Metropolitan Toronto Sewer and Watermain Contractors Association v. International Union of Operating Engineers, Local 793, 1985 CanLII 1109

[1985] OLRB Rep. December 1763

1469-84-R Metropolitan Toronto Sewer and Watermain Contractors Association, Applicant, v. International Union of Operating Engineers, Local 793, Respondent, v. The Ontario Formwork Association, Intervener #1, v. Metropolitan Toronto Road Builders' Association, Intervener #2, v. A Group of Independent Contractors, Intervener #3, Ontario Concrete and Drain Contractors Association, Intervener #4

BEFORE: N. B. Satterlield, Vice-Chairman, and Board Members J. Wilson and H. Kobryn.

APPEARANCES: George W Adams, Q. C., Richard J. Charney, Margaret Dancy, R. WA. Cochrane and Mary-Ann Kril for the applicant; A. M. Minsky, Q. C., S.B.D. WahI, E. A. Ford and J. Redshaw for the respondent; S. C. Bernardo, Jim Ross and Jim Ris for intervener #2; Bruce Binning, R. A. Werry, Daniel Fryzuk and W Lippett for intervener #3; Hercules E. Faga for intervener #4; 5. C. Bernardo for Dufferin Construction Company, a Division of St. Lawrence Cement and Bot Construction (Canada) Limited, employers; Robert D. Statton for Dranco Group Inc., Donald Construction Limited and C.D.C. Contracting, employers; Richard Nixon for High Rise Crane and Rentals Limited, employer; Frank Csaszar for Urban Construction Equipment Ltd., employer; Michael G. Horan and Tony Michael for Fapp-Co Contractors Ltd., employer; Michael T. Franck for Code I Investments Inc., employer; William S. Challis for Lisgar Construction Company and Aztec Contracting Inc., employers; Richard A. Monette for Ellis Don Limited and Aztec Contracting Inc., employers; no one appearing for intervener #1.

DECISION OF THE BOARD; December 18, 1985

[1]. The applicant, Metropolitan Toronto Sewer and Watermain Contractors Association ("the Association") has applied pursuant to section 125 of the Labour Relations Act to become the accredited bargaining agent of a group of employers in the sewers and watermains sector of the construction industry in the Board's geographic area #8. Section 125 provides as follows:

Where a trade union or council of trade unions has been certified or has been granted voluntary recognition under section 16 as the bargaining agent for a unit of employees of more than one employer in the construction industry or where a trade union or council of trade unions has entered into collective agreements with more than one employer covering a unit of employees in the construction industry, an employers' organization may apply to the Board to be accredited as the bargaining agent for all employers in a particular sector of the industry and in the geographic area described in the said certificates, voluntary recognition documents or collective agreements, as the case may be.

[2]. The Association and the respondent, International Union of Operating Engineers, Local 793 ("Local 793") are parties to a collective agreement signed July 31, 1984 to be effective from May 1, 1984 to April 30, 1986 ("the Agreement"). It is made in respect of employees of employers engaged in sewer and watermain construction in a geographic area which may generally be described as Board area #8. The Agreement applies to more than one employer. The Board finds, therefore, that it has jurisdiction under section 125 of the Act to entertain this application.

[3]. Local 793, several of the interveners and several employers have challenged the status of the Association to bring the application on the grounds that it is not a properly constituted employers' organization with appropriate vested authority to bargain for the employers whom it represents. This is an interim decision dealing only with that threshold issue. The sections of the Act which bear on that question are:

l.-(l) In this Act,

(f) "construction industry" means the businesses that are engaged in constructing, altering, decorating, repairing or demolishing buildings. structures, roads, sewers, water or gas mains, pipe lines, tunnels, bridges, canals or other works at the site thereof.

(j) ~employers' organization" means an organization of employers formed for purposes that include the regulation of relations between employers and employees and includes an accredited employers' organization and a designated or accredited employer bargaining agency;

117. In this section and in sections 118 to 136,

(c) "employer" means a person who operates a business in the construction industry, and for purposes of an application for accreditation means an employer for whose employees a trade union or council of trade unions affected by the application has bargaining rights in a particular geographic area and sector or areas or sectors or parts thereof.

