United Brotherhood of Carpenters and Joiners of America Local Union 785 v. L-K Interior Contracting Ltd.

[1991] OLRB Rep. December 1416

0980-91-G; 0981-91-U; 0982-91-R; 0983-91-R United Brotherhood of Carpenters and Joiners of America Local Union 785, Applicant v. L-K Interior Contracting Ltd., 754762 Ontario Inc. a.k.a Tri-County Contracting and 666017 Ontario Limited, Respondents; United Brotherhood of Carpenters and Joiners of America Local Union 785, Complainant v. L-K Interior Contracting Ltd. 754762 Ontario Inc. a.k.a Tri-County Contracting and 666017 Ontario Limited, Respondents; United Brotherhood of Carpenters and Joiners of America Local Union 785, Applicant V. L-K Interior Contracting Ltd., 754762 Ontario Inc. a.k.a Tri-County Contracting and 666017 Ontario Limited, Respondents; United Brotherhood of Carpenters and Joiners of America Local Union 785, Applicant V. L-K Interior Contracting Ltd., 754762 Ontario Inc. a.k.a Tri-County Contracting and 666017 Ontario Limited, Respondents

BEFORE: G. T. Surdykowski, Vice-Chair, and Board Members W. N. Fraser and H. Kobryn.

APPEARANCES: N. L. Jesin, K. Ball and J. Gross for the applicant; Frank Carere, Rudy Lipowitz and Doug Cox for the respondents on August 6, 1991; Rudy Lipowitz and Doug Cox for the respondents on November 4, 1991; Rudy Lipowitz for L-K Interior Contracting Ltd. and 666017 Ontario Limited, and Doug Cox for 754762 Ontario Inc. a.k.a Tri-County Contracting on November 5 and 6, 1991.

DECISION OF THE BOARD; December 9, 1991

1. The name of the respondent L.K. Interior Contracting Ltd. is amended to "L-K Interior Contracting Ltd."

2. "666017 Ontario Limited" was added as a respondent in all of these matters at the end of the first day of the hearing on August 6, 1991, subject and without prejudice to any arguments the respondents might wish to make subsequently.

3. These matters were heard together. Board File No. 0980-91-0 is a referral to the Board of a grievance in the construction industry pursuant to section 124 of the Labour Relations Act. Board File No. 0981-91-U is a complaint under section 89 of the Act in which the United Brotherhood of Carpenters and Joiners of America Local Union 785 ("Local 785") alleges that the respondents have breached sections 64, 66, 67 and 70 of the Act. Board File No. 0982-91-R is an application under section 63 of the Act in which Local 785 alleges that there has been a sale of a business by L-K Interior Contracting Ltd. ("L-K") and 666017 Ontario Inc. to 754762 Ontario Inc. a.k.a. Tri-County Contracting ("Tri-County"). Board File No. 0983-91-R is an application for relief under section 1(4) of the Act in which Local 785 pleads that the respondents constitute and should be treated as one employer for purposes of the Act.

4. In the course of the first day of hearing, the respondents other than 666017 Ontario Limited (which was added as a respondent later), through their counsel (who represented them at the first day of hearing only), conceded that the relationship between them was such that the prerequisites for a declaration, under section 1(4), that they constitute one employer for purposes of the Act did exist. That is, the respondents L-K and Tri-County conceded that they are separate entities which carry on associated or related activities or businesses under common control or direction. In argument at the conclusion of the evidence, Tri-County (then represented by Mr. Cox) made an attempt to resile from that concession. It would have been unfair to Local 785 to have permitted any respondent to resile from that concession at that stage of the proceeding and we therefor did not allow Tri-County to do so.

5. The respondents did, however, indicate that they would argue that the Board should nevertheless exercise its discretion to not issue a declaration or grant other relief under section 1(4) because Local 785 was guilty of inordinate delay in pursuing its application in that respect.

6. We wish to note that Mr. Cox, who was representing Tri-County at the time, sought to call a witness in reply to testify with respect to the knowledge that respondent asserted Local 785 had of Tri-County and the relationship between it and L-K prior to these proceedings. Mr. Cox advised the Board that he had not sought to call this witness previously because he was not sure that the witness was "available" to testify. The Board unanimously upheld Local 785's objection to this and ruled that what Mr. Cox described was not proper reply evidence because it ought to have been part of the respondent's case in chief. In our view, it would have been unfair to Local 785 to permit Tri-County (or any other respondent) to split its case in such a manner.

