International Union of Operating Engineers, Local 793 v. Russell H. Stewart Construction Company Limited, 1990 CanLII 5773

1580-89-R International Union of Operating Engineers, Local 793, Applicant v.

Russell H. Stewart Construction Company Limited, Respondent v. Group of

Employees, Objectors

BEFORE: Ken Petryshen, Vice-Chair, and Board Members W. N. Fraser and H. Kobryn.

APPEARANCES: Bernard Fishbein, John Monti and Alcino Silveira for the applicant; Henry Dinsdale and Robert Tout for the respondent; James E. Bowden and Randy Parks for the objectors.

DECISION OF THE BOARD; April 3, 1990

1. By decision dated October 20, 1989 the Board (differently constituted) certified the applicant as the bargaining agent for all employees of Russell H. Stewart Construction Company Limited (hereinafter referred to as "the Company") in the Township of Manvers, save and except superintendents, persons above the rank of superintendent, and students employed during the school vacation period. The application was scheduled to be heard by the Board on October 20, 1989. On that day the applicant and the Company met with a Labour Relations Officer, reached agreement on all matters in dispute between them and further agreed to waive their right to a formal hearing in the matter. No petition opposing the certification of the applicant was filed in connection with this application prior to October 20, 1989 and no one appeared at the hearing representing the objecting employees.

2. Randy Parks is an employee in the bargaining unit. Subsequent to the certification of the applicant, Mr. Parks sought reconsideration of the Board's decision certifying the applicant. After an exchange of correspondence between the parties, the Board scheduled a hearing on January 12, 1990 before the present panel for the purpose of hearing submissions with respect to Mr. Parks' request for reconsideration, as set forth in letters dated October 27 and November 2, 1989 from counsel for Mr. Parks. After entertaining the parties' submissions on January 12, 1990, the Board reserved its decision.

3. Mr. Parks' reconsideration request was based on two relatively distinct grounds. He alleged that the applicant utilized improper solicitation techniques in securing its membership evidence. At the hearing on January 12, 1990, counsel for Mr. Parks conceded that Mr. Parks did not exercise due diligence in investigating the matters and in placing these allegations before the Board. In addition, Mr. Parks alleged that the application was tainted by fraud. In support of this latter position, he asserted that Jack Kerr, an employee in the bargaining unit, circulated a petition prior to the terminal date but never intended to file the petition with the Board nor to appear at the October 20, 1989 hearing. Mr. Parks also alleges that Mr. Kerr was acting as "agent" for the applicant with respect to his petition activity.

4. In a decision dated January 29, 1990 the Board decided that it would not entertain Mr. Parks' allegations concerning the applicant's conduct in obtaining its membership evidence since the Board was satisfied that these allegations were made in an untimely manner. In this decision, the Board (H. Kobryn dissenting) also determined that a hearing would be held on February 16, 1990 in order to give Mr. Parks the opportunity to call evidence to support the allegations concerning Mr. Kerr's petition conduct. In the majority's view, these allegations suggested a serious abuse of the Board's process, which might constitute fraud.

5. At the hearing on February 16, 1990 counsel for Mr. Parks called three witnesses to give evidence, namely Mr. W. McMillan, Mr. R. Bennett and Mr. Parks, all employees within the bargaining unit. The Company did not call any oral evidence. When the applicant was given the opportunity to present evidence, counsel made a non-suit motion and argued that the applicant should not be put to its election. After considering the parties' submissions on this issue, the Board (H. Kobryn dissenting) put the applicant to its election. The applicant elected not to call any evidence and the Board proceeded to hear final submissions. After hearing submissions from counsel for Mr. Parks and counsel for the Company and after recessing to consider the matter, the Board ruled orally at the hearing that the facts did not support the allegations made by Mr. Parks and that accordingly the reconsideration request and the application under section 58 of the Act were dismissed.

6. The applicant filed its application for a bargaining unit of the Company's employees on September 26, 1989 and the Registrar fixed October 10, 1989 as the terminal date. The Company operates a quarry. A significant number of employees do not leave the site during the work week. They use sleeping accommodation on site supplied by the Company. Mr. Kerr was the employee who first made contact with the applicant. He talked to some employees concerning their interest in having a union represent them and advised them that a meeting of employees would be arranged to discuss unionization. The applicant held an organizing meeting on September 25, 1989 in a restaurant attended by three officials of the applicant. Mr. Kerr attended the meeting but did not play a role which distinguished him from any other bargaining unit employee. On a day shortly after the organizing meeting, Mr. Kerr woke an employee and took him outside the gate to meet certain union officials. Mr. Kerr did not sign as a collector on any of the membership cards filed by the applicant in support of this application.

7. The Company held a meeting in the Recreation Room next to the cook trailer at approximately 6:00 p.m. on October 2, 1989. Mr. R. Tout, general superintendent, was in charge of the meeting which appeared to be called for the purpose of discussing unionization of the Company's workforce. In a five-page letter addressed to the Company's employees and circulated at the

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meeting, the Company advised: "We are considering NEW SALARY INCREASE AND BENEFIT PACKAGE and will be announcing our decision in the very near future". Shortly after the meeting, employees did receive a wage increase effective October 2, 1989. One of the witnesses called by Mr. Parks testified in cross-examination that a lot of employees began re-thinking the question of unionization after the Company meeting.

8. After discussions with counsel, Mr. Parks decided he should not be the one to circulate a petition opposing the applicant. Mr. Parks contacted a fellow employee by telephone who volunteered to find someone to circulate the petition. Mr. Parks was unaware of how or why Mr. Kerr was selected to circulate the petition. Mr. Kerr did advise Mr. Parks the day after the Notice to Employees was posted on October 4, 1989 that he would circulate the petition. It was approximately at this time that Mr. Parks found out that Mr. Kerr had played a role in assisting the applicant in its organizing efforts. Mr. Kerr did obtain names on a petition opposing the certification of the applicant. He also obtained $500.00 from Mr. Parks and pledges of financial support from other employees in order to assist in hiring a lawyer. Mr. Kerr repaid the $500.00 after the hearing. As noted earlier, a petition was not filed with the Board prior to the October 20, 1989 hearing and no one appeared at the hearing on behalf of the objecting employees. Mr. Kerr did not attend work on October 20, 1989.

9. Mr. Kerr was not an officer or official of the applicant during the relevant time frame. Nor was he, in our view, an agent of the applicant. Mr. Kerr was an employee in the bargaining unit who played what we would characterize as a relatively minor role in the applicant's organizing campaign. He made the initial contact with the applicant, discussed the matter of unionization with some employees and introduced at least one employee to trade union officials. Mr. Kerr did not act as a collector as disclosed by the membership evidence filed with the Board. Subsequent to the Company meeting of October 2, 1989 and the posting of the Notice to Employees, Mr. Kerr became involved in circulating a petition in opposition to the applicant. The Board's experience is that employees, for various reasons, may change their minds about unionization during the course of an organizing campaign and while an application for certification is being processed by the Board. Employees may initially favour a trade union, oppose it and then support it again within a very short time frame. There is nothing in the evidence which suggests that Mr. Kerr was anything but a supporter, albeit a somewhat active one initially, who changed his mind about supporting the applicant and was prepared to circulate a petition. It appears that after the Company meeting on October 2, 1989 and the wage increase effective that date, a number of employees began to reconsider their support for the applicant. There is no evidence before us concerning why Mr. Kerr did not file the petition with the Board or appear at the hearing. Such conduct is consistent with Mr. Kerr's simply changing his mind again. These are not the circumstances in which we would conclude that an evidentiary onus shifted to the applicant to explain why Mr. Kerr acted the way he did.

10. In selecting Mr. Kerr to represent their interests in opposing the trade union, the objecting employees are bound by the actions of their representative. The Board was not satisfied that the evidence before us disclosed an abuse of the Board's process or fraud on the part of Mr. Kerr or the applicant.

[1990] OLRB REP. APRIL 467

0821-88-R Tactix Construction Limited, Applicant v. United Brotherhood of Carpenters & Joiners of America, Local 27, Respondent v. Labourers' International Union of North America, Local 183, Intervener

Construction Industry - Related Employer - Five corporations carrying on related activities - Whether Board should exercise its discretion to treat them as one employer - One of five corporations evincing willingness to revive other four dormant corporations to defeat bargaining rights of Carpenters Union with respect to the residential sector - Board making one employer declaration to protect those bargaining rights from erosion

BEFORE: N. B. Satterfield, Vice-Chair, and Board Members D. A. MacDonald and H. Kobryn.

