Carpenters' District Council of Toronto and Vicinity v. Inducon Construction (Northern) Inc., 1982 CanLII 856

[1982] OLRB Rep. March 390

1437-80-M Carpenters' District Council of Toronto and Vicinity, on behalf of Locals 27, 666, 681, 1133, 1747, 1963, 1304, 3227 and 3233, United Brotherhood of Carpenters and Joiners of America, Applicant, v. Inducon Construction (Northern) Inc., Inducon Development Corporation, Inducon Construction of Canada Limited, Desbil Management Inc. and Inducon Design/Build Associates, Respondents

BEFORE: R. A. Furness, Vice-Chairman, and Board Members H. J. F. Ade and M. Ross.

APPEARANCES: Harold F. Caley and Fred Leach for the applicant; W. Michael Temple R. T. Pettypiece and R. S. MacKay for Inducon Construction (Northern) Inc., S. C. Bernardo and Joe Watson for Inducon Development Corporation; no one for Inducon Construction of Canada Limited; J. Alexander Menzies for the employees of Inducon Construction (Northern) Inc., D. N. Corbett and R. E. McCormack for Desbil Management Inc. and Inducon Design/Build Associates.

DECISION OF THE BOARD; March 11, 1982

1. 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 its referral to the Board, the applicant has alleged that Inducon Construction of Canada Limited ("ICCL") has violated the Carpenters' provincial collective agreement. In particular, the applicant has alleged that ICCL violated Articles 4 and 19 and Schedule "A" of that collective agreement. The applicant referred to one project as the Honeywell Limited job on Gordon Baker Road in Willowdale and which involved concrete formwork. The applicant claimed, on its own behalf and on behalf of its members, compensation for all hours worked by non-members of the union on the project.

2. The initial hearing of this referral was held on October 23, 1980. On October 21, 1980, the Board received the following letter from the solicitors for Inducon Construction (Northern) Inc.:

We have been consulted by Inducon Construction (Northern) Inc. concerning your letter of October 14, 1980 addressed to Inducon Construction of Canada Limited which has been received in the mail.

We are advised that Inducon Construction of Canada Limited ceased to exist on or about August 31, 1977 as the result of an amalgamation, and that the officials of Inducon Construction (Northern) Inc. have no knowledge of any collective agreement having been entered into with the applicant. Our client is therefore not able to respond on behalf of the former company by way of filing a reply to the application nor is it able to forward any collective agreement to the Board.

We will be attending before the Board on Thursday, October 23rd to endeavour to obtain more particulars about this application and to request a copy of the collective agreement which is referred to in paragraph four of the Notice of Referral of the applicant. In the event that it is determined that the applicant intends to proceed with the application we will be requesting an adjournment in order that we may be properly instructed to prepare for any hearing to be held.

3. After the conclusion of the hearing on October 23, 1980, the Board received a letter from the applicant which stated that the applicant wished to have Inducon Development Corporation ("IDC") and Inducon Construction (Northern) Inc. ("ICNI") added as respondents. In addition, the applicant further advised the Board that it would be alleging that one of IDC or ICNI is the successor company of the intitially named respondent ICCL and would be further arguing that all of the respondents are bound by the Carpenters' provincial collective agreements referred to in paragraph one by virtue of section 1(4) of the Act. The Board served notice of this referral and of hearing on ICCL, IDC and ICNI.

4. In March of 1981, replies to the referral were filed by IDC and ICNI. In its reply, IDC denied that any sale of business took place between it and any other company and denied that it is the successor of any other company and further denied that it carries on associated or related activities or businesses with ICCL and Inducon Construction (Northern) Limited or any other company, within the meaning of section 1(4) of the Act. IDC denied it was bound by the Carpenters' provincial collective agreement and further denied that the applicant or any other local of the United Brotherhood of Carpenters and Joiners of America, or the International has, or ever has had, bargaining rights for the employees of IDC and that if any such bargaining rights for the employees of IDC and that if any such bargaining rights were ever held that these bargaining rights have been abandoned. IDC further denied that the applicant or any local of the United Brotherhood of Carpenters and Joiners of America has, or ever has had, bargaining rights for the employees of ICCL, and that if any such bargaining rights were ever held that these bargaining rights have been abandoned.

5. In its reply, ICNI denied that it is a party to or bound to the applicant by the collective agreement referred to by the applicant. ICNI adopted the position that the applicant does not have and never has had any bargaining rights to represent its employees. ICNI also denied that it had purchased a business or that it is the successor of any other company or that it has carried on associated or related activities or businesses with any other company within the meaning of the Labour Relations Act. In the alternative, ICNI stated that if by operation of law the applicant has had bargaining rights to represent its employees, such rights have been abandoned by the applicant.