7. In the course of his submissions with respect to Local 785's objection to the reply evidence he sought to call, and in final argument, Mr. Cox reminded the Board that he was a small businessman and not a lawyer, which we took to be a kind of plea for greater latitude and in mitigation on the merits of the matters herein.

8. Persons involved in proceedings before the Board are entitled to appear before it with or without counsel or other representation. The Board is sensitive to the difficulties faced by persons who appear before it unrepresented by counsel. Consequently, the Board generally, and as we did in this case, gives such persons somewhat greater latitude in the manner in which they conduct their case than would normally be afforded to counsel. However, the Rules of Procedure and the law applicable to issues raised in the proceedings before the Board are the same for all parties, whether they appear with counsel or not. Choosing to not retain counsel, or otherwise failing to inform itself does not relieve a party of the obligation to prove its case. The considerations of onus, procedural rules (particularly those based in fairness) and the law apply equally to parties which appear without counsel and those which appear with counsel. A party which chooses to not retain counsel, or fails to obtain the appropriate legal advice, or otherwise fails to inform itself, must live with the consequences of exercising that choice. Certainly, it cannot expect to find itself in a more advantageous position procedurally or in law because it has chosen to not retain counsel.

9. Because of the concessions of the respondents other than 666017 Ontario Limited, we find it unnecessary to review in detail the evidence of the relationship between L-K and Tri-County. However, we do observe that, on the evidence before the Board, L-K and Tri-County are clearly separate entities which operate under common control or direction and are engaged in associated or related activities or businesses. The evidence reveals that Rudy Lipowitz and his spouse Renate Lipowitz each own 50 per cent of 666017 Ontario Limited which in turn owns 95 per cent of L-K. Rudy Lipowitz and Cox each own 50 per cent of Tri-County. Rudy Lipowitz is also the president and one of the two directors (Renate Lipowitz being the other) of 666017 Ontario Limited. He is also the vice-president, treasurer and one director (Cox is the other, as well as the president, secretary/treasurer and general manager) of Tri-County. In his testimony, Rudy Lipowitz claimed to not take part in the day-to-day affairs of Tri-County. However, he also displayed a great deal of knowledge of its affairs. From his testimony, we are satisfied that L-K and Tri-County effectively operate together with L-K seeking larger scale projects and Tri-County going after smaller ones. Mr. Lipowitz testified that there was a flow of work between the companies and although he said that this flow was from Tri-County to L-K he also spoke of the work at 180 Frobisher Drive in Waterloo being "transferred" from L-K to Tri-County by 666017 Ontario Limited - the manager and corporate owner of L-K.

10. 666017 Ontario Limited was described by the respondents as acting as a holding company with respect to L-K. L-K was described as the operating company. That may be so, and the distinction may be significant for corporate, tax or other purposes, but 666017 Ontario Limited and L-K clearly operate together as a single business for labour relations purposes. The principals of both companies are the same (i.e. Rudy Lipowitz and his wife Renate), 666017 Ontario Limited owns 95 per cent of the shares in L-K, the building which houses both companies and all of the vehicles and equipment used by L-K in its operations are owned by 666017 Ontario Limited, and, pursuant to a contract between them signed and approved by the same principals on behalf of both companies, 666017 Ontario Limited manages L-K; that is, it "manages, supervises and conducts" the business of L-K, including hiring and firing L-K's employees. Notwithstanding the "independent contractor" clause in the management contract, 666017 Ontario Limited clearly owns and operates L-K. Accordingly, on the evidence before the Board, we are satisfied that 666017 Ontario Limited and L-K are properly considered to constitute one employer for labour relations purposes.

11. L-K and Tri-County are both conceded, and are on the evidence, one employer for labour relations purposes. In the circumstances, we conclude that 666017 Ontario Limited and Tri-County are also one employer for labour relations purposes.

12. In the result, we are satisfied that L-K, Tri-County and 666017 Ontario Limited constitute one employer for labour relations purposes and should be treated as such for purposes of the Labour Relations Act.

13. The respondents argued that the Board should nevertheless decline to issue a declaration to that effect. In essence, their argument was that Local 785 knew or ought to have known of the relationship between them and that the union's wilful delay in taking this action precludes them from obtaining the relief they seek under section 1(4) of the Act.