APPEARANCES: Nancy Courtney and Andy Senyi for the applicant; David McKee and Frank D'Abbondanza for the respondent; no one appearing for the intervener.

DECISION OF THE BOARD; April 25, 1990

1. Tactix Construction Limited applied under subsection 1(4) of the Labour Relations Act for a declaration that it, together with three other corporations, Mark/Barry Holdings Ltd., Stash Investments Inc. and Danand Investments Limited be treated as constituting one employer for purposes of the Act. For ease of reference, the Board will refer to the four corporations as ("Tactix", "Mark/Barry", "Stash" and "Danand"). Tactix later sought to withdraw its application. The Board refused Tactix' request and allowed the request of the United Brotherhood of Carpenters and Joiners of America, Local 27 to pursue an independent claim for relief made in its reply to the application. The Board's reasons for refusing Tactix' request and allowing the request of Local 27 are set out in the Board's decision which issued August 21, 1989 [reported at [1989] OLRB Rep. Aug. 903]. Local 27's request for relief included a request that those same four corporations, together with Jilsen Investments Inc., be treated as constituting one employer for purposes of the Act. This decision deals with the merits of that request.

2. It is useful to an understanding of Local 27's claim for relief to summarize briefly the chronology of events leading up to the Board's decision issuing on August 21, 1989. That decision sets out the chronology in full. Local 27 was certified on February 18, 1988 to represent Tactix' carpenters employed in the industrial, commercial and institutional ("ICI") sector of the construction industry in the Province of Ontario and in all other sectors of the construction industry in the Board's geographic area #8. That geographic area includes Metropolitan Toronto and adjacent municipalities. On the same date, in a separate application which was heard together with Local 27's application for certification, the Board also certified the Labourers' International Union of North America, Local 506 for Tactix' construction labourers employed in the ICI sector and in all other sectors in Board area #8. Tactix was represented by experienced labour relations counsel at the hearing into the two applications and had agreed together with Local 27 and Local 506 to the descriptions of the unit of employees in each application which the parties considered to be appropriate for collective bargaining purposes. The Board accepted the agreement of the parties. Since both applications had been made under subsection 144(1) of the Act, two certificates were issued in each application pursuant to subsection 144(2) of the Act, one for the ICI sector and the other for all other sectors in Board area #8. Some four months later, Tactix applied to have the Board reconsider its February 18th decision and revoke Local 27's certificate for Tactix' carpenters in all other sectors of the construction industry in Board area #8. The application was made through Tactix' solicitors, a different firm than the one which represented it at the certification hearing. No request was made to revoke the similar certificate of Local 506. The application for a declaration

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under subsection 1(4) of the Act was made in support of and at the same time as the request for reconsideration. Labourers' International Union of North America, Local 183 also requested that the Board reconsider its decision and revoke the certificate to Local 27 and intervened in the application under subsection 1(4).

3. The basis of their applications was the claim that Tactix was bound to a collective agreement between the Metropolitan Toronto Apartment Builders Association ("the MTABA") and Local 183 which was alleged to have made Local 183 the bargaining agent for all of Tactix' construction employees, including its carpenters. According to Tactix and Local 183, Tactix was bound to the MTABA agreement because it was an employer carrying on related businesses with Danand, Stash and Mark/Barry, and Mark/Barry was bound to the MTABA agreement.

4. An essential element of their theory was that the MTABA agreement established bargaining rights for Local 183 for carpenters of employers bound to the agreement. At the time the requests for reconsideration were made, that issue was being litigated with respect to another employer unrelated to any of the five corporations named in this proceeding, before a different panel of the Board. All of the parties agreed that it would be appropriate to adjourn the request for reconsideration and this application until that issue was decided by the other panel. The other panel of the Board ultimately found that Local 183 did not have bargaining rights for carpenters employed by employers bound to the MTABA agreement.

5. When that issue was finally resolved, Tactix and Local 183 requested leave to withdraw their applications for revocation of Local 27's certificate and in addition, Tactix requested leave to withdraw this application. The Board consented to the request for withdrawal of the applications for reconsideration but, for the reasons given in its decision which issued August 21, 1989, refused Tactix' request to withdraw this application. After two further adjournments at the request of Tactix and Local 27, Local 27's request for relief under subsection 1(4) of the Act came before the Board for hearing on February 26, 1990.

6. Tactix and Jilsen were represented by counsel at the hearing, but Mark/Barry, Stash and Danand were neither present nor represented. The parties filed an agreed statement of facts with the Board which had been executed between Tactix, Jilsen and Local 27. They also stipulated further facts orally to the Board and Local 27 filed the most recent corporate returns of the corporations and a copy of minutes of settlement executed between Local 27, Local 506, Tactix and Jilsen at the time the two unions' applications for certification were being processed by the Board.

7. The parties agreed as well that the Board should determine from the agreed facts and the documents filed by Local 27 whether any two or more of the five corporations carry on related activities or businesses under common control or direction within the meaning of subsection 1(4) of the Act. The parties agreed further to limit their submissions to the issue of whether the Board should exercise its discretion to make the declaration requested by Local 27 in the event that the Board finds, on those facts, that it does have the discretion. Accordingly, the Board's findings of fact herein are made from the agreed statement of facts executed between Tactix, Jilsen and Local 27, the further facts agreed to by them at the hearing and the documents filed by Local 27 at the hearing.

8. Mark/Barry was incorporated in the earlier 1970's and, from that time until approximately 1981, was involved primarily in the construction and development of apartment complexes. It has been inactive and has employed no employees since 1981. From incorporation until the making of this application, Mr. Mel Greenspoon was president and a director of Mark/Barry and held a thirty-seven and a half per cent ownership interest in it. Stash was formed as a joint venture in the late 1970's by Mark/Barry and another corporation. Mark/Barry held a fifty per cent interest in

[1990] OLRB REP. APRIL 469

Stash. Stash constructed a number of apartment buildings in the Metropolitan Toronto area in the late 1970's and early 1980's. It has been inactive and has employed no employees since approximately 1983. Greenspoon was the secretary and a director of Stash, and remained so as at the date of making of this application. Danand was incorporated on April 20, 1977, and between then and 1985 it built at least one apartment project in the Metropolitan Toronto area. Mr. Andy Senyi was its vice-president and one of its directors from incorporation until 1985 when he resigned those positions. Jilsen was incorporated February 11, 1982. Its relationship with Tactix began when Tactix was incorporated June 24, 1982. Jilsen owns twenty-five per cent of the shares of Tactix and between 1982 and April 30, 1988, Jilsen employed the carpenters and construction labourers who performed construction work for Tactix. These trades were employed by Jilsen for administrative reasons because Tactix did not have a computerized payroll. It established a computerized payroll on April 30, 1988, and at that time Jilsen ceased to employ any employees and has remained inactive in the construction industry without employees since that time. Tactix has been involved in construction projects in the ICI and residential sectors of the construction industry. Senyi is the president and sole director of Tactix. Greenspoon is vice-president in charge of Tactix' construction activities. Greenspoon directed the construction activities of Mark/Barry and Stash during all of the time when they were active in the construction industry. He also directed the construction activities of Danand from its incorporation until he resigned his position with Danand in 1985 at the same time Senyi resigned as vice-president and director.

9. In the minutes of settlement executed January 25, 1988, between Local 27, Local 506,

Tactix and Jilsen, both parties agreed that Tactix and Jilsen are related employers within the meaning of the Labour Relations Act. As a condition of the minutes of settlement, Local 27 and Local

506 withdrew applications for certification which each had made in January 1988 with respect to

carpenters and construction labourers employed by Tactix and Jilsen.

10. It is agreed that Mark/Barry joined the Metropolitan Toronto Apartment Builders Association in 1976. It is undisputed that Mark/Barry became bound to the MTABA agreement at that time and that Local 183's bargaining rights under that agreement survived at the date of making of this application.

11. Subsection 1(4) of the Labour Relations Act provides as follows:

(4) Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.

The subsection sets out three preconditions which must be satisfied in order for the Board to have discretion to treat more than one corporation, individual, firm, syndicate or association or any combination thereof as constituting one employer for purposes of the Act. They are:

(1) there must be more than one corporation, individual, firm, syndicate or association or any combination thereof;

(2) the activities or businesses of two or more of those entities must be under common control or direction; and

(3) the entities concerned must carry on related or associated activities or businesses.