6. During the hearing of this application the applicant made a motion that Desbil Management Inc. ("Desbil") and Inducon Design/Build Associates ("IDBA") be made parties to this referral. In a decision in this matter dated June 15, 1981, the Board directed the Registrar to serve notice of the continuation of hearing of the referral to Desbil and IDBA. In a further decision dated June 30, 1981, the Board stated that it was prepared to add Desbil and IDBA as respondents upon this referral commencing from the beginning with full participation by Desbil and IDBA. The parties subsequently briefed counsel for Desbil and IDBA with the evidence and it was agreed that Robert MacKay again be called as a witness in order to permit counsel for Desbil and IDBA to question him. Counsel for Desbil and IDBA withdrew his objection to the jurisdiction of the Board and this reference proceeded to the conclusion of evidence and argument.

7. Before considering the issue of the existence of bargaining rights and the present relationship of the respondents, it is helpful to consider the evolution of the various companies within the Inducon group of companies. In 1968, ICCL and Inducon Consultants of Canada Limited were chartered as wholly owned subsidiaries of Inducon Holdings Limited ("IHL"). In December of 1976, IHL changed its name to IDC so that ICCL and Inducon Consultants of Canada Limited were wholly owned subsidiaries of IDC. In August of 1977, ICCL and three other companies were amalgamated with IDC. On December 29, 1978, ICNI was incorporated as a wholly owned subsidiary of IDC. On March 1, 1979, the direction and control of ICNI and Inducon Consultants of Canada Limited was assumed by IDBA. Desbil was incorporated on February 9, 1979, and entered into an equal relationship with IDC in IDBA.

8. In November of 1970, Local 1669 of the United Brotherhood of Carpenters and Joiners of America ("Local 1669") applied for certification with respect to certain employees of Inducon Consultants of Canada Limited and ICCL. For reasons which are not relevant to this referral, neither application was ultimately successful (see Board File Nos. 1866 l-70-R and 1 8796-70-R) and the Board dismissed and terminated, respectively, these two applications. On December 24, 1970, Local 1669 and ICCL signed a short form agreement which, in part, recited:

That the parties hereto accept and agree each with the other to be bound by all terms and conditions contained in the current Agreement between the Union and the Construction Association of Thunder Bay Incorporated, and as it may be changed or renewed from time to time by negotiations and/or by lapse of time, to the same extent as though the Contractor has executed such agreement as a member of the Construction Association of Thunder Bay Incorporated, and such terms and conditions are hereby made part of this agreement and effective on all projects of the contractor in the geographical District of Rainy River, Kenora, Thunder Bay and that part of the District of Algoma and Cochrane north of the 49th Parallel and west of the North Driftwood, Abitibi and Mosse Rivers to the James Bay including the rivers herein named.

This agreement shall be effective on date of signing and shall remain in effect for a term of not less than one year and shall continue automatically thereafter for annual periods of one year each unless either party notifies the other in writing not less than ninety (90) days prior to the expiration date that it desires to change, add to, or amend this Agreement.

9. The collective agreement between Local 1669 and The Construction Association of Thunder Bay Incorporated ("Association") was made on June 1, 1970, and remained in effect until April 30, 1973. Article 24.02 of the collective agreement between Local 1669 and the Association provides:

Should the Association or the Union desire to change, add to, or amend this Agreement, notice in writing of such intent shall be made not later than ninety (90) days prior to termination of Agreement, and all changes are to be specified at this time.

The Parties agree to meet not later than ten (10) days following the date that notification of changes, additions, or amendments are to be received as herein mentioned.

If no such notice is given, this Agreement is to continue in force from year to year, subject to ninety (90) days' notice in writing, prior to April 30th of each year.

Articles 3.01 and 1.05 of this collective agreement provide:

3.01 The employer recognized the Union as the sole collective bargaining agent for all Employees as defined in Article 1, Section 1.05 of this Collective Agreement in his employ in the geographical districts of Rainy River, Kenora (including the Patricia Portion), Thunder Bay and that part of the Districts of Algoma and Cochrane, north of the 49th parallel and west of the North Driftwood, Abitibi annd Moose Rivers to James Bay including the Rivers herein named.

1.05 “Employee" or "Employees" means any foreman, working foreman, lead hand, journeyman or apprentice in the employ of the Employer and engaged in work covered by this Collective Agreement.

10. ICCL was engaged in the construction of three schools in Rainy River and Fort Frances which are located within the geographic area referred to in paragraphs eight and nine. Members of Local 1669 were employed on these three schools and the collective agreement between ICCL and Local 1669 was applied to these jobs. Local 1669 filed grievances with respect to these jobs and such grievances were settled prior to arbitration. The work on these jobs was concluded by the end of 1973 or the early part of 1974. After the completion of the last of these three jobs, ICCL did not subsequently engage in construction work in the geographic area referred to in paragraphs eight and nine.

