Ontario Labour Relations Board
[1983] OLRB Rep. April 569
2288-82-M United Brotherhood of Carpenters and Joiners of America, Local 1316, Applicant, v. Losereit Sales and Services Ltd., Respondent
BEFORE: R. D. Howe, Vice-Chairman, and Board Members J. A. Ronson and W. F. Rutherford.
APPEARANCES: David McKee and Richard Harkness for the applicant; Martin Addario and Henry Losereit for the respondent.
DECISION OF THE BOARD: April 1, 1983
1This is a referral of a grievance to the Board pursuant to section 124 of the Labour Relations Act. The parties are in agreement that the Board has jurisdiction to hear and determine this matter. They also agree that in the event the grievance succeeds, the Board will remain seized of the matter for the purpose of dealing with the issue of quantum of compensation in the event that the parties are unable to resolve that matter.
2Since 1964, the respondent has operated an acoustic and drywall installation business from Kitchener in the industrial, commercial and institutional ("ICI") sector of the construction industry in the Province of Ontario. The respondent is bound by the current provincial collective agreement (the "Provincial Agreement") between The Carpenters Employer Bargaining Agency and The Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America (the "Council"). The respondent is currently working on a renovation project at a hospital in Owen Sound, Ontario, and has employed at that site from one to four members of Local 785 of the United Brotherhood of Carpenters and Joiners of America ("Local 785") between January 5, 1983 and March 16, 1983 (the date of hearing of this matter). It was common ground between the parties that Local 785 has jurisdiction in the "Grand River Valley" area (Board Areas 4, 6, and 7) in which Kitchener is located. Owen Sound is located in Board Area 28 (Grey County) which is within the geographical area of the applicant (also referred to in this decision as "Local 1316"), which consists of Board Areas 3 and 28 (i.e., the Counties of Oxford, Perth, Huron, Middlesex, Bruce, Elgin, and Grey).
3It was also common ground between the parties that unless the respondent can rely upon the principle of estoppel, the respondent, by failing to employ any members of Local 1316 at the Owen Sound site, has contravened Article 5 of the Acoustic and Drywall Appendix (the "Appendix") to the Provincial Agreement, which provides, in part, as follows:
ARTICLE 5 - UNION SECURITY
(Special Provision)
(This Special Provision shall replace Article 5 in the master portion of the Agreement.)
(a) (i) The employer agrees to only employ members in good standing of the United Brotherhood of Carpenters and Joiners of America to perform all work, within the Article 19 of this appendix.
(ii) If an employer is a partnership or corporation, not more than one member of the firm shall work with the tools.
(b) All employees covered by this Appendix shall be hired through the offices of the affiliated Local Unions. However, it is agreed that the employer may recall former employees who have worked for the employer within the last six months prior to recall through the affiliated Local Union office, provided the employee is unemployed and registered at the affiliated Local Union office on the date of recall. All employees before commencing work, must obtain a Referral Slip, from the affiliated Local Union or District Council.
(c) Notwithstanding the provisions of Section (b) the employer may transfer the first two key men from one geographical area to a project located in the geographical area of another affiliated Local Union. The next two (2) employees shall be hired from the affiliated Local Union and thereafter one employee from outside the geographical area and one from the affiliated Local Union area, to a maximum of a twelve man crew. An employee who is transferred from one area to another shall be paid the rate of wages in the area from which he was transferred or the rate in the area to which he was transferred whichever rate is the greater. This twelve man crew is defined as six men from outside the geographical area and six men from the affiliated Local Union's area. If the affiliated Local Union in the other area cannot supply sufficient competent workmen, additional employees may be transferred as agreed upon between the employer and the affiliated Local Union in the other area.
It is understood that, if the Local Union or District Council is unable to provide the required competent workmen within two (2) working days, the employer is free to hire such manpower as is available, but such manpower shall, as a condition of employment before commencing work, apply to the affiliated Local Union having jurisdiction for the job or project where said manpower is working, and shall comply with all the applicable union regulations for membership therein.
That agreement was signed on August 11, 1982 by The Carpenters Employer Bargaining Agency and the Council, which, together with the United Brotherhood of Carpenters and Joiners of America, has been designated, pursuant to section 139 of the Act, as the employee bargaining agency bargaining all journeymen and apprentice carpenters (other than millwrights) represented by various affiliated bargaining agents including Local 785 and Local 1316. (The E.B.A. was duly notified of this section 124 referral, but did not have a representative in attendance at the hearing of this matter.)