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It is not necessary that the related or associated activities or businesses be carried on simultaneously. For examples, see Brant Erecting and Hoisting, [1980] OLRB Rep. July 945 and Warren Steeplejacks Limited, [1989] OLRB Rep. March 309.

12. Although the facts do not establish a common ownership link between the five corporations, their construction operations during their periods of activity in the residential sector of the construction industry were effectively under the control of one person, Mel Greenspoon. In addition, Greenspoon was a director and/or officer of Mark/Barry, Stash and Tactix and remains so today. Andy Senyi also was a director and/or officer of Danand and Tactix. He resigned his position in Danand in 1985 but remained president and sole director of Tactix as at the date of making of this application. Jilsen owns twenty-five per cent of the shares of Tactix, with which it was engaged in residential construction activities. Tactix, Jilsen and Local 27 agree that Tactix and Jilsen carry on related activities or businesses under common control or direction within the meaning of subsection 1(4) of the Act.

13. Therefore, on those facts, the Board is satisfied that Mark/Barry Holdings Ltd., Stash Investments Inc., Danand Investments Limited, Jilsen Investments Inc. and Tactix Construction Limited are corporations carrying on associated or related activities or businesses under common control or direction within the meaning of subsection 1(4) of the Act. Thus, the statutory preconditions exist for the Board to have the discretion under subsection 1(4) to treat two or more of those corporations as constituting one employer for purposes of the Act. It remains to be decided whether the Board should exercise this discretion respecting any two or more of the five corporations just named. That question will be decided based on the facts before the Board and the submissions thereon of counsel. Although the Board will not summarize their submissions, it has reviewed and weighed them in coming to the conclusions reached below.

14. When Tactix made this application in conjunction with its request to have the certificate which the Board had issued to Local 27 revoked, Tactix had asserted the labour relations purpose of its application to be the apparent conflict between Local 27's bargaining rights and those alleged for Local 183 under the MTABA agreement. If that was the purpose, it evaporated when Tactix and Local 183 accepted the conclusion of another panel of the Board that the MTABA agreement did not contain bargaining rights for carpenters employed by the employer bound to that agreement in the application before that panel. Tactix also asserted that there was no other valid labour relations purpose for the application. Those grounds were advanced by Tactix at the hearing into Local 27's request to have the application processed on its merits. The Board rejected Tactix' argument for the reasons set out in its August 21, 1989 decision.

15. Local 27's concern then and now is founded in the readiness and willingness with which Tactix sought to revive the four dormant corporations as a basis for asserting that Local 183 held prior collective bargaining rights for Tactix' carpenters employed in the residential sector of the construction industry. Had Tactix been able to establish that the MTABA agreement did indeed give Local 183 bargaining rights for Tactix' carpenters and had it been successful in getting the Board to declare that Tactix, Mark/Barry, Stash and Danand were to be treated as constituting one employer, the result would have been the elimination of Local 27's bargaining rights with respect to the residential sector.

16. The Board has commented before that ". . .a firm engaged in the construction business can, with relative ease, become involved, from time to time, in various sectors, subdivisions, phases or specialized kinds of construction work, depending largely upon the business opportunities which present themselves,...". Frank Plastina Investments Ltd., [1986] OLRB Rep. June 720,

[1990] OLRB REP. APRIL 471

at paragraph 20. In this respect see also the Board's comments at paragraph 13, B rant Erecting and Hoisting, supra.

17. Having regard to the ease with which a firm can become active and cease to be active in the construction industry, Tactix' readiness to revive Mark/Barry, Stash and Danand four months after the Board issued its certificate to Local 27 respecting Tactix' carpenters employed in the residential and other sectors of the construction industry, sends a clear message to Local 27 about the vulnerability of those bargaining rights to potential erosion unless Local 27 is protected by a declaration under subsection 1(4) of the Act to treat those corporations as one employer for purposes of the Act.

18. The Board agrees with Local 27's perception that its bargaining rights would be exposed to potential erosion if the Board does not make the declaration requested. The Board does not agree, however, that the existence of Danand Investments Limited poses a threat to Local 27's bargaining rights. This is because both Greenspoon and Senyi resigned from their positions with Danand in 1985 and would no longer be able to exercise any direction over its construction activities. With respect to the other corporations, however, Greenspoon remains an officer and/or a director of Mark/Barry, Stash and Tactix, Senyi is president and sole director of Tactix. Tactix is twenty-five per cent owned by Jilsen and they were still engaged together in residential construction when the Board certified Local 27 for Tactix' carpenters. Greenspoon also remains in charge of the construction activities of Tactix.

19. In these circumstances, and having regard for the fact that Tactix was prepared to rely on the interrelationship of Mark/Barry, Stash and Danand in order to try and extinguish Local 27's bargaining rights for Tactix' carpenters in the residential sector, the Board is satisfied that Mark/Barry, Stash, Jilsen and Tactix are a source of potential erosion of Local 27's bargaining rights. Therefore, the Board is satisfied that these are circumstances in which it should exercise its discretion under subsection 1(4) of the Act to declare that Mark/Barry Holdings Ltd., Stash Investments Inc., Jilsen Investments Inc. and Tactix Construction Limited be treated as constituting one employer for the purposes of the Labour Relations Act, and the Board so declares. Accordingly, Mark/Barry Holdings Ltd., Stash Investments Inc., Jilsen Investments Inc. are bound to the carpenters provincial agreement and, together with Tactix, they are obliged also by section 15 of the Labour Relations Act to bargain in good faith with the United Brotherhood of Carpenters & Joiners of America, Local 27 and make every reasonable effort to make a collective agreement for all sectors of the construction industry, except the industrial, commercial and institutional sector.

20. For the reasons given above, this application is dismissed with respect to Danand Investments Limited.

472 [1990] OLRB REP. APRIL

2624-89-M Corporation of the County of Simcoe (Trillium Manor Home for the Aged), Employer v. Ontario Nurses' Association, Trade Union

Conciliation - Hospital Labour Disputes Arbitration Act - Reference - Sale of a Business -Board of arbitration constituted - Business sold - New employer requesting Minister to appoint a conciliation officer - Whether Minister can appoint a conciliation officer even though an arbitration board has been established under HLDAA - Sale of a business provision does not preserve all the rights of a union as they stood at the time of sale - Board advising Minister that he is required to appoint a conciliation officer

BEFORE: Ken Petryshen, Vice-Chair, and Board Members G. O. Shamanski and H. Peacock.

APPEARANCES: Steven F. Wilson and Lynda Toms for the employer; David Nicholson for the trade union.

DECISION OF THE BOARD; April 4, 1990

1. This is a reference to the Board by the Minister of Labour pursuant to section 107 of the

Labour Relations Act ("the Act"). The Minister has referred to the Board for its advice the following question:

Is the Minister required to appoint a conciliation officer in this case even though an arbitration board has already been established under the Hospital Labour Disputes Arbitration Act?

2. The parties agreed on the facts. In December 1987, the Ontario Nurses Association ("ONA") was certified to represent a bargaining unit of nurses employed by the Ladies Orange Benevolent Association ("LOBA"). LOBA operated a home for the aged which is an institution included within the definition of "hospital" in the Hospital Labour Disputes Arbitration Act ("I-ILDAA"). Shortly after ONA was certified, it gave notice to bargain to LOBA. The negotiation process resulted in the resolution of some issues, the appointment of a conciliation officer and the Minister issuing a no collective agreement report. A board of arbitration was constituted and the dispute is scheduled to be heard by that board on April 11, 1990.

3. On July 31, 1989, LOBA sold the business to the Corporation of the County of Simcoe ("the Corporation"). After some discussion between ONA representatives and representatives of the Corporation, a bargaining session took place on September 25, 1989. On September 27, 1989, ONA sent the Corporation a notice to bargain. The Corporation applied for the appointment of a conciliation officer on November 23, 1989 and it was ONA's objection to the appointment that gave rise to this reference.

4. Counsel for the Corporation argued that the Board should advise the Minister that he has the authority to appoint a conciliation officer in these circumstances. Counsel took the position that, upon the sale of the business to the Corporation, ONA was required to give notice to bargain to the Corporation and that all of the statutory mechanisms are then available to these parties, including the appointment of a conciliation officer. In counsel's submission, the Corporation is not required by law to inherit any results of the bargaining process between ONA and LOBA. In particular, it is argued that the board of arbitration constituted by ONA and LOBA has no jurisdiction subsequent to the sale of the business to the Corporation. In support of its position, the Corporation relied primarily on Davidson-Walker Funeral Homes, [1981] OLRB Rep. Oct. 1359.

