I.B.E.W. Electrical Power Systems Construction Council of Ontario v. Ontario Hydro, 1984 CanLII 1050

[1984] OLRB Rep. February 299

0746-82-M I.B.E.W. Electrical Power Systems Construction Council of Ontario and International Brotherhood of Electrical Workers, Local 1788, Applicants, v. Ontario Hydro, Respondent

BEFORE: George W. Adams, Q.C., Chairman and Board Members W. H. Wightman and

F. S. Cooke.

APPEARANCES: S. B. D. WahI, Richard P. Lawlor, J. W Mulhall and William Gilroy for the applicant; and R. Ross Dunsmore, G. A. Mackie and W 5. O'Neill for the respondent.

DECISION OF THE BOARD; February 27, 1984

1. This is a continuation of File No.: 0746-82-M together with File Nos: 1541-82-M and 1542-82-M. All three matters were consolidated by order of the Board, September 20th, 1983. In this respect the Board ruled:

Having regard to the submissions of the parties, the Board has decided to hear the two outstanding grievances (File Nos: 1541-82-M and 1542-82-M) by consolidating them with File No. 0746-82-M. The Board will permit both union and employer to call whatever additional evidence they wish with respect to the non-nuclear referrals bearing on File No. 0746-82-M. Mr. Cooke dissents on the basis that the employer has closed his case with respect to the non-nuclear sites referred to in the Board's de­cision of January 24th, 1983. Mr. Wightman dissents on the basis that the Board in 0746-82-M was dealing only with the nuclear Pickering site.

2. Many of the background facts are set out in the Board's decision of January 24th, 1983 [Now reported at [19831 OLRB Rep. Jan. 991. In that decision the Board found that the respondent employer had not acted in a discriminatory, arbitrary or unreasonable manner in refusing to hire Mr. William Gilroy upon his referral by the trade union to various nuclear construction sites in the Province of Ontario. Internal memoranda issued by the respondent's security division outlined its understanding of the facts causing it to act as it did with respect to rehiring Mr. Gilroy. One memorandum is dated February 25th from J. H. Kearns, Security Co-Ordinator, Security Division to "All Security Officers, Business Administrators/Supervi­sors, All Thermal Stations and NPD-GS". It reads:

Ontario Hydro Employee Voluntarily Terminated

The following is submitted for your information.

On Friday, February 5, 1982, William Gilroy, age 36 years, DOB Feb­ruary 27, 1945, SIN #432 704 575, 82 Ventura Drive, St. Catharines, Ontario, voluntarily terminated his employment with Ontario Hydro at Pickering NGS "B", Construction.

He was employed there as an electrician, and previously worked on con­struction at Lakeview GS, Nanticoke GS, Southern Zone Construction, Pickering NGS "X' and possibly other locations. Gilroy is currently President of IBEW, Local 1788.

During the weekend of February 6 and 7, 1982, Gilroy was one of five Irish Nationals arrested while crossing the border from Canada into the United States. Two other Canadians arrested were William O'Neill, age 26, and James Kelly, age 42, both from St. Catharines, Ontario. The three Irish Nationals were ordered to be temporarily removed from the U.S. without an immigration hearing. Gilroy, O'Neill and Kelly, all landed im­migrants, were returned to Canada, after posting bail of $5,000 to appear in the United States on charges under the immigration law of aiding and abetting to illegally enter the country, using false statements, plus crim­inal charges.

Immigration officials said after the arrests, they seized a shopping list of guns and ammunition to be bought in the United States. All charges oc­curred outside of Canada.

In a subsequent U.S. federal district court hearing, Gilroy admitted that he had been sentenced to two years in 1975, after pleading guilty to con­spiracy to export arms to the Irish Republican Army. Gilroy served his sentence from June, 1975, until his release in October, 1976.

Attached are photocopies of four newspaper clippings taken from the

Globe and Mail, The Toronto Sun and Toronto Star.

You may wish to discuss this with your staffing officers.

For further details, contact the Criminal Investigations Section, Security Division.

3. A selection of newspaper accounts of the grievor's arrest are reproduced in the Board's earlier decision.

4. A subsequent memorandum to Mr. G. T. Leader, Manager of Construction, from Mr. G. Kileeg dated June 17, 1982 reads:

William Gilroy — Electrician

We understand that the above person, who has been employed by Ontario Hydro previously, is seeking to return to work at Pickering NGS "B" Construction site. Attached is a copy of his work record with Ontario Hydro.

We strongly recommend that this person not be employed at Pickering "B" site as we consider him an unsuitable employee and a security risk.

In 1975 Mr. Gilroy was charged and convicted of conspiracy to export arms to Ireland via the USA. The attached news clippings confirm this. A transcript of the trial has been requested.

From June 27, 1975, to October 25, 1976, Mr. Gilroy spent in the Mim­ico correctional centre. His original sentence was two years less one day. He was refused temporary absence privileges.

On February 6, 1982, the day after he voluntarily terminated his work at Pickering "B", he and four others were charged by US Immigration authorities with conspiracy to smuggle aliens into the USA. We under­stand that William Gilroy, William O'Neill and James Kelly are landed immigrants of Irish descent. The other two, Edward Howell and Des­mond Ellis, are Irish nationals.

In addition, Gilroy, O'Neill and Kelly were charged with two counts each of smuggling aliens (ie, the Irish nationals). Gilroy, O'Neill and Kelly were returned to Canada after posting bail of $5,000.00 to appear in Court in the US on a date to be set. As of this date these charges are still pending in the USA and no definite court date has been set. We are informed that the US authorities have not dropped the charges and intend to proceed with court action in all cases concerning Gilroy, O'Neill and Kelly.

Howell had posted bail in the US, was returned to Canada and was or­dered deported. He escaped from Canadian authorities at the Paris airport and turned himself in at Dublin, Southern Ireland. Ellis is apparently still in Erie County correctional institute seeking political asylum.

Inasmuch as Mr. Gilroy has been found in the company of persons sus­pected of an arms-buying mission for the Irish Republican Army and has been charged by US authorities, it appears that he may be continuing in unlawful activities, similar to those he was convicted of previously in 1975. Mr. Gilroy has not demonstrated to his former employer and the public that he is refraining from questionable and perhaps unlawful ac­tivities. As a result, the subject person should not be employed in a Reg­ular or temporary position with Ontario Hydro.

Ensuring the suitability of our employees, including reliability, is one of the measures taken by Ontario Hydro to provide effective security. This is even more important at our nuclear facilities.

5. The actual charges laid against the grievor are set out in documents reproduced in the Board's earlier decision.

6. By letter dated November 3rd, 1982 Mr. J. W. Mulhall, Business Manager of the complainant trade union wrote to Mr. William O'Neill, Manager, Construction Labour Re­lations, Electrical Power Systems Construction Association. The letter reads:

Dear Sir:

Re: Collective Agreement between the Electrical Power Systems Construction Association and International Brotherhood of Electrical Workers, Local 1788 effective May 1, 1982 until April 30, 1984

Re: Collective Agreement between the Electrical 'Power Systems Construction Association and the I.B.E.W. Electrical Power Systems Construction Council of Ontario effective from May 1, 1982 until April 30, 1984.

I.B.E.W. Electrical Power Systems Construction Council of Ontario and I.B.E.W. Local 1788 consider William Gilroy a reliable, certified and competent Union Member.

This letter serves as notice to Ontario Hydro and E.P.S.C.A. that William Gilroy is, from on and after October 1, 1982

1. referred to employment by I.B.E.W. Local 1788 following each and every request for certified tradesmen whenever made, throughout the Province of Ontario;

and

2. referred to replace travel card members and/or permit holders wherever employed by Ontario Hydro throughout the Province of Ontario

pursuant to the terms and conditions of the Collective Agreement re­ferred to above.

Failure to hire William Gilroy pursuant to this province wide re­ferral three working days from the date hereof is recognition that Ontario Hydro and E . P.S. C. A. consider William Gilroy ineligible and unsuitable for employment throughout the Province of Ontario. This constitutes an unjustified refusal of employment, termination, disci­pline or discharge contrary to the Collective Agreement.

