[1985] OLRB Rep. February 165

2628-83-R United Food and Commercial Workers International Union, Ap­plicant, v. Cabral Foods Inc., Respondent, v. Canadian Union of Restaurant and Related Employees, Intervener #1, v. Canadian Union of Restaurant and Related Employees, Hotel Employees and Restaurant Employees Local 88, Intervener #2

BEFORE: Owen V. Gray, Vice-Chairman, and Board Members W. G. Donnelly and C. A. Ballentine.

APPEARANCES: A. M. Minsky, Q. C., and M. L. Levinson for the applicant, R. B. Cumine for Cara Operations Limited; S. C. Bernardo for M. Jeronimo Investments Inc.; S. McCormack for all other respondents; A. Ryder, Q.C. for interveners.

DECISION OF THE BOARD; February 18, 1985

1. These twenty-four certification applications by the United Food and Commercial Workers International Union ("UFCW") were filed on various dates between February 10th and August 23, 1984. In each case, the employees affected work in a "Swiss Chalet" restaurant. Each of the respondent employers claims it is a member of the Swiss Chalet Employers' Association ("the SCEA") bound by the terms of a collective agreement between the SCEA and the Canadian Union of Restaurant and Related Employees (CURRE) dated October 19, 1981 ("the SCEA agreement"), with effect from November 9, 1981 to November 8, 1984. As each of these applications was filed well before the final two month "open period" of the SCEA agreement, the respondent in each case takes the position that the certification applica­tion is untimely by virtue of the provisions of subsection 5(4) of the Act. Canadian Union of Restaurant and Related Employees, Hotel Employees and Restaurant Employees, Local 88 ("Local 88") filed an intervention in each of these applications, claiming that CURRE had merged with or into it on January 13, 1984, and that it should be treated as the successor to CURRE's bargaining and collective agreement rights. As that claim was challenged by the applicant, interventions were also filed in each application on CURRE's behalf, asserting the rights that CURRE claimed it must still have if Local 88 is not recognized as CURRE's successor.

2. In addition to putting the respondents and interveners to the strict proof of their assertions, the applicant has alleged in each case that Foodcorp Limited ("Foodcorp") assisted CURRE in the original organization and certification of the employees at a number of food outlets then operated by Foodcorp. In particular, it says that in 1979 Foodcorp retained Intertec Security & Investigation Limited to engage and instruct persons who, once hired by Foodcorp to work in its various outlets, would support and assist CURRE in organizing other Foodcorp employees at those locations. The applicant says these activities constitute employer participa­tion and support of the sort contemplated by section 13 and 48 of the Act, which would adversely affect bargaining rights thereby acquired and deprive each of CURRE's subsequent agreements, including the SCEA agreement, of status as a "collective agreement" for the purposes of the Act generally and of the timeliness provisions of subsection 5(4) in particular. The factual and legal issues relating to and arising out of these allegations of employer support are referred to here, as they came to be referred to by the parties in hearings to date, as the "Intertec issue". We should note that Foodcorp Limited underwent a merger on April 1, 1984, as a result of which the respondent Cara Operations Limited is its legal successor for all purposes. For ease of reference, both Foodcorp Limited and Cara Operations Limited will be referred to through­out as "Foodcorp". The other respondents will be referred to collectively as "the franchisees".

3. The parties to the first several of the applications filed consented to have evidence and argument in them heard together with respect to common issues. As further applications were filed, the parties to those applications agreed to join in the hearings and be bound by the result. The scope of issues being heard evolved during the Board's first set of hearings held on various dates during the months of March through June, 1984. That evolution was traced in paragraphs 3, 4 and 5 of our earlier decision dated September 12, 1984, which dealt with certain issues in the first twenty-one above-styled applications and three others. In the result, the hearing of evidence and argument with respect to the Intertec issue was deferred, and the first series of hearings, which affected those twenty-four applications, dealt with the following matters:

(a) Local 88's claim to be the successor to CURRE under section 62 of the Act;

(b) UFCW's argument that CURRE was no longer an existing trade union as a result of its failure to effectively merge with Local 88;

(c) the respondents' and interveners' claim that the SCEA as an "employer organization" as defined by clause 1(1 )(j) of the Act;

(d) the respondents' and interveners' claim that the SCEA agreement was a "collective agreement" within the meaning of the Act;

(e) in each case, the claim of the respondent and the interveners that the respondent was bound by the SCEA agreement, and that one or other of the interveners had bargaining rights for employees affected by the application.

It was recognized that a later determination of the Intertec issue might affect the last two of these questions, and that our determinations of those questions at the end of the first series of hearings might only be tentative.

4. When hearings resumed September 7, 1984, we read to the parties the text of a decision released in writing on September 12th, in which we set out the determinations we had made on the issues of fact and law with which the first set of hearings had dealt, with reasons to follow at a later date. We summarized those conclusions in paragraph 32 of that decision:

5. In summary, we have concluded that:

(a) Local 88 is not successor to CURRE's bargaining or collective agreement rights.

(b) Subject to the effect, if any, of a determination of the “Intertec issue", the agreement between the Swiss Chalet Employers Association and CURRE is a collective agree­ment, the terms of which are binding on the respondents in, and serve as a bar to, the following applications:

Board File

2628-83-R

2629- 83-R

2630-8 3-R

263 i-83-R

2686-83-R

2688-83-R

2831-83-R

2964- 83-R

2965-83-R

0040-84-R

0128-84-R

0129-84-R

0144-84-R

0318-84-R

0407-84-R

0493-84-R

Respondent

Cabral Foods Inc.

J. Paiva Foods Ltd.

Manuel Goncalves,

Restaurateur, Ltd.

L.M.L. Foods Inc.

L. DeSousa Enterprises Ltd.

F. G. Andrioulo Foods Inc.

Cara Operations Limited

Cara Operations Limited

Cara Operations Limited

C. Calisto Foods Limited

William Odorico Investments Ltd.

G. H. Sousa Holdings Inc.

Cara Operations Limited

Cara Operations Limited

D.N.M. Lau Foods Inc.

Cara Operations Limited

(c) The following applications are timely, and neither intervener has established any pre-existing right to represent the employees affected:

Board File Respondent

2766-83-R Dinnerex Inc.

