International Brotherhood of Electrical Workers, Local 1687 v. F.D.V. Construction Limited

[1986] OLRB Rep. May 617

1398-83-R; 1399-83-R; 1503-83-M; 0916-84-U International Brotherhood of Electrical Workers, Local 1687, Applicant, v. F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction, and 556631 Ontario Limited carrying on business as G.P. Construction, Respondents; International Brotherhood of Electrical Workers, Local 1687, Applicant, v. F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction, 556631 Ontario Lim­ited carrying on business as G.P. Construction, and The Electrical Trade Bargaining Agency of the Electrical Contractors Association of Ontario, Respondents; Interna­tional Brotherhood of Electrical Workers, Local 1687, Complainant, v. F.D.V. Con­struction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction, 556631 Ontario Limited carrying on business as G.P. Construction, Wil­liam Moffat and Graham Pope, Respondents

BEFORE: R. A. Furness, Vice-Chairman, and Board Members W F. Rutherford and W. H. Wightman.

APPEARANCES: Michael Mitchell, Steven Barrett, Lou Popovich, Gary Bouchard and L. Lyman for the applicant; Raimo T. Heikkila and William Moffat for F.D.V. Construction Lim­ited, 515112 Ontario Limited carrying on business as Bluebird Construction and William Moffat; Lorenzo Girones and Graham Pope for 556631 Ontario Limited carrying on business as G.P. Construction; S.C. Bernardo and Eryl Roberts for The Electrical Trade Bargaining Agency of the Electrical Contractors Association of Ontario.

DECISION OF THE BOARD; May 20, 1986

[Paragraphs 1 to 18 inclusive omitted: Editor]

19. During the course of the hearings in this matter counsel for FDV and Bluebird raised a preliminary objection regarding the jurisdiction of the Board to deal with the appli­cant's request for an order under section 1(4) of the Act. This preliminary objection may be stated as follows:

Section 1(4) of the Act which allows the Board to declare that two or more employers may be treated as one for the purposes of the Act infringes the guarantee of freedom of association provided in section 2(d) of the Canadian Charter of Rights and Freedoms. Since this infringement cannot be justified under section 1 of the Charter as a reasonable limit in a free and democratic society, section 1(4) of the Act is unconstitutional and of no force and effect and thus the Board should refuse to proceed with the applicant's request for an order under section 1(4) of the Act.

The Board has stated in Third Dimension Manufacturing Limited, [1983] OLRB Rep. Feb. 261 that there is an obligation on the Board to deal with and determine a constitutional issue which has been raised before it. It was argued by counsel that section 1(4) is discretionary with respect to the issuance of a declaration even though all the statutory preconditions may be present. It was emphasized by counsel that the criteria employed by the Board to exercise its discretion is not contained in the Act. Counsel pointed out that the Board had in fact developed criteria over a series of cases decided over a number of years. Section 2(d) of the Canadian Charter of Rights and Freedoms provides that:

Everyone has the following fundamental freedoms:

(d) Freedom of association.

20. Section 2(d) is qualified by section 1 which provides as follows:

The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

Counsel argued that declarations under section 1(4) interfered with the freedom of employees to choose the bargaining agent desired by the majority of employees or to remain non-union. Counsel argued that there was no question that the Labour Relations Act does contain limits or infringements other than section 1(4) on the freedom of association enjoyed by employees. However, as viewed by counsel, the key issue was whether a particular limit is a reasonable limit prescribed by law as can be demonstrably justified in a free and democratic society. Counsel relied on a number of authorities and quoted other sections of the Act in support of his argument on the constitutionality of section 1(4) of the Labour Relations Act.

21. The applicant referred to section 35 of the Judicature Act, R.S.O. 1980, c.223 which provides in subsection 1:

where in an action or other proceeding the constitutional validity of any act or enactment of the Parliament of Canada or of the Legislature is brought into question, it shall not be adjudged to be invalid until after notice has been given to the Attorney General for Canada and to the Attorney General for Ontario.

