Ontario Sheet Metal Workers Conference v. Ontario Hydro, 1986 CanLII 1490

Ontario Labour Relations Board

[1986] OLRB Rep. May 663

2445-83-M Ontario Sheet Metal Workers Conference, Applicant, v. Ontario Hydro, Respondent

BEFORE: Owen V. Gray, Vice-Chairman, and Board Members I. M. Stamp and C. A. Ballentine.

APPEARANCES: S.B.D. Wahl and George Ward for the applicant; Harvey A. Beresford, Steven L. Moate and W. S. O'Neill; Marc J. Somerville, Ian S. Campbell and Bob Goel for 3-L Filters Limited.

DECISION OF THE BOARD; May 12, 1986

Reasons for Decision

1. The applicant ("the union"), on behalf of Ontario locals of the Sheet Metal Workers' International Association, and the Electrical Power Systems Construction Association ("EPSCA"), an association of employers engaged in construction work in the electrical power systems sector of the construction industry, are parties to a first collective agreement ("the collective agreement") with effect from May 1982 to April 1984, in which EPSCA recognized the union as the exclusive bargaining agent for certain classifications of sheet metal workers engaged in construction work performed on Ontario Hydro property. Ontario Hydro ("Hydro") is one of the employers bound by the collective agreement.

2. After the collective agreement came into force, Hydro entered into a contract with 3-L Filters Limited ("3-L") for the purchase from 3-L of certain equipment - heavy water vapour recovery dryers - for use by Hydro in the construction of its Darlington nuclear generating station. The contract is a sizeable one, involving payment of several million dollars for the fabrication of units which are to be delivered at various times over a five year period. The performance of work under this contract has already begun, and the applicant says that 3-L's employees are performing sheet metal work of the sort contemplated by Article 18 of the collective agreement, which provides:

18.1 Where the word "shop'' is used in this Article, it shall be defined as a sheet metal shop under Agreement with the Sheet Metal Workers' International Association or one of its Local Unions or the Ontario Sheet Metal Workers' Conference. It being understood that such shops shall be shops using the yellow label of the International Association.

18.2 All sheet metal work at the option of the Employer shall be fabricated on the job site or in a shop.

18.3 Notwithstanding section 18.2 above, EPSCA and the Union acknowledge that packaged equipment, catalogue items and engineered assemblies may be supplied for installation. Such packaged equipment, catalogue items and engineered assemblies shall be installed by members of the Union in accordance with their jurisdiction as provided for in Article 8, Work Assignment, of this Agreement.

18.4 Both EPSCA and the Union acknowledge that situations may arise where the terms packaged equipment, catalogue items or engineered assembles may require interpretation. In such circumstances, this matter will be immediately referred to a permanent review panel consisting of three (3) members appointed by the Union and three (3)members appointed by EPSCA.

18.5 Nothing in this Collective Agreement shall be taken to interfere with the existing divisions of work in the plants of the employer or affiliated companies, or as established between the Sheet Metal Workers' International Association and other certified or recognized unions operating in the plants where special building products are produced.

3-L is not party to any collective agreement with the applicant or the Sheet Metal Workers International Association or one of its constituent local unions. In August 1983, the applicant filed a grievance under the collective agreement, alleging that these circumstances constitute a violation by Hydro of the collective agreement. Representatives of the applicant and respondent met thereafter in an unsuccessful attempt to resolve the grievance. On January 26, 1984, the applicant referred its grievance to this Board for arbitration pursuant to the provisions of section 124 of the Labour Relations Act, R.S.O. 1980, c. 228, as amended ("the Act"). The relevant portions of that section are as follows:

124.-(1) Notwithstanding the grievance and arbitration provisions in a collective agreement or deemed to be included in a collective agreement under section 44, a party to a collective agreement between an employer or employers' organization and a trade union or council of trade unions may refer a grievance concerning the interpretation, application, administration or alleged violation of the agreement including any question as to whether a matter is arbitrable, to the Board for final and binding determination.

(2) A referral under subsection (1) may be made in writing in the prescribed form by a party at any time after delivery of the written grievance to the other party, and the Board shall appoint a date for and hold a hearing within fourteen days after receipt of the referral and may appoint a labour relations officer to confer with the parties and endeavour to effect a settlement before the hearing.

(3) Upon a referral under subsection (I), the Board has exclusive jurisdiction to hear and determine the difference or allegation raised in the grievance referred to it, including any question as to whether the matter is arbitrable, and the provisions of subsections 44(6), (8), (9), (10), (11) and (12) apply with necessary modifications to the Board and to the enforcement of the decision of the Board.

3. The hearing of this referral was first scheduled for February 9, 1984, but the parties agreed to adjourn the hearing sine die pending further efforts at settlement. Those efforts were ultimately unsuccessful, and the hearing of this referral began on July 17, 1984. Counsel then spent some time defining for us the issues of fact and law which might have to be determined in these proceedings. The issues as the parties defined them can be organized into two categories. Issues in the first category address the question "what are the enforceable employer obligations under the collective agreement with respect to shop fabrication of sheet metal components?" Issues in the second category address the question 'do the circumstances of Hydro's contract with 3-L and of the performance of that contract fall within the scope of the employer's responsibility under the collective agreement, so as to amount to a breach by Hydro of that obligation?" The text of Article 18 of the collective agreement appears in two documents said by Hydro to be relevant issues in the first category. The first is a "Memorandum of Agreement" executed on October 20, 1982, by representatives of the union and EPSCA. The second is a "collective agreement" executed on December 21, 1982, after the first document was ratified. As it appeared in the Memorandum of Agreement, Article 18 had appended to it the following note:

Provisions of Article 18 will apply to all sheet metal goods and material purchased from tenders with a closing date of November 20, 1982, or later.

