Labourers' International Union of North America, Local 607 v. Nicholls-Radtke & Associates Limited, 1982 CanLII 927

[1982] OLRB Rep. July 1028

2490-81-R Labourers' International Union of North America, Local 607, Applicant, v. Nicholls-Radtke & Associates Limited, Respondent, v. The Lumber and Sawmill Workers' Union, Local 2693 of the United Brotherhood of Carpenters and Joiners of America, Intervener.

BEFORE: D. E. Franks, Vice-Chairman, and Board Members H.J.F. Ade and B. L. Armstrong.

APPEARANCES: A. M. Minsky for the applicant; S. C. Bernardo for the respondent; Laurence C. A mold for the intervener.

DECISION OF THE BOARD; July 23, 1982

1. This is an application for certification pursuant to the construction industry provisions of the Labour Relations Act.

2. The applicant has challenged the status of the intervener to intervene in this matter. The matter was listed for hearing. Prior to the hearing in this matter the parties agreed to a Statement of Facts to be put before the Board. That agreement is as follows:

"The above named parties agree as follows:

1. On October 8, 1975 Local 2693 and the respondent entered into an agreement (Exhibit A) which purported to incorporate the bargaining unit and other terms and conditions of the then current collective agreement between the General Contractors Division of the Construction Association of Thunder Bay Inc. and Local 2693 (Exhibit B).

2. On October 8, 1975 the respondent had not commenced a proposed project at Geralton — TCPL Station 80 (Project) which was to be its first project in any of Board geographic areas 22, 23, or 24. The respondent had no employees in the purported bargaining unit contained in Exhibits 'A' and 'B' on October 8, 1975.

3. The agreement was signed on the understanding that Local 2693 would supply workers if and when requested to do so by the respondent to the project which could be commenced at a later date.

4. The project commenced on October 4, 1975 and two Local 2693 members were hired and commenced employment on the project (one each) on October 15 and 16, 1975. From and after October 16, 1975 there were at least two members of Local 2693 employed in the bargaining unit on the project.

5. The Agreement (Exhibit A) is the first and only agreement ever signed by and between the respondent and Local 2693.

6. The respondent is not now nor has it ever been a member of the General Contractors Division of the Construction Association of Thunder Bay.

7. The parties specifically reserve their right to make any submissions whatsoever as to the conclusions that the Board should draw from this Agreement to Fact and the issue before the Board is whether Exhibit 'A' which purports to incorporate Exhibit 'B' constitutes a collective agreement under the Labour Relations Act."

The exhibit 'B' referred to is a standard area agreement between the Construction Association of Thunder Bay Inc. and the intervener Local 2693. Exhibit 'A' is a standardized "short form agreement" which reads as follows:

"AGREEMENT entered into this 8th day of OCTOBER, 1975,

between

THE FIRM OF NICHOLLS RADTKE ASSOCIATE LIMITED

1425 Bishop St. N., CAMBRIDGE, Ontario.

hereinafter referred to as the "COMPANY"

and

THE LUMBER & SAWMILL WORKERS' UNION, LOCAL 2693, of the United Brotherhood of Carpenters and Joiners of America, Thunder Bay, Ontario,

hereinafter referred to as the "UNION".

WHEREAS: The Union and the General Contractors Division of the Construction Association of Thunder Bay Incorporated, negotiate and establish by agreement certain terms and conditions of employment, and

WHEREAS: The parties hereto desire to promote and maintain harmonious relations between the Employer and the Employee:

WITNESSETH: That the parties hereto accept and agree each with the other to be bound by all terms, rates and conditions contained in the current agreement between the Union and the General Contractors Division of 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 Company has executed such agreements as a member of the General Contractors Division of the Construction Association of Thunder Bay Incorporated, and such terms, rates and conditions are hereby made part of this agreement and effective on all projects of the Company in the Districts of Kenora (including Patricia Portion), Rainy River and Thunder Bay.

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."

3. On the basis of the agreed Statement of Facts, the parties argued the status of the Lumber and Sawmill Workers' Union, Local 2693 to intervene in the present application.

