United Food and Commercial Workers International Union, Local Unions 175 and 633 v. The Great Atlantic & Pacific Company of Canada Limited
[1982] OLRB Rep. March 386
1500-80-R United Food and Commercial Workers International Union, Local Unions 175 and 633, Applicant, v. The Great Atlantic & Pacific Company of Canada Limited, A & P Drug Mart limited, Respondents
BEFORE: R. O. MacDowell, Vice-Chairman, and Board Members B. Armstrong and C. G. Bourne.
DECISION OF THE BOARD; March 16, 1982
1This is an application under section 1(4) of the Labour Relations Act. Section 1(4) reads as follows:
"Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate."
2By a decision dated March 27, 1981, (Reported at [1981] OLRB Rep. Mar. 285) the Board declared that The Great Atlantic & Pacific Company of Canada Limited, and A & P Drug Mart Limited, were one employer for the purposes of the Act. The applicant trade union now requests that the Board amplify or clarify its decision. In particular, the union seeks clarification about whether the declaration has retrospective effect. The respondents point out that this issue was not expressly addressed at the hearing (Although mention was made of certain grievances arising from the respondent's failure to apply the A & P collective agreement to the employees in the Drug Mart) and contend that the declaration should not be given retrospective effect.
3The circumstances of this case were canvassed at some length in the reasons accompanying the Board's decision of March 27, 1981. The Board sees no reason why it should repeat that analysis here. It suffices to note that A & P Drug Mart Limited was created so that "A & P" could have a specialized pharmacy department in some of its larger stores. The Great Atlantic & Pacific Company of Canada Limited and A & P Drug Mart Limited have been under common control and direction since the inception of the latter.
4In JDS Investments Limited [1981] OLRB Rep. March 294, the Board addressed the retrospective effect of a section 1(4) declaration as follows:
"At the hearing, the parties raised the issue as to whether a Board declaration under section 1(4) can have effect prior to the time it was made, or whether it could be effective only in the future. We are satisfied that unless a Board declaration under section 1(4) is specifically stated to be otherwise, it has force and effect from the time the associated or related activities or business commenced, and does not operate only from the date of the actual Board declaration."
There are good policy reasons why this should be the case; for otherwise, the mischief to which section 1(4) is directed would prevail until the union discovered the existence of the related corporate entity and had the matter litigated before this Board. In the meantime, the activities giving rise to employment normally regulated by the collective agreement would be beyond its scope — thereby placing upon the union and its members the full burden of dealys in discovery and litigation.
5Section 1(4) overrides the "corporate veil" and the notion of privity of contract, so that an employer which is party to a collective agreement cannot escape its obligations thereunder by carrying on related business activities through a separate corporate vehicle (See: Norfolk Hospital [1977] CLLC ¶ 14,094.) It would seriously undermine the remedial thrust of section 1(4) if, in the ordinary course, a declaration did not have the effect described by the Board in JDS In vestments Limited, supra. Indeed, in the construction industry where physical plant and equipment are frequently not an important aspect of an employer's economic organization, and economic activity can be readily channelled into a newly created corporate entity, the remedial effect of section 1(4) would be substantially impaired. Even in the instant case, the union did not discover for some time that what it thought was merely the drug department in the stores was, in fact, being run through a separate corporate entity. Nor did either of the respondents go out of its way to acquaint the union with this situation. It was not until the eve of an arbitration hearing, (well after the union had filed a grievance complaining about the failure to apply the agreement to the employees in the drug department) that the respondent raised the argument that the grievance was not arbitrable because the Drug Mart was a separate legal entity.
6Section 1(4) is discretionary, and the Board is given a broad authority to "grant such relief, by way of declaration or otherwise, as it may deem appropriate". That discretion could extend to a limitation on the retrospective effect of its declaration (see Roy Brandon Construction [1981] OLRB Rep. Feb. 219). The appropriate time to raise this issue however is at the hearing of the 1(4) application itself since the issue of remedy is linked to the merits of the section 1(4) proceeding and the exercise of the Board's discretion.
7In all of the circumstances of this case, the Board is not prepared to reopen and reconsider its section 1(4) declaration or limit its effect.