That note does not appear in the text of Article 18 as it appears in the document executed December 21, 1982. Hydro takes the position that its contract with 3-L resulted from a tender with a closing date prior to November 20, 1982. It says that the note which appeared in the Memorandum of Agreement forms part of the collective agreement between the parties, arguing that a collective agreement may be found in two or more documents and that, in all the circumstances, the Board should conclude in this case that the documents executed October 20 and 21, 1982, together constitute the parties' collective agreement. The union's position is that the document of December 21, 1982, alone constitutes the collective agreement between the parties. Hydro argues in the alternative that, if the union is right on the first issue, the Board has the jurisdiction to rectify the parties' agreement and should exercise it in this case and, in the further alternative, that the facts and circumstances in this case give rise to an estoppel which prevents the union from relying on Article 18 in circumstances to which it would not have applied had the note in question been reproduced in the final collective agreement document. The union says that the Board has no jurisdiction to rectify a collective agreement and that the facts do not support the application of the doctrine of estoppel.

4. The first issue in the second category of issues is whether the equipment purchased by Hydro from 3-L can be described as "purchased from tenders with a closing date of November 20, 1982, or later", even if the critical note does influence, by one means or another, the interpretation or application of Article 18 of the parties' collective agreement. The remaining issues in the second category all require a detailed examination of the nature of the work being performed by 3-L under its contract with Hydro, in order to assess, for example, whether the subject matter of Hydro's contract with 3-L is properly described, as Hydro claims, as "packaged equipment" or "engineered assemblies" within the meaning of Article 18.3. In that connection, to complete the example, the union proposes to argue that determination of that issue is within the exclusive jurisdiction of the review panel provided for in Article 18.4, and that the failure of a majority of that panel to conclude that the subject matter of the 3-L contract was within the exceptions provided for in Article 18.3 is conclusive that it does not.

5. At the Board's hearing of July 17, 1984, the parties were in agreement that the Board should, if it could, adjudicate all of the issues in the first category and the first issue in the second category before hearing evidence and argument with respect to the balance of the issues in the second category. The parties then felt that their evidence and argument on these "preliminary issues", as the parties referred to them, could be severed from, and would be considerably less extensive than, evidence and argument in connection with the remaining issues, that the Board's determination of these "preliminary issues" might be dispositive and that, in any case, a determination of those issues would assist the parties in further attempts to settle their dispute. The union took the position that the first issue in the first category -the identification of the document or documents constituting a collective agreement between the parties - could and should be disposed of before any of the other "preliminary issues", and that in the course of so doing the Board should place limits on the extent to which it was prepared to hear evidence of the course of negotiations leading to the execution of the collective agreement document(s). Hydro argued that the Board's initial hearings should deal with all of the preliminary issues together. Hydro also took the position that the Board's hearing should be adjourned in order to give notice of these proceedings to 3-L. Counsel for Hydro advised the Board that he had first thought of this point the previous evening and had not yet made any effort to notify 3-L himself, but proposed to do so at the earliest opportunity.

6. After hearing the submissions of counsel with respect to the issues involved in this arbitration and the manner in which the Board should proceed to hear and dispose of their differences over those issues, we ruled orally that the Board would not hear evidence and argument on the first preliminary issue separately from the others, nor would it rule in advance on the scope of the evidence which it would entertain with respect to any of those issues. This ruling made it necessary to adjourn the hearing of the arbitration, as neither party was prepared to proceed with the hearing together of all of the preliminary issues. Accordingly, it was unnecessary for the Board to rule whether it would adjourn its proceedings in order that 3-L could be given notice, or determine whether the Board should give 3-L notice, since counsel for Hydro had indicated that he would be giving 3-L notice of the Board's continuation dates. In consultation with the parties, a series of dates commencing November 19, 1984, were set aside for the hearing of the "preliminary issues".

7. As a result of Hydro's subsequent communication with 3-L, 3-L wrote to the Board requesting a hearing to determine whether it would be granted "status" in these proceedings. The requested hearing was scheduled for and conducted on October 22, 1984. In support of his application, counsel for 3-L sought to introduce evidence to establish that there was a contract with Hydro, that 3-L had been performing its obligations under that contract and that in the course of doing so it had designed and engineered custom products to suit Hydro's needs in a way which resulted in 3-L's having proprietory or industrial property rights in its designs. The Board asked the applicant and respondent to say whether those facts could be agreed upon. The applicant would agree only that there was a contract between 3-L and Hydro. Hydro agreed that there was a contract and that engineering was involved, but was not prepared to agree that 3-L retained any proprietory or industrial property rights in respect of the design of products delivered to Hydro pursuant to that contract. Counsel for 3-L explained that the existence of these alleged propriety or industrial property rights was important to his argument, and that 3-L's concern about those rights was that if the union succeeded in the arbitration, Hydro might cancel its contract with 3-L and misappropriate 3-L's design in order to complete or have another contractor complete the fabrication of the heavy water vapour recovery dryers which 3-L had contracted to supply. The Board then ascertained that neither the applicant nor the respondent opposed the Board's assessing 3-L's application for standing as an intervener on the assumption that it did have the propriety rights it claimed; this obviated any need for counsel to call the proposed evidence.