4. The position taken by the applicant is that the intervener never acquired bargaining rights by the short form agreement, Exhibit 'A', since it is not a valid collective agreement (notwithstanding the fact that this was in 1975), since it was the first and only collective agreement ever signed between the parties. Thus the applicant argues that the intervener never did and does not now have bargaining rights with respect to the respondent employer. In respect of its position, the applicant relies primarily on three cases. The Sunrise Paving and Construction Co. Ltd. case, 72 CLLC ¶1 16,060; The C. Strauss (1973) Limited case, [1975] OLRB Rep. July, 581; and an unreported decision of the Board in Volens Contractors Limited, OLRB File No. 0802-75-R, decision dated 17th November, 1975. In both the Sunrise Paving case, supra and the C. Strauss case, supra, like the present case, the same issue was argued on the basis of an agreed Statement of Facts. The Facts in the C. Strauss cases, supra are very similar to the facts in the present case. There the agreement was entered into some three days before employees commenced working under the agreement. That is, the agreement was clearly entered into at a time when the employer had no employees. In denying the intervener status, the Board quoted from the Sunrise Paving case, supra as follows:

"15. It is readily apparent that the alleged collective bargaining relationship between the respondent and the intervener arose as a result of an arrangement between them without reference to or consultation with the employees who would be affected by this arrangement. Clearly, the respondent selected the intervener as the bargaining agent for its future employees. Such an arrangement strikes at the very spirit of the Labour Relations Act which envisages the selection of a bargaining agent by the employees concerned without the intervention or influence of their employer.

16. Employees of the respondent did not have an opportunity to select their bargaining agent. The Board finds that the actions of the respondent in all of the circumstances of this application constitute other support to a trade union (the intervener) within the meaning of section 40(a) of the Labour Relations Act. The Board is given the jurisdiction to consider the question of support by an employer for a trade union. Certain consequences flow from the Board making a finding that an employer has contributed other support to a trade union. This consequence is set forth in section 40 of the Labour Relations Act."

17. In both the Sunrise Paving case, and the C. Strauss case, the Board found that the signing of a collective agreement at a time when there were no employees in the bargaining unit, constituted employer support of the trade union within the meaning of then section 40(a) now section 48(a). That section reads as follows:

"if an employer or an employers' organization participated in the formation or administration of the trade union or if an employer or an employers' organization contributed financial or other support to the trade union; or ..."

In effect, however, the C. Strauss case is distinguishable from the Sunrise Paving case in one important aspect. In Sunrise Paving it was clear that the employer, when he eventually employed persons under the agreement in question, employed employees who had not been members of the intervening union. That is, non-members were required to become members of the union by virtue of the collective agreement in question. In the C. Strauss case, subsequent to the signing of the agreement, members were referred from the signatory union to the employers' job sites. The present case goes even farther in that the agreed Statement of Facts points out that this was an intention of the parties in the present case, namely to supply employees to the work site after the proposed agreement was signed.

6. The intervener argued that the present case was outside the Sunrise Paving, supra policy in that, as noted in the Agreement of Facts, the agreement in Exhibit 'A' was signed on the understanding that the intervener would supply workers if and when requested to do so by the respondent, to the project which would be commenced at a later date. From this the intervener argues that the intention of the parties was that the document signed on October 8th was signed with an intention to become effective when the project in question started. Counsel for the intervener argues that there is nothing sinister in these events, that the document was signed in contemplation of members being employed on the project. He argues this is a common practice in the construction industry and that to interpret section l(l)(e) as requiring employees at the date of signing is a simplistic approach which denies the realities of the construction industry since a number of construction unions take the view that they will only supply members if there is a collective agreement in place.

7. Counsel went on to argue that in the Board decision in Brayshaws Steel Limited, [1970] OLRB Rep. Feb. 1297, the Board had found a valid collective agreement notwithstanding the fact that there were no employees in the bargaining unit at the time the collective agreement was signed. Further, although that decision was quashed on appeal, the Board's finding concerning a collective agreement was specifically upheld by the courts. Clearly, the Brayshaws case, supra does not apply in the present situation since, in that case, the union that signed the agreement had, in the past, held bargaining rights, and held bargaining rights at the time the agreement was signed. At page 1303 paragraph 9 of the Brayshaws decision, supra the Board stated:

"Having found that the intervener did have bargaining rights at the time the agreement was entered into it had the right to represent employees in the bargaining unit and, notwithstanding the fact that there were no employees at that time, the company properly recognized the right of the intervener to represent its employees and to enter into a collective agreement. While such agreement might not be immediately effective, it would become so when there were employees in the bargaining unit, and we find nothing improper in that, particularly in these circumstances where there was an intended transfer of operations and employees. We find therefore that the agreement between the intervener and the respondent was a collective agreement within the meaning of section l(l)(c) of the Act."