2966-83-R Famz Foods Limited

0020-84-R Bini Foods Ltd.

(d) The following applications are timely but, subject to the effect, if any, of a determina­tion of the Intertec issue, CURRE has existing bargaining rights for the employees affected:

Board File Respondent

2830-83-R Famz Foods Limited

0336-84-R Famz Foods Limited

(e) Our determination with respect to the following applications is subject both to the effect, if any, of determination of the Intertec issue and the resolution of matters discussed in paragraphs 27 to 3] hereof, on which we invite further submissions:

Board File Respondent

2687-83-R 485376 Ontario Limited

2689-83-R Rahims Food Limited

2829-83-R 555618 Ontario Ltd.

Elsewhere in the discussion we noted our conclusion that CURRE had not ceased to exist as a result of its executive board's ineffective attempt to merge it into Local 88.

5. As we had found them to be timely, the applications referred to in paragraph 32(c) of our decision dated September 12, 1984 were each heard and disposed of individually on September 19, 1984. The further submissions contemplated by subparagraph 32(e) of that decision were heard on September 19, 1984, and our final conclusions with respect to the subject matter of those submissions are set out in Part I of this decision.

6. The first date of hearing before us in Board Files 0922-84-R and 1239-84-R was September 7,1984. The first date of hearing before us in Board File 1 353-84-R was September 17, 1984. That application involved a respondent not party to the earlier proceedings. That respondent, and the other parties, agreed that the application affecting its employees would be heard together with the others with respect to the Intertec issue, which was the only common issue left to be tried in the other applications. Hearings dealing with the Intertec issue proceeded on September 17 and 18, October 11, November 22 and December 17, 18, 19 and 20, 1984. That issue is dealt with in Part II of this decision.

PART I

Outstanding Issues in Board Files

2687-83-R, 2689-83-R and 2829-83-R

7. In our decision dated September 12, 1984, we invited further submissions on the question whether three of the respondents were bound to the SCEA agreement. The considera­tions which prompted that invitation were set out in paragraphs 27 to 31 of that decision, which read:

Applications in which 485376 Ontario

Limited, Rahims Food Limited and

555618 Ontario Limited are respondents

27. The evidence before us establishes that the restaurants at locations affected by these three applications (Board Files 2687-83-k, 2689-83-k and 2829-83-k, respectively) were being operated by founding members of the SCEA on September 2, 1981 when the SCFA was formed. The application of our general findings to the circumstances of these applica­tions raises considerations which were not addressed in argument by any of the parties. Accordingly we propose to review those circumstances, highlight the unaddressed concerns and reserve our final conclusions until the parties have had a further opportunity to address the matters newly raised here.

28. The application in Board File No. 2829-83-k affects employees employed by 555618 Ontario Limited at 260 Dundas Street, London, Ontario. The evidence is that Foodcorp opened an operation at that location in N4ay, 1969. CURRE was certified as bargaining agent for a unit of employees of Foodcorp at that location on July 25, 1979, in Board File 0613-79-k. CURRE and Foodcorp then became parties to a collective agreement covering employees employed at that location, with effect from July 25, 1979, to July 24, 1982. Foodcorp "franchised" this location to Bruno Bini on January 19, 1981. On the basis of the evidence and argument, we would treat this "franchise" transaction as a sale of business within the meaning of section 63 of the Labour Relations Act. It appears to us, however, that this would have resulted in Bruno Bini's having become bound by the terms of this first agreement between Foodcorp and CURRE. Foodcorp and CLJRRE applied for and were granted the Board's consent to the early termination of their first agreement in a decision dated October 19, 1981, in Board File 1401-81 -M. There is no evidence that Bruno Bini joined in that application or filed a separate application of his own. It would therefore appear arguable that Bini and CURRE continued to be bound by the terms of that first agreement with respect to Bini's employees, even though its application to Foodcorp and Foodcorp employees had been terminated upon the granting of the Board's consent, and that this was so until the expiry of that agreement's original term on July 29, 1982. If that is so, Bini could not have become bound by the SCEA agreement at the time it was entered into, having regard to the provisions of sections 49 and 52(3) of the Act. Having regard to our general findings, it is not apparent how Bini could thereafter have become bound to the terms of the SCEA agreement or any renewal agreement with CURRE, if he did not become bound to the SCEA agreement at the time it was entered into.

29. We have it from the evidence that there was a further transaction June 12, 1983, by which 555618 Ontario Ltd. became the employer of employees at the location in question. The evidence comes from Ms. Paszkowski, and she was less than clear about the nature of the transaction and the parties to it. At one point she said the location had been "refranchised" to 555618 Ontario Ltd. That suggests that Foodcorp may have been involved directly. However, M?s. Paszkowski testified it was her belief that the transaction in question was between Bruno Bini and 555618 Ontario Ltd. Whatever Foodcorp's involvement may have been in this transaction, the immediate predecessor business was that of Bruno Bini, and the putative successor business is that of 555618 Ontario Ltd. Consistent with our other findings in this regard, we would treat this transaction as a sale of business from Bruno Bini to 555618 Ontario Ltd. on June 12, 1983. If, as may be argued, there was no subsisting collective agreement binding upon Mr. Bini as of that date, then subsection 63(3) of the Act would apply. CURRE would be entitled to claim bargaining rights with respect to employees of 555618 Ontario Ltd. falling within the bargaining unit described in the first collective agreement between CURkE and Foodcorp.

