Teamsters, Local 419 v. 176218 Canada Inc. c.o.b. Booth Fisheries et al.

[1991] OLRB Rep. August 947

0144-90-R; 0145-90-R; 2050-90-R; 2051-90-R Teamsters, Local 419, Applicant v. 176218 Canada Inc. c.o.b. Booth Fisheries; and Van Home Fish Distributors Ontario Ltd., Respondents; Teamsters Local 419, Applicant v. 176218 Canada Inc. c.o.b. as Booth Fisheries; Van Home Fish Distributors Ontario Ltd.; and 167100 Canada Inc. c.o.b. as Groupe La Mer, Respondents

BEFORE: Janice Johnston, Vice-Chair, and Board Members R. M. Sloan and K. Davies.

APPEARANCES: Mike McCreary and Paul Dunne for the applicant; Jim Hassell and Kosta Katsoulis for the respondent.

DECISION OF THE BOARD; August 1, 1991

1. The name of the respondents are hereby amended to read: "176218 Canada Inc. c.o.b. as Booth Fisheries; Van Home Fish Distributors Ontario Ltd.; and 167100 Canada Inc. c.o.b. as Groupe La Mer". The Board directs that the above applications be and the same are hereby consolidated.

2. Board Files No. 0144-90-R and 2050-90-R are applications under section 63 of the Labour Relations Act (the "Act") and Files No. 0145-90-R and 2051-90-R are applications under section 1(4) of the Act.

3. Teamsters Local 419 (the "applicant" or the "union") is seeking a declaration that 176218 Canada Inc. c.o.b. as Booth Fisheries ("Booth"), 167100 Canada Inc. c.o.b. Groupe La Mer ("Groupe La Mer") and Van Home Fish Distributors Ontario Ltd. ("Van Home") are and always have been one employer for the purposes of the Act. Should the application pursuant to section 1(4) of the Act be unsuccessful, the union has requested that the Board consider its application pursuant to section 63 of the Act. If the Board finds in the unions favour with regard to the applications pursuant to section 1(4) of the Act, it will not be necessary to make a finding on the applications under section 63 of the Act.

4. 126953 Canada Inc. is the "parent" or "holding" company for Booth, Van Home and Groupe La Mer. It owns all of the preferred and common shares of Booth, Van Home and Groupe La Mer. In addition to owning the shares of the three companies directly affected by this application, it also owns the shares of seven other affiliated companies.

5. The Board heard evidence from three witnesses in this case. Mr. Kosta Katsoulis was called on behalf of the respondent companies and Mr. Garry Blakely and Mr. John Gutauskas were witnesses on behalf of the union. In assessing the credibility of the three witnesses the Board took into account the usual factors, including their ability to avoid the influence of self interest, their general demeanour, their ability to recall the events and what was reasonably probable in all the circumstances. We would observe that Mr. Blakely and Mr. Gutauskas gave their evidence in a straightforward, candid manner and the Board finds them both to be credible witnesses. On the other hand, Mr. Katsoulis was inconsistent and at times very evasive. He was unable to resist the influence of self interest. In areas where his evidence conflicts with that of the other witnesses the Board will accept the evidence given by Mr. Blakely and Mr. Gutauskas.

6. Mr. Kosta Katsoulis is the president of the holding company, his sister Diane Cicirello is the vice-president and his brother Anastasuis Katsoulis is the secretary-treasurer. Although Mr. Katsoulis' evidence was not clear on this point it appears that he and his brother and sister control the voting or common shares. The preferred or non-voting shares have been divided equally between their nine children (each one has three children). Two of Mr. Kosta Katsoulis' children, Helen Katsoulis and Mary Katsoulis, are active in the business. The business is very much a family business, and in addition to those members already named, Diane Cicirello's husband A. Cicirello is also active in the business.

