[1982] OLRB Rep. June 875
2014-81-R International Ladies' Garment Workers' Union, Applicant, v. Harwill Originals Limited, carrying on business under the registered name and style of Golden Crown Sportswear, and Rosengarten, Freedman Knitting Co. Ltd., carrying on business under the registered name and style of Golden Crown Knitting Co., Respondents
BEFORE: Ian Springate, Vice-Chairman, and Board Members W. H. Wightman and S. Cooke.
APPEARANCES: S. B. D. Wahl, H. Stewart, R. Sutherland for the applicant; C. E. Humphrey and W. Rosengarten for the respondent.
DECISION OF THE BOARD; June 24, 1982
This is an application for certification in which the Board issued an earlier decision on January 26, 1982.
The applicant seeks to be certified as the bargaining agent for certain employees of Harwill Originals Limited, which carries on business under the registered name and style of Golden Crown Sportswear. It is the position of the respondents, however, that Harwill Originals Limited and Rosengarten Freedman Knitting Co. Ltd., which carries on business under the registered name and style of Golden Crown Knitting Co., should be treated as a single employer for the purposes of the Labour Relations Act, and that the bargaining unit be described so as to encompass the employees of both companies. In support of this position the respondents rely on section 1(4) of the Act which provides 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.”
At the commencement of the hearing, counsel for the applicant contended that since section 1(4) does not make any reference to an application being made under the section by an employer, it follows that the section cannot be invoked by the respondents. The Board orally rejected this contention. Section 1(4) states that an application can be made under the section by "any person, trade union or council of trade unions concerned". If the legislature had desired to limit applications under the section only to trade unions and councils of trade unions, it would not have also made provision for an application to be made by “any person”. By virtue of the Interpretation Act, a "person" can include a "corporation" or other similar legal entity which can act in the capacity of an employer. Accordingly, we are satisfied that the respondents, being corporations and thus, at law, "persons" are entitled to bring an application under section 1(4). In this regard see Bright Veal Meat Packers Ltd., [1981] OLRB Rep. March 247, and Forest Public House, [1974] OLRB Rep. Jan. 40.
Rosengarten Freedman Knitting Co. Ltd. is owned by Mr. William Rosengarten, Mrs. Freda Freedman and their children. Mr. Rosengarten and Mrs. Freedman are the only two officers of the firm, and they along with Mr. L. B. Heath are its Directors. Harwill Originals Ltd. is owned by Rosengarten, Freedman Knitting Co. Ltd. Mr. Heath, Mr. Rosengarten and Mrs. Freedman are the Directors of Harwill Originals Ltd. while Mr. Rosengarten and Mrs. Freedman are its only officers. Mr. Rosengarten is the president of both companies.
Although Rosengarten, Freedman Knitting Co. Ltd. was only incorporated on January 1, 1965, Mr. Rosengarten testified that the firm began operations in 1953 as a knitting company. According to Mr. Rosengarten, the company, at one time was knitting sportswear and this led him in 1967 to decide to also go into the sportswear business. Mr. Rosengarten testified that Harwill Originals Limited was incorporated to do the sportwear, as opposed to simply starting a separate department within the Rosengarten Freedman Knitting firm, because originally another person had a part-interest in the sportswear operation. The interests of this other person were bought out by Rosengarten, Freedman Knitting Co. Ltd after about a year. The sportswear operations began at either 165 or 167 John Street in Toronto whereas at about that time the knitting operation was moved from elsewhere in the city to 179 John Street. At some point in the early 1970's the sportswear operation was also moved to 179 John Street.
Harwill Originals Limited leases the fifth floor at 179 John Street. The floor is used primarily for the manufacture of sportwear. Rosengarten, Freedman Knitting Co. Ltd. leases the sixth and seventh floor at 179 John Street. The seventh floor is used for knitting operations. The sixth floor contains office space and a shipping room which serve both the knitting and sewing operations. The office staff on the sixth floor takes care of the accounts receivable and payroll for both companies, although separate accounts are used. The same mechanics are responsible for the maintenance and repair of both sewing and knitting machines.