8. Counsel for 3-L argued that the Board should follow the approach the courts take when they determine whether a party can or should be added in a proceeding, and referred the Board to the following cases: Union Natural Gas Co. v. Chatham Gas (1917) 1917 CanLII 516 (ON SCAD), 40 O.L.R. 148 (Ontario C.A.); Amon v. Raphael Tuck & Sons [1956] 1 Q.B. 357; Starr and Township of Pus/inch et al (1976) 1976 CanLII 870 (ON HCJ), 12 O.R. (2d) 40 (Ont. Div. Ct.); Looker v. Imperial Oil Limited [1944] O.W.N. 167 (Ont. H.C.); Moser v. Marsden, [1892] 1 Ch. 487 (Eng C.A.); Westgate v. Sudbury Rand Mines Ltd. [1940] O.W.N. 258; and, Re Schofield and Minister of Consumer and Commercial Relations, (1980) 20 OR. (2d) 764 (Ontario C.A.). All but the last mentioned decision dealt with the application of Rule 136 of the then Ontario Rules of Practice under the Judicature Act, R.S.O. 1980, c. 223, or its predecessors or the equivalent rule in England. The relevant portion of Rule 136 provided:

136(1) The court may, at any stage of the proceedings, order that the name of a plaintiff or defendant ... that any person who ought to have been joined, or whose presence is necessary in order to enable the court effectually and completely to adjudicate upon the questions involved in the action, be added ...

The Schofield case dealt with the application of Rule 504a of the then Ontario Rules of Practice, which provided:

504a. Any person interested in an appeal to the Court of Appeal between other parties may, by leave of the Court, the Chief Justice of Ontario or the Associate Chief Justice of Ontario, intervene therein upon such terms and conditions and with such rights and privileges as the Court, the Chief Justice or the Associate Chief Justice may determine.

9. Counsel for 3-L relied particularly on the decision in Union Natural Gas Co. v. Chatham Gas Co., supra, which he said was factually analogous to the circumstances of this case. The plaintiff in that case was a producer of natural gas. The defendant distributed the plaintiff's natural gas in the City of Chatham. The plaintiff and defendant were parties to a contract of some complexity which defined, inter a/ia, the plaintiff's obligation to supply natural gas to the defendant and the circumstances in which the defendant could and would distribute and sell that gas. The defendant had entered into a subsequent contract with the Dominion Sugar Company to supply it with natural gas it obtained from the plaintiff. The plaintiff took the position that the performance by the defendant of its obligations under the agreement with the Dominion Sugar Company violated the provisions of the plaintiff's agreement with the defendant. In proceedings to which the Dominion Sugar Company was not a party, the trial Judge granted an injunction restraining the defendant from supplying gas to the Dominion Sugar Company until further court order. In the decision cited by 3-L, the appeal court set aside the trial decision and directed a new trial in which Dominion Sugar Company was to be added as a party. Counsel submitted that, because Hydro might cancel its contract with 3-L if the applicant succeeds in this referral, 3-L's position is analogous to that of the Dominion Sugar Company in Union Natural Gas Co. v. Chat ham Gas Co., supra.

10. Counsel for 3-L argued that the test we ought to apply is as set out by Lord Denning, with respect to the English equivalent of Rule 136, in Gurtner v. Circuit et al., supra, at p. 595:

it seems to me that when two parties are in dispute in an action of law, and the determination of that dispute will directly affect a third person in his legal rights or in his pocket, in that he will be bound to foot the bill, then the court in its discretion may allow him to be added as a party on such terms as it thinks fit. By so doing, the court achieves the object of the rule. It enables all matters in dispute to "be effectually and completely determined and adjudicated upon" between all those directly concerned in the outcome.

This test was quoted with apparent approval in Re Starr and Township of Pus/inch et al., supra, where Mr. Justice Grange reviewed a number of authorities and made these observations (at page 46):

I can only conclude from these cases that there is no absolute rule that for a party to be added he must have a direct interest in the very issue to be determined. It is, I think, sufficient in the words of Lord Denning, supra, that the "determination of that dispute will directly affect a third person in his legal rights or in his pocket". I also believe that it is clear from the cases that even when the applicant satisfies that condition it is entirely discretionary in the Court whether he will be allowed to intervene or not, and the Court may always decline the application where it considers that the interest of the applicant is already adequately represented. I think we should adopt the caveat of Lieff, J., supra, and lay down no fixed rule, but I do believe that in this instance, where the very enterprise of the applicants will be in danger of prohibition and where both applicants appear to have acted in reliance on the official plan that is now attacked, they should be permitted to intervene.

Counsel for 3-L argued that 3-L would be "directly affected" by a decision in the applicant's favour in this referral, and that the Board should therefore permit it to participate as a party in these hearings.

