Graphic Communications International Union, Local 500M v. Metroland Printing, Publishing & Distributing, 1991 CanLII 6199

Graphic Communications International Union, Local 500M v. Metroland Printing, Publishing & Distributing

[1991] OLRB Rep. September 1069

2230-89-R; 3286-89-U Graphic Communications International Union, Local 500M, Applicant v. Metroland Printing, Publishing & Distributing and The Mississauga News, Respondents; Graphic Communications International Union, Local 500M, Complainant v. Harlequin Enterprises Limited through its Divisions The Mississauga News and Metroland Printing Publishing and Distributing, Respondent

BEFORE: Brain Herlich, Vice-Chair, and Board Members G. O. Shamanski and D. A. Patterson.

APPEARANCES: D. A. McKee and J. Neilson for the applicant/complainant; F. G. Hamilton, Vince Johnston and Brenda Biller for the respondents.

DECISION OF THE BOARD; September 25, 1991

1. Metroland Printing Publishing & Distributing (hereinafter referred to as the "production division") and The Mississauga News (hereinafter referred to as the "News") are both divisions of Harlequin Enterprises Limited (hereinafter referred to as "Harlequin"). In Board file the applicant (also referred to as the "union") seeks a declaration pursuant to section 1(4) of the Labour Relations Act that the production division and the News constitute one employer for the purposes of the Act. Board File is a section 89 complaint alleging that Harlequin (through its two divisions which are the subject of the 1(4) application) has violated sections 64, 66, 67 and 70 of the Act. Both matters arise out of the introduction of new equipment at the News.

Background

2. The related employer application was filed on December 8, 1989 and came on for hearing on January 22, 1990 at which time the Board heard argument regarding preliminary matters raised by the respondents. In a decision dated March 22, 1990 the Board dismissed the respondents' motions. The section 89 complaint was filed on March 30, 1990, less than two weeks before the section 1(4) application was next scheduled to come before the Board. When that hearing resumed the union sought to have the two matters consolidated for hearing, a position opposed by the respondents. For reasons delivered orally at the hearing the Board declined to order that the matters be consolidated at that stage of the proceedings but observed that there appeared to be a significant overlap in the evidence required and expressed the hope that the parties would cooperate in expediting the section 89 complaint once it was properly processed and came before a panel of the Board. In the interim this panel beard two days of evidence in the section 1(4) application before the section 89 complaint came before a different panel of the Board on June 12, 1990. In an oral ruling later reduced to writing in a decision dated July 11, 1990, that panel adjourned the section 89 complaint to dates before this panel. When the hearing reconvened we continued to hear evidence in respect of both matters subject only to the respondent's expressed intention, unopposed by the union, to recall John Dean whose evidence had previously been heard.

3. The hearings in these matters commenced on January 22, 1990 and, after 15 days of hearing all set in consultation with the parties, concluded well over a year later. The Board heard the evidence of 10 witnesses, one of whom provided a demonstration of the capabilities of some of the new equipment currently in use at the News. Some fifty-eight documents were filed as exhibits in these proceedings. In coming to its findings of fact the Board has carefully considered all of the evidence before it and taken into account such factors as: the demeanour of the witnesses when giving their evidence, the clarity and consistency of that evidence when tested in cross-examination, the witnesses' ability to recall events and resist the tug of self-interest in shaping their answers, and what seems most probable in all the circumstances. Credibility of witnesses, however, is not a major factor in these matters since, subject perhaps to some exceptions, there do not appear to be many basic factual matters in dispute between the parties. We recognize what may be viewed as the irony in this observation given that the parties felt compelled to call close to fifteen days of evidence before the Board.

The Facts

4. A brief review of the history and current corporate organization of the respondents will be helpful, particularly since even some of the witnesses seemed uncertain or vague about the specifics of the present arrangement. Metroland Printing & Publishing Ltd. was created in July of 1981 through the amalgamation of Metrospan Printing & Publishing Ltd. ("Metrospan") and Inland Publishing Co. Limited ("Inland"). Prior to the amalgamation Metrospan published a number of community newspapers including the News and had a number of production centres including composing room facilities at 3125 and 3145 Wolfedale Rd. Similarly, Inland published a number of community newspapers including The Mississauga Times and had a number of production facilities including a composing room at South Sheridan Way. Subsequent to the amalgamation and by November of 1982 The Mississauga Times ceased production and the remaining composing room work formerly done at the three locations referred to was all moved to the 3145 Wolfedale location which also housed the publication headquarters of the News.

5. The bargaining rights involved in the present matters have their genesis in an application for certification filed in August of 1981 and seeking what was essentially a tag end production bargaining unit. We heard some evidence suggesting that there may have been some relationship between the uncertainties arising out of the amalgamation of Metrospan and Inland and certification drive. Ultimately, on April 14, 1982, a certificate issued in respect of a bargaining unit described, in part, as "all employees of Metroland Printing & Publishing Ltd., employed in the composing rooms at its plant in Mississauga, Ontario...". As already indicated, at the time of the certification there were composing rooms in operation at each of the Wolfedale Road locations; by November of 1982 the 3125 Wolfedale Road composing room had closed leaving only the 3145 Wolfedale Road composing room.

6. A further corporate reorganization took place in January of 1984 when a number of corporations, including Metroland Printing & Publishing Ltd., were amalgamated into Harlequin Enterprises Limited (a pre-existing corporation). However, while as a result of this amalgamation Metroland Printing & Publishing Ltd. ceased to exist as a corporate entity, its name, or at least variations on the name, continue to exist in several important respects. Witnesses invariably used the name "Metroland" to refer to the entire chain of community newspapers and production enterprises formerly carried on by Metroland Printing & Publishing Ltd. Filed in evidence were numerotis registrations of business name or style under the Corporations Information Act - one for each of the over twenty community newspapers (including the News) formerly part of Metroland Printing & Publishing Ltd. and in addition one for the name "Metroland Printing Publishing & Distributing". Each of these is a registered name of Harlequin and each registration identifies “newspaper publishing" as the business activity to be carried on in or identified by the registered name. The evidence of Mr. Dean was that "Metroland" includes all of the community newspapers and the production operations; Mr. Lenyk testified that his best guess was that the registered style name "Metroland Printing Publishing & Distributing" includes the same operations. Finally, the most current collective agreement relating to the bargaining rights involved in the present matters is perhaps curious in a number of respects. The index page of the agreement is headed:

METROLAND PRINTING. PUBLISHING & DISTRIBUTING COMPOSING ROOM GCIU LOCAL SOOM UNION AGREEMENT

The agreement itself is styled as:

COMPOSING ROOM AGREEMENT September 1, 1988 to August 31. 1990 BETWEEN: THE COMPOSING ROOM, at Mississauga, Ontario, of METROLAND PRINTING, PUBLISHING & DISTRIBUTING. (hereinafter referred to as the "Employer")

7. In the recognition clause of the agreement (Article 1.01) the "Employer recognizes the Union as the sole and exclusive bargaining agent for all employees in the Composing Room at its plant in Mississauga, Ontario...".

