The United Food & Commercial Workers International Union, Local 206 v. Knob Hill Farms Limited, 1990 CanLII 5649

Ontario Labour Relations Board

[1990] OLRB Rep. February 169

0542-86-R; 0035-86-U The United Food & Commercial Workers International Union, Local 206, Applicant v. Knob Hill Farms Limited, Respondent v. Group of Employees, Objectors; The United Food & Commercial Workers International Union, Local 206, Complainant v. Knob Hill Farms Limited, Respondent

BEFORE: Ken Petryshen, Vice-Chair, and Board Members G. O. Shamanski and R. Wilson.

APPEARANCES: Joanne L. McMahon and Ronald Springall for the applicant/complainant; Michael Gordon and Howard Wood for the respondent; Michael Horan and Donna Baydak for the objectors.

DECISION OF KEN PETRYSHEN, VICE-CHAIR, AND BOARD MEMBER R. WILSON; January 31, 1990

1. This is an application for certification. By decision dated December 22, 1987, the Board (G. O. Shamanski dissenting), pursuant to section 8 of the Labour Relations Act, certified the United Food and Commercial Workers International Union, Local 206 ("Local 206") as the bar­gaining agent for a bargaining unit of Knob Hill Farms Limited ("Knob Hill") employees. By let­ter dated January 4, 1988, Knob Hill applied for reconsideration of this decision, and for reasons set out in a decision dated March 2, 1988, the Board declined to reconsider its December 22, 1987 decision. The Board now has before it a further request for reconsideration by Knob Hill which was made on its behalf by counsel in a letter dated November 14, 1988. In addition to this further request from Knob Hill, the Board has before it requests for reconsideration from Local 206, the United Food and Commercial Workers International Union, Local 175 ("Local 175") and the United Food and Commercial Workers International Union ("the UFCW"). As reflected in a decision dated October 24, 1989, the Board decided at a hearing on August 29, 1989 that it would proceed first with Knob Hill's request for reconsideration. We note that counsel acting on behalf of the trade unions took the position that their requests for reconsideration would only be advanced if Knob Hill's request succeeded. Counsel for the trade unions indicated that they would be seeking leave to withdraw their requests if Knob Hill's request was dismissed.

2. Subsequent to receiving Knob Hill's request dated November 14, 1988, the Board received extensive written submissions from the parties. The Board entertained Knob Hill's request for reconsideration at a hearing held on August 29 and November 2 and 3, 1989. Knob Hill placed before the Board extensive documentation and on November 2 and 3, 1989 called a number of witnesses to give evidence. The Board entertained submissions from the parties during the after­noon of November 3, 1989. In dealing with Knob Hill's request for reconsideration, the Board has considered the parties' written submissions, the documentary evidence the oral evidence and the parties' oral submissions.

3. In order to describe the context in which Knob Hill's reconsideration request arises, we will briefly refer to the relevant events. Local 206 applied for certification as bargaining agent for a bargaining unit of employees of Knob Hill at Oshawa on May 23, 1986. The application was opposed by Knob Hill and a group of employees represented by Donna Baydak. The application was heard over the course of 14 days of hearing in the period from August 5, 1986 to February 19, 1987. Local 206 was represented during the course of this proceeding by the firm of Ahee & Asso­ciates. As noted above, the Board's decision certifying Local 206 pursuant to section 8 of the Act issued on December 22, 1987.

4. While Local 206's application for certification was before the Board, certain develop­ments occurred within the UFCW. For our purposes, we find it unnecessary to set out these devel­opments in detail in this decision and note that they are referred to extensively in Knob Hill Farms Limited, [1989] OLRB Rep. Feb. 149. Suffice it to say that there had been discussions for a num­ber of years within the UFCW to merge a number of the Ontario locals of the trade union. In May 1986, the International's President and the International's Secretary-Treasurer wrote to the Secre­tary-Treasurer of Local 206 granting Local 206 permission to enter into merger discussions with Locals 175, 409 and 486. Along with the letter was enclosed a document referred to as the "UFCW merger procedure". One of the steps to be followed by UFCW's chartered bodies contemplating merger as set out in this document is that the charter and seal of the chartered body going out of existence shall be surrendered to the International Union. On August 8, 1986, the Presidents of Locals 175, 206, 409 and 486 agreed in writing to recommend to their respective Executive Boards that they adopt a merger resolution. The merger resolution was approved at membership meet­ings, although employees of Knob Hill who had become members of Local 206 were not given notice of and did not attend any such meeting.