11. In a letter dated February 27, 1973, ICCL wrote to Local 1669 enclosing a copy of a letter it had sent to its own solicitors on the same date advising that it would not be renegotia­ting or re-entering into a new collective agreement upon the expiration of the then current collective agreement either separately or as a part of the Association. In a letter of the same date the Association was also advised of this position of ICCL. In a letter dated March 2, 1973, Local 1669 advised ICCL that it had no wish to terminate its agreement with ICCL. Local 1669 did not serve notice to bargain on ICCL in 1973 or 1975. Similarly, Local 1669 did not apply for the appointment of a conciliation officer with respect to ICCL. The Association filed an application for accreditation on May 15, 1973, and in that application Local 1669, as the respondent, named ICCL as an employer for whom Local 1669 was entitled to bargain as of May 15, 1973. The Association requested leave to withdraw its application and the Board dismissed the application on October 16, 1973. (See Board File No. 3814-73-R.) In March of 1978, Local 1669 wrote to ICCL by registered mail as follows:

Please be advised that the agreement that we now hold with your Company will cease to operate on the 30th April 1978.

We are negotiating a Provincial Agreement for the Industrial Commercial and Institutional Sectors which may affect your Company.

We will also be negotiating an agreement with the Construction Association of Thunder Bay for the Residential Sector.

As soon as the guidelines are set, we may have to negotiate separately with your Company for a new agreement. We will contact you at a later date to arrange a mutually acceptable time and date to meet if necessary.

There was no evidence before the Board that either Local 1669 or ICCL followed up on the letter of March, 1978. The next contact with ICCL was a letter dated July 18, 1980, from Philip Robichaud, the acting business manager of the applicant, which stated:

We understand that the United Brotherhood of Carpenters and Joiners of America, Local 1669 holds bargaining rights for carpenters and carpenters' apprentices employed by your company in their geographic area. Pursuant to Bill 204, and Act amending the Labour Relations Act effective May 1st, 1980, we believe your company is bound by the provincial collective agreement with the Carpenters' Union, province, and in particular, Board area #8.

We are enclosing a copy of the Provincial collective agreement which expired on April 30, 1980. As you are probably aware, a new collective agreement has been entered into and as soon as copies are available, we will forward a copy to you.

We expect you to comply with the collective agreement. If you have any questions concerning this matter, please contact me.

ICCL did not respond to this letter.

12. It was argued by the respondents that whatever bargaining rights had been held by Local 1669 with respect to ICCL had been abandoned by the lack of action by Local 1669, and that there were no bargaining rights which would form the basis of a finding that Local 1669's bargaining rights were included in the provincial agreement which came into effect in 1978. It followed from the position of the respondents that there would be no basis for applying the provisions of section 137(2) with a deemed recognition of the applicant in its geographic jurisdiction by any of the respondents. It was the position of the applicant that Local 1669 had not abandoned its bargaining rights.

13. While ICCL did not give Local 1669 notice in accordance with either the short form agreement or the collective agreement between the Association and Local 1669, the notice in the letter dated February 27, 1973, falls within the notice requirements set forth in section 53(1). However, the letter dated February 27, 1973, did not have the effect of terminating the bargaining rights of Local 1669. There was no longer a collective agreement which was binding on ICCL after April 30, 1973, which covered the balance of its work until its completion early in 1974. Whether a trade union has abandoned its bargaining rights is a matter which must be assessed on the facts of each case. ICCL had its base of operations in southern Ontario and since the completion of its jobs in Rainy River and Fort Frances in 1974, it has not undertaken any construction work within the geographic jurisdiction of Local 1669. ICCL may be described as a non-resident contractor with respect to Local 1669 and it is readily appreciated that Local 1669 has more immediate concerns with contractors, whether resident or non resident, who either regularly or actually work within its geographic jurisdiction. In Dravo of Canada Limited, [1977] OLRB Rep. Sept. 568, 572, the Board considered a case where there was a similar lack of employees and stated:

Where there has been an absence of employees (as is not uncommon 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 the Dominion Bridge Company Limited Mount Dennis Plant case, [1971] OLRB Rep. April, 201, 204.

While it is expected that a trade union will actively promote its bargaining rights, in the instant case, there was only a period of some eight to ten months when Local 1669 did not actively pursue its bargaining rights before ICCL moved out of its geographic jurisdiction - never to return. Reference was made to two recent cases of the Board, namely, Hugh Murray Limited, [1979] OLRB Rep. July 664 and John Entwistle Construction Limited, [1979] OLRB Rep. Nov. 1096, (applications for judicial review dismissed) where the Board held that two trade unions had abandoned their bargaining rights. The facts in these two cases are quite different from the instant referral. In the latter case, the company was active in the geographic jurisdiction of the trade union throughout the period when the trade union had not actively promoted its bargaining rights. In the former case, the trade union was aware of the employer and for reasons of its own chose not to serve notice to bargain on the employer and at all times acted as though it did not have bargaining rights for the company's employees. In the instant referral Local 1669, with the exception of some eight to ten months in 1973 and 1974, has not failed to represent employees in the bargaining unit when there were employees to represent. A trade union is not required to perform academic exercises with an employer in the construction industry in order to represent non-existent employees. On the facts of this referral, the Board is not prepared to find that Local 1669 has voluntarily abandoned its bargaining rights with respect to carpenters and carpenters' apprentices employed by ICCL in the geographic area referred to in paragraphs eight and nine.

