[1985] OLRB Rep. May 676
2105-84-R Labourers' International Union of North America, Ontario Provincial District Council and Labourers' International Union of North America, Local 1081, Applicants, v. Hespeler Concrete Floors Ltd. Puslinch Concrete Floors Limited, Respondents
BEFORE: R. A. Furness, Vice-Chairman, and Board Members C. A. Ballentine and A. Grant.
APPEARANCES: S. B. D. Wahl, E. Bairos and K. Rimmington for the applicants; no one appearing for the respondents.
DECISION OF THE BOARD; May 14, 1985
The name of one of the respondents is amended to read: Puslinch Concrete Floors Limited.
The applicants have applied to the Board for relief under sections 63 and 1(4) of the Labour Relations Act with respect to the bargaining rights of the applicants. The applicants have alleged that a sale of a business by Hespeler Concrete Floors Ltd. (Hespeler) to Puslinch Concrete Floors Limited (Puslinch) has occurred and has allegedly taken place on a date unknown, and/or there has been the operation of associated or related businesses or activities under common direction or control by Hespeler and Puslinch.
In its reply, Hespeler adopted the position that it had operated at a loss for the last several years and had decided between going bankrupt or closing its business operations when it ceased business operations in the summer of 1984. Hespeler also stated that it had no assets and was still indebted to the Ontario Workmen's Compensation Board and Ministry of Revenue for arrears in payments and has a contingent liability owning to Revenue Canada for income taxes for which Axel Tromm might be personally liable. It was also the position of Hespeler that all of its employees were provided with notice of termination, paid severance pay and accrued holiday pay at the time their employment was terminated. Hespeler adopted the position that the applicants were not entitled to relief under either section 1(4) or section 63.
In its reply, Puslinch stated that it was not under the same control and direction of Hespeler and that Puslinch had 100 issued common shares, all of which were owned by the president of Puslinch, Elizabeth McKellar. The reply further stated that there were no arrangements or trust by which any third person has or was able to maintain any proprietory rights to the issued shares or by which any person had a right or option to have shares in Puslinch issued to them. Puslinch, in its reply, further stated that Elizabeth McKellar was the sole director of Puslinch, having been elected a director on August 15, 1984, and that she is the sole officer of Puslinch, holding the offices of president, vice-president and secretary. Puslinch further stated that Ms. McKellar has sole signing authority for cheques and borrowings from Puslinch's sole banker, the Bank of Nova Scotia, and that she devotes herself full-time to the duties of managing and operating Puslinch and operates her office at the head office of Puslinch. The reply further stated that Ms. McKellar is not related by birth or marriage to any officer, director or shareholder of Hespeler, and that Puslinch has entered into a lease with Irene Poechman for a four-year term for the rental of its warehouse premises. Puslinch also stated that it leased its vehicles, and it did not acquire any equipment from Hespeler. It was also the position of Puslinch that it has not entered into an agreement for the purchase of all or substantially all of the assets of Hespeler, and had not entered into any agreement for the purchase of shares in Hespeler.
The reply from Puslinch also stated that Axel Tromm is an hourly-rated employee of Puslinch and has no right to any further amounts by way of bonus, dividends, or otherwise, and that other employees of Puslinch are hired from time to time as required from the available non-union labour pool in Cambridge, or in areas where Puslinch is carrying on business. It was the position of Puslinch that the applicants are not entitled to any relief under sections 1(4) or 63.
The applicants endeavoured to serve subpoenas duces tecum on Axel Tromm, Elizabeth McKellar and Peter R. Sturdy, Q.C. For reasons which will become apparent, subsequently, the subpoenas were not served on Mr. Tromm or Ms. McKellar. However, Mr. Sturdy was served with the subpoena duces tecum and appeared before the Board at the hearing on January 30, 1985.