[1990] OLRB REP. APRIL 473

5. Very generally, counsel for ONA argued that the Board should advise the Minister that on these facts he does not have the authority to appoint a conciliation officer. If the Board felt compelled to advise the Minister that he can appoint a conciliation officer in this situation, counsel submitted that the Board should advise the Minister that he should not make the appointment until after the presently-constituted board of arbitration has performed its functions. ONA takes the position that the board of arbitration that has been constituted continues to have jurisdiction. In response to the Corporation's reliance on Davidson-Walker Funeral Homes, supra, counsel for ONA argues that the Board should take a different approach given the interrelationship between the Act and the HLDAA.

6. Counsel for ONA emphasized the consequences of accepting the Corporation's position for ONA and the employees in the relevant bargaining unit and argued that the Legislature could not have intended such consequences. Counsel noted that the process of obtaining a collective agreement under the HLDAA is often a lengthy one. Counsel noted that an interpretation of the Act and HLDAA as suggested by the Corporation would have the effect of delaying and postponing the concrete benefits of unionization for a considerable and unwarranted length of time. Counsel referred to subsections 10, 11 and 13 of Section 10 of HLDAA in emphasizing that the timing of the notice to bargain is particularly significant under the HLDAA.

7. In considering this matter, the panel has reviewed the HLDAA as well as the relevant provisions of the Act. For convenience, we set out below section 16(1) and (2) and section 63(3) and (10) of the Act as well as certain provisions of the HLDAA:

Ontario Labour Relations Act

16.-(1) Where notice has been given under section 14 or 53, the Minister, upon the request of either party, shall appoint a conciliation officer to confer with the parties and endeavour to effect a collective agreement.

(2) Notwithstanding the failure of a trade union to give written notice under section 14 or the failure of either party to give written notice under sections 53 and 122, where the parties have met and bargained, the Minister, upon the request of either party, may appoint a conciliation officer to confer with the parties and endeavour to effect a collective agreement.

63.-(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or has given or is entitled to give notice under section 14 or 53, sells his business, the trade union, or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement or the renewal, with or without modifications, of the agreement then in operation and such notice has the same effect as a notice under section 14 or 53, as the case requires.

(10) For the purposes of sections 5, 57, 59, 61 and 123, a notice given by a trade union or council

of trade unions under subsection (3) or a declaration made by the Board under subsection (6)

has the same effect as a certification under section 7.

Hospital Labour Disputes Arbitration Act

2.-(1) This Act applies to any hospital employees to whom the Labour Relations Act applies, to

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the trade unions and councils of trade unions that act or purport to act for or on behalf of any such employees, and to the employers of such employees.

(2) Except as modified by this Act, the Labour Relations Act applies to any hospital employees to whom this Act applies, to the trade unions and councils of trade unions that act or purport to act for or on behalf of any such employers of such employees.

1O.-(10) Except where the parties agree to a longer term of operation, any document that constitutes a collective agreement between the parties shall remain in force for a period of one year from the effective date of the document.

(11) Notwithstanding the provisions of subsection (10) and except where the parties agree to a longer term of operation, a document that constitutes a collective agreement shall cease to operate on the expiry of a period of two years.

(a) from the day upon which notice was given under section 14 of the Labour Relations Act; or

(b) from the day upon which the previous collective agreement ceased to operate where notice was given under section 53 of the Labour Relations Act.

(13) In making its decision upon matters in dispute between the parties, the board of arbitration may provide,

(a) where notice was given under section 14 of the Labour Relations Act, that any of the terms of the agreement except its term of operation shall be retroactive to such day as the board may fix, but not earlier than the day upon which such notice was given; or

(b) where notice was given under section 53 of the Labour Relations Act, that any of the terms of the agreement except its term of operation shall be retroactive to such day as the board may fix, but not earlier than the day upon which the previous agreement ceased to operate.

8. As noted earlier, the case which the Corporation relies on and which ONA argues does not address the facts of this situation is Davidson-Walker Funeral Homes, supra. The case involves an application under section 92 of the Act in which the applicant alleged that because of a sale of a business a lawful strike against its predecessor cannot be lawfully continued. The Board decided that a trade is not permitted to continue to strike, nor an employer permitted to continue to lock out when the sale of a business has occurred, but in the circumstances declined to exercise its discretion to grant the applicant any relief and dismissed the application. The Board's reasoning on the strike issue has relevance to this case. After noting that the resolution of the complaint before it turns on the interpretation of section 63 of the Act, the Board made the following comments:

9. Section 63 as it now stands has evolved through several amendments of the Act. A review of

the history of the section is helpful to a better understanding of the rights and duties which it confers on unions and employers respectively.

10. Prior to the enactment of successorship legislation, the bargaining rights of a trade union terminated upon the sale or disposition of a business. The common law afforded no protection to established collective bargaining rights when the employer's legal identity was altered. As concluded in earlier cases such as Brantford Produce Company Ltd. 61 CLLC ¶16,193, unless the parties to the employment relationship were contractually bound or the union had been certified for that specific employer's business, the Board could not enforce collective bargaining. A mere change in the legal ownership of the business was therefore fatal to the trade union's representation rights.

[1990] OLRB REP. APRIL 475

11. In the 1962 Ontario Royal Commission's Report on Labour - Management Relations in the Construction Industry, (the Goldenberg Report), the need for statutory protection of a trade union's bargaining rights upon a transfer of ownership was seen as essential to orderly industrial relations. At. p. 114 of its report, the Commission suggested:

i. The Act should provide that where a business or part thereof is sold, leased or transferred, the purchaser, lessee or transferee shall be bound by all the proceedings before the date of sale, and shall become ipso facto a party thereto, and that the proceedings shall continue as if no such change has occurred, and that if a bargaining agent was certified the certification shall remain in effect, and if a collective agreement was in force that agreement shall continue to bind the purchaser, lessee or transferee to the same extent as if it had been signed by him.

ii. Consideration should be given to measures for the protection of acquired bargaining rights in situations arising from certain types of business practices which may affect such rights, for example, where a contractor, engaged on a number of projects in each of which he has a different partner, is in a position to shift employees from a project with respect to which certification has been granted to another.

12. In response to this concern the Legislature enacted successor rights legislation in the form of the Labour Relations Amendment Act, SO. 1962-63, c. 70, s. 47(a), which provided:

47a.-(1) In this section,

(a) 'business' includes a part of parts thereof;

(b) 'sells' includes leases, transfers and any other manner of disposition, and sold' and 'sale' having corresponding meanings.

(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or on behalf of whose employees a trade union has been certified as bargaining agent or has given or is entitled to give notice under section 11 or 40 sells his business, the trade union continues, until the Board otherwise directs, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement, and such notice has the same effect as a notice under section 11.

13. It should be noted that the Legislature's first intention, reflected in The Labour Relations Amendment Act, SO. 1961-62 c. 28, was to enact a provision similar to the present section 63, including the "flow through" of any collective agreement in effect at the time of the sale of a business. However that amendment was not proclaimed in force and the more limited rights described above were enacted instead. It is clear from these tentative and incremental legislative steps that in its first proclaimed version section 63(2) (then section 47a(2)) was intended only to preserve the bargaining rights of the trade union on the sale of a business. The union then gained the advantage of not being required to reorganize and obtain certification in respect of the like bargaining unit in the business of the new employer. The limited right which the union had, however, was to give notice to bargain to the new employer, who in turn must recognize its right to act as exclusive bargaining agent, as though it had been certified. It is clear that in enacting that legislation the Legislature was concerned only with protecting the union's bargaining rights. To the extent that a collective agreement could not survive the sale of a business, the Legislature obviously did not intend to preserve the established rights of employees, apart from the right to be represented by the same union.

14. The Legislature did not, in other words, adopt the broader Goldenberg recommendation that when a business is transferred the purchaser of the business should be "bound by all of the

476 [1990] OLRB REP. APRIL

proceedings before the date of sale". As noted in Aircraft Metal Specialists Ltd., [1970] OLRB Rep. Sept. 702 the purpose of section 47a was twofold:

To prevent the subversion of bargain-rights by transactions which are designed to get rid of the union. We have encountered situations where there are transactions between various corporate entities which are in effect 'paper transactions'~ and are a form of corporate charade engaged in for the purpose of eliminating the trade union. In this type of case the Board has liberally interpreted section 47(a) to preserve the bargaining rights and has attempted to look beyond 'paper transactions' to achieve that purpose.