By letter dated February 16th, 1983, Mr. G. A. Mackie, Director of Transmission Systems, replied. He wrote:

Dear Mr. Mulhall:

I have been advised by Mr. W.S. O'Neill of your intention to refer Mr. Gilroy for employment as an electrician into the Lines and Stations Di­vision of Ontario Hydro. As the senior officer responsible for this di­vision, I have reviewed the recent decision of the Ontario Labour Relations Board respecting Mr. Gilroy and I have reviewed the material which our organization has secured concerning him and I have consid­ered the risks inherent in hiring someone of Mr. Gilroy's circumstances.

The facts indicate a continuing involvement by Mr. Gilroy with persons suspected of unlawful activity which could be job related. Therefore, I am satisfied that the degree of risk involved in hiring him into Lines and Stations is sufficient to justify refusing to hire Mr. Gilroy at this time. This conclusion is supported by Mr. Gilroy's continuing failure to ex­plain his conduct and the inherent public interest involved.

7. As set out in our earlier decision, the grievor, Joseph Myles, Robert Gray, and Philip Kent were convicted in 1975 of conspiracy to export or attempt to export from Canada goods (military arms) included in an export control list, contrary to section 13 of the Export and Import Permits Act, thereby committing an indictable offence contrary to section 423(1 )(d) of the Criminal Code of Canada. Myles and the grievor received imprisonment sentences for two years less a day and Mr. Gray and Mr. Kent received somewhat lesser punishments. Myles, Gray, Gilroy and Kent pleaded guilty to the charge for which they were convicted. A transcript of the 1975 criminal proceedings was introduced into evidence. The transcript con­tains a recitation of facts by an officer of the Royal Canadian Mounted Police which was ac­cepted by the grievor's counsel, Mr. A. Maloney, as correct. This is the transcript referred to in the internal security memorandum of the respondent dated June 17th, 1982 and repro­duced above.

8. Mr. Stewart Shearer, an officer of the Royal Canadian Mounted Police, was ex­amined by Mr. Duffy for the Crown as follows:

MR. MALONEY: I have no objection to this, Your Honour, provided that a copy of the summary which my friend has given to me, that would assist you in listening to the evidence.

MR. DUFFY: Q. Would you start the summary and go through it and tell us what happened to substantiate these charges?

A. Yes, sir. During 1973 and early 1974, it came to the attention of the RCMP in Toronto that arms were being shipped from Toronto area and these arms were ending up in certain places in Ireland.

An investigation was instituted in an attempt to identify the persons responsible for these illegal shipments. As a result of intelligence gained from this investigation, a meeting was held at the RCMP Headquarters on the 17th of June, 1974 which I attended.

As a result of information obtained at that meeting I, along with other principals, conducted a surveillance at the rear of 100 Doncaster Avenue, Toronto.

A. During the course of this evening, the evening of the 17th of June, 1974, persons who subsequently have been positively identified as the two accused, Mr. Gray and Mr. Gilroy, sitting third from the right and Mr. Gray, fourth from the right in the inside seat — not gowned — the Court official on the right,.

These, the persons, Gray and Gilroy at this time were observed and actually photographed receiving a shipment about, later determined to be, 15 semi-automatic military rifles. These rifles were subsequently seized and they were found to be, the normal name of them was called L 181 semi-automatic. They were a military rifle for use; 7.62 calibre, my information.

Q. Well, who would normally use this kind of weapon?

A. They are normally used by the military of various countries.

These rifles were subsequently packed in boxes at this location and ad­ditional surveillance was maintained on these boxes of rifles, that is, the date of 17th of June, 1974 until approximately 6.25 p.m., when they were seized in the possession of the accused, Mr. Myles. The accused sits be­tween the gentlemen in the grey suit and the blue suit, second from the left.

Q. Between Windsor and Detroit, that is the Ambassador Bridge, be­tween Windsor and Detroit, I understand that he was driving a vehicle across the bridge and the vehicle contained the arms at that time?

A. That is correct.

Q. And he was stopped?

A. That is correct, and he was stopped and arrested in possession of these arms on the 1st of July, 1974 at 12.31 a.m.

During the surveillance period from the 17th of June to the 1st of July, '74, this shipment of arms was observed by members of the RCMP to pass from the hands of Gilroy and Gray to the accused, Philip Kent, who is sitting second from the right in the accused's seats.

Investigation, both prior to, and subsequent to, the actual seizure re­vealed packages and documents which indicated with absolute certainty that the final destination of this shipment of arms was intended to be Ire­land and also that the identification has confirmed extensive linkage be­tween the accused men and the documents, as follows:

There is a statement by the accused Gray to his employer, Howard

Sandy of the Stage Door, 100 Doncaster, that he was constructing a wooden box at that address to ship arms to Ireland in. Joseph Myles, who obtained a shipment of arms directly from the accused Kent was an Executive Officer of the Irish Northern Aid.

Q. I believe that is an American organization?

A. Yes, it is and in fact, he was Treasurer of the Irish Northern Aid Committee, Detroit Chapter.

The accused, Mr. Myles' name, address and telephone number were in the possession of the I.R.A. which stands for Irish Republican Army — as Staff Sergeant, who was arrested in 1973 by the Irish Federal Police. There is a document from the Michigan Bell Telephone that shows in May of 1974 a telephone call was placed from Mr. Myles' residence in Livonia, Michigan which is near Detroit, to that of Kent's residence in Tavistock.

There is documentary evidence that on January 18th, 1974, American Airline tickets were issued from Detroit to New York for a J. Myles and Gillian (sp) Kent. The one day after that trip to New York by Kent and Myles an amount of $2,000 in U.S. funds was deposited by Philip Kent to a bank in Stratford, Ontario. And on that date he wrote four cheques in the amount of $500 each in the name of Lena Gilroy, wife of the ac­cused, Mr. Gilroy.

Mr. Gilroy stated that he received this money, not his wife.

During May and June, five telephone calls were made from the resi­dence of Gillian Kent and the residence of Myles. Articles seized during the search of Philip Kent's residence subsequent to the seizure revealed a connection between Kent and the Irish Northern Aid in the form of books, a banner, and other documents. Certain photographs were taken, the surveillance on the shipment, and also photographs of other articles, items seized during the course of the investigation.

Photograph No. 2 is also of Mr. Gilroy, a back view.

Photograph No. 3 is a photo of Mr. Gilroy receiving packages.

Photograph No. 4 also shows Mr. Gilroy, vaguely, in the warehouse door.

No. 5, this is a rear view of the accused Gilroy handling what later proved to be rifle box, and the butt of one of the rifles is visible.

Photo No. 6, this is a photo taken in order to get all the warehouse door.

A. In the sequence, by these photographs, rifle boxes were unloaded, taken inside and then the empty boxes go out and were thrown in the garbage container.

Photograph No. 10, or, No. 12, pardon me, is more, another load of empty rifle boxes being thrown in the garbage containers.

Q. But these were boxes that the rifles were originally in and they were placed in those boxes at 100 Doncaster; is that what happened?

Photograph No. 21 is a photograph of items also seized from the Kent residence which includes an Irish Republican Army, "Irish People" newspaper and photos.

Photo No. 22 is a photo of a box seized from the residence of Philip Kent. It states "Philip Kent, 1973, In appreciation for your benevolence, Northern Aid for Irish Freedom.

MR. DUFFY: Those are the facts, Your Honour, on which the Crown relies to support the plea of guilty as entered by the accused.

THE COURT: Mr. Maloney, are those facts substantially correct?

MR. MALONEY: Yes.

THE COURT: These convictions are based on the plea of the four ac­cused and having heard the facts, convictions will be registered against these four.

It was also the Crown's position that Myles and Gilroy were the "front line of this con­spiracy" and the sentences rendered by the court reflected this greater responsibility.

9. Mr. Gilroy was extensively cross-examined on this transcript under the protection of the Ontario and Canada Evidence Acts. He admitted to having been charged with con­spiracy to export arms without a licence and to pleading guilty to that charge. He was in Court when all of the above was attested to. He, however, denied knowing rifles were in­volved and the money he received was, he said, the repayment of a loan made to Mr. Kent. He said he pleaded guilty on being advised by Mr. Arthur Maloney that "an Irish Catholic with guns had no chance in this Province". He denied knowing where the guns were going. He admitted his attendance at 100 Doncaster but denied knowing what was in cticut in the United States. He is also an elected state representative. He testified that the Irish Northern AiHe said he knew Messrs. Gray and Kent but not Mr. Myles. He testified that he did not realize he and Myles were viewed as leaders although he heard Mr. Duffy say this and saw no point in objecting. He could not recall any reference to the I.R.A. during the proceedings.