30. Ms. Paszkowski testified that when 485376 Ontario Limited executed SCEA's consti­tution on September 2, 1981, it was the employer at a restaurant at 540 Montreal Road, Ottawa. Foodcorp had opened that restaurant in August, 1979, and operated it until it was "franchised" 10485376 Ontario Limited at some unspecified time prior to September 2, 1981. The evidence also establishes that CUkkE was certified to represent employees of Foodcorp at this location on October 31, 1979 in Board File 1310-79-k and that Foodcorp and CURRE then entered into a collective agreement covering those employees, with effect from October 31, 1979 to October 30, 1982. Rahims Food Limited currently operates the restaurant at that location, which is now the subject of the application in Board File 2689-83-k. 485376 Ontario Limited now operates the restaurant at 2930 Carling Avenue, Ottawa, which is the subject of the application in Board File 2687-83-k. That restaurant was opened by Foodcorp in February, 1978. Ms. Paszkowski says that when kahims Food Limited signed the SCEA constitution on September 2, 1981 it was the employer at this location, which had been "franchised" to it by Foodcorp at some earlier date. CURkE had been certified to represent Foodcorp employees at this location on May 17, 1979 in Board File 0166-79-k, ann Foodcorp and CU kkE then entered into a collective agreement covering those employees, with effect from May 17, 1979 to May 16, 1982. Ms. Paszkowski's evidence is that kahims Food Limited and 485376 Ontario Limited switched or traded these locations at some time after September 2, 1981, in a transaction about which she knew nothing other than its result. Although Foodcorp and CURRE applied for and on October 19, 1981 were granted this Board's consent to early termination of its agreements with CURkE with respect to these locations (Board File 1401-81-M), there is no evidence that any such application was ever made by either 485376 Ontario Limited or kahims Food Limited. As with Bini, it appears arguable that both respondents were bound by unexpired collective agreements at the time the SCEA agreement was entered into, could not have become bound by that agreement at that time, and did not become bound thereby at any subsequent time.

31. We do not propose to draw any final conclusion with respect to these three applications until we have the benefit of the parties' submissions on the question whether any of the respondents therein was bound to an unexpired collective agreement at the time the SCEA agreement was entered into and, if any was, what would follow therefrom.

32. Counsel for the interveners and the franchisees argued that the Board's early termina­tion decision had been effective to terminate the collective agreements between CURRE and the three franchisees in question, even though none of the three was named in that decision. They both submitted that we could take it that Foodcorp was acting as agent for the franchisees in making the application. Counsel for the franchisees noted that an application for early termination had been contemplated in the minutes of the founding meeting of the SCEA. Whatever may have been contemplated, the text of the Board decision treats Foodcorp as the employer, and we are obliged to assume that that is the capacity in which Foodcorp purported to join in the application which led to the decision. Had an application been made expressly as agent for a named employer, the style of cause would have named that employer. No one has argued that the Board dealt improperly with whatever material was before it at the time the application for consent was made. There has been no application to reconsider the decision in question.

33. Both counsel also argued that the decision applies to any collective agreement in operation at the locations referred to therein, and so would affect the agreements to which the franchisees had earlier become parties by operation of section 63. They seek to bolster that contention with the further submission that there was no agreement between Foodcorp and CURRE applicable to the locations in question at the time of the order, and so effect can only be given to the decision if it terminated the franchisees' agreements at those locations. This submission is based on the proposition that, on a sale of business, section 63 operates by substituting the successor for the predecessor in the collective agreement which covered the predecessor's employees in the business sold, so that the predecessor is not bound thereafter by the terms of that agreement. Both arguments are without merit. The Board grants consent under section 52 with respect to the early termination of a collective agreement between the parties who apply for the consent, and not with respect to every collective agreement which might be in operation at a particular location. Furthermore, section 63 does not extinguish any of the predecessor employer's collective bargaining or collective agreement obligations. When a sale occurs during the term of a collective agreement covering a unit of employees of the predecessor engaged in the sold business, the result of the operation of section 63 is that a separate collective agreement is effectively created between the successor and the union party to that collective agreement covering persons employed by the successor in the sold business. There will then be two agreements and two collective bargaining relationships, when once there was only one. Of course, one of those agreements will have nothing to operate on if the predecessor no longer has employees who fall within its bargaining unit description, but the absence of such employees no more terminates the predecessor's obligations that it would if a sale had not taken place.

34. Another argument was that, after all this time, the intervener union was entitled to rely on the decision as having had the necessary effect, particularly as the parties had behaved as though the collective agreements with those franchisees had been terminated early. The simple answer to that submission is that the extent to which the interveners are entitled to rely on the decision is the very point in issue, and if it were enough for the parties to behave as though their collective agreement had been terminated early, the statutory prohibition against early termination without Board consent would be meaningless.

35. Only the parties to a collective bargaining relationship can effectively amend or apply for consent to early termination of the collective agreement obligations by which they are bound. We are satisfied that no consent to early termination granted to Foodcorp and CURRE with respect to any collective agreement to which they may have been party was effective to permit early termination of contemporaneous collective agreement obligations between CURRE and one of Foodcorp's franchisees, no matter how those obligations had earlier come into existence. The consequences of that conclusion are as set out in the passage quoted from our earlier decision: the three applications in question are timely, but must (subject to the outcome of the Intertec issue) be treated as displacement applications.

PART II

The "Intertec" Issue

12. CURRE was first certified to represent employees of Foodcorp at one of its Swiss Chalet restaurants in October, 1978. In February, 1979 it was certified to represent the employees at three more Swiss Chalet restaurants. By the end of August, 1979, it had been certified to represent employees at a total of thirteen Swiss Chalet restaurants in Ontario. In September, 1979, CURRE filed certification applications with respect to two more Swiss Chalet restaurants. In each case, the respondent employer was Foodcorp. CURRE was no stranger to Foodcorp. In 1975, Foodcorp had voluntarily recognized CURRE as the bargaining agent for employees at nine of its "Harvey's" operations. In order to keep subsequent events in perspective, it is important to note that there is no evidence before us that Foodcorp or any other employer participated in the formation of CURRE in 1975 or thereafter improperly assisted CURRE at any time before the events of October and November, 1979, to which reference will be made.

13. At about the beginning of October, 1979, Local 254 of the Hotel, Restaurant and Cafeteria Employees Union applied for certification with respect to employees of Foodcorp at its Swiss Chalet restaurant at 2990 Eglinton Avenue East, in Scarborough. The Foodcorp employee then in charge of labour relations matters was Kevin Boyd, a former Toronto policeman whose other responsibility was security. On or about October 5, 1979, Boyd retained the services of Intertec Security & Investigation Limited ("Intertec").