14. We reject that argument. Mr. Cox's evidence in that respect boils down to an allegation that it was and is in Local 785's policy to not bring matters like the section 1(4) application herein to the Board until it has investigated them and concluded that it has a "good" case. Local 785 does not dispute this and, with respect, we see nothing wrong (and much right) with such an approach. Mr. Cox also asserted, and the union disputed, that Local 785's policy is to avoid contact with non-union companies and to, in any case, not leave clues that it has had any prior knowledge of a "connection" between a unionized and non-unionized company, and further that Local 785 applied that policy in this case. There is nothing in the evidence other Mr. Cox's own testimony which supports this latter assertion. Mr. Cox showed himself to be unable to either resist the influence of self interest or be objective in his testimony, and we are not satisfied that his testimony, standing alone as it does, is a sufficient basis for concluding that Local 785 has taken such an approach, either generally or in this case. On the contrary, we are satisfied, on the basis of the evidence before the Board, that Local 785 did not have actual knowledge of the labour relations connection between the respondents prior to the events of late May, 1991 involving the job at 180 Frobisher Drive in Waterloo (and of which we shall have more to say below). We are also satisfied that Local 785 was not wilfully blind to the connection between the respondents or that there is any reason why it ought to have known of the connection prior to May, 1991. On the evidence, the labour relations connection between L-K and 666017 Ontario Limited on one hand, and Tri-County on the other began on September 6, 1988, when Rudy Lipowitz purchased a one half interest in Tri-County (actually in 516279 Ontario Inc. which used a slightly different version of the Tri-County name and to which 754762 Ontario Limited a.k.a Tri-County Contracting is clearly a successor employer -something which was implicitly agreed to by the parties in these proceedings). Not only was this transaction or the subsequent relationship between L-K and Tri-County not advertised, but Tri-County seemed to do what it could to not advertise its presence on job sites.

15. Even if we were satisfied that Local 785 knew or ought to have known of the relationship between the respondents since September 6, 1988, we would not, in the circumstances of this case, refuse to grant the declaration sought by Local 785.

16. In the past, the Board has taken an applicant's delay in seeking relief under section 1(4) into account as a factor when considering whether or not to exercise its discretion in favour of making a section 1(4) declaration. In a number of cases, the Board has declined to issue such a declaration on the basis that a trade union applicant has delayed too long and without satisfactory explanation, in making its application. In that regard, we respectfully prefer and adopt as our own the Board's reasoning on that point in KNK Limited, [1991] OLRB Rep. Feb. 209 at paragraphs 29 to 57.

17. Section 1(4) is a remedial provision intended to prevent the intentional or incidental erosion of bargaining rights consequent upon the weaving of a corporate or other veil through what is, for labour relations purposes, a single business activity. To put it another way, whatever separation may exist between two or more entities for corporate, tax, or other purposes, this Board is entitled to treat them as one employer for purposes of the Labour Relations Act where they carry on associated or related activities or business under common control or direction. The purpose of the provision is to prevent form, or an alteration in form, from undermining a trade union's bargaining rights and the rights of employees to bargain collectively with their employer through a trade union.

18. Consequently, and as the Board said in K. N. K. Limited, supra, a trade union which has established that the basis for a section 1(4) declaration exists (that is, that two or more entities carry on associated or related activities or businesses with a common control or direction), and the mischief which section 1(4) is designed to prevent or remedy exists, is generally entitled to a declaration in that respect unless there are compelling labour relations policy reasons to not do so, or where such a declaration would unfairly prejudice the respondents. In that latter respect, there must be demonstrable prejudice which must be something more than becoming subject to the very bargaining rights which section 1(4) is designed to protect. A union's undue delay in the face of actual knowledge of the material facts may be a factor which the Board will consider, although the presumption in such an application is that a trade union will not know (which is the reason section 1(5) is in the Act). However, the Board will. focus on the actual prejudice suffered by the employer entities and the contribution of the union's conduct to that prejudice. Consequently, in the absence of a clear representation by the trade union that it would not assert its bargaining rights with respect to one or more of the employer entities concerned, or a situation in which the trade union has participated in the very corporate or business structuring which is the subject of its section 1(4) application, any "delay" by a trade union will normally be factored in when the Board considers what retrospective relief, if any, is to be given a declaration or what other relief, if any, should be granted.

19. In this case, we are satisfied that the respondents properly constitute one employer for purposes of the Labour Relations Act and we see no reason to not grant the declaration sought by Local 785.