At the commencement of the hearing, Mr. Sturdy put forward a claim of solicitor/ client privilege with respect to his being required to give evidence before the Board. Mr. Sturdy made it quite clear that he was not appearing, nor, indeed, was any member of his firm appearing in the capacity of representing either of the respondents. By way of clarification, Mr. Sturdy informed the Board that he is not a director of either corporation, and that he has not done any corporate work for the respondents for the past two years. He has not acted for Puslinch recently, but has acted for Hespeler as a solicitor and client up to approximately two years ago, and he has ceased doing their corporate work. He worked for Mr. Tromm in the sixties on a personal matter, and in 1971, when Mr. Tromm was incorporated, Mr. Sturdy performed the work of incorporation. He was a provisional director for Hespeler for three days in 1971.
On the agreement of Mr. Wahl on behalf of the applicants and Mr. Sturdy, the following facts were placed before the Board. Mr. Sturdy does not have documents in his care and control. They are in the custody of the firm and consist of some minute books. He is a partner of the firm. Mr. Sturdy conducted an interview prior to the incorporation of Hespeler, only in the sense that he was named as a director. His partner, Mr. Lennox, did the incorporation work and he was there to sign the papers. On that occasion, those present were Mr. Lennox, Mr. Tromm and Ms. McKellar. Mr. Tromm is the president of Hespeler and Ms. McKellar is the president of Puslinch. Mr. Tromm, the president of Hespeler, was present at the time that all the documents relating to the incorporation of Puslinch were signed. Mr. Sturdy did not handle any matters with respect to any discussions in contemplation of litigation and knows nothing of the particulars. Mr. Sturdy is not a director and, therefore, has no evidence or documentation. As a solicitor of the firm retained, he had no consent to divulge information, and as a solicitor, his correspondence on an individual basis was claimed as privileged. Conversations with respect to the corporations would have taken place with Mr. Lennox and not with Mr. Sturdy. Mr. Wahl agreed with Mr. Sturdy's position in view of his activity and he did not choose to challenge the extent of his privilege. At this point, Mr. Sturdy was released from the hearing and took no further part in the hearing of the application before the Board.
Mr. Wahl pointed out that this matter was previously scheduled for hearing on December 20, 1984, and that on that occasion Mr. Tromm had contacted Mr. Strang, another solicitor, and had requested and had received an adjournment with respect to both of the respondents.
Keith Rimmington gave evidence that he is the secretary-treasurer and a business representative of the Labourers' International Union of North America, Local 1081 (Local 1081). Mr. Rimmington stated that the Board issued a certificate to Labourers' International Union of North America, Local 506 with respect to all construction labourers in the employ of Hespeler in the Board's geographic area #8, except residential building projects, but including labourers employed as helpers of brickiayers and plasterers, save and except non-working foremen and persons above the rank of non-working foreman on December 5, 1978. He caused his solicitors to make corporate searches of Hespeler. On May 7, 1971, Hespeler was incorporated and Axel Tromm is listed in the annual information return as the sole director and sole officer of Hespeler. He informed the Board that Local 1081 has had problems with Hespeler and with Mr. Tromm with respect to the Labourers' provincial collective agreement. In 1982, a grievance was filed by Local 1081 against Hespeler. In that grievance, a settlement was agreed to wherein Hespeler agreed that it was bound by the provincial collective agreement between the Labourers' International Union of North America and the Labourers' International Union of North America, Ontario Provincial District Council, effective from June 1, 1980, until April 30, 1982. In that settlement, Hespeler in acknowledging that it was bound by the collective agreement, also acknowledged that it had violated certain articles, agreed to adhere to all terms and conditions in the provincial collective agreement with respect to cement finishers and agreed to pay the sum of five hundred dollars with respect to damages for the breach of the collective agreement. (See Hespeler Concrete Floors Ltd. — Board File 0059-82-M, decision dated April 22, 1982).
Thereafter, Hespeler filed the appropriate employer's contribution reports for about six months after the settlement and decision of the Board in April of 1982. Reports were made for all of 1983, and for January and February of 1984. However, the returns for 1983 are nil returns and show no hours worked, with the exception of June when a total of 112 manhours of work was reported and July when a total of 98 man-hours of work was reported. Hespeler paid monthly dues for three employees for this period. The three employees who are listed thereon were not on Local 1081's out-of-work list. One of the members on the return is Mr. Tromm. Since that time Mr. Tromm has dropped his membership in Local 1081.
