[1991] OLRB Rep. May 579
0007-90-R; 0008-90-G; 0009-90-U Labourers' International Union of North America, Local 1059 and Labourers' International Union of North America, Ontario Provincial District Council, Applicants/Complainants v. Ably Concrete Floor Limited and Turner Murray Contractors Inc., Respondents
BEFORE: R. A. Furness, Vice-Chair, and Board Members C. A. Ballentine and W. N. Fraser.
APPEARANCES: L. A. Richmond and J. MacKinnon for the applicants/complainants; T. A. Crossman and Willis Turner for Ably Concrete Floor Limited; Barry Card and W. V. Hicks for Turner Murray Contractors Inc.
DECISION OF THE BOARD; May 29, 1991
The name of one of the respondents appearing in the styles of cause of these matters is amended to read: "Ably Concrete Floor Limited".
In Board File 0007-90-R, the applicants have applied to the Board under sections 63 and 1(4) of the Labour Relations Act with respect to the bargaining rights of Labourers' International Union of North America, Local 1059 ("Local 1059") as the result of an alleged sale of a business by Ably Concrete Floor Limited ("Ably") to Turner Murray Contractors Inc. ("Turner") which is alleged to have taken place on or about February 1, 1990. The applicants have also applied for an order under section 1(4) of the Act.
It is the position of the applicants that a sale of a business did take place and as a result Tumer is bound to the industrial, commercial and institutional collective agreement entered into by the Labourers' Employee Bargaining Agency and the Labourers' Employer Bargaining Agency and that Turner is required to meet within fifteen days of the giving of notice and to bargain in good faith and make every reasonable effort to make a collective agreement with the applicant in the non-industrial, commercial and institutional sector of the construction industry. With respect to the request for relief under section 1(4), the applicants seek a declaration that the respondents constitute one employer pursuant to that section.
In Board File No. 0008-90-G, the applicants have referred a grievance concerning the interpretation, application, administration or alleged violation of a provincial collective agreement to the Board for final and binding determination. The provincial collective agreement was entered into on May 16, 1988, and is operative from May 1, 1988, to April 30, 1990. In the grievance, the applicants have grieved on their own behalf and on behalf of its past and present members that Ably and Turner have violated the provincial collective agreement in respect of its projects in London and Sarnia. It is the position of the applicants that Ably and Turner have failed to apply the provincial collective agreement entirely and has thereby violated each and every article of the provincial collective agreement. In particular it is the position of the applicants that Ably and Turner have performed work covered by the provincial collective agreement without applying the provincial collective agreement and have engaged subcontractors who are not in contractual relations with the applicants contrary to Article 2 of the provincial collective agreement. The applicants seek the following relief:
A declaration that Ably and Turner have violated the provincial collective agreement.
An order that Ably and Turner comply with the full terms and conditions of the provincial collective agreement forthwith.
An order that Ably and Turner pay to the applicant damages arising out of their violation of the provincial collective agreement, including the payment of wages and all other monetary benefits to the applicants in trust for employees who would have received these wages and other monetary benefits had Ably and Turner not violated the provincial collective agreement as aforesaid forthwith with interest.
An order that Ably and Turner pay to the applicants' union dues that the applicants would have received had Ably and Turner not violated the provincial collective agreement as aforesaid, forthwith, with interest.
An order that Ably and Turner pay to the appropriate recipients contributions in respect of industry, grading and retraining, pension funds contributions, welfare funds contributions and other contributions as required by the provincial collective agreement, forthwith, with interest.
Such further and other relief as may be appropriate in the circumstances.
In Board File No. 0009-90-U, the complainants have complained that on or about February 1, 1990, the respondents have dealt with the complainants contrary to the provisions of sections 3, 15, 64, 66, 70 and 79 of the Act. The complainants seek the following relief:
A declaration that the respondents have violated sections 3, 15, 64, 66, 70 and 79 of the Act.
An order that the respondents cease and desist from violating the Act as set out in the complaint.
An order that the respondents meet and bargain in good faith with the complainants and make every reasonable effort to make a collective agreement with the complainants.
An order that the respondents compensate the complainants for all damages they have sustained due to the respondents' violation of the Act.
5uch further and other relief as may be appropriate in the circumstances.
The Board heard evidence from Willis Turner, the president of Ably, from William Hicks, the Vice-President of Turner, and from Gary Turner, the President of Turner.
After hearing the representatives of the parties, the Board ruled at the commencement of the hearing that in view of the commonality of the allegations of fact, the Board would hear the complaint under section 89 and .the applications under sections 63 and 1(4) matters together initially, and, if appropriate, would subsequently hear the referral under section 124 of the Act.