7. Mr. Kosta Katsoulis is the directing mind in this family business made up of various incorporated and unincorporated entities. He is the controlling shareholder in the holding company and he makes the major decisions affecting that company and any of the affiliates. He testified that if he made a decision with which his brother and sister disagreed he would proceed to implement it and they "would back off". If any of the family members made a decision that he disagreed with, he has the authority to veto it. Mr. Katsoulis is the ultimate authority in this family business, which includes the three companies at issue in these proceedings, Booth, Van Home and Groupe La Mer. It is clear to the Board, and Mr. Katsoulis admitted that he "controls" Booth, Van Home and Groupe La Mer.

8. Each of the companies in this proceeding have a combination of family members in executive positions. Diane Cicirello is the president of Van Home, A. Cicirello and K. Katsoulis are the vice-presidents, Helen Katsoulis is the secretary-treasurer, and Mary Katsoulis is the assistant secretary-treasurer. Anastasius Katsoulis is the president of Booth and Groupe La Mer, Helen Katsoulis is the vice-president of both companies and Mary Katsoulis is the secretary-treasurer of both companies.

9. Mr. Katsoulis testified that on May 6, 1989, he purchased Booth from Sara Lee Inc. Booth has carried on business at 6080 Indian Line Road in Mississauga for a number of years, both before and after its purchase by Mr. Katsoulis. Booth is a party to a collective agreement with the union, and this collective agreement was in existence at the time of the sale of Booth to Mr. Katsoulis. The recognition clause of the current collective agreement states in part:

Article I- Recognition

1.01 The Company recognizes the Union as the exclusive bargaining agent with respect to all matters covered by this Agreement for all employees of the Company, save and except foremen, persons above the rank of foremen, office and sales staff, located at the respective plant of the above named Company in Toronto, Canada.

1.03 It is agreed between the parties that work that is normally performed by members of the bargaining unit will not be done by anyone outside of the bargaining unit while employees are laid off, working short time, which would reduce the working force or deny them the opportunity of working overtime.

10. Booth is engaged in the business of distributing fish products and specializes in frozen fish. Approximately eighty percent of Booth's business is in frozen product and the remainder is in fresh fish. Booth has approximately sixteen sales people and fourteen employees in the product distribution side of the business. It appears that the premises occupied solely by Booth in 1989 were approximately 45,000 - 50,000 square feet. Some of the space was not being utilized.

11. Van Home carries on business at 136 Crockford Boulevard in Scarborough. It too is a fish products distributor. As it specializes in fresh fish, approximately eighty percent of Van Home's business is in fresh fish and the remaining twenty percent is in frozen fish. Van Home employs approximately twenty-two employees.

12. Mound October, 1989 Van Home started using some of the surplus space at Booth's facility on Indian Line Road for storage. At this point in time Van Home would occasionally send one or two of its employees to work on the Booth premises.

13. In February, 1990 Van Home moved its operations into Booth's facilities on Indian Line Road. The employees of Booth and Van Home worked side by side processing orders for both companies. The Van Home employees performed work which had previously been done by Booth employees and vice-versa. During this period two Van Home employees, Francis Amankwass and John Robitaille performed fresh fish filleting work that had previously been done by Booth employees. The inventory of fresh and frozen fish owned by the two companies was for the most part not kept in separate areas, but was intermingled. Both companies were and still are in the fish distribution business. At this point the receiving of fish product was done by both Booth and Van Home employees. A Van Home employee inspected and received most of the fresh fish and Booth employees received most of the frozen product. The fresh product was then stored in the cooler and the frozen product was kept in a freezer. Employees from either company could access both areas to fill customer orders. When inventory was taken, employees from Booth and Van Home would work together to complete it.

14. While most of the fish product arrived by truck, fresh fish was on occasion flown in by airplane. Employees from both companies would be called upon to travel to the airport to pick-up this fish. Van Home employees would pick up fish that could end up in the hands of customers of Booth and vice-versa.

