Retail, Wholesale and Department Store Union - Local 414 v. Willett Foods Limited, 1986 CanLII 1441

[1986] OLRB Rep. October 1364

1013-86-R and others on Schedules "A" and "B"; 1015-86-U and others on Sched­ule "C"; 1175-86-R; 1176-86-R; 1177-86-U; 2313-84-R; 2314-4-R; 2315-84-R; 2316-84-R; 1 178-86-R; 1 179-86-R; 1 181-86-R; 1 182-86-R; 1180-86-U; 1183-86-U Retail, Wholesale and Department Store Union - Local 414, AFL-CIO-CLC, Applicant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hollinger Inc., Conrad Black, and all respondents listed on Schedule "A", Respondents; Ter­marg Food Services Limited, Stalba Enterprises Inc., Carma Groceries (Ontario) Inc., 548082 Ontario Limited, 568429 Ontario Limited, Ron Nelson's Foods Ltd., Jorfy Foods Inc., Read-Wentworth Markets Ltd., Stroudal Marketing Ltd., 571726 Ontario Inc., W & J Holdings Limited, R.G.T. Marketing Limited, Stone-gate Marketing Ltd., Kerland Foods Ltd, 578588 Ontario Inc., 580265 Ontario Limited, 580266 Ontario Limited, Jules Foods Limited, 579679 Ontario Inc., Lars Persson Active Marketing Inc., Challis Groceries Limited, Applicants, v. Retail, Wholesale and Department Store Union - Local 414, AFL-CIO-CLC, Respon­dent; Retail, Wholesale and Department Store Union - Local 414, AFL-CIO­CLC, Applicant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hollinger Inc., Conrad Black, and all respondents listed on Schedule "C", Res­pondents; Retail, Wholesale and Department Store Union - Local 545, AFL-CIO­CLC, Applicant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hollinger Inc., Conrad Black, 510688 Ontario Limited and Claude Brunet, Res­pondents; Retail, Wholesale and Department Store Union - Local 545, AFL-CIO­CLC, Complainant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hollinger Inc., Conrad Black, 510688 Ontario Limited and Claude Brunet, Respondents; Retail, Wholesale and Department Store Union - Local 579, AFL­CIO-CLC, Applicant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hollinger Inc., Conrad Black, 510647 Ontario Limited, Saul Kansala, Janet Kansala, 510662 Ontario Inc., Romeo Sauve and Diane Sauve, Respondents; Retail, Wholesale and Department Store Union - Local 579, AFL-CIO-CLC, Applicant, v. Willett Foods Limited, c.o.b. as Mr. Grocer, Domgroup Ltd., Hol­linger Inc., Conrad Black, 510647 Ontario Limited, Saul Kansala, Janet Kansala, 510662 Ontario Inc., Romeo Sauve and Diane Sauve, Respondents

BEFORE: Owen V. Gray, Vice-Chairman and Board Members F. C. Burnet and R. R. Montague.

APPEARANCES: James Hayes, James Carpick, Robert McKay and D. G. Collins for Retail Wholesale and Depart­ment Store Union, Locals 414, 545 and 579. Richard Nixon for Bo-Ma Co. Ltd., Charles Cornelius Postma, 590105 Ontario Limited, Frank Dam, Theodorea Margaret Dam, Robert D. Bell Investments Inc., Robert Donald Bell, Corine Kay Bell, 607099 Ontario Inc., Roger Percy Hem, Ellen Betty Hem, 597077 Ontario Inc., Ronald Stothers, 580265 Ontario Limited, Joseph John Dilello, Nicholas Anthony Giannini, Alexander Kilfin, 580266 Ontario Limited, Richard Petelka, Anthony Russo, 579679 Ontario Inc., Garnet James Reid, William Francis Deschamps, Stroudal Marketing Ltd., Edward James Stroud, Alain Pierre Lebrun, Levon's Groceries Inc., Michael Vincent Levon, 597060 Ontario Inc., Michael Sci­arra, Joseph Finella, David Sciarra, Peter John Jurmain, 568429 Ontario Ltd., David Joseph Rob­ert, Larry Howard Deschamps, 659651 Ontario Limited, Graham Arnold, W & J Holdings Lim­ited, Wesley Victor Spurrell, Myrtle Joy Spurrell, Termarg Food Services Limited, Terence Joseph Nicol, Stonegate Marketing Limited, Egon Pototschnik, 659484 Ontario Limited, Andrew Morris McLennan, Gerald Edward Michael Finley, G. E. Shaw Foods Limited, George E. Shaw, 578588 Ontario Inc., Anthony Zezza, Rosina Zezza, Anthony Pietro Reda, Susan Elizabeth Reda, Mijon Foods Inc., Maurice Vivion D'Arcy, Rosalind Frances D'Arcy, Gatestone Marketing Limited, Robert Ahearn, 651423 Ontario Limited, Angelo Vento, George Jovanovich, Richard Weiditch, R.G.T. Marketing Limited, Gerald Russell Taylor, Herbert Russell Taylor, Samkeiken Foods Inc., William John Shudlock, 657041 Ontario Inc., Frank Balsamo, Brian Shewell, Ed Poirier Foods Limited, Edward Poirier, M & T Grocers Ltd., Michael Santeramo, Annette Santeramo C.G. McMullen Grocers Ltd., 660401 Ontario Inc., Mark Dzugan, Challis Groceries Limited, Larry E. Challis, Diane Challis, 510688 Ontario Limited, Claude Brunet, 510647 Ontario Limited, Saul Kansala, Janet Kansala, 510662 Ontario Inc., Romeo Sauve, Diane Sauve and 650287 Ontario Limited.

James E. Bowden for 587266 Ontario Limited, William R. Anderson, Marianne Anderson, John 5, Manderson, Dianne Manderson, Jofry Foods Inc., Doris Gyorffy, Robert Gyorffy, Robert Moulder, Ron Nelson's Foods Ltd., Ronald John Nelson, Stalba Enterprises Inc., Steven Alfred Bartley, Carma Groceries (Ontario) Inc., Roger Black, Jules Foods Limited, Josef Jan Robert Gwiazda, Julie Ann Gwiazda.

