Canadian Paperworkers' Union v. Somerville Belkin Industries Limited, 1986 CanLII 1387

[1986] OLRB Rep. September 1307

0497-84-R Canadian Paperworkers' Union and its Locals 36, 311 and 1112, Applicant, v. Somerville Belkin Industries Limited, Tencorr Packaging Inc., Belkin Packaging Ltd., and Canadian Folding Cartons Limited, Respondents

BEFORE: D. E. Franks, Vice-Chairman, and Board Members P. J. 0'Keeffe and F. W. Murray.

APPEARANCES: Harold F. Caley, Norman L. Jesin, Gary Buccella and Michael Hunter for the applicant; D. Jane Forbes-Roberts and D. Daugharty for Sommerville Belkin Industries Limited; Howard Levitt and R. Ellery for Tencorr Packaging Inc.; Bruce Binning and Gerry Jansen for Belkin Packaging Ltd.

DECISION OF THE BOARD; September 23, 1986

1This is an application under sections 63 and 1(4) of the Labour Relations Act made by the Canadian Paperworkers' Union ("CPU") on its own behalf and on behalf of its Locals 36, 311, and 1112. The named respondents are: Somerville Belkin Industries Limited ("Somerville Belkin"), Belkin Packaging Ltd. ("Belkin"), Tencorr Packaging Inc. ("Tencorr"), and Canadian Folding Cartons Limited ("CFC"). Somerville Belkin is a wholly-owned subsidiary of Belkin.

2By a decision dated May 24th, 1985 another panel of this Board made the following direction to the respondents in paragraph 16:

at which time the respondents will be required to produce witnesses to adduce all facts within their knowledge that are material to the successor rights and related employer allegations. ...

3At the hearing in this matter the respondents Tencorr and Belkin tendered a copy of the "corrugated financing agreement~~ together with its appendices. The respondents also tendered viva voce evidence through two witnesses, Mr. Ellery and Mr. Jansen. These witnesses reviewed, affirmed and expanded upon the Statement of Fact document which had been tendered by the respondents and discussed in the previous Board decision. At the conclusion of the cross-examination of each of these witnesses, counsel for the applicant served notice on the other parties to the proceedings that he felt that the witnesses were not in a position to comply with the Board's decision of May 24th, 1985 referred to above. At the conclusion of the case for the respondents, counsel for the applicant formally requested the Board to direct that the respondents comply with the duty imposed by subsection 5 of section 1 and subsection 13 of section 63 of the Act.

4Counsel for the respondents took the position that they had complied with the previous decision of Mr. MacDowell and the order made therein, and further that decision sets out what for them constitutes compliance with section 1(5) and 63(13) in the present case.

5Both of the witnesses called by the respondents in this matter, Mr. Ellery and Mr. Jansen were not involved in the setting up of Tencorr. Mr. Ellery who is the vice-president and general manager of Tencorr since its conception in December of 1983 had previously been employed by Atlantic Packaging. He could thus give, and in fact did give extensive evidence concerning the present relationship between Belkin and Tencorr. However, he could give no direct evidence concerning any of the material events prior to the setting up of Tencorr.

6Mr. Jansen who is the general manager of Belkin's Corrugated Division at Cartwright Avenue has only been with Belkin since September 10th, 1984. Like Mr. Jansen he gave extensive evidence concerning the current arrangements. However, prior to his employment by Belkin he was employed by Consolidated-Bathurst. The only evidence he could give concerning the formation and the arrangements leading up to the formation of Tencorr was the result of a conversation he had with Mr. Belkin.

7In neither the case of Mr. Jansen nor Mr. Ellery was any attempt made by the respondents to adduce additional evidence which might be admissible hearsay under the exceptions to the exclusionary rule which were as a result of their attempting to apprise themselves of events which occurred prior to their employment with the respective respondents. The evidence that was tendered in that regard was the corrugated financing agreement and its appendices referred to above. In sum then any evidence that was tendered by these two witnesses with respect to events surrounding the formation of Tencorr would have been plain and simply hearsay evidence.