In February of 1984, a termination application was put forward by Mr. Tromm on behalf of Hespeler with respect to the bargaining rights of Local 1081 for employees of Hespeler. In a decision dated February 28, 1984, the Board dismissed this application to terminate the bargaining rights of Local 1081, on the grounds that the employer had participated in the application and that the section under which the application was made was a section which was clearly not open to employers. (See Board File No. 2712-83-R).
The membership files of Local 1081 show the payment of union dues throughout 1983 until at least November of that year with respect to James Brown, Norman Jarvis and Axel Tromm. The payment of union dues was accompanied by check-off forms.
In July of 1984, Labourers' International Union of North America, Ontario Provincial District Council filed a grievance with respect to Hespeler and Mr. Tromm. Labourers' International Union of North America, Ontario Provincial District Council alleged that Hespeler was bound by and had violated the agreements binding on Hespeler between the Labourers' designated employer and employee bargaining agencies in that it had failed or refused to remit working dues and benefit contributions for hours worked by labourers on its various projects on or after December 1, 1983. In a decision dated October 12, 1984, the Board again declared that Hespeler was bound by the provincial collective agreement between the employer bargaining agency — Labourers and the Labourers' International Union of North America and the Labourers' International Union of North America, Ontario Provincial District Council. The Board made certain directions in that decision with respect to the failure of Hespeler to comply with the terms of the provincial collective agreement. (See Board File No. 1232-84-M, decision dated October 12, 1984).
Mr. Rimmington also caused the solicitors for Local 1081 to search the corporate records of Puslinch under the terms of the Corporation Information Act. Form 1 thereunder dated August 15, 1984 shows that Puslinch was incorporated on August 15, 1984. This current form also shows that Elizabeth McKellar of 64 Christopher Drive, Cambridge, was on August 15, 1984, the sole director of Puslinch and was also as the president, secretary and vice-president of Puslinch, its sole officer. This form was filed on October 12, 1984, with the company's branch of the Ministry of Consumer and Commercial Relations. Ms. McKellar was or still is Mr. Tromm's secretary and she used to do the bookkeeping for Hespeler. She worked from 30 Sheldon Drive in Cambridge and Mr. Tromm used to have an office there with a service bay at the back in an industrial building. Afterwards she worked from Mr. Tromm' s recreation room in his home at R. R. #2, Puslinch, where she does the bookkeeping and time sheets for him. When telephoning Mr. Tromm's home, Mr. Rimmington has been informed on several occasions that she was not in at the present time. On January 23, 1985, at approximately 2:00 p.m., Mr. Rimmington visited Mr. Tromm's home and when he arrived there he noticed a black Mercury Capri parked in the drive in front of the garage. He went to the door and knocked at the door. After several minutes a girl and a your g man came to the door. He asked the girl if he could speak to Ms. McKellar. The young girl informed him that she was not home, and she did not know when Ms. McKellar would be returning. Mr. Rimmington identified the girl as Mr. Tromm's daughter, Nancy. At around 4:00 p.m. on the same day, he went to 64 Christopher Drive in Cambridge where he noticed parked outside the same car he had seen outside Mr. Tromm's home. He also noticed Mr. Tromm's daughter Nancy and the same young man. Mr. Rimmington parked on the other side of the street and observed the premises for about ten minutes. He saw Nancy get out of the car and go around to the back door of 64 Christopher Drive. The young man drove the black Mecury Capri away and Mr. Rimmington went to the front door and knocked on the front door intermittently for twenty minutes. No one answered the door. On both occasions he had a summons to serve on Ms. McKellar.