Cohn D. McKinnon for 548082 Ontario Limited, David Stephen Lockett, Betty Ruthe Lockett, Karsmor Limited, William Aldrich, Elsie M. Aldrich, Thomas Morrow, GGW Enterprises Ltd., Rico Gelano, Linda Gelano, Frank Winkel, Wingil Foods Enterprises Ltd., Petcol Foods Limited, Peter LaRose, Colleen McGee, 125913 Canada Inc., Herbert Willar, T. H. Sims, 652668 Ontario Inc., Gani Vata.

C. E. Humphrey and Martin Rosenbaum for Read-Wentworth Markets Ltd., Michael Read, Susan M.Read, Dennis Read, Elizabeth Read.

R. C. Fihion for Willett Foods Limited and Domgroup Ltd.

Win. R. Patchett for 599872 Ontario Inc., William Reginald Patchett, 370801 Ontario Limited,

Delphine Patchett, William Patchett Jr., 653862 Ontario Inc.

R. A. Spence for C. M. Black.

R. P. Armstrong and P. D. Jackson for Hollinger Inc.

Win. S. Challis for Dave Kusluski, Carol Hull, Steve Borzuch, Leslie MacLean, Margaret Forma,

John MacKenzie, Joyce Valliere, William Ariss, Jeffrey Sywyk.

Barb Walter for Pannell Kerr Forester Inc., trustee in bankruptcy of Kerland Foods Ltd.

No one appearing for Ronald John Boan, J. & L. Hayden Enterprises Ltd., Jack Hayden, Lillian Hayden, Lars Persson Active Marketing Inc., Lars Persson, Iris Persson, Kerland Foods Ltd., John D. Kerr, Joan N. Rowland, 134805 Canada Inc., Lawrence Henry Taylor, J. E. Taylor, Ronald J. Hannah Holding Co. Ltd., Ronald J. Hannah, Antonio Agozzino, Bob Jackson Foods Ltd., Robert Jackson, Wayne Allen Hamilton, 571726 Ontario Inc., James Roland Grandy, Carl George McMullen, Nicholas Anthony Giannini, Joseph John Dilello.

DECISION OF THE BOARD; October 1, 1986

1. The question addressed in this decision is whether either or both of Conrad Black ("Black") and Hollinger Inc. ("Hollinger") should be or remain respondents in these proceedings.

2. Each of Locals 414, 545 and 579 of the Retail, Wholesale and Department Store Union ("the unions") has bargaining rights for a unit of employees of Domgroup Ltd., which until April of this year was known as Dominion Stores Limited and will hereafter be referred to as "DSL". Willett Foods Limited ("Willett"), a subsidiary of DSL, is the franchisor of "Mr.Grocer" super­market operations. Some of the respondents are the franchisees or former franchisees of over 50 Mr. Grocer stores currently operating in the geographic areas in which the unions have bargaining rights for DSL employees.

3. As against each respondent franchisee in the geographic area in which it has bargaining rights for DSL employees, each union seeks a declaration, under section 63 of the Labour Rela­tions Act ("the Act"), that the transactions by which that respondent came to be operating a super­market or supermarkets under the Mr. Grocer name in that area constituted one or more sales of what was initially a part of DSL's business, and that, accordingly, the union has bargaining rights for the employees of that franchisee and that franchisee is bound by the terms of the union's collec­tive agreement with DSL and has been bound by those terms since it began operating a Mr. Grocer store. Certain of the respondent franchisees have applied under subsection 63(5) of the Act, and employees of certain of the respondent franchisees have applied under subsection 57(2) of the Act, to terminate the bargaining rights which are alleged to affect them. We are not concerned with any of these claims in this decision, and the history of their filing will not be reviewed in the recital of background which follows.

4. As against DSL, Willett and all respondent franchisees in the area for which it holds bargaining rights for DSL employees, each union seeks a declaration or declarations, under sub­section 1(4) of the Act, that those respondents all constitute one employer for the purposes of the Act, were all bound at all material times to apply the terms of the union's collective agreement with DSL to a single bargaining unit consisting of all persons employed in grocery stores operated by any one of them and are all jointly and severally liable for any past (or future) failure of any of them to apply the collective agreement in that way. Each union also complains under section 89 of the Act of unfair labour practices in the promotion and implementation of the Mr. Grocer fran­chise programme and the operation of the Mr. Grocer franchises in the relevant area. It is in respect of these claims under subsection 1(4) and section 89 that the trade unions would have Black and Hollinger be and remain respondents.

5. In July 1983, Local 414 filed a section 89 complaint and applications under section 63

and subsection 1(4) with respect to the first franchising of a Mr. Grocer operation at 666 Bumham­thorpe Road, Mississauga. It named DSL, Willett and the franchisee, Penmarkay Foods Limited, as respondents. The franchisee filed an application under subsection 63(5) shortly thereafter. Those matters were heard together beginning in September 1983, and resulted in the September 1984 decision in Penmarkay Foods Limited, [1984] OLRB Rep. Sept. 1214. The filing by Local 414 of further subsection 1(4) applications with respect to other Mr. Grocer stores began in March 1984. Each such application focused on one franchise location, naming as respondents DSL, Wil­lett and the person thought by the applicant union to be the franchisee at that location. Local 414 had filed 31 such additional subsection 1(4) applications by the end of December 1984. Local 579 filed subsection 1(4) applications with respect to one location in Sturgeon Falls and two locations in Sudbury in November and December 1984.