8. Throughout the lengthy hearings in this matter there was a continuing confusion and imprecision in names used. For ease of reference and in order to minimize the confusion in a manner which best reflects what appears to be the common parlance we shall use the term "Metroland" to refer to the entire chain of newspapers (including the production division) and shall continue to use the term "production division" as a reference to the first respondent in the related employer application. We note of course that the full name of this respondent corresponds with the registered style or name referred to earlier. In addition, although we heard evidence that every newspaper within the Metroland chain (with the exception of the News and papers from Willowdale and Etobicoke) has its own composing room, all future references to the "composing room" shall refer to the composing room facility of the Wolfedale plant of the production division where. until the events giving rise to these proceedings, composing work related to the production of the News was carried on.

9. At the time of the application the production division consisted of three plants: Wolfedale in Mississauga doing primarily newspaper work, Tempo in North York doing both newspaper and commercial work, and the Heatset plant in Scarborough doing primarily commercial work. Each of the plants has a plant manager who reports to Hub Foley, the vice-president of Metroland in charge of production and commercial sales. Mr. Foley reports to John Baxter, the president of Metroland. Each of the publishers (some of whom are also vice-presidents of Metroland) of the various Metroland newspapers (including the News) also report to Hub Foley.

10. John Dean has been the plant manager of the Wolfedale operation since 1988. Mr. Dean (and others) testified as to the general business orientation within Metroland. Each plant within the production division and each newspaper within the chain is viewed as a separate and independent profit centre. Mr. Dean's compensation package is a function (to a certain extent) of the profitability of his operations. This can and does lead to situations where different entities within the corporate structure view each other as both client and competitor. The 1990 Wolfedale budget totalled some 24 million dollars of which approximately 19 million dollars derived from newspaper printing, 20-25% related to production of the News. And while it is readily apparent that the News is a significant overall client of the production division, the importance of the News to the Wolfedale composing room is even more dramatic. Up to the events giving rise to these proceedings some 90% of all the work performed in the composing room was related to production of the News. At the same time the separate commercial sales departments within the News and the production division could find themselves competing to attract the same work. Furthermore, while the News was historically one of the production division's largest clients, there was no contractual obligation on the News to continue to have all or most or any of its printing or composing work done through the production division.

11. David Griffin is the general manager of the electronic imaging group of McCutcheort Graphics Inc. (hereinafter "McCutcheon") and has a wealth of experience involving the introduction of electronic technology to the newspaper industry. From 1983 to 1986 he was development manager of the newspaper systems division of Compugraphics, a firm which was responsible for the introduction of the "Intrepid" system at the News in 1986. Intrepid was a PC based system operating in a word processing environment which provided a unique form of "text management" allowing multiple users access to each other's texts as well as the opportunity to merge, share or review text prior to output. The system essentially automated the typing function and some aspects of the composing function and was seen as the first step toward towards building each and every page of the newspaper electronically. In the spring of 1989, however, Compugraphics announced that it would no longer support any new development of the Intrepid system in the newspaper industry. At this point in time elements of the system had been introduced in the News' classified and (to a limited extent) editorial departments but not in the retail department.

12. In any event, given Compugraphics' announcement, the only options open to the News were to abandon its investment, content itself with the limited stage of the system's development and implementation, or find some other way to develop the system.

13. Mr. Griffin who by this time was no longer with Compugraphics saw the potential of the situation and approached John McCutcheon, president of McCutcheon to suggest that a system he (Griffin) had developed for newspapers in the U.S. could be used to further develop the Intrepid system. They decided to work together to realize the market opportunity and with that in mind subsequently contacted the News.

14. Ron Lenyk is the publisher of the News and a vice-president of Metroland. He too described the Metroland business orientation and perhaps best summed up the Metroland entrepreneurial culture when he testified that his role as a publisher is to "derive the most profit I can from the Mississauga market and contribute that profit to the corporation so we can stay a viable portion of Torstar [Harlequin's corporate parent]".

15. In the fall of 1989 Mr. Lenyk was contacted by the Toronto sales manager of McCutcheon while at the same time John McCutcheon contacted John Baxter, president of Metroland. Both contacts were made with a view to McCutcheon's proposal to update the abandoned Intrepid system. A series of meetings and correspondence followed involving both Mr. Lenyk and Mr. Baxter and culminated late in November with an agreement to purchase equipment and training services from McCutcheon at a cost of approximately $800,000.

16. Before reviewing the basis, process and impact of the decision it will be useful to briefly review budgeting and expenditure procedures at both the News and the production division. As we have already seen both the News and the production division are ultimately accountable to the same Metroland executives (normally Mr. Foley; however, in view of Mr. Foley's protracted illness during much of the relevant period, it would appear that Mr. Baxter more directly assumed much of this responsibility). It is perhaps therefore not surprising that the budgeting process exhibits a similar structure. Mr. Lenyk sets his annual operating and capital expenditure budgets in consultation and with the approval of Wayne Zubek, Metroland's vice-president of finance. There are a number of items over which Mr. Lenyk has no control like the rent the News pays to Metroland and the rates the production division will charge for services (including the composing room)~ all of which are determined by Mr. Zubek. Although there is no formal budget review directly between Mr. Lenyk and Mr. Baxter, Mr. Lenyk was sure that Mr. Baxter would review the budgets.

17. The limits on Mr. Lenyk's autonomy can be seen in other areas as well. For example, although the News maintains its own bank accounts, Mr. Lenyk's cheque signing authority is limited to $1500. Any expenditure beyond that limit requires Mr. Lenyk to requisition the approval of Metroland who will ultimately issue the cheque, if approved. The News' payroll is prepared and issued by Metroland, a service for which the News is charged.

