[1983] OLRB Rep. August 1282
2161-82-M Christian Labour Association of Canada, Applicant, v. Carroll Electric (1982) Limited, Respondent, v. Derek Murr, Employee
BEFORE: R. D. Howe, Vice-Chairman, and Board Members I. M. Stamp and E. G. Theobald.
APPEARANCES: Owen V. Gray and Hank Beekhuis for the applicant; Richard Nixon, Frank Sanders, Pat Carroll and Suzanne Holland for the respondent; Derek Murr appearing on his own behalf
DECISION OF THE BOARD; August 17, 1983
This is a referral of certain grievances to the Board under section 124 of the Labour Relations Act. Two of the grievances are dated January 11, 1983 and the third is dated January 13, 1983. The grievances, as further particularized by counsel for the applicant in an eight paged document dated March 23, 1983, claim union dues, wages, vacation pay, medical plan benefits, tool allowance, holiday pay, and compensation for various other losses resulting from the respondent's alleged collective agreement breaches from September 20, 1982 to March 31, 1983.
In his preliminary submissions to the Board on March 25, 1982 (following abortive settlement discussions), counsel for the respondent contended that the Board was "without jurisdiction to deal with all three grievances referred to the Board simultaneously". He also submitted that certain employees who might be adversely affected by the Board's decision had not received adequate notice of the hearing, that particulars of the grievances had not been supplied sufficiently far in advance of the hearing, and that the Board did not have jurisdiction to hear the grievances to the extent that they related to employees not working in the construction industry. After considering those submissions, the Board made the following oral ruling, which is hereby confirmed:
"Having considered the submissions of counsel for the respondent and having offered the individual employee who has entered an appearance an opportunity to make submissions to the Board concerning the preliminary matters raised by counsel for the respondent, we are of the view that it is unnecessary to hear submissions from counsel for the applicant concerning the four preliminary matters raised by the respondent. The issue of whether the persons whom the respondent asserts to be 'affected employees' have received notice of these proceedings sufficiently in advance of the hearing date is academic in view of the fact that the Board will not in any event embark upon a hearing of the merits of these grievances today in view of the lateness of the hour. There can be no doubt that those persons will have had adequate notice by April 12th and 13th when the hearing of this matter is scheduled to continue. Similarly, the issue of whether the particulars of the grievances were supplied sufficiently in advance of the hearing, and whether particulars needed to be supplied in any event, is also academic in the view of the fact that we will not proceed with the merits until April 12th. We would note, however, that if counsel for the respondent disputes the adequacy of the particulars that have been supplied, it will be incumbent upon him to notify the applicant of any alleged inadequacies forthwith.
With respect to the matter of the Board's jurisdiction to deal with these three grievances together, we are of the view that the Board, as master of its own procedure, should, as a matter of labour relations policy, hear all of these grievances together in order to deal with the matters in dispute between the parties in a single proceeding. In reaching that decision, we have considered the obvious interrelatedness of the subject matter of the grievances. With respect to the fourth point, the respondent does not dispute that the Board has jurisdiction to hear these grievances at least in so far as they relate to the construction industry. As part of its case on the merits, it will be incumbent upon the applicant to satisfy the Board that the relief which it requests falls within the Board's jurisdiction. However, we are of the view that evidence concerning that matter can best be heard together with the other evidence which the applicant will adduce in support of its case. Therefore, this matter is recessed until April 12th and 13th when we shall hear the matter on its merits."
The evidence adduced before the Board in this matter included twenty-seven exhibits and the testimony of ten witnesses. There were a number of conflicts in that evidence, many of which merely reflect the natural weakening of memory with the passage of time, and the tendency of witnesses to recall events in the light most favourable to their present concerns, rather than a conscious attempt to mislead the Board. In making our findings of fact in this matter, the Board has considered a number of factors including the firmness of the witnesses' respective memories, their ability to resist the influence of interest to modify their recollections, their consistency of their evidence, their capacity to express their recollections clearly, and their demeanour. We have also assessed what is most probable in the circumstances of this case, and what inferences may reasonably be drawn from the totality of the evidence.
The applicant has had a collective bargaining relationship for a number of years with J. B. Carroll Electric Limited ("JBC"), an electrical contractor in the construction industry, which also performed some service and maintenance work. The most recent collective agreement (the "collective agreement") between those parties was signed in April of 1981 for a two year term, from April 1, 1981 to March 31, 1983.