14. Robert MacKay gave evidence that he is employed and paid by IDBA and holds the position of president. He is also a director of IDC. In 1968 he was employed by IHL and believes he was vice-president at one time. An extract from the share register of IHL indicated that Mr. MacKay and Andrew Zsolt became directors as of December31, 1974, and that on the same date Mr. Zsolt was elected president executive, Mr. MacKay was elected vice-president and J. O'Connell was also elected vice-president. There were apparently changes being made from time to time in IHL and the Board of Directors on January 6, 1969, included Mr. Zsolt, Mr. MacKay, Mr. O'Connell and Kalman Czegledy. In addition, the election of officers as of January 6, 1969, comprised Mr. Zsolt as president with Mr. MacKay, Mr. O'Connell and Mr. Czegledy as vice-presidents and J. Leach as secretary-treasurer. William Buck was appointed a director on October 15, 1970. On October 23, 1973, Mr. MacKay was appointed executive vice-president and Mr. O'Connell was appointed vice-president.

15. On December 27, 1968, Mr. Zsolt, Mr. MacKay and Mr. O'Connell became directors of Inducon Consultants of Canada Limited and on May 22, 1970, Mr. Czegledy and Mr. Buck also became directors. With respect to the officers, Mr. Zsolt became president on December 27, 1968, and held that position until June 5, 1975. Mr. Zsolt became chairman of the board on June 5, 1975. Mr. MacKay was a vice-president from December 27, 1968, until May 25, 1976 and on May 25, 1976, he became vice-chairman of the board. Previously, Mr. MacKay had been secretary-treasurer from October 12, 1972, until December 11, 1972, and secretary from December 11, 1972, until December 31, 1974. On March 1, 1979, Mr. O'Connell resigned as a director and as a vice-president. On March 1, 1979 Mr. MacKay resigned as a vice-president and was appointed president. On March 5, 1979, Mr. MacKay resigned as president and was appointed vice-chairman and secretary. On March 1, 1979, Mr. Buck and Mr. Czegledy were appointed as vice-president and secretary and vice-president and treasurer respectively. On March 5, 1979, Mr. Buck resigned as a vice-president (and also presumably as secretary) and Mr. Czegledy resigned as a vice-president and treasurer. On that same date Mr. Buck was appointed president and Mr. Czegledy was appointed a vice-president.

16. Mr. Zsolt, Mr. MacKay and Mr. O'Connell became directors of ICCL on May 24, 1968, and Mr. Buck and Mr. Czegledy became directors on September 8, 1971. Mr. Zsolt was elected president on May 24, 1968, and resigned from that office on May 25, 1976. On May25, 1976, Mr. Zsolt was elected chairman of the board of ICCL. Mr. MacKay was elected a vice‑president on May 24, 1968, and resigned from that office on May 25, 1976. Mr. MacKay was elected secretary-treasurer on October 12, 1972, and resigned from that office on December 11, 1972. Mr. MacKay was elected secretary on December 11, 1972, and resigned from that office on January 4, 1974. On May 25, 1976, Mr. MacKay was elected president of ICCL. Mr. Buck and Mr. Czegledy were elected vice-presidents of ICCL on January 4, 1974.

17. The major and controlling shareholder of IHL from 1968 to 1976 or 1977 was Andrew Zsolt with about eighty-five per cent of the issued shares. The remaining fifteen per cent was held among more than twenty persons with four or five senior employees holding most of the fifteen per cent. From 1968 until 1976 Inducon Consultants of Canada Limited was functioning as a consulting engineering firm with the bulk of its activities involving the designing of construction projects and with some consulting activities for outside clients. More than sixty per cent of the work of Inducon Consultants of Canada Limited was "in house" work. The philosophy of the Inducon group is to combine engineering in a contract and to have Inducon Consultants of Canada Limited perform the engineering work. With very few exceptions, Inducon Consultants of Canada Limited performed all of the engineering work for ICCL. Design-built contracts would be signed by ICCL with the engineering portion being performed by Inducon Consultants of Canada Limited.

18. There were individuals whose primary work was for Inducon Consultants of Canada Limited and there were managers whose work was for ICCL. These two groups would overlap in the area of marketing where both engineering and construction services were being offered. IHL, ICCL and Inducon Consultants of Canada Limited were based in Toronto during the period between 1968 and 1976. The Inducon group of companies entered the construction field in northwestern Ontario with the design and construction of schools after it had gained some success with schools in Whitby. In 1969, Inducon Construction Western Limited was incorporated with an office in Winnipeg. It was difficult to supervise the construction of the schools in Rainy River and Fort Frances from Toronto and the supervision for this construction was from the office in Winnipeg.