14. This was the first time Intertec had been asked to act for Foodcorp. What it was asked to do was a matter of considerable controversy in these proceedings, and will be described for the moment as "an investigation". There can be no doubt that Intertec was asked to do "an investigation" at seven Swiss Chalet restaurants. An Intertec employee was to and did become employed at each restaurant, after making application for employment in the ordinary way. The undercover operative would be and was paid by Foodcorp at the same hourly rate and perform the same duties as any other Swiss Chalet employee. Intertec would and did pay each operative at a higher hourly rate for each hour the operative spent on the "investigation" outside of her work hours at the restaurant, and would and did make up the difference between the two rates for hours for which she was also paid directly by Foodcorp. The operatives' living and other expenses would also be and were reimbursed. Foodcorp would be and was billed at an hourly rate for field work and supervision, plus expenses. Seven Intertec operatives were dispatched to seven Swiss Chalet stores in October, 1979. Each spent about two or three weeks at the assigned store. The operatives were instructed, dispatched and supervised by Barry Wilson, an Intertec "supervisor”. Wilson was the link between Intertec and Boyd after the initial meeting of October 5th. Foodcorp paid Intertec over fourteen thousand dollars for this ''investigation''.

15. The people who would best know what "investigation" was asked for are Kevin Boyd and Barry Wilson. Kevin Boyd died in June, 1980. Barry Wilson left Intertec in the spring of 1980, but was available at the time of our hearings, and could have been called as a witness. He was not.

16. The applicant subpoenaed Hal Flinn, President of Intertec, to testify with respect to his knowledge of the services performed for Foodcorp and to produce any relevant documen­tation in his company's possession. Mr. Flinn recalled the meeting with Wilson and Boyd when Intertec was first retained in early October, 1979. He did not remember anyone else being at that meeting. He recalled that Boyd asked for a "health check" — an investigation to discover whether theft was taking place, and to find out the state of employee morale: whether there were disgruntled employees, who they were, the reasons for unhappiness and the state of the relationship between employees and supervisors. Flinn remembered Boyd mentioning either that a union was in or that a union was coming in. Flinn said he was familiar with industrial relations in 1979. He told counsel for Foodcorp that he would not have allowed his company to become involved in anything illegal. That counsel then asked whether it would have been illegal in 1979 for a company to assist a union in getting to represent its employees. Flinn answered that it would be unusual, but not illegal. He did not recall being asked to participate in that kind of activity, and felt he would recall if he had been asked. Flinn was able to produce documentation relating to the employment by Intertec of five of the seven operatives sent to Swiss Chalet Stores in October, 1979. He also produced documentation evidencing the invoicing of and payment by Foodcorp for the "investigation" at the seven stores. He said that Intertec did not ~tilHiave copies of the written reports which would have gone to Foodcorp; such copies would have been destroyed in the ordinary course long before these proceedings began. The only such report in evidence is one located by Foodcorp in its files.

17. Naduff Consultants is the trade name of the numbered company that acts as adminis­trator of the group insurance plan provided for in the SCEA agreement with CURRE. Charmaine Fullerton is the owner of Naduff Consultants. She shares office space with CURRE and Local 88. She has a personal relationship with Bill Whyte of CURRE and Local 88. That relationship led to the termination, in July, 1983, of her previous employment by Foodcorp in its industrial relations department. She had been a hostess at a Swiss Chalet restaurant in September, 1979, when Kevin Boyd had her transferred to head office to work in industrial relations. While Boyd was in charge of both industrial relations and "security", prior to Boyd's death Fullerton was only involved in industrial relations. She testified that she went with Boyd to his initial meeting with Intertec in October, and to a second such meeting the following week. Her understanding was that "for security reasons" Boyd wanted operatives put in several stores "selected at random", because he wanted to see if there were cash shortages, thefts or problems with management. She was adamant that there was no mention of a union at the meetings she attended. She had not been aware of any plan to assist CURRE, and thought Boyd would have told her about such a plan if there had been one.

18. After Kevin Boyd died at the end of June, 1980, Ms. Fullerton (then known as Charmaine Papayanidis) was the only person in Foodcorp's industrial relations department, such as it was, until Allen Morrow was hired as Director of Industrial Relations in late October, 1980. She testified that she took over the security function when Boyd died. Foodcorp was then negotiating a first collective agreement with Local 254 of the Hotel, Restaurant and Cafeteria Employees Union, which had on October 25, 1979 been certified as bargaining agent for Foodcorp employees at the Swiss Chalet restaurant at 2990 Eglinton Avenue East. Fullerton thought the negotiations were taking a long time, so she hired Intertec to place an operative in that store. She received reports from Intertec on that operative's activities, which focused on assessing the determination of the employees to go on strike and involved urging employees to vote in favour of the company offer. Ms. Fullerton was not aware until she gave testimony in these hearings that in August and September, 1980, Foodcorp received reports from another security firm on the similar activities of an operative that security company had placed in the same store, purportedly as a result of a request made by Boyd prior to his death. Of course, the fact that Intertec interfered in union matters for Foodcorp in 1980 does not establish that it did so in 1979; it does dispel the notion that such activity was unthinkable either to Intertec or to someone who had worked in industrial relations with Mr. Boyd. While the existence of these reports is not proof of their contents, Ms. Fullerton's unawareness of reports of that sort received by Foodcorp at a time when she believed she was in charge of both industrial relations and security matters is some measure of the accuracy of her belief that she would have been aware of what Boyd was up to in the fall of 1979.

19. Margaret Salisbury was one of the seven operatives Intertec sent to Swiss Chalet restaurants in October, 1979. She had been hired by Intertec as a security guard in August, 1979. After she had worked in that capacity at various locations for several weeks, she asked the personnel manager for a transfer to different work. In early October she was called to a meeting with Barry Wilson at Intertec's offices. There were several others at the meeting, including three women whom Salisbury got to know later that year when they all worked as strike replacements supplied by Intertec to Fotomat. Those three were Luba Kurman, Joy Nadeu and Laurie Burns, whom the documentary evidence establishes were three of the operatives sent by Intertec to Swiss Chalet restaurants in October. The meeting had two parts. In the first, Wilson described field work in general terms. At the end of that part, the participants were invited to leave if they were not interested. They stayed. Wilson then told them that the client was Foodcorp, and that they would each be sent to one of its Swiss Chalet restaurants, where they were to apply to local management for a job. If they were not hired within two days, they were to call in and arrangements would be made to ensure their employment. They were told there were two unions; one with a long name which Salisbury wrote down as CURRE, and another with a long name which she could not remember; she thought it had the word "North America" in it. While working at their assigned restaurants, they were to persuade employees there to join CURRE. They were to push the union without being conspicuous. Their "contact" with the union would be Cathy Perry. Pushing the union was not the only thing they were to do. Ms. Salisbury testified there were other duties; they were also to report anything that happened, especially pilfering.

