector. Hence, they may be estopped from claiming any damages beyond the time of the filing of this grievance.
The one thing we cannot ignore in this case is the anti-union animus on the part of Messrs. John Griffon and Carl Noe, the two people operating this company since March of 1975; after the time at which the union was certified and right up to the time the company was reorganized on May 1, 1980. These two gentlemen were certainly not going out of their way to let the union know where and how they were operating the business; for example, what work they were bidding. They were not prepared to bid on jobs of the size that would draw the attention of the union representatives to their operations. In essence, the timeliness aspect really begins when the company changed its whole profile; when Messrs. Robert and Arthur Groff joined the company on May 1, 1980. Shortly thereafter, they had their first confrontation with the union when they bid their first large mechanical job.
For all the above reasons, the union's application should succeed because there has been no abandonment of bargaining rights. The Board should declare that Twin City Plumbing and Heating is bound by both the provincial collective agreement in the industrial, commercial and institutional sector of the construction industry and by any other collective agreement which it has with the applicant.