[1990] OLRB Rep. November 1107
2790-89-R; 2791-89-R United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local Union 463, Applicant v. Andreynolds Company Limited and Bill Bailey of Belleville Limited, Respondents
BEFORE: Louisa M. Davie, Vice-Chair, and Board Members W. Gibson and R. R. Montague.
APPEARANCES: A. Ahee and B. Christie for the applicant; D. A. Whyte and G. Reynolds for the respondents.
DECISION OF THE BOARD; November 11, 1990
In Board File 2790-89-R, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local Union 463 ("U.A.") seeks a declaration pursuant to section 63 of the Labour Relations Act ("the Act") that there has been a sale of all or part of the business from Andreynolds Company Limited ("Andreynolds") to Bill Bailey of Belleville Limited ("Bill Bailey") and that Bill Bailey is thus the successor employer. At the conclusion of the hearing counsel for the U.A. made no submissions in respect of this application. Having regard to the evidence before us the application in Board File 2790-89-R is dismissed.
In Board File 2791-89-R, the U.A. has applied to the Board for a declaration that the two corporate respondents are one employer within the meaning of section 1(4) of the Act. In that application the corporate respondents concede that the statutory conditions precedent to the Board's jurisdiction are present. They admit that the corporate entities carry on associated or related activities under common direction or control but submit that we should exercise our discretion and not make the single employer declaration by reason of the U.A.'s delay in filing this application.
Andreynolds was incorporated in 1968. Since its incorporation it has carried on business as a mechanical contractor in the construction industry in Belleville, Trenton and the surrounding area. Since its incorporation, Andreynolds has been bound to successive collective agreements with the U.A (Local 320 and its successor Local 463), the International Brotherhood of Electrical Workers Local 115 and the Sheet Metal Workers International Association, Local 269. The majority of its business is in the ICI sector of the construction industry.
In or around 1972 - 1973, representatives of Andreynolds acquired an interest in the already existing Bill Bailey enterprise. Witnesses called on behalf of the corporate respondents candidly admitted that one of the reasons Andreynolds acquired an interest in Bill Bailey was to enable it to bid competitively on "non-union" jobs. Bill Bailey is not, and in the past has not been, bound to any collective agreement with any trade union. Since at least 1974, Bill Bailey has also carried on business as a mechanical contractor in the ICI sector of the construction industry in Belleville, Trenton and surrounding areas. It has either directly employed or engaged by way of sub-contract journeymen or apprentice electricians, sheet metal workers, and plumbers.
Since 1977 Bill Bailey and Andreynolds have been wholly under common direction or control. Since that time (and indeed before then) the two companies have followed separate but parallel paths, each performing as mechanical contractors in the construction industry. Andreynolds performed its work in the unionized segment of the construction industry. Bill Bailey carried on business in the non-unionized segment of the construction industry as a "non-union" contractor.
Each company has three separate divisions - an electrical division, sheet metal division and a "mechanical" or "plumbing" division. Throughout the hearing the witnesses used the terms "mechanical" and "plumbing" divisions interchangeably although it is commonly understood that "mechanical" construction industry work encompasses more than just. "plumbing work" and generally includes, inter alia sheet metal work. For ease of reference we will refer to the "mechanical" division as the "plumbing" division and refer to the business of both Andreynolds and Bill Bailey as mechanical contracting. The managers of each of the three divisions are common to both companies. Over the years the electrical and sheet metal divisions of each of the two companies has generated the highest volume of work for the companies.
The two companies have operated side by side since approximately 1972. Since 1979 the companies have operated from the same premises. A large sign along the top of the building has the names of both companies on it. Below the name of the companies the words "Electrical, Plumbing, Sheet Metal and Air Conditioning" appear without any apparent delineation. There is thus no indication that one company performed exclusively in the "electrical" area while another only does "plumbing" work. Within the physical environment of the office there is also no indication that certain offices are exclusive to either company. Neither is there any indication that management and staff in that office are exclusive to either company.
The companies each have separate telephone listings, separate bank accounts, separate payroll records and other office records. Office and managerial staff are generally paid by the holding company which owns both Andreynolds and Bill Bailey. The two corporate respondents are each "charged" a fee proportionate to the amount of work managerial staff perform on behalf of each company.
Each of the corporate respondents has its own employees. All of the Andreynolds construction employees are members of the applicant union or another construction trade union and are engaged through the union hiring halls. None of the Bill Bailey employees are members of the applicant union or any other union.