6, Some time after the decision in Penmarkay Foods Limited, supra, was released, the subsection 1(4) and related applications affecting the Mr. Grocer operation franchised to Termarg Foods Services Limited ("Termarg") were scheduled for hearing in March 1985. On February 13, 1985, Local 414 filed a section 89 complaint. That was the second section 89 complaint to be filed with respect to the franchising of a Mr. Grocer operation. It named DSL, Willett and Termarg as respondents. On March 18, 1985, a few days before the initial hearing date set for the proceedings involving Termarg, counsel for Local 414 wrote a letter to the Board stating that it was amending its application and complaint in those proceedings to add Argcen Holdings Inc. ("Argcen"), Argus Corporation Limited, ("Argus"), G. Montegu Black and Conrad M. Black ("the Blacks"). This was resisted by the proposed respondents. After requiring and receiving particulars of the nature of Local 414's claims against those proposed respondents, a differently constituted panel of the Board (hereafter referred to as "the Termarg panel") heard the submissions of counsel for Local 414, the proposed respondents, DSL, Willett and Termarg on the question whether the proposed respondents should be added. The Termarg panel decided they should not: Termarg Food Services Limited, [1985] OLRB Rep. March 516. Because the contents of that decision ("the Termarg deci­sion") are so central to the issues before us, the relevant paragraphs are set out here in full:

2. The applicant to these section 1(4) and 89 proceedings seeks to add as respondents the cor­porations Argcen Holdings Inc. and Argus Corporation as well as individuals Conrad and Montegu Black. The addition of the corporations is on the basis of an alleged re-organization on or about August 30, 1984, in which the respondent Dominion Stores Limited was to become 100 per cent owned by Argcen, which in turn is said to be a company under the control and direction of the Argus Corporation. The basis for adding the Blacks is essentially the allegation that they in one way or another, as major shareholders in Argus, or as officers and directors of the vari­ous Argus companies (including Dominion), direct and control the activities of Dominion Stores Limited. The applicant relies as well on published media accounts of direct involvement in the affairs of Dominion on such matters as the firing of its President, John Toma. In addition to these corporate developments already referred to, the applicant points to the recent sale of a substantial number of Dominion's stores to competitor A & P, together with other real property that previously had housed the head office and distribution facilities for Dominion Stores Lim­ited.

3. While the Board can understand the applicant's concern over the impact on its current litiga­tion of the events recently unfolding around it, the fact is that the respondent "Dominion Stores Limited" has apparently been operated for a good deal longer than the events in question as a subsidiary of the Argus group of companies. There is nothing new in that. More importantly, Dominion Stores Limited was, at the time of franchising, the corporate entity carrying on the business in question for that group, and continues to do so today, whether on the basis of the remaining 41 stores operated by it under its own name, or, as this application alleges, through its franchised "Mr. Grocer" stores as well. The applicant at the hearing advanced a number of credible concerns in support of its request to the Board to add additional parties, but its desire to insure the results of its various legal proceedings by way of further "deep pockets" did not emerge until counsel for Dominion tabled with the Board an earlier letter from counsel for the applicant. That letter asked that the applicant be furnished with a guarantee that the additional corporations and individuals now sought to be added as respondents would honor any claims arising from the instant proceedings. The applicant stated its position as follows:

"We are currently actively reviewing, among other things, the possibility of seeking to name additional parties to the imminent Ontario Labour Relations Board proceed­ings which would include a corporation or corporations related to Dominion, and also the principal shareholders or persons in control of the corporations in their personal capacities.

Naturally we are quite anxious to avoid spawning additional grounds for controversy which may be unnecessary. There would clearly be no need to pursue such a course of action should the corporate and individual principals be prepared to provide us with a written guarantee that they would honour any claims which may be asserted whether or not Dominion continues in business."

4. The Board in the relatively recent case of Total Marketing Incorporated, [1983] OLRB Rep. April 616, expressly addressed the issue of attempting to use section 1(4) of the Act solely as a means of collecting from a "deeper pocket", where that other "pocket" is not itself engaging in the business to which the Union's bargaining rights attach. The Board wrote:

The facts are not in dispute. The applicant has a bargaining relationship with Sepco­graphics Incorporated, which is a wholly owned subsidiary of the respondent Total Marketing Incorporated. In an arbitration award dated August 21, 1981, it obtained an order for the payment of $3,403.39 against Sepeographics Incorporated. sepeo­graphics Incorporated was insolvent at the time of the arbitration and subsequently made an assignment in bankruptcy. The full amount of the arbitration award remains unsatisfied. By this application the applicant seeks to put itself in a position to realize its arbitration award, now registered in the Court as a judgment debt, against the res­pondent Total Marketing Incorporated.

The material before the Board establishes that the two corporate entities are under common control and direction, and would qualify as related companies within the meaning of section 1(4) of the Act. This is not a case, however, where the Board should exercise its discretion to declare that Total marketing Incorporated is a related employer for the purposes of the Act.

It is clear that Sepcographics Incorporated has ceased operations, and that the work which it performed is no longer being done. There has been no transfer of work, and in that sense no undermining or erosion of the applicant's bargaining rights. If it appeared on the material before us that the respondent had spun off a similar com­pany to do identical work the case might be more compelling for relief, whether by way of declaration of successorship under section 63 of the Act or by the application of section 1(4). In those circumstances the Board could, by the operation of section 1(4) pierce the corporate veil in the interests of protecting the bargaining rights. (5ee e.g., Devon Studio, [1980] OLRB Rep. July 961). Those facts are not shown in the instant case. The purpose of section 1(4) of the Act is to preserve bargaining rights. It is not intended to give a party to a collective agreement the right to a "deep pocket" recovery of an unsatisfied debt against a related corporation.

The Labour Relations Act is predicated on the free choice of employees. It is also drafted in contemplation of the existing economic order, with due allowance for the realities of commercial law, including principles of limited liability for corporations. While section 1(4) provides an exception to that law for a limited purpose, that pur­pose must always be kept in mind. The section was not intended to extend bargaining rights, nor should it be used to extend the liabilities that arise under them, when bar­gaining rights have not in fact been transferred or undermined. (cf. Re Cassin-Remco Ltd., 1979 CanLII 2013 (ON HCJ), [1980] 105 D.L.R. (3d) 138 (Ont. H.C.)). The Board should not generally allow a union with bargaining rights for the employees of a subsidiary to use section 1(4) to automatically obtain a declaration that its bargaining rights extend to the parent com­pany and its employees, or to a sister company. We do not see why the consequencesshould be any different simply because the subsidiary has become insolvent. (cf. Chandelle Fashions, 11982] OLRB Rep. June 828 at 848-49).

The Board is not without sympathy for the hardship suffered by the applicant. It is left with an uncollectable bad debt. That result, however, is a risk that unions and employees have always assumed like all participants in the economic marketplace. Whether employees of a bankrupt subsidiary or their union should have a claim for an unpaid debt against a parent company that is solvent is a policy question of substantial consequence best resolved legislatively. It is not a result that should, absent clear and unequivocal language in the Act, be ushered in by this Board through a novel inter­pretation or application of section 1(4)."