20. The question then becomes whether the declaration should be effective from the time which the respondents became one employer for purposes of the Act (i.e. September 6, 1988) or some later date. In argument, the respondents asked that the Board not "back date" the declaration. The only basis which we are able to discern for that request is that it would cause them financial hardship if the Board did so. That, in our view, is not a cogent reason. We are not satisfied that there is any reason to not grant Local 785 the declaration it would ordinarily be entitled to; that is, that the respondents constituted one employer for purposes of the Act since September 6, 1988, the time they began to so conduct themselves.

21. In its section 1(4) application Local 785 also sought a declaration that the respondents are bound by the "present" collective agreement between the Carpenters Employer Bargaining Agency (E.B.A.) and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America (O.P.C.) effective from May 1, 1990 to April 30th, 1992 (which relates to the industrial, commercial and institutional sector of the construction industry). Local 785 did not, on a fair reading of the application, seek damages for other than the violations of section 64, 66, 67 and 70 of the Act which are complained of in the section 89 complaint herein as well. Local 785 did not specifically seek to amend its request for relief in that respect. Accordingly (and assuming we otherwise could and would) and having regard to all the circumstances, we do not find it appropriate to award damages in the section 1(4) application.

22. This case was litigated primarily as a section 1(4) case. Indeed, in argument Local 785 stated that it is substantially a section 1(4) case. Nevertheless, Local 785 did not abandon its section 63 application and does seek relief with respect to its section 89 complaint and its grievance in the section 124 referral to the Board.

23. In our view, the evidence before the Board does not establish that there was a sale of a business, within the meaning of section 63 of the Act, from any of the respondents to any of the other respondents. Local 785's section 63 application is therefore dismissed.

24. On the evidence before the Board, Tri-County was engaged in the following industrial, commercial and institutional jobs to which it did not apply the terms of any collective agreement:

a) 180 Frobisher Drive, Waterloo in late May or June, 1991;

b) the K-W Real Estate Board Building in late 1990;

c) a Bellamy's Restaurant in Ottawa in February, 1990;

d) Network Automation on Weber Street in Waterloo in 1991 prior to the 180 Frobisher Drive job referred to in a above;

e) Sanyo Machine in Elmira in April, 1991;

f) Leo Krane and Co. at 5 Hoffman Street in Kitchener in September, 1990;

g) Crown Delivery on Trillium Drive in Kitchener in December, 1990;

h) Nora Trading in Cambridge in July, 1990;

i) The Guelph Jail in or about 1986 to 1988.

Although there was some reference to other jobs~ including a Bellamy's Restaurant in Barrie, a Yellow Pages building in Kitchener Waterloo, and a Fisher Canada job on Frobisher Drive in Waterloo, we are unable to discern when that work was performed.

25. It was conceded that L-K was bound, at all material times to the provincial collective agreement pertaining to work in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario between the Carpenters Employer Bargaining Agency (E.B.A.) and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America (O.P.C.) (the "Carpenters Provincial Agreement") in effect at the time. Accordingly, since September 6, 1988, the respondents have all been bound, as a result of their being one employer for purposes of the Act, by that collective agreement. Since Tri-County has never applied the terms of any collective agreement to any work it has done, it obviously did not apply the terms of the Carpenters Provincial Agreement as aforesaid to any of the jobs listed above. Further, although Local 785's grievance is very broadly framed, there was never any objection to its timeliness or lack of particularity. However, in referring its grievance to the Board, Local 785 referred only to a collective agreement effective from May 1, 1990 to April 30th, 1992. Taken as a whole then, the grievance~ like the section 1(4) application is only with respect to alleged breaches of the Carpenters Provincial Agreement presently in effect. Accordingly, we find that the respondents breached the aforesaid collective agreement by failing to apply it to the jobs listed at (a), (b), (d), (e), (f), (g), and (h) of paragraph 24 above and Local 785 is entitled to damages with respect to those jobs and those jobs only.