10. Apparently in response to references in the transcript to the Irish Northern Aid, the union called Mr. Richard P. Lawlor, an attorney practicing in Hartford, Connecticut in the United States. He is also an elected state representative. He testified that the Irish Northern Aid is a humanitarian organization headquartered in New York City with the purposes of (1) raising funds to send to families of political prisoners and (2) informing the American public about the problem in Northern Ireland from an Irish Nationalist viewpoint. Mr. Lawlor is the publicity chairman for the north-east United States and a spokesman for the Hartford unit. He testified that the organization is not connected with violence and does not send money to the I.R.A. He knew of no connection between Mr. Gilroy and the Irish Northern Aid and he knew of no violent act in the United States or Canada committed on behalf of Irish Nation­alism. He testified that such violence would impede the development of greater sensitivity in North America to Irish Nationalism and to the bringing of pressure by Canada and the United States on the United Kingdom.

11. Board File No. 0746-82-M deals with a grievance filed by the complainant with the respondent dated July 5th, 1982. In this grievance it was alleged that the respondent from on and after June 17th, 1982 "and continuing to date" had violated the collective agreement be­tween the complainant and the Electrical Power Systems Construction Association by refusing to employ Mr. Gilroy as a reliable and competent union member and by refusing to hire him as a replacement for permit holders or travel card members after three working days' notice. In this grievance the location of the violation was said to be at the Pickering Generating Sta­tion. The collective agreement in question pertained to construction in relation to generation projects. The recognition provision of this agreement provides:

EPSCA recognizes the union as the exclusive bargaining agency for a bargaining unit as defined in Item B engaged in all construction industry work performed in the Province of Ontario on Ontario Hydro property for the "Generation Projects Division of Ontario Hydro". This work in­cludes the building of generating stations, hydraulic works, heavy water facilities, microwave and repeater stations, but excludes the building of commercial type office facilities at urban locations remote from operating facilities.

12. During the first set of hearings leading to the Board's decision of January 24th, 1983, and over the objection of counsel for the respondent, evidence was entertained of the refusals by the respondent to hire the grievor when referred to a number of locations sub­sequent to the refusal at Pickering, the only specific refusal mentioned in the grievance. This evidence was given by Mr. Joseph Mulhall, Business Agent for IBEW Local 1788. These other locations included Bruce Generating Station (July 9th, 1982); Lakeview Generating Sta­tion (October 7th, 1982); Darlington Generating Station (October 19th, 1982); the Southern Construction Zone of Ontario Hydro for work at the Hamilton Lake Transformer Station, Sir Adam Beck Generating Station, Cherry Wood Transformer Station and Stde the development of greater sensitivity in North America to Irish Nationalism and to the bringing of pressure by because it followed the filing of a grievance in point of time. Counsel for the applicant argued that events following a discharge can be relevant and in this respect it was submitted that the other refusals to employ the grievor at both nuclear and non-nuclear sites demon­strated a complete "blacklisting" of the grievor and not a determination restricted to nuclear power sites. The Board reserved on the relevance of the subsequent refusals and permitted the applicant to adduce testimony with respect to other locations provided further particulars were provided to the respondent. Ultimately, these subsequent refusals lead to Mr. Mulhall writing his letter of November 3rd, 1982 to Mr. William O'Neill of the respondent in which he made an open province-wide referral and replacement offer on Mr. Gilroy's behalf. In turn, Mr. Mackie rejected this offer by letter dated February 16th, 1983 reproduced above.

13. While evidence was admitted under reserve with respect to the subsequent refusals, the trade union filed two additional grievances (No. 154 l-82-M and No. 1542-82-M) per­taining to all of the refusals including the Pickering Generating Station. In effect, the situation was unfolding for the applicant trade union as it was litigating its initial grievance (No. 0746-82-M) and it was not clear that the Board would treat the subsequent refusals as, in them­selves, the subject matter of the first application. Indeed, the panel hearing the first complaint refused to consolidate the two subsequent referrals or to entertain those referrals within the context of the initial grievance. As it turned out, the Board confined its first decision to the nuclear sites and made only passing reference to evidence indicating refusals at a number of non-nuclear sites. By our direction, set out in paragraph one of this decision, we were making clear that our first decision was not aimed at resolving the refusals to hire at non-nuclear sites and that we were willing to entertain whatever additional evidence the parties wished to call in relation to these sites. Accordingly, it is the subsequent refusals at non-nuclear sites oc­curring against the background of the grievor's earlier conviction in 1975 and the most recent incident in 1982 that are the subject matter of this decision.

14. William Gilroy is 38 years old; married; and has two children. He is a landed im­migrant and President of IBEW Local 1788. He has held that position for two years and the local has a membership of approximately 1300 tradesmen. His employment history is set out in the Board's earlier decision of January 24, 1983 at paragraph 4. He testified that he was apprehended at the United States border at Niagara Falls, N.Y. and subsequently charged by American authorities with conspiracy to bring aliens into the United States. He said this was a felony charge which was later reduced to a misdemeanour charge to which he pleaded guilty on the assurance from his own lawyer that there would be no more time to serve other than the two weeks of incarceration following his arrest. He stated that the judge called his in­volvement a "foolish escapade". However, he testified that in actual fact he had no involve­ment in the conspiracy to bring Desmond Ellis and Edward Howell into the United States. The hearing and sentencing with respect to his 1982 arrest occurred in March of 1983. Thus, the matters were still before the courts in the United States at the time of the Board's original decision and related hearings.

15. On February 6th, 1982 at approximately 6:00 p.m. Thomas J. Algoe, an inspector with the United States Customs Service, was requested to do a customs secondary vehicle in­spection on a vehicle driven by William O'Neill, a 1976 Plymouth Fury with Ontario Licence #LDU 672. This car belonged to the grievor. William O'Neill is a friend and neighbour of the grievor. There were two other occupants in this car who identified themselves to Algoe as William McKee and Michael Gilmore. All three men gave negative customs declarations orally and the result of the vehicle search was negative. They all said that they were going to Pete's Market in Niagara Falls, New York. The ownership information on this car was given by Algoe to immigration officials who determined that the owner of the vehicle had a "look out" information on him as possibly smuggling weapons or people. Subsequently, it was de­termined that the two persons identifying themselves as McKee and Gilmore were carrying false documentation and that in fact they were Edward Howell and Michael Ellis respectively. On completing this secondary inspection, and at approximately 6:20 p.m. Algoe was requested to do a customs vehicle search on a 1975 Ford bearing Ontario Licence Plate #SPO 019 dri­ven by a James M. Kelly. The only other occupant of this vehicle was the grievor, William Gilroy. Both Kelly and Gilroy gave Algoe negative oral customs declarations. All five men were placed in a space 15 feet by 15 feet and were asked if they knew each other and the response was that they did not. Algoe was then asked to do a secondary examination of the second car. Prior to doing this, Mr. Kelly and Mr. Gilmore were asked if they had anything to declare; if were they importing anything; and did they have with them money in excess of $5,000.00. Both men gave a negative response. Underneath the front passenger seat of Mr. Kelly's car Mr. Algoe found a bundle of documents and books held together by a rubber band. The bundle contained a wallet of Edward Howell which contained 900 pounds sterling; a cou­ple of address books; two airline tickets; a brown envelope addressed to Michael Weir con­taining a yellow notebook and several other documents; a bundle of 83, 50 pounds sterling notes wrapped with a rubber band; and a small note describing what appeared to be various types of firearms. Overnite bags were found in the back seat and in the trunk of Mr. Kelly's car. One of the bags contained a cheque book and bankbook of J. McCafferty and Irish pass­ports of Robert Murray, Edward Howell, and Michael Weir. Kelly claimed one of the bags and Howell claimed ownership of another of the bags in Kelly's car. No one claimed own­ership of the bundle of documents and money found under the front passenger seat of Kelly's car where the grievor had been sitting. The currency of 4,150 pounds sterling was never claimed. Nor did Howell claim ownership of any of the items listed above and found either under the grievor's seat or in the bags found in the car he was riding. Both Kelly and the grievor told Algoc they were going to Pete's Market for dinner. The only article Howell claimed was his passport. Algoe testified that once Howell admitted to the ownership of the bag found in Kelly's car there was a feeling in the room that the individuals knew each other.