To preserve the bargaining rights with respect to work which has accrued to the benefit of the employees as a result of their union becoming the bargaining agent through certification or voluntary recognition. Once the union had been recognized with respect of a particular business the union then obtains a right to bargain with respect to wages, hours and other conditions of employment in that business. The right to participate in the business and its functions in that manner is in the nature of a vested right and section 47(a) allows the union to pursue that bargaining right when all or part of the business is sold.

15. It is significant that the language of section 47(a)(2) as first enacted, which is the very language of the present section 63(3), did not preserve the rights of employees or their union under the Act as they stood at the time of a sale; only the right of representation was preserved. This was reflected by the following observation of the Board in Thorco Manufacturing Ltd., 65

CLLC ¶16,053:

Section 47(a) does not operate to bind the successor of the business with the collective agreement which has been made between the union and the predecessor employer but only with the obligation to recognize the union's bargaining rights for his employees in a like bargaining unit. The new employer is therefore, left free to bargain for and to negotiate his own agreement with the union.

16. It was not until a further amendment of The Labour Relations Act in 1970 (The Labour Relations Amendment Act 1970 (No. 2), SO. 1970, c. 85, s. 22) that the language currently found in section 63(2) was introduced. That legislation provided for the flow through of a collective agreement that was in effect at the time of a sale.

17. The section was amended to provide, in part:

47(a)(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council or trade unions sells his business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if he had been a party thereto and, where an employer sells his business while an application for certification or termination of bargaining rights to which he is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purpose of the application as if he were named as the employer in the application.

(3) Where an employer on behalf of whose employees a trade union or council of trade unions, as the case may be, has been certified as bargaining agent or had given or is entitled to give notice under section 11, sells his business, the trade union or council of trade unions continues, until the Board otherwise declares, to be the bargaining agent for the employees of the person to whom the business was sold in the like bargaining unit in that business, and the trade union or council of trade unions is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement and such notice has the same effect as a notice under section 11.

18. Under the then section 47(a)(2) (later section 55(2) and now section 63(2)) a subsisting collective agreement was protected from termination upon a sale of a business. Significantly the amended section 47(a)(3) (now section 63(3) as further amended by SO. 1975, c. 76, s. 15(1))

[1990] OLRB REP. APRIL 477

adopted the very language of the earlier section 47(a)(2) to describe the rights of a union which did not have a collective agreement, but was certified and had given notice or was entitled to give notice to bargain under section 13 (now section 14). In 1975 the same language was extended to explicitly cover a union whose collective agreements had expired at the time of the sale of a business. The right of a union, whether in a first agreement negotiation or in a renewal situation, was to give the new employer notice to bargain, such notice to have the same effect as notice under section 13 (now 14) or section 45 (now 53).

19. Counsel for the union concedes that the giving of notice under section 63(3) has significant legal consequences to the extent that, in the words of the Act, it "has the same effect as a notice under section 14 or 53..." Notice under those sections triggers the duty to bargain and the negotiation and conciliation processes which are the preconditions to a lawful strike or lockout under the Act. More specifically, section 15 of the Act requires the parties to meet and bargain within fifteen days from the giving of the notice. The notice effectively freezes the rights and duties of the union, the employer and the employees by the operation of section 79(1) of the Act. Where the notice has been given under section 14 or 53 the Minister is required, by section 16 of the Act, to appoint a conciliation officer. By virtue of section 72(2) of the Act where no collective agreement is in operation no strike or lockout can commence until the Minister has appointed a conciliation officer and fourteen days have elapsed after a no-board report. The scheme of bargaining under the Act clearly contemplates that the giving of notice under sections 14 and 53, and by clear extension the giving of notice under section 63(3) of the Act, are required before a union can lawful strike or an employer can lawfully impose a lockout. That is not disputed by the union in the instant case. Counsel for the union maintains, however, that in this case the union did not give notice under section 63(3). In her view the union is therefore free to pursue the continuation of the prior right to strike which matured against the predecessor employer, Davidson Funeral Homes.

20. In other words, counsel for the union submits that sections 63(3) gives the union a choice. She argues that when the sale of a business takes place during a strike the union may either continue the strike as an ongoing incident of continuing bargaining or, in the alternative, it can give notice to the employer under section 63(3), thereby ending its strike and reverting to the negotiation and conciliation process that must be pursued to the point of a no-board report before a strike can be lawfully undertaken against the new employer.

21. In our view that analysis of section 63(3) raises some fundamental problems. Firstly, bearing in mind that legislation must be presumed to have some meaning and purpose, it is difficult to see why a union should need the alternative which she describes. Mediation is generally available to willing parties when a strike is ongoing. Moreover, there is nothing under the Act to prevent a union from pursuing mediation and suspending ongoing strike for such time as it sees fit, assuming no lockout has been imposed. It is difficult to see why the Legislature would have deliberately fashioned the possibility of a second round of conciliation as a precondition to a strike at the option of the union when the union already has the capacity to suspend its strike and explore the possibility of a mediated solution to its dispute.

22. A further difficulty with the union's interpretation is the obvious inequality in bargaining that it would create. In the scheme of the Act the strike and lockout are co-relative rights. Neither party can strike or lockout until the requirements of the Act, in the form of notice, bargaining conciliation and the lapse of time after a no-board report have been met. A significant feature of the balance of bargaining under the Act is that neither party can, except by making a collective agreement, remove the other's power to lawfully use economic sanctions once those conditions precedent have been met. As a corollary right, the choice as to the timing of a strike or lockout rests entirely in the discretion of the union and employer respectively. If the union's interpretation of section 63(3) obtains, that fundamental balance would be shifted on the sale of a business. If we were to accept the union's interpretation, the Act so construed would give to the union the unilateral right to end not only an ongoing strike by giving notice under section 63(3), but also the unilateral right to end an ongoing strike lockout by giving the same notice. Since the power of notice under section 63(3) is exclusively the union's, the employer could not exercise a similar right. Counsel for the union was not troubled by that anomaly. We are.

23. We cannot accept the union's construction of the rights granted by section 63(3) of the Act. Its interpretation would spawn procedures that are unnecessary and which are fundamentally

478 [1990] OLRB REP. APRIL

counter to the scheme of bargaining generally contemplated by the Act. In effect, counsel for the union submits that section 63(3) of the Act, by continuing the union's right to bargain for the employees has, in the words of Goldenberg, continued all collective bargaining proceedings as they were before the sale. Neither the history nor the words of the section support that conclusion.

24. The limited words of section 63(3) of the Act and their piecemeal evolution stand in sharp contrast to the plain words that might have been chosen to impart the intention advanced by the union, and which have been chosen by the Legislature in a different context of successorship. Section 62 of the Act, which deals with the consequences of amalgamation or merger by which one union may become the successor another, is unequivocal in its terms. Where there has been a merger, amalgamation or transfer of jurisdiction the section vests in the Board the authority to declare that the successor union has "acquired the rights, privileges and duties under this Act of its predecessor" and subsection 3 of section 63 provides:

Where the Board makes an affirmative declaration under subsection (1), the successor shall for the purposes of this Act be conclusively presumed to have acquired the rights, privileges and duties of its predecessor, whether under a collective agreement or otherwise, and the employer, the successor and the employees concerned shall reorganize such status in all respects.

25. The wording chosen by the Legislature to describe the rights of a union vis-a-vis the successor employer where no collective agreement is in effect are obviously more limited. The plain reading of the section leads to the conclusion that the union has what the section gives it, namely the entitlement (in our view a word indistinguishable from "right") to give notice to the new employer of its intention to bargain to make a first collective agreement or to renew and amend a previously expired collective agreement. By the inescapable words of the Act the notices so given, for the purposes set out in subsection (10) of section 63, has the same effect as certification.