18. A similar process is in place at the production division. Mr. Zubek, Mr. Foley and Mr. Baxter would all (to varying degrees) be involved in the Wolfedale budget process. Like the News, certain budget items were fixed, such as the rates to be charged to and the anticipated income from the News. A similar payroll system appears to be in place. Mr. Dean did not testify as to the limits on his spending powers.

19. At the time of the decision to accept McCutcheon's proposal to upgrade and revamp the Intrepid system the News' 1990 operating and capital expenditure budgets had already been set and approved. Thus, this decision did not fall within the normal budget decision making process. Given the magnitude of the expenditure, this would not be surprising in any event. The economic advantages of implementing the system were seen as dramatic. The News would no longer have to purchase composing room services, budgeted at $1.7 million for 1990, from the production division. This saving would more than offset both the anticipated $0.5 million expenditure required to hire people in the new positions of marketing assistants to work in conjunction with the upgraded technology and the $0.8 million capital expenditure itself. Further savings would result from the fact that Mr. Lenyk anticipated Metroland would allow the News to amortize the capital expenditure over a period of ten years with no interest charges. In addition to these economic advantages the new system offered the prospect of significantly reduced turnaround time as well as extended deadlines, both general advantages in newspaper publication and ones of particular value in increasing potential advertising capacity and consequent income. There was no dispute that the system envisioned and ultimately implemented is consistent with technological trends within the industry.

20. In view of the obvious advantages of the system as well as the significant capital cost associated with its implementation, Mr. Lenyk sought the approval of Mr. Baxter (who, it will be recalled, had already been involved in discussions with McCutcheon) for the required expenditure.

21. Although there appeared to be little downside in implementing the system from the News' perspective, the same cannot be said of the production division. Although Mr. Lenyk couldn't confirm the 90% figure, he acknowledged that most of the work performed in the Wolfedale composing room came from the News. He further acknowledged that he knew the decision would therefore have a major impact on the composing room and that this would be obvious to anyone in any position of authority at Metroland. Of course, given the entrepreneurial climate already described, it should not be surprising that the economic position of the production division would be of little immediate concern to Mr. Lenyk. He did acknowledge, however, that to the extent any weighing of the composing room versus the News' budgets were to take place it would be performed by Mr. Zubek or Mr. Baxter.

22. Indeed, in the circumstances, there is little doubt that the decision to implement the new technology was tantamount to a decision to close the composing room. And while it may not have (nor could reasonably be expected to have) been viewed as such by Mr. Lenyk, one would have expected that such a significant decision and the impact it would have on the composing room would have been considered by one or more of the Metroland executives (none of whom testified) who were in a position to evaluate and presumably would have been concerned with the economic positions of both the News and the production division.

23. Although the decision had been taken late in the fall of 1989, there were apparently no visible signs of its impact until March of the following year. The News and the Wolfedale plant of the production division are located in adjacent attached buildings at 3145 and 3125 Wolfedale Rd. Quite apart from that proximity of operations, the composing room is located in the very same building (3145) as the News. On March 13, 1990 Mr. Wayne Moore, the composing room manager, wrote a memo to Mr. Dean advising him that he had learned of plans by the News to install typesetting equipment and processors and asking Mr. Dean to provide clarification.

24. Mr. Dean who was unaware of the News' plans began to make inquiries. He first contacted Mr. Foley who in turn advised that he would contact Mr. Lenyk. When neither of them contacted Mr. Dean who by now was aware that composing room employees were becoming anxious about the matter, he decided to contact Brenda Biller. Ms. Biller has human resources responsibilities for Metroland which appear to include such matters as labour relations~ negotiations and pay equity. A meeting was subsequently arranged with Mr. Lenyk where the latter confirmed the arrival of the new system and advised that the News would be doing its own composing room work.

On March 26, 1990 a memorandum signed by Ms. Biller on behalf of Mr. Dean was distributed to composing room staff. It advised that the News had begun installation of a desk top publishing system and that the loss of business would necessitate an as yet undetermined number of layoffs of composing room staff.

25. A further meeting was held involving Mr. Dean, Ms. Biller, Mr. Lenyk and representatives from McCutcheon who described the new operation. Based on that information it was determined that the composing room would close. Mr. Dean at a subsequent regular production meeting (attended by publishers in the Metroland chain, production division representatives, Ms. Biller, and Metroland executives) advised of the pending layoffs and the consequent availability of composing room staff to fill appropriate vacancies within the Metroland operations. This was followed by a written memo dated May 15, 1990 and addressed to many of the same individuals. Although the process was protracted, due in large part to the longer than anticipated training and implementation period associated with the new system at the News, the closure of the composing room was completed by the end of the calendar year with the elimination of some 46 (full and part time) positions.

26. The News' decision to introduce the new system was not the first time that its composing room work (or its equivalent) was done elsewhere than in the production division. As already indicated and under a practice which appears common in the industry, the News was under no continuing obligation to have any of its composing or printing work done by the production division. Thus, we heard evidence that there have been occasions where at least some portions of the News have been printed elsewhere from time to time based on price and sufficiency of turnaround time. No precise figures were advanced and the Board was certainly left with the impression that although a certain number of contrary examples can be identified, the bulk of the News' printing is and has been done by the production division. We also heard evidence about work which might otherwise have been done by the composing room having been contracted out or performed directly by employees of the News. None of this work, however, appears to have emanated from either of the three major departments of the News: editorial, classified, or retail (sometimes referred to as display). Rather this work seems to have emerged from printing and distribution sales or from other small working groups within the News created to solicit more advertising work. Much of this work would include the production of leaflets or flyers (not necessarily to be inserted into the News) or other occasional publications. We heard evidence about a string of groups such as the Metroland Creative Group and the Creative Impact Group many of which were fairly fleeting in duration. It is in relation to this sort of work, however, where the News and the production division could perhaps best be characterized as competitors as both run commercial sales departments (or equivalents) which seek the business of advertisers interested in producing flyers, pamphlets or like materials.