On September 9, 1982, J. B. Carroll, the President of JBC, caused the following written notice (Exhibit 4) to be given to bargaining unit employees:
"To J. B. Carroll Electric Limited Employees:
Dear Employee:
Due to trending economic pressures and lack of sufficient work, I am serving this notice that all employees of J. B. Carroll Electric Ltd. covered under the bargaining unit of the C.L.A.C. will be laid off effective Friday, September 17, 1982.
This notice is given persuant [sic] to Article 11.04 of the collective agreement."
That notice was distributed to employees by E. Patrick Carroll ("Pat Carroll"), J. B. Carroll's son, at a meeting held on Sepember 9, 1982 at the request of J. B. Carroll. Pat Carroll had been employed by JBC for a number of years in various capacities; he had worked as a licensed electrician and had also exercised various managerial responsibilities. His involvement with the firm was reduced while he attended university, but was restored after he obtained an engineering degree and returned to JBC where he was known as "Vice-President" (although he testified that there were "no legal documents" giving him that position). At that meeting, Pat Carroll told employees that he had "formed a new, non-union company in order to be more competitive in the immediate area and to try to get some contracts". He informed the employees that his new company would pay $10.50 per hour for a licensed journeyman electrician ($2.00 per hour less than the wage rate specified in the collective agreement.) Apprentices' wage rates were also be calculated on the basis of that reduced wage rate (by applying the appropriate percentage). He added that there would be "no benefits except for O.H.I.P" since the collective agreement would no longer apply. He also advised the employees that his father would be "winding down his operation" and "trying to sell off his inventory". Pat Carroll told employees that they were all welcome to apply for a job with the new company, but cautioned them that he "couldn't promise them too much work" because he "had no work to start from". He also stated that he would be holding job interviews the following week. When one of the men asked if that would mean that the men might be working for the new company one week at non-union rates and for JBC the next week at union rates, Mr. Carroll responded in the affirmative. The "new company" to which Pat Carroll referred was the respondent, Carroll Electric (1982) Limited.
- On or about September 13, 1982, Pat Carroll, as President of the respondent, posted in a conspicuous location on JBC's premises, the following notice to bargaining unit employees:
"Job applications will be available from Mrs. Shirley Barker today. Please complete the forms and return them to her. You will be notified and personal interviews will be arranged on one of the following dates, September 15, 16, or 17th, 1982."
On September 15, 1982, Pat Carroll met with Earl Prouse, a bargaining unit employee who had spent a number of months preparing himself for "high voltage" work (testing high voltage transformers, lines, and switch gear). After explaining to him that there did not appear to be enough "high voltage" testing work to occupy all of his time, Mr. Carroll asked him if he would consider "going back into the trade" to work as a journeyman. He also asked him to consider purchasing the "high voltage" equipment from JBC so that the respondent could subcontract that work to him. When Pat Carroll had not heard back from Mr. Prouse by September 23, he proceeded to hire Wayne Beard, an individual who had not previously worked for the respondent or for JBC, but who had "high voltage sales, service, and maintenance experience" with another (unrelated) company. Mr. Prouse testified that he did not contact Pat Carroll following that meeting because he "just figured it was all over there". It is also evident that he was not prepared to work for the respondent on the basis of the reduced wage rates and benefits which Pat Carroll was offering.
The grievor Elwood Chapman was not in attendance at the September 9th meeting as he was away from work at that time due to medical problems. However, a copy of Exhibit 4 was sent to him and he was laid off, effective September 17, 1982, along with grievors Beverley Long, Earl Prouse, Terry Smith, Milt Smith, Gerald Smith, and Derek Murr, whose respective seniority dates ranged from April 14, 1954 to September 30, 1964. Also laid off at that time was Terry Pottelberg, an apprentice whose senority date was April 27, 1981. A number of other employees, including the grievors Dale Wooley (whose senority date was June 1, 1969), Dan Murray (who senority date was June 12, 1970), and Jim Gable (whose seniority date was October 10, 1972) had been laid off by JBC prior to September due to lack of work.