(d) "employers' organization" means an organization that is formed for the purpose of representing or represents employers as defined in clause (c).

(e) "sector" means a division of the construction industry as determined by work characteristics and includes the industrial, commercial and institutional sector, the residential sector, the sewers and watermains sector, the roads sector, the heavy engineering sector, the pipeline sector and the electrical power systems sector.

127.-(3)

Before accrediting an employers' organization under subsection (2), the Board shall satisfy itself that the employers' organization is a properly constituted organization and that each of the employers whom it represents has vested appropriate authority in the organization to enable it to discharge the responsibilities of an accredited bargaining agent.

[4]. The Association is a corporation under the Corporations Act, R.S.O. 1980, c. 95. It was incorporated by Letters Patent dated October 16, 1957, issued under the predecessor statute, the Corporations Act, 1953. Supplementary Letters Patent were issued by the Minister of Consumer and Commercial Relations on May 16, 1972. A certified true copy of the latter document filed by the Association shows the objects of the Association to include, amongst other things, the following:

(I) to represent its members, or any other persons whom the Association may be entitled to represent in an matters pertaining to the construction industry in Ontario or any geographic area of Ontario and negotiate on their behalf;

(2) to enter into trade and other agreements respecting wages and all other matters on behalf of members or the other persons;

(3) to act on their behalf in the administration and interpretation of such trade or other agreements and in the arbitration of disputes under those agreements;

(4) to authorize other associations or organizations to do all of the foregoing;

(5) to become an accredited employers' bargaining agent, alone or jointly with other organizations;

(6) to regulate relations between employers and employees in the construction industry; and

(7) to represent employers in the construction industry in collective bargaining in any sector of the construction industry in any geographic area defined under the Labour Relations Act.

[5]. The Association filed as Schedule "B" of its application a document titled By-Law No. 9 "A by-law relating generally to the transaction of business and conduct of affairs of Metropolitan Toronto Sewer and Watermain Contractors Association". Page 16 of the document bears the following statement:

I Remo Bandiera, Secretary Treasurer of the Metropolitan Toronto Sewer and Watermain Contractors Association do hereby certify that this is a true copy of the By-Laws of the aforesaid Association.

The statement is signed and dated August 28, 1984. The document does not bear the corporate seal of the Association. Absent consent of the parties to accept the document as the by-laws of the Association, Association counsel elected to call viva voce evidence to prove the document. As a result, the Board heard the testimony of Tony Cosentino and Michael Poce.

[6]. Cosentino testified first. He is one of seven directors of the Association and was last elected in 1984 for a two-year term. He has been a director since 1981 when he was elected at the annual meeting of the Association. He recalled By-Law No. 9 being discussed at the meeting. While he believed By-Law No. 9 to be the Association's only by-law, he was unaware whether specific action had been taken to repeal any by-laws. Cosentino testified in cross-examination that he had seen the original copy of By-Law No. 9 which is kept in the minute book of the Association. He was unaware of any difference between the original and the photocopy which had been filed with the Board, except for the certification of the photocopy. Cosentino was uncertain whether the original copy bore the corporate seal of the Association.

[7]. It was necessary to adjourn the proceedings after Cosentino ' s examination was completed without receiving any other evidence or submissions. As a result, Associatton counsel reserved his decision whether to close his case in-chief with Cosentino's evidence. Counsel complied with the Board's direction and advised the Board and other parties prior to the continuation of the hearing that the Association would be calling further evidence to prove By-Law No. 9.

[8]. When the hearing continued, Michael Poce, President of the Association, was called to testify for the Association. He was a director of the Association at the time of its annual meeting, April 9, 1981 and had served on a committee of directors which studied revisions of the Association's by-laws prior to that meeting. He testified that a motion at the annual meeting to adopt By-Law No. 9 was accepted unanimously. The minutes of the annual meeting and the original copy of By-Law No. 9 were introduced into evidence through Poce. The By­Law is signed by the president and the secretary-treasurer of the Association. In cross-examination Poce could not recall whether the notice of the annual meeting made reference to the repeal of By-Laws No. 1 through No. 8 and he was unaware of any by-laws being repealed at the annual meeting. Nor could he recall whether there had been a directors' meeting prior to the annual meeting on April 9th, although he acknowledged that By-Law No. 9 purports to have been enacted on April 9, 1981. The minutes of the annual meeting record that a quorum of voting members was present and that "A lengthy discussion was held on [revisions to the Association By-Laws] after which the new By-Laws were unanimously accepted.".