27. Rob Leuschner has been the News' advertising manager since June of 1990 and prior to that was the print and distribution sales manager. He testified that for approximately eight months from September of 1988 to April of 1989 the composing room was used for work on the flyers and inserts his department was producing. There was little question, however, that the composing room's priority was work related to the production of the News (and other actual newspaper publications) and in any event was not the types of products with which Mr. Leuschner was involved. Consequently, some difficulties were encountered in achieving the desired turnaround time and a decision was taken in April of 1989 to contract the work to a graphics company which had undertaken to do the required work in a timely fashion and at an acceptable price. By November of 1989 the volume of work and the amount of money flowing out to the graphics company led to a further decision to employ a full time artist and thus reduce the amount of work required to be sent to the graphics company or the composing room. The artist worked with a MacIntosh PC, a scanner and a printer all located within the News' print and distribution sales department and was thus able to perform the functions previously accomplished in the composing room. It was not seriously disputed that even prior to November of 1989 the composing room functions (or equivalent) in respect of this aspect of the News' work (i.e. production of flyers, pamphlets or other publications apart from the actual newspaper) were performed in a variety of different fashions: by an outside company, directly by employees of the News or by the composing room. It also appears that the decision to employ a full time artist in November of 1989 was made entirely independently of the plans then crystallizing to upgrade the Intrepid system.

28. Without a doubt the bulk of the evidence called by all parties to these proceedings dealt with comparing the work and functions performed by composing room employees with the work and functions actually or projected to be performed by persons hired by the News as marketing assistants. In view of our ultimate conclusion as to the relevance of this issue to our proceedings and the extent to which it is necessary to determine whether the work of marketing assistants would be bargaining unit work, we now set out a review of that evidence in an abbreviated form.

29. It was in the context of the production of retail or display ads that the parties focused their attention and we shall do the same. Filed in evidence were examples of an ad published in the News as well as a flyer produced by the News' in house artist through his desk top publishing facilities. The ad in question was accompanied by the documents which might typically be submitted to the composing room at the start of the process. We say typically because we were advised that the accompanying documents in this case were not the actual documents submitted to the composing room but rather were prepared after the fact. Although there was some dispute as to how typical the extremely detailed instructions included in these documents were~ there was no objection to the Board otherwise receiving them as evidence of the type of information typically provided to the composing room.

30. The process of ad production typically begins with a contact between a (News) salesperson and the client. The client would advise the salesperson of the form and content of the desired ad. This might range in specificity anywhere from the extremes of a camera ready copy of the ad to some fairly vague instructions regarding form and content. Based on these instructions the salesperson would prepare and submit a layout and advertising copy sheets to the composing room. The layout (which in some cases may have been prepared by the client) is essentially a mock up of the ultimate ad prepared to scale. The advertising copy sheets contain more specific instructions regarding the text to be included in the ad. They are structured around a system of numerical keys which correspond to specific sections of the layout. These materials might also include instructions regarding such matters as font selections type and design of borders within and at the limits of the ad, shading or colour, size of type. Also submitted to the composing room would be any logos, photographs or other graphic material to be included in the ad. Based on all of this information the composing room would prepare a version of the ad ready (subject to the approval of the salesperson and the client) to proceed to the next step in the printing process. This would generally involve up to five separate steps (as necessary) each performed by a different individual within the composing room: markup, typesetting, pasteup, camera, and proofing.

31. There was much conflicting evidence regarding the extent of creative input provided by composing room employees. It would appear that the expectation is that the level of detail included in the material submitted to the composing room would be such as to require minimal subsequent creative input. There was no dispute that the responsibility for creative design~ text and graphic selection does not reside in the composing room. It would also appear, however, that the level of detail included in the advertising copy pages and layout submitted in evidence is atypical. Consequently, persons working in the composing room would routinely be faced with lack of precise instructions regarding such creative matters as size of type, font selection, kerning (the process of adjusting the space between letters to accommodate space restrictions), shading, boldness of type and others. In the face of this lack of precision the response of composing room employees was not uniform. Some would seek further clarification from their supervisor or from the salesperson while others would simply exercise their own judgement and make and implement the creative choices (subject always to the approval of sales and, ultimately, the client). So while composing room employees would not exercise judgement regarding the primary creative choices (basic design, text and graphic material), it would appear that, whether or not formally part of the job description, they would regularly exercise creative judgement in respect of other matters associated with advertising production.

32. The documents filed regarding the production of a flyer by the News' in house artist evidence a comparable but different process. In this case a document resembling the layout (prepared by the customer in this case) and a printing request order form were submitted to the artist by a sales representative. In this case as well the basic design, text and graphics selection are contained in the layout and maintained in the final ad. The finished product does, however, reflect a number of creative choices made by the artist including type selection, shading, borders, and angling. The significant difference, however, is that these choices are realized not through the (mainly) manual and mechanical 5 step process associated with the composing room, but rather are done electronically with the aid of the computer, scanner and printer. From this perspective the technological innovation may be seen as a precursor of the system ultimately established at the News.

33. This brings us to a brief description of the significant aspects of the new system adopted by the News. We should note that the system was in the process of being implemented during the lengthy course of these proceedings. In the circumstances it may be helpful, as the parties did, to refer to both the actual and contemplated implementation of the system.

34. Central to the functioning of the new system was the creation of the new position of marketing assistant. The stated basic purpose of the position is "to support and assist in sales and marketing functions within a specified sales unit including; advertising planning, creative design, booking, billing and client communication". Although we have already described some of the capabilities of the new system, there is one aspect not yet adverted to. In addition to automating many of the functions formerly performed by the composing room, the system effects a corresponding automation of accounting functions. As well as electronically creating and storing advertising material, the system allows for the simultaneous recording of "demographic" information (customer coordinates, accounts, bookings, billings etc.) in relation to each ad and advertiser. This centralization and automation of accounting functions is yet another significant advantage of the new system.

35. In terms of the comparison of the work and job functions of marketing assistants and composing room employees, the following general findings are sufficient for our purposes. The marketing assistant position, both in conception and in the limited practice to date, incorporates many of the functions previously performed by composing room employees. For the most part these functions are performed electronically rather than manually. For example, rather than incorporating or altering the size of a logo to be included in an ad photographically, the marketing assistant performs these tasks using a scanner (for initial entry) and the computer (to alter size). (We did hear evidence that a scanner was used in the composing room, but it was acknowledged that it was not as sophisticated as those used by marketing assistants.) The marketing assistants have access to an electronic library of frequently used logos; the composing room (or at least individual compositors) kept a corresponding hard copy library of logos. Many of the other choices and functions formerly exercised by composing room employees (e.g. choice of type, size of type, kerning, shading, etc.) are now performed by marketing assistants electronically. Thus, while the significant functions of the composing room have been incorporated into the marketing assistant's duties and while they are required to exercise similar judgement and make comparable choices, they do so using the tools of a technology quite different from that formerly available in the composing room.