15. During this period the delivery of the product to the customers of each company was also not kept entirely separate. For example a Booth driver and Booth truck did deliver fish to a Van Home customer. Mr. Katsoulis testified that although this did not happen often he did not see anything wrong with the two companies covering for each other. As Mr. Katsoulis said, "if the Van Home truck was not there we would ask the Booth truck - the customer had to be served".

16. The employees shared a common change room, lunchroom and work areas. The forklifts, towmotors and other equipment owned by Booth was utilized by both Booth and Van Home employees in the course of their duties.

17. In June, 1990 as a result of inventory problems and an agreement reached with the union, Van Home moved out of the Indian Line Road facility and returned to the Scarborough location where it is still currently located.

18. At some point over the summer extensive renovations were completed at the Indian Line Road facility. A wall was built which segregated approximately 3,000 - 4,000 square feet. Separate washrooms, changerooms and a lunchroom were built in this newly segregated area. Booth's operations were moved into this smaller space and most of the remainder of the building was to be utilized by the other company in these proceedings, Groupe La Mer.

19. Groupe La Mer was formed in May, 1990. Mr. Katsoulis testified that this company was set up to centralize the fish product inventory and to centralize the purchasing function generally. Groupe La Mer purchases fish product from all over the world and then supplies it to Booth and Van Home. After the inception of Groupe La Mer, neither Booth nor Van Home were permitted to purchase anything on the open market. They own no assets and no inventory. Groupe La Mer owns all of the inventory. As Mr. Katsoulis indicated at one point "Booth and Van Home don't have assets, just receivables and payables to Group La Mer". Booth and Van Home receive all of their supplies from Group La Mer. Sometime after the completion of the renovations, Groupe La Mer moved into the Indian Line location. It occupies the premises which were segregated off from that part of the warehouse occupied by Booth. There is no intemal access or connection between the two parts. To go to Booth from Groupe La Mer one has to go outside.

20. Mr. Blakely, the first witness called by the union, is employed as a driver/warehouseman for Booth. He has worked for Booth in that capacity for ten years. He testified that at the time of, and after the sale of Booth to Mr. Katsoulis, Booth employees performed the full range of receiving and shipping functions. They received product from a variety of suppliers continually throughout the day. To use his words, "there were trucks coming and going all day". After the product was unloaded from the truck it would be checked and counted by the foreman, and then bargaining unit employees would move it into the appropriate storage area. In addition to receiving goods, Booth employees were also expected to do the occasional "pick-up" of product either at the airport or at a supplier's warehouse. The drivers/warehousemen also performed a function known as "picking" orders which consists of filling customer orders. They would be given a particular order from a customer and they would put together the appropriate fish product to fill the order. With regard to fresh fish, some orders would call for the product to be filleted. Filleting is a specialized, skilled job, and at this time Booth had two employees who were qualified filleters. In addition to filling orders, the Booth employees also ensured that the frozen product was rotated and properly stored. Once the orders were "picked" they would be loaded on the appropriate truck for delivery. Each of the drivers had a route with many stops to drop off orders along the way. At the end of the shift, the drivers/warehouseman would clean the work area, which at that time was approximately 45,000 square feet.