20. Margaret Salisbury was assigned the Swiss Chalet restaurant in Niagara Falls. She went there and got a job as a waitress. A few days afterwards, a woman from a union other than CURRE met with some of the waitresses in the change room of the restaurant. One morning a few days after that, at or before the time the restaurant normally opened, a woman and two men arrived and met with employees in the restaurant. The woman introduced herself as Cathy Perry, and said she was from CURRE. She invited the employees to apply for membership. They had been afraid to even talk about a union, Salisbury says, and they were reluctant to sign. Salisbury said she would sign, "breaking the ice" as she put if Perry gave Salisbury some applications, to help sign up employees. She got a few employees to sign, then persuaded Liz Duffy, a waitress with whom she had become friendly, to take over the collection of signed applications. The applications found their way to Perry, CURRE filed an application for certification on October 25, 1979, and the customary green notices to employees were posted. Salisbury quit her job at the restaurant on about November 9th. CURRE was certified to represent the employees at that restaurant on November 20, 1979.

21. Catherine Littlefield (as she was then known) worked for Intertec from August, 1979, to July, 1983 at a range of assignments, including undercover work. Her supervisor in 1979 was Barry Wilson. In the first week of October, Wilson called her in to his office and told her several employees were being sent to various Swiss Chalet locations because Swiss Chalet wanted to unionize all their stores, and had hired Intertec to send investigators to put the union in. She was told to go to the Swiss Chalet restaurant in Waterloo and apply for a job, using as a reference the name of a man whom she was told worked at Swiss Chalet's head office. Wilson also gave her the name and telephone number of a trade union. She was to find the employees most anxious to have a union, single out a likely leader, and give her the name and telephone number. She was not to handle cards or call in the union herself. She was to get the girls signed into the union, then drop out of sight.

22. Littlefield went to Waterloo. She applied for and got a job as a waitress at the Swiss Chalet restaurant there. She recalls starting just after Thanksgiving, around October 10th. She became friendly with a group of waitresses right away, and went out drinking with about seven of them three or four days after she started work. They started "talking union". They were fed up with their working conditions. They went back to Littlefield's hotel room, where she had a book about unions from the public library, to continue the discussion. When that discussion had reached a suitable stage, Littlefield went to the telephone book, took out the note of the name and number she had been given, and pretended to copy that name and telephone number from the telephone book. She then gave the note to one of the waitresses, who the next day had union cards and was signing employees. Littlefield signed and paid a dollar, which she later claimed as an expense. She later saw a green notice posted in the changing room; it had on it the name of the union whose name and telephone number she had given and whose card she had signed. She left very shortly thereafter, as a result of catching mumps from a customer's little boy.

23. CURRE was certified as bargaining agent for the employees at the Swiss Chalet restaurant in Waterloo on November 20, 1979. Littlefield went on to work as a strike replace­ment in the Fotomat strike in early November. Cross-examination of her established that the Swiss Chalet job was for a long time the only undercover job she had done which involved a union, until Intertec sent her to Saskatoon to assist in the de-certification of a union at a hotel there.

24. While working at their respective Swiss Chalet assignments, Salisbury and Littlefield regularly submitted written reports to Barry Wilson. It appears from the one surviving report from Intertec to Foodcorp that the operatives' reports would be summarized in the reports Foodcorp received, although we cannot now know how complete the summaries were. Fullerton remembers seeing regular reports from Intertec in the period after Intertec was retained in the fall of 1979. She recalls reports making reference to cash shortages and to green sheets. She was of no further assistance with respect to the reports Foodcorp received from Intertec at that time.

25. Cathy Perry (as she was known at the time of the events in question) had been a waitress in a Swiss Chalet restaurant in Etobicoke until early 1979, when CURRE was organizing that restaurant. She was fired at that time, and CURRE made a complaint that she had been fired for union activity. She received six weeks' pay in settlement of that complaint, and was hired by CURRE's then General Manager, William Von First, to assist him in organizing other Swiss Chalet restaurants. She testified that she was not aware of any arrangement between Von First and Boyd whereby Foodcorp would arrange for undercover assistance for CURRE's organizing campaign. She thought it unlikely that either Von First or Boyd would make such an arrangement, as they seemed antagonistic toward one another. Fullerton testified to the same effect Perry described her organizing activities, and said she would not have been involved in organizing the Niagara Falls store. It was clear that her belief in this regard was based on the fact that she only went out of town if she had someone to drive her. Her independent recollection of the events of 1979 was extremely weak. She was not adamant in her claim that she was not at the Niagara Falls before it was certified. Salisbury testified before Perry did, and her identification of Perry as the person who attended at Niagara Falls was not challenged in cross-examination. Salisbury said Perry had been accompanied by two gentlemen, which provides a potential explanation of how she could have got there. In this particular, we do not consider Salisbury's evidence shaken by that of Perry.

26. In assessing the evidence of the witnesses we heard, we are acutely aware of the effect of the passage of time. Witnesses who have no reason or motive to fabricate or distort what they recall may nevertheless suffer so hazy a recollection that it becomes difficult for them to distinguish between a recollection of what happened and a belief as to what must have happened given what they now know. This is more likely to be so with respect to events or details which would not at the time have struck the witness as significant or out of the ordinary. Those who question the witness later, whether in the hearing room or outside it, can subconsciously and quite unintentionally supply the confusing "what must have happened" by making their own assumptions about what must have happened implicit in their questions. A good example of this emerged in the questioning of Salisbury and Littlefield about the CURRE cards they said they had seen and signed. Although Littlefield had earlier worked in a unionized factory, the evidence does not establish whether she had ever before signed an application for trade union membership or, if she had, what form the application had taken. Nothing in the evidence suggests that Salisbury would ever have seen an application for union membership before she went to the Swiss Chalet restaurant in Niagara Falls. Indeed, there is no reason to suppose that either of them knew that an application for membership in a union is usually in the form of a card. The form of the application they handled in 1979 would not have seemed significant to them at that time. Although someone familiar with unions and union organizing generally would have found it odd if, for example, the form of an application for membership in CURRE was letter-sized, rather than card-sized, in their inexperienced state Salisbury and Littlefield would have thought it unexceptional and unworthy of note. Five years later, the repeated use of the word "card" to describe the application, at first by the applicant's counsel and especially later by CURRE's own counsel, would have led these witnesses to doubt and discard any faint mental image they might still have of a letter-sized document and substitute for it the image of a card-sized document of the sort these learned counsel, especially CURRE's lawyer, would seem to them to think they must have seen. By the time CURRE's counsel finally asked "what size was the card", then sought to contradict the predictable answer by suggesting, as the fact was and as counsel for CURRE knew all along, that the applications were on paper 8 1/2 by 11 inches in size, the witnesses' denials were of little assistance to us in assessing their credibility or the accuracy of their recollection of events which would have seemed more important to them at the time they occurred.