36. Some of the evidence we heard would suggest that, at least to date, the functions of the marketing assistants do not significantly differ from those formerly performed in the composing room. Whether or not that is accurate, we are satisfied that the marketing assistant position, at least in its conception, is designed to include more than simply incorporating the composing room functions. It is contemplated that marketing assistants will have more direct and regular contact with clients than the infrequent contact between the composing room and News' clients. It is also projected that marketing assistants will perform certain accounting functions never previously associated with the composing room. There is no doubt that the marketing assistant position is designed to include a "sales" component absent from the work previously done in the composing room.

The Positions of the Parties

37. The submissions of counsel in these matters occupied the better portion of two hearing days. We do not propose to review those submissions in intricate detail and what follows is but a summary of the salient points of counsels' arguments.

38. The respondents assert that the News and the production division are and have always been treated by the parties as separate labour relations entities. The Board should not disturb that. Although it was acknowledged that some of the issues raised as preliminary matters (i.e. whether section 1(4) is available in respect of separate divisions of the same corporate entity) might go to the exercise of the Board's discretion, counsel declined to adopt or repeat the submissions of the different counsel who represented the respondents with respect to the preliminary issues.

39. The respondents pointed us to the following Board observation in Ethyl Canada, Inc., [1982] OLRB Rep. July 998 at paragraph 37:

37. Section 1(4) of the Act deals with situations where the economic activity giving rise to the employment is or can be carried out through more than one legal entity. In such circumstances an alteration in legal form, or a transfer of work from one legal entity to another, can undermine established collective bargaining rights. Section 1(4) ensures that the institutional rights of the trade union and the contractual rights of its members, will attach to a definable commercial activity rather than the particular legal vehicle(s) through which that activity is carried on. Legal form is not permitted to obscure economic and collective bargaining realities. In this respect section 1(4) creates a regime of collective bargaining law which significantly modifies common law notions of privity of contract or the corporate veil. However, while the language of section 1(4) is very broad, the section is not intended to apply in every case which in a general or linguistic sense meets its statutory criteria. The Board has a discretion concerning the application of section 1(4) and, in the past, it has exercised that discretion carefully, in light of the circumstances of each case, and labour relations policy considerations.

Based upon this authority it is asserted that an alteration in legal form and a corresponding transfer of work (not merely functions) resulting in the undermining of established collective bargaining rights are conditions precedent to a related employer finding. Alternatively, these are factors the Board should consider in the exercise of its discretion under the section.

40. In the present case, given the history of separation of divisions, there has been no change in legal form. Further and even assuming the functions to be performed by marketing assistants are comparable to those formerly performed in the composing room, there has been no transfer of work. A transfer in the context of this case would entail the movement of work from the production division to the News, but the production division played absolutely no role in the decision to implement the new system at the News. It is thus impossible to view the News as the recipient of anything from the production division, particularly in view of the fact that the News was under no obligation to have its composing work done by the production division. Even if there has been a transfer, it is not a transfer of work since the work performed by marketing assistants using the new technology is entirely different from composing room work even if there is some overlap in function. The net effect of the introduction of new technology is that work has been eliminated, not transferred.

41. The respondents also argue that in order to succeed, the applicant must prove that the marketing assistant's work is identical to composing room work and that work done exclusively in the composing room bargaining unit has been undermined by the News' innovation. They deny that there has been any attempt at legal manoeuvring to create a new entity for the purpose of avoiding collective bargaining obligations. Finally, the Board should consider the fact that the applicant raised no objection in the years prior to the application regarding News' employees or others doing work which could have been done in the composing room.

42. With respect to the section 89 complaint, the respondents deny any anti-union motive and assert that there is simply no evidence to allow the Board, even by inference and having regard to the reverse onus, to make such a finding. The basis and rationale for the decision to implement the technological change are clearly set out in the evidence and disclose no improper motive.

43. The position of the union, not surprisingly, is different. With respect to the section 1(4) application we were pointed to the language of the statute for the preconditions to any related employer declaration. The legislation (and the cases interpreting it) require that two different entities carry on related or associated activities or businesses under common control or direction. Although such a finding may well be relevant, anti-union animus is not a precondition to relief under the section.

44. In view of the respondents' position on the issue of whether related employer relief is available in the context of separate divisions of the same corporate entity, the union did not add to submissions already made when the Board dealt with the respondents' preliminary motions.

45. We were pointed to the Board's decision in Stebill Limited, [1989] OLRB Rep. Apr. 384 for the proposition that the activities of two entities need not be identical to be related or associated within the meaning of the section. Both the News and the composing room are/were involved in the production of the News. Furthermore, there is a sufficient nexus or relationship between the work of marketing assistants and that previously performed in the composing room to allow the Board to conclude that the two entities carry on associated or related activities or businesses. In this context we were invited to focus on the functions and not necessarily the technology used to perform those functions by the two groups of employees. An actual and specific transfer of identical work is not a precondition to the application of the section. It was asserted that the evidence supported the conclusion that the current technological innovation and the resulting marketing assistants' positions is merely part of the evolution of the compositor function. There is such a strong overlap between the core functions of marketing assistants and composing room employees that (but for the different employer) the former would be found to be doing bargaining unit work under the terms of the composing room collective agreement. In this context we were referred to a number of arbitration cases dealing with issues of bargaining unit work.

46. The union relied on, inter alia, McCollum Graphics Incorporated, [1986] OLRB Rep. Jan. 131 in support of its arguments regarding common control or direction. In that case the Board observed at paragraph 21:

Common control or direction over two corporate entities is generally demonstrated by showing that the two corporations have common shareholders and officers. However, the Board has in a number of cases held that two corporations can be under common direction even though legally owned by different individuals... While in these and certain other cases, the Board has indicated that it will look beyond mere ownership to ascertain who, in fact, directs or controls activities that give rise to employment, it has also indicated that the type of control involved must involve a real ability to "call the shots", as opposed to acting under the direction of more senior officials within the organization.

47. In reviewing the evidence, the union argued that the real control, the ability to "call the shots" in relation to both the News and the composing room was to be found in the same individuals, the senior executives of Metroland. The budgets of the two entities were subject to approval by common individuals. Whatever Mr. Lenyk's contribution to the decision to purchase the new technology, his spending authority is limited to $1500 and the ultimate decision was made by Mr. Baxter. The fact that neither Mr. Lenyk nor Mr. Dean have any real control over their budgets is highlighted by the fact that not long before the new technology was contemplated at the News, Mr. Dean saw proposals to purchase comparable (but admittedly not as sophisticated or extensive) equipment for the composing room rejected in the budgeting process monitored by Mr. Zubek and, ultimately, Mr. Baxter. It was logical and, as Mr. Lenyk conceded in his cross-examination, a safe assumption that any weighing of relative costs and benefits as between the News and the composing room would be performed by Messrs. Zubek and Baxter.