Beverley Long, Gerald Smith, Derek Murr and apprentice Terry Pottelberg commenced to work for the respondent in late September of 1982, after filling out applications for employment and being interviewed by Pat Carroll. However, Terry Smith, Milt Smith, Dale Woolley and Dan Murray did not complete applications or seek interviews with Pat Carroll concerning employment by the respondent. Jim Gable also applied for a position with the respondent but was not hired until November of 1982 when the respondent obtained government funding for a Canada Community Development Project, involving the development and installation of a new electrical heating system at a church. Mr. Gable was one of the four persons hired by the respondent to work on that project. Although Mr. Gable was technically ineligible to work on the project because he was "on welfare" rather than unemployment insurance, Pat Carroll persuaded Employment and Immigration Canada to “make an exception” in his case and also in the case of apprentice EdHill (whose seniority date was August 3, 1978), who was another of the four persons employed on that project. In addition to that project, in the period covered by the grievances the respondent also performed other construction work, and some electrical service and maintenance work. The persons employed by the respondent to perform bargaining unit work during that period were Beverley Long (who was first on the senority list), Gerald Smith (who was sixth on the senority list), Derek Murr (who was seventh on the senority list), Jim Gable (who was eleventh on the security list), Wayne Beard (who was not the senority list since he had never worked for JBC and was not, in any event, a bargaining unit employee), apprentice Ed Hill (who was thirteenth on the seniority list), apprentice Terry Pottelberg (who was fourteenth on the seniority list), and apprentice Gary Shackleton (who was also not on the seniority list as he had never worked for JBC). Pat Carroll also performed some bargaining unit work during that period.
On September 29, 1982, the applicant filed with the Board an application under section 63 of the Labour Relations Act (File No. 1216-82-R) in which it alleged that as a result of a sale of a business by JBC to the respondent on or about September 20, 1982, the respondent was bound by the collective agreement. In that application the applicant also requested the Board to apply section 1(4) of the Act.
By letter dated September 30, 1982, counsel for the applicant wrote to the respondent (to the attention of Pat Carroll) as follows:
"We act for the Christian Labour Association of Canada.
The Ontario Labour Relations Board will have served you with our client's application under Section 63 of the Labour Relations Act for a declaration that your company is bound by the terms of CLAC's Collective Agreement with J. B. Carroll Electric Limited.
If you consult solicitors with some expertise in this area, I am quite sure they will advise you that you are covered by the provisions of Section 63 of the Ontario Labour Relations Act. They will also advise you that Sections 1(5) and 63(13) of the Ontario Labour Relations Act require that you give evidence at the hearing of CLAC's application and disclose all facts material to the allegations made therein. Those facts would include the identities of the directors and officers of both Respondent companies, the names of the shareholders of each company and the number of shares held by each, all financial arrangements between the shareholders and the companies and between the companies themselves, all bids and contracts made by and awarded to each of these coSolicitors with expertise in this area will undoubtedly advise you that you were required to pay the wage at least, your arrangements with your various creditors and so on. This list is not intended to be exhaustive, but merely to make it clear to you that you will be obliged to expose for scrutiny every aspect of the business of Carroll Electric.
Solicitors with expertise in this area will undoubtedly advise you that you were required to pay the wage rates set out in the aforementioned Collective Agreement from the moment you took on any electricians or electricians' apprentices. Our client is advised that you have not been paying the wage rates set out in that agreement.
I suggest you have your solicitors contact me immediately to discuss this matter. If I do not hear from you or your solicitors within one week of the date of this letter, the necessary steps will be taken under the Grievance Procedure of the Collective Agreement, leading to a referral to arbitration before the Ontario Labour Relations Board under Section 124 of the Labour Relations Act.
Kindly govern yourself accordingly."