The sources of work for the two companies are basically the same. Contracts are obtained either through requests to tender from general contractors, requests to tender from private institutions or Government bodies, advertisements in the Daily Commercial News or local newspapers, or the Construction Association of Belleville. It is not uncommon for both Andreynolds and Bill Bailey to receive a request to tender on particular projects. The companies do not however "compete" against each other and would not both tender on the same project.
In determining which of the two companies will tender on any particular project, management of the two companies first determine who their competition for that particular project is or is likely to be. Over the past several years, the majority of the plumbing work in the Belleville area has been awarded to non-union contractors. When originally incorporated in 1968 Andreynolds was one of three major unionized mechanical contractors in the Belleville area. Since that time however one of the other unionized mechanical contractors has gone out of business while the other mechanical contractor is performing more maintenance and service work. As a result Andreynolds finds that it is unable to compete against its non-union competitors for a number of jobs because of its higher wage rates. In those instances Bill Bailey tenders on the project. On other occasions the general contractor will require the mechanical contractor to use unionized labour in which case Andreynolds tenders on the project.
If Andreynolds is successful in obtaining the contract it employs union members to perform the work.
If Bill Bailey is successful in obtaining the contract it attempts to employ its own direct hire employees to do the work. These employees are not members of the union. If Bill Bailey is unable to man the project with its own employees, it will subcontract all or a portion of the work to another non-union contractor. If Bill Bailey is unable to use its own employees or engage a nonunion subcontractor, it will subcontract the work to Andreynolds and use Andreynolds' unionized employees to perform the work. Those employees would be paid by Andreynolds in accordance with the terms of the U.A. agreement to which Andreynolds is bound.
Over the years Bill Bailey has subcontracted approximately fifty percent of the work it has obtained to Andreynolds. There is no evidence to suggest that contracts obtained by Andreynolds were ever subcontracted to Bill Bailey or that Bill Bailey employees ever performed work for Andreynolds or on Andreynolds projects. Thus, although the non-unionized contractor (Bill Bailey) subcontracts work it obtains back to the unionized contractor (Andreynolds), the reverse is not true.
We accept the evidence of the witnesses that neither the employees nor the union would necessarily know whether a project upon which Andreynolds employees were working was a Bill Bailey contract or an Andreynolds contract. Although it is true that employees were told to charge supplies to either Bill Bailey or Andreynolds and would thus have some indication as to which company held the contract, we accept that for the most part Andreynolds employees were concerned only with whom their employer was and from whom they received their paycheques. Similarly, we accept that the U.A. does not and need not necessarily involve itself in determining who holds the mechanical contract on any particular job so long as U.A. members are working on that job. In those circumstances, as far the U.A. is concerned it would mean that the contractor is a union contractor hiring union members.
As indicated the two companies have carried on parallel construction operations. Tendered into evidence was a list of projects for which each company held the contract and a summary of work in the ICI sector in terms of dollar value and percentage of total business for each company. That documentary evidence may be summarized as follows (deleting invoices of $1,000.00 or less).
Andreynolds ICI Projects for Period Ending June 30th.
Year Electrical (%) Plumbing (%) Sheet Metal (%) 1980 11,673.02 (100) 0.00 (0.0) 0.00 (0.0)
1981 473,688.52 (64.6) 61,705.95 (8.4) 198,124.99 (27.0)
1982 460,905.44 (74.2) 67,377.78 (10.8) 93,022.34 (15.0)
1983 1,232,389.81 (86.4) 8,174.60 (0.6) 185,865.18 (13.0)
1984 439,542.52 (66.3) 106,400.16 (14.8) 171,040.24 (23.9)
1985 168,165.94 (66.6) 25,124.77 (9.9) 59,336.99 (23.5)
1986 56,540.58 (38.8) 8,590.00 (5.9) 80,688.94 (55.3)
1987 64,190.73 (18.8) 37,707.84 (11.0) 240,265.14 (70.2)
1988 40,158.21 (57.5) 10,783.61 (15.4) 18,894.39 (27.1)
1989 508,436.47 (98.1) 9,652.90 (1.9) 0.00 (00.0)
Bill Bailey ICI Projects for Period Ending June 30th.