Ably was incorporated on October 29, 1984, by four cement masons, namely, Willis Turner, Edward House, Sr., Edward House, Jr., and Douglas House. Each of them owns one of the four issued shares in Ably which was in the business of installing concrete floors until December of 1989. Willis Turner is the oldest of the four at fifty-nine and has more than thirty years of experience in the trade of cement mason. Edward House, Sr., is fifty-four and has twenty-seven years of experience in the trade, Edward House, Jr., has nine years experience in the trade and Douglas House has seven years experience in the trade. Willis Turner is the sole director of Ably and is also its president. Edward House, Sr., is the secretary and Edward House, Jr., is the treasurer. In 1989 the last complete year of operations, Ably achieved gross sales between $450,000 and $475,000 and each partner received about $50,000 from Ably.
Turner has been in existence since 1979. Certain changes in ownership which are not material to this application occurred between 1979 and 1981. In 1981 William Hicks became involved in Turner. There are one hundred and twenty-two issued shares of Turner. William Hicks owns fifty-one shares, Gary Turner owns fifty-one shares, their wives, Mrs. Hicks and Mrs. Turner each own an additional ten shares for a total of one hundred and twenty-two shares. Mr. Turner is the president with twenty-two years experience as a cement mason. Mr. Hicks is the vice-president. Mrs. Turner is the secretary and Mrs. Hicks is the treasurer. Turner is engaged in concrete floor finishing with some repair work. Most of its work is in the industrial, commercial and institutional sector of the construction industry. None of the persons referred to in paragraph 8 has any ownership or any financial interest in Turner. None of the persons referred to in this paragraph has any ownership or any financial interest in Ably. Willis Turner is the uncle of Gary Turner.
On November 14, 1989, the Board issued certificates to Local 1059, iter alia, with respect to "all construction labourers in the employ of [Ably] in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario, save and except non-working foremen and persons above the rank of non-working foreman" and also with respect to "all construction labourers in the employ of [Ably] in all sectors of the construction industry in the Counties of Oxford, Perth, Huron, Middlesex, Bruce and Elgin, excluding the industrial, commercial and institutional sector, save and except non-working foremen and persons above the rank of non-working foreman." Willis Turner and his three partners in Ably met with representatives of the applicant on December 6,1989, at the offices of the applicant. It was explained to the four partners that they were bound by the Labourers' provincial collective agreement and there was some discussion of the other bargaining rights held by the applicant. After the meeting the four partners left the meeting with the applicant on December 6, there was a discussion as to whether Ably should carry on or fold up. On December 7 Ably received clearance to finish a job which was in progress and on the same day the employees of Ably requested their employment separation papers. It was the evidence of Willis Turner that depending on the weather this was the start of the slack time which would last until the Spring or about May. He added that the slack or slow time depended on the weather and/or the amount of work actually available. It was his assessment that there would be very little work in the Spring for Ably. The Board notes that there was very little evidence before the Board which supported this assessment by Willis Turner.
In fact Ably did not start up its operations in the Spring of 1990. Willis Turner stated that the reasons were that it could not afford the rates under the collective agreement, an inability to employ a person full-time in the office and an expectation that they would not be able to keep their steady customers and pay the rates under the provincial collective agreement. On December 6, 1989, Willis Turner at approximately 3:00 p.m. telephoned the offices of Turner and left a message for Gary Turner who returned the telephone call that evening. The evidence of Willis and Gary Turner about the contents of this and subsequent telephone calls is peculiarly short of details. For example, during this first telephone conversation, Willis Turner told Gary Turner that he was looking for work but did not say why and Gary Turner did not ask why. However, Gary Turner did say that he would have to speak to William Hicks. The conversation which lasted a couple of minutes according to Gary Turner also covered the fact that while no dates were mentioned, the three Houses were also looking for work. The next morning Gary Turner spoke to William Hicks about his telephone conversation and told him that "Willie and the three Houses are looking for work." Gary Turner testified that he felt a little uncomfortable dealing with his uncle and decided to let William Hicks make the inquiries and make the decision.
On December 21, 1989, Willis Turner made a telephone call to William Hicks and Gary Turner. The call led to a meeting at the home of Willis Turner on Saturday, December 23, 1989. William Hicks had sought legal advice about the requests for employment. A decision had been made to hire the four partners before December 23. At the meeting the four were offered employment at the same rate as other employees, namely, sixteen dollars and fifty cents an hour. The evidence before the Board is that although William Hicks and Gary Turner were aware of Ably's relationship and obligations with the applicants, not a single question was asked and no points were raised. It is incredible that witnesses who admitted to being curious over the relationship between Ably and the applicants never once sought clarification. This is all the more strange given the fact that the reason legal advise was sought was certainly due to the relationship and obligations which flowed between Ably and the applicants.
Willis Turner made no secret of the fact to his customers that the four partners were going out of business as Ably and that they were working for Turner. He gave customers business cards from Turner. William Turner arranged for work which he had previously estimated for Ably's customers to be completed by the partners as employees of Turner at the same price after speaking to either William Hicks or Gary Turner. Turner invoiced for the completion of the work not Ably. In 1990 Turner attracted thirty-five new accounts. Of these new accounts six were for former customers of Ably. William Hicks was unable to tell the Board of the last occasion prior to December 1989 where Turner had hired cement masons in December. After the four partners had been hired by Turner, they spent several months working for former customers of Ably. Willis Turner did the estimating of jobs for Ably and from time to time he estimates for Turner under the supervision of William Hicks and Gary Turner.