19. In 1970, ICCL employed between eight and ten carpenters outside northwestern Ontario and in 1971 there were fourteen jobs in progress and an annual billing of about seven and a half million dollars. All of the new projects in 1971 were in Toronto with the exception of one project in Owen Sound and between eight and ten carpenters were employed in Toronto. By 1972 there were fourteen projects of which thirteen were in Toronto with the remaining project in Fort Frances. The annual billing increased from six million dollars in 1972 to almost twenty million dollars in 1978. Between 1973 and 1979 most of Inducon's jobs were in Toronto with the balance in southern Ontario. Between 1972 and 1976, ICCL employed between eight and sixteen carpenters in southern Ontario. As of 1980, ICNI employed about fifteen carpenters. Prior to the amalgamation, ICCL endeavoured to provide continuous employment for its carpenters. The same policy was adhered to after amalgamation and ICNI also follows this policy. Before 1970, and up until the change in name in 1976, IHL never acted as a builder. During this period, I HL acted as a developer in the area of greater Toronto. From December of 1976 until August of 1977, IDC did not act as a builder but did act as a developer in the area of greater Toronto. At the time of the amalgamation in 1977, contracts were signed by ICCL as a division of IDC. At this time, ICCL, as a division of IDC, continued to work with Inducon Consultants of Canada Limited in the same relationship. IDC employed the carpenters and after amalgamation IDC continued to act as a development company. Mr. MacKay gave evidence that the amalgamation occurred essentially for tax reasons and that no consideration was given to the labour relations aspect of the change.

20. Mr. MacKay, Mr. Zsolt and Mr. Buck became directors of ICNI on December 29, 1978. On March 2, 1979, Mr. Zsolt ceased to be a director and on that date Mr. Czegledy became a director. Mr. MacKay was elected president on December 29, 1978, and resigned on March 2, 1979. On the latter date, Mr. MacKay was elected president and resigned on March 5, 1979, when he was elected vice-president and secretary. Mr. Buck was elected secretary on December 29, 1979, and resigned on March 2, 1979. On that date, Mr. Buck was elected vice-president and secretary and on March 5, 1979, he resigned from these positions. On March 5, 1979, Mr. Buck was elected vice-president. On March 2, 1979, Mr. Czegledy was elected vice-president and treasurer. On March 5, 1979, he resigned from these positions. On March 5, 1979, Mr. Czegledy was elected president.

21. Mr. MacKay informed the Board that ICNI was incorporated on December 29, 1978, in anticipation of a partnership for which a construction vehicle would be needed. ICNI performed construction from the time of its incorporation until March 1, 1979, with the on-site supervision and office management being performed by the superintendent and the office manager who previously worked for ICCL and for ICCL as a division of IDC.

22. Desbil was incorporated on February 9, 1979, and the first directors were Mr. MacKay, Mr. Czegledy and Mr. Buck and they hold the offices of president, vice-president and treasurer, and vice-president and secretary, respectively. The shareholders of Desbil consist of these three persons and John O'Connell and James Ross, who are also directors. In addition, five department heads and department managers are shareholders and ten other associates, for example, project managers. It was the intention either that all the design and development work would be taken away from IDC and given to the partnership or that IDC would donate the design and development work to the partnership as its contribution to the parternship. Of the fifteen sharehoders of Desbil, about a half of them hold shares in IDC. However, one of the conditions agreed to on forming the partnership was the surrender of shares in IDC in exchange for the contribution to the partnership.

23. In brief, IDC contributed the design/build and development work to the partnership and Desbil contributed money and those shares of IDC which had to be surrendered to IDC. It was agreed that Desbil would be the managing partner and would exercise this function through an executive committee. Mr. MacKay chairs this committee. The members of the executive committee nominate directors and officers for ICNI. The persons who make management decisions for ICNI and Inducon Consultants of Canada Limited are principals and agents of Desbil.

24. The partnership agreement was made as of March 1, 1979, and is between IDC of the first part, Desbil of the second part, and W. P. Buck Investments Inc., K.C.N. Consultants Limited and Santo Company Limited. The last three companies are the personal companies of Mr. Buck, Mr. Czegledy and Mr. MacKay. The agreement recites that Desbil has been incorporated for the primary purpose of forming a partnership together with IDC to carry on the construction and engineering business previously carried on by IDC. In a further recital it is set forth that IDC has agreed to transfer to the partnership all of the assets and goodwill of its existing design/build business and that Desbil has agreed to transfer certain additional capital to the partnership. The partnership leases space from IDC at 235 Yorkland Boulevard in Willowdale. The partnership is presently engaged in the designing and construction of buildings under contract for third parties and the designing and construction of buildings for IDC on a fee basis. Since the partnership has been established, IDC has not operated as a builder or a consultant. IDC continues to act as a developer and operates properties and office buildings. In paragraphs 32 and 33 of the partnership agreement, IDC granted to the partnership for a period of ten years the first opportunity to provide design/build services whenever such services are required by IDC. In addition, IDC covenanted not to undertake any design/build services for third parties. On the other hand, Desbil covenanted that it would not carry on any land development, land assembly or leaseback business and the partners agreed that the partnership would only undertake design/build projects contracted for with third parties or with IDC unless otherwise determined by the partners. Mr. MacKay informed the Board that it was the intention of the parties to the partnership agreement that the activities of IDC and the partnership be kept separate. Commencing in 1984, Desbil has the right to acquire IDC to sell to Desbil up to one-half of IDC's present fifty per cent interest in the partenership. In addition, Desbil has agreed under the partnership agreement to purchase an aggregate of one-half of IDC's present fifty per cent interest in the partnership on or before June 1, 1989. In the event that Desbil purchases an aggregate of one-half of IDC's fifty per cent interest in the partnership, then Desbil is entitled to purchase all of the remaining interest of IDC in the partnership upon the happening of certain events.