27. Both Littlefield and Salisbury were subjected to intense cross-examination. Neither had any apparent reason to fabricate their evidence. Littlefield having been located in Saskatch­ewan only days before she testified; the consistency between her evidence and that of Salisbury could not be the result of any recent sharing of reminiscences. Indeed, there was nothing to suggest that the two had had any contact with each other since 1979 when they worked as strike replacements in the Fotomat strike. Barry Wilson was not called to contradict anything either of them said about the instructions he had given them. We accept Littlefield's evidence as truthful and accurate. We accept a good deal of Salisbury's evidence as accurate, and we are satisfied that she believed all of it to be accurate and intended all of it to be truthful. However, there were areas in her testimony in which she seemed highly receptive to suggestion, particular­ly on the subject of what Wilson had said about the relationship between Foodcorp and CURRE. Her evidence in this area changed during her testimony, and grew to be so apparently fanciful that counsel for the applicant made no attempt to rely on it. While it may be a case of truth being stranger than fiction, we are not prepared to believe that Wilson told Salisbury that CURRE was "owned and operated" by Swiss Chalet. Even if we could believe that he had said that to Salisbury, we would not accept that hearsay as evidence that CURRE was in fact a company dominated or controlled union. If Wilson had some reason to believe such a thing, then he could have been called by the applicant as a witness to give testimony to that effect.

28. We find that Salisbury and Littlefield were instructed by Wilson to persuade employ­ees at the Niagara Falls and Waterloo Swiss Chalet restaurants to join CURRE. We find that similar instructions were given to Luba Kurman, Laurie Burns and Joy Nadeau. We have no direct evidence of the instructions given to the other two operatives who were sent to Swiss Chalet restaurants. We find that Salisbury and Littlefield did take steps which were calculated to and did influence some employees at the stores to which they were sent into joining CURRE. We cannot make that finding with respect to any of the other operatives. Even though we have found that three of those other operatives were instructed to promote CURRE, we cannot assume from that that they did so, especially when they were available to testify and were not called by the applicant.

29. Flinn thought it would be unusual for an employer to want to covertly assist a union in organizing its employees. Taking that as the perspective of someone in Flinn's business, we think it highly unlikely that Wilson, a man in the same business, would instruct operatives to assist a union to organize his client's employees unless the client had asked him to do so. We do not believe, as Fullerton says she did, that the seven stores were selected at random. At the beginning of October, 1979, CURRE had bargaining rights at thirteen stores in Ontario and had an application for certification pending with respect to one more. On the evidence before us, we can identify only eleven other Swiss Chalet stores open in Ontario at that time; two of those became the subject of certification applications filed by CURRE on October 5th and 9th. That leaves nine stores at which CURRE had neither bargaining rights nor a pending certification application nor an organizing campaign so far advanced that a certification application was imminent. One of those was 2990 Eglinton Avenue East, the subject of Local 254's application. Boyd selected seven of the remaining eight stores. In fairness, evidence presented with respect to store openings was not exhaustive; there may have been some other stores open at the time. Whether there were eight or sixteen or even twenty-four stores at which bargaining rights were not the subject of certificates or certification applications, however, it would be a remarkable and mathematically improbable coincidence that seven stores were selected "at random" without choosing at least one of the fourteen stores at which CURRE had either bargaining rights or a pending certification application.

30. In addition to the coincidence of the locations selected for this supposed random security test, there is also the timing of the decision to conduct it. That decision was contempora­neous with the filing of Local 254's certification application. That timing is meaningful if we take it, as Salisbury was told, that Foodcorp — that is, Boyd — wanted CURRE in at its stores because it preferred CURRE to some other "North American" union. Boyd may have been "paranoid about unions", as one of the witnesses said, and still prefer CURRE over another union with which he was unfamiliar or, at least, prefer to deal with one union rather than two. We conclude that Boyd's instructions to Wilson were that the operatives were to be sent to the seven selected stores to assist CURRE in organizing those stores, and it was as a result of Boyd's instructions to Wilson that Salisbury and Littlefield lent assistance to CURRE in its organizing of Foodcorp's Niagara Falls and Waterloo Swiss Chalet restaurants in October of 1979.

31. There can be no doubt that the services Boyd sought and obtained from Intertec on Foodcorp's behalf constituted a violation of what was then section 56 and is now section 64 of the Labour Relations Act, which provides:

No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence.

We do not accept the argument of the respondents and interveners that the interference had no effect because employees at both the Niagara Falls and the Waterloo store were ripe for organizing and needed no encouragement. It does seem that the employees at the Waterloo store needed little encouragement; it is not as clear that was true of the Niagara Falls store, which had only just opened shortly before Salisbury arrived. Even if it were true of both stores, a focus on the employees' appetite for collective bargaining ignores the significance of the attempt to co-opt that appetite and focus or steer it in a particular direction. It is impossible to say where and when the employees' unprovoked, unguided interest in collective bargaining might have taken them, had there been no interference. It is impossible to assess what the effect of the uninfluenced exercise by the employees at those locations of their right to choose a bargaining agent might have had on the later exercise of that right by employees at both the other then unorganized locations and the locations that had previously been organized. The interference was no less invidious because the employees were not aware that their employer was attempting to steer them in a particular direction. Indeed, it is far more disturbing that it was covert. Apart from any question of the propriety of an employer's openly preferring a trade union, if it is done openly the employees are at least aware of the perspective and bias of the person expressing the opinion, and can assess how that reflects, if at all, on the desirability of that trade union as his or her bargaining agent in dealing with that employer. When the preference is expressed through the mask of someone who appears to share the employee's interest, that opportunity to critically assess the motivation of the speaker is lost. The Labour Relations Act does not countenance such employer subversion; the violation is clear, serious and disturbing.