4The Acoustic and Drywall Appendix to the Carpenters' 1978-80 provincial agreement contained a provision similar in all material respects to Article 5, as did the Appendix to the Carpenters' 1980-82 provincial agreement.
5Local 1316 is a small local with under 100 members. Because of its relatively small size, Local 1316, which once had a full-time business agent, is able to afford only a part-time business agent. Thus its business agent, Richard Harkness, "works with the tools" and "takes time off when a problem arises". He "polices" the application and administration of the Appendix in Local 13 16's geographical area by referring to Southam Building Reports as a source of information about projects within that area, by attending meetings of the Carpenters' Western Ontario District Council (which is also an affiliated bargaining agent of the E.B.A.) at which business agents exchange information about projects within that area, by attending meetings of the Carpenters' Western Ontario District Council (which is also an affiliated bargaining agent of the E.B.A.) at which business agents exchange information about projects within their respective areas, and by using Brian Black, the business agent of Locals 2050, 2222, and 2451 (which supply general carpenters, rather than accoustic and drywall carpenters) to check on jobs in Huron, Bruce, and Grey Counties. He also from time to time receives calls from business agents of other locals advising him that a contractor from one of their areas is performing work in Local 1316's area. Similarly, Mr. Harkness, who usually knows when men from his Local are going out of town to work within another local's area, sometimes calls the business agent of another local to tell him that a contractor from Local 13 16's area is performing work in the latter's area. However, he conceded that such calls are not made as often as they should be.
6The respondent first signed a collective agreement with the Grand River Valley District Council in 1966. That agreement covered only the Counties of Brant, Norfolk, Waterloo, and Wellington, and was the first in a series of collective agreements between those parties in respect of those counties. It is unclear from the evidence whether the applicant and the respondent were ever bound by a collective agreement covering Grey County prior to the introduction of mandatory province-wide bargaining in the ICI sector. (Article 3(a) of the accoustic and drywall appendix to the 1978-80 Carpenters' provincial agreement provided: "This Appendix on behalf of its own provisions and on behalf of the provisions in the master portion of the Agreement, extends their scope to be applicable to and effective throughout the Province of Ontario.") Henry Losereit, the President of the respondent, testified that when the respondent was working on the construction of the London City Hall in 1969 and 1970, he "signed something" which he "believed to be a collective agreement" with the Carpenters' London Local "in order to get men" to work on that project. Mr. Losereit did not receive a copy of that agreement, nor was a copy of it placed in evidence before the Board in these proceedings. Moreover, there is no evidence before the Board which indicates what the geographic scope of that agreement was. Thus, it is unclear whether it extended to Board Area 28 (Grey County) or was confined to Board Area 3 or a part thereof. However, we are satisfied that the appropriate disposition of this case would be the same irrespective of the geographic scope of that agreement since, in our view, the case turns primarily on events which have occurred since the advent of province-wide bargaining in the ICI sector.
7Mr. Losereit, whom we found to be a candid and credible witness, told the Board that his company has used carpenters supplied by "out of town" locals on a number of jobs outside of Local 785's geographical area. He explained that this generally came about when a Carpenters' representative came to a site in an area in which the respondent had not previously worked and told management that the respondent was required to use men from the Local which had jurisdiction in that area. After the respondent had thereby "established a working relationship" with such local, it would then call that local to obtain additional men on a basis similar to that set forth in Article 5. Mr. Losereit cited Toronto, Ottawa, Sarnia, Huntsville, and Collingwood as examples of locations in which that had occurred. It was his uncontradicted evidence that he had never been approached by any Carpenters' official about using men supplied by the applicant or by any local other than Local 785 in Oxford, Perth, Bruce, Huron, or Grey Counties (hereinafter referred to as "the five counties"). He told the Board, "We had been working there for eighteen years.... We just carried on. Since no one came around and told us different, we just carried on as before." He further testified that it never occurred to him to use men supplied by the applicant on jobs in those counties because "it makes no sense; economically it's not feasible." Mr. Losereit explained that the travelling allowance payable to men from the London area (in which Local 1316 is located) in respect of work performed on projects in the five counties, such as the Owen Sound hospital site, would be much greater than that payable to men from the Cambridge area, in which Local 785 is located and from which the respondent normally draws its workforce. In addition to the significantly higher travel costs which the respondent would incur by using carpenters supplied by Local 1316 rather than Local 785 on those projects, the "wage and related payments" schedule applicable to Local 1316 provides for higher wages and related payments than does the schedule applicable to Local 785. (The differential is currently $1.57 per hour). Mr. Losereit also testified that he was bidding against non-union contractors on many of the jobs in five counties, and that if he had allowed for use of workers (supplied by Local 1316) from London in his bids, he would never have been awarded the jobs in the first place.