- The trade union's application under sections 63 and 1(4) of the Act was heard by another panel of the Board on November 1, 1982. In a decision dated December 20, 1983 (reported in [1982] OLRB Rep. Dec. 1814), that panel concluded that a "sale of a business within the ambit of section 63(l)(b) of the Act" had taken place and so declared. In reaching that conclusion, the Board noted that anti-union animus formed part of the motivation for the transaction:
"15. It has been said that while no anti-union animus must be proved to succeed under either section 1(4) or section 63, it is nevertheless, a relevant consideration (see Grand Valley Ready Mix, [1981] OLRB Rep. June 663; Moore Groceteria Limited, [1980] OLRB rep. April 486.) In this instance it is clear that an important reason why Mr. P. Carroll wished to incorporate his company was in order to avoid the collective bargaining obligations under which J. B. Carroll Electric operated. He testified that if he were to remain in the Tillsonburg area and do contracting and high voltage work, he would have to have competitive wages. Since his competitors were non-union, he needed to be non-union. Two years before, J. B. Carroll Electric employees in this bargaining unit had been asked to make wage concessions to be more competitive, but this had been rejected. In light of this the only route to competitiveness was through a non-union work force. Section 63 was enacted to block this very type of avoidance. While the context of a collective agreement always has an impact on competitiveness, any negative impact must be resolved in the normal course of collective bargaining, not through avoidance thereof. This is not a situation where a company is formed to compete with another. The formation of his own company meant that Mr. P. Carroll was not 'leaving' his father. In his own testimony he chose not to leave him because if he did, it would have been hard for him to get started. After all, J. B. Carroll Electric was a going concern with customers, 'goodwill', inventory and the kind of equipment best suited to the high voltage work Carroll Electric wished to increase. Therefore, it is the Board's conclusion that incorporation of Carroll Electric was intended in part to avoid one of the two significant liabilities J. B. Carroll Electric had - a collective bargaining relationship."
That decision was received by the respondent on January 6, 1983.
The evidence before the Board establishes that although most of the work to which the grievances pertain is work within the "construction industry" (as defined in section 1(1)(f) of the Act), some of it is non-construction work, such as service and maintenance of electrical equipment. Counsel for the respondent contends that the Board has no jurisdiction under section 124 of the Act to consider those portions of the grievances which pertain to matters outside the construction industry. Counsel for the applicant, on the other hand, submits that the Board has jurisdiction under section 124 of the Act to consider and award relief in respect of all aspects of the grievances since the applicant is a "trade union" within the meaning of section 117(f), and the respondent is an employer within the meaning of section 117(c). In the alternative, he submits that the Board has jurisdiction in these proceedings to grant relief under section 89 of the Act in respect of the respondent's breaches of the collective agreement.
In M. G. Burke Investments Ltd., [1978] OLRB Rep. April 348, the employer acknowledged that it was bound by a collective agreement with the union in respect of its construction work, but denied that the collective agreement also covered non-construction work. Through the grievance referred to the Board in that case, the union sought to recover the differential between the collective agreement rate and the rate which the company had paid with respect to its non-construction work. At the hearing, the union also challenged the employer's contention that it had paid the collective agreement rate for all its construction work. After noting that section 124 (then section 1 12a) "is not of general application but is restricted only to the construction industry", the Board ruled that it lacked jurisdiction to "act as an arbitration board with respect to matters arising outside the scope of the construction industry". Counsel for the respondent also relies upon London Sandblasting & Painting Limited, [1982] OLRB Rep. Sept. 1322, in support of his contention that the Board's jurisdiction under section 124 is limited to the respondent's work in the construction industry. However, in that case the parties agreed that the Board could not concern itself with grievances insofar as they relate to non-construction work, and further agreed that "if one or more ['private' arbitration] boards are established, it or they should deal with all aspects of the grievances, both construction and non-construction, notwithstanding the two section 124 referrals". Thus, it was unnecessary for the Board to rule on the extent of its jurisdiction under section 124 in that case.
Section 124 provides as follows:
"124.-(1) Notwithstanding the grievance and arbitration provisions in a collective agreement or deemed to be included in a collective agreement under section 44, a party to a collective agreement between an employer or employers' organization and a trade union or council of trade unions may refer a grievance concerning the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable, to the Board for final and binding determination.
(2) A referral under subsection (1) may be made in writing in the prescribed form by a party at any time after delivery of the written grievance to the other party, and the Board shall appoint a date for and hold a hearing within fourteen days after receipt of the referral and may appoint a labour relations officer to confer with the parties and endeavour to effect a settlement before the hearing.
(3) Upon a referral under subsection (1), the Board has exclusive jurisdiction to hear and determine the difference or allegation raised in the grievance referred to it, including any question as to whether the matter is arbitrable, and the provisions of subsections 4(6), (8), (9), (10), (11) and (12) apply with necessary modifications to the Board and to the enforcement of the decision of the Board.