16. Before this Board, the grievor denied having anything to do with the attempt by Ellis and Howell to obtain entry into the United States unlawfully. He testified that he never saw a shopping list of arms and that it was coincidental that both vehicles used the same bridge and attempted to enter the U.S. within a short period of time of each other. He stated that his friend William O'Neill had asked to borrow his car and that he did not know the car would be used to transport Ellis and Howell into the United States. The grievor testified that he quit Ontario Hydro on February 5th in order to take a job in St. Catharines where he lived and where he could be closer to his wife who was expecting a baby. He was to commence employment as an electrician at the Port Weller shipyard the following Monday. This had been arranged through the union office the week before and the work at Port Weller has nothing to do with Ontario Hydro or the collective agreement under which this dispute arises. Kelly and O'Neill are close friends of the grievor and are from Ireland originally. They live close to each in St. Catharines. O'Neill has borrowed the grievor' s car in the past and asked to use it some time during the afternoon of February 6th. He lives across the street from the grievor. According to the grievor, O'Neill did not tell him why he wanted the car. The grievor has only one car. The grievor testified that he was planning to go to Niagara Falls, New York to purchase some liquor for the upcoming birth of his daughter that same day and, after loaning his car to O'Neill, he called Mr. Kelly to take him. He testified that he and Kelly were also planning to go to Pete's Market for dinner. He agreed that this would leave his wife and child at home alone but that this had happened before. He testified that he and Kelly arrived at the border only to discover Mr. O'Neill was also there and being detained. The grievor denied that all five men were in effect travelling together. The grievor could not recall a bag in the back seat of Kelly's car and he denied knowledge of any of the other contents found in Kelly's car.

17. The grievor testified that he pleaded guilty to the ensuing charges because it was "better for everyone and we would get off with time served". Nevertheless, he was individ­ually represented by counsel. He testified that he has no idea who is responsible for the cir­cumstances leading to his arrest and conviction and further testified that he has not discussed the matter again with his two friends. The grievor acknowledged that while incarcerated in the United States he joined a hunger strike initiated by Howell and Ellis to protest their "in­humane treatment". In the grievor's view, it was merely coincidental that Howell and Ellis were at the border when he and Kelly arrived. He disclaimed any responsibility for the lug­gage belonging to either of these men found in Kelly's car. He cannot enter the United States at this time but is appealing the decision to bar him entry. Subsequently, the grievor was re­ferred to the Pickering Generating Station "B" and refused employment because he was "unsuitable for employment". On July 9th, 1982 the union was advised by D. J. Laut not to refer the grievor to the Bruce Generating Station project to bump out travel card electricians because the grievor was considered "unsuitable for employment". As of October 7th, 1982 Mr. Gilroy was the first available employee to be referred to work. The Lakeview Generating Station required three tradesmen. Mr. Mulhall contacted Mr. G. C. Thorne, Personnel Officer responsible for the Lakeview Generating Station, and was advised by Mr. Thorne that Mr. Gilroy was "considered unsuitable for employment by Ontario Hydro". This advice was con­firmed by letter dated October 7th, 1982 from Thorne to Mulhall. Later in October Mr. Mul­hall received a request for four tradesmen at the Lake Transformer Station located in Hamilton but was advised by Linda Johns that Mr. Gilroy was "considered unsuitable for employment with Ontario Hydro in the Southern Construction Zone". At about the same time there was a request for four electricians on the night shift at the Darlington Generating Station and, by letter dated October 19th, 1982, Mr. J. P. Bennett confirmed that Mr. Gilroy was "considered ineligible for employment at Darlington G. S. at this time". Employment opportunities at Sir Adam Beck Power Plant; Cherry Wood Transformer Station; and Stachen Avenue Transformer Station were also denied the grievor and for the same stated reason.

18. Under both collective agreements, i.e. the Generation Projects Construction agree­ment and the Transmission Systems Construction agreement, travel card holders and permit men may be bumped by regular tradesmen. Mr. Mulhall produced a table detailing the travel card holders working in Local 1788's jurisdiction (other than at nuclear sites) from August of 1982 until July of 1983. The table relates to Atikokan, Lines and Station, Miscellaneous Projects, Nanticoke, and Thunder Bay. It shows a high of 58 travel cards to a low of 11 travel cards working in the jurisdiction of the. local during the period surveyed. The Atikokan lo­catiober Mr. Mulhall received a request for four tradesmen at the Lake quit Ontario Hydro on February 5th in order needed. Lines and stations pertain to transmission stations and switching stations. Miscellaneous projects include a number of operational generating stations together with the Hearn G. S. which is being shut down and moth balled. Mr. Mulhall testified that the Lakeview referrals pertained to anything the plant maintenance people were unable to do or lacked the time to perform. He also described the work required at Lennox, Lambton and Nanicoke Generating Stations.

19. Mr. G. A. Mackie is the Director of Transmission Systems. He has been with Ontario Hydro 36 years. He is in charge of the design and construction of the bulk of elec­trical systems, i.e. the delivery system to Ontario. People who work for him do the basic engineering and anything else in connection with the construction of the electrical system or the hook-up of any related mechanical system. Electricians install underground conduit, engage in steel erection and the installation of insulators, switch gear and transformers. Inside of con­trol rooms they install conduit, cabling, cablepan, lighting, instrumentation and relays. He tes­tified that the Vice-President, Design and Construction and the Vice-President of Operations were aware of "the Gilroy situation". While the problem was handled at the workplace level, Mr. Mackie was aware of what zone managers were doing in that they report to him. He said he could have overruled their decisions but did not issue a global order until February 16th, 1983. This response is reproduced above. . Mr. Mackie, however, has no responsibility for power sources and was not involved in refusals to hire the grievor at generating stations. He testified that he did not speak on the issue until February of 1983 but he was aware of the decisions made by the managers reporting to him and it is fair to infer that Mr. Mackie's peers and superiors were aware of each and every refusal to hire. And like Mr. Mackie, his peers and superiors would have a veto power over these local decisions.

20. Mr. Mackie described the transmission system of Ontario Hydro in considerable detail. The reliability of this system is of the utmost concern to Ontario Hydro and the people of Ontario. To this end, the Corporation has built a redundancy into the system to provide for outages. Nevertheless, outages do occur and the system is not fail safe. He gave the ex­ample of what would happen should a small distribution station be destroyed. Ontario Hydro could span around it within eight hours but it would take a year and 4 to 5 million dollars to rebuild. If a station such as the Leaside Station were destroyed outages could last up to ten days and affect 10 to 15% of Toronto. He pointed out that blackouts in the United States had attracted lootings, violence and contributed directly or indirectly to a number of deaths. Outages during the winter period could be very damaging. The Cherry Wood station was de­scribed as a particularly sensitive station in terms of its role and volume. This station would cost 131 million dollars to replace and take up to 4 years to construct. Other stations were described in similar terms. Mr. Mackie also described the previous experience of Ontario Hy­dro with bomb threats and other unlawful interferences with its operations. Problems of this nature have been experienced at the Saunders Generating Station, Sudbury Clairebell, Sir Adam Beck, and the Darlington Generating Station. Saunders involved a bomb threat in a bid to extort a half a million dollars. Sudbury Clairebell involved an explosive device used to blow up an oil system and put a transformer unit out of service. Explosive devices were also found at Sir Adam Beck but detected before any explosion occurred. At Darlington a tower was cut in three places causing it to sag. Ontario Hydro, the Board was advised, does not maintain a substantial security system. It does, however, react to security problems as they are iden­tified. Mr. Mackie testified that it has never been Ontario Hydro's policy to spend large amounts of money to, in the abstract, preclude sabotage because the cost would simply be too great. For example, the security systems at transformer stations are sufficient only to "keep out a child and an honest man". Nevertheless, the Corporation does maintain its own security division and liaises with the RCMP. This division is sensitive to terrorist and sabotage activity and receives information from various police sources on such activities. From time to time the RCMP is called in for security point checks, particularly with respect to sensitive in­stallations. Mr. Mackie indicated that a fossil fired plant like Lakeview was more at risk than many others because high duty piping leading from the boilers contain super-heated steam. If this piping ruptured for any reason, life expectancy in the immediate vicinity would be two minutes or less. He said he was "afraid" to put the grievor in any one of these plants in­cluding Nanicoke, Lennox, Lambton and Lakeview because there are weaknesses in all of them. With respect to the Hamilton Lake Transformer Station, he testified that the station was designed to provide an individual load to the Hamilton area and that it was tied into the heavy industry in that city. There are control rooms on the property and employment status would allow the grievor entry into the key buildings. On cross-examination Mr. Mackie agreed that a person without employment status could in many of these locations gain entry to the area surrounding the transformer or generating station and place an explosive which would ac­complish precisely what Mr. Mackie feared. This was because of the rather minimal security precautions in place at each transformer and generating station and at other facilities of Ontario Hydro.