The applicant relied on Butler v. York University and Ontario Labour Relations Board, (1984) 1 O.A.C. 60 where the Divisional Court refused to hear the applicant's argument that sections 43 and 46 of the Labour Relations Act contravene the right to freedom of religion and conscience as set out in section 2(b) of the Charter, and so were unconstitutional, on the grounds, inter alia, that there was a complete absence of notice to the Attorneys-General as required by section 35 of the Judicature Act. Even though counsel for FDV and Bluebird subsequently gave notice to the Attorney General as required by section 35 of the Judicature Act, the Board concludes that at the time the constitutional validity of section 1(4) was called into question, the Board was without jurisdiction to adjudicate upon the constitutional validity of the related employer provisions in the absence of proper notice to the Attorneys-General.

22. The applicant also raised another issue with respect to the standing of counsel for FDV and Bluebird to challenge the constitutional validity of section 1(4). The applicant argued that the respondents did not assert that section 1(4) interfered with their constitutionally protected rights, but rather with the constitutionally protected rights of others. The applicant relied on a number of cases where the courts had been reluctant to permit an employer to invoke on behalf of other persons, and in particular, on behalf of employees, rights which did not belong to the employer but did belong to other persons. Having regard to the decision of the Supreme Court of Canada in Canada Labour Relations Board and Transair Limited, (1976) 1976 CanLII 170 (SCC), 67 D.L.R. (3d) 421 and Cunningham Drug Stores Limited v. B. C. Labour Relations Board, (1973) 1972 CanLII 143 (SCC), 31 D.L.R. (3d) 459, the Board finds that FDV and Bluebird do not have the standing to raise the constitutional validity of section 1(4) of the Act.

23. However, if the Board is wrong with respect to the requirements of section 35 of the Judicature Act and is further wrong with respect to the standing of FDV and Bluebird to raise the constitutional validity of section 1(4), the Board will proceed to deal with the challenge on the basis of its merits. The applicant argued that it was impossible to determine whether any statutory provision infringed upon a right or freedom guaranteed by the Charter without a clear understanding of the purpose, operation and effect of the statutory provision in question, both in relation to the overall legislative scheme of which it is part and relation to the impact it has on the person whose constitutional rights are allegedly contravened. The applicant further argued that section 1(4) empowered the Board to treat two or more business entities as constituting one employer for the purposes of the Labour Relations Act only where each of the three following preconditions have been met:

24. There is more than one corporation, individual, firm, syndicate or association involved;

25. The activities or businesses must be under common control or direction; and

26. The related or associated activities or businesses must be carried on by the employers concerned.

It was argued by the applicant that one of the main purposes for which section 1(4) was enacted was in order to protect the choice made by a majority of the employees of an employer to be represented by a bargaining agent. Further, upon employees choosing to be represented in their dealings with their employer through a certified bargaining agent, the certified union was granted bargaining rights which attached to the business activities which gave rise to the employer-employee relationship. The applicant reasoned that it was in order to preserve the union's bargaining rights, and therefore to protect the decision of a majority of the employees to be represented by a trade union, that section 1(4) was enacted.

24. The purpose of section 1(4) of the Labour Relations Act is to preserve the bargaining rights of a trade union and therefore to protect the decision of a majority of employees to be represented by a trade union. In the absence of section 1(4), the selection made by employees to be represented by a specific trade union could and would be undermined and destroyed by an employer's decision to create subsequent non-union companies and to perform part or all of its business activities which were previously carried out by the unionized company through a non-union company or through non-union companies either by diverting work or transferring work from the unionized company to non-union companies. Section 1(4) is part of an overall scheme contained in the Labour Relations Act which include certification, termination and unfair labour practice provisions for affording to employees the right to bargain collectively with their employer through a certified trade union of their choice and also for protecting this right from the conduct of an employer which either incidentally or intentionally destroys the collective bargaining rights which employees have acquired pursuant to the Labour Relations Act.