11. Counsel for 3-L acknowledged this Board's decisions in Napev Construction Limited & Vepan Leaseholds Limited, [1976] OLRB Rep. Mar. 109 ("Napev #1") and Napev Construction Limited, [1979] OLRB Rep. Sept. 886 ("Napev #2"). In Napev #1, the union with bargaining rights for employees of Napev, "Local 2", applied pursuant to subsection 1(4) of the Act for a declaration that the respondents Napev and Vepan be treated as one employer for the purposes of the Act. It also made a concurrent referral to arbitration, under what is now section 124 of the Act, of a grievance alleging breach by Napev of a provision of its collective agreement with Local 2 which required that Napev let sub-contracts only to individuals or companies whose employees were members in good standing of unions affiliated with the Toronto Building Construction Trades Council. Napev was the general contractor on a construction project in Oakville. It had let a sub-contract to the respondent Vepan. Vepan had then entered into a further sub-contract with Prime Construction Limited for performance of masonry work. Prime was party to a collective agreement with "Local 1", a union which was not affiliated with the Toronto Building and Construction Trades Council. Prime and Local 1 were not given notice of Local 2's application under ss. 1(4) and referral under s. 124. On October 7, 1975, the Board determined that Napev and Vepan were related employers and declared that they would be treated as one employer for the purposes of the Act. The Board also declared that Napev and Vepan were bound by the collective agreement in question, and that any sub-contract of work by either Napev or Vepan to tradesmen or employers of tradesmen who were not members in good standing of unions affiliated with the council constituted a breach of the agreement. The Ontario Divisional Court later noted that:

... the effect of the Board's decision was to require Vepan to terminate the subcontract with Prime, which it did about October 10, 1975, and the employees who were members of Local 1 left the job site at Oakville. Vepan then entered into a new contract with a different sub­contractor for the masonry work. The masonry work at the job was substantially completed by April 22, 1976, and all work on the project, with the exception of certain minor deficiencies, was completed by February 25, 1977.

On November 7, 1975, Local 1 applied to the Board to be added as a party to the application and requested that the Board reconsider its decision of October 7, 1975. It confined its request for intervention to the proceedings under subsection 1(4) of the Act, conceding that it had no status to intervene in the arbitration proceedings referred to the Board under what is now section 124. In its decision of March 19, 1976, dismissing Local l's reconsideration request, the Board said:

14. The parties of prime and direct interest in proceedings under section 1(4) are the companies said to be associated or related (in this case Napev Construction Limited and vepan Leaseholds Limited), their respective employees, unions demonstrating representational rights for their employees, or unions who are bargaining agents for employees of the named corporations (in this case, the applicant). The parties directly affected by the decision of the Board under section 1(4) of the Act are therefore the applicants and the respondents in the original application. These are the parties of interest within the meaning of the Act.

15. Where attempts have been made to intervene in certification proceedings, the Board has consistently held that, in order to safeguard the rights of parties originating proceedings, and with a view to eliminating delay by parties claiming an interest, a would-be intervener must meet certain requirements. These requirements are deemed necessary in the field of industrial relations where time is indeed of the essence in order to avoid delay, multiplicity of proceedings and frustration of the purposes of the Act by parties who have no real representative status with respect to the employer and the employees involved. The Board has always required that an intervener must be either an employee in the bargaining unit to which the proceedings relate or a union holding representational authorization from one or more persons in the bargaining unit, or be the bargaining agent for employees in the bargaining unit. In the absence of these requirements, intervention has been denied.

16. In the present case, Prime Construction is not one of the related or associated companies named in the application under section 1(4), and this for obvious reasons. Furthermore, the persons whom Local I purports to represent are not employees of either Napev or Vepan but are in fact employees of the subcontractor, Prime. They are therefore not employees in the bargaining unit affected by the Board's decision under section 1(4). Local 1 therefore fails to meet the requirements for intervention referred to above. These requirements have application to the present circumstances.

17. There is a rule at common law which states that a person who would only be commercially and incidentally injured by a judgement is not entitled to be made a party to an action on the ground of such prospective injury. (See Moser v. Marsden (1892), 1 Ch. 487 at 490 (CA.).) The plaintiff in that case was the patentee of a machine and brought an action against the defendant for using a machine which he alleged was an infringement of his patent. The foreign manufacturer of the machine applied to be added as a defendant alleging that a judgment in the action would injure him and that the defendant would not properly defend the action. The court held that the foreign manufacturer was not directly interested in the issues between the plaintiff and the defendant, but would only be indirectly or commercially affected and consequently had no right to intervene.

18. This case has been followed in Ontario in Westgate v. Sudbury Rand Mines Ltd., (1940) OWN. 258 (Master Barlow) at 259:

The law is neatly stated in Holmsted, 5th ed., p. 656 as follows:

'A person who would be commercially and incidentally, but not legally and directly, injured by a judgment being obtained against the defendant in an action, is not entitled, on the ground of such prospective injury, to be made a party to the action.'

See Moser v. Marsden, (1892) 1 Ch. 487.

19. On consideration of the foregoing and the relevant evidence, the Board finds that Local 1 was at all material times lacking in status as a party having an interest within the meaning of the Act enabling it to notice of and participation in the 1(4) proceedings in this matter. Furthermore, the determination sought and made under section 1(4) clearly could not disturb the bargaining relationship between Local 1, its members, and Prime Construction. In any event, any injury that might have been anticipated at the commencement of the proceedings

or which may have occurred as the result of the decision of the Board could only arise commercially and incidentally but not legally and directly. In addition, the claims of Local 1 are too remote in time and in law to warrant its addition as a party to these proceedings.