Year Electrical (%) Plumbing (%) Sheet Metal (%) 1980 172,099.23 (93.5) 0.00 (0.0) 11,967.24 (6.5) 1981 220,050.23 (46.4) 173,522.22 (36.6) 80,784.27 (17.0) 1982 44,848.07 (12.0) 116,686.72 (31.2) 212,513.75 (56.8) 1983 332,392.16 (48.3) 158,928.46 (23.1) 197,205.68 (28.6) 1984 389,139.15 (61.5) 116,628.66 (18.4) 126,958.84 (20.1) 1985 335,565.87 (30.2) 244,816.37 (22.0) 532,545.99 (47.8) 1986 301,060.97 (30.0) 355,694.83 (35.5) 346,378.21 (34.5) 1987 366,952.28 (30.7) 321,259.16 (26.8) 508,533.12 (42.5) 1988 443,433.45 (35.7) 87,510.99 (7.0) 712,875.90 (57.3) 1989 957,446.94 (42.8) 564,102.30 (25.2) 715,482.12 (32.0)
This evidence discloses that while the overall fortunes of Bill Bailey have remained fairly constant with steady growth from year to year, Andreynolds has fared less well. In particular, there has been a gradual decrease in the overall dollar volume of Andreynolds business particularly since 1985. A spurt of growth in business in 1989 is wholly due to its electrical work. From the perspective of the plumbing work performed by both companies however, since 1985 there has been a gradual decline in plumbing work at Andreynolds although there has been a steady (with the exception of 1987) growth at Bill Bailey.
The evidence also discloses however that for the past ten years Bill Bailey has had a constant presence in ICI plumbing work in the Belleville/Trenton area. In relation to its overall operations, the plumbing work at Bill Bailey has generally represented less than one third of the total and generally less than either the sheet metal or electrical work. The evidence does not support the assertion by the U.A. and its witnesses that Bill Bailey was primarily a "sheet metal shop" which only recently ventured into the plumbing business.
Notwithstanding the fairly substantial amount of plumbing work acquired by Bill Bailey, that company has only rarely over the past ten years directly employed any apprentice or journeymen plumbers to work in the field. Much of its work appears to have been sublet either to other non-union contractors or to Andreynolds. For the period from 1980 to the Fall of 1989, with the exception of Scott Maracle who commenced his apprenticeship as a plumber with Bill Bailey in July 1986, the company did not directly employ any journeyman or apprentice plumbers.
Prior to 1980 Bill Bailey did have plumbers in its direct employ for various periods of time. These included Jim Salt and Keith Shangraw.
In the Fall of 1989 Bill Bailey hired approximately three plumbers to work on its projects at the Warkworth Penitentiary and Frankford Water Plant. The union asserts that this is the clear change in the operations of Bill Bailey which alerted the union to the erosion of its bargaining rights. Upon being confronted with this knowledge it promptly filed this application.
The employment history of Scott Maracle is significant to any determination whether the union knew of circumstances which should have caused it to file a section 1(4) application at some significantly earlier point in time. We therefore find it convenient to set out that employment history and the place of the parties within that history.
Prior to his registration as an apprentice, Scott Maracle worked for Bill Bailey. His father Laverne Maracle is a journeyman plumber and a member of the U.A. who has worked "steady" for Andreynolds (except for the usual periods of layoffs typical in the construction industry) for the past twenty years. In that time he has not worked for any other mechanical contractors. He has the longest service of any plumber employed by Andreynolds.
Scott Maracle worked as a summer student for Bill Bailey during the summer months of 1981, 1982 and 1983. While so employed he did, what he termed as "basically labour type jobs". These he described as carrying pipe, cleaning up jobs, etc. After graduating from High School, Mr. Maracle attended Loyalist College with the view to obtaining employment in the electronics field. Upon graduation from college however there were few opportunities, and in May 1985 Mr. Maracle returned to work at Bill Bailey. Again he performed primarily "labouring" jobs.
For a period of time Mr. Maracle attempted to become a registered apprentice electrician. He applied to the IBEW but to no avail. Having some familiarity with the plumbing trade he determined to become an apprentice plumber instead. He therefore approached Len Webster the Plumbing Manager at Bill Bailey and Andreynolds. Mr. Webster advised him to contact the U.A. In May 1986, Mr. Maracle spoke to Les Weegent, the local U.A. business agent but was advised that the U. A. was not accepting apprentices that year. When Mr. Maracle advised Mr. Webster of this fact it was suggested he could start his apprenticeship with Bill Bailey instead. The appropriate documentation was drawn up and in June 1986 Scott Maracle entered into a contract of apprenticeship with Bill Bailey.