25. In our view, the position of employees in a related non-union company to which a certified employer's business has been transferred is no different from that of employees hired by an employer after an employer's work force has chosen to be represented by a trade union as a result of the Board's certification under section 7 of the Act. Section 1(4) does not prevent employees from bringing timely applications to terminate a trade union's bargaining rights or prevent another trade union from making an application to displace an incumbent trade union. The purpose of section 1(4) is to protect existing bargaining rights and the Board has been given a discretion to exercise in the issuance of a declaration under section 1(4) only so as to advance the purpose of preserving bargaining rights which have been obtained in conformity with the Labour Relations Act. In our view, the provisions of section 1(4) do not interfere with the right of employees to select a bargaining agent as and when a majority of such employees so desire. When a trade union has been certified as a bargaining agent, its bargaining rights extend to the business carried on by the employer who has been certified. When such an employer, for whatever reason, chooses to operate his business through another vehicle separate from the one which was active at the time of the certification, the desire of the majority of his employees to be represented by a trade union would be frustrated in the absence of a provision of the type represented by section 1(4). Section 1(4) underlines the right of employees to select their own bargaining agent as desired by a majority through the processes of certification under the Labour Relations Act. The Board finds that section 1(4) of the Act does not contravene section 2(d) of the Charter because it preserves the freedom of association rather than denying it. The objections of counsel for FDV and Bluebird to the constitutionality of section 1(4) is therefore denied by the Board.

26. Having regard to the evidence and representations before it, the Board finds that associated or related activities or businesses are carried on by FDV, Bluebird and GP. The next criterion to be determined under the provisions of section 1(4) is whether they are under common control or direction. In Walters Lithographing, [1971] OLRB Rep. July 406, the Board stated the following criteria in determining whether there is common control or direction: (i) common ownership or financial control; (ii) common management; (iii) interrelationship of operations; (iv) representation to the public as a single integrated enterprise and (v) centralized control of labour relations. While counsel for FDV and Bluebird objects to the Board's jurisdiction, he concedes that the necessary preconditions exist with respect to FDV and Bluebird for a declaration under section 1(4). The Board agrees with this assessment. With respect to the first criterion of common ownership or financial control, the Board decided in Evans-Kennedy Construction Ltd., [1979] OLRB Rep. May 388 that in order for there to be common control or direction it was not necessary that there be common ownership. In the case before the Board the ownership of FDV, Bluebird and GP has been deliberately presented and arranged so as to give the appearance of unrelatedness. In all of the circumstances, the Board finds that there is overall financial control of FDV, Bluebird and GP by Mr. Moffat. With respect to the second criterion of common management, the evidence abundantly supports a finding that these three companies all had the same common management, exercised through Mr. Moffat, Mr. Beardesley and Mr. Yantstew. With respect to the third criterion of interrelationship of operations, it is again quite clear that these three companies were more than capable of taking over and substituting one for the other on any project which any one of them was doing. With respect to the fourth criterion of representation to the public and as a single, integrated enterprise, the evidence on this supports a finding that there was a representation to the public of being different enterprises, notwithstanding the reality of the situation. With respect to the fifth criterion of centralized control of labour relations, the conduct of Mr. Moffat in seeking to keep one step ahead of the applicant and in marshalling the employment by the companies, indicates that the centralized control of labour relations was exercised by Mr. Moffat through Mr. Yanisiew. In considering all of these criteria the Board finds that FDV, Bluebird and GP are under common control and direction. In B rant Erecting and Hoisting, [1980] OLRB Rep. July 945 there was similarly an ease of transfer of work and a similar importance of a single principal to more than one integrated enterprise. The Board finds that the criteria set forth in section 1(4) has been satisfied and declares that FDV, Bluebird and GP were and remain bound by the collective agreement from the time that FDV first entered into collective bargaining with the International Brotherhood of Electrical Workers, Local Union 1687 and with respect to Bluebird and GP from the date of their incorporation.