Local 1 then sought judicial review of this decision, on the ground that the Board had committed a jurisdictional error in denying it status, either by failing to give effect to the provisions of the Labour Relations Act and regulations or by "failing to observe the principles of natural justice that required that anyone likely to be affected adversely by a decision of a tribunal should be given an opportunity to be heard." The Divisional Court dismissed the application (in an unreported decision dated May 24, 1977), noting that:

In our view, the Board should be considered as master of its own practice and procedure and should be considered as having exclusive authority and jurisdiction to determine the rights or status of any person to intervene and to participate in any proceedings before the Board. We are satisfied that the Board did afford the parties a full hearing and there was no denial of natural justice in that respect. We are satisfied not only that the Board acted within its jurisdiction, but that the conclusion of the Board that Local I had no status was based on sound principles.

(emphasis added)

12. Napev #2 involved the referral to the Board by Local 2 of a grievance that Napev had sub-contracted certain masonry work to Venice Masonry Contractors (Toronto) Limited ("Venice"), which employed members of Local 1, in violation of Local 2's collective agreement with Napev. Local 2 requested both damages against Napev and an order directing Napev to either perform the work itself with members of Local 2 or sublet the work to another firm which employed members of Local 2. Local 1, Venice, and the contractors' association to which Venice belonged all sought standing as interveners when the hearing of the merits of this grievance began. The Board dismissed those applications for standing, setting out its reasons in paragraph 5 of the decision:

5. None of the interveners is party to, or bound by, the collective agreement alleged to be binding upon Local 2 and Napev. Although they may be incidentally or commercially affected by a determination as to the merits of the grievance, that is not a sufficient basis to accord them status. See: Napev Construction Limited and Vepan Leaseholds Limited, [1976] OLRB Rep. March 109. Further, the fact that a jurisdictional dispute has been alleged by the interveners does not, in our view, open the way for them to participate in a hearing on the merits of the grievance in that they still remain strangers to the alleged collective agreement. Accordingly, we are satisfied that the interveners do not have status to participate in a hearing on the merits of the grievance.

An application by Local 1 for reconsideration of this decision was dismissed at [1980] OLRB Rep. Jan. 74.

13. Counsel for 3-L argues that the position of the proposed intervener in Napev #1 is distinguishable from his client's position because in Napev #1 the Board's decision reflects no suggestion and makes no finding that the Board's proceedings would "directly affect" the proposed intervener's legal rights or interfere with its contractual relations. He draws our attention also to the concluding words of the decision of the Divisional Court on judicial review, in which Mr. Justice Griffiths observed:

Finally, I might mention, we have some doubt in any event as to whether there still remains any lis or dispute between the parties requiring adjudication. As I indicated earlier, the job at the Oakville site has long been completed, and it is very difficult for us to understand in what way Local 1 would now be affected and in what way Local I would now obtain any meaningful relief if this matter were sent back to the Board for a further determination.

Counsel draws from this the further distinction that the work in question here is still going on. With respect to Napev #2, counsel for 3-L submits that, on a review of the Board's decision, it appears that the proposed interveners failed to argue that their legal or contractual rights would be "directly affected" by the arbitration proceedings in which they sought to intervene.

14. Counsel for 3-L also sought to distinguish the decision of the Board in Abitibi -P rice Inc., now reported at [19841 OLRB Rep. Sept. 1155. In that case, the applicant trade union sought certification with respect to journeymen and apprentice plumbers and pipe fitters employed by the respondent in the ICI sector of the construction industry. The application raised a threshold issue whether the respondent operated a business in the construction industry so as to make it an employer within the meaning of section 117(c) of the Labour Relations Act. The Mechanical Contractors Association of Ontario sought to intervene on two grounds: first, that it was the employer bargaining agency which would be obliged to bargain on the respondent's behalf under the provisions of the Labour Relations Act if the application were successful and, second, that the threshold issue addressed the distinction between maintenance work and construction work, an issue which was important to the M.C.A.O. and its members. Counsel for 3-L drew our attention to paragraph 22 of that decision:

22. The Board finds nothing in the submissions of the parties to persuade it that the MCAO or its members will be legally and directly injured or prejudiced by the Board's determination of the threshold issue of whether the respondent operates a business in the construction industry. Nor does the Board find anything in the submissions of the parties to persuade it to exercise its discretion to determine its own practice and procedure to make the MCAO a party to the proceedings. In the result, the Board is satisfied that the issue of whether the respondent operates a business in the construction industry will be fully and fairly argued by the parties to this application.

Counsel for 3-L says that his client's interest can be distinguished from the interests of the M.C.A.O., and those of the proposed interveners in the other Board decisions, in that it has an existing ongoing legal relationship with Hydro which would be directly and adversely affected if the applicant were to succeed in this arbitration.