21. In describing why the grievor had been singled out for special security treatment, Mr. Mackie testified that he was concerned a possibility of improper conduct on behalf of the grievor existed. He said "it [was] going to be difficult to predict what the grievor will do next". He said "requests could be made of Mr. Gilroy to take action against Ontario Hydro at some later date". He said the Corporation was "just frightened of such a possibility and that it had no right to place the people of Ontario at risk by hiring this individual". He tes­tified that his security division has advised him of "the possibility of an exchange of favours between terrorist groups leading to even greater unpredictability in the grievor's associations". He was also advised that utilities, computer installations, and nuclear facilities are prime tar­gets for terrorist activity. He pointed out that some terrorist acts had no purpose other than to obtain financial support such as the recent attempted kidnapping of one of the Weston fam­ily. He agreed that there are levels of 'risk but asked "why should Ontario Hydro take any risk?" On cross-examination, he referred to the grievor's association with "unsavoury ele­ments". He said that one could not predict how the grievor will act in response to these as­sociations in the future. He agreed, however, that he had no firsthand knowledge of an association of terrorist groups around the world. He agreed that the grievor was a good elec­trician but that his continued association with "the unsavoury" raised a sufficient doubt in his mind over the wisdom of hiring the grievor. He said that the grievor's testimony before this Board did not change his point of view. He did not believe the grievor and, based on his testimony, Mackie continued to believe that the grievor's associations could affect his work. He said that the individuals who were involved in the attempted border crossing in the grie­vor's car were "less than satisfactory". He testified that "in our business we cannot afford to take that chance: we would be highly criticized". In his view, Ontario Hydro made a mis­take in bringing the grievor back the first time. The grievor had been given "the benefit of the doubt" after 1975 and Ontario Hydro was not prepared to do this again. Mackie testified that Ontario Hydro' s reaction could well have been different had the grievor only been in­volved in social contact with the two men who were attempting to gain illegal entry into the United States. The same would be the case if the grievor was merely advocating an Irish na­tionalist point of view. However, from Mr. Mackie's perspective, the grievor's conduct to which Ontario Hydro objected exceeded mere association and involved unlawful acts com­mitted in support of terrorist-like activities or organizations abroad. This second unlawful act represented to Ontario Hydro an objectionable link between the grievor, terrorist groups, and the security of the corporation's facilities.

22. William O'Neill is the Manager of Construction Labour Relations for Ontario Hy­dro and the General Manager of EPSCA. In February of 1982 he learned through news re­ports of Mr. Gilroy '5 arrest. He called the Pickering G.S. and ascertained that the grievor had voluntarily terminated his employment the previous Friday. He obtained as much back­ground on the grievor's arrest as he could from the security division of Ontario Hydro and initiated a meeting with "senior people to discuss Bill". A meeting occurred approximately one week to ten days after the grievor's arrest. Those who met included Mr. Mackie, George Estey, Director of Generation Projects, Harold Coo, Senior Personnel Manager for the Design and Construction branch. He testified that Mr. Estey is part of the Ontario Hydro executive. The material placed before this group included the memorandum found at page 15 of the Board's earlier decision. Mr. O'Neill explained that he was trying to warn these people that the grievor would be referred to Ontario Hydro some time in the future and that Ontario Hy­dro had to be ready for that event. During the course of the meeting it was decided that a memorandum should be issued to all locations indicating the grievor was not eligible for em­ployment until his situation was clarified. Mr. O'Neill testified that the 1975 incident and the grievor's most recent arrest made Ontario Hydro unsure whether it could rely on him as one of its employees. Mr. O'Neill was then asked to prepare a letter along the lines of the letter ultimately sent out over Mr. Mackie's signature on February 16th, 1983. After doing this, Mr. Estey called Mr. O'Neill and indicated that he had thought it over and had decided not to issue the letter at that time. Information on the grievor had been given to all of the local hiring officials of Ontario Hydro and the decision to employ was going to be left with these individuals.

23. Mr. O'Neill testified that he was contacted by Mr. Thorne when the grievor was referred to the Lakeview Generating Station. Mr. Thorne inquired as to the contents of any letter that should be sent to the trade union. The decision not to hire the grievor was made by Mr. Lee who was Mr. Thorne's boss at the time. Mr. O'Neill advised Mr. Thorne as to the contents of the letter that was ultimately sent. Similarly, the grievor was consulted by Mr. Pegg with respect to the grievor's referrals to Sir Adam Beck, Cherry Wood, Hamilton Lake and Strachen Avenue transformer stations. Mr. O'Neill testified that the decision not to hire had been made by a Mr. Stai, Manager of the Southern Construction Zone, and Mr. O'Neill advised Mr. Pegg of the contents of any letter to be sent to the trade union. Mr. O'Neill denied wanting to discredit the grievor as President of the trade union or as an Irish Catholic. He said it was not in Ontario Hydro' s best interests to attack Gilroy in that the Corporation wanted "clear leadership" and direction in the trade union. He said none of the actions of Ontario Hydro have been based on the grievor being an Irish Catholic. On cross-examination, Mr. O'Neill agreed that Mr. Mackie and Mr. Estey had not issued directions to refuse the hiring of the grievor. He said that his department is a staff function and that "the line" has the responsibility for making decisions. He simply provides these people with staff assistance. Thus, he would advise the officials making decisions with respect to Gilroy on what they should do but it was these officials who would make the decision. Further, Mr. O'Neill did not advise for all of Ontario Hydro's miscellaneous projects. He agreed that the zone manager controls all subcontractors performing work in the transmission system and a referral of Mr. Gilroy to one of these subcontractors would have resulted in a decision similar to that taken at the Bruce G.S. In releasing Mr. Mackie's letter of February 16th, 1983, Mr. O'Neill ob­served that it had been "demonstrated enough times that Bill was not going to be hired". However, the Corporation "didn't want to find Bill Gilroy guilty before the fact" and there­fore no general letter was sent until February of 1983. He agreed that it would have taken a direction from Mr. Mackie or Mr. Estey for the grievor to be hired.

Argument

24. Mr. WahI asked the Board to reconsider its earlier decision and find that the griev­ance involved a discharge of the grievor with the onus of proof of "just cause" resting with the employer. Alternatively, he submitted that even if the standard of arbitral review was ar­bitrariness and bad faith, Ontario Hydro should have the onus of proving that its decision complied with that standard. It was again urged upon the Board that in the absence of pro­visions granting the employer the right to reject referrals the hiring hall provision of the col­lective agreement granted the hiring function to the trade union and the standard just cause clause applied in respect of any refusal to hire. In this regard the Board was referred to Re Bitulithic Ltd. and International Union of Operating Engineers, Local 115 (1977), 1977 CanLII 2928 (BC LA), 17 L.A.C. (2d) 47. It was submitted Ontario Hydro had failed to prove that the conduct of the grievor was employment related. Counsel contended that the only direct evidence given with respect to that incident was given by the grievor and that a plea of guilty is only an admission to the charge and not proof of all the evidence tendered by the Crown. At best, the 1975 incident, it was submitted, pertained only to an assessment of the grievor's credibility before the Board. Counsel also stressed that there was no evidence of the grievor's involvement in any orga­nization known as the IRA or with any individual associated with that group. All the direct evidence relating to the prior events was from Gilroy's mouth and counsel emphasized that Mr. Gilroy denied any association with the IRA or with persons he knew to be associated with the IRA. It was also asked how the Board could make an assessment of the reasona­bleness of Ontario Hydro's conduct without direct evidence substantiating its fears. Counsel submitted that the Board must come to the decision that the grievor has, on the evidence be­fore it, nothing to do with the IRA. It was submitted that the only finding the Board could make is that the grievor was going to dinner in the United States.