32. What should our response he to this illegal behaviour? Before answering that question, it is important to review the way in which the issue of this behaviour came before us. It arose as an allegation by the applicant in these certification applications, and was asserted against CURRE, Foodcorp and the other respondent employers. It was raised as an attack on the status of bargaining rights and collective agreements whose existence, as we have found, would otherwise make a number of these applications untimely and in three others preclude certifica­tion without a vote in which CURRE's name would appear on the ballot. The applicant asked for reconsideration of the certificates on which those bargaining rights were based, and for a declaration that the SCEA agreement and its predecessor agreements were not 'collective agreements" within the meaning of the Act. It also asked for a declaration that Foodcorp had vlolated section 64 of the Labour Relations Act. It asked for no other remedial response to the breach of section 64. It did not name Intertec as a respondent, and sought no remedy against it. We have no jurisdiction to penalize either Intertec or Foodcorp for unlawful behaviour as, under the Labour Relations Act, punishment is in the exclusive jurisdiction of the courts. We also have no jurisdiction in these proceedings to make any order against Intertec, as it is not a party to these proceedings. Natural justice requires that any order affecting any of the respondents or interveners not go beyond the bounds of the case the applicant required them to meet. We turn, then, to that case.

33. The applicant argued that the actions of Foodcorp constituted the contribution by an employer to CURRE of "other support" within the meaning of section 13 of the Labour Relations Act. It argued that CURRE had therefore been disentitled to all of the certificates it obtained thereafter, and that all of its subsequent collective agreements, whatever locations they covered, were deemed not to be collective agreements by operation of section 48 of the Act. The applicant argued that we could and should infer from the evidence before us that CURRE was aware of and at least acquiesced in the provision of support to it by Foodcorp. Indeed, it argued that CURRE must have provided Foodcorp with information about its organizing in order to coordinate efforts to support its organizing campaigns.

34. The evidence before us does not establish that CURRE was aware that the persons put in place by Intertec and Foodcorp were anything other than the ordinary pro-union employees they pretended to be, nor that CURRE would have had the slightest inkling that Foodcorp was assisting its organizing efforts in any way. Having regard to the organizing CURRE had already done and the additions to its staff of Cathy Perry and other organizers, Boyd did not need inside knowledge to predict that CURRE would soon attempt to organize the Swiss Chalet restaurants which remained unorganized, or to say to Flinn with some assurance either that a union was in or that a union was coming in, or to tell Wilson, as he must have, that Cathy Perry was the person who was likely to show up at a restaurant trying to organize the employees. The timing of events suggests that Boyd did not know when certification applications would be filed by CURRE. If he had known, it seems unlikely he would have had Intertec send an operative to the Queenston Road store in Hamilton. CURRE filed its application for that location on October 17th. That filing limited the time within which relevant membership evidence could be collected. An Intertec operative did not begin work at that store until October 17, 1979.

35. Counsel for the applicant argued that sections 13 and 48 had the effect he contended for even if CURRE had been unaware of the support it had received. With respect to the issue of "employer support", the following cases were referred to in argument by one or more of the parties' counsel: Edwards & Edwards Limited, 52 CLLC ¶ 17,027; Swift Canadian Co. Limited, 54 CLLC ¶ 17,071; Navco Food Services Limited (Formerly National Automatic Vending Company Limited), [1971] OLRB Rep. Feb. 80; Metal Textile of Canada, [1971] OLRB Rep. Nov. 694; Sunrise Paving and Construction Co. Ltd., 72 CLLC ¶ 16,060; Zehr's Markets Limited, [1972] OLRB Rep. June 635; Service Employees' International Union, Local No. 333 v. Nipa win District Staff Nurses Association of Nipawin, et al., 1973 CanLII 191 (SCC), 41 D.L.R. (3d) 6 (S.C.C.); Smith Beveridges Limited, [1975] OLRB Rep. Dec. 956; Veres Wire Industry Ltd., [1976] OLRB Rep. July 337; Canada Crushed Stone, [1977] OLRB Rep. Dec. 806; Municipality of Casimir [1978] OLRB Rep. Feb. 130; Coons Heating & Sheet Metal Limited, [1978] OLRB Rep. June 525; Japamco Company Limited, [1979] OLRB Rep. Feb. 106; Addidas Textile (Canada) Ltd., [1980] OLRB Rep. May 639; Tilco Plastics (1976) Limited, [1980] OLRB Rep. July 1096; Frusino Structure Inc., [1981] OLRB Rep. Mar. 271; Tn-Canada Inc.,[1981] OLRB Rep. Oct. 1509; and, Primo Importing and Distributing Co. Ltd., [1982] OLRB Rep. Dec. 1869. None of these cases supports the contention that sections 13 and 48 can apply to support of which the affected union is wholly unaware. Sections 1 3 and 48 must be interpreted with reference to their obvious purpose, which is:

... to prohibit the certification of any trade union which, because of the nature of its relationship with an employer, is not qualified to act on behalf of employees in their relations with their employer.

(Edwards & Edwards, supra).

In Canada Crushed Stone, supra, the Board described the purpose of section 13 (then section 12) this way at paragraph 27:

The broad purpose of the section, simply stated, is to preserve the integrity of the collective bargaining process by barring the application of any trade union which, because of employer support, does not owe its sole allegiance to those whom it seeks to represent. A trade union which has accepted the support of any employer whose interests may be affected by its representation places itself in a potential conflict of interest and thereby undermines itself as a union "qualified" to act on behalf of those it seeks to represent. Section 12 catches both the "sweetheart" arrangement between the parties directly affected and also the accepted support of any outside employer whose interests may be affected by the collective representation of those whom the union seeks to represent. In both instances the union's acceptance of employer support activates the Section 12 bar.

(emphasis added)

If a trade union's ability to be certified or to enter into binding collective agreements could be destroyed by unsolicited employer behaviour of which the union was totally unaware, sections 1 3 and 48 would cease to serve as protections from employer interference in employees' selection of a bargaining agent and, instead, become potent instruments for effecting just such interfer­ence.