5. That case has equal application to the matter before us. Apart from the application, where appropriate, of section 1(4) of the Act, the law recognizes the separate identity of each individ­ual corporate entity, notwithstanding that a corporate entity in fact can act only through individ­uals, and may be controlled to a greater or lesser extent by other corporate entities, whether through the ownership of its shares or through the existence of common officers or directors. Here, as in the Total Marketing case, there is no allegation of a "transfer of the work", and thus the work opportunities of the employees for whom the applicant has bargaining rights, other than to the extent already covered by the application as filed (i.e. the franchising through Wil­lett Foods Limited of "Mr. Grocer" stores), and apart from the sale of certain stores to A & P (which the applicant does not challenge). Were that to change, the full "successor" and "related employer" provisions of the Labour Relations Act, together with its unfair labour practice provi­sions, would again be available to the applicant for the purpose of litigating any claims it might have.

6. There is, of course, a companion section 89 complaint in these proceedings, as there was in Penmarkay, 11984] OLRB Rep. Sept. 1214, although the Board in that case did not deem it nec­essary to comment upon it. With respect to section 89 relief, the Board made it clear in Sunnylea Foods, [1984] OLRB Rep. Nov. 1640, and in Daynes Health Care Limited, (as yet unreported) Board File No. 2053-83-U, released March 5, 1985, that, in an appropriate kind of case, and at least where the corporate entity itself has disappeared, or has explicitly threatened to do so if a full measure of damages is claimed, the Board is not unprepared to affix liability to an individual or "person" acting on behalf of the corporate employer. But again, every corpora­tion must ultimately act through individuals, and the applicant has been unable to plead (nor, as in Sunnylea and Daynes, has prior litigation shown) a course of conduct anywhere close to the exceptional circumstances causing the Board to consider the steps it did in those latter two cases.

7. On the basis of the foregoing, the request of the applicant to expand the list of parties beyond those already encompassed by the present proceedings is denied.

7, The applications and complaint involving Termarg Food Services Limited were not then heard on the merits. Instead, applications involving the Mr. Grocer operation franchised to RPKC Holding Corporation Limited ("RPKC") were scheduled for hearing beginning in May 1985. On April 29, 1985, Local 414 filed a complaint under section 89 naming DSL, Willett and RPKC as respondents; Local 414 did not seek to add Argcen, Argus or the Blacks. Another panel heard that complaint together with the scheduled applications. Those hearings ended in February 1986. The Board's decision was released in June 1986: RPKC Holding Corporation Limited, [1986] OLRB Rep. June 828 ("the RPKC case").

8, Local 414 did not name Argcen, Argus or the Blacks in the 7 subsection 1(4) appli­cations it filed in May 1985, nor in the 21 section 89 complaints it filed in July 1985. All outstanding applications and complaints by Locals 414 and 579 involving Mr. Grocer franchises, including those involving Termarg Food Services Limited, were eventually scheduled for hearing in June 1986, together with all outstanding applications by franchisees under subsection 63(5). On April 23, 1986, counsel for Locals 414 and 579 advised the Board by letter that they wished to amend the then outstanding subsection 1(4) applications and section 89 complaints to add Black and Hollinger

as respondents. The proposed respondents opposed the amendment at the opening of the June hearings before us. We adjourned consideration of the question and directed that particulars be given. They were, in 58 new subsection 1(4) applications and 58 new section 89 complaints filed in July 1986, together with 58 applications under section 63, with respect to 58 Mr. Grocer locations, including the 40 locations affected by applications and complaints which were still pending in June. All 174 new applications and complaints, together with the 110 then outstanding "old" section 89, 63, 63(5) and 1(4) matters and the 10 termination applications which had been filed under subsec­tion 57(2) in 1984 by employees of Mr. Grocer franchisees, came before us on the August 1986 continuation dates in the "old" matters. Local 579 is the applicant/complainant in new filings involving the two aforementioned Sudbury locations, but Local 545 has been substituted for Local 579 as applicant/complainant in new filings involving the Sturgeon Falls location. Local 414 is now the applicant/complainant with respect to 52 locations, having withdrawn with respect to three locations on August 12th. Black and Hollinger maintain their objection to being added as respon­dents in the old subsection 1(4) applications and section 89 complaints, and ask that they be deleted as respondents in the new ones.

II

9. The trade unions plead, as Local 414 did in March 1985, that: DSL became a wholly owned subsidiary of Argcen in August 1984, and publicly held shares in DSL were exchanged for shares in Argcen shortly thereafter; the Blacks, who controlled Argcen and DSL through other corporations and held directorships and senior executive offices in those corporations and in DSL, had become more actively involved in the management of DSL; the Blacks caused the replacement of the President of DSL in December 1984; the intended sale to The Great Atlantic and Pacific Tea Company Limited ("A & P") of a number of "Dominion" stores and related assets was announced in February 1985, and there was speculation that DSL would thereafter dispose of other retail operations.

10. In addition, the unions now plead that, since mid-March 1985, the sale to A & P has closed and hundreds of DSL employees, including most of DSL's head office staff, have been laid off; DSL assets in New Brunswick and Nova Scotia have been sold; Conrad Black ("Black") has bought the shares and taken over the corporate positions formerly held by his brother Montegu (including, as counsel for the unions conceded in argument, the position of Chairman of the Board of DSL); Argcen and other corporations have amalgamated to form Hollinger Inc.; Black has initi­ated what Hollinger's interim financial statements describe as "the winding down and rationaliza­tion of Dominion's ongoing activities", including DSL's now well publicized attempts to recover monies from its pension fund; the President of DSL was again replaced in late February 1986; and, Black and Hollinger "are anxious to dispose of all their remaining holdings in the food business including the Mr. Grocer franchise operation carried on in Ontario through Willett" and have engaged in extensive discussions with potential purchasers since March 1985. The following para­graph of the unions' pleadings reflects the thrust of their allegations with respect to the period since the Termarg decision:

Since March of 1985, it has become ever more clear that Dominion and/or Domgroup Ltd. has become a shell of a company under the direction and control of the new parent corporation Hol­linger, the individual respondent Mr. Black and others on their behalf, who have not previously taken an active role in grocery retailing or wholesaling.