8In support of his contention that Local 1316 is estopped from relying on Article 5 in the circumstances of this case, counsel for the respondent submitted that there is a "long established local area practice" in the Kitchener area by which acoustic and drywall contractors in that area have used carpenters exclusively from their "home local" (Local 785) on projects in the ICI sector in the five counties. In support of that contention, the respondent adduced evidence which establishes that it used members of Local 785 exclusively to perform work valued at over $900,000 involving over 35,000 hours of work on 70 projects in various locations in the five counties from 1966 to 1981, without complaint, grievance or objection from the applicant, the Council, or Local 785. Eleven of those projects, involving a total of almost 3,300 hours of work projects, involving a total of almost 3,300 hours of work and a total value of about $107,000, have been performed in the period (from 1978 to 1981) during which the respondent has been bound by contractual obligations similar in all material respects to those contained in Article 5, as set forth above. On each of those projects, all of the carpenters on the respondent's work crews, which have varied in size from two to about twenty carpenters, have been supplied by Local 785. Those eleven projects included not only renovation work but also new construction. Some of that work was subcontracted to the respondent by general contractors bound by the Provincial Agreement, such as Win. Parker Construction and Traugott Construction, although most of it was subcontracted to the respondent by non-union contractors.
9The evidence also establishes that Prestige Acoustic Limited, another Kitchener area acoustic and drywall contractor, which has had a collective agreement with the Carpenters since 1967 and is bound by the Provincial Agreement, has used men supplied exclusively by Local 785 to perform acoustic and drywall work involving a total value of over $200,000, and a total of over 5,000 hours of work on twenty projects within the applicant's geographical jurisdiction during the past five years without any complaint, grievance, or objection from the applicant, the Council, or Local 785. Thus, there is some evidentiary basis for the respondent's contention that the use of carpenters supplied by Local 785 on projects in the five counties is an established local area practice in the Kitchener area.
10As indicated above, the main issue in this case is whether the respondent can rely upon estoppel to shield it from liability in respect of the applicant's grievance. The doctrine of estoppel is succinctly summarized in the following passage from Brown and Beatty, Canadian Labour Arbitration (Agincourt: Canada Law Book Limited, 1977) at paragraph 2:2210:
"The concept of promissory estoppel is well established at common law and has been expressed in the following way:
The principle, as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word.
One arbitrator in a recent award has summarized the doctrine in the following terms:
It is apparent that there are two aspects of the doctrine as thus stated. There must be a course of conduct in which both parties act or both consent and in which the party who later seeks to set up the esestoppel is led to suppose that the strict rights will not be enforced. It follows that the party against whom the estoppel is set up will not be allowed to enforce his strict rights if it would be inequitable to do so. The main situation where it would be inequitable for strict rights to be upheld would be where the party now setting up the estoppel has relied to his detriment.
Thus, the essentials of estoppel are: a finding that there was a representation by words or conduct intended to be relied on by the party to which it was directed; some reliance in the form of some action or inaction; and detriment resulting therefrom
Although the Ontario Divisional Court decision in Re Hospital Commission, Sarnia General Hospital and London District Building Service Workers' Union Local 220, S.E.I. U., 1972 CanLII 742 (ON HCJDC), [1973] 1 O.R. 240, cast some doubt on whether the doctrine of estoppel could be applied in labour arbitration proceedings, that doubt has been removed by a more recent unanimous judgment of that Court written by Osler J., who also wrote the decision in the former case: see Canadian National Railway Co. et al. (1981), 1981 CanLII 2953 (ON HCJDC), 34 O.R. (2d) 385. Moreover, this Board has not infrequently applied that doctrine in the context of section 124 applications; see, for example, Vanbots Construction, [1982] OLRB Rep. July 1086; Comstock International, [1982] OLRB Rep. June 852; Sinclair Welding Limited, [1981] OLRB Rep. March 331, and The Master Insulators' Association of Ontario, Incorporated, [1979] OLRB Rep. Sept. 877.