25. In an asset sale agreement made as of March 1, 1979, the contribution of IDC to the partnership is set forth. The agreement states that all of IDC's construction and engineering business, including the goodwill associated with that business, are contributed to the partnership. The value placed on this contribution was $233,168. The agreement also sets forth that the fair market value of property transferred from IDC to the partnership was $983,168. Such property included furniture, fixtures, tools, equipment, goodwill, shares in ICNI and Inducon Consultants of Canada Limited.

26. Since the formation of the partnership, ICNI has signed the construction contracts. Mr. MacKay described Desbil as a holding company which holds its share of the partnership and has no assets other than the partnership. The three personal companies, namely, W. P. Buck Investments Inc., K.C.N. Consultants Limited and Santo Company Limited, hold the shares in Desbil as the principal shareholders. While Desbil does not engage directly in construction, its objects are broad enough to permit it to engage in the businesses of construction and engineering. There was some confusion in the mind of Mr. MacKay about the identity of the employer of carpenters and labourers who are employed to perform the construction. Initially, it was his position that ICNI never had any employees and the carpenters and labourers were employed and paid by the partnership. Subsequently, Mr. MacKay informed the Board that the carpenters, labourers and superintendents are employed by ICNI but are paid by cheques which bear the name of the partnership. He explained that this arrangement was because of the fact that neither ICNI nor Inducon Consultants of Canada Limited have bank accounts. Mr. MacKay explained that these cheques are computer cheques which utilize the computer owned by IDC. A bank runs the payroll and the general ledger and various accounts of the partnership are on the computer. T‑4 slips from Revenue Canada indicate that during 1979 the carpenters were employed by IDC and Inducon Design Build Associate (emphasis added). Employee Joe Vital worked for IDC and Inducon Design Build Associate during 1979. The T-4 slips from Revenue Canada for 1980 indicate that Inducon Design Build Associate was the employer of the carpenters. Record of Employment statements for Unemployment Insurance Canada were prepared for the carpenters which indicated that IDC was the employer. However, these statements were never issued to the carpenters. Subsequently, the carpenters completed personal data sheets in applying for employment with ICNI. The partnership utilizes the computer and may be running the accounts for ICNI and Inducon Consultants of Canada Limited. The signs which are displayed on construction projects depend upon the marketing ideas being used with a particular project. The signs which may be used have displayed "Inducon", "Inducon Construction", "Inducon Construction Northern" or "Inducon Design/ Build Contractors". Managment functions are provided by the partnership and the managers receive salaries from the partnership. One of the managers, who works for the partnership, is responsible for hiring carpenters.

27. Edwin Ribeiro gave evidence that he joined the Inducon group of companies in or about 1968. With the exception of a period of three years he has worked for the Inducon group of companies from 1968 until the present. He related his unhappy experiences when he was a member of a Carpenters' local trade union. Mr. Ribeiro expressed opposition to having the applicant represent him or his fellow employees who are carpenters in collective bargaining and stated that the carpenters were "not in favour of Inducon joining the union". Mr. Ribeiro identified a petition and the signatures of fifteen carpenters on the petition. The heading on the petition stated:

We the undersigned being all employees of the said company, Inducon Construction (Northern) Inc. are firmly opposed to membership in a carpenters' union and more particularly the union represented by the Carpenters' District Council of Toronto and Vicinity, on behalf of Locals 27, 666, 681, 1133, 1747, 1963, 1304, 3227 and 3233, United Brotherhood of Carpenters and Joiners of America.

Mr. Ribeiro collected the signatures during working hours and informed his superintendent what he was doing and was paid for a full day on the day when he visited ten to twelve job sites to obtain the signatures on the petition. In cross-examination, Mr. Ribeiro said that he did not know exactly which Inducon company he worked for and that "to me it's all the same people to me. I don't understand the difference".

28. The Inducon group of companies is generally presided over by Andrew Zsolt. As the Inducon group of companies has proved to be successful over the years, a variety of arrangements have been put into effect to accomplish the expansion and success of the group. The most recent corporate metamorphosis of the Inducon group of companies has involved the formation of Desbil as a vehicle for permitting valued employees to participate in the present and the anticipated future success of the Inducon group of companies.