11. Thus, since Hollinger is the legal successor of Argcen, the proposed respondents are two of the very persons whose proposed addition as respondents was considered by the Termarg panel in March 1985, and the proposed respondents now stand in the same relation to DSL and Willett as the two Blacks and Argcen did then. Counsel for the trade unions concedes that most ofthe facts pleaded in support of their claims against Black and Hollinger either had occurred or were predicted by him when the Termarg case was argued.

12. Counsel for Black and Hollinger argue that the claims now asserted against them are tl~e very claims that were being asserted against them in March 1985, when the Termarg panel determined in their favour the question whether the Board would entertain those claims. They say that the allegations of fact now made in support of the renewed claims against them are materially unchanged from the allegations placed before the Termarg panel. They submit that the Board should refuse to permit the relitigation of the very issues disposed of in Termarg, either on princi­ples analogous to res judicata and issue estoppel or on the principles applied by the Board on appli­cations for reconsideration. In any event, they say the Termarg decision was right and that this panel should follow it even if not bound by the aforesaid principles to do so.

13. Counsel for the unions submits that their pleadings disclose an arguable case for a single employer declaration which includes Black and Hollinger, because one object of a declaration under subsection 1(4) is "to ensure that the union representing employees is able to deal directly with the person or company possessing real economic control over them rather than with someone else who is their employer in name only": Penmarkay Foods Limited, supra, at paragraph 40. He argues that we should not follow the Termarg decision because the Termarg panel did not have before it the allegations with respect to the period following March 1985 and because that decision is wrong. It is wrong, he says, because an application under subsection 1(4) should not be dis­missed as against a respondent without hearing the evidence which subsection 1(5) requires a res­pondent to adduce. The Termarg panel was wrong and unfair, he says, to conclude from his letter that access to "deep pockets" was the only object of the application under subsection 1(4). (We note that counsel does not say the Board should not have considered the letter. He acknowledges having waived the privilege which may otherwise have attached to it as an offer to settle potential claims.) In any event, he argues, the premise of the decision, and that of the decision in Total Mar­keting Incorporated, supra, on which it relies, is wrong: giving access to "deep pockets" is, in his submission, a legitimate use of the discretion granted to the Board in subsection 1(4).

III

14. In the courts, a question arising between parties is res judicata if it has already been decided, as between those parties or their privies, by a final judgment of a court which had juris­diction to deal with it. The previous decision creates an estoppel per rem judicatam. Court deci­sions refer to two distinct forms of estoppel: cause of action estoppel and issue estoppel. We need not explore in detail the differences between cause of action estoppel and issue estoppel, nor deter­mine whether issue estoppel is something distinct from estoppel per rem judicatam (as the language of some decisions suggests) or merely one kind of estoppel per rem judicatam. The purposes served by the doctrines of cause of action estoppel and issue estoppel were described by Laskin, J. (as he then was) in Angle v. Minister of National Revenue (1974), 1974 CanLII 168 (SCC), 47 D.L.R. (3d) 544, [1975] S.C.R. 248, at pp. 550-551 (D.L.R.):

The basis of issue estoppel as well as of cause of action estoppel has been variously explained; for example, that it is "founded on considerations of justice and good sense" (see New Bruns­wick R. Co. v. British and French Trust Corp. Ltd. [19391 A.C. 1 at p. 19); that it is "founded upon the twin principles so frequently expressed in Latin that there should be an end to litiga­tion and justice demands that the same party shall not be harassed twice for the same cause" (Carl Zeiss case, [1967] 1 A.C. 853, per Lord Upjohn at p. 946, per Lord Guest at p. 933); that it is founded on "the general interest of the community in the termination of disputes, and in the finality and conclusiveness of judicial decisions; and .. .the right of the individual to be protected from vexatious multiplication of suits and prosecutions..." (Spencer Bower and Turner, Res Judicata, 2nd ed. (1969), p. 10). Although, as Lord Reid said in the Carl Zeiss case, at p. 913, "issue estoppel may be a comparatively new phrase" (and is also known, especially in American decisions and writings, as collateral estoppel or issue preclusion), as a principle it goes back almost two hundred years in English case law to the Duchess of Kingston's Case (1776), 20 5t. Tr. 355. It has been recognized as well in Canadian case law as the following statement by Mid­dleton, l.A., in Mcintosh v. Parent (1924), 1924 CanLII 401 (ON SCAD), 55 O.L.R. 552 at p. 555, attests:

When a question is litigated, the judgment of the Court is a final determination between the parties and their privies. Any right, question, or fact distinctly put in issue and directly determined by a court of competent jurisdiction as a ground of recovery, or as an answer to a claim set up, cannot be re-tried in a subsequent suit between the same parties or their privies, though for a different cause of action. The right, question, or fact, once determined, must, as between them, be taken to be con­clusively established so long as the judgment remains...

In Town of Grandview v. Doering (1975), 1975 CanLII 16 (SCC), 61 D.L.R. (3d) 455 (S.C.C.), Mr. Justice Ritchie cited with approval the following passage from Phosphate Sewage Co. v. Molleson (1879), 4 App. Gas. 801 at pp. 814-5 (per Earl Cairns L.C.):

As I understand the law with regard to res judicata, it is not the case, and it would be intolerable if it were the case, that a party who has been unsuccessful in a litigation can be allowed to re­open that litigation merely by saying, that since the former litigation there is another fact going exactly in the same direction with the facts stated before, leading up to the same relief which I asked for before, but it being in addition to the facts which I have mentioned, it ought now to be allowed to be the foundation of a new litigation, and I should be allowed to commence a new lit­igation merely upon the allegation of this additional fact. My Lords, the only way in which that could possibly be admitted would be if the litigant were prepared to say, I will shew you that this is a fact which entirely changes the aspect of the case, and I will shew you further that it was not, and could not be reasonable diligence have been, ascertained by me before....

15. While perhaps not bound by law to apply doctrines like res judicata and issue estoppel, the Board has found good reason to do so, as the Board observed in Arnold Markets Limited, 62 CLLC 16,221:

It seems obvious that as a general rule, once a fact or question has been put in issue and directly adjudicated upon in a proceeding before the Board, such adjudication should constitute a final determination of the matter between the same parties and conclusive evidence for or against them in any other proceeding before the Board which involves the same question or fact. It is our opinion that the Board ought, as a general rule, to apply a principle analogous to that of res judicata or estoppel with the result that it must accept an existing decision made by it on the merits as conclusive evidence for or against the parties or their privies in any subsequent pro­ceeding brought before it by the same parties and involving the same questions or facts decided by it in the first decision.