[9]. Minutes of a Board of Directors meeting held April 7, 1981 were admitted in evidence by agreement of the parties. They are signed by the president and the secretary treasurer of the Association. Minute No. 454 records that a motion was passed "... for adoption of the By-Laws and for presentation of same at the annual meeting."

[10]. Cosentino testified that the Association has conducted elections of directors, held regular meetings of the Board of Directors and annual meetings pursuant to By-Law No. 9. Poce testified in cross-examination that the 1982-84 collective agreement was negotiated after the April 9, 1981 enactment date of By-Law No. 9.

[11]. By-Law No. 9 is titled as follows:

BY-LAW NO. 9

A by-law relating generally to the transaction of business and conduct of affairs of METROPOLITAN TORONTO SEWER AND WATERMAIN CONTRACTORS ASSOCIATION BE IT ENACTED AND IT IS HEREBY ENACTED as a by-law of METROPOLITAN TORONTO SEWER AND WATERMAIN CONTRACTORS ASSOCIATION (hereinafter called the "Corporation"), as follows:

Its various sections, amongst other things, provide that:

(1) the Board of Directors shall be composed of seven elected directors (clause 3.01);

(2) the affairs of the Association shall be managed by the Board plus the immediate past president of the Association unless he is a director (clause 3.02);

(3) the board "... shall manage or supervise the management of the affairs and business of the [Association]" (clause 3.08);

(4) the directors of the Association may administer its affairs and generally exercise the powers and do the things which the Association is authorized by its charter to do (clause

3.15);

(5) the powers of the board to manage the Association can be delegated to agents or attorneys for the corporation, including the power to sub-delegate, as the Board may think fit (clause 5.08);

(6) membership of the Association shall consist of such individuals, corporations, partnerships and legal entities as are admitted as members by the Board of Directors (clause

9.01);

(7) there shall be two classes of membership, corporate and associate (clause 9.02);

(8) corporate members are persons, firms, incorporations and their authorized representatives, actively engaged in a sewer and watermain contracting business, who have been admitted to membership (clause 9.03), and they are entitled to vote at all meetings of members of the Association (clause 9.04);

(9) associate members, in general terms, are businesses actively engaged as suppliers to the sewer and watermain industry who have been admitted to membership; they are not entitled to vote at meetings of the Association (clause 9.06);

(10) a qualified applicant for membership shall not be prevented from becoming a member of the Association except for fair and reasonable cause (clause 9.09);

(11) the Association shall not act in a manner that is arbitrary, discriminatory or in bad faith in its representation of any employer in connection with labour negotiations, whether the employer is a member of the Association or not (clause 9.09);

(12) the Association shall not discriminate against any employer or other organization with respect to fees, dues or levies whether or not the employer or organization is a member of the Association (clause 9.09);

(13) membership shall not be suspended or terminated except for fair and reasonable cause (clause 9.09); and

(14) with the coming in force of By-Law No. 9, By-Laws 1 through 8 inclusive are repealed (Clause 15.02).

[12]. Section 13 of By-Law No. 9 deals specifically with labour relations and defines "labour matters" to include such things as the representation by the Association of employers as an employers' organization under the Labour Relations Act, labour negotiations, administration and interpretation of collective agreements, arbitration of disputes under collective agreements and all matters relating to an application for accreditation under the Labour Relations Act and matters necessarily incidental to the carrying out of responsibilities of an accredited employers' organization as defined by the Labour Relations Act (clause 13.01). When votes are taken on labour matters as defined in By-Law No. 9 only corporate members who have delivered to the Association written authorizations to bargain on their behalf with respect to labour matters are entitled to vote (clause 13.02). All questions dealing with labour matters are to be decided by a majority of the votes cast on the question.