21. The creation of the new company, Groupe La Mer, had a significant impact on many of the above noted daily duties performed by Booth Employees. After Groupe La Mer moved in to the Indian Line location, many of these functions changed. Instead of receiving product throughout the day from many different suppliers, Booth now receives only a couple of trucks a day from Groupe La Mer. Group La Mer receives all of the fish product from a variety of suppliers and has all of the storage facilities for this product. Groupe La Mer employees review the total orders to be filled by Booth on a given day. They then load the product on skids. The product is arranged on the skid in accordance with the route the truck driver will follow. The Groupe La Mer employees separate the bulk product by route prior to sending it next door to Booth. The product on skids is then loaded back onto a truck and taken next door for delivery to Booth. Any required filleting of fresh fish is also now performed by Group La Mer employees. When the product arrives from Groupe La Mer, Booth employees separate the product on the skids into the individual customer orders and load the product onto the Booth truck for delivery. Therefore Booth employees no longer spend as much time receiving the fish product, nor are they responsible for storing it and maintaining the inventory (i.e. rotating and counting stock). They no longer fillet fresh fish as this is done for them by Groupe La Mer employees. Booth employees no longer pick up orders at the warehouse of suppliers or at the airport as this is now done by Groupe La Mer employees. Some of the "picking" of orders function has been lost as Groupe La Mer employees now arrange the product in bulk on skids for the Booth employees. Before this additional step was added to the process Booth employees were responsible for all the work involved in filling an order. Clearly the efforts of Groupe La Mer employees has expedited the "picking" process and reduced the workload of the Booth employees. Booth employees are no longer responsible for the clean up of the entire warehouse but only their 3,000 - 4,000 square feet of space. Although the evidence on this was somewhat limited it appears that some of Booth's equipment has been moved to the Groupe La Mer premises and is being used there.

22. After Groupe La Mer's creation other business functions formerly carried out by Booth and Van Home were also centralized. Although Mr. Katsoulis' evidence was not very clear on this point, it appears that much of the banking for the family business, including Booth and Van Home, is centralized. Operating expenses are paid out of one central account for all the companies. Bookkeeping functions for Booth, Van Home and Groupe La Mer are centralized and performed by a staff of approximately twenty Groupe La Mer employees. The function is headed up by the Comptroller David Hoe.

23. Mr. Katsoulis in his evidence stressed that Groupe La Mer is a wholesaler of fish products, and that Booth and Van Home were distributors. In his opinion this made them very different businesses. We would note that the line between the two functions may not be as clear as Mr. Katsoulis attempted to portray it. Groupe La Mer if it is a wholesaler, supplies fish products only within the family business. It does not supply fish product to any unaffiliated company. The Board concludes therefore that to describe Groupe La Mer as a wholesaler, and Booth and Van Home as distributors, is to put an artificial gloss on the business being conducted. The purchasing, and receiving portions of Booth's and Van Home's business were split off and a new company created to perform those functions. To portray Booth and Groupe La Mer, and Van Home and Groupe La Mer as distinct businesses is simply not accurate. Both pairs are parts of what was once a business engaged in distributing fish products wholesale.

24. Mr. Katsoulis also stressed that although both Booth and Van Home were fish distributors they were very different companies because Booth sold 80 percent frozen fish and 20 percent fresh fish and Van Home sold 80 percent fresh fish and 20 percent frozen fish. While we accept Mr. Katsoulis' evidence that fresh fish require more attention, have a shorter shelf life and must be moved quickly, and require specialized skills to be filleted properly, the evidence is clear that both Booth and Van Home employees handle both types of fish. While the percentages of fresh and frozen fish handled by each company is different, they both deal with fresh and frozen fish and they both are in the fish distribution business. To say that they are different businesses is simply not accurate. The similarity of the work is also evidenced by the interchange of work which went on during the period when Booth and Van Home were under the same roof. Mr. Gutauskas, the second witness called by the union, was a supervisor for Booth Fisheries at the time that Booth and Van Home were sharing the Indian Line premises. He testified that the employees of Van Home and Booth basically performed the same work and that the two businesses were essentially the same. He said that both Booth and Van Home were engaged in the business of buying and selling seafood and generally the distribution business.