(See also Canadian General Electric Company Limited, [1978] OLRB Rep. Apr. 384 and the deci­sions cited therein.) Of course, neither cause of action estoppel nor issue estoppel can operate against anyone other than a person whose position or claim was asserted in the proceedings which led to the decision or someone claiming under or through that person. The dismissal of one union's claim that two employers be the subject of a single employer declaration cannot bar another trade union s claim for such a declaration with respect to the same respondent employers, for example: Valentine Enterprises Contracting Limited, [1981] OLRB Rep. June 807.

16. A party adversely affected by the determinative or preclusive estoppel effect of a Board decision may apply under subsection 106(1) of the Act for reconsideration of that decision. The principles usually applied by the Board in assessing requests for reconsideration have been reviewed in a number of cases. The following passage from K-Mart Canada Limited, [1981] OLRB Rep. Feb. 185 at paragraph 4 is illustrative:

To avoid abuse of the reconsideration provision and bring some finality to its adjudicated deci­sions the Board has adopted principles not unlike those of the courts. The Board will not nor­mally acceded to a request to reconsider unless the party requesting reconsideration intends to adduce new evidence which was not previously available to them by the exercise of due dili­gence, and then only where such additional evidence, if proved, would be likely to make a sub­stantial difference to the outcome of the cases. Reconsideration is therefore generally restricted to allowing a party to adduce evidence or make representations which it did not have a previous opportunity to raise. The Board may also consider such factors as the motives for the request for reconsideration in light of a party's conduct, and the resulting prejudice to another party if the case is reopened. (See, generally, International Nickel Company of Canada, 63 CLLC 16,284; The Detroit River Construction Limited, 63 CLLC 16,260; National Steel Car Corporation Limited, [1966] OLRB Rep. Apr. 55; Canadian Union of General Employees, 1 1975] OLRB Rep. Apr. 320; York University, [19761 OLRB Rep. Apr. 187 affirmed, sub. nom. Jordan v. Ontario Labour Relations Board, York University Faculty Association, York University, 78 CLLC 14,132, (Ont. Div. Ct.).

The Board will also reconsider a decision founded on an undisputed error of fact, a decision which is clearly wrong in law, a decision which appears inconsistent with another decision in the same proceedings, a decision made without notice to a necessary party or a decision obtained by fraud or deceit. The Board may choose to reconsider a decision if the request raises significant and impor­tant issues of Board policy (John Entwistle Construction Ltd., [1979] OLRB Rep. Nov. 1096; Clifford Masonry Ltd., [1982] OLRB Rep. Jan 14), but the mere fact that the Board has changed its approach to like cases since making a decision may not be sufficient reason to reconsider it (County of Lambton, 65 CLLC 16,057).

17. Beyond its determinative or preclusive effect in subsequent proceedings involving the immediate parties, a Board decision in one case will also ordinarily have a persuasive influence on decisions in other disputes involving similarly situated parties. Reasons why that should be so are reflected in paragraph 22 of the Board's decision in Oakwood Park Lodge, [1980] OLRB Rep. Oct. 1501:

18. We do not wish to leave this matter without returning briefly to the views expressed by Pro­fessor Arthurs in Wickett and Craig 1(1963), 13 L.A.C. 363]. There, it will be recalled, he distin­guished between the preclusive and persuasive effect of a previous decision; and while rejecting the former, held that a previous decision between the same parties should generally be followed unless it can be fairly distinguished or appears to be clearly wrong. This decision, of course, was made in an arbitration context, but the reliance interests and need for predictability and objec­tivity in decision-making are equally applicable to proceedings before the Board. Cases and decisions do not stand alone; they are part of a continuum. The Board does not face each prob­lem as a new and pristine blackboard never previously written on. As we have already pointed out parties can, and should, reasonably expect that if a decision has been rendered in an earlier proceeding which is related logically to a later one, the former must be taken into account. Decisions in earlier cases should not be undercut promiscuously by those in later cases. Later decisions should, unless there are overriding factors to the contrary, be consistent with those in earlier cases. Only in this way can respect for the system be maintained...

IV

18. Again, Local 414 did not expressly apply for reconsideration of the Termarg decision. Had it done so, that application would undoubtedly have been put before the panel which made the original decision, in accordance with the Board's usual practice. Rather than apply for recon­sideration per se, Local 414 has simply sought again to achieve what it was denied in Termarg, this time with respect to a larger number of applications and complaints which, however, include the very application and complaint which had been before the panel in Termarg. The parties all recog­nized at the outset that the argument of the questions dealt with here would take on the aspect of a reconsideration request and, in the end, none opposed this panel's dealing with such a request, even though we are not the panel which made the original decision.

19. Apart from the added question whether they are the subject of a cause of action or issue estoppel, the basic issues raised by the question whether Black and Hollinger should be or remain respondents in the proceedings now before us are exactly the same as those raised by Local 414's application to add Black and Argcen as respondents in the Termarg proceedings. In the circum­stances, we agree with the respondents that the result of the Termarg decision ought to be treated as determinative of the questions before us, at least with respect to those proceedings in which Local 414 is applicant/complainant, unless the allegations of fact with respect to the period since mid-March 1985 materially alter the nature of or basis for the proposed claims or there is some other appropriate reason to reconsider the Termarg decision itself.

20. None of the parties addressed themselves to the fact that Locals 545 and 579 were not parties involved in the Termarg case, and are not the successors, assigns or "privies" of Local 414 in the matters before us. However persuasive the Termarg decision may be in assessing their right to have Black and Hollinger as respondents in these proceedings, it does not appear that any doc­trine analogous to res judicata or issue estoppel could fairly be applied to Locals 545 and 579 in respect of the Termarg decision. If it appeared that the possible difference between Local 414's position and that of Locals 545 and 579 might affect the result, we would have invited the parties' submissions on this point before coming to any firm conclusions.