As already indicated, both corporations carry on business under the "Golden Crown" name. A single phone number is used for both operations. The same salesmen carry the products of both companies, although they also handle the lines of other unrelated firms. The respondents do very little advertising, but when they do it is by way of advertisements under the name of "Golden Crown Knitwear and Sportswear". If a customer places an order covering both knitwear and sportswear, both types of garments will be shipped out together with one bill of lading. For small orders, both types of garments will be placed in the same box. Separate invoices are sent covering knitwear and sportswear, although at times the two invoices will be sent in the same envelope. Customers often pay for both knitwear and sportswear with a single cheque.
The sportswear operation makes a number of items including jackets, pants and shorts from cloth purchased elsewhere. Employees cut out the required pieces from the cloth, and these in turn are sewn into garments. In the knitting operation, yarn is first knit into pieces of fabric. From this knitted fabric pieces are cut out and then sewn into finished garments. In the past certain items for sportwear were knitted on the seventh floor, although apparently this is no longer being done.
On occasion, goods started on one floor are transferred to be finished on the other floor. An example given at the hearing was the taking of knitwear to the sportswear area to have button holes made. A much more common practice has been to temporarily transfer employees between floors, either because of a need for extra help in one area, or because there is not enough work to keep employees busy in the other area. Some transfers have been for a month or more, others for a day or two, and still others for only an hour. Some employees, however, have never been transferred at all. Unfortunately, no records have been kept of these transfers, and the evidence as to the number of transfers was somewhat less than precise. The evidence when taken as a whole, however, appears to support Mr. Rosengarten's estimate that about seventy per cent of the time, one person will be temporarily working on another floor.
There is a schedule under the Industrial Standards Act covering the "ladies dress and sportswear industry". The Schedule sets out certain minimum wage rates, (almost all of which are now of no effect due to the higher minimum rates prescribed under the Employment Standards Act), and also sets the regular work week at thirty-five hours per week. There is an "advisory committee" which oversees the operation of the schedule. Harwill Originals makes filings to the advisory on behalf of its sportswear operations. There is no schedule under the Industrial Standards Act covering knitwear. Because of the sportswear schedule, the respondents' sportswear employees work a regular work week of thirty-five hours, whereas the knitwear employees have a regular work week of forty hours.
Mr. Rosengarten is in charge both of the sportswear and knitting operations. Under Mr. Rosengarten is an assistant who Mr. Rosengarten described as "The overlooker of everything". There is also a knitwear foreman and a sportswear foreman. Although, the foremen can hire most production employees, Mr. Rosengarten is involved in the hiring of designers, mechanics and cutters. All employees in knitwear are hourly paid, but in sportswear some are hourly paid while others are on piece work. Employees deal with the sportswear foreman about piece rates, but all final decisions concerning the rates are made by Mr. Rosengarten.
The applicant called Mr. William Villano, its Toronto Business Manager, to testify as to the applicant's practice in negotiating collective agreements. According to Mr. Villano, the applicant has a collective agreement with an association representing seventeen manufacturers of cloaks and suits, as well as an agreement with the Toronto Dress and Sportswear Manufacturers' Guild Inc. which has as members thirty-five firms in the dress and sportswear fields. It is of interest to note that this latter document indicates that prior to 1980 separate agreements were negotiated for ladies dresses and for sportswear. According to Mr. Villano, the applicant negotiates individual agreements with a number of knitwear firms. Mr. Villano testified that the applicant does not have any collective agreements covering both knitting and sportswear operations, and he went on to add that he is not aware of any Toronto firms which make both knitwear and sportswear. Mr. Villano conceded, however, that two other unions also organize employees in the garment industry and that he does not know what their experience has been in this regard.
There can be no doubt that Harwill Originals Limited and Rosengarten Freedman Knitting Co. Ltd. are being carried on under common direction and control. The firms have identical directors and officers, and Harwill Originals Limited is owned by Rosengarten, Freedman Knitting Co. Ltd. Further, in that the two firms are both engaged in the manufacture of clothing, serve the same general market and are being carried on for the benefit of the same principals, we are satisfied that they are engaged in "associated or related activities or businesses". In these circumstances, we are of the view that the statutory pre-conditions for the application of section 1(4) have been met. There still remains, however, the question as to whether the Board should exercise its discretion under section 1(4) to treat the two corporations as a single employer for the purposes of the Act. In this case, we believe that the issue turns primarily on whether the bargaining unit should be described only in terms of employees engaged in the manufacture of sportswear on the fifth floor, or whether it would more appropriately be described to also include knitwear employees working on the seventh floor.