25. In the fall of 1990, when Groupe La Mer moved into Indian Line Road, John Robitaille and Francis Amankwass (two former Van Home employees) came back to the Indian Line location, this time as Groupe La Mer employees. They are both still employed by Groupe La Mer. Around the same time four Booth employees, Len Nelson, Brian Guthro, Dan Knight and C. Tan were "loaned" to Groupe La Mer from Booth. Mr. Katsoulis testified that because Booth's business "was down" they were going to have to lay-off employees. To avoid the lay-offs, the four employees were "loaned" to Groupe La Mer where work was available for them. Mr. Katsoulis testified that the four remained on Booth's payroll and were still Booth employees. When confronted with the pay stubs for Len Nelson and Brian Guthro which indicated they had been paid by Groupe La Mer and were on their payroll, Mr. Katsoulis indicated that it was an administrative error. The Board concludes therefore that when Groupe La Mer started operating, employees from Van Home and Booth were transferred over to this new company. We note that after the transfer to Groupe La Mer, Brian Guthro and Dan Knight occasionally worked on the Booth side. Mr. Guthro has driven a Booth truck and Mr. Knight has cut halibut on behalf of Booth.

26. Groupe La Mer, Booth and Van Home are connected by a shared computer system. Booth sales people obtain orders, these are entered into the computer and generate the "pick slips" utilized by the Groupe La Mer employees in preparing the bulk orders for Booth. After the product has moved from Groupe La Mer to Booth, a bill is automatically generated. When Booth has paid for the fish, the money automatically flips from Booth's bank account into an account utilized by Groupe La Mer to pay the supplier.

27. Photographs of the sign on the building located at Indian Line Road were put before the Board. The sign reads:

BOOTH FISHERIES

a Division of Groupe La Mer

Booth's letterhead says the same thing.

28. Mr. Katsoulis testified that each of the three companies Booth, Van Home and Groupe

La Mer were managed independently of each other. Mr. Gutauskas, originally a supervisor for

Booth testified to the contrary. He put before the Board a notice which indicated as follows:

GROUPE LA MER

February 14, 1991

TO: All Employees

FROM: Carl D. Cameron

Please, join with me on congratulating Mr. John Gutauskas on his promotion to Operations Manager of Groupe La Mer with responsibilities for Groupe La Mer, Mississauga and Booth Fisheries.

The Board heard very little evidence with regard to the day to day management of Booth, Van Home and Groupe La Mer. We have no difficulty concluding however that although each business was run separately, no major decisions could or would be made without Mr. Kosta Katsoulis' involvement. When Mr. Katsoulis was asked who was in charge of Labour Relations for Booth, he replied that he has asked the supervisors to communicate with the employees and solve problems in that way. Mr. Katsoulis was quite vague when asked what supervisors were to do if they could not resolve a problem, but based on Mr. Katsoulis' evidence it appears that they can contact counsel for advise. Supervisors have the authority to discipline and Mr. Katsoulis testified that he too had the authority to discipline. He said "I can discipline someone myself. If I walk by and someone laughs at me I can discipline him. If I was calm I would go to his supervisor and not do it myself'. Given that this is the extent of the evidence before the Board with regard to whether or not the control of labour relations is centralized, the Board cannot determine this issue. We would observe however that it seems likely that any major "labour relations" decisions would be made by Mr. Katsoulis given the level of control he exerts in the company.

29. Although Booth and Van Home have their own customers or clients, the evidence makes it clear that they both are suppliers of fresh and frozen fish product. Both of their client lists include a mixture of retailers of fish, hotels, restaurants, fish and chip shops and supermarkets such as Loblaws or A & P.

Decision

30. We turn first to consider the section 1(4) application. The relevant section of the Act

states as follows:

1.-(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 Board's case law makes it clear that these are three criteria which must be met before a common employer declaration will be made pursuant to section 1(4) of the Act. First of all, there must be more than one corporation, individual, firm syndicate or association involved; secondly these organizations or entities must carry on associated or related activities or businesses whether or not simultaneously; and thirdly these various organizations or entities must be under common control or direction. If these three criteria are met, the Board has the discretion to make a common employer declaration. The declaration is not automatic, but is discretionary.