Mr. Rimmington gave evidence that Puslinch is presently located on Pinebush Road in Cambridge and that Hespeler works out of this location. Mr. Rimmington spoke to an employee of Mr. Tromm or Hespeler who told him that Mr. Tromm had a ten-year lease at this location with the person who owned the property as of two years ago when the lease was negotiated. Mr. Rimmington has seen vehicles at that location. For example, on October 16, 1984, he saw a blue pick-up truck, licence number KDl9l 1. He followed the vehicle and caused a licence search to be done. The truck was leased by Axel Tromm operating as Hespeler. On that same morning another pick-up truck, licence number KT3556, also left the premises. The truck was leased by Hespeler. Both vehicles were kept in the service bay at night. Some months ago one of the members of Local 1081 inquired about Mr. Tromm and was told by Mr. Rimmington that the union was having its problems. The member said that he was now working for Puslinch where Mr. Tromm was the superintendent. On October 17, 1984, Mr. Rimmington saw a Ford LTD vehicle licence number TTT968 at the Pinebush Road premises. He observed it leaving the premises with four men inside the car. He caused a licence plate search to be done, and discovered that the lessee was Mr. Tromm, operating as Hespeler.
More recently, he has seen the Ford LTD on January 9, 1985, at a construction project in Guelph. Ariss Construction was the general contractor. Local Union 1081 or the Labourers' District Council have bargaining rights for Ariss Construction under the provincial collective agreement. On January 9, 1985, he also saw a vehicle licenced KT3556 with the blue Ford pick-up on that job. Concrete flooring at the project was being performed and Mr. Rimmington asked the superintendent of the project who was doing the concrete floors and he was told that Axel Tromm was doing the work. When Mr. Rimmington tried to inquire further, the superintendent refused to give him any further information. There was something about the licence plate on the Ford LTD, licence number XDXO73, which caused Mr. Rimmington to believe that it was exactly the same car as the car which had displayed the licence number TTT968. He caused a further licence search to be done and discovered that the registered owner was Puslinch. In other words, the vehicle bearing licence number TTT968 and the vehicle licence number XDXO73 were the same vehicle and had been transferred to Puslinch. On other occasions Mr. Rimmington followed the trucks previously referred to. On the morning of October 24, 1984, he followed the Ford LTD licence TTT968 from Pinebush Road. He observed four men inside the car and followed the car to another construction project at the University of Guelph. The general contractor on that job was X.D.G., which is one of the signatory contractors to the provincial collective agreement. He went to the shack on the job, phoned the head office of X.D.G., spoke to a person there, and told him that there was a problem with respect to the cement finishing work on the project. The person he spoke to was one of the owners of X.D.G. and he promised to send over a representative of his company in order to try and resolve the problem. About thirty minutes later the superintendent called him back into the shack and said that one of the owners wanted to speak to him regarding the problem. The owner said that he did not know that Local Union 1081 was having problems with Mr. Tromm and told him that if Local Union 1081 did not interrupt the pour, he would pay damages to Local Union 1081 with respect to the violation of the provincial collective agreement. He also told Mr. Rimmington that Mr. Tromm never told him which company he was using to do the job under until he had been made aware of the company called Puslinch. Mr. Rimmington told him that Puslinch was operated as a non-union company by Mr. Tromm. The part-owner stated that he did all of his dealings as far as prices were concerned for the floors with Mr. Tromm, and then said the work could be done by Puslinch or Hespeler. The part-owner said that he would no longer use Mr. Tromm on a subsequent project that was planned. X.D.G. paid two hundred dollars to Local Union 1081 for the damages it sustained as a result of the work performed by Mr. Tromm.