[13]. Other documents which are relevant to the Association's status to bring this application are the collective agreements between it and Local 793 for the periods 1982-84 and 1984-86 and the form of authorization for the Association to act for its members.

[14]. The 1982-84 collective agreement, which was signed to be in effect until April 30, 1984, displays the following style and preamble:

Between:

THE METROPOLITAN TORONTO SEWER AND WATERMAIN CONTRACTORS ASSOCIATION, by and on behalf of its member Companies whose signatures are individually affixed hereto hereinafter called the "Employers"

OF THE FIRST PART

• and -

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793

hereinafter called the "Union"

OF THE SECOND PART

WHEREAS the Association, acting on behalf of those of its members who are signatory to this Agreement, and the Union wish to make a common Collective Agreement with respect to certain employees of the Employers engaged in sewer and watermain construction, and to provide for and ensure uniform interpretation and application in the administration of the collective bargaining agreement;

AND WHEREAS, in order to ensure uniform interpretation and application of the Collective Agreement, the said Union recognizes the formation by the Employers of the Association and agrees to deal with the said Association as the agent of the Employers who are members thereof in negotiating and administering a common Collective Agreement and agrees not to negotiate with any of the said Employers on an individual basis;

(emphasis added)

The agreement is signed, as the style and the preamble suggest, by employers individually and not by the Association. For example, Cosentino signed it for the company which he represents in the Association, Warden Construction Company Ltd., as did Poce for Poce Construction Limited.

[15]. The 1984-86 collective agreement was signed July 31, 1984 to be effective from May 1, 1984 to April 30, 1986. It bears the following style and preamble:

Between:

THE METROPOLITAN TORONTO SEWER AND WATERMAIN CONTRACTORS ASSOCIATION on behalf of its Contractor Member Companies listed in Appendix "A" hereto.

(The Contractor Member Companies listed in Appendix "A" are hereinafter called the Employer or Employers)

OF THE FIRST PART,

• and -

INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793

(hereinafter called the "Union")

OF THE SECOND PART.

WHEREAS the Association acting as an employers' organization on behalf of its contractor members listed in Appendix "A" hereto, but without personal liability for any violations by the Employers of this Collective Agreement and the Union wish to make a common Collective Agreement with respect to certain employees of the Employers engaged in Sewer and Watermain Construction listed in Appendix "A" and to provide for and insure uniform interpretation and application to the Administration of the collective bargaining agreement.

AND WHEREAS in order to insure uniform interpretation and application of the Collective Agreement the said Union recognizes the formation by the Employers of the Association as the agent of the Employers who are members in good standing and who have given the Association written bargaining authority in negotiating and administrating a common Collective Agreement and agrees not to negotiate with any of the said Employers on an individual basis.

It is signed for the Association by Poce as president, and by the secretary treasurer. There are no signatures of individual employers.

[16]. The form of employer authorizations filed by the Association in support of this application purports to authorize and appoint the Association as the employer's agent to apply for accreditation under the Act and thereafter act as the employer's accredited bargaining agent with respect to the sewers and watermains sector of the construction industry in Board Area No. 8, or such modified description of Board Area No. 8, as the Board may deem appropriate.

[17]. The respondent, interveners #2, #3 and #4 and various employers contend that the Association is not an employers' organization within the meaning of section l(1)(j) of the Act and is not a properly constituted organization and lacks the vested authority to discharge the responsibilities of an accredited bargaining agent pursuant to section 127(3). Their arguments were explicit and forceful and, while the Board has considered and weighed them carefully, including the submissions on the weight to be given to the evidence, it does not intend to set them out in detail here. Instead, it will group and summarize them, with the caveat that not all arguments were made or adopted by each party or employer.

[18]. With respect to the contention that the Association is not an employer's organization within the meaning of section l(l)(j) of the Act, it is argued that its by-laws do not explicitly exclude employees from membership and are broad enough to be construed to permit employees to become members. Thus, the Board cannot be satisfied that it is and will remain an organization solely of employers.

[19]. The arguments in support of the contention that the Association is not a properly constituted organization and lacks the vested authority to discharge the responsibilities of an accredited bargaining agent are more varied. These arguments all relate to the form and substance of By-Law No. 9.