(4) The expense of proceedings under this section, in the amount fixed by the regulations, shall be jointly paid by the parties to the Board for payment into the Consolidated Revenue Fund."
Under that provision only "a party to a collective agreement between an employer or employers' organization and a trade union or council of trade unions" may refer a grievance to the Board for final and binding determination. By virtue of section 117, for the purposes of section 124 "'employer' means a person who operates a business in the construction industry" (as defined in section 1(1)(f) of the Act) and “trade union' means a trade union that according to established trade union practice pertains to the construction industry.” It is common ground between the parties that the applicant is a "trade union" within the meaning of section 117(f). The parties are also in agreement that the respondent "operates a business in the construction industry", although counsel for the respondent contends that the respondent also operates a business outside the construction industry. However, as noted by counsel for the respondent, the section 117(c) definition of employer is not limited to persons who operate a business exclusively in the construction industry. Moreover, all of the grievors in the present case are "employees" within the meaning of section 117(b) of the Act since all of them who are not engaged exclusively in on-site work are commonly associated in their work or bargaining with on-site employees. It is true, as submitted on behalf of the respondent, that the applicant could have referred its grievances to arbitration under the arbitration clause contained in the collective agreement (Article 20). However, that would have meant ,that these grievances, which primarily relate to construction work, would have been subjected to arbitration procedures of a type which have generally been recognized to be ill-suited to the needs of the construction industry (see, for example, The Lummus Company Canada Limited, 111976] OLRB Rep. Jan. 980). It is also true that the applicant could have availed itself of the expedited arbitration procedure provided by section 45 of the Act. However, since the majority of the work to which the present grievances relate is clearly within the construction industry, and since the grievances have unfair labour practice overtones, arising as they do from the respondent's continuing refusal to recognize the binding effect of the collective agreement upon it despite the Board's aforementioned declaration, it was not at all unreasonable for the applicant to refer these grievances to the Board under section 124 rather than requesting the Minister to refer them to a single arbitrator pursuant to section 45 of the Act. Moreover, it is also not without significance that the respondent made no objection to the Board's jurisdiction under section 124 until the time limit set forth in section 45(2) of the Act had expired. (Article 20.02 of the collective agreement stipulates a fourteen day time limit for referring a grievance to arbitration).
Under the circumstances, the Board is satisfied that it has jurisdiction to hear all aspects of these grievances under section 124 of the Act. Furthermore, if section 124 gives us jurisdiction to hear the grievances only redecessor's collective agreement "as if he had been a party thereto". Thus, the respondent's failure to honour t with the non-construction aspects of these grievances under section 89 of the Act, and that in the circumstances of the present case we should exercise our discretion to do so. Section 50 of the Act provides that a collective agreement is binding upon the employer and upon the trade union that is a party to the agreement. Moreover, as noted above, section 63(2) provides that, until the Board otherwise declares, a successor employer is bound by his predecessor's collective agreement "as if he had been a party thereto". Thus, the respondent's failure to honour the collective agreement is a contravention of sections 50 and 63(2) of the Act, which can be enforced under section 89 of the Act in the context of the present proceedings. See, Genaire Ltd., 58 CLLC ¶15,388 (O.H.C.), aff'd. 59 CLLC ¶15,416 (Ont. C.A.), in which MeRuer C.J.H.C. indicated that the procedure before the Board ought not to be so formal as to deny an applicant relief because of some technical formality in the framing of an application, and further indicated that the Board "should exercise any jurisdiction given to it under the Act notwithstanding that a particular section of the Act is referred to in the formal application", where, in substance, the application can be considered an application to the Board to exercise its jurisdiction. See also J. G. Rivard Limited, [1980] OLRB Rep. July 1009, and Eastern Sheet Metal and Mechanical Construction, [1981] OLRB Rep. Jan. 26, in which the Board followed the court's directions to construe liberally the substantive and remedial bases to the matters before it, by granting relief under section 89 of the Act in section 124 proceedings, even though the applicant had not "pleaded" section 89. See also Imperial Tobacco Products (Ontario) Limited, [1974] OLRB Rep. July 418.
For the foregoing reasons, the Board concludes that it has jurisdiction to deal with all aspects of the grievances which have been referred to us in the present proceedings.