26. With respect to the section 89 complaint, the evidence is clear that Rudy Lipowitz, a principal of all three respondents, made a conscious decision to use Tri-County to perform the lease improvement work at the 180 Frobisher Drive job so that the work could be completed, at the most "economical way". The only difference between performing the work through Tri-County rather than through L-K was that Tri-County performed it by paying lower wages and benefits than required by the Carpenters Provincial Agreement. We are satisfied that the work was "transferred", to use Lipowitz's word, to Tri-County in order to avoid Local 785 and the terms of the Carpenters' Provincial Agreement. We are also satisfied that the respondents, which we have found constituted one employer for purposes of the Act at all material times, refused to continue to employ members of Local 785 and specifically at the 180 Frobisher Drive job unless they agreed to work "non-union"; that is, under the terms and conditions other and less favourable than those stipulated in the collective agreement. When they refused to do so, these individuals were laid-off and Tri-County performed the work using other persons.

27. Sections 64, 66(a) and (b) and 67(1) of the Act provide that:

28. No employer or employers' organization and no person acting on behalf of an employer or an employers' organization shall participate in or interfere with the formation, selection or administration of a trade union or the representation of employees by a trade union or contribute financial or other support to a trade union, but nothing in this section shall be deemed to deprive an employer of his freedom to express his views so long as he does not use coercion, intimidation, threats, promises or undue influence.

29. No employer, employers' organization or person acting on behalf of an employer or an employers' organization,

(a) shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;

(b) shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or

67.-(1) No employer, employers' organization or person acting on behalf of an employer or an employers' organization shall, so long as a trade union continues to be entitled to represent the employees in a bargaining unit, bargaining with or enter into a collective agreement with any person or another trade union or a council of trade unions on behalf of or purporting, designed or intended to be binding upon the employees in the bargaining unit or any of them.

In our view, the respondents' proposal was intended to interfere with the representation of their employees by Local 785 and constituted an attempt to restrain those employees from exercising their rights under the Act. We are satisfied that the respondents' conduct violated sections 64 and 66(a) and (b) of the Act. Further, the respondents' actions constituted an improper attempt to bargain directly with its employees while they were represented by Local 785 with a view to avoiding Local 785 and the Carpenters' Provincial Agreement, within the meaning of section 67(1) of the Act (see, for example, Rexwood Products Limited, [1987] OLRB Rep. Feb. 267). On the other hand, we are not satisfied that the respondents' actions were intended or perceived by the employees to be discriminatory or threatening within the meaning of the Act. Consequently, they were not breaches under sections 66(c) or 70.

28. In summary, having regard to the evidence and representations of the parties, the Board:

a) declares that the respondents L-K Interior Contracting Ltd., 754762 Ontario Inc. a.k.a Tri-Country Contracting and 6660167 Ontario Limited have constituted one employer for purposes of the Labour Relations Act since September 6, 1988;

b) declares that the respondents are bound to the Provincial Collective Agreement between the Carpenters Employer Bargaining Agency (E.B.A.) and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America (O.P.C.) effective from May 1, 1990 to April 30th, 1992;

c) declares that the respondents have breached the provisions of the said collective agreement by failing to apply its terms to jobs at 180 Frobisher Drive in Waterloo in May or June, 1991, the K-W Real Estate Board Building in late 1990, Network Automation on Weber Street in Waterloo in early 1991, Sanyo Machine in Elmira in April, 1991, Leo Krane and Co. at 5 Hoffman Street in Kitchener in September, 1990, Crown Delivery on Trillium Drive in Kitchener in December, 1990, and Nora Trading in Cambridge in July, 1990;

d) declares that the respondents have breached section 64, 66(a) and (b), and 67(1) of the Labour Relations Act;

e) directs the respondents to cease and desist from bargaining directly, with respect to employment matters, with those of its employees represented by the United Brotherhood of Carpenters and Joiners of America Local Union 785;

f) directs the respondents to abide by the terms and conditions of the collective agreement between the Carpenters Employer Bargaining Agency (E.B.A.) and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America (O.P.C.) effective from May 1st, 1990 to April 30th, 1992;

g) orders the respondents to pay damages, for which they are jointly and severally liable, to the United Brotherhood of Carpenters and Joiners of America Local Union 785 for the breaches of the collective agreement and Act as aforesaid.

The Board is not satisfied that any further or other relief is appropriate and, more specifically, the Board is not satisfied that this is a case in which it is either necessary or appropriate to order that notices be posted or otherwise distributed by the respondents.

29. The Board shall remain seized with respect to the quantum of damages owing by the respondents (which was the basis upon which these matters proceeded) for a period of six months. The Registrar shall, if necessary, schedule a hearing before the Board in that respect upon the written request of any party. We note that Local 785 is entitled to only a single measure of damages.