25. Alternatively, it was submitted that if the grievor's conduct involved a breach of trust or constituted employment-related conduct, Ontario Hydro's position was too severe. In this respect the Board was directed to Re McManus and Treasury Board (1980), 1980 CanLII 4058 (CA LA), 25 L.A.C. (2d) 150; Re Ville de Granby and Fraternite des Policiers De Granby Inc. (1981), 1981 CanLII 4537 (QC LA), 3 L.A.C. (3d) 443; Re Corporation of the City of Calgary and Amalgamated Transit Union, Local S83 (1981) 1981 CanLII 4480 (AB GAA), 4 L.A.C. (3d) 50; and Re Government of the Province of Alberta and Alberta Union of Provincial Employees (1982) 1982 CanLII 5047 (AB GAA), 7 L.A.C. (3d) 429.

26. It was further submitted that Ontario Hydro did not adduce sufficient evidence to demonstrate the reasonableness of the various refusals to hire. Counsel emphasized that Mr. Thorne and Mr. Stai did not testify and yet they made the operative decisions. There was also no direct evidence as to who made the decisions at the various non-nuclear generating stations, submitted counsel. It was argued that the failure of the direct decision makers to testify should cause the Board to draw a negative inference with respect to the bona fides and reasonableness of the decisions so made. It was also submitted that the decision-making was defective in that Ontario Hydro had not taken all reasonable steps to mitigate the risk associated with the grie­vor's employment such as closer supervision and appropriate transfers to less sensitive work. In this respect the decision was clearly arbitrary counsel submitted. See Humber Memorial Hospital (1982), 1982 CanLII 5031 (ON LA), 6 L.A.C. (3d) 97 and Ontario Jockey Club (1977) 1977 CanLII 2913 (ON LA), 17 L.A.C. (2d) 176. With respect to the various mitigating factors on which the applicant relied, counsel stressed the absence of proper security measures; the good employment record of the grievor and the fact that he had been employed on at least eight prior occasions without incident; and the fact that reasonable precautions could be taken to guard against any general concern the Corporation had. In counsel's view, the Corporation's conduct could be explained only by a "cover your backside" stance so that the employment of the grievor in light of his conviction "did not hit the papers".

27. Alternatively, it was submitted that the failure to hire the grievor interfered with his freedom of association. Counsel submitted that the Corporation's refusal to hire prevented the grievor from participating in the activities of his trade union. It was also contended that the decision of the Corporation interfered with the grievor's freedom to associate with whomever he wished — a reference to the Corporation's apprehension of the grievor's association with "terrorists". Counsel stressed that there was no proof of a world association of terrorists or that terrorist activity in Canada was a realistic fear in deciding whether to employ the grievor.

28. On behalf of the Corporation it was submitted that the issue before the Board whether the Corporation acted reasonably in judging Mr. Gilroy's reliability for employment. Counsel pointed out that there was specific proof of the grievor's misconduct on February 6th

and that his evidence with respect to that incident was so unsatisfactory as to confirm the rea­sonableness of the employer's rejection or refusal to hire. Counsel pointed out that in the Board's earlier decision it was held that the onus of establishing the unreasonableness of the Corporation's decision rested with the trade union and, having regard to all of the facts es­tablished with respect to the incident on February 6th, the union had not provided a reasonable explanation sufficient to alleviate the employer's concerns. Counsel stressed that terrorist-like violence is extremely difficult to predict and, thus, it was not possible to characterize the Cor­poration' s actions with respect to the grievor as unreasonable. After the grievor' s initial con­viction in 1975, he was, counsel contended, put on notice as to the Corporation's concerns. He was given a second chance and, in counsel's submission, is not entitled to another. Coun­sel contended that, if anything, the Board had more and better evidence before it justifying the employer's decision than it had earlier . Counsel submitted that Mr. Gilroy was not a credible witness and could not be found to have told the truth with respect to the border in­cident. It was submitted that the grievor's story was totally specious and, thus, the Board was not provided with sufficient evidence to find the employer acted arbitrarily or unreasonably in the circumstances. Indeed, counsel contended that the grievor's willingness to fabricate a story justifying his involvement in the February incident confirmed his unreliability as an employee. If anything, counsel submitted, his testimony magnified the employer's legitimate concerns. It was contended that the employer was rightly concerned about its image given the depend­ence of the public on the Corporation's services. The Corporation had a need for reliable and predictable employees and the grievor, against the background of this case, did not qualify. Counsel stressed that no final or comprehensive decision was taken by Ontario Hydro until after the grievor pleaded guilty. It was submitted that power installations are clearly targets for the kinds of organizations that may have been the beneficiaries of activities in which the grievor has engaged.

Decision

29. The Board confirms its earlier decision that the grievor cannot take the benefit of the discharge or just cause provisions founds in Article 13.0 1(b) of the Generation Projects Construction Agreement and Article 14.0 1(b) of the Transmission Systems Construction Col­lective Agreement. Both of these provisions apply to "an employee" who has been discharged or otherwise disciplined for cause and at the time of all refusals to hire the grievor was not, by definition, an employee in the bargaining unit. See also McNeilly v. International Asso­ciation of Bridge, Structural and Ornamental Ironworkers, Local 97, 82 CLLC ¶16,195. The trade union has obligated itself under both collective agreements (Article 7) to refer "reliable and competent union members" and we confirm our earlier decision holding that Ontario Hy­dro' s assessment of an employee's reliability and competence must be exercised "reasonably, in good faith and without discrimination". We further confirm our holding that the trade union bears the onus of proof in establishing that the employer has acted improperly with respect to this standard of conduct and arbitral review.

30. There can be no doubt, based on the evidence before us, that Ontario Hydro refused to employ the grievor in all instances because he was considered "unreliable" and, in effect, a security risk or threat to the company's various facilities. We accept that a public utility of the dimensions of Ontario Hydro constitutes a strategic industry. This is so from a political, an economic or a military perspective. It is therefore proper and reasonable for such an em­ployer to be concerned about security matters. There is no dispute that the grievor was con­victed in 1975 of a conspiracy to ship arms out of the country. The details of that conviction are properly before us. The guilty plea and the related contents of the transcript constituted an admission against interest and an exception to the hearsay rule. See English v. Richmond (1956), 1956 CanLII 8 (SCC), 3 D.L.R. (2d) 385 (S.C.C.) and R. v. Brown, 1963 CanLII 670 (NWT CA), [1963] 3 C.C.C. 326, rev'd [1963] 3 C. C. C. 341 (S.C. C.). The grievor' s testimony with respect to this prior conviction was not believable when viewed against the guilty plea and the other admissions revealed in the tran­script. It has also been established that on February 6th, 1982 the grievor unlawfully conspired to aid others in an illegal entry of the United States of America. It was also established before this Board that the vehicle in which the grievor was riding contained a large amount of money and an apparent shopping list of arms. We have no doubt that all decisions to refuse to hire the grievor were made on the basis that the grievor constituted a security risk. All of the decision-makers were aware of the grievor's background and all, it is reasonable to infer, would have been motivated to act for the same reasoning as explained to us by Mr. Mackie.

31. The precise backgrounds of Edward Howell and Desmond or Michael Ellis remain undocumented before this Board by direct evidence. The only description of them in any detail is contained in the various newspaper reports reproduced in the Board's earlier decision. How­ell, however, claimed possession of an Irish passport and both Howell and Ellis gave false names in attempting to seek entry to the United States. Howell's overnite case was discovered in the car in which the grievor was travelling. Howell's passport was also found in this vehicle as was a "shopping list" of arms. It was also established that the large amount of money found in the vehicle in which the grievor was travelling went unclaimed. Against these facts and the background of the grievor's earlier conviction, did Ontario Hydro act unreasonably or arbitrarily or in bad faith in refusing to re-employ the grievor? We believe we can take judicial notice that there is an organization known as the Irish Republican Army; that this organization is in support of Irish nationalism; and that in support of this objective it engages in acts of violence. It is in this latter respect that the organization has been characterized as a "terrorist group" throughout these proceedings. The Board has no evidence before it of acts of violence by the IRA in North America. We also have no direct evidence of co-operation between terrorist groups throughout the world. Mr. Mackie believes this to be the case but, he too, has no direct knowledge of this as a fact. We must ask whether Ontario Hydro acted unreasonably in acting upon its fears of such co-operation and its fears of potential violence in Canada against one of its facilities.