As already indicated, the applicant seeks to restrict the bargaining unit to the sportswear employees. Indeed, it appears that it has only tried to organize the sportswear employees. It is the applicant's contention that the respondent is seeking to include the knitwear employees in the bargaining unit as a device to "flood" the bargaining unit and thereby defeat the application. The Board recognizes that frequently both unions and employers take positions relating to the description of a bargaining unit based upon their perception of the union's chances of being certified for the final unit. The Board also recognizes that in shaping bargaining units it must be sensitive to the real difficulties which trade unions face in organizing employees. This is particularly true where large numbers of employees are involved, the employees are spread out geographically or the industry involved is one that has traditionally been unorganized. In the instant case the knitwear and the sportwear operations between them employ about 43 bargaining unit employees. All of these employees work in the same building, and the industry is one in which trade unions have been active for many years. Given these facts we do not believe that concerns about difficulties in organizing should be an overriding factor in determining the bargaining unit. Rather, we believe that concerns about viable bargaining structures and the fragmentation of employees should also be taken into account. Although two corporate entities are involved here, in reality the knitwear and sportswear operations are carried on as if they were separate divisions of the same firm. They are in the same building, under the direction of the same management and use the same "Golden Crown" name in dealing with the public. There is also a significant amount of movement of employees between the two operations. Given these facts, it is our opinion that to treat the two corporations separately for collective bargaining purposes would result in an undue fragmentation of the work force and also create the real potential of different trade unions becoming the bargaining agents for separate segments of what is essentially an integrated business. Accordingly, in our view, it would be appropriate to treat the two corporations as a single employer for the purposes of the Act and to group their employees together in a single bargaining unit.
In reaching this conclusion we have considered the fact that the sportswear but not the knitwear employees are covered by a schedule under the Industrial Standards Act. We do not regard this as a determining factor in these proceedings. Most of the wage rates set out in the schedule are no longer of any effect due to the higher minimums provided for in the Employment Standards Act, and in any event Mr. Villano's testimony indicated that wage rates negotiated by the applicant are well above the minimum set out in the schedule. The schedule does provide for a 35 hour regular work week for sportswear, whereas no such legal requirement exists for knitwear. In our view, however, this is a matter that could be accommodated without undue difficulty in collective bargaining. We also believe that collective bargaining can accommodate having sportswear and knitwear employees in the same bargaining unit, not withstanding the fact that the respondent currently has no agreements with firms that make both knitwear and sportswear.
Having regard to the above, the Board declares Harwill Originals Limited, carrying on business under the registered name and style of Golden Crown Sportswear and Rosengarten, Freedman Knitting Co. Ltd., carrying on business under the registered name and style of Golden Crown Knitting Co. to be one employer for the purposes of the Labour Relations Act. The Board also finds that all employees of Harwill Originals Limited carrying on business under the registered name and style of Golden Crown Sportswear and all employees of Rosengarten, Freedman Knitting Co. Ltd. carrying on business under the registered name and style of Golden Crown Knitting Company in the municipality of Metropolitan Toronto, save and except forepersons, persons above the rank of foreperson, mechanics, designers, shippers and receivers, office and sales staff and persons regularly employed for not more than 24 hours per week and students employed during the school vacation period, constitute a unit of employees appropriate for collective bargaining.
The Board is satisfied on the basis of all the evidence before it that less than forty-five per cent of the employees of the respondent in the bargaining unit, at the time the application was made, were members of the applicant on December 30, 1981, the terminal date fixed for this application and the date which the Board determines under section 103(2)6) of the Labour Relations Act, to be the time for the purpose of ascertaining membership under section 7(1) of the said Act.
This application is accordingly dismissed.