11It is also firmly established in the arbitral jurisprudence that acquiescence or inaction can have the effect of a "representation": see Re Consolidated-Bathurst Packaging Ltd. and International Woodworkers of America, Local 2-242 (1982), 6 L.A.C. (2d) 30 (MacDowell), and the authorities referred to in that award. The labour relations rationale for that conclusion was aptly explained as follows by the British Columbia Labour Relations Board in Re City of Penticton and C. U.P.E. Local 608 (1978), 1978 CanLII 3523 (BC LA), 18 L.A.C. (2d) 307, at page 320:
..... a collective bargaining relationship is quite a different animal [from a single, isolated commercial transaction]. The union and the employer deal with each other for years and years through successive agreements and renewals. They must deal with a wide variety of problems arising on a day-to-day basis across the entire spectrum of employment conditions in the workplace, and often under quite general and ambiguous contract language. By and large, it is the employer which takes the initiative in making operational decisions within the framework of the collective agreement. If the union leadership does not like certain management actions, then it will object to them and will carry a grievance forward about the matter. The other side of that coin is that if management does take action, and the union officials are fully aware of it, and no objection is forthcoming, then the only reasonable inference the employer can draw is that its position is acceptable. Suppose the employer commits itself on that assumption. But the union later on takes a second look and feels that it might have a good argument under the collective agreement, and the union now asks the arbitrator to enforce its strict legal rights for events that have already occurred. It is apparent on its face that it would be inequitable and unfair to permit such a sudden reversal to the detriment of the other side. In the words of the Board in District of Burnaby, [1978] 2 Can. L.R.B.R. 99, at page 103, 'it is hard to imagine a better recipe for eroding the atmosphere of trust and co-operation which is required for good labour management relations, ultimately breeding industrial unrest in the relationship — all contrary to the objectives of the Labour Code: see also the observations of Mr. Justice Hutcheon in Larson et al. v. MacMillan Bloedel (Alberni) Ltd.. 1977 CanLII 2265 (BC SC), [1978] 1 W.W.R. 749 (B.C.S.C.). To return to the metaphor which was used earlier, it is equally as unacceptable to watch someone go out on the end of the limb, as it is to invite that person out on the limb — before sawing it off."
12Having regard to all the evidence and the submissions of the parties, we are satisfied that all of the elements of estoppel are present in the instant case. It is reasonable to infer in the circumstances that Local 785 and, through it, the Council, of which it is an affiliate, were aware that the respondent has used only members of Local 785 on projects in the five counties, and has not used any members of Local 1316 as required by the provisions of Article 5. It is also apparent that the Council and its affiliates have acquiesced in the respondent's practice and, by not complaining, grieving, or objecting to that longstanding practice in any way, have led the respondent to believe that its practice is acceptable to the Council and its affiliates, including Locals 785 and 1316. Relying upon that acquiescence, the respondent has in good faith bid on and obtained work at a number of projects on the basis of the Local 785 wage, travel and board payments set forth in the Appendix. The detriment which the respondent would suffer if the grievance were to succeed is quite clear; it would not only be required to pay its "key men" (and any other worker from Local 785 whom it was entitled by Article 5 to use on the projects) the difference between the wages and related payments that the members of Local 1316 would have received if they had been employed on the project. Under the circumstances, it would be quite unfair and inequitable to permit the Council or the applicant, which is an affiliate of the Council, to assert right under Article S in respect of the Owen Sound project, or in respect of any other projects in the five counties on which the respondent bid prior to being notified of this grievance. As a matter of labour relations policy, it is neither desirable nor permissible for one affiliate, such as Local 785, which is the union with which an employer maintains an ongoing day-to-day working relationship, to knowingly accept the benefit of having its members employed on a substantial number of projects outside its geographical area in violation of the Appendix, without being taken to have in any impaired the ability of another affiliate, bound by the same Appendix and linked through the Council, to seek the strict enforcement of its rights under that Appendix, which forms part of the Provincial Agreement, negotiated by the Council (as part of the E.B.A.) on behalf of its affiliates. At some point in time, which in the circumstances of the present case was reached considerably in advance of the fifth year in which a provision such as Article S has been in force, the knowledge of an affiliate (such as Local 785) concerning an employer's practice which is inconsistent with such provision, can reasonably and properly be imputed to the Council, and through it, to the other pertinent affiliate, such that neither the Council nor the other affiliate can begin to saw off the limb onto which the employer has been permitted to go, without duly notifying the employer of their intention to revert to their strict rights under the Appendix. However, by filing the present grievance, the applicant, on behalf of itself and the Council, gave the respondent such notice in respect of the application of Article 5 to projects in the five counties, and thereby brought the estoppel to an end in respect of any projects thereafter bid upon in that area by the respondent.
13In view of our disposition of this matter, it is unnecessary to determine whether, as contended by the respondent, the applicant is also estopped from succeeding with this grievance by virtue of its (alleged) failure to take adequate steps to "police" the acoustic and drywall work performed by the respondent within its geographical area.
14For the foregoing reasons, the grievance is hereby denied.