31. In Brant Erecting and Hoisting, [1980] OLRB Rep. July 945, the Board elaborated on the intent of section 1(4) of the Act:

32. Section 1(4) of The Labour Relations Act provides as follows:

"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."

Section 1(4) was enacted in 1971 and deals with situations where the economic activity giving rise to employment or collective bargaining relationships regulated by the Act, is carried out by, or through more than one legal entity. Where such legal entities carry on related business activities under common control or direction, the Board is empowered to pierce the corporate veil. Section 1(4) ensures that the institutional rights of a trade union, and the contractual rights of its members, will attach to a definable commercial activity, rather than the legal vehicle(s) through which that activity is carried on. Legal form is not permitted to dictate or fragment a collective bargaining structure; nor will alterations in legal form undermine established bargaining rights. In this respect the purpose of section 1(4) is similar to that of section 55 which preserves the established bargaining rights and collective agreement when a "business" is transferred from one employer to another. Section 55 has been part of the scheme of the Act since the mid 1960's. Neither remedial provision requires a finding of anti-union animus; their primary application is to bona fide business transactions which incidentally undermine or frustrate established statutory rights. Since the two sections are complementary, it is not unusual, as in the present case, for an applicant to rely on both.

13. Section 1(4) does not require that related business activities under common control or direction be carried on simultaneously or contemporaneously. This issue was clarified in 1975 by the addition to section 1(4) of the phrase "whether or not simultaneously". The amendment reflects a legislative recognition that the essential unity and identity of an economic activity (which gives rise to employment) may be preserved even though the legal vehicles through which the activity is carried on will not operate simultaneously; and, business may be effectively transferred from one corporate entity to another, without any of the indicia of a "transfer of a business" which might trigger the application of section 55. This is especially the case in the construction industry where many of the employers will not have the permanence or investment in fixed plant and equipment characteristic of a manufacturing concern. A small construction company can move from jobsite to jobsite or place to place, assembling tools, equipment and a labour force as required after it has made a successful bid. There may be no established economic organization, labour force or configuration of assets. A single principal may have several companies which are used, more or less interchangeably, so that bidding is done and work performed through whichever company is convenient. In such circumstances there may be an effective transfer of business between related businesses without any apparent disposition of assets, inventory, trade names, goodwill, employees, etc. Similarly, where capital requirements are minimal and business relationships transitory, it is relatively easy to wind up one business, and create another one which carries on essentially the same business as before. Indeed there will often be good commercial reasons for doing so unrelated to any express desire to undermine the union's bargaining rights. The earlier company may have run into financial difficulties, or lost its reputation, or there may be legal, accounting or tax advantages in establishing a new vehicle through which the business, or related business activities can be conducted. Again, it is quite possible to do this without a clear and concrete disposition between the two firms so as to call section 55 into play. To ensure that the industrial relations status quo is preserved, the Legislature has provided that where two employers carry on related economic activities, under common control and direction, whether or not simultaneously, they can be treated as one for the purposes of the Act. However, it should be noted that section 1(4) is discretionary. The Board need not make a 1(4) declaration even when the conditions precedent are present; and has not done so, for example, where a trade union is seeking to extend rather than preserve its bargaining rights.

14. Counsel for the respondent companies conceded that the first criteria had been met. He acknowledged that in this proceeding before the Board, we are dealing with more than one corporation or business.

15. In the Walters Lithographing Company Limited, [1971] OLRB Rep. July 406, the Board set out the relevant criteria which should be considered prior to reaching a determination on the common employer issue. These are:

16. The indicia or criteria which the Board considers relevant in making a determination as to whether the activities or businesses of one or more corporations, individuals, firms, syndicates or associations, or any combination thereof are carried on under common direction and control and therefore may be treated as one employer are -- (1) common ownership or financial control, (2) common management, (3) interrelationship of operations, (4) representation to the public as a single integrated enterprise, and (5) centralized control of labour relations. No single criterion is likely to decide the issue. Rather, as has been stated, the Board's determination undoubtedly will be based on an appraisal of all of them in the light of the particular facts before it. It hardly need be said that in applying the above criteria, the greater the degree of functional coherence and interdependence which the Board finds among the associated or related activities and businesses the more probable it is that the Board will conclude that the entities carrying on these activities should be treated as one employer. We would mention here also that the indicia or criteria themselves obviously overlap. For that reason, in applying them to the facts of the instant case we have not attempted to deal with each criterion on an individual basis.