[Review of grievances omitted]
Counsel for the respondent contended that the JBC employees who did not apply for employment with the respondent are not entitled to any compensation since they failed to mitigate their loss by accepting the "offer of employment" extended by Pat Carroll on behalf of the respondent, failed to observe the "comply now, grieve later principle" by accepting employment with the respondent, or "quit" in that they failed to accept recall by the respondent. Counsel for the respondent conceded that the events cannot be "easily pigeon-holed" into any of those three categories. However, the essence of his submission is that the employees should have availed themselves of the opportunity to apply for employment with the respondent. Having regard to all the evidence, we find that the JBC employees who did not apply for employment with the respondent declined to do so because of a concern that by accepting a position with the new company at a lower rate of pay and without other benefits (except O.H.I.P.) provided by the collective agreement, they might prejudice their right to recover their losses and might also undermine the applicant's position. Moreover, many, if not all of them, felt that there was no need to apply for a job since they already had jobs with the firm. For example, when Milt Smith was asked in cross-examination if he had ever seen "any kind of posting by Pat Carroll that job applications were available", he replied, "Yeah, I saw that posting but I already had a job through the union with this firm so why would I go for another one?" He also indicated that he would have been willing to "accept work for Pat Carroll under the same conditions [he] was working at [before being laid off by JBC]". Similarly, when Earl Prouse was asked (in cross-examination) why he did not apply for employment with the respondent, he replied, "I felt that it was all one with the same company, and we already had a contract."
In Wilco Canada Inc., [1983] OLRB Rep. June 989, the Board, in the context of unfair labour practice discharges, reviewed in depth the common law, labour board, and arbitral jurisprudence concerning the issue of whether the mitigation duty requires a discharged employee to accept an offer of reinstatement by the employer who discharged him. The Board held that an employee who rejects a bona fide offer of reinstatement is not entitled to receive compensation for the period following the date at which acceptance at that offer would have resulted in re-employment. However, the Board also stated (at paragraph 33):
“…. To be effective to relieve an employer from further liability, an offer to reinstate an illegally discharged employee should generally be on the same terms as those enjoyed by the individual prior to discharge. Any adverse modification in terms and conditions of employment may provide an indication that the reinstatement offer was not made in good faith ….”
Having carefully considered the pertinent jurisprudence as set forth in that decision, we are of the view that the grievors were not obliged to apply for employment with the respondent in the present case. The circumstances of this case, when viewed as a whole, clearly indicate that the creation of the respondent, complete with employment applications and interviews by Pat Carroll of individuals whom he had known in the context of his father's work place for many years, was an transparent device adopted for the express purpose of jettisoning the collective agreement and the applicant's bargaining rights. Employees cannot be faulted for being unwilling to lend an element of credibility to a charade of that sort by filling out employment applications and attending employment interviews concerning positions to which they (quite correctly) view themselves to be legally entitled in any event. Moreover, it is important to note that Pat Carroll was not specifically offering them employment, but rather was merely offering them an opportunity to apply for possible employment on a sporadic basis with a new “non-union” company under substantially poorer terms and conditions of employment than those to which their collective agreement entitled them. Thus, we are of the view that the grievors did not fail to observe the "comply now, grieve later" principle which has application in some instances where a grievor is given an order or direction, did not "quit" their employment, and did not fail to mitigate their loss by applying for employment with the respondent in the circumstances of this case.
Furthermore, on the basis of all the evidence before us, including the evidence concerning the efforts made by various grievors to find alternate employment by registering with Canada Manpower and approaching other employers, we find that there is no merit in the respondent's contention that the grievors have failed to properly mitigate their respective losses. (See, generally, Sutton Place Hotel, [1980] OLRB Rep. Aug. 1250).
We are, however, satisfied that Elwood Chapman, who was away from work recovering from an operation at the time of the "lay-off" on September 17, 1982, is entitled compensation only from December 12, 1982, which we find to be the date as of which he should have been recalled. Although he testified that his surgeon told him that he would be able to go back to work on October 4, 1982, he took no steps to communicate that information to JBC or the respondent until early December of 1982.