26. The issue in this case relates directly to the issue before the Board in Oxford Manor Rest Home, [1980] OLRB Rep. Dec. 1786. In that case the Board was required to assess a union's claim that a freeze of the employee's rights under section 79 of the Act instituted by notice to bargain to the predecessor employer continued in effect against the successor employer after the sale of the business. Interpreting section 63(3) (then 55(3)) the Board determined that the freeze binding the predecessor employer, triggered by notice to it under section 14 of the Act, did not survive the transfer of the business. In other words, the rights of the union as against the prior employer as they stood under the Act at the time of the sale did not continue without interruption to bind the new employer. Any freeze of the conditions of employment binding the successor employer was found to originate entirely in the notice to bargain given to the successor employer under section 63(3) of the Act and extended only to conditions as they stood at that date. In concluding that section 63(3) does not vest in the union all ongoing proceedings and rights under the Act as against the successor employer the Board commented at p. 1788:

In essence the trade union, such as in the instant case, continues 'to be the bargaining agent for the employees of the person to whom the business was sold' and 'is entitled to give to the person to whom the business was sold a written notice of its desire to bargain with a view to making a collective agreement'. Nothing in the section explicitly puts the new employer into the shoes of the previous employer so as to make all the rights and obligations relating to the collective bargaining relationship automatically attach to the new employer. The fact that the Legislature has specifically set out that the trade union shall continue to be the bargaining agent and shall have the right to serve notice to bargain on the new employer, militates against there being any additional rights or privileges from any other notice to bargain which may have been served on the previous employer. This view is further fortified by an examination of section 55(2) which, in dealing with a sale of business while an application for certification or termination is before the Board provides, '... person to whom the business has been sold is ... the employer for the purposes of the application as if he were named as the employer in the application'. In this latter case where the Legislature intended that the new employer should fit precisely into the shoes of the previous

[1990] OLRB REP. APRIL 479

employer it has explicitly said so. Had the Legislature similarly intended in section 55(3) we have no doubt it would have said so.

27. It should be noted that the giving of notice to a successor employer under section 63(3) affords the union extraordinary protection to its bargaining rights - protections which are clearly beyond those available if the section were merely to continue all proceedings under the Act as they stand at the time a business is sold. In a recent decision the Board had occasion to explore the benefit to a union conferred by sections 63(3) and (10). In Vaunclair Meats Limited, [1981] OLRB Rep. Aug. 1186 the Board found that the giving of notice by a union under section 63(3) (then 55(3)) has the effect of sheltering a union for at least one year from applications for the termination of its bargaining rights or from raids by another union. When a union gives notice under the section that would otherwise be the open period in which the union is vulnerable to termination or displacement is effectively closed. In dismissing the application for termination brought by an employee in that case the Board commented:

Where a business has changed hands the possibility of greater stress on a union is real; it can no longer be sure that it will bargain with the same expectations along the paths that it travelled time and again with the predecessor employer. In this sense a union bargaining with a successor employer after the transfer of a business is in a situation similar to a union bargaining a first collective agreement after certification. By enacting section 55(10) of the Act the Legislature has recognized that reality and provided the union faced with a first negotiation with a successor employer the same protection of its bargaining rights as would operate to protect the negotiation of a first collective agreement. Like a newly certified union, a union dealing with a successor employer can proceed with the assurance that its bargaining rights cannot be subject to attack for a minimum of one year. That is the unequivocal effect of section 49(1) of the Act and it is the clearly intended consequence of section 55(10) of the Act.

28. There are compelling reasons for qualifying the rights of unions and employers by postponing the right to strike or lock out on the sale of a business. By the present operation of article 63(3) an employer who purchases a business during a strike is given at a minimum the opportunity to advance his own proposals and attempt to make a collective agreement in an atmosphere free of the inevitable tension of a strike or lockout. The industrial dispute will, after all, generally not be of his own making. The new employer may well bring to the bargaining table a substantially different point of view, shaped by such various factors as his own production and marketing strategies, his employment policies or collective agreements in other plants, his general objectives for the business, and an economic well being that may differ substantially from his predecessor's. In many respects he may display a more positive face with more positive results. The view, implicit in the Act, therefore, is that at the moment of the sale the successor employer should be given a fair opportunity to bargain initially in an atmosphere devoid of the stress caused by a lockout or strike. Moreover, the opportunity so given to the new employer is not prejudicial to the union in any terminal sense. The right to strike the new employer is not removed; it is only postponed for the time which the Act allows for any two parties to avail themselves of the statutory mechanisms designed to assist them to reach an accommodation. In our view that result is more consistent with the scheme of the Act. It is, moreover, the only conclusion supportable on the words of section 63 viewed in the overall context of the statute.

29. We agree with the above reasoning and we are satisfied that it does support the position of the Corporation in this case. We note that the statutory provisions which are determinative are contained in the Act and not in the HLDAA. The sale of a business, the notice to bargain and the appointment of a conciliation officer provisions are in the Act and these provisions are not modified by the HLDAA. The fact that the circumstances of this case concern a "hospital" as defined by the HLDAA cannot affect the Board's interpretation of section 63 of the Act.

30. The essence of Davidson-Walker Funeral Homes, sup na, is that section 63 of the Act has the effect on a sale of a business of preserving a trade union's bargaining rights and a collective agreement, if one exists. Section 63 of the Act does not preserve all of the rights of employees or their trade union as they stood at the time of the sale. When a sale occurs after certification and before a collective agreement is executed, the trade union has the right to give notice to bargain to

480 [1990] OLRB REP. APRIL

the successor and that notice has the same effect as certification under section 7 of the Act. The trade union and the successor, the Corporation in this case, are free to engage in collective bargaining and to utilize all of the dispute resolution mechanisms available to them, including in this case, a conciliation officer and a board of arbitration if necessary. Given this scheme, the Board is of the view that the board of arbitration constituted by LOBA and ONA cannot have any impact on the parties to this application subsequent to the sale of the business from LOBA to the Corporation.

11. Accordingly, the Board's advice to the Minister is that he is required to appoint a conciliation officer in this case even though an arbitration board has already been constituted under the Hospital Labour Disputes Arbitration Act.

CONCURRING OPINION OF BOARD MEMBER H. PEACOCK; April 4, 1990

1. I concur in the Board's advice to the Minister and add the following observations.

2. In paragraph 10 above the Board writes that:

the board of arbitration constituted by LOBA and ONA cannot have any impact on the parties to this application subsequent to the sale of the business from LOBA to the Corporation.

3. That first board of arbitration was scheduled to convene April 11, 1990. The question then may be, does the first board of arbitration have jurisdiction to settle terms and conditions for the period from the first notice to the date of sale. It may decide that it does not. Such a decision would require the parties to put their positions regarding the pre-sale period terms and conditions before the second conciliation officer and ultimately a second board of arbitration, if one is required. Though it was not for the Board to decide in advising the Minister, a result is possible, from considering the submissions of counsel, that no tribunal may have jurisdiction for the period from the date notice was first given following certification to the date of sale, an interval of 19 months in this case. The Goldenberg report contemplated that the purchaser should be "bound by all the proceedings before the date of sale", but the Legislature did not adopt this broader recommendation in enacting section 63 as it is now numbered. (Paragraph 14 of Davidson-Walker Funeral Homes, supra). Instead, by enacting subsection 63(10) which gives the notice of desire to bargain following a sale the same effect as certification, the Legislature may have afforded the parties, but especially the new employer, a clean slate, erased of all of the matters, settled or otherwise, that were on the bargaining table prior to the sale. When time runs, as it has in this case, the impact of decisions of the Labour Relations Board and possibly two boards of arbitration may be to deny the affected employees for a very long period of time the access to collective bargaining their certificate granted them.

4. We were not advised of any application for termination of bargaining rights. The trade union has maintained its representational duties, obviously. There has likely been a reliance by employees on an expectation that there will be a collective agreement covering the period from the date notice to bargain was given following certification in December 1987. This Board cannot amend the law. But in agreeing that this panel has correctly applied the law I feel compelled to say that the Board must point out this potential lapse in the law for these employees, as part of our advice to the Minister.

[1990] OLRB REP. APRIL 481

0368-89-U; 0369-89-U; 0857-89-U Anna Wilson, Complainant v. Ontario Public

Service Employees Union and Ontario Public Service Employees Union, Local

110, Respondents v. Fanshawe College, Intervener #1 v. Ontario Council of

Regents for the Colleges of Applied Arts and Technology, Intervener #2; Anna

Wilson, Complainant v. Ontario Public Service Employees Union and Ontario

Public Service Employees Union, Local 110, Respondents v. Eanshawe College,

Intervener #1 v. Ontario Council of Regents for the Colleges of Applied Arts and

Technology, Intervener #2; Anna Wilson, Complainant v. Ontario Public Service

Employees Union, Respondent v. Fanshawe College, Intervener #1 v. Ontario

Council of Regents for the Colleges of Applied Arts and Technology, Intervener

#2

Duty of Fair Representation - Practice and Procedure - Unfair Labour Practice - Motion by counsel for the complainants to have the Board remove counsel for the union on basis of conflict of interest - Argued that counsel for respondent had acted on behalf of the complainants on grievances and had received confidential information in that capacity - Whether Board has the jurisdiction to compel a party to change counsel - Board discussing jurisdiction over professional conduct of barristers and solicitors - Board declining to entertain motion on discretionary grounds

BEFORE: Judith McCormack, Vice-Chair, and Board Members R. M. Sloan and B. L. Armstrong.