15. Counsel for Hydro advised the Board that he was instructed not to take a position on the legal issues raised by 3-L's application and that his client took no objection to the participation of 3-L in all respects in this hearing, should the Board see fit to grant it standing. He noted that as counsel for Hydro he was not in a position in this arbitration to represent the views or wishes of 3-L. He suggested that the Board should weigh the benefit of having a party in 3-L's position participate in an arbitration of this sort when the contractual arrangements in question are complex.

16. Counsel for the applicant advised the Board that his client was not requesting any remedy which would "directly" affect the contractual relations between Ontario Hydro and 3-L. He emphasized that the applicant was not seeking any form of injunctive relief. He said the applicant was asking only for a declaration that the collective agreement had been violated and an award of damages, and not for a cease and desist direction. If the applicant were successful in this arbitration, he submitted, the consequences for 3-L and its relations with Hydro would be determined by Hydro, and not by this Board.

17. Counsel for the applicant questioned the Board's jurisdiction to permit intervention. He argued that section 124 of the Act defines exhaustively the persons who may participate in the hearing of an arbitration referred to the Board under that section. In any event, he submitted, 3-L's position was indistinguishable from the position of Venice in Napev #2, and it was no more entitled to standing than Venice had been. He noted that the court cases referred to by counsel for 3-L focus closely on the nature of the relief sought in the proceedings before the court, and that the courts tended to add parties directly affected by injunctive relief which, he noted, was not sought in this case. Counsel argued that the issue of 3-L's assumed propriety rights in the design of the items being delivered to Hydro was a "red herring." He argued that if Hydro' s response to success by the applicant in this arbitration was to cancel the contract with 3-L and retender the balance of the work, it could require contractors to do their own design work.

18. Counsel for the applicant acknowledged that employees in the bargaining unit covered by a collective agreement may, in some circumstances, be entitled to participate in arbitration proceedings concerning that agreement and to receive notice of them as if they were parties: Re Hoogendoorn and Greening Metal Products Screening Equipment Co. et al., (1968), 1967 CanLII 20 (SCC), 65 D.L.R. (2d) 641, [1968] S.C.R. 30 (S.C.C.) and Re Bradley et al. and Ottawa Professional Firefighters Association et al., 1967 CanLII 160 (ON CA), [1967] 2 O.R. 311, 63 D.L.R. (2d) 376 (Ont. C.A.). They have that right, in certain circumstances, because they are bound by the terms of the collective agreement as a matter of law. Conversely, those who, like 3-L, are not bound by the collective agreement do not have the right to participate in or have notice of hearing of an arbitration under that collective agreement: Westroc Industries Ltd., (1974) L.A.C. (2d) 61 (Beatty) at pp. 73-74.

19. This Board is not a court with an inherent jurisdiction to deal with any legal dispute which may exist between the parties who appear before it. The Board derives its jurisdiction from the Labour Relations Act, which provides in subsection 102(13) that:

(13) The Board shall determine its own practice and procedure but shall give full opportunity to the parties to any proceedings to present their evidence and to make their submissions, and the Board may, subject to the approval of the Lieutenant Governor in Council, make rules governing its practice and procedure and the exercise of its powers and prescribing such forms as are considered advisable.

Section 79 of the Board's Rules of Procedure, R.R.O. 1980, Reg. 546, provides:

79. The Board may direct that any person be added as a party to a proceeding or be served with any document, as the Board considers advisable.

Although on a referral under section 124 the Board acts as "an arbitrator to which ... the Labour Relations Act applies" within the meaning of section 3(2)(d) of the Statutory Powers Procedure Act, R.S.O. 1980 c.484, the Board's jurisdiction and procedure are still determined by those provisions of the Labour Relations Act and Rules of Procedure which govern the Board's proceedings generally: Re International Association of Heat & Frost Insulators & Asbestos Workers Local 95 and Master Insulators Association of Ontario et al. (1979), 1979 CanLII 1622 (ON HCJ), 25 O.R. (2d) 8 (Ont. Div. Ct.), and Ontario Erectors Association et al. v. International Union of Operating Engineers, Local 793, (1980) 2 A.C.W.S. (2d) 307 (Ont. Div. Ct.)

20. Section 79 of the Board's Rules of Procedure impose no express limit on the circumstances in which the jurisdiction to add a party may be exercised, leaving it entirely in the discretion of the Board. This section of the Rules would be inapplicable to arbitration referrals only if it were inconsistent with the language of section 124 of the Act. There is no inconsistency. Section 124 requires that an applicant be a party to the collective agreement, but it is silent as to who may be a party respondent or intervener. As the Board observed in Ontario Hydro, [1978] OLRB Rep. Mar. 304 at paragraph 7:

7. .... It is well settled that a person whose interests may be directly and adversely affected by an adjudication in respect of a collective agreement is a proper party to those proceedings notwithstanding that he may not, strictly speaking, be one of the two parties to the collective agreement. In that circumstance a board of arbitration has a duty to give notice of its proceedings to the person or company in question and to afford them a full opportunity to participate. (Re Bradley and Ottawa Professional Fire Fighters Ass 'n, (1967) 1967 CanLII 160 (ON CA), 63 DLR (2d) 376 (Ont. CA.), Re Hoogendoorn and Greening Metal Products and Screening equipment Co., (1968) 1967 CanLII 20 (SCC), 65 DLR (2d) 641 (S.C.C.).) Thus the parties to a collective agreement and the parties to proceedings relating to that agreement need not always be one and the same. And that is so no less under section 1 12a [now s. 1241 of The Labour Relations Act than in other arbitration proceedings.