5. Given the timing of the ratification of the merger by the local unions, the merger with Local 175 was to become effective on November 1, 1986. Mr. Springall, who was President of Local 206 during the relevant period and who continues to be President of that Local, recognized that it was his obligation after November 1, 1986 to take the steps necessary to accomplish what the merger agreement contemplated. Over a period of time, all the steps but a few have been com­pleted. The assets of Local 206 have been transferred to Local 175. Bargaining rights were trans­ferred for most of Local 206's bargaining units to Local 175. The employees of Local 206 were transferred to Local 175 no later than January 1, 1987. Mr. Springall is the only officer Local 206 has and Local 206 has held no meetings since October 1986. Most significantly, however, Local 206 has not surrendered its charter. Mr. Springall does not intend to surrender the charter until all steps have been taken to give effect to the merger agreement. Local 206 members employed at Knob Hill have not been transferred to Local 175.

6. Subsequent to its decision of December 22, 1987, there have been a number of proceed­ings before this Board involving Knob Hill and Local 206, which we also find unnecessary to detail. We note that in some of these proceedings Local 175 asserted that it had the bargaining rights for the employees of Knob Hill and that this assertion was supported by Local 206. In the matter we referred to earlier, Knob Hill Farms Limited, supra (the "second reference"), the Board (R. W. Pirrie dissenting), pursuant to a ministerial reference under section 107(1) of the Labour Relations Act, advised the Minister that he did have the authority to appoint a conciliation officer on the basis of a request from Local 206. In submitting that the Board should advise the Minister he had no such authority, Knob Hill and the objecting employees argued that Local 206 had ceased to exist, that Local 206 was no longer a trade union within the meaning of the Act and that Local 206 was not at that time the trade union to which the Board would have thought it was granting exclu­sive bargaining rights in the decision of December 22, 1987. In response to these submissions, the Board determined that Local 206 did not cease to exist since its charter was neither surrendered nor revoked as contemplated by the UFCW constitution. In arguing that Local 206 was not a "trade union" within the meaning of the Act, Knob Hill and the objecting employees referred to its failure to hold meetings, its lack of assets, the significant decrease in its membership and the fact that it had only one officer. In distinguishing between inactivity and non-existence, the Board determined that Local 206 continued to exist as a trade union within the meaning of the Labour Relations Act. The Board's response to the third position put to it was as follows:

7. Finally, there was the argument that when it made its request to the Minister, Local 206 was not the trade union the Board certified or thought it had certified in December 1987. This argu­ment turned also on the changes in assets and numbers of members which Local 206 had under­gone between the time it applied for certification and the time it applied to the Minister for an appointment of a conciliation officer. There is no suggestion that there is some other entity which is the same organization as was certified by the Labour Relations Board in December of 1987. The argument seems to be that to be and remain certified a trade union must not only con­tinue to exist but must maintain the size and wealth it had when it applied for certification. The Labour Relations Act places no such limitation on the continuation of a trade union's bargaining rights. Indeed, the whole thrust of the Act is that the continuation of a trade union's bargaining rights for a bargaining unit is something which is ultimately determined by the employees in that bargaining unit. It would be inconsistent with that perspective that a trade union could lose bar­gaining rights for employees of one bargaining unit because it had lost (or, perhaps, gained) bar­gaining rights in a number of other bargaining units because of the wishes of the employees in those other units.

8. The fact that Local 206 intends ultimately to go out of the business of representing employ­ees does not affect its current right to represent the employees in the subject bargaining unit. It has not abandoned its right to represent employees in that unit, nor has it abandoned its obliga­tions in that regard. It has not gone out of existence as a trade union and it does not intend to go out of existence so long as it continues to have bargaining obligations.

In determining that the Minister did have authority to appoint a conciliation officer at Local 206's request, the Board concluded in summary that "at the time it made its request to the Minister, Local 206 continued to exist as a trade union with the bargaining rights which had been conferred on it by the Board in December of 1987 with respect to the employees of Knob Hill Farms

7. Local 206 argued that Knob Hill's request for reconsideration was untimely and that this in itself should cause the Board to dismiss its latest reconsideration request. Counsel for Local 206 submitted that Knob Hill had knowledge of the facts upon which its reconsideration request was based months before it applied for reconsideration as a result of disclosures made by Local 206 in other proceedings before the Board. In reviewing the timing of events relied upon by Local 206 in support of its timeliness objection, we are not satisfied that the circumstances before us concern­ing any delay on the part of Knob Hill in making its latest reconsideration request should cause us to dismiss this request.