21. With respect to the unions' argument that the facts here are new and different, when we compare the allegations before us with those which were put before the Termarg panel and con­sider the reasons that panel gave for their decision, it is apparent that the "new" facts are merely facts "going in exactly the same direction with the facts stated before." There is nothing new in the allegation that the proposed respondents are exercising control over DSL; the added changes in the chain of control and the identity of those in ultimate control are immaterial if the Termarg pan­el's analysis is correct. The allegations of further divestitures, of DSL's having become a "shell" and of the proposed respondents' intention to sell DSL or its remaining assets are new, but they merely amplify the unions' original concern about the ability of DSL and Willett to satisfy any money award which may be against them in these and earlier Board and related arbitration pro­ceedings. It is quite clear that the amplitude of that concern was a matter of indifference to the Termarg panel, which concluded that neither actual nor anticipated inability of an employer to sat­isfy liabilities arising out of its collective bargaining relationship is by itself any reason to declare that that employer and the solvent entities which control it constitute one employer for the purpose of the Act.

22. We do not see any reason to reconsider the Termarg panel's acceptance of the state­ments of law and policy made by the Board in Total Marketing Incorporated. As for the panel's application of those statements to the case before it, we are unable to accept counsel's submission that it was unfair for the Termarg panel to conclude from his letter that Local 414's "desire to insure the results of its various legal proceedings by way of further 'deep pocket"' was the only object of Local 414's application under subsection 1(4). We are bound to observe that the letter clearly gives that impression, as it shows Local 414 is content to drop any question of including additional respondents in a single employer declaration if those respondents guarantee that the union s existing claims would be financially honoured. Furthermore, it does not appear that the panel drew that conclusion from the letter alone. The letter alerted the Termarg panel to the fact that this was the applicant's major (if not only) object. The panel then noted, in paragraph 5 of its decision, that there was no allegation of "transfer of work" other than that covered by the appli­cation as originally filed, and made it clear that the result would have been different if there had been such allegations. We might add that in the particulars it filed with the Termarg panel, Local 414 had not alleged any other collective bargaining difficulty which it connected in some way with the control of DSL by the persons it sought to add as respondents. The Termarg panel's focus on whether such difficulties had been pleaded is not inconsistent with the proposition that one object of a declaration under subsection 1(4) is "to ensure that the union representing employees is able to deal directly with the person or company possessing real economic control over them rather than with someone else who is their employer in name only." That statement of the proposition should not be taken out of context, and the significance of its last seven words should not be mini­mized.

23. Many employers are corporations. Many corporations are under the ultimate control of one person. Such circumstances do not attract a declaration that the corporation and its directors or controlling shareholders are one employer for the purpose of the Labour Relations Act, in the absence of some labour relations problem involving a transfer of work or some other difficulty with the exercise or definition of bargaining rights. Putting it another way, a corporate employer is not "an employer in name only" in the sense intended by the quoted phrase by reason only of its being closely held or having a small number of executive decision makers or having a modest or dimin­ishing net worth. It should not be overlooked that statements of the sort quoted are made in cases in which the nominal employer is heavily dependent on one sole or dominant supplier or customer or revenue source (generally, but not necessarily, an employer or former employer of persons rep­resented by the applicant trade union who do or did work like that now undertaken by the nominal employer) whose dictates, enforced through the exercise of its economic power, make it a ghost at the bargaining table.

24. In Carroll Electric (1982) Limited, [1983] OLRB Rep. August 1275, the potential inabil­ity of one respondent to satisfy collective agreement liabilities was one of the considerations which led the Board to grant a single employer declaration. In that case, the Board found a scheme by an e~nployer to defeat the bargaining rights of the union which represented its employees by transfer­ring its business to a shell company over which it exercised significant control, with the result that, but for a declaration under subsection 1(4), the assets of the former would be isolated from the lia­bility consequences of the intended wholesale refusal by the interposed shell company to recognize the union's bargaining rights or abide by the terms of the applicable collective agreement. It was this unfair labour practice element, among other features, on which the Board in Carroll Electric distinguished the decision in Total Marketing Incorporated, supra. In this case, however, the trade unions do not plead, and in argument expressly declined to allege, that DSL's alleged "shell" con­dition is the result of any attempt by the proposed respondents to remove assets from exposure to the unions' claims under their collective agreements or the Act or to frustrate collective bargaining or is otherwise the result of an unfair labour practice.

25. An applicant trade union is not entitled as of right to a declaration under subsection 1(4) when it is established that respondents carry on associated or related businesses under com­mon control or direction. Those conditions are merely the prerequisites to the exercise by the Board of a discretion to grant or withhold a single employer declaration. The Board will be guided ir~ the exercise of that discretion by its understanding of the labour relations purpose of the subsec­tipn. Subsection 1(5) casts on respondents an obligation to adduce all facts within their knowledge that are material to the allegation that they are or were under common control or direction. We agree with counsel for the unions that the adequacy of an applicant's pleading of that allegation should not ordinarily be the basis of a decision to dismiss before hearing the respondents~ evi­dence: Guaranteed Insulation '77 Limited, [1981] OLRB Rep. Oct. 1394. It does not follow, how­ever, that there are no circumstances in which the Board could dismiss a subsection 1(4) appli­cation before hearing the respondents' evidence.

26. Before hearing any evidence in a proceeding before it, the Board may (but is not obliged to) invite an applicant or complainant to state or set out in writing all of the material facts on which it relies in asking for the relief claimed, not just those facts which it may be obliged by a prescribed form, or by section 72 of the Board's Rules of Procedure, to particularize. Counsel for the unions concedes that the Board can do that in proceedings involving the application of subsec­tion 1(4). When it does so, it may consider whether, assuming the truth of the facts alleged, includ­ing the allegation that the respondents are or were at all material times carrying on associated or related activities or businesses under common control or direction, it would exercise its discretion under subsection 1(4) in the applicant's favour. That is the sort of inquiry on which the Termarg panel embarked with respect to the proposed addition of respondents to the subsection 1(4) appli­cation. We see nothing improper in its having done so, nor any reason to reconsider the result at which it arrived.