In that case the Board held that Ontario Hydro was a proper party to a referral to arbitration of a grievance that Hydro had violated the provisions of a collective agreement between the Ontario Allied Construction Trades Council and EPSCA. The Hoogendorn and Bradley cases illustrate that persons other than parties signatory to a collective agreement will have the right to participate in an arbitration thereunder if they are bound by the agreement and their own rights thereunder are directly in question and may be determined in the arbitration. There is no discretion in such cases to permit or deny standing as an intervener when it is sought by such persons - they are entitled to participate as of right. Since it involves the exercise of a discretion, the Board's power under section 79 of its Rules of Procedure obviously extends to persons other than those entitled to participate as of right. As we understood its submission, 3-L did not claim it had a right to standing but, rather, that we had a broad discretion to grant it standing - a discretion which we should exercise in their favour in the circumstances of this case.

21. While it was well understood by all involved, it is worth noting here that the undoubted right of either the applicant or the respondent to involve 3-L in these proceedings as a source of evidence relevant to the issues either of them raised before the Board was not in question here. The question raised by 3-L's motion was whether 3-L had or would be given the same right to participate as a party. Having regard to the analysis in Napev #1 of which the Divisional Court approved and the similar analysis in the other Board decisions referred to earlier, we were and are satisfied that 3-L was not entitled to standing as of right. We were and are also satisfied that we did have a discretion to grant 3-L standing if we considered it appropriate to do so.

22. In deciding how to exercise its discretion to permit intervention by a person not entitled to intervene as of right, the Board must be sensitive to the nature and limits of the jurisdiction it exercises in the particular proceedings before it and, for that reason, cautious about drawing analogies with the courts' experience in exercising a facially similar discretion. One of the factors weighed by the courts in many of the cases cited by counsel for 3-L was that the effect on the proposed intervener of the result sought by one of the parties before the court might become the subject of subsequent legal proceedings in the same court involving the proposed intervener and one or more of the original parties; thus, by adding the proposed intervener the court could bind it to the result and so avoid a multiplicity of proceedings. The Board's permitting intervention in its proceedings could only avoid a multiplicity of proceedings if the potential proceedings involve matters within the Board's jurisdiction. As the Board's jurisdiction is considerably narrower than that of the courts, there will be a narrower range of cases in which avoidance of a multiplicity of proceedings can weigh in favour of granting intervener status. This is clearly not one of those cases, as 3-L took the position that this Board would have no jurisdiction to resolve any of the legal issues which would or might arise between it and Hydro should this referral be decided in the applicant's favour.

23. Apart altogether from the fact that we could not adjudicate the rights inter se of the respondent and proposed intervener if the latter were permitted to participate as a party in this proceeding, there are other important distinctions between the facts of this case and those in Union Natural Gas Co. v. Chatham Gas, supra. There, the trial judgement enjoined the defendant from fulfilling its obligations under its contract with the sugar company which the appeal court ruled ought to be a party to the action. As the appeal court observed about the trial decision:

This adjudication virtually annuls the sugar company's agreement, or at all events deprives that company of any right to specific performance, and places it under such a disability that it cannot make an agreement with the defendants except by the permission of the Court....

Hydro's primary obligation to 3-L is not to supply goods, but to pay money. No decision the Board would or could make in this referral would enjoin Hydro from paying money to 3-L. It is hard to see how any such decision would deprive 3-L of a right (if it would otherwise have one) to specific performance or to any other remedy for breach by Hydro of its agreement with 3-L. In the Union Natural Gas case, the appeal court noted that the agreement between the defendant and the sugar company was not merely an agreement for the supply of natural gas generally but for the supply of the particular gas obtained by the defendant from the plaintiff pursuant to the terms of the agreement between the latter two parties. The terms of that agreement were recited in the defendant's contract with the sugar company, the defendant's obligation to supply gas under the latter contract was conditional on its being able to obtain it from the plaintiff pursuant to the terms of its agreement with the plaintiff and the sugar company's contract with the defendant gave it the right to act in the defendant's name to compel supply under the agreement between the defendant and the plaintiff. The appeal court observed that:

... these provisions distinguish this case from others in which it might be said that a contract for the supply of a commercial article between two parties may be attacked in litigation between them without bringing in a sub-purchaser or a person to whom the purchaser is to hand over the article bargained for under the contract. In that case the remedy would be in damages, and the sub-purchaser would be expected to go into the market and supply himself. Here, however, while such a course might be open and might be taken by the sugar company – see Erie County Natural Gas and Fuel Co. v. Carroll, [1911] A.C. 105 - the other rights given by the contract would entitle the sugar company to a larger remedy than mere damages. Besides this, if the learned trial Judge's view of the relations of the plaintiffs and defendants, as that of partners, is sustainable, then there is all the more reason why the outsider should be heard in his own interest, and not left in the lurch in the settlement of the partnership difference.

3-L's contract with Hydro is not intertwined in these ways with the collective agreement before us here. 3-L did not argue that its contractual or proprietary rights under or arising out of the performance of its contract with Hydro were in any way contingent on the scope of Hydro's collective agreement obligations. It may be that Hydro might cancel its contract with 3-L if this referral were decided in the applicant's favour, but that possibility exists independent of these proceedings, and it was not suggested that Hydro's obligations to 3-L upon cancellation would be altered by a Board decision in the applicant's favour.