8The respondents take the position that the tendering of such hearsay evidence complies with the Board's previous decision in this matter, that is, they rely on the analogy discussed at great length in the previous decision with the pre-trial discovery process discussed in the Board's Canada Cement Lafarge Ltd. and Point Anne Quarry Company case [1977] OLRB Rep. Jan. 5. They argue that the tendering of such hearsay evidence is adequate in a discovery proceeding and, accordingly, is appropriate in the present proceeding since the Board in paragraph 13 of its decision of May 24th, 1985 in this matter specifically approved of the discussion in the Canada Cement Lafarge Ltd. case. Thus, the respondents ultimately argue that as long as their witnesses are prepared to apprise themselves of the facts, whatever is tendered by them in the giving of their evidence has to be accepted as evidence by this Board notwithstanding the fact that it might be hearsay evidence. Thus, for instance, when Mr. Jansen spent time discussing with Mr. Belkin the formation and the transactions relating to the formation of Tencorr that evidence is admissible evidence and is sufficient to comply with the Board's previous direction in this matter.

9In our view, the argument put forward by counsel for the respondents involves a serious misreading of both the Canada Cement Lafarge case and the previous decision in this matter. In both decisions the Board quite carefully enunciated that any analogy with the discovery process was not complete. In the Canada Cement Lafarge case the Board was addressing a much broader question about the procedures the Board ought to use in entertaining evidence in the face of the then new section 15 and section 55(13). In the previous decision in this matter, the Board was addressing the specific problem raised by the Statement of Fact filed by the respondents on which they intended, solely, to rely. Indeed, of critical importance in the Board's previous decision in this matter is the paragraph immediately following the paragraph citing with approval in the Canada Cement Lafarge case:

While there may well be a distinction between "facts" and "evidence", we do not think it is a helpful one in interpreting the onus provisions of sections 63(13) and 1(5) of the Labour Relations Act. Nor is the "discovery analogy" entirely parallel, appropriate, or applicable to proceedings before this Board. Of more assistance is the remedial thrust and purpose of the 1975 amendments, which, in our view, clearly require the respondents to produce witnesses to testify under oath as to the material facts of the transaction and relationships under examination, as well as the completeness and materiality of those facts. To say that this obligation can be satisfied by pleadings - which need not be substantiated - is to blunt the intent of the legislative change. Moreover, while it may be that section 1(5) is restricted to the question of common control or direction, section 63(13) clearly has no such limitations. Section 63(13) requires the respondent employers to adduce all of the facts of the transaction(s) between them said by the applicant union to constitute a transfer of all or part of a business. As noted above, that determination turns on a careful analysis of all of those facts, having regard to the purpose and ambit of section 63, and in the absence of a more complete disclosure of the "commercial facts", we are hesitant to limit the obvious effect of section 63.

10It is precisely the facts in the realm of labour relations that the respondents have not tendered any evidence. Neither witness could give direct evidence or be cross-examined on the considerations which went into the setting up of the present series of arrangements. Yet it is precisely the evidence in that realm which, as the Board has pointed out in its previous decision, is the evidence that is of most concern to the Board in assessing the application of section 63 and section 1(4) of the Act. In our view, it is precisely that area which the applicant is entitled to enquire into when the applicant examines the witnesses tendered by the respondents pursuant to section 1(5) and 63(13). In such a critical area of this inquiry, neither the applicant nor this Board ought to be content with anything but the best available evidence. As we have noted, the hearsay sought to be introduced does not fall within any of the exceptions to the exclusionary rule; it is simply statements in the nature of rumours upon which no meaningful cross-examination can be conducted.

11Accordingly, we are of the view that the applicant's motion in this matter should succeed and we therefore direct that the respondents tender evidence concerning the events leading up to and the formation of the corrugated financing agreement and the setting up of Tencorr Packaging Inc. The Registrar is directed to list this matter for continuation of hearing.