APPEARANCES: Joseph Hoffer and Anna Wilson for the complainants; James Hayes, Stephen T.

Goudge, R. Ross Wells, Paddy Missson, Gary Fordyce and Tom Geldard for the respondents;

Brenda Bowlby and Guy Giorno for interveners #1 and #2.

DECISION OF THE BOARD; April 26, 1990

1. On the agreement of the parties, the names of the respondents in Files 0368-89-U and

0369-89-U are amended to read: "Ontario Public Service Employees Union and Ontario Public

Service Employees Union, Local 110", and the name of the respondent in File 0857-89-U is

amended to read: "Ontario Public Service Employees Union".

2. These cases are three complaints which were scheduled to be heard together, all alleging that the union respondents have violated section 68 of the Labour Relations Act. Although there is only one complainant, she is joined by a number of grievors listed in the complaint, whom we will also refer to as "the complainants" for the purpose of this decision.

3. At the commencement of the hearing, counsel for the complainants made a motion to have the Board remove James Hayes from his position as counsel for the respondents on the basis that a conflict of interest existed with respect to his representation of the respondents. More specifically, Mr. Hoffer claimed that Mr. Hayes and other members of his firm, Cavalluzzo, Hayes & Lennon, had acted on behalf of the complainants on a variety of grievances and one court application between 1982 and the present, and that they had received confidential information from the complainants in that capacity. It is not clear whether or to what extent that information relates to the grievances which form part of the subject matter of these complaints. Having allegedly received this confidential information, the complainants assert that Mr. Hayes and members of his law firm should not now take a position where they might be tempted, or might appear to be tempted, to use such information against the complainants.

482 [1990] OLRB REP. APRIL

4. Counsel for the parties advised us that they intended to call a total of six or seven witnesses between them to give evidence on the motion, which would consume a number of the days set aside for the hearing of the merits of the complaint. As a result, we asked the parties to first address whether the Board had the jurisdiction to entertain the subject matter of the motion at all and, if we had the jurisdiction, whether in the exercise of our discretion, it was appropriate for us to deal with the matter. The Board also directed the complainants to provide further particulars of the conflict alleged. Subsequently, we issued the following decision:

The complainants' motion is dismissed. Our reasons will follow.

5. After our ruling, Mr. Hayes concluded on the basis of further investigation of the particulars filed that there might indeed be a conflict of interest in relation to a matter handled by a former member of his firm. As a result, Mr. Hayes stepped down as counsel for the respondents. On the next day of hearing, Steven Goudge from the firm of Gowling, Strathy and Henderson appeared on behalf of the respondents. Counsel for the complainants then made a similar motion, alleging that Mr. Goudge and members of his law firm had represented the complainants in the past on a variety of grievances, and received confidential information in that capacity. As a result, he argued, representing the union in these complaints placed Mr. Goudge and his firm in a conflict of interest position. Once again particulars were requested, which counsel for the complainants agreed to provide. Mr. Hoffer also advised the Board and Mr. Goudge that he intended to file a complaint with the Law Society of Upper Canada, the professional regulatory body for lawyers in Ontario. Mr. Goudge then requested an adjournment for the purpose of receiving and reviewing the particulars referred to above, and obtaining an advisory opinion from the Law Society. Although we granted the adjournment, we also set eighteen more hearing days and the respondents were advised that if they changed counsel for any reason, they would have to obtain counsel prepared to proceed on those days. The respondents were also directed to notify the Board and the other parties by December 31, 1989 whether Mr. Goudge would be continuing to represent the union. If he was, the Board would then rule on the second motion. Subsequently, Mr. Goudge notified the parties and the Board that he had received an advisory opinion from the Law Society, and that he would be continuing to represent the respondents. The Board then dismissed the second motion. We now provide our reasons for the dismissal of both motions.

6. In support of its position that the Board had the jurisdiction to compel a party to change counsel and should proceed to hear the motion on its merits, the complainants argued that the Board had an inherent and implied jurisdiction to remove a solicitor of record in much the same manner as a court, that the Board had an inherent jurisdiction to control its own processes, and that sections 102(13) and 106 of the Labour Relations Act provided those powers as well. Counsel referred to the Law Society of Upper Canada's Rules of Professional Conduct and the Canadian Bar Association's Code of Professional Conduct, and suggested that the Board should apply those rules in a manner analogous to the application of the Canadian Charter of Rights in a case before the Board. In his view, the right of parties to choose their own counsel must be balanced against the public's confidence in the administration of justice. While he acknowledged that his motions involved an arguable, rather than a clear cut case of conflict, he asserted that this was the only forum which provided the specific relief he sought. In the alternative, he asked that the Board simply issue a declaration of conflict of interest, rather than removing Mr. Hayes, and subsequently Mr. Goudge, as the respondents' counsel in this matter.

7. With respect to the first motion Mr. Hayes argued that it was designed to disadvantage the respondents by denying them the use of counsel experienced in labour relations and knowledgeable about their affairs, that the motion itself had no merit since the respondents were the clients in all the previous matters described by the complainant and not the complainant and the

[1990] OLRB REP. APRIL 483

grievors, and that the one instance of a court application was unrelated to the matters before us. In his view, the duties between a solicitor and client pertained to the relationship between Cavalluzzo, Hayes and Lennon and the respondents, rather than between Cavalluzzo, Hayes and Lennon and the complainants. However, if the Board had jurisdiction to deal with the matter, the respondents were content to have the Board decide the merits of the motion, given its legal and labour relations expertise. With respect to the second motion, Mr. Goudge adopted Mr. Hayes' arguments.

8. Turning first to the question of whether the Board has the jurisdiction to entertain this motion, we have serious doubts about our ability in this regard. Unlike a superior court which has an inherent supervisory jurisdiction over lawyers, the Ontario Labour Relations Board is an administrative tribunal, and its jurisdiction is founded in the Labour Relations Act and other statutes which refer matters to the Board for determination. For the Board to have jurisdiction over the subject matter of the motion, there must be some statutory foundation for it. The complainants referred us to Minto Construction Ltd. v. Regional Assessment Commissioner (1989), 1989 CanLII 4252 (ON HCJ), 68 O.R. 350 (H.C.), a case involving the application of the Canadian Charter of Rights and Freedoms to proceedings before the Ontario Municipal Board. We do not find this case particularly helpful for two reasons. Firstly, there is an obvious distinction between the Charter, which is described as part of the supreme law of Canada by virtue of section 52(1) of the Constitution Act, 1982, and the Rules of Professional Conduct which, while authorized by section 62 of the Law Society Act, do not even appear to be provincial regulations. Secondly, we note that the Ontario Municipal Board is granted all the powers of a court of record by virtue of section 33 of the Ontario Municipal Board Act, R.S.O. 1970 c. 323, unlike the Ontario Labour Relations Board. In other words, the case does not stand for the proposition that an administrative tribunal in itself has any inherent jurisdiction, and we do not find the application of the Charter in Board cases to be analogous to the issue before us.

9. Counsel for the complainants also cites sections 102(13) and 106(1) of the Labour Relations Act as the basis for his motions, which provide as follows:

(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.

106.-(1) The Board has exclusive jurisdiction to exercise the powers conferred upon it by or under this Act and to determine all questions of fact or law that arise in any matter before it, and the action or decision of the Board thereon is final and conclusive for all purposes, but nevertheless the Board may at any time, if it considers it advisable to do so, reconsider any decision, order, direction, declaration or ruling made by it and vary or revoke any such decision, order, direction, declaration or ruling.

10. At first glance, both sections appear broad enough to encompass the motions at hand.

However, in our view both sections must be read together with the Statutory Powers Procedure

Act, R.S.O. 1980 c. 484 ("the S.P.P.A.") which applies to the Board as a tribunal exercising a statutory power of decision within the meaning of section 3 of that Act (see Rexwood Products

Limited, [1986] OLRB Rep. Aug. 1139). The S.P.P.A. provides in part as follows:

10. A party to proceedings may at a hearing, (a) be represented by counsel or an agent;

484 [1990] OLRB REP. APRIL

23.-(1) A tribunal may make such orders or give such directions in proceedings before it as it considers proper to prevent abuse of its processes.