After he entered his contract of apprenticeship, Scott Maracle continued to "still do a lot of running around". He also however started to do "small, commercial work such as one and two-day jobs" such as roughing in washrooms in new stores. Towards the end of his employment with Bill Bailey, and as he progressed in his trade, Scott Maracle began to perform more sophisticated plumbing work including the laying of pipe and installation of fixtures. He estimated he began to lay pipe "probably in 1985". Throughout this time Mr. Maracle worked exclusively with his father, Laverne Maracle.
At the instigation of his father, Scott Maracle went to see Brian Christie who was at that time the Training Coordinator of the U.A. in an attempt to join the U.A. Mr. Christie testified that he had been approached by Laverne Maracle to accept his son into the union. During the discussions with Mr. Laverne Maracle, Mr. Christie became aware that Scott Maracle was a registered apprentice working for Bill Bailey.
Scott Maracle met Brian Christie when he filed his application to join the U.A in 1987. Thereafter, sometime in early 1988, Scott Maracle was required to complete an aptitude test. He again spoke to Mr. Christie. He showed Mr. Christie his contract of apprenticeship with Bill Bailey. Mr. Christie recalled that he spoke to Scott Maracle about the type of work he was doing and how he was learning his trade as plumber. He testified that Scott Maracle was vague about the details and attributed this fact to the notion that Scott Maracle did not want to implicate his father.
Scott Maracle also testified that he discussed with Mr. Christie the type of work Bill Bailey was performing although he stated "we never really talked in detail". He believed he discussed with Mr. Christie "who run Bill Bailey" and who he, Scott Maracle, worked for. Mr. Maracle advised Mr. Christie that it was Len Webster. Finally, in cross-examination Scott Maracle was asked and answered the following question:
Question: "Did he [Mr. Christie] seem to know about Bill Bailey and that it was a non-union mechanical contractor in Belleville?"
Answer: "Yes".
Mr. Christie acknowledged that at that point he was aware "of at least some tie in between Andreynolds and Bill Bailey. Mr. Christie however considered Scott Maracle's employment as an apprentice with Bill Bailey to be a "side deal which one of our members had cooked up with a contractor". He saw the situation as one in which Mr. Laverne Maracle, a U.A. member and long-service plumber employed by Andreynolds was desirous of having his son get into the plumbing trade and was able to get the contractor to accommodate his wishes. Mr. Christie considered the opportunity to have Scott Maracle join the union as a method of "cleaning up" the situation without involving the U.A. in lengthy and costly litigation such as a single employer application under section 1(4). He thought that if Scott Maracle joined the union the respondent companies would no longer have any non-union plumbers in their employ.
In July 1988, Scott Maracle was admitted into the membership of the U.A. At that time he ceased his employment with Bill Bailey. At the time he became a member of the U.A. he was given the appropriate credit for the years of apprenticeship served with Bill Bailey. He was taken in as either a second or third year apprentice. He was referred by the U.A. to Andreynolds. Mr. Maracle was taken off the Bill Bailey payroll and was switched to the payroll of Andreynolds.
Counsel for the respondent companies asserts that the companies have carried on their activities in an open and public manner. The respondents submit that this application should be dismissed because the union knew, or alternatively should have known, of the relationship between Andreynolds and Bill Bailey. The applicant's failure to act promptly or with due diligence forecloses it from obtaining the remedy which it now seeks. In support counsel relied upon Zaph Construction Ltd., [1977] OLRB Rep. Nov. 741, Ellwall and Sons Construction Limited, [19781 OLRB Rep. June 535, Farquhar Construction Ltd., [1978] OLRB Rep. Oct. 914, Harold R. Stark Limited, [1978] OLRB Rep. Oct. 945, Evans-Kennedy Construction Limited, [19791 OLRB Rep. May 388, Acto Builders (Eastern) Limited, [1979] OLRB Rep. June 465, Ferro Structural Steel (Toronto) Limited, [1981] OLRB Rep. May. 523, Capricorn Acoustics & Drywall Ltd., [1986] OLRB Rep. March 308, Krest Masonry Contracting Limited, [1988] OLRB Rep. August 813, Gottcon Contractors Limited, [1989] OLRB Rep. July 757, Steve's Sheet Metal Company, [1985] OLRB Rep. Dec. 1804.
We find it unnecessary to detail the jurisprudence to which counsel referred. The Board's refusal to exercise its discretion in favour of a section 1(4) applicant by reason of the applicant's delay is well established. Whether there has been such delay, and what effect it has on the exercise of the Board's discretion depends on the facts and circumstances of each case and the knowledge of the trade union.