Counsel for the respondent contends (as an alternative to other arguments which, if accepted, would further restrict or eliminate his client's liability) that the respondent's liability for contravention of the collective agreement should run only from January 6, 1983, the date on which the respondent received the Board's decision (in File No. 1216-82-R) concerning the aforementioned application under sections 63 and 1(4). However, section 63(2) provides that "[w]here an employer who is bound by or is a party to a collective agreement sells his business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto . . .." Thus, by virtue of that provision, the respondent was bound by the collective agreement from the moment that the sale of business took place. The legal effect of section 63(2) was described by the Board as follows in Emrick Plastics Inc., [1982] OLRB Rep. June 861:
"18. We conclude, similar to the British Columbia Labour Relations Board, that section 63(2) of our own Act continues the effect of a collective agreement over a sale transaction without hiatus, and that the purchaser stands literally in the shoes of its predecessor with respect to any rights or obligations under that agreement. The purchaser, in other words is given no opportunity to 'weed out undesirable employees' contrary to the provisions of the collective agreement, nor to decline to recognize any of the seniority or other rights accrued by employees under the collective agreement during their tenure with the predecessor employer. We agree with counsel for the respondent that the purchaser takes the business exactly as he receives it from the vendor. Even if, for example, employees have been given notice of termination by the vendor, the purchaser is no more entitled to start that business up without regard to the recall rights of employees under the collective agreement than the vendor would have been. The obligations of neither employer are determined by whether the employer on its own chose to treat a severance at a given point in time as a termination or a lay-off."
Thus, we reject the respondent's contention that liability should not predate receipt of the Board's decision. The respondent had retained experienced counsel in advance of the hearing of that matter and it is reasonable to infer that the respondent had been fully and properly advised concerning its potential exposure to liability. In any event, ignorance of the law provides no excuse for the respondent's actions and does not reduce its liability for breaches of the collective agreement by which it was legally bound from the time of the sale.
We are also satisfied that there is no merit in the submission of counsel for the respondent that his client's liability should not predate by any more than five work days, the filing of the grievances which form the subject matter of these proceedings. Within days after the sale, the applicant not only filed the aforementioned application under sections 63 and 1(4) of the Act, but also caused its counsel to write to the President of the respondent advising him of that application and of the applicant's intention to enforce its rights under the collective agreement. While that letter emphasized the respondent's obligation to pay the wage rates set out in the collective agreement, it also indicated, at a more general level, that the applicant was of the view that the respondent was bound by the terms of the collective agreement, and that the applicant intended to assert (before the Board) its rights under that agreement. The applicant's continued intention to enforce those rights was evident from its pursuit of its application under sections 63 and 1(4). When it became apparent to the applicant that the respondent was continuing to flaunt its obligations under the collective agreement notwithstanding the Board's decision of December 20, 1982, it promptly filed the grievances which are presently before us. The five work day time limit for filing grievances, specified in Article 19.02, is inapplicable to the present grievances since Article 19.02 provides that the limitation period in question "shall not apply to differences arising between the parties [thereto] relating to interpretation, application or administration of this Agreement." Moreover, even it were to be assumed that the five work day period applies to the instant grievances, and that it is a mandatory (as opposed to directory) time limit, having regard to all the circumstances, we are satisfied that this is an eminently appropriate case in which to extend the time for filing the grievances, pursuant to section 44(6) of the Act, as we are empowered to do by section 124(3).
Pat Carroll testified that much of the work which the respondent performed during the period covered by these grievances, was obtained by bidding at "non-union rates", and would not have been obtained if it had been bid at "union rates". However, his evidence in this regard was strictly hearsay, and there is no cogent direct evidence which supports that assertion. Moreover, as a matter of labour relations policy, it simply does not lie in the mouth of a party which has unabashedly breached its obligations under a collective agreement binding upon it, to attempt to escape liability for such breaches by asserting that since it only obtained the work in question by disregarding its collective agreement obligations, the trade union and its members cannot claim any loss in respect of that work. If such a defence were available, any employer could proceed to ignore with impunity its wage rate and other collective agreement obligations. Such an approach is utterly inconsistent with the provisions, spirit, and intent of the Labour Relations Act and, in particular, with sections 50 and 63(2), as described earlier in this decision. Similarly, the respondent cannot raise the Canada Community Development Project employee eligibility requirements as a shelter from liability for violations of the collective agreement, particularly where, as in the present case, persons ostensibly employed on such project forty hours per week were in fact working far fewer hours on that project as they were being concurrently assigned by the respondent to perform other bargaining unit work.
[Portion of decision assessing quantum of damages omitted]