[20]. It is argued that By-Law No. 9 was not properly enacted pursuant to the requirements of the Corporations Act, in that, on the evidence, the Association failed either to give proper notice of the relevant directors' meeting and annual meeting or to place properly before those meetings the By-Law for enactment and ratification. Further, the Association has failed to establish that By-Law No. 9 is its only by-law because there is no evidence that By­Laws No. 1 through No. 8 were revealed or do not exist. The Association's failure to comply with the Corporations Act, it is argued, makes By-Law No. 9 a nullity and precludes the Association from relying on its status as a corporation to satisfy the Board that it is a properly constituted organization.

[21]. In the alternative, if the Board finds that By-Law No. 9 was properly enacted, its contents are objectionable on a number of grounds that should cause the Board not to be satisfied that it is a properly constituted organization. First it was argued, even though By-Law No. 9 purports to give the Association the authority to bind its members in collective bargaining, the Association and its members clearly do not recognize that authority. That is evident, the argument claims, from the fact that the 1982-84 collective agreement was signed individually by the member employers, rather than by the Association's officers in their capacities as officers. An organization which holds itself out as an employers' organization with the authority to act for and bind its members in collective bargaining matters and fails to demonstrate the authority which it claims to have, it is submitted, cannot satisfy the Board that it is either properly constituted pursuant to section 127(3) of the Act, or, as the Board understands the argument, an employers' organization within the meaning of section 1 (l)(j).

[22]. Second, it is contended that By-Law No. 9 fails to provide specific conditions of membership so that a candidate for membership can know precisely the conditions for admission to membership. At the same time, the directors of the Association are given the authority to exclude persons from membership, with the result that the directors can decide the grounds for admission to or exclusion from membership.

[23]. A third ground is that By-Law No. 9 gives the directors such wide discretion to delegate the management of the Association to other parties, that the Board cannot be sure who would be the actual employers' organization and who would administer it. It is argued that the directors' discretion would permit them to "give away" the power to manage the Association, or even to incorporate another organization and delegate to it all the responsibilities of the employers' organization. These conditions prevent the Board from knowing with certainty who would be discharging the responsibilities for the accredited bargaining agent should the Association be accredited.

[24]. The final ground argued is that clause 13.02 of By-Law No. 9 is discriminatory with respect to voting on labour matters. First of all it has the effect of creating two classes of membership, voting and non-voting, because only members who have given the Association their written authorization to bargain on their behalf are entitled to vote on labour matters. It is argued that members of non-share capital corporations are either members or not and it is contrary to the Corporations Act to curtail voting rights of members. Second, clause 13.02 is discriminatory on its face because the Association, if accredited, must represent allemployers in its bargaining unit whether or not they are members of the Association. Since clause 13.02 limits the power to vote to members who have assigned their bargaining rights to the Association, clearly, members who fail to do so and non-members are prohibited from voting on labour matters. Thus, by excluding from voting on labour matters, employers for whom the Association would have a statutory duty to bargain, clause 13.02 is discriminatory.

[25]. The Association must satisfy two criteria in order to be an employers' organization within the meaning of section l(l)(j) of the Act. It must be an organization of employers and the purposes for which it was formed must include the regulation of relations between employers and employees. The objects of the Association as set out in items 5, 6 and 7 of paragraph 4 above clearly include the regulation of relations between employers and employees; that much the parties do not contest and the Board so finds. The Board finds as well that the Association is an employers' organization, notwithstanding the contentions that it is not. The Association is not a new organization, it has existed as a corporate entity since 1957. More recently it has acted on behalf of its members by executing on their behalf the 1984-86 collective agreement. There is no evidence before the Board that at any time in its existence it has accepted employees into membership, particularly at the time of and subsequent to its execution of the 1984-86 collective agreement. In the absence of such evidence, there is no reason for the Board not to accept the definition of Corporate Membership in clause 9.03 of By-Law No. 9 (see item 8 of paragraph 11 above) as implicitly excluding employees by its reference to persons, etc. " ... actively engaged in the Sewer and Watermain Contracting Business.