The past jurisprudence of the Board does address the issue in terms of whether the union knew or ought reasonably to have known. The Board's past jurisprudence has also imposed a "due diligence" test on trade unions and their representatives. That test is designed to be a realistic and not unduly onerous standard which balances the competing interest of the parties. Trade union representatives should not have to become private investigators spying to obtain information within the control of the employer and which can, with little difficulty, be hidden or camouflaged by an employer with whom it has a collective bargaining relationship. As counsel for the U.A. accurately pointed out, the Legislature itself has recognized the difficulty a union has in determining "relatedness" and "loss of job opportunities" through use of corporate restructuring by enacting section 1(5). We do not think that the trade union should be obliged to file a single employer application on the basis of hearsay, rumour or innuendo.
Neither on the other hand, neither should trade union business agents be allowed to simply ignore clear evidence of an interrelationship between corporate entities (thereby inducing the employer to rely upon the fact that the trade union is ignoring that evidence) and simply claim "we didn't know" the obvious. The trade union cannot be "wilfully blind" (see The Great Atlantic and Pacific Co. Ltd. [1981] OLRB Rep. March 285; Subito Contracting (Drywall & Painting) Co. Ltd., [1981] OLRB Rep. Oct. 1494 and the cases referred to therein.) For this reason, in certain circumstances actual knowledge may be imputed to the union by reason of such surrounding facts as the prominent display of signs at company premises, work projects, or on company vehicles, the open and regular intermingling of unionized and non-unionized employees, etc.
The issue highlighted by the facts and circumstances before us is what is it the union must have knowledge of so that it can act with "due diligence"? Counsel for the union submits that the union must have actual knowledge of actual work opportunities lost by reason of the relationship between two entities. In the circumstances of this case it is asserted that the U.A. must have actual knowledge not only that Bill Bailey was a mechanical contractor which did plumbing work, but also that such plumbing work was actually performed in a manner which would be a violation of the U.A. collective agreement if Bill Bailey was bound to that collective agreement i.e. through non-union employees or a sub-contract to a non-union contractor?
On the other hand, counsel for the respondents asserts that the U.A. must have knowledge only of the fact that there is some relationship between two entities each of which performs the type of work covered by the collective agreement between an applicant union and one of the corporate entities before the union is required to act with "due diligence". More specifically, in the circumstances of this case he argues that, once the union had knowledge of the fact that Bill Bailey was a non-union mechanical contractor and that plumbing work covered by the agreement was done by or through that mechanical contractor the union should have acted. He submits that the U.A.'s failure to act then should result in the Board now exercising its discretion to decline to grant the section 1(4) declaration.
We have determined that it is unnecessary in the circumstances of this case to determine which of these two tests is more appropriate. Regardless of the test employed we find on the evidence before us that the union had actual knowledge of the fact that Bill Bailey and Andreynolds were under common direction or control, that Bill Bailey was a mechanical contractor which did plumbing work, and that the manner in which Bill Bailey carried out that plumbing work was beyond the terms of the collective agreement to which Bill Bailey would become bound if the U.A. had moved expeditiously in filing this application.
The evidence before us establishes that at the absolute latest the union had actual knowledge that Bill Bailey was a mechanical contractor which did plumbing work by late 1987. This application was filed in February, 1990.
Richard Thomson, a retired pipefitter and plumber who has been a member of the U.A. for approximately forty years testified. Mr. Thomson was the President of U.A. Local 320 for fifteen years. Local 320 of the U.A. merged with Local 463 in or about 1984 - 1985. After he ceased to be on the executive of Local 320 but prior to the merger with Local 463 Mr. Thomson acted as "doorman" at union meetings. This involved meting people at the door and checking their union cards. As such Mr. Thomson attended most, if not all, union meetings. Mr. Thomson was aware that both Bill Bailey and Andreynolds carried on plumbing, heating and sheet metal work although he was not personally familiar with the connection between the two companies and had never worked for either of the two companies. Mr. Thomson recalled that Bill Bailey and Andreynolds were discussed "on different occasions" at meetings of the membership "anywhere from five to eight years ago". Mr. Thomson testified the matter was raised two or three times. When asked to recollect the nature of those discussions Mr. Thomson testified that "... I remember they said we did not have funds to carry on with it at the time". When counsel asked what he meant by funds to "carry on with what?" Mr. Thomson responded "with a hearing like this ... what you are having here today." Mr. Thomson further testified that he thought that the two companies were of concern to the U.A. stating "I think they were. I imagine so. That's why our business agent at the time was supposed to look into it. How far he got I don't know."