32. One of the difficulties in answering this question relates to the basic asymmetry of terrorist activity and related violence. Terrorists can attack anything, anywhere, anytime. This creates a continuing obsession on the part of potential victims with terrorist threats and phys­ical security. How much security is enough? This, of course, depends upon the level of fear, a subjective measure. If terrorists had a more limited range of targets, one could more easily assess the effectiveness and reasonableness of various security measures. As it is, potential victims remain uncertain whether the absence of an attack is due to security or to the fact that terrorists never intended such an attack in the first place. The failure to act in the face of a known problem could later be characterized as incompetence, irresponsible, and poor management. On the other hand, given the absence of evidence of violence in Canada on be­half of Irish nationalism and the nature of the grievor's two criminal convictions, the em­ployer's refusals to hire the grievor could also be characterized as excessive — an over-reaction brought about by a very high subjective level of fear. The reasons why these two conflicting characterizations are at the same time possible stems, of course, from the nature of terrorism. Obviously, an organization such as Ontario Hydro must take precautions against sabotage and possible acts of extortion. But actions of terrorist-like groups are hard to penetrate and hard to predict. Knowing what Ontario Hydro knows or suspects or fears is mainly a matter of human intelligence. There is always "a high noise level" of threats, few of which materialize, few of which can be ignored. The problem, therefore, is that there is no clear line between prudence and paranoia. See generally J. B. Bell, A Time of Terror: How Democratic Societies Respond to Revolutionary Violence (1978).

33. A second major complication in assessing whether this employer's refusal to hire the grievor has been unreasonable and, instead, more in the direction of paranoia is the failure of the grievor to provide the Board with a plausible and credible explanation of his conduct on February 6th. We simply do not accept his assertion that the two cars arrived at the U.S. border "by coincidence". There was clear connection between the two gentlemen seeking un­lawful entry into the United States and the grievor. The two gentlemen in question were trav­elling in the grievor's car. The grievor, on his own testimony, initiated the involvement of Mr. Kelly. Thus, it is a reasonable inference to conclude that the grievor was responsible for Howell's bag being in Kelly's car. It is also reasonable to infer a direct connection between the grievor, the money and list of arms, etc. found in the car in which he was travelling, and the two gentlement seeking unlawful entry into the United States in the grievor's car which O'Neill was driving. The implausible and untruthful testimony of the grievor with respect to the February 6th incident makes it doubly difficult for this Board to assess the reasonableness or unreasonableness of Ontario Hydro's fears. The export of guns abroad reasonably generates speculation of a connection with and support of violent activity abroad. The willingness of the grievor to engage in unlawful conduct in North America reasonably seen as connected to violent acts abroad raises the issue of his own reliability in Canada. Where does the grievor draw the line in his personal conduct and where is he able to draw the line? His failure to be candid with the Board has impeded our ability to make an informed assessment along these lines.

34. Having regard to all of the circumstances, we have come to the conclusion that the trade union has not met the legal onus of demonstrating that the refusals to hire the grievor were unreasonable, arbitrary or made in bad faith. We believe that the type of decision made by Ontario Hydro in this case is one meriting a substantial measure of deference. The nature of the management decision is one based on inference and one that is inherently difficult to document with direct evidence. Accordingly, where there is an unresolved doubt with respect to a potential security risk, deference ought to be paid to the decision of the employer who is responsible for the overall management of the organization affected. From this perspective, security clearances and the assessment of security risks are particularly central to management authority and responsibility. They ought not to be interfered with in the absence of clear and cogent evidence. See, for example, Lee v. Attorney General of Canada et al. (1981), 1981 CanLII 194 (SCC), 126 D.L.R. (3d) 1 (SCC).

35. There remains the Charter argument of the applicants. Section 2 and 32 of the Charter provide:

36. Everyone has the following fundamental freedoms:

a) freedom of conscience and religion;

b) freedom of thought, belief, opinion and expression, including free­dom of the press and other media of communication;

c) freedom of peaceful assembly; and

d) freedom of association.

32. (1) This Charter applies

a) to the Parliament and government of Canada in respect of all mat­ters within authority of Parliament including all matters relating to the Yukon Territory, and Northwest Territories;

Does the Charter apply to Ontario Hydro in its employment decision-making? There appears to be little doubt that the Charter would apply to actions of government officials in issuing regulations and granting or denying licences or benefits authorized under statutes. (See Kath­erine Swinton, "Application: Canadian Charter of Rights and Freedoms", in Canadian Charter of Rights and Freedoms: Commentary, W. Tarnopolsky and G. Beaudoin and Paul Bender, "The Canadian Charter of Rights and Freedoms and the United States Bill of Rights: A Com­parison", 28 McGill Law Journal 84). Can the employment actions of Ontario Hydro be prop­erly characterized as government or state action within the meaning of section 32(1) of the Charter? Ontario Hydro is a creature of statute and subject to, on a reading of this statute, extensive government control. See the Power Corporation Act RSO 1980 c .384. In Jackson v. Metropolitan Edison 419 U.S. 345 (1974) the defendant was a private company that ex­ercised monopoly control over Pennsylvania's hydro electricity supply. The Court stated that state regulation would not by itself constitute state or governmental action and that a company in a monopoly position would not necessarily be carrying out governmental or state actions. At page 453 of the judgment, the majority of the Court noted:

It may well be that acts of a heavily regulated utility with at least something of a governmentally protected monopoly will more readily be found to be "state" acts than will the acts of an entity lacking these char­acteristics. But the inquiry must be whether there is sufficiently close nexus between the State and the challenged action of the latter may be fairly treated as that of the state itself. Moose Lodge No. 107 supra 407 U.S. at 176, 92 St.Ct. at 1973. The true nature of the State's involvement may not be immediately obvious, and detailed inquiry may be required in order to determine whether the test is met. Burton v. Wilmington Park­ing Authority, supra.

The approach taken by the United States Supreme Court appears to be that only where there is a delegation of authority by the state to another body of an activity which the state is ob­ligated to carry out will that latter body be deemed to be carrying out state action. The Court elaborated this view as follows:

If we were dealing with the exercise by Metropolitan of some power delegated to it by the state which is traditionally associated with sover­eignty, such as eminent domain, our case would be quite a different one. But while the Pennsylvania statute imposes an obligation to furnish serv­ice on regulated utilities, it imposes no such obligation on the state. The Pennsylvania courts have rejected the contention that the furnishing of utility services is either a state function or a municipal duty.

36. However, the question of whether the state's delegation of authority with respect to a service it is not obligated to provide to corporations it itself owns constitutes state action is not specifically addressed in the judgment. The obvious question therefore remains. Where does a public corporation such as Ontario Hydro fit?

37. Of some relevance is the decision of The Ontario High Court in Re McCutcheon and City of Toronto et al., (1983), 1983 CanLII 1629 (ON HCJ), 41 O.R. (2d) 652 which accepted the "state action" ap­proach in determining the legislative reach of section 32 of the Charter in relation to mu­nicipal by-laws. In this respect the Court wrote at pages 662-663:

Second, s.32(l) contemplates municipal by-laws being subject to the Charter. Counsel for the respondents point out that there is no express mention of municipal governments and their by-laws as s. 32 which pro­vides that the Charter applies to the Parliament and Government of Canada and the Legislature and government of each province. Absent a specific reference to municipal governments in s.32(1), it is contended, that the Charter does not apply to them and, hence, it cannot render in­operative their by-laws, notwithstanding any inconsistency between a by­law and a constitutionally guaranteed right or freedom.

This cannot be the case, for it would permit circumvention of the Charter through delegation to any body that is not classified as part of the Government of Canada or a province. This is contrary to the tenor of s.32(1), which provides that subordinates (the Governments of Canada and of each province) cannot do that which their principals (Parliament and the Legislatures) cannot do. It must be that more junior subordinates, like municipalities~ are to be similarly bound by the Charter.

The American experience is of help here. The Bill of Rights in the United States is, on its face, addressed exclusively to the federal and state governments. Private activity offensive to the Bill's guarantees of liberty and equality can be enjoined, however, where "state" (i.e. governmen­tal) action or inaction can be characterized as tacit affirmation of the pri­vate action. Most particularly, delegation of government authority will permit a conclusion of "state action", as in Evans et al. v. Newton et al. (1966), 382 U.S. 296 at p.299, where the U.S. Supreme Court declared:

[W]hen private individuals or groups are endowed by the State with powers or functions governmental in nature, they become agencies or instrumentalities of the State and subject to its constitutional limitations.