[26]. If there is any merit at all to the argument that the signing of the 1982-84 collective agreement by the individual members of the Association, and not the Association, demonstrates that it does not have the authority to represent its members as an employers' organization, the Association's act of signing the 1984-86 collective agreement on behalf of its members would have corrected any flaw which might have been created by the way the prior agreement was signed.

[27]. Therefore, the Board finds that the Metropolitan Toronto Sewer and Watermain Contractors Association is an employers' organization within the meaning of section 1(1)(j) of the Labour Relations Act.

[28]. The Board turns next to the question of whether the Association is a properly constituted organization.

[29]. With respect to the argument that By-Law No. 9 has not been properly enacted pursuant to the Corporations Act, the Board has documentary evidence before it in the form of minutes of the Association's annual meeting held April 9th, 1981 and a directors' meeting held April 7th, 1981. Neither the excerpt from the minutes of the annual meeting quoted at paragraph 8 nor the excerpt from the directors' meeting quoted at paragraph 9 refer to By­Law No. 9 by that title. Cosentino and Poce both testified that By-Law No. 9 was discussed and adopted at the annual meeting. Cosentino testified also that the Association has conducted its regular business pursuant to that by-law. Having regard to their evidence, the Board is satisfied that the minutes of the annual meeting are referring to By-Law No. 9 when they say ”.....the new By-laws were unanimously accepted.". It is reasonable to infer from the same evidence that the minutes of the Board of Directors' meeting are also referring to By-Law No. 9 when they say that a motion was passed "... for the adoption of the By-Laws and for presentation of same at the annual meeting.". The minutes of both meetings are signed by the president and the secretary-treasurer. Pursuant to section 299(2) of the Corporations Act they are admissible in evidence as prima facie proof of those proceedings and pursuant to section 299(3) those meetings are deemed to have been duly called, constituted and held and all proceedings to have been duly had. Section 301 of the Corporations Act makes the Association by-laws admissible in evidence as prima facie proof of all facts stated therein. Having regard to all of the foregoing, the Board finds that By-Law No. 9 has been properly enacted by the Association and, pursuant to clause 15.02 thereof, By-Laws 1 through 8 have been repealed. Therefore, the Board finds that By-Law No. 9 is the by-law of the Association.

[30]. Turning to the arguments with respect to the substance of By-Law No. 9, the Board finds the argument without merit that the members of the Association, by virtue of having signed the 1982-84 collective agreement, were demonstrating that they do not recognize the Association's authority to bind them in collective bargaining. Nor does the Board agree with the argument that By-Law No. 9 is deficient in its conditions for membership. To become a corporate member, the candidate has to be actively engaged in a sewer and watermain contracting business and be admitted by the Board of Directors. Clause 9.09 requires that there be fair and reasonable cause for preventing a qualified applicant from becoming a member. More importantly, a similar safeguard exists in section 133 of the Act.

[31]. The third ground on which it is argued that By-Law No. 9 is objectionable is the discretion given to the Board of Directors of the Association to delegate its management to others. The argument focuses primarily on the possibility that this discretion might be exercised in a manner which would prevent the Board from knowing with certainty who would be discharging the responsibilities of the accredited bargaining agent as a result of the Board of Directors "giving away" the power to manage the Association, perhaps to the extent of incorporating another organization and delegating to it the responsibilities of the employers' organization. The basis of the argument is entirely hypothetical. As the Board has already noted, the Association has been in business for a considerable time. There is no evidence that its directors have abused their powers to delegate management of the Association. In any event, By-Law No. 9 leaves no doubt that actions taken by anyone to whom the Board of Directors, pursuant to the By-Law, has delegated authority to manage the Association, are actions for which the Association is ultimately responsible. To delegate power is not to abandon responsibility as this argument suggests. Thus, the Board finds no grounds for finding the delegatory powers of the Board of Directors to be an impediment to the Board being satisfied that the Association is a properly constituted organization.

[32]. The Board turns now to the final ground that clause 13.02 establishes voting conditions on labour matters which are discriminatory. The argument is made in two parts, the first of which is that clause 13.02, by creating two classes of membership, voting and non-voting, violates the Corporations Act. The Board disagrees. Section 125 of the Corporations Act contemplates that the by-laws of a corporation may provide that a member has no vote. The second part of the argument is that, by limiting voting privileges on labour matters to members who have assigned their bargaining rights to the Association, clause 13.02 discriminates against members who have not made that assignment and non-members for whom the Association would be the accredited bargaining agent pursuant to section 128(1) of the Act.