The evidence of other tradesmen and the other witnesses called by the respondents also support the respondents' assertion that it was commonly known that Andreynolds was the unionized mechanical contractor while Bill Bailey was the non-unionized mechanical contractor and that the two companies were closely related.
Mr. Laverne Maracle also testified that it was "commonly known around Belleville that [Bill Bailey and Andreynolds] were owned by the same company" and that it was commonly known that both companies did mechanical work. He also testified however that, with the exception of a period in 1974 when he worked with Jim Salt he never worked with non-union plumbers who were employed by Bill Bailey.
In Mr. Christie's own evidence he admitted that the U.A. became aware that Bill Bailey was tendering work as a mechanical contractor while Les Weegent was Assistant Business Manager (sometime between 1985 - 1988). He was aware that Bill Bailey was tendering out work and was subcontracting the work to Andreynolds. Mr. Christie was unaware if any action was taken by the U.A. as a result of its, (and specifically Les Weegent's), knowledge of the relationship between the two companies but candidly admitted that his predecessor, Chris Burrows dealt more closely with Mr. Weegent than he did. Mr. Christie did however indicate that he had been to the Bill Bailey/Andreynolds premises during the period that Les Weegent was the Assistant Business Manager and would have seen the common signage on the building at that time. He met Len Webster, the manager of the plumbing divisions at that time.
Mr. Weegent was not called to refute, contradict, or otherwise explain any of this evidence. Mr. Weegent was available to be called, had been subpoenaed to attend the hearing, and was present on at least one day of the hearing when he could have been called. In the circumstances of this case, the failure of Mr. Weegent to give evidence which was within his power to give and through which relevant facts might have been elucidated justifies the Board in drawing the inference that his evidence would have been unfavourable to the U.A. or at least would not have supported it (see for example Sopinka and Lederman, The Law of Evidence in Civil Cases at p. 535).
Mr. Weegent started as a part-time Business Representative for U.A., Local 320 in the mid 1970's. He continued in that position until he became full-time Business Representative for Local 320. After the merger of Local 320 with Local 463 he continued as Assistant Business Manager until 1988 when he retired from the union. The evidence tendered by the respondents met the onus of proof and evidentiary burden cast upon them in respect of their "defence" that the union knew but failed to act. Thereafter the evidentiary burden shifted to the applicant. The applicant could have put in evidence to refute the respondent's evidence which attributed actual knowledge to the U.A., Local 320 and to its Business Representative, (Mr. Weegent) through Mr. Weegent. Mr. Weegent was in the best and indeed the only position to deal with Mr. Thomson's evidence for example that Mr. Weegent had been instructed to "look into" the matter and what his conclusions were as result of such investigation. Mr. Christie's honest and credible evidence deals only with the period post the Fall of 1987. It does not and cannot account for the time before the merger of Local 320 and Local 463 when Mr. Weegent was the only Business Representative of Local 320 and the evidence points to a finding that U.A. Local 320 was aware that Bill Bailey was a non-union mechanical contractor which carried out plumbing work by or through non-union employees or subcontractors.
Counsel for the U.A. has argued that the knowledge which a union must have before an application is dismissed by reason of delay is actual knowledge that a related corporation is undermining or eroding the bargaining rights of the union. He submits that, in this case, although the union knew that Bill Bailey was a mechanical contractor which tendered on plumbing work for some time, the union did not have actual knowledge of the erosion or undermining of its bargaining rights because it did not know that Bill Bailey ever subcontracted the work to non-union subcontractors or otherwise performed the work itself. Rather, the union only knew that Bill Bailey tendered on jobs but thought that it then subcontracted the plumbing portion of the work back to Andreynolds. As there is no "erosion" of its bargaining rights in those circumstances, there was no need for the U.A. to bring a section 1(4) application. The trade union ought not to be required to engage in costly, time-consuming litigation before the Board to obtain what it views as a superfluous single employer declaration because there has not been any erosion of its bargaining rights. Counsel asserted that it was not until the Fall of 1989 that the union became aware that Bill Bailey had changed its approach to business by directly hiring non-union plumbers to perform work which it had previously sub-contracted to Andreynolds. He submits that then the union was required to act and it did so promptly. Upon being confronted with that actual knowledge the union investigated, and filed this application with due diligence.