27. We engaged in the same sort of inquiry with respect to the questions considered here. At several points, we invited counsel for the unions to amplify what appeared in the documents filed, by asking questions in the form "Do you allege that ...?" Counsel's answers were often in the form "We have no evidence that ..." It is important to note here, as we did then, that when engag­ing in this sort of inquiry the Board's focus is not on what evidence the applicant may have or the likelihood that it can prove what it alleges, but merely on what the applicant chooses to allege. We do not denigrate in any way counsel's statement that he considers it would be irresponsible of him or his clients to make allegations, particularly allegations of wrong-doing, which he has no expecta­tion of proving. The fact remains that the purpose of hearing evidence is to determine whether contested allegations of fact are true. There is no reason to hear evidence if the only allegations an applicant makes would not, if proven or admitted, lead the Board to grant it the relief it seeks.

28. We are satisfied that the Termarg panel's decision that the Blacks and Argcen not be added as respondents to Local 414's subsection 1(4) application should not be disturbed on recon­sideration. We are also satisfied that that decision should now preclude Local 414 from adding Black and Hollinger as respondents in the subsection 1(4) applications before us on the facts it has alleged. Even if that decision were not preclusive for Local 414, we are satisfied that if all its alle­gations were proven true we would not exercise our discretion to include Black or Hollinger in any single employer declaration which might otherwise result in these matters. As Locals 545 and 579 rely on the same allegations in support of similar claims, we have come to the same conclusion with respect to their section 1(4) applications. Accordingly, the request of Locals 414 and 579 to add Black and Hollinger as respondents in the "old" subsection 1(4) applications is denied, and the "new~~ subsection 1(4) applications of all three unions are dismissed as against Black and Holling­er.

V

29. The argument of the questions addressed here proceeded on the implicit assumption that the unions have pleaded a prima facie unfair labour practice case against at least some of the entities it asks the Board to include in a single employer declaration. Had we concluded that Black and Hollinger were proper respondents to the unions' applications for a single employer declara­tion, we would have concluded that they were proper respondents to their section 89 complaints as well. That is because it can be argued that entities declared to be a single employer for the pur­poses of the Act are jointly and severally liable for breaches of the Act committed by any one of them during the period for which the declaration is effective. Because we have concluded that nei­ther Black nor Hollinger is a proper respondent to the subsection 1(4) applications, we must con­sider whether they are nevertheless proper respondents to the unions' section 89 complaints.

30. In the complaints before us, the complainant trade unions do not allege that either of the proposed respondents has planned, ordered or participated in any behaviour now alleged to constitute an unfair labour practice. The only basis on which the unions suggest that either Black or Hollinger could remain proper respondents to the section 89 complaint if they are not also res­pondents to the subsection 1(4) application is the theory that those who actively control a corpo­rate employer are personally liable for the wrongdoing of anyone acting on behalf of that employer even if they have not personally planned, ordered, committed or otherwise participated in that wrongdoing. In other words, counsel for the union argues that those who actively control a corpo­rate entity have a vicarious liability which is as broad as that of the employer itself. The sections which the unions say have been breached are sections 50, 64, 66 and 67. Nothing in the language of these sections supports the unions' proposed extension of vicarious liability to directors and con­trolling shareholders. While the language of sections 64 and 66 exposes persons "acting on behalf of an employer" to liability for their own personal behaviour and its consequences, that does not put such persons in the same position as employers with respect to the acts of other employees or agents of the employer. The unions have not alleged a prima facie case against either Black or Hol­linger under section 89 of the Act. Therefore, the applications of Local 414 and 579 to add Black and Hollinger as respondents to the "old" section 89 complaints is denied, and the three unions' "new" section 89 complaints are dismissed as against them both.

31. From the material filed in the Termarg case, it appears that this vicarious liability theory was the only basis on which Local 414 argued that the proposed respondents there were proper res­pondents to its section 89 complaint independent of any exposure created by its subsection 1(4) application. The breaches of the Act alleged there were broader than those alleged here. At that point, Local 414 took the position that the decision to close DSL's stores and the decision to embark on the franchise program through Willett both constituted violations of the Act, whereas at this point, the unions accept the finding in the RPKC case that those decisions did not violate the Act. Even in that context, however, Local 414 was not alleging direct participation in unfair labour practices by the then proposed respondents. With respect to the section 89 complaint, the particulars filed with the Termarg panel said only this:

We wish, in fairness, to make clear our position with respect to the Section 89 Complaint. We have no direct knowledge of any misconduct specifically attributable to those parties which it sought to add. The Complaint as drawn, alleges in effect, inter alia that the decision to embark upon the franchising scheme and, a fortiori, the decision to persist in it violated the pleaded sec­tions of the Labour Relations Act. It is our position that, in the circumstances of such a basic corporate decision which is alleged to be unlawful, the appropriate respondents include those who exercise direction and control of that organization.

This is the claim to which the Termarg panel was responding in paragraph 6 of its decision. Read in isolation from that context, that paragraph might be taken to imply that the Board will not grant apy remedy against a respondent whose behaviour otherwise contravenes the Act if that respon­dent is "an individual or 'person' acting on behalf of [a] corporate employer" unless "the corporate entity itself has disappeared, or has explicitly threatened to do so if a full measure of damages is cjaimed" or the respondent has engaged in "a course of conduct anywhere close to the exceptional circumstances causing the Board to consider" granting a remedy against the individual respondents in Sunnylea Foods, [1981] OLRB Rep. Nov. 1640. As it was not alleged before the Termarg panel that the proposed respondents or any of them had themselves planned, ordered or participated in behaviour alleged to constitute an unfair labour practice, any suggestion that the proposed respon­dents might not have been proper respondents even if such allegations had been made would have been obiter dicta. Even if, in its context, the language of paragraph 6 of the Termarg decision rep­resents anything more than a rejection of the theory of vicarious liability advanced by Local 414, faithfulness to principles analogous to doctrines of cause of action estoppel and issue estoppel would not have required us to conform to views expressed in obiter dicta. In any event, our deci­sion in this case does not rest on any notion that there are circumstances in which the Board will decline to inquire into a section 89 complaint against a respondent merely because that respondent is an individual or because that respondent is an officer or shareholder of a corporate employer. In both this and the Termarg case, it has been unnecessary to decide whether there are any such cir­cumstances.

32. In the result, neither Black nor Hollinger shall be or remain a respondent in, and their names shall hereafter be deleted from the titles of, these proceedings.

[Schedules "A" to "C" omitted: Editor]