It follows that municipal governments in the U.S. are bound by the Bill of Rights. Thus, in Buchanan v. Warley (1917), 245 U.S. 60 at p.81, the U.S. Supreme Court used constitutional principles to strike down a municipal ordinance which denied meept of "state action" is subtle and elusive. The U.S. Supreme Court itself has acknowledged that for Speaking for the court, Mr. Justice Day stated:

It is urged that this proposed segregation will promote the public peace by preventing race conflicts. Desirable as this is, and important as is the preservation of the public peace, this aim cannot be ac­complished by laws or ordinances which deny rights created or pro­tected by the federal constitution.

In the U.S. the concept of "state action" is subtle and elusive. The U.S. Supreme Court itself has acknowledged that formulating "an infal­lible test" is "an impossible task": Reitman et al v. Mulkey at a. (1967) 387 U.S. 369 at p.378. There are many cases grappling with the issue and the scholars have not yet resolved it definitively: see Tribe~ American Constitutional Law (1978), at p.1155.

The Charter of Rights and Freedoms is meant to curtail absolute par­liamentary and legislative supremacy in Canada. As such, the Charter addresses itself expressly to the two levels of government whose primary legislative organs have been held in the past to be sovereign within their respective spheres. Municipalities, though a distinct level of government for some purposes, have no constitutional status; they are merely "crea­tures of the legislature", with no existence independent of the Legislature of government of the province. Hence, just as the provincial Legislatures and governments are bound by the Charter, so too are municipalities, whose by-laws and other actions must be considered, for the purposes of s.32(1), as actions of the provincial government which gave them birth. Thus, these by-laws must comply with the Charter by virtue of both s.52 and s.32.

I cannot imagine that there exists any doubt that the regulation of park­ing on municipal streets is a "local" matter within s.92(16) of the Con­stitution Act, 1867 and hence is a matter "within the authority of the legislature" referred to in s.32(l )(b) of the Charter.

The proposition that municipal by-laws are subject to the Charter is further buttressed by the provisions of s .2 of the Summary Convictions Act. That section specifically provides that the Act applies to matters

(a) . . . over which the Legislature has legislative authority and for which such person is liable, on summary conviction, to imprisonment, fine, penalty or punishment...

To bring a municipal parking by-law under the Summary Convictions Act for purposes of enforcement it is essential that the by-law be a matter "over which the Legislature has.. .authority" or in the words of the Charter, s.32(1)(b), "within the authority of the legislature".

38. It, however, was also argued that even if Ontario Hydro can be characterized as part of the state for the purposes of the Charter, not all the actions of the state ought to be subject to the Charter. In response counsel for the applicants relied on Smith et al. v. Hydro Electric Power Commission of Ontario (1976) 1976 CanLII 576 (ON HCJ), 14 OR. (2d) 502 where in the context of a tort action the Hydro-Electric Power Commission of Ontario was held to constitute a public authority within the meaning of the Public Authorities Protection Act, an act that contains a six month limitation period for the commencement of causes of action. On the other hand counsel for the respondent relied on Hanna v. Ontario Hydro (1982), 1982 CanLII 1873 (ON HCJ), 37 OR. (2d) 783 where it was held that the Public Authorities Protection Act did not apply to conduct of a public authority that was subordinate and incidental to its primary public functions. In that case, it was held that the limitation period did not apply to an employment related cause of action. It is on the basis of this latter case that the respondent argues that its employment-related decision-making is more analogous to private conduct which the Charter is not aimed at reg­ulating. He, however, acknowledges that the Charter makes no explicit distinction between primary and subordinate governmental actions and in Re McCutcheon and City of Toronto, supra, the Ontario Supreme Court was concerned about distinctions which could permit the circumvention of the Charter through ad hoc administrative decision-making on issues which would otherwise attract legislation and related regulatory enactments. The cases reveal that security related requirements have been the subject matter of legislation and related regulations and not just applied on an administrative decision-making basis. See Lee v. Attorney General of Canada et al., supra; United States v. Robel (1967) 389 U.S. 258 (USSC); Wieman et al. v. Updegraff 344 U.S. 183 (USSC); Cafeteria and Restaurant Workers Union, Local 473 and McElroy 367 U.S. 886 (USSC). And yet the implications of the applicant's argument might be to subject all of a government body's commercial and administrative transactions to the Charter. In this respect, it can be argued that these responsibilities are necessary for the gov­ernment to carry on its affairs but they are not the essence of governmental action. In other words, they are acting with others as their employers or customers and not as their government.

39. Nevertheless, the American authorities clearly establish, that subject to certain con­siderations, employees do not forfeit their constitutional protections when they enter the public service. The seminal cases for the first amendment protection for public employees are Perry v. Sniderman (1972), 408 U.S. 592 and Pickering v. Board of Education (1968), 391 U.S. 563. In Perry the Supreme Court noted at page 597:

1 [2] For at least a quarter-century, this Court has made clear that even though a person has no "right" to a valuable government benefit and even though the government may deny him the benefit for any number of reasons, there are some reasons upon which the government may not rely. It may not deny a benefit to a person on a basis that infringes his constitutionally protected interests—especially, his interest in freedom of speech. For if the government could deny a benefit to a person because of his constitutionally protected speech of associations, his exercise of those freedoms would in effect be penalized and inhibited. This would allow the government to "produce a result which [it] could not command directly". Speiser v. Randall, 357 U.S. 513, 526, 78 S.Ct. 1332, 1342, 2 L.Ed.2d 1460. Such interference with constitutional rights is impermissible.

However, the United States Supreme Court has also noted that such protections are not ab­solute and that regulations as to time, place and manner might be legitimate so long as such limitations are reasonably related to the public interest. See Cox v. Louisiana (1965), 379 U.S. 536 at 558. The Court in Pickering, supra, characterized this problem of degree in the context of free speech in the following manner at page 568:

The problem in any case is to arrive at a balance between the interests of the teacher, as a citizen, in commenting upon matters of public con­cern and the interest of the state, as an employer, in promoting the ef­ficiency of the public services it performs through its employees.

(See also Phillips v. Adult Probation Dept. 491 F.2d. 951, at 954.) See also Abood v. Detroit Board of Education 431 U.S. 209 (1977).

40. We also note that while the protection given the public employee to exercise his first amendment rights might appear, at first glance, very broad in the United States, such protection is not forthcoming unless a "substantial part" of the employer's decision to ter­minate or discipline was based upon the employee's exercise of his protected rights. The Su­preme Court in Mount Healthy City Board of Education v. Doyle (1977), 429 U.S. 274 in establishing the "substantial part" test did not wish to use the first amendment in instances where the exercise of such rights was but only one of many reasons for the employer's action. To do so, the Court felt, would be to put the employee in a position than he might otherwise not have been in. As such, the Court held at page 516:

Once the employee has shown that his constitutionally protected con­duct played a substantial role in the employer's decision not to rehire him, the employer is entitled to show "by a preponderance of the evidence that it would have reached the, same decision as to the employee's re­employment even in the absence of protected conduct. (for a similar re­sult see Givhan v. West Line Consolidated School 439 U.S. 410, 99 S.Ct. 693, 697.)

41. Because of the profound importance and complexity of the applicant's assertion that the Charter applies to Ontario Hydro's employment decision-making we .have reviewed the competing considerations in some detail. But for the same reasons, and given our conclusion in this case that even if the Charter applied the grievances must be dismissed, we will make no final determination on the Charter's application. Therefore, assuming, without deciding, that the Charter applies~ we cannot find that the respondent's action in this case would have violated the Charter. In the facts at hand, the grievor pleaded guilty to a criminal charge in the United States which, having regard to all of the circumstances, was reasonably seen as job-related from a security point of view. Ontario Hydro was not reacting to "mere associ­ation" or to the exercise of any other right which the grievor might claim under the Charter. The grievor involved himself in circumstances which reasonably attracted the response of his former employer and we have no jurisdiction under the collective agreements or the Charter to intervene.

42. For all of these reasons the grievances are dismissed.