Counsel for the U.A. further asserted that for the Board to require a union business agent to check out every subcontract to determine who holds the contract and if the subcontracting arrangement is an erosion of the U.A.'s bargaining rights is much too onerous. He argues such a test is inconsistent with the Board's "due diligence" jurisprudence or the legislative recognition in section 1(5) that such information is often beyond the trade union's reach.
In response counsel for the respondents argued that even if the test was that the delay must be linked to knowledge of an erosion of bargaining rights or loss of job opportunities that test has been met in the circumstances of this case. Notwithstanding the fact that the trade union may not have had actual knowledge of the fact that Bill Bailey performed plumbing work in a manner other than through the subcontracting of work to Andreynolds, in light of the knowledge which the trade union did have, it ought to have been aware of that possibility. It should have acted promptly to foreclose the potential erosion. At a minimum it should have investigated the situation. If a trade union knows that work is going from a non-union contractor to the union contractor, it should be sensitive to the possibility that perhaps work is going the other way as well or that perhaps work is going from the non-union contractor to another non-union contractor or non-union employees. The trade union should file a section 1(4) application when it has that knowledge. In this regard counsel pointed to the evidence of Mr. Christie that he knew that Bill Bailey was an operating company that subcontracted work and was "concerned" by that fact.
Counsel argues that acceptance of the trade union submissions also affects the rights of the Bill Bailey employees to choose whether or not they wish to be represented by this trade union. He submits that the applicant is seeking to acquire bargaining rights to avoid the certification procedures of the Act and that a declaration ought not to be granted. (See John Hayman & Sons Company Limited, [1984] OLRB Rep. June 822 at 827-828). In the past Bill Bailey has subcontracted a portion of its work to non-union subcontractors without apparent complaint from the trade union. Now it seeks to have some of the work it had previously subcontracted either to Andreynolds or to non-union subcontractors performed by direct hire employees. This does not constitute such a change in Bill Bailey's approach to business that it warrants the exercise of our discretion notwithstanding the substantial delay of the trade union in bringing this application.
Counsel argues that this is especially so where the rights of employees to select their own bargaining representatives or to remain unrepresented is affected.
On the evidence before us need not resolve these two opposing positions. We note merely that each has merit and a certain attractiveness.
On the evidence before us however, we find that the trade union did have actual knowledge of an actual erosion of its bargaining rights or loss of work opportunities yet the U.A. apparently took no action as a result of this knowledge.
Certainly, in late 1987/early 1988 Mr. Christie was aware of the fact that Bill Bailey employed a registered apprentice plumber. Registered apprentice plumbers and the work they do is clearly covered by the U.A. collective agreement to which Andreynolds is bound. At the very least at that point in time therefore the U.A. had actual knowledge of an actual loss of job opportunities. Work covered by the collective agreement was being performed, and had been performed by a related employer not bound to the collective agreement. At that time the union had actual knowledge that all of the criteria necessary for a successful section 1(4) application existed yet chose not to act.
Mr. Christie provided a very practical reason for not filing a section 1(4) declaration at that time. He attempted to deal with the problem without litigation by having Scott Maracle join the union and thus having him become an employee of Andreynolds. Mr. Christie's common sense approach to the problem is commendable. That common sense approach or informal resolution of the immediate problem however, was not sufficient because the union took no steps to put the companies on notice that it objected to Bill Bailey performing plumbing work in a non-union manner. There is no evidence that after Scott Maracle's membership in the union and transference to the Andreynolds' payroll anyone from the union contacted Bill Bailey/Andreynolds to express the union's concern about what had occurred. The union took no steps to put the employer on notice that it viewed the situation as one to which section 1(4) applied or could be applied.
We agree with the U.A.'s assertion that it is preferable to resolve problems without litigation. We are also of the view that in these circumstances it is not necessarily incumbent upon the union to file a section 1(4) application. The parties are encouraged to continue to settle these types of labour relations matters through discussion, compromise and other non-litigious means.
In this instance, however there was no true resolution of the "problem" because the respondents were not put on notice by the U.A. that the union viewed the co-existence of Bill Bailey/Andreynolds and the fact that Bill Bailey did plumbing work non-union as a "problem The "problem" was solved from the U.A.'s perspective only. The respondents remained unaware that there was any problem. Indeed, the opposite conclusion could be reached. The union's silence conveyed the message that there was no problem and that Bill Bailey could continue to employ non-union plumbers as it had with Scott Maracle and as it had throughout the 1970's.