On January 24, 1985, Mr. Rimmington and Ernest Bairos went to visit Mr. Tromm's home at R. R. #2, Puslinch and found no one there. On January 29, 1985, Mr. Rimmington again went to Mr. Tromm's home and his daughter Nancy came to the door. He asked to see Ms. McKellar and he was told she was not at home. He then went over to Ms. McKellar's home at 64 Christopher Drive and knocked at the door. There was no sign of anyone at the house and there was no one in the garage. Mr. Rimmington has obtained the services of a sheriff's officer in the Judicial District of Waterloo in order to serve subpoenas on Mr. Tromm and Ms. McKellar. He made contact with the sheriff January 25, 1985, and received the report from the sheriff's officer in response to his attempts to serve the subpoenas on Mr. Tromm and Ms. McKellar. The officer visited the home of Ms. McKellar at 64 Christopher Drive in Cambridge on January 25, 1985, and there was no answer at the door. He made a trip there on the following day and no one would answer the door, although he saw someone looking out from between the curtains. He then went home and phoned this residence and a man answered and stated that Ms. McKellar was sleeping and he couldn't wake her up. He attended once more at around 3:30 p.m. on January 26, 1985, and once more someone was in the house in the view of the officer but would not answer the door. He made one more journey on January 28, 1985, to the home of Ms. McKellar shortly after 9:00 p.m., and although the house was well lit no one would answer his knocking at the door. The officer also made visits to the home of Mr. Tromm at R. R. #2, Puslinch. He made a trip there on Saturday, January 26, 1985, and received no answer. He left his card, but there was on response. He made another visit there on January 28, 1985, at about 9:00 p.m. and there was no one at home. He also tried phoning Mr. Tromm's home at 7:00 a.m. on the 28th and the 29th of January, 1985, but received no answer.
Ernest Bairos, the business manager of Local Union 1081, gave evidence before the Board. He has been involved in an investigation of Hespeler and Puslinch. On October 16, 1984, Mr. Bairos and Mr. Rimmington sat down and went over the Hespeler situation. Mr. Rimmington was assigned to the job and on October 23, the two men discussed the matter and decided on October 24 to get some more information. On that date, the two men met at 6:30 a.m. at the Pinebush Road yard and followed the truck bearing licence number KDI9l 1. Mr. Bairos followed Hespeler's truck along Highways 401 and 52 to the Milton Road. He turned on to the Airport Road. At that point it seemed to Mr. Bairos that the people in the truck suspected they were being followed and they tried successfully by quick maneuvers to lose Mr. Bairos. He identified the names of the two men in the vehicle as Cam Brown and Rick Harting. The latter is a member of Local 1081, the former is not. Mr. Bairos then returned home and prepared this grievance.
On November 11, after lengthy discussions with Mr. Rimmington, Mr. Bairos decided to act as a contractor, picked up the telephone and dialed the number for Hespeler. The telephone was answered by Ms. McKellar. He told her that he was a contractor looking for tenders. She told him to speak to Mr. Tromm. When he asked for the address, she gave him the address of R. R. #2, Puslinch. She said there was always time for a job. She referred him to Mr. Tromm at his home address and gave him the directions on how to getthere. She said she would be there, but said there was no point in his delivering the blueprints because he would have to speak to Mr. Tromm and added that he was working. About ten minutes later, Mr. Bairos knew they had to be at 64 Christopher Drive, so he went to see and a young girl came to the door and said that Ms. McKellar was at work and that she was the secretary at Hespeler. He tried to serve summons on Tuesday, January 22, at about 7:00 p.m. He went to R. R. #2 in Puslinch and had no success because no one was there. He also went there the next day and tried to serve Mr. Tromm and Ms. McKellar with subpoenas. Again he had no success. On January 24, he decided to go during the day and went there with Mr. Rimmington. They were there at about 3:00 p.m. There were people home and there was a car in the garage. He knocked at the door and no one answered. The two men decided then to give the subpoenas to the sheriff. Upon discovering that the sheriff's officer had been unsuccessful in serving subpoenas on Mr. Tromm and Ms. McKellar, Mr. Bairos and Mr. Rimmington decided once again on January 29 to try and serve them. Mr. Bairos went to Mr. Tromm's home at R.R. #2, Puslinch, and found the lights on at about 7:00 p.m. He looked through the window and saw grocery bags on the table and that half of the contents of the bag had been put away. There was a dog barking inside the home but no one would come to the door. He then went straight to 64 Christopher Drive at about 8:00 p.m., and was told that Ms. McKellar was at work. He identified himself and explained that he had a subpoena. The person who came to the door refused to accept the subpoena. A car that was parked in the driveway at 64 Christopher Drive was driven away shortly after Mr. Bairos had unsuccessfully tried to serve the subpoena.