Prior to December 1989, Ably and Turner were competitors. In 1989 Turner's sales figures were somewhat more than twice the sales figures for Ably. Willis Turner gave evidence that he was not asked for customer lists by Turner. He explained that as competitors, Turner and Ably had a very good idea of where the other's work was coming from. Willis Turner stated in evidence that quite frankly his skill, contacts and reputation made him attractive to Turner. Ably did not own any vehicles and operated its business out of the home of Willis Turner. Such assets which Ably did possess have not been disposed of. These include nine power trowels with a value of between $1,200 and $1,800, two wheelbarrows, and a few bags of hardner. The four partners continue to use Ably's power trowels from time to time because they are in better condition than the power trowels which Turner owns. However, Turner paid for the maintenance of these machines. Most of Ably's work was secured by requests by telephone for quotations on a job. The balance of work was generally secured by tendering to specific jobs. The former method was generally done with a minimum of formality with an invoice changing hands.
The issue in the application under section 63 is whether there has been a sale of a business from Ably to Turner. In Raymond Cots, [1968] OLRB Rep. Mar. 1211 at page 1214, the Board remarked that a business is the totality of the undertaking. The physical assets of buildings, tools and equipment used in a business are not necessarily the undertaking per se but are, along with management and operating personnel and their skills, necessary in the operations to fulfill the obligations undertaken with a hope of producing profit to assure its success. The total of these things along with certain intangibles such as goodwill constitutes a business. The transaction under consideration must necessarily be viewed in the context of the industry which is involved. In The Tatham Company Limited, [1980] OLRB Rep. Mar. 366, the Board stated at pages 376-377 as follows:
The issue of employer successorship arises out of a seemingly endless variety of factual settings, with each new case presenting some of the factors considered relevant to the resolution of prior cases while raising other materially altered, entirely omitted, or newly-added facts which arguably should affect the decision on the merits. Much of the confusion which attends successorship results from the facility with which each case can be distringuished [sic] on its facts from all former cases; but to dismiss the confusion so lightly would be to disregard the fundamental differences inherent in the various business contexts in which the successorship issue arises. Factors which may be sufficient to support a "sale of business" finding in one sector of the economy may be insufficient in another. In some industries, particular configuration of assets - physical plant machinery and equipment - may be of paramount importance; while in others it may be patents, "know-how", technological expertise or managerial skills which will be significant. Some businesses will rely heavily on the goodwill associated with a particular location, company name, product name or logo; while for other businesses, these factors will be insignificant. The Labour Relations Act applies equally to primary resource industries, manufacturing, the retail and service sector, the construction industry and certain public services provided by municipalities and local authorities. In each of these sectors the nature of the business organization is different, yet in each case section 63 must be applied in a manner which is sensitive to both the business context and the purpose which the section is intended to accomplish.
In the instant application, the physical assets, even bearing in mind that Ably operated in the construction industry, are minimal. Yet no one would dispute that the four partners were operating a business in the form of a company, namely, Ably. What were the assets of Ably? In our view they were the skills, contacts and reputation of Willis Turner and, to a lesser degree, the three Houses. The evidence before the Board established that cement masons are not readily hired in London. Even rarer are individuals like the four partners - cement masons with skills, contacts and good reputations. It is clear from the evidence that, by hiring the four partners, Turner added to its customer base and eliminated a substantial competitor. This was done against a background of Ably's newly acquired relationship and obligations with the applicants over bargaining rights. The four partners may be thought of as key personnel and, in the context of this application, by acquiring the exclusive services these four key personnel there was a sale of a business from Ably to Turner within the meaning of section 63 of the Labour Relations Act. Moreover, the Board finds that there has been an intermingling of employees as contemplated by section 63. Accordingly, Turner is bound by the provincial collective agreement referred to in paragraph 3. In addition, Turner is required to meet within fifteen days from the giving of notice or within such further period as the parties agree upon and bargain in good faith and make every reasonable effort to make a collective agreement with respect to the non-industrial, commercial and institutional sector of the construction industry. The application with respect to relief under section 1(4) is dismissed.
Having regard to the evidence before it, the Board finds that Ably has violated and Ably is hereby directed to cease and desist from violating sections 15, 66, 70 and 79 of the Labour Relations Act. The complaints with respect to Ably regarding sections 3 and 64 are hereby dismissed. The complaints with respect to Turner are premature and are hereby dismissed with respect to sections 3, 15, 64, 66, 70 and 79 of the Labour Relations Act.
The Registrar is directed to list the referral under section 124 for hearing. This panel of the Board is not seized.