[33]. There is nothing inherently wrong or discriminatory in a condition that only members of an organization have a voice in the organization's policy matters. Nor is it inherently wrong or discriminatory for an organization to limit the right to vote on policy matters to a prescribed class of member. Clearly, the Legislature has not considered it to be inherently wrong to limit the right to vote in that way. With the exception of what is now section 39 of the Act, which gives the Minister discretion to direct a last-offer type of vote after a strike or lock-out, the Act was silent until the 1980 amendments respecting who was eligible to vote in strike, lock-out or ratification votes. When those amendments were made, they introduced what is now section 40 and amended what is now section 72(5). Section 40 is a last-offer type vote that may be requested by an employer. The eligibility to vote is the same as in section 39, that is, all employees in the bargaining unit. Section 72 deals with strike and ratification votes. Its predecessor set no eligibility standards. The predecessor to section 72(5) required only that employees entitled to vote have ample opportunity to do so. Section 72(5) defines eligible voters as all employees in a bargaining unit "... whether or not [they] are members of the trade union . Prior to those amendments~ with the exception of section 39, the Act left it up to the trade union bargaining agency to decide who was eligible to vote, subject to whatever limitations might be imposed by its duty of fair representation under section 68 of the Act.

[34]. It is significant that the 1980 amendments did not deal with the eligibility of employers to vote respecting lock-outs or ratifications where they are represented in collective bargaining by an employers' organization, including an accredited one or a designated employer bargaining agency under the province-wide bargaining scheme. The Act remained silent on this matter until 1984 when section 149a was introduced (R.S.O. 1984, c. 34 s. 5). Section 149a(2) deals with lock-out and ratification votes conducted by a designated employer bargaining agency. In general terms, it makes all employers represented by the agency eligible to vote. The Legislature did not see fit to introduce a similar provision for accredited employer bargaining agents. It is reasonable to conclude that the Legislature had not perceived any need for a similar provision. In the result, accredited employers' organizations are free to set their own conditions for voter eligibility on lock-out and ratifications subject to any limitations which might be imposed by their duty of fair representation under section 132 of the Act.

[35]. Therefore, the provisions of clause 13.02 of By-Law No. 9 do not provide cause for the Board not to be satisfied that the Association is a properly constituted organization. That is not to say the Board is without concern at all about clause 13.02. While the clause may be a permissible voting restriction for an unaccredited employers' organization, if the Association becomes accredited, section 128 of the Act makes the need for an assignment redundant. It gives the Association the authority to bargain for all members captured by the accredition order which it previously had required from its members. Therefore, should the Association be accredited and then deny a member the right to vote on labour matters solely because the member had not given the Association a written assignment of bargaining rights, it would be at risk of being found to have acted arbitrarily and in violation of section 132 of the Act. That does not give the Board licence, in exercising its discretion under section 127(3), to adopt as a criterion a standard of conduct contemplated by section 132 of the Act. Section 132 by its wording only applies to an accredited employers' organization, it is not a standard for determining whether an organization is an employers' organization within the meaning of section 1(l)(j) of the Act or whether it is a properly constituted organization, as inferred by the argument that clause 13.02 is objectionable.

[36]. Having regard to all of the foregoing, there is nothing in By-law No. 9 that would cause the Board not to be satisfied that the Association is a properly constituted organization.