The evidence before the Board indicates a design by Mr. Tromm and Ms. McKellar to evade service of subpoenas in connection with the hearing of this application. It is apparent from the number of grievances filed by and on behalf of the applicant that Mr. Tromm has not accepted the reality of a collective bargaining relationship with the applicant. Moreover, his unsuccessful attempt to improperly terminate the bargaining rights of Local 1081 with respect to Hespeler in February of 1984 was followed within six months by the incorporation of Puslinch. Mr. Tromm was present during the execution of the documents in connection with Puslinch. His secretary and bookkeeper Ms. McKellar is the sole director and officer of Puslinch. It is apparent, however, that Ms. McKellar does not engage in concrete flooring work and that an employee of Puslinch regards Mr. Tromm as his effective boss or superintendent.
The part-owner of X. D. G. believes that the concrete flooring at the University of Guelph could have been performed by Hespeler and Puslinch when he dealt with Mr. Tromm. While Ms. McKellar is said to be the sole shareholder of Puslinch, the Board was denied the opportunity to explore this fully because of the absence of any evidence by Mr. Tromm and Ms. McKellar. On the evidence before it, the Board is satisfied that Mr. Tromm is the actual and effective management of Hespeler and Puslinch. The Board also finds that in operating out of the same premises and performing the same line of work of concrete flooring there is an interrelationship of operations. Moreover, the transfer of a car from Hespeler to Puslinch and the use by Puslinch of trucks leased to Mr. Tromm and Hespeler support a finding of an interrelationship of operations. The only evidence of a representation to the public that Hespeler and Puslinch are a single, integrated enterprise comes from the use of the same premises and the impression of the part-owner of X.D.G. that the work of concrete flooring could be performed by either Hespeler or Puslinch. The evidence with respect to the centralized control of labour relations is revealed by the fact that the only evidence before the Board on this point is the uncontradicted evidence that only Mr. Tromm appeared to be in charge of Hespeler and only Mr. Tromm served as a superintendent of Puslinch.
In Walters Lithographing Co. Ltd., [1971] OLRB Rep. July 406, the Board stated the criteria for determining whether there is common direction and control. These criteria are: 1) common ownership or financial control; 2) common management; 3) interrelationship of operations; 4) representation to the public as a single, integrated enterprise; and 5) centralized control of labour relations. Having regard to the evidence before it, the Board is satisfied that the last four criteria have been established with respect to the two respondents. The Board makes this finding based essentially on the evidence provided by the applicant. The thinness of the evidence in some instances is due to the fact that the respondents chose to perform concrete flooring work outside the geographical jurisdiction of Local 1081 in Toronto and Hamilton, thereby making the detection of the conduct of the respondents immeasurably more difficult for investigation by the applicant. In addition, the recalcitrant behaviour of the respondents has denied the Board the opportunity to develop a more complete understanding of the affairs of the respondents.
The Board finds that Hespeler and Puslinch are carrying on associated or related activities or businesses under common control or direction. In determining whether to grant relief under the provisions of section 1(4), the Board considers whether there has been any erosion of the union's bargaining rights. See, for example, Kustom Insulations Ltd., [1979] OLRB Rep. June 531. On the evidence in this application, there has most certainly been an erosion of bargaining rights which the applicant holds with respect to Hespeler. This application has been made within a reasonable period of time of Local 1081's becoming aware of Puslinch's existence and the Board is prepared to issue an order with respect to the bargaining rights. The Board declares that Puslinch and the applicant are bound to the same provincial collective agreement that is binding on Hespeler and the applicant, namely, the current provincial collective agreement between the Employer Bargaining Agency - Labourers, and the Labourers' International Union of North America, and the Labourers' International Union of North America, Ontario Provincial District Council.
The applicants have also requested relief under section 63. The evidence before the Board does not disclose a sale of a business within the meaning of section 63. The respondents appear to be in existence with no indication that Hespeler has either been wound up or that it has sold its business rather than sold certain assets within the meaning of section 63 to Puslinch. In these circumstances, the request for relief under section 63 is denied and the application under section 63 is dismissed.