48. Finally with respect to the section 1(4) application, a number of other points raised by the respondents did not go to the essential ingredients of a related employer application. Although some of these might be relevant to the exercise of the Board's discretion under the section, they should not prevent the Board from issuing the declaration sought. These included the respondents' submission that the union was aware for some period of time that the News, through its various "creative" groups, was doing work similar to that in the composing room. No grievance or complaint was ever filed prior to the instant proceedings. The respondents had also argued that a related employer declaration and consequent relief could impact on other bargaining units represented by the applicant and another union.

49. With respect to the section 89 complaint the union acknowledges that the central issue is motive. While it concedes that there may have been a legitimate business justification for the introduction of the new technology, it asserts that, in view of the reverse onus, the respondents have an obligation to adduce evidence to negate any improper motive. The real decision maker in the case was Mr. Baxter and his failure to testify leaves too many questions about the respondents' real motive unanswered and should lead the Board to conclude that the respondents have failed to discharge their obligation in the section 89 proceeding.

Decision

50. We shall deal first with the section 89 complaint. The union alleges that the respondent has violated sections 64, 66, 67 and 70 of the Act. These sections provide as follows:

64. 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.

65. 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

(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to compel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

67.-(l) 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.

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

70. No person, trade union or employers' organization shall seek by intimidation or coercion to compel any person to become or refrain from becoming or to continue to be or to cease to be a member of a trade union or of an employers' organization or to refrain from exercising any other rights under this Act or from performing any obligations under this Act.

51. It was common ground that in order for this complaint to succeed the Board must be persuaded (whether through the respondents' failure to meet the reverse onus or otherwise) that the decision to implement the new technology was motivated, at least in part, by anti-union animus. Although we might have been painted a more complete picture of the decision making process had Mr. Baxter (and, indeed, other Metroland executives) testified in these proceedings, we are not persuaded that this is sufficient, in the circumstances, to impel us to conclude that there has been a violation of the Act.

52. We have already set out our factual findings on this point; we are satisfied that there was more than sufficient economic justification for the introduction of the new system whose myriad benefits and attractions have been outlined earlier. Even without Mr. Baxter's evidence we are satisfied that the various capabilities and advantages of the new system were the real reason for its introduction. This is consistent with general technological trends within the industry. We note as well that the union did not argue that even accepting the legitimacy of the introduction of the new technology (and presumably assuming the success of the section 1(4) application) that the decision to introduce the equipment at the News rather than in the composing room was improperly motivated.

53. In these circumstances there is simply no basis for finding the improper motive which all parties agreed was necessary for the success of this complaint.

54. The section 89 complaint is consequently dismissed.

55. Disposition of the related employer application is somewhat more complicated. Section 1(4) of the Act provides:

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.

56. While the Board's authority under the section is clearly discretionary, the essential ingredients necessary to found a related employer application are those enumerated in the statute as the Board has observed in many cases including Radio Shack, [1979] OLRB Rep. July 689 at paragraph 7:

Section 1(4) of the Act is designed to deal with situations where more than one legal entity carries on related business or activities under common control and direction and where "it may not make industrial relations sense to allow the legal form to dictate and possibly fragment the collective bargaining structure." There are three conditions which must be met before the section can be applied.

(a) There must be more than one corporation, firm or individual[,] association or syndicate involved.

(b) These entities must be under common control or direction, and

(c) they must be engaged in associated or related business activities.

If these conditions are met the Board is given a discretion under the statute to make a declaration that the entities in question constitute one employer for the purposes of the Act. The Board has consistently exercised its discretion under section 1(4) to preserve rather than to extend bargaining rights.

57. In view of the words of the statute and the Board decisions interpreting it, we are simply unable to accept the respondents' argument that an alteration of legal form, a transfer of work from one entity to another and a resulting undermining of collective bargaining rights are all conditions precedent to a related employer finding (on the point regarding alteration of legal form, the words "whether or not simultaneously" found in the statute are obviously relevant). Similarly we do not agree that establishing an identity of work performed as between the entities in question is a prerequisite to finding the statutory requirements have been met. While all these factors may well be ones the Board may wish to consider in determining whether or how to exercise its discretion, they simply are not matters directly relevant to determining whether the essential statutory ingredients have been established. We move then to a consideration of whether the respondents are related employers under the terms of section 1(4) and leave any issues regarding our discretion to be dealt with later as necessary.

58. Apart from the submissions just adverted to, the respondents did not seriously challenge the contention that the News and the composing room carry on related or associated activities. And although the union pointed to what it asserts are significant overlaps in the core functions of marketing assistants and compositors to bolster its claim that the composing room and the News carry on related or associated activities, we were also directed to authorities (like Stebill Limited, supra) which indicate that the activities of the entities in question need not be identical in order to be related or associated. In the circumstances we are satisfied that the functions and work performed in the composing room are related or associated with the business or activities of the News, i.e. production of the newspaper.

59. It was the question of whether the entities are under common control or direction which was most seriously challenged by the respondents. The McCollum Graphics case, supra, speaks of common shareholders and ownership as a principal indicator of common control or direction. If that were the exclusive test it would readily be met in a situation such as the instant one involving different divisions of the same corporate entity. Yet one could imagine that such a degree of independence and autonomy could exist in such a situation as to preclude a finding of common control and direction. Indeed, the respondents argue that is precisely the case here.

60. Given the nature of the organizational structure it is perhaps not surprising to find many indicators of common control and direction present. The prices the News is to pay and the composing room are to receive for composing room work are set by Mr. Zubek. It is perhaps somewhat curious that monthly accountings of all composing room work (i.e. not limited to the News) are sent to three individuals at the News, including Mr. Lenyk. Paycheques at both enterprises are drawn and paid on Metroland accounts. Mr. Lenyk and Mr. Dean attend regular monthly production meetings with other Metroland publishers, production division representatives, Metroland executives and human resources personnel. The composing room was operated in the very same premises which house the News. Although we heard evidence that the News pays rent to Metroland for use of its facilities, we heard little other evidence as to ownership and charges for facilities paid or received by either the News, the production division, or the composing room. Yet despite the physical proximity of the operations, we are satisfied that the day to day operations and management of the News and the production division are, for the most part, separate and autonomous. It is, however, in relation to many of the events giving rise to these proceedings that the common control or direction of the enterprises becomes evident.