29. IDC, ICNI, IDBA, and Inducon Consultants of Canada Limited make up the totality of the business operations of the Inducon group. ICNI is in some respects the alter ego of IDBA in that by having the commercial contracts in the name of ICNI, the partnership obtains the benefits of limited liability and ease of bonding and financing. The construction and engineering and the design/build business, the name of Inducon, the premises, the employees, the assets and the goodwill have been preserved and transferred to IDBA. A core group of carpenters, labourers and site managers have been successively employed by ICCL, IDC and IDBA and/or ICNI. In the formation of the partnership, it should be remembered that IDC has donated the design/build business as its contribution to the partnership, the partnership now not only performs design/ build business for third parties, but also for IDC on a fee basis. The evidence of Mr. MacKay and Mr. Ribeiro is of significance with respect to the employment relationship. In the case of Mr. Ribiero, he was not sure and really did not care who was similarly unsure as to who was the employer of the carpenters and labourers. Notwithstanding the change in the testimony of Mr. MacKay, the T-4 slips indicate IDBA as an employer. The partnership operates and manages ICNI, and the managers and operators for the partnership are employees of the partnership. The general manager and the individual who hires the carpenters is also an employee of the partnership. After the incorporation of ICNI in December of 1978, the employees continued to be paid by IDC. IDC had some projects that it was engaged in and was required to finish off. ICNI signed up the new business and the same work force was utilized to perform both the finishing off of the previous projects and the new construction. The management to complete these projects for IDC was provided by the partnership.

30. In Walters Lithographing Company Limited, [1971] OLRB Rep. July 406, the Board set forth criteria with respect to section 1(4) of the Act. These criteria are (1) common ownership or financial control, (2) common management, (3) interrelationship of operations, (4) representation to the public as a single integrated enterprise, and (5) centralized control of labour relations. The Board now considers these criteria in relation to IDBA, ICNI, Inducon Consultants of Canada Limited, IDC and Desbil.

31. IDBA, ICNI, Inducon Consultants of Canada Limited, IDC and Desbil were formally all located at 250 Consumers Road in a building owned by IDC. Subsequently, they all moved to 235 Yorkland Boulevard in Willowdale, which is another IDC building. These companies occupy the eleventh and twelth floors of the premises. All of the companies use the computer of IDC and all of the companies use payroll systems at the same bank, with the exception of Desbil. All of the companies have the same solicitors with the exception of Desbil. All of the companies have the same telephone number, and the calls are answered by the same individual who is employed by IDBA and located on the eleventh floor. The signs at the various projects may indicate IDBA, Inducon or ICNI, and are interchangeable depending upon the marketing concept which is being used on a specific job. The carpenters and labourers were transferred either to ICNI or IDBA and the salaried personnel were transferred to the partnership. The persons who secure the construction contracts and the estimators who prepare the bids for such contracts are employed by IDRA. The tools and equipment, which were formally owned by IDC, were transferred to ICNI. Counsel for IDC informed the Board that the technical requirements of section 1(4) have been satisfied with respect to 1CCL and IHL, and also with respect to IDC and ICNI.

32. There is present in the arrangement between 1DC and ICN1, common ownership and financial control. The same core group of project managers worked for both companies, and there was an interrelationship of operations with employees performing work for both companies and continuing on the same payroll. There was a representation to the public as a single integrated enterprise, and it is quite clear the Inducon was the important name. These companies occupy the same head office and, in the Board's opinion, there was a centralized control of labour relations with all employees being paid on payroll of IDC and supervised by the same personnel. By virtue of the bargaining rights held by Local 1669 with ICCL, IDC upon amalgamation, and subsequently ICNI became parties to those bargaining rights. At the time, the provincial agreement was in effect but those bargaining rights would apply to those companies only in the geographic area of Local 1669, which has been referred to earlier in this decision. On March 1, 1979, the design/build business, including the shares which were exchanged, were sold to the IDBA. This comprised IDC and Desbil as equal partners in IDBA. The partnership commenced its business and the design/build business was sold to it by IDC. Projects which were started by ICNI prior to March of 1979, were completed for IDC by the partnership and some of the projects which were in the process of being performed by ICNI were completed for the partnership. The construction assets of IDC were transferred to ICNI through the partnership.

33. With respect to IDC and IDBA, it is noted that IDBA commenced work during the period of the first provincial agreement which was in effect from September 6, 1978 to April 13, 1980. The assets of the partnership, for example, furniture and fixtures, were previously owned by IDC and were utilized by the same group of employees in the design/ build business. The same equipment and tools which were formally owned and used by IDC were used on the new projects. The goodwill associated with the design/ build business was transferred from IDC to IDBA and in return there was the payment of two hundred and fifty thousand dollars for this consideration. IDC received a fifty per cent interest in the partnership and the other consideration was that Mr. MacKay, Mr. Buck and Mr. Czegledy had to return their shares in IDC. In effect, the whole of the design/build business of IDC had therefore been sold to IDBA. For its part, IDC obtained cash and a fifty per cent interest, together with the return of its shares and this had the effect of securing the continuation of the design/build business by the same employees who had looked after the business of IDC.