In our view, at a minimum and short of filing a section 1(4) application at that time, the union could have and should have put Bill Bailey on notice that it viewed anything other than a sub-contracting of the plumbing work acquired by Bill Bailey back to Andreynolds as a dilution of its bargaining rights. It did not do so. Instead, Bill Bailey was allowed to continue to grow and develop notwithstanding the union's current contention that Bill Bailey's operations dilute or undermine its bargaining rights and job opportunities. To this extent, the case is similar to Krest Masonry Contracting Limited, supra, where the Board stated at page 820:
The evidence before us establishes that the union was aware of Canada Contracting as early as June of 1986 when it became actively involved in residential projects and the union was conducting a strike. Union business agents approached Mr. DeRose to complain about his presence on construction sites, warning that he would not "get way with it" although little or no effort was made to organize the "non-union" bricklayers working on those sites. Thereafter, there were discussions between the union and various members of MCAT, but no section 1(4) application was made. In other words, the union was well aware, two years ago, that Canada Contracting presented a potential threat to its bargaining rights/work opportunities but chose not to pursue the remedy clearly open to it. Canada Contracting was allowed to develop and grow despite the union's current contention that it was merely a device to develop a non-union arm through the use of subcontractors. Business developed and flourished, contracts were entered into and completed, and relationships were established and terminated, while the union grumbled and complained but made no concrete effort to assert what it now claims are its statutory rights. It is understandable and indeed commendable that the union would seek an informal resolution of its concerns without resort to litigation, but there is also something to be said for the proposition that one should move promptly to assert one's statutory rights under section 1(4).
Similarly, in this case Bill Bailey also developed, bid and obtained contracts, established and terminated relationships, while the union took no steps of any kind. It did not file an application under section 1(4) but neither did it put the respondents on notice that this was possible in the circumstances.
In Krest Masonry Contracting Limited, supra, the Board went on to make a "prospective" single employer declaration effective as of the application date. In this manner, the employers' "reliance interest" was taken into account as it could be said that from that point in time, "the respondents would have been clearly put on notice that their subsequent business activities might be affected by pending litigation". The prejudice to the employer caused by the trade union's delay or tolerance of the double breasted company was a factor considered by the Board in the exercise of its discretion.
A similar exercise of our discretion is not available in the circumstances of this case because of the intervening events. In Krest Masonry Contracting Limited, supra, it was determined that a section 1(4) declaration would not "directly affect any employment relationship established since [the] incorporation in February of 1986 [of the related common employer]. No previously unrepresented employees would be "swept in" to an established bargaining relationship." The same is not true in the situation before us.
As the union failed to file a section 1(4) declaration, and because it failed to put the employer on notice that (at a minimum) it viewed the direct hire of non-union plumbers as an erosion of its bargaining rights, Bill Bailey hired non-union plumbers to perform work which in the past it had sub-contracted either to another non-union contractor or to Andreynolds. No steps were taken by the union to put the company on notice that, in the union's view, it could not do that. Bill Bailey had employed non-union plumbers at various times in the 1970's, and had employed a non-union apprentice plumber from 1986 to June 1988 without complaint from the union. As indicated we find that the union had actual knowledge of these facts but took no steps to assert its rights in any way on those occasions.
In John Hayman and Sons Co. Ltd., [1984] OLRB Rep. June 822 at page 827-828, the Board set out certain criteria which it may use in determining whether to exercise its discretion found in section 1(4) of the Act. In addition to a reference to delay and due diligence by the trade union, (Criteria No. 4 in the decision) the Board noted that it would consider "whether a declaration would interfere with the interests and rights of employees to select their own bargaining representative or to remain unrepresented" and "whether the applicant is seeking to acquire bargaining rights by means of section 1(4) in order to avoid the certification procedures of the Act." We view those criteria as being applicable to the case before us.
It may be, as the Board noted in Krest Masonry Contracting Limited, that "a failure to move expeditiously should [not] totally foreclose [an] applicant from the remedy it seeks." We make no finding in that regard. In our view however, because of the intervening events which occurred because the applicant failed to move expeditiously, the prejudice to the respondents which results from that delay, and the fact that the delay directly affects the rights of the presently unrepresented employees to select their own bargaining representative or remain unrepresented, the applicant in this instance is foreclosed from obtaining the remedy it seeks in this application.
For all of these reasons the application in Board File 2791-89-R is also dismissed.