8. Counsel for the intervener also argued that this was an estoppel situation since the agreement had in fact been applied without challenge. In this context he urged the Board to apply a doctrine of estoppel to find that the collective agreement could not now be challenged. While there may very well be a valid estoppel argument as between the intervener and the respondent in the present case, such an estoppel cannot go the issue raised by the applicant in the present matter. The effect of an estoppel is that in a particular proceeding a party is not entitled to make a certain argument. Thus, for instance, in a proceeding between the intervener and the respondent, if the respondent were to deny that there was a collective agreement, the Board, for instance in an arbitration under section 124 of the Act, might very well find that the respondent by virtue of its conduct was estopped from arguing that there was no collective agreement because there were no employees in the bargaining unit at the time the agreement was entered into. That, however, is a matter between the respondent and the intervener. With respect to the applicant, the applicant's argument is not limited by any past conduct on its part or by the respondent or intervener.

9. In view of the arguments put forward by the applicant and the intervener, the present case comes down to a very basic policy choice for this Board. Should the Board continue to follow the policy set out in the C. Strauss case, that the mere signing of a collective agreement, when there are no employees in the bargaining unit, of itself constitutes employer support for a trade union? The agreed Statement of Facts signed by the parties in this matter indicates in paragraph three that the agreement was signed on the understanding that Local 2693 would supply workers if and when requested to do so by the respondent to the project which would be commenced at a later date. In making such an agreement, the intervener was merely acting as a lot of construction trade unions do in attempting to obtain work for its members. In this regard, reference should be had to section 46 of the Act which deals with certain permitted provisions of collective agreements, in particular union security provisions.

Subsection 1 of section 46 reads as follows:

"46.-(l) Notwithstanding anything in this Act, but subject to subsection (4), the parties to a collective agreement may include in its provisions,

(a) for requiring, as a condition of employment, membership in the trade union that is a party to or is bound by the agreement or granting a preference of employment to members of the trade union, or requiring the payment of dues or contributions to the trade union;

(b) for permitting an employee who represents the trade union that is a party to or is bound by the agreement to attend to the business of the trade union during working hours without deduction of the time so occupied in the computation of the time worked for the employer and without deduction of wages in respect of the time so occupied;

(c) for permitting the trade union that is a party to or is bound by the agreement to use the employer's premises for the purposes of the trade union without payment therefore.''

(emphasis added)

Subsection 4 reads as follows:

"(4) A trade union and the employer of the employees concerned shall not enter into a collective agreement that includes provisions requiring, as a condition of employment, membership in the trade union that is a party to or is bound by the agreement unless the trade union has established at the time it entered into the agreement that not less than 55 per cent of the employees in the bargaining unit were members of the trade union, but this subsection does not apply,

(a) where the trade union has been certified as the bargaining agent of the employees of the employer in the bargaining unit; or

(b) where the trade union has been a party to or bound by a collective agreement with the employer for at least one year; or

(c) where the employer becomes a member of an employers' organization that has entered into a collective agreement with the trade union or council of trade unions containing such a provision and agrees with the trade union or council of trade unions to be bound by such agreement; or

(d) where the employer and his employees in the bargaining unit are engaged in the construction, alteration, decoration, repair or demolition of a building, structure, road, sewer, water or gas main, pipe line, tunnel, bridge, canal, or other work at the site thereof."

(emphasis added)

It is of course obvious that section 46(4)(d) uses the exact same language as clause l(l)(f), the definition of construction industry in the Act. Taken together, subsection I and subsection 4

of section 46 can be said to contemplate as permissive, provisions in a construction industry collective agreement requiring as a condition of employment membership in the trade union. And further, the structure of subsection 4 seems to indicate that, in the construction industry, compulsory membership or a preferential hiring clause may be inserted into a first collective agreement signed when voluntary recognition creates the bargaining rights which the union holds. If the Act contemplates as permissive conditions in construction collective agreements, preference of employment for union members extending to membership in a trade union as pre-condition of employment, are we to find that the signing of such an agreement in the absence of any other factor is to be interpreted as support for the trade union within the meaning of section 48(a)? In the Sunrise Paving case, for instance, there was evidence upon which such a conclusion could be drawn. That is, the employer on hiring employees did the membership recruiting for the union. However, in the C. Strauss case, and in the present case, no such implication arises.