34. The application of the provisions of section 1(4) of the Act to ICNI and IDBA is most appropriate. Mr. MacKay and Mr. Ribeiro, as referred to previously, were unsure of the employment relationships surrounding these two companies. In addition, there is also the documentary evidence which indicates that the partnership was the employer of the carpenters. There was the representation to the public as a single integrated enterprise by the use of the name Inducon, the use of common premises, together with a measure of common ownership and financial control. In addition, there is the fact that ICNI was owned by the partnership.

35. With respect to IDC and Desbil, it was strongly argued by the applicant that Desbil under its articles is able to engage directly in construction and engineering work. As referred to earlier, Desbil is a holding company and is not an active company in that it has no employees. It is the only entity which does not use the word Inducon in its name and while its articles give it the capability to do construction and engineering work it should not be forgotten that for the sum of fifty dollars anyone in this Province can have that right inserted into the articles of a corporation. In effect, such a capability does not mean a great deal in Ontario today. This is not a matter of any great consequence because a company's articles can always be amended. The Board looks to the reality of the situation in the circumsntances of this application rather than to the capabilities which may or may not be exercised. In this case, the capabilities for performing construction and engineering work have not been exercised.

36. In applying the criteria referred to in Walters Lithographing Company Limited, supra, and having regard to the kaleidoscope of common management, the periodic pairings of common ownership or financial control, the interrelationship of operations, the representation to the public as a single integrated enterprise during the evolution of the Inducon group of companies together with the centralized control of labour relations for much of that time, the Board finds that IDC, IDBA and ICNI have carried on associated or related activities or businesses under common control or direction within the meaning of section 1(4) of the Act. In applying the provisions of section 1(4), it is not necessary that the related activities or businesses are carried on simultaneously. For an example, see Brant Erecting and Hoisting, [1980] OLRB Rep. July 945. In the exercise of its discretion under section 1(4), the Board treats IDC, IDBA and ICNI as constituting one employer for the purpose of the Act.

37. In Crown Cork and Seal Company Limited, [1978] OLRB Rep. Sept. 809, the Board reasoned that there ought to be a labour relations purpose in the exercise of the Board's jurisdiction under section 1(4). In the case of Desbil, the Board notes that it never had any employees, is a holding company which holds its share of the partnership and has no other assets. In the view of the Board, there is no labour relations purpose to be served at this time in applying the provisions of section 1(4) to Desbil. Accordingly, the Board, in the exercise of its discretion, it not prepared to treat Desbil as constituting one employer with IDC, IDBA and ICNI for the purposes of the Act. The applicant did not request any relief with respect to Inducon Consultants of Canada Limited and there was no evidence before the Board that this company ever employed carpenters or labourers on any construction project. While the aspects of common management, common ownership or financial control, interrelationship of operation and representation to the public as a single integrated enterprise apply to the relationship between this company and IDC, IDBA and ICNI, in the opinion of the Board, no labour relations purpose would be served at this time in applying the provisions of section 1(4) to Inducon Consultants of Canada Limited. Accordingly, the Board, in the exercise of its discretion, is not prepared to treat Inducon Consultants of Canada Limited as constituting one employer with IDC, IDBA and ICNI.

38. The Board finds that Local 1669 possessed bargaining rights for IDC upon the amalgamation of ICCL to form IDC. And that upon the incorporation of ICNI in 1978 as a wholly owned subsidiary of IDC, the bargaining rights continued to ICNI, and that from there the bargaining rights flowed to IDBA upon the application by the Board pursuant to its discretion under section 1(4). Upon the execution of the first provincial collective agreement between the employer bargaining agency and the employee bargaining agency in 1978, IDC, IDBA, and ICNI became bound by that agreement, and, by virtue of the operation of section 137(2), there is a deemed recognition by IDC, IDBA and ICNI of the applicant which is an affiliated bargaining agent of the designated employee bargaining agency. Therefore, these companies are deemed to have recognized the applicant as the bargaining agent in the geographic jurisdiction of the applicant in respect of employees of the employer employed in the industrial, commercial and institutional sector of the construction industry.

39. The employees and the respondents object to a declaration issuing to the applicant which would have the effect of making the applicant or one of its locals the bargaining agent with their employer or employers. In enacting section 137(2) of the Act, the Legislature made no reference to any consideration to be given to the unrepresented employees of the employer when the deemed recognition comes into effect. The applicant has not indicated what will be its attitude towards these employees. The petition, which was filed before the Board, would not have persuaded the Board, had this been an application for certification, to lend any weight to the objections of the employees. Quite clearly, there was too much knowledge and participation and assistance by the supervisory staff of the employees for the Board to give any weight to such a document. On the one hand, the applicant may offer membership to the employees and, on the other hand, it may require their dismissal pursuant to a union security clause in the current provincial collective agreement. Clearly, it is open to the applicant under union security provisions of the current provincial collective agreement to require the employees to be or become members in good standing of the United Brotherhood of Carpenters and Joiners of America.

40. The Board notes the agreement of the parties that the applicant will not be requesting damages from any of the respondents with respect to any violations of the current provincial agreement with respect to work until three days after the date which appears on this decision. The Board remains seized with this reference, pending a resolution of the issue of damages between the parties.