8. The position of Knob Hill can be summarized as follows. It appears that part of its request for reconsideration was initially based on the proposition that Local 206 ceased to exist. In a written submission prior to the hearing in early November 1989, and at that hearing, Knob Hill advised the Board that it does not dispute the existence of Local 206 in this proceeding. Counsel for Knob Hill characterized the reconsideration request in essence as an application under section 58 of the Labour Relations Act. That section provides that the Board may declare at any time that a trade union no longer represents employees in a bargaining unit if a trade union has obtained a certificate by fraud. Counsel argued that by applying for certification, Local 206 represented to the Board that it intended to represent the employees of Knob Hill in collective bargaining. Counsel submitted that if any material change occurred while a matter was before the Board, there was an obligation on a party to advise the Board accordingly. The internal union developments in 1986 and the fact that at least by August 1986 Local 206 intended to merge with Local 175 are matters which counsel argued should have been brought to the Board's attention by Local 206 or its coun­sel as soon as possible and certainly no later than December 22, 1987, the date when the Board issued its decision. It is argued that the failure of Local 206 or its counsel to bring these facts to the Board's attention deprived the Board of the opportunity to satisfy itself with respect to certain matters. The failure to disclose material facts, such as Local 206's capacity and desire to bargain, amounts to fraud since it is submitted that a failure to disclose where there is an obligation to do so constitutes a misrepresentation, which in the circumstances also constitutes fraud. Counsel argued that the failure of Local 206 or its counsel to disclose material facts resulted in the Board not hav­ing before it relevant information which would impact on the way in which the Board exercised its discretion. Counsel noted that there was no direct evidence that the firm Ahee & Associ­ates had any direct knowledge of the merger, but submitted that the rumours which Mr. Ahee heard con­cerning a merger should have caused him to make an inquiry, which in turn, should have resulted in certain disclosures being made to the Board.

9. During the course of Mr. Springall's evidence before us, he referred to the rights of MACC's (members awaiting contract coverage). Over the objection of Local 206's counsel, the Board allowed Mr. Horan, acting for the objecting employees, to ask certain questions about MACC's and to make certain submissions relating to this evidence. Mr. Springall testified that the concept of MACC's is not provided for in either the UFCW constitution or Local 206's by-laws, but was a procedure used by Canadian locals of the UFCW. MACC's do not pay dues and do not have all of the rights of those members who are covered by collective agreements and who pay dues. MACC's can vote to ratify or strike with respect to their own employer but are not permitted to vote concerning other Local issues. It was for this reason that Local 206 members employed at Knob Hill were not notified of the meeting called to approve the merger resolution.

10. Counsel for the objecting employees noted that the evidence disclosed that the subject of the quality of membership did not arise during the Local 206 organizing campaign at Knob Hill so that one could not argue that Local 206 misrepresented to the Knob Hill employees what status they would have as members. However, counsel argued that the concept of MACC's is not given any constitutional foundation within the UFCW. As well as not being members in a constitutional sense, the employees at Knob Hill who signed Local 206 membership cards are qualitatively in an inferior position when compared to active members. Counsel argues that even if they are mem­bers, this latter factor should have an impact on how the Board exercises its discretion under sec­tion 8 of the Act.

11. In determining the issues before us, we turn first to the argument made on behalf of the objecting employees. Member and membership is defined in section 1(1)(l) of the Labour Relations Act as follows:

1.-(1)(l) "member" when used with reference to a trade union, includes a person who,

(i) has applied for membership in the trade union; and

(ii) has paid to the trade union on his own behalf an amount of at least $1 in respect of initiation fees or monthly dues of the trade union,

and "membership" has a corresponding meaning.

The Board was satisfied at the time and continues to be satisfied that Local 206 filed membership evidence which conformed with the Act's definition of "member". On the basis of the evidence before us, including the membership evidence filed by Local 206, the Board determined that the pre-conditions to section 8 relief had been met and exercised its discretion to certify Local 206 pur­suant to that section. At the time it issued its decision on December 22, 1987, the Board was unaware that Local 206 treated the employees who signed Local 206 membership cards as MACC's. After considering the submissions of counsel for the objecting employees, the Board is satisfied that the evidence before us relating to the MACC's does not affect our determination that the pre-conditions to section 8 have been met, nor does it cause us to exercise differently our dis­cretion under that provision. The Board's finding with respect to membership is made in order to ascertain what percentage of employees in the bargaining unit desire a particular trade union to represent them in collective bargaining. Given the Act's definition of member, it is unnecessary to determine whether a person is a member according to the trade union's constitution or, given the circumstances in this case, what quality of membership a person will enjoy. The Board is satisfied that at all material times the persons on whose behalf Local 206 filed membership evidence were members of Local 206 within the meaning of section 1(1)(l) of the Act. Having considered the rep­resentations of the objecting employees to be a request for reconsideration, that request is denied for the above reasons.