10. Both the Supreme Court of Canada in Re International Longshoremen's Association, Local273 et al. v. Maritime Employers' Association et al. (1978), 1978 CanLII 158 (SCC), 89 D.L.R. (3d) 289, and the Ontario Court of Appeal in Re Blouin Drywall Ltd. (1975) 1975 CanLII 707 (ON CA), 57 D.L.R. (3d) 199, have recognized that certain types of collective agreements, one in the longshoring industry, the second in the construction industry, cause problems with the word "employees" in that persons with no direct employment relationship may be employees because they are members of the union. In the Blouin Drywall Ltd., case, supra Brook J. A. commented as follows:

"While ss. 37(9) and 42 of the Labour Relations Act do not extend the binding effect of a collective agreement or arbitration award made pursuant thereto beyond "employees", I do not regard these sections as prohibiting the negotiating parties from agreeing to confer rights or benefits on non-employee members of the union and that such rights and benefits may then be the subject of grievance procedure and within the jurisdiction of an arbitration board under the agreement. Collective agreements in this industry have developed to include benefits to non-employees who are union members. In this industry, there is no continuing employment and so collective agreements have developed to ensure a source of labour to the contractor, to provide for preference in the employment of trade union members and, while establishing the terms and conditions of such employment, to provide other benefits which may become due or payable at a time when the union member is not employed.

Relevant to this case is the fact that s. 38(l)(a) of the statute contemplates the employer's covenant to give preference in hiring the union members. That section says:

'38(1) Notwithstanding anything in this Act, but subject to subsection 4, the parties to a collective agreement may include in its provisions,

(a) for requiring, as a condition of employment, membership in the trade union that is a party to or is bound by the agreement or granting a preference of employment to members of the trade union, or requiring the payment of dues of contributions to the trade union;'

No doubt the provision contemplated by the statute is, indeed, union security; but equally certain in my view is that it anticipates a covenant in favour of those who are union members, unemployed and available and qualified to do the work, which covenant should be enforced in their favour. The Divisional Court held that as a primary purpose the clause was union security, the union could not claim on behalf of non-employee union members. With deference, in my view one cannot sever this clause into primary and secondary purposes and give it any effect at all. The enforcement of the preferential hiring of unemployed union members is the crux of the union security. The employment of its members is an assurance of union strength of the members collectively can only result in the loss of union strength."

Indeed, as counsel for the intervener points out, there was nothing sinister in the making of the agreement referred to in paragraph three of the agreed Statement of Facts.

11. In the Sunrise Paving case, the Board commented that "the employees of the respondent did not have an opportunity to select their bargaining agent". While in a case where the employer recruits employees who are subsequently forced to join the union, without a previous history of membership that may constitute support for the trade union. The simple fact is that in the construction industry, the unemployed members in a union's hiring hall have in fact selected their bargaining agent as their union, and once they are referred to a job, that selection normally continues. As a consequence, one is faced with a rather difficult problem in interpreting how far the stated policy of the Board in the C. Strauss case should be carried. If an agreement is invalid because it was signed when there were no members in the bargaining unit, does the agreement become valid when, in the same circumstances it is signed after the employees have arrived at the job site. Thus, in the present case, would it really have made any difference concerning the wishes of employees if instead of signing the agreement on October 8, 1975, with an intention to supply at a later date, an agreement to supply had been made between the respondent and the intervener on the 16th of October, when there were two members of the intervener union employed in the bargaining unit? To say that the document is valid then, but not valid if signed on the 8th, in completely similar circumstances, is to propose a distinction without a difference.