[37]. While the Board has chosen to deal with and dismiss each of the grounds on which the respondent, three interveners and some employers have contended that the Association is not properly constituted, even if the Board had found the content of By-Law No. 9 objectionable as contended, it has serious concern that it might be acting in excess of its jurisdiction within the principles of CSAO National (Inc.) re Oakville Trafalgar Memorial Hospital Association and Ontario Labour Relations Board (1972), 1972 CanLII 563 (ON CA), 26 D.L.R. (3d) 63, to rely on those grounds as the basis for being satisfied, pursuant to section 127(3) of the Act, that the Association is not a properly constituted organization. CSAO National Unc.) had applied for certification but had not previously established that it was a trade union within the meaning of what is now section l(l)(p) of the Act. It was, to quote the court, "... a company organized under the Canada Corporations Act, R.S.C. 1970, c. 32, having amongst its objects the representation of its members in matters governing their relationship with their employers.". Nonetheless the Board found that the by-laws of CSAO National (Inc.) discriminated against a certain group of members with respect to the rights and privileges which they could exercise within the union and, to quote the Court at page 66, "... the Board held that the union is not a trade union within the meaning of the Labour Relations Act and it accordingly dismissed the application for certification.". The Court found that to be an assumption by the Board of a jurisdiction it did not have. Jessup, J.A., writing for the Court at page 68 put it this way:

In my opinion, through error of law in the interpretation of section i(i)(n) [now section i(l)(p)] apparent on the face of the record, the Board assumed a jurisdiction it did not have to create an unjustified impediment to the right of the union to certification subject to satisfying the express conditions to certification provided by the statute.

[38]. Were the Board in the instant case to find the Association to be an organization of employers, with objects as are in evidence here, and then find that it was not an employers' organization within the meaning of section l(l)(j) of the Act because, for example, its by­laws establish two classes of membership, voting and non-voting, with respect to labour matters, its conduct would be on all fours with the conduct which, in CSAO National, supra, the courts found to be an assumption by the Board of a jurisdiction it did not have. While a determination under section 127(3) as to whether the Board can be satisfied that the Association is a properly constituted organization is not wholly analogous to a determination under section l(l)(j) or l(l)(p), it is sufficiently analogous that the Board might be courting a similar result to that in CSAO National, supra, if it found the Association not to be a properly constituted organization solely because the contents of By-Law No. 9 were objectionable, when it is a corporation under the Corporations Act, has enacted by-laws and is carrying on its business pursuant to those by-laws.

[39]. Moreover, for employers represented by an accredited employers' organization, sections 132, 133 and 134 of the Act set out hereunder, contain safeguards against the kinds of potential misconduct raised herein by the interveners and employers:

132. An accredited employers' organization, so long as it continues to be entitled to represent employers in a unit of employers, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employers in the unit, whether members of the accredited employers' organization or not.

133. Membership in an accredited employers' organization shall not be denied or terminated except for cause which, in the opinion of the Board, is fair and reasonable.

134. An accredited employers' organization shall not charge, levy or prescribe initiation fees, dues or assessments that, in the opinion of the Board, are unreasonable or discriminatory.

These sections set standards of conduct which an employers' organization must satisfy after accreditation. They are not pre-conditions to accreditation, to being found an employers' organization within the meaning of section l(l)(j) of the Act, or to satisfying the Board pursuant to section 127(3) that an employers' organization is properly constituted. The grounds on which the parties herein based their objections are in the nature of extra pre-conditions to be satisfied before accreditation, particularly the grounds with respect to the sufficiency of membership conditions, the discretion of the Board of Directors respecting admission to membership, the power to delegate the management of the Association, and the voting requirements of clause 13.02 of By-Law No. 9. In the Board's view, if, because of By-Law No. 9, the Board was to anticipate that the Association might violate one of sections 132, 133 or 134, conclude therefore that it was not properly constituted and deny it accreditation, the Board could be found to be assuming a jurisdiction it does not have.

[40]. For all of the foregoing reasons, the Board confirms its earlier finding above that the Metropolitan Toronto Sewer and Watermain Contractors Association is an employers' organization within the meaning of section 1(1)0) of the Labour Relations Act, and further, pursuant to section 127(3), the Board is satisfied that the Association is a properly constituted organization and that there is nothing in the Association's By-Law No. 9 which prevents the Board from being satisfied that the employers whom it represents have vested appropriate authority in it to enable it to discharge the responsibilities of an accredited bargaining agent. It remains to be determined, however, whether the documentary evidence of representation filed with the application establishes that every employer whom the Association represents has vested the Association with the aforesaid appropriate authority.

[41]. The Board directs that hearings into all remaining matters arising out of and incidental to this application continue as scheduled.