12. In responding to Knob Hill's request for reconsideration, we note that the documentary material, the oral evidence and the submissions lead us to adopt the same conclusions as the majority of the panel of the Board that decided the second reference. The Board finds that at the time it certified Local 206 on December 22, 1987, Local 206 had not ceased to exist (a matter which no party takes issue with in this proceeding), and it had not ceased to be a trade union within the meaning of the Labour Relations Act. Knob Hill's reconsideration request is based on facts which came to its attention subsequent to the certification decision and it argues that these facts should have been brought to the Board's attention by Local 206 or Ahee & Associates. Hav­ing the benefit of these additional facts before us, the Board concludes that they would not alter the determinations made by the Board in its decision of December 22, 1987. Since Local 206 con­tinued to exist as a trade union on December 22, 1987 and at all relevant times, the additional information does not affect our conclusion that the pre-conditions of section 8 have been met, nor does it alter our conclusion that the circumstances warranted the exercise of our discretion to cer­tify Local 206 pursuant to section 8 of the Act.

13. Knob Hill's argument in support of its position that Local 206 and/or Ahee & Associ­ates are guilty of fraud within the meaning of section 58 of the Act is based on the proposition that material changes in circumstances occurred which obliged Local 206 and Ahee & Associates to dis­close certain facts to the Board. Given that the additional facts were not material, as they would not have changed the result in the certification decision, we do not accept the assertion that Local 206 or its counsel had an obligation to disclose them to the Board. Further, and in any event, the material and evidence does not support the conclusion that Local 206 or Ahee & Associates are guilty of fraud. In our view, the only representation one can infer from the fact that Local 206 applied for certification is that Local 206 desired the bargaining rights for the employees of Knob Hill. The fact that Local 206 or its solicitor did not advise the Board prior to the certification deci­sion that Local 206 intended to merge with Local 175 and intended that this merged Local would bargain for the Knob Hill employees does not lead to the conclusion that there has been a misrep­resentation which in turn can be characterized as fraudulent. The facts before us, particularly the evidence of the trade union officials called to testify, do not disclose an intent on the part of Local 206 or its solicitor to deceive the Board. Accordingly, Knob Hill's application for reconsideration is dismissed, as well as its application under section 58 of the Act.

14. In December 1988, a petition was filed with the Board by the objecting employees. On March 1, 1989, in an endorsement, the Board indicated that it had some difficulty in appreciating the basis upon which it should give the petition any weight given the stage of the proceedings. In the endorsement, the Board also indicated that it would give the parties the opportunity to make representations concerning the petition when the reconsideration requests were heard. When the reconsideration requests were heard, the Board invited the parties to make representations con­cerning the December 1988 petition if they so desired. In effect, no party wished to make any such representation. Counsel for the objecting employees simply noted that the petition was another indication that certain bargaining unit employees did not want Local 206 to represent them. The Board is satisfied that the petition filed by the objecting employees in December 1988 is untimely and irrelevant given the stage of the proceedings at which it was filed (see section 73 of the Board's Rules of Procedure). Accordingly, the petition will be given no weight.

15. Having regard to the disposition of Knob Hill's request for reconsideration, the recon­sideration requests of the trade unions referred to in paragraph 1 of this decision are withdrawn with leave of the Board.

DECISION OF BOARD MEMBER G. O. SHAMANSKI; January 31, 1990

1. I dissent.

2. From the evidence adduced at the hearing of this matter it was clearly established that on August 6, 1986, the Presidents of Local 175, 206, 409 and 486 agreed in writing to recommend to their respective Executive Boards that they adopt a merger resolution with respect to creating one large Local namely Local 175.

3. It should be noted at this juncture that certification proceedings before the Board were being heard.

4. The fact that Local 206 officials or its solicitors did not advise the Board prior to the certification decision that Local 206 intended to merge with Local 175 and that this merged Local would bargain for Knob Hill employees does in my opinion equate to misrepresentation and deception on the Board which is tantamount to fraud.

5. Accordingly, I would allow the company's application for reconsideration and in accor­dance with section 58 of the Act declare that Local 206 no longer represents the employees of Knob Hill.