12. On the other hand, it may be argued that the C. Strauss case, simply recognizes a limitation on the acquisition of bargaining rights that is implicit in the Act, namely, there must be employees in the employ of the employer at the time bargaining rights are acquired. Obviously, this is so in the case of certification, but also in the case of voluntary recognition. In this regard this latent policy in the Labour Relations Act is implicit in section 121 of the Act which reads as follows:

"An agreement in writing between an employer or employers' organization, on the one hand, and a trade union that has been certified as bargaining agent for a unit of employees of the employer, or a trade union or council of trade unions that is entitled to require the employer or the employers' organization to bargain with it for the renewal, with or without modifications, of the agreement then in operation or for the making of a new agreement, on the other hand, shall be deemed to be a collective agreement notwithstanding that there were no employees in the bargaining unit or units affected at the time the agreement was entered into.

That provision primarily recognizes that special circumstances are required for the construction industry due to the cyclical nature of employment in the construction industry. There may be times when an employer has no employees, but nevertheless as a matter of the on-going labour relations in the construction industry, the employer is bound by the results of collective bargaining. It would appear that such a provision which deems a collective agreement to be valid when there are no employees in the bargaining unit would only be necessary if in fact there was a problem with the validity of collective agreements signed when there are no employees in the bargaining unit.

13. It is our view, however, that when the document in the present case was signed on October 8th, 1975, the respondent and the intervener were performing two distinct, but related acts at the same time. The respondent employer was voluntarily recognizing the intervener union as the exclusive bargaining agent for employees in the bargaining unit, and contemporaneously agreed to certain terms and conditions of employment for those employees who would be affected by the recognition agreement. There would have been no arguable issue in this case as to the validity of the collective agreement if the respondent employer had signed it after the union's members had reported for work. For this Board to hold that, in the circumstances of this case, where no other persons were working or had worked for the employer in the bargaining unit, and no other trade union held bargaining rights in respect of that bargaining unit, the agreement is not a valid collective agreement would have us place a premium on a strict, and technical interpretation of the Act, rather than giving the statute a practical and purposive one, particularly having regard to the common and sensible methods used by employers and trade unions in the construction industry to create bargaining rights without resorting to the certification procedures under the Act.

14. The respondent employer required persons to do work for it, and went to the intervener union, who had members available to do that work, for those persons. In the same way that the Courts in the Blouin Drywall and Maritime Employers Association cases, supra, held that members of a trade union who are not actually working for a particular employer but are associated with the union's hiring hall to seek work are employees, the members of the intervener trade union on whose behalf the collective agreement was entered into are "employees" whom the union represents, Section 121 of the Act indicates that an agreement in writing which is signed when there are no employees in the bargaining unit is deemed to be a collective agreement if, for example, the union is renewing a collective agreement or making a new agreement after an earlier collective agreement had expired, thus implying that an agreement signed after voluntary recognition when there are no employees in the unit may not be a collective agreement. The Board notes that section 121 of the Act merely deems an agreement in writing to be a collective agreement under certain circumstances; it does not provide that an agreement signed when there are no employees in the unit is not a collective agreement. (See section 48 of the Act for a specific provision deeming an agreement not to be a collective agreement). Therefore, section 121 of the Act has no application to the facts of this case.

15. The Board in C. Strauss and Volens held that there was no collective agreement by applying section 40 [now 48] after finding that the union had received "other support" from the employer when it signed a collective agreement without employees in the bargaining unit. We are satisfied that, in the circumstances of this case, although the agreement was signed on October 8th, 1975, when, as the parties have stipulated, "The respondent had no employees in the purported bargaining unit .. .", the intervener union did not receive "other support" from the employer. To the contrary, the employer needed persons to perform work, and the union, which had members available with the skills necessary to do that work, undertook to refer its members to the employer in exchange for receiving voluntary recognition from the employer as exclusive bargaining agent for those persons. In our view this arrangement in the circumstances presently before us is not "other support" from an employer which calls for the application of section 48 of the Act.

16. Counsel for the applicant suggested that the C. Strauss case, supra, is a necessary Board policy if the Board is not to effectively exempt construction unions from the operation of section 60 of the Act. That section provides in subsection 1 for an application for termination during the first year of an agreement after voluntary recognition. We think rather that section 60 provides the sort of protection necessary to go along with a finding that a collective agreement signed in the circumstances of the present case is not the result of some agreement between employer and the trade union subverting the rights of employees as, for instance, in the Sunrise Paving case. The Board therefore finds that the intervener had a collective bargaining relationship with the respondent in October, 1975.

17. The Registrar is directed to list the matter for continuation of hearing.