On the facts of this case, it is clear that Booth, Van Home and Groupe La Mer are part of a family

business which is owned and controlled by Mr. Kosta Katsoulis. It is his business and he makes all of the important decisions. It is obvious that Booth, Van Home and Groupe La Mer are under common control and direction and we so find.

34. The final determination to be made is whether or not Booth, Van Home and Groupe La Mer carry on related or associated activities or businesses. In the Brant Erecting and Hoisting case, supra, in dealing with this issue the Board said:

35. A more difficult question is whether Brant Erecting and Hoisting and Provincial Steel can be said to have engaged in "associated or related activities or businesses" since, for practical purposes, Brant Erecting ceased to exist as a going concern prior to the establishment and subsequent incorporation of Provincial Steel. The respondent contends that the two businesses cannot be "related" within the meaning of section 1(4) because they were never engaged in any joint ventures or business endeavours, nor were they carrying on business as the same time. The respondent argues that such overlap as there may have been between the activities of Provincial Steel and Brant Erecting, was solely for the purpose of winding up the latter company, and cannot be regarded as the kind of related activity to which section 1(4) is directed. But for the 1975 amendment to the Act, this argument would have considerable force; but it is now clear that the "associated or related activities or businesses" need not be carried on simultaneously. The amendment extends the ambit of section 1(4) to situations in which one business entity is actively carrying on business and the other is not. It is not necessary to have shared participation in a common business endeavour or even contemporaneous economic activity. The relationship between the business entities is a functional rather than a temporal one. Businesses or activities are "related" or "associated" because they are of the same character, serve the same general market, employ the same mode and means of production, utilize similar employee skills, and are carried on for the benefit of related principals. If these criteria are met, two businesses may be "related" within the meaning of section 1(4) even though their activities are carried on through different or corporate vehicles and are not carried on simultaneously. it is evident that the Legislature has created a regime of collective bargaining law which significantly modifies the common law notions of "privity of contract" or "the corporate veil".

[emphasis added]

35. On the facts of this case, the criteria set out above are met. Booth, Van Home and Groupe La Mer are all involved in the distribution of fish products therefore clearly they are of the same "character". Groupe La Mer supplies Booth and Van Home with fish product and both Booth and Van Home are simply stepping stones along the way to the ultimate customer. These customers make up the same general market consisting of hotels, restaurants, retailers, supermarkets etc. All three companies employ the same means and mode of operation which is the receiving, warehousing and shipping of fish products. The employee skills required to run the three operations are essentially the same. The employees of Booth and Van Home worked side by side and were interchangeable while they were under the same roof at Indian Line Road. The three businesses are carried on for the benefit of related principals, the Katsoulis family.

36. In addition to the above, we would also observe the following additional facts which contribute to the conclusion that Booth, Van Home and Groupe La Mer are carrying on related or associated activities or businesses. Groupe La Mer only sells to companies which are a part of the Katsoulis family business, and Booth and Van Home can only buy from Groupe La Mer. Groupe La Mer can access the bank accounts of Booth, there have been "loans" and "transfers" of employees from Booth and Van Home to Groupe La Mer, the three companies share a computer system and bookkeeping accounting staff, there is a centralized payment system utilized by all three companies, Booth and Van Home do not own any inventory as it is all owned by Groupe La

Mer, and finally, the company signs and letterhead describe Booth as a "division" of Groupe La Mer.