27. Having regard to the evidence before it, the Board is not prepared to find that there was a sale of a business with respect to FDV, Bluebird and GP or any of them within the meaning of section 63 of the Labour Relations Act.

28. Having regard to the evidence and representations before it and pursuant to the provisions of the Labour Relations Act, the Board makes the following declarations and orders:

I On or about April of 1982 and continuing thereafter, F. D. V. Construction Limited and 515112 Ontario Limited carrying on business as Bluebird Construction have carried on associated or related activities or businesses under common control or direction and on or about June 1983 and continuing thereafter, F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G.

P. Construction have carried on associated or related activities or businesses under common control or direction.

II F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction are bound by the collective agreement between the Electrical Trade Bargaining Agency of the Electrical Contractors Association of Ontario and the International Brotherhood of Electrical Workers and the International Brotherhood of Electrical Workers Construction Council of Ontario.

III F D. V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction shall forthwith apply the terms and conditions of the said collective agreement to such projects covered by the said collective agreement which F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G.

P. Construction were, are or will be engaged.

IV F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction, William Moffat and Graham Pope have violated sections 64 and 66 of the Labour Relations Act.

V F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction, William Moffat and Graham Pope shall forthwith cease and desist from violating sections 64 and 66 of the Labour Relations Act.

VI F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction, 556631 Ontario Limited carrying on business as G. P. Construction, William Moffat and Graham Pope shall forthwith comply with the terms and conditions of the said collective agreement, in accordance with the provisions of the Labour Relations Act, and employ and continue to employ members in good standing of the International Brotherhood of Electrical Workers, Local Union 1687 and to hire such employees through the International Brotherhood of Electrical Workers, Local Union 1687 to perform the work covered by the said collective agreement at the projects at which they may now or hereafter be engaged in accordance with the said collective agreement.

VII F.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction, William Moffat and Graham Pope shall forthwith apply the terms and conditions of the said collective agreement to all employees who perform work covered by the said collective agreement at any of the projects that which it may now or hereafter be engaged.

VIIIF.D.V. Construction Limited, 515112 Ontario Limited carrying on business as Bluebird Construction and 556631 Ontario Limited carrying on business as G. P. Construction, William Moffat and Graham Pope shall be jointly and severally liable to pay damages by reason of violations of the said collective agreement, including any charges, interest or penalties with respect to any unpaid amount of wages, benefits, contributions, deductions, allowances and other required payments, pursuant to the said collective agreement.

29. The Board has no authority to award costs as requested by the applicant and the request for its costs in the form of damages is dismissed.

30. The Board directs FDV, Bluebird and GP to each post a copy of the attached notice after being duly signed by the representative of FDV, Bluebird and GP, respectively, in a conspicuous place on their projects where it is likely to come to the attention of the employees in the bargaining unit. The notices are to remain posted for 60 consecutive working days on the projects or for an aggregate period of 60 days where FDV, Bluebird and GP engaged in projects which do not extend over a period of 60 days, reasonable steps shall be taken by FDV, Bluebird and GP to ensure that the notice is not altered, defaced or covered by any other material. Reasonable physical access to the project shall be given by FDV, Bluebird and GP to a representative of the International Brotherhood of Electrical Workers, Local 1687 SO that the International Brotherhood of Electrical Workers Local 1687 can satisfy itself that this posting requirement is being complied with.

31. The Board remains seized of these matters pending the agreement of the parties on the damages and consequent amounts payable to the International Brotherhood of Electrical Workers, Local 1687 and on any issue regarding the implementation of the declarations and orders. The Registrar is directed to list for hearing Board File No. 1503-83-M at the request of any of the parties hereto.

[Notice to Employees omitted.' Editor]