36. We are satisfied that Foodcorp's interference in 1979 did not compromise CURR F's independence in any way which warrants application of sections 13 and 48, either prospectively or retrospectively. In coming to that conclusion, we have considered what effect should be given to Salisbury's evidence that an organizing meeting took place on company premises during working hours. That is the sort of evidence which, if heard and accepted at the time the certification application was before the Board, would have resulted either in the rejection of membership evidence or in the Board's exercising its discretion to order a representation vote, despite a level of membership evidence adequate for certification without a vote. It would not have deprived CURRE of existing rights or prevented it acquiring bargaining rights in other, appropriate, circumstances. We need not decide which of the two indicated possibilities would have been the result, because we do not regard Salisbury's evidence with respect to this alleged overt support as an adequate basis on which to grant reconsideration of five year old certification decisions.

37. In concluding that CURRE has not been shown to be a "company union" of the sort sections 13 and 48 of the Act are meant to neutralize, we should not be taken as making any judgment about the quality of representation CURRE has given Swiss Chalet employees in the past. That is an issue on which the only relevant judgment is that of the affected employees, whose right to select, discharge or change their bargaining agent is at the heart of the Labour Relations Act. We should also not be taken as minimizing the seriousness of Foodcorp's behaviour in 1979. The challenge we face, in the circumstances as we find them, is to devise a response that does not further victimize the victims of that behaviour.

38. If we were dealing with a fresh situation, if the interference had come to light before certifications had been granted, then we would not have certified CURRE without a vote, at least in the locations in which it appeared that there had been any interference. That, it seems to us, would have ensured that CURRE became neither the beneficiary nor the innocent victim of Foodcorp's illegal activity. Even if the interference had been discovered early in those first three year collective agreements at locations potentially affected by the interference, we might well have reconsidered the decisions granting certificates, set the certificates aside, returned to the point at which the Act requires exercise of the discretion to certify with or without a vote, and exercised that discretion by ordering a vote of the then employees to determine whether they wished to be represented by CURRE. Of course, that course of action might have undermined rights accrued under the collective agreement prior to the decision, or at least made those rights uncertain, and to that extent employees might have been disadvantaged by action taken to uphold in principle their freedom of choice. This countervailing factor is even stronger when the rights which might be jeopardized have developed over an extended period of time; this concern has to be balanced against a desire to ensure that current employees have an early opportunity to select a bargaining agent in circumstances in which they are aware of Foodcorp's covert support of CURRE in 1979, and can take that into account along with anything else they feel is relevant in choosing a bargaining agent for the future.

39. We have considered whether, in the exercise of our power to reconsider, we should set aside certificates and order a vote in any of the locations to which applications before us relate. That seems an inappropriate step to take five years after the event, with all that has happened since, especially when we take into account the fact that the employees of Swiss Chalet restaurants, and the trade unions of their choice, have had an opportunity to file timely representation applications since the applicant's allegations were first made. Indeed, the applicant has since September 9, 1984, filed a further certification application with respect to each one of the locations affected by this decision (other than the two which sub-paragraph 3 2(d) of our September 12th decision determined were the subject of timely UFCW applica­tions). Local 88 has also filed applications with respect to some of those locations. Subject to the effect of section 103(3) where two such applications have been filed at different times with respect to the same location, those timely applications will be processed if the applications before us are dismissed and the original certifications are not reopened. In other words, employees at all of the locations affected by this decision will, we trust, have an early opportunity in those applications to have their wishes tested without jeopardizing any accrued collective agreement rights, and those employees will then be able to determine for themselves what effect, if any, our findings should have on their selection of a bargaining agent.

40. The sole remedy requested by the applicant against Foodcorp in respect of the engagement of Intertec and the activities of Intertec operatives in 1979 was a declaration that Foodcorp had violated section 64 of the Act. We do hereby declare that in October, 1979, Foodcorp violated section 56 (now 64) of the Labour Relations Act by engaging Intertec Security & Investigation Limited to place in its stores operatives who, while purporting to be ordinary employees, were to and, at least two of Foodcorp's restaurants, did interfere in its employees' selection of a trade union by promoting membership in and representation by the Canadian Union of Restaurant and Related Employees.

41. In the result, the following applications are dismissed as untimely, but expressly without prejudice to any timely application which the applicant may since have filed:

Board File Respondent 2628-83-R Cabral Foods Inc. 2629-83-R J. Paiva Foods Ltd. 2630-83-R Manuel Goncalves, Restaurateur, Ltd. 2631-83-R L.M.L. Foods Inc. 2686-83-R L. DeSousa Enterprises Ltd. 2688-83-R F. G. Andrioulo Foods Inc.

2831-83-R Cara Operations Limited

2964-83-R Cara Operations Limited

2965-83-R Cara Operations Limited

0040-84-R C. Calisto Foods Limited

0128-84-R William Odorico Investments Ltd.

01 29-84-R G.H. Sousa Holdings Inc.

0144-84-R Cara Operations Limited

0318-84-R Cara Operations Limited

0407-84-R D.N.M. Lau Foods Inc.

0493-84-R Cara Operations Limited

0922-84-R Cara Operations Limited

1239-84-R Cara Operations Limited

42. It follows from our findings that the SCEA agreement was a collective agreement with more than two months left in its term on the date of the application in File No. 1 353-84-R, in which M. Jeronimo Investments Inc. is respondent. We have not formally dealt with the question whether that respondent was bound by the terms of the SCEA agreement on the date of the application. On the facts indicated to the Board by its counsel, it would be. We would ask that counsel for the applicant advise the Board, within three weeks of the date of this decision, whether it wishes the respondent put to the formal proof of those facts. If the Board is not so advised within the time frame mentioned, this application will be dismissed on the same basis as the applications referred to in the previous paragraph.

43. It follows from our findings here and in our previous decision that the following five applications must be treated as timely applications in which CURRE has bargaining rights for the affected employees:

Board File

2687-83-R

2689-83-R

2829-83-R

28 30-8 3-R

0336-84-R

Respondent

485376 Ontario Limited

Rahims Food Limited

555618 Ontario Ltd.

Famz Foods Limited

Famz Foods Limited

The Registrar is directed to list those five applications for further hearing. This panel is not seized of any of the issues remaining to be dealt with in those applications.