61. There is little question that ultimate financial control resides in the hands of the same individuals. And while decisions made or recommended by either Mr. Lenyk or Mr. Dean are no doubt premised on the economic health and viability of their particular corners within the Metroland patchwork, there is no reason to believe that the perspective of the Metroland executives who must ultimately approve or reject significant economic proposals is similarly limited.

62. In this context we see that the real economic decision making power of Mr. Lenyk and Mr. Dean is somewhat limited. In concrete terms, Mr. Lenyk's spending power is limited to $1500. Expenditures beyond that amount must be approved by Metroland executives and, assuming such approval, the required funds (although apparently ultimately charged to the News) come from Metroland or Harlequin accounts. The capital expenditure budgets of both men are subject to approval by (the same) others. Perhaps most significant, however, is the fact that the (albeit comparatively modest) proposals to introduce desk top publishing technology into the composing room which originated with Mr. Moore were rejected by the same individual(s) who ultimately approved the decision to introduce the new system at the News. Furthermore there can be no doubt that the decision to introduce the new system at the News was tantamount, from the perspectives of the Metroland executives, to a decision to close the composing room. Whether or not that was the specific intent in making the decision, its impact in this regard could not have escaped the decision makers.

63. We note that we were invited by the union to draw negative inferences from the failure of either Mr. Foley, Mr. Zubek or Mr. Baxter to testify. Although there may be some basis for the invitation and although the Board may have benefitted from the evidence of these individuals, we have not found it necessary to draw the suggested inferences as we are satisfied that the evidence before the Board adequately supports the factual conclusions we have drawn.

64. Finally with respect to the issue of common control and direction we note as well that the industrial relations functions of the enterprises appear to be centralized at least to the extent that they are serviced by the same human resources personnel. In this context we note that Brenda Biller of Metroland's human resources department has been an active player in many of these events. She appears to have been involved in collective bargaining negotiations for the composing room and grievances involving both the composing room and the News. She was responsible for several memos to composing room employees and was the recipient of at least one memo from McCutcheon regarding implementation difficulties associated with the new system at the News.

65. Although there may be some significant differences which we shall examine later, we are of the view that at least the general thrust of the following observations found at paragraph 9 the Radio Shack case, supra, are applicable to the present case:

Work which was previously done by one arm of the Tandy organization is now being done by another arm of the Tandy organization at the same location and with some of the same employees. Although the change was made for sound business reasons and was not in any way motivated by a desire to oust the representation rights of the trade union in respect of the employees performing the work in question, the effect has been to remove these employees from the union's recognition. Section 1(4) of the Act was designed to protect bargaining rights which are threatened by non-arm's length restructuring as in the instant case. Employees who have been represented by a trade union should not be left unrepresented as the result of a corporate reorganization, regardless of the motives for the reorganization.

The Board is satisfied that the respondents' activities are carried on under common control or direction.

66. This brings us to a consideration of whether the respondents' activities are carried on "by or through more than one corporation, individual, firm, syndicate or association or any combination thereof'. Despite the parties' reticence on this point in final argument, we feel compelled to deal with it since it was the subject of a preliminary motion. And, although dismissed, the substance of the motion styled "jurisdictional" was not resolved. Further, while counsel for the respondents explicitly declined to repeat or adopt the submissions made on the preliminary point, neither did he withdraw them.

67. The issue was dealt with as follows in our preliminary decision in this matter:

7. The respondents, based on the evidence currently before the Board, argue that no declaration under 1(4) can issue in the present case since the first condition referred in the Radio Shack case can not be met. The respondents, argue that as they are both divisions of the same corporate entity, namely Harlequin, there is therefore not "more than one corporation, individual, firm, syndicate or association or any combination thereof'. Essentially, argue the respondents, there is already only one entity and the Board is therefore without jurisdiction to make the order requested.

8. The union argues that the statute does not require two separate corporate persons before 1(4) can apply. Indeed, it is not even necessary for two entities of separate legal personality (corporate or otherwise) to exist as a precondition to the application of section 1(4). The wording of the section and in particular the taxonomy of entities contained therein are, according to the union, deliberately vague. While individuals and corporations may be seen as recognized legal entities, the terms "firm" "syndicate" and "association" cannot and are not otherwise defined in the statute. This vagueness, it is asserted, is necessary to effect the labour relations purpose of the section.

9. In the context of the argument regarding the applicability of section 1(4), the union extended an invitation to the respondents. The union expressed its concern that while the respondents in the present application take the position that they are divisions of the same legal entity, they may all the same rely on their distinctness as a defence in the arbitration proceedings arising from the grievance. The scope clause of the collective agreement defines the bargaining unit as including "... all employees in the composing room...". If the respondents were prepared to undertake not to rely on their separate status to argue at arbitration that an employee of The News cannot be covered by the agreement with Metroland then the union indicated the present application would not need to be pursued. The respondents did not accept the invitation.

10. A number of cases were referred to in support of the parties' positions on the motion(s) currently before the Board including General Bakeries Limited, [1979] OLRB Rep. May 400; Radio Shack, supra; George Hamers Limited, [1981] OLRB Rep. Oct. 1382; General Motors of Canada Limited, [1986] OLRB Rep. Feb. 244; and Masstron Scale Ltd., [1987] OLRB Rep. Nov. 1578.

11. The respondents relied principally on the General Motors case. In this case the union had been certified in respect of a single plant. In the certification proceedings the employer had unsuccessfully argued that the bargaining unit ought to include employees working throughout the municipality. Several years later, when the employer took over an existing facility in another location in the municipality, the union applied under section 1(4) for a declaration that the respondents (two separate plants) were one employer and a further declaration that the newly acquired plant was subject to the terms of the existing collective agreement.

12. In dismissing the union's application the Board, at paragraph 7, made the following observation:

In our view, the clear purpose behind section 1(4) is to enable the Board to "pierce the corporate veil" and to treat what would otherwise be separate legal employers as one employer. In the instant case, we have only one legal entity before us, namely General Motors of Canada Limited, which is already a single employer. In these circumstances, we are satisfied that section 1(4) cannot be applicable to the facts of this case.