37. The evidence in the case before us overwhelmingly points to the conclusion that Booth, Van Home and Groupe La Mer are separate entities under common control and direction engaged in associated or related businesses or activities. The next question to be decided is whether this is an appropriate case in which to exercise our discretion and made a section 1(4) declaration.

38. In Penmarkay Foods Limited, [1984] OLRB Rep. Sept. 1214 the Board in dealing with the purpose of section 1(4) stated:

39. Section 1(4) is designed to accomplish at least three purposes:

(1) One objective is to prevent the erosion of bargaining rights. Take a case in which a union is certified to represent the employees of a firm; as soon as certification is granted, the proprietor redirects work to another enterprise. Treating both corporations as one employer preserves the union's bargaining rights. The large numbers of cases in this category include Dominion Stores Ltd., supra,; Radio Shack, supra, and Great Atlantic and Pacific Company of Canada, [1982] OLRB Rep. Mar. 386.

(2) Section 1(4) also removes roadblocks to viable structures for collective bargaining. For example, on an application for certification, the Board may include the employees of two companies in a single unit. See Walters Lithographing Company, [1971] OLRB Rep. July 406 and Diversey (Canada) Ltd., supra. For a case in which a related employer declaration was issued at the instance of management, see Bright Veal Meat Packers Ltd., [1981] OLRB Rep. Mar. 247.

(3) Another function of section 1(4) is to ensure that the union representing employees is able to deal directly with the person or company possessing real economic control over them rather than with someone else who is their employer in name only. See J. H. Normick inc., supra, and Don Mills Bindery Inc., [1983] OLRB Rep. Dec. 2008.

These criteria shed some light on the kinds of situations in which it may be appropriate for the Board to exercise its discretion and make the section 1(4) declaration.

39. On the facts of the case before us it is clear that bargaining unit work has been taken from Booth and is now being performed by Groupe La Mer employees. Groupe La Mer employees are receiving product from a a variety of suppliers, selecting and preparing orders in bulk, performing "pick-ups", storing and maintaining the inventory of fish products used by Booth and Van Home and performing the fresh fish filleting for Booth customers. As all of this work used to be done by Booth employees, there has been a direct diversion of work from Booth, a unionized company, to Groupe La Mer, a non-unionized company. Four Booth employees were "loaned" to Groupe La Mer at the time of its start-up. The alleged reason for this transfer was to prevent the lay-offs of these employees due to a slow down in business. On the evidence before us it is difficult to ascertain the cause of the slowdown but we have no doubt that work formerly done by Booth was being done by Van Home. We find therefore, that there has been an erosion of the union's bargaining rights.

40. The facts in this case raise exactly the kind of scenario which section 1(4) of the Act was intended to address. What has occurred is an erosion of the Booth bargaining unit and an erosion of the bargaining rights of the employees. The Board therefore declares that 176218 Canada Inc. c.o.b. as Booth Fisheries, 167100 Canada Inc. c.o.b. as Groupe La Mer and Van Home Fish Distributors Ontario Ltd. constitute one employer for the purposes of the Labour Relations Act. The effect of a section 1(4) declaration is to affirm that Booth, Van Home and Groupe La Mer are "one employer" and must be treated as a single business entity for the purpose of any collective bargaining obligations arising under the statute. Consistent with the manner in which the parties put this case before the Board, and the submissions of the parties, the collective agreement does not apply to the Van Home employees working in, and the work performed at, the premises in Scarborough. In the circumstances it is unnecessary for the Board to direct its attention to the two applications made under section 63 of the Act.

41. Counsel for the respondent has requested that any remedial relief granted by the Board be prospective only and not retroactive. We see no reason here to do so, and indeed, it would be inequitable and inappropriate to do so. Our declaration shall therefore have force and effect from the time the associated or related activities or businesses commenced. (See JDS Investments Limited, [1981] OLRB Rep. March 294).