24. Proceedings before this Board under section 124 were intended by the Legislature to be an analogue of the private arbitration process which section 44 of the Act requires be provided for in each collective agreement as the final mechanism for resolving disputes over its interpretation, application, administration or alleged violation. This arbitration process is intended to be private and expeditious. The concern for expedition is particularly reflected in the prompt hearing requirements of section 124. The need for expedition will ordinarily militate against permitting intervention by a third party not entitled to participate as of right. Common sense suggests, and experience confirms, that the time consumed in hearing a matter will increase if the number of participants increases, because the mechanics of conducting and even scheduling the hearing become more complex. The essential nature of grievance arbitration as a private system for dispute resolution also militates against permitting intervention by a third party not entitled to participate as of right.

25. Craigmont Mines Limited, [1979] 1 Can. LRBR 222, involved an application under section 108 of the British Columbia Labour Code, which affords "a party affected by the decision or award of an arbitration board" the right to apply to the B.C. Labour Relations Board for review of the award. Employees of Craigmont represented by the United Steelworkers of America (the "Steelworkers") had refused to cross a picket line established at Craigmont's premises by another union, the Canadian Association of Industrial Mechanical and Allied Workers ("CAIMAW"). An arbitration proceeding involving Craigmont and the Steelworkers resulted in an award declaring that the employees' refusal to cross CAIMAW's picket line constituted a violation of the "no-strike" clause of the collective agreement between Craigmont and the Steelworkers. CAIMAW, which had not been a party to those arbitration proceedings, claimed to be a "party affected" by the award and applied to the BCLRB for review under section 108 of the B.C. Labour Code. In that context, the B.C. Board observed (at pages 225 and 226):

... The broad philosophical assumption which underlies the grievance arbitration system established in that Part of the Code - an assumption which really underlies the whole of collective bargaining - is that the relationship between an employer and a trade-union should be one of self determination, subject only to those kinds of external controls or influences as may be absolutely essential to the general public interest. Employers and trade-unions are encouraged to create their own private law in the form of collective agreements. They are free as well to fashion their own private systems for the resolution of grievances. The bargaining table understandings they reach may create immediate or potential problems for others: e.g. restrictions on contracting-out, non-affiliation clauses, and the like. Similarly, arbitration boards selected by the parties to interpret and apply those provisions may produce awards which have a major impact on outsiders to the relationship. Nevertheless, it could not be seriously argued that those outsiders have any right to participate in the initial bargaining, or that they have the legal right to either initiate or intervene in the subsequent arbitration proceedings. It would come as something of a surprise, then, to discover that the legislature had opened the door to those "affected outsiders" at a final, review stage - i.e. so that they could seek to have set aside an award with which the parties, for whatever reasons, are apparently content.

... One can imagine a variety of cases where "affected outsiders" would welcome the opportunity to make an application under Section 108(1). Two examples were given earlier; contractors affected by interpretations of contracting out provisions, or third parties affected by interpretations of non-affiliation clauses. Surely the legislature did not intend that those outsiders should be entitled to insinuate themselves into the private law of the parties through the vehicle of section 108(1).

The legal issue with which the B.C. Board dealt in Craigmont is different from the issue here. There the question was whether someone not bound by the collective agreement under which an arbitration board is constituted may be a "party affected" so as to have the right to initiate review of the board's award. Here the question is whether a discretion to permit intervention in arbitration proceedings ought to be exercised in favour of someone not bound by the collective agreement with which the arbitration proceedings are concerned. Despite those differences, however, the labour relations considerations which the B.C. Board took into account in dealing with the question before it are appropriate considerations in dealing with the issue before us. While some arbitrators have found that the existence of a jurisdiction to permit intervention is not per se inconsistent with the nature of rights arbitration under a collective agreement (see, for example, Re British Columbia Institute of Technology and College of New Caledonia (1979), 1979 CanLII 3977 (BC LA), 24 LAC (2d) 129 (Hope)), the exercise of such a jurisdiction seems to have been confined to circumstances in which the proposed intervener is an employee or trade union interested in an issue which might affect the intervener in other labour arbitration proceedings with the same employer party: Somerville Industries Ltd., (1969) 1969 CanLII 1452 (ON LA), 20 L.A.C. 404 (Palmer) and Re Canadian Union of Public Employees, (1982) 4 L.A.C. (3d)

385 (Swinton); and see Re Omega Marble Co. Ltd., (1971) 1971 CanLII 1956 (ON LA), 22 L.A.C. 221 (Johnston).

26. Having regard to the nature of the grievance arbitration process, when sitting as an arbitration board under section 124 of the Labour Relations Act this Board should not permit intervention by persons who are not entitled to standing as of right except when the special circumstances of the proposed intervener make it desirable from a labour relations perspective to permit such intervention. No such circumstances were demonstrated here. Accordingly, by telegram dated November 14, 1984, the parties and 3-L were advised that, for reasons to be delivered at a later date, the application of 3-L Filters Limited for standing as an intervener in the hearing of this arbitration referral was dismissed. These are the reasons then promised.