(3) A tribunal may exclude from a hearing anyone, other than a barrister and solicitor qualified to practise in Ontario, appearing as an agent on behalf of a party or as an adviser to a witness if it finds that such person is not competent properly to represent or to advise the party or witness or does not understand and comply at the hearing with the duties and responsibilities of an advocate or adviser.

11. Section 10 codifies a basic and traditional legal right with which we would be loathe to interfere. While we do not view that right as absolute, its strength and historical resonance in the Canadian legal tradition is such that we are reluctant to read into section 106 and 102(13) the authority to curtail it in the circumstances of this case. We also note that section 23(3) provides that a tribunal cannot exclude a barrister and solicitor from a hearing for the reasons stated therein. When this section was brought to the attention of the complainants, counsel argued that it should be interpreted so that it was only with regard to matters of competence that a tribunal could not exclude a barrister and solicitor. We agree that that is one possible interpretation of the section; however, it does seem to be worded more broadly than that, referring as it does to "understand[ing] and comply[ingj with the duties and responsibilities of an advocate and an advisor". Certainly the subject of these motions could be considered a question of understanding and complying with the duties and responsibilities of an advocate, in this case, the professional responsibilities of a lawyer. Indeed, it makes some sense to us that a tribunal may have the power to limit the appearances of agents who are not presently governed by any other authority, but that the competence and conduct of barristers and solicitors is presumed, since that is regulated by an existing body with a comprehensive structure of rules and procedures. In our opinion, it would be an odd result to find that the Legislature had removed the competence of lawyers from the ambit of tnbunals governed by the S.P.P.A., but left their professional conduct or responsibilities within their jurisdiction.

12. It is true that section 23(3) does not specifically pre-empt our ability to make a declaration of conflict of interest, the complainants' alternative request. However, if the underlying purpose of section 23(3) is to remove the professional conduct of banisters and solicitors from the scrutiny of the Board, it would be inconsistent to enter into an investigation of that conduct for the purpose of providing declaratory relief, particularly when that relief is available from a more appropriate forum, such as the Law Society of Upper Canada or, perhaps, a superior court.

13. Ultimately, we do not find it necessary to resolve our doubts about our jurisdiction because we are also of the view that we should decline to entertain this motion on discretionary grounds. We have little difficulty in concluding we have such a discretion. Assuming, without finding, that section 106 is drafted broadly enough to include this motion within its parameters, we do not read it as requiring us to determine every question of fact and law which arises, but only enabling us to do so. Certainly the Board is presented frequently with evidence and arguments upon which it is not necessary for it to rule, because other evidence or arguments may dispose of the application before it. Often arguments are expressly advanced as alternative positions. As a routine matter then, the Board decides only those questions which it deems necessary to determine the application or complaint before it. If the Board were required to determine every single question of fact and law arising before it, the Board's proceedings would rapidly come to a standstill.

14. Similarly, section 102(13) only authorizes the Board to determine its own practice and

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procedure. It leaves open the possibility that our determination may be to refuse to entertain any particular motion. And even if one could characterize the issue here as one involving abuse of process, a proposition which is far from self-evident, section 23(1) of the S.P.P.A only allows the Board to make orders and directions; it does not require us to do so.

15. With that in mind, we must consider whether it is necessary for us to determine the merits of this motion as a concomitant of our responsibilities towards these complaints as a whole. The issue before us in these complaints is whether the union violated its duty to represent the complainants in a manner which is not arbitrary, discriminatory or involving bad faith. The allegations before us cite a sequence of events relating to the settlement of compensation with respect to a number of workload grievances, an agreement on a consent arbitration award, and subsequent amendments to a collective agreement. It is not alleged in these complaints that the representation of the respondents by either Mr. Hayes or Mr. Goudge is in itself a violation of section 68. Rather, the conflict of interest question relates to a matter separate and apart from the respondents' duties towards the complainants under the Labour Relations Act. We can certainly determine whether there has been a violation of section 68 without deciding whether the professional responsibilities of the respondents' lawyers prevent them from representing the respondents in these complaints. That issue is entirely superfluous to the merits of these complaints.

16. If we are not required to decide this motion, in our view it would be unwise to do so. In the first place, there is a real likelihood of conflicting decisions were we to determine the merits of this kind of issue. There is no question that the Law Society of Upper Canada is charged with the jurisdiction to determine matters relating to the professional conduct of lawyers in Ontario. Indeed, the Rules of Professional Conduct the complainants wish us to apply in this case are a creation of the Law Society in pursuance of its powers to supervise the legal profession. In addition, it may also be that the inherent jurisdiction of the courts extends even to the conduct of counsel not currently before them in an action. It is possible that if the Board decided, for example, that there was no conflict of interest in this case, the Law Society or a court might decide otherwise, resulting in obvious difficulties.

17. We are also concerned that entertaining this kind of motion might well have the affect of tying up a significant portion of the Board's time and resources. The Board was originally designed as an adjudicative body which would resolve labour relations matters in an informal and expeditious manner. We must be constantly vigilant that our processes do not evolve into something more cumbersome, time-consuming and expensive than the court proceedings they were intended to replace. There is no doubt that parties are now more commonly represented by legal counsel, and as a result, the Board has had to consider a number of related issues which are essential to decisions on contested issues before it. One typical example is deciding whether certain evidence relating to conversations between a lawyer and a client is "privileged", in the course of determining its admissibility. But the Board has only extended itself into this area to the extent necessary to facilitate its hearings and the disposition of the various kinds of applications and referrals contemplated by the Labour Relations Act. What we are asked to do here is to go one step further, and decide a matter of professional conduct which is essentially unrelated to the primary issue involved in the complaints. In our view such an excursion would be at best, gratuitous, and at worst, foolhardy. It was indicated by counsel for the complainants that he had at least five witnesses to call on the merits of the conflict of interest motion. The respondents indicated that they would have one or two witnesses. With three parties entitled to cross-examination, this was likely to add a significant number of days to the already extended hearing schedule for these cases. It appears to us that entertaining motions relating to counsel's conduct or the propriety of their representation could occupy the Board's scarce resources in lengthy disputes unrelated to its mandate under the Labour Relations Act, that is, not only to resolve labour relations conflicts, but to

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resolve them in an expeditious manner. Our conclusion in this regard is reinforced by the possibility of other forums where these issues can be canvassed.

18. Naturally, we are not unmoved by the respondents' view that our particular labour relations expertise is important in determining the conflict of interest motion. There is no doubt that the issue of the identity of the client when a lawyer is counsel on a grievance under a collective agreement is one which may be coloured by the traditional background and specific culture of labour relations and labour law. However, it is also clear that other bodies such as the Law Society and the courts have their own specific expertise in matters such as the professional conduct of lawyers, and that it is possible for counsel to acquaint them with the climate and circumstances of the labour relations community. In any event, this alone would not persuade us to entertain matters which have a significant potential for interfering with the expeditious resolution of our cases.

19. For these reasons, if we have the jurisdiction to entertain this kind of motion, we decided that we had the discretion not to do so, and we exercised it accordingly.

COURT PROCEEDINGS

01O1-87-R (Court File No. 206/88) Genspec Construction Incorporated, Applicant v. United Brotherhood of Carpenters & Joiners of America, Local Union 27 and Ontario Labour Relations Board, Respondents

Bargaining Unit - Certification - Construction Industry - Employee - Judicial Review -Practice and Procedure - Board using tests in Gilvesy and E & E Seegmiler to determine whether persons should be included in the bargaining unit for purposes of "the count" - Employee included in unit because majority of his working time on date of application spent performing carpentry work

• Certificates issuing - Employer bringing application for judicial review on the grounds that, inter aba, the Board erred in considering the type of work performed by employees solely on the application date as opposed to a more representative period - Judicial review dismissed by Divisional Court

Board decision February 3, 1988 (unreported).

High Court of Justice, Divisional Court, Reid, Steele, and Lane JJ., April 18, 1990:

Reid J.: This application is dismissed. Notwithstanding Ms. Oughtred's able argument we are not persuaded that the Board erred in any way that would justify the intervention of this court. Costs to respondent union.