In a similar vein, the Board in General Bakeries Limited, supra held that an application under 1(4) could not succeed where the respondents were separate divisions of the same corporate entity and did not have separate legal personality.

13. Notwithstanding the above the Board has, in Radio Shack, supra, applied section 1(4) to divisions of the same corporation. Similarly, in George Hamers Ltd., supra, the Board concluded (at paragraph 12) that "... whether a segment of a corporation's business, designated by it as a division, is to be treated as a legal entity or not is a question of fact in each case."

14. To the extent that there may be inconsistencies in the cases referred to the Board has determined that it is neither necessary nor advisable to deal definitively with these at this stage of the proceedings. It may well be, as counsel for the applicant suggests, that the focus on legal entities has been overemphasized and the cases ought not to be read outside of the factual circumstances in which they arise. Counsel noted that the Act does not refer to legal entities. It may be more sensible to describe the taxonomy contained in section 1(4) as "labour relations entities" which may not always coincide, strictly speaking, with "legal" entities. It is the purpose of the section, namely to preserve (and not to extend) bargaining rights which must guide any interpretation of the section.

15. In any event, whether we are concerned with legal entities or labour relations entities we agree that whether such entities should be viewed as separate entities for the purpose of section 1(4) is a question of fact in each case. In the present case this is not a determination the Board feels should be made at this stage in the proceedings and in the absence of a complete evidentiary framework.

16. Consequently, to the extent that the respondent's motion is made pursuant to Rule 71, the Board declines to exercise its discretion to dismiss the application at this stage of the proceedings. To the extent that the respondents' motion is an objection to our jurisdiction to make the order requested, the motion is dismissed. The Board's jurisdiction in this context is, inter alia, to determine whether the respondents are separate entities as contemplated by section 1(4) of the Act. If they are not, the application will be dismissed. This is a determination to be made with the benefit of all the relevant evidence.

17. The respondents will, of course, be free to renew all their arguments (whether directed at the conditions precedent to the application of section 1(4) or to the issue of the exercise of the Board's discretion) at the conclusion of the case.

68. In reviewing our prior decision and the arguments made and authorities cited in relation to the preliminary motions, we are struck that there is some limited merit to the position articulated by the employer at that time. Whether we are concerned with employees of the composing room, the production division, the News or, indeed, any of the community newspapers in the Metroland chain, there is only one corporate employer entity involved - Harlequin. And while the parties may have chosen to name some entity other than Harlequin and without legal personality as the employer party to the collective agreement(s) before us, this cannot change the fact that the legal entity ultimately bound and liable for any breaches of the agreement remains Harlequin. We seriously doubt that any arbitrator or court called upon to enforce an arbitrator's award would allow Harlequin to escape liability for a breach of the agreement merely because the parties chose to name Metroland or the News rather than Harlequin as the party bound by the agreement. This is, of course, an issue entirely distinct from the scope of the union's bargaining rights as defined in a certificate and, ultimately, in a collective agreement. Parties are obviously free to limit the scope of a union's bargaining rights to a particular division of a corporate entity. In those circumstances the fact that the legal entity is larger than the division to which bargaining rights are limited will not of itself serve to expand the limits on bargaining rights agreed to by the parties.

69. These observations highlight the significance of the "invitation" made by the union and referred to in paragraph 9 above of our earlier decision in this matter. As indicated the employer declined to accept the union's invitation. In view of our current observations, had any of the parties requested that the matter be dealt with on this basis, the Board might seriously have entertained a request for a declaration that (quite apart from any questions involving the interpretation of the scope of the collective agreement) Harlequin, as the legal entity involved in the operations of the composing room and the News, is a party to the collective agreement with the union. As will become clear, that result might have been similar to the one we have arrived at, but might have obviated the significant delay and expense associated with these proceedings. However, none of the parties argued the matter on that basis, but rather chose to deal with the matter exclusively and explicitly under the rubric of section 1(4). Consequently, we must now decide whether section 1(4) relief is available in these circumstances.

70. Upon reviewing the cases referred to we are satisfied that the respondents are separate entities as contemplated by section 1(4) of the Act. We note that the General Bakeries case arose out of the purchase and amalgamation of a non-unionized employer by a unionized company. The Board was satisfied that the arbitration process was adequate to protect the union s rtghts. In a similar vein, the General Motors of Canada case involved what was little more than a naked attempt by the union to expand the geographic scope of its bargaining rights (after insisting, at the certification hearing, that bargaining rights be limited to a single plant location). Thus, while we cannot quarrel with the results in either of these cases, we think it would be wrong to interpret them as establishing any rigid rule limiting the application of section 1(4) to separate legal entities. Rather we think there may be situations such as the one described in the excerpt from Radio Shack, supra, which typify the mischief towards which section 1(4) of the Act is directed and thereby clearly warrant its application. We thus adopt and adapt the words cited from the George Hamers Ltd. case and conclude that whether a segment of a corporation's business, designated by it as a division, is to be treated as a labour relations entity as contemplated by and capable of warranting the application of section 1(4) of the Act is a question of fact in each case. Additionally, there may be aspects of the particular arrangement in each case which may influence whether and how the Board exercises its discretion under the section. The mere fact, however., that the entities in question are not legal or corporate entities does not, of itself, preclude the application of the section.

71. In the present case the respondents argued quite forcefully that they are separate labour relations entities and should continue to be treated as such. While this argument may be more significant in relation to the exercise of the Board's discretion, it helps to highlight our conclusion. Essentially we are of the view that the respondents' operations are sufficiently distinct so as to permit, yet sufficiently related or associated so as to warrant (subject to arguments regarding our discretion) the application of the related employer provisions of the Act.

72. Nothing in this, or any other aspect of this decision, should be viewed or interpreted as a departure from the Board's stated preference, which we affirm, that employer respondents in certification applications remain the legal entity or corporation rather than any subdivision thereof. Where parties explicitly agree to limit bargaining rights to a particular corporate division this can be effected by the appropriate bargaining unit description without altering the name of the legal entity which is the employer party to the collective bargaining relationship (see Beatrice Foods (Ontario) Limited, [1982] OLRB Rep. June 815). Indeed, had the parties to the present application previously turned their minds to this point they may have avoided the need for the present lengthy litigation.

73. As we are therefore satisfied that the essential ingredients necessary for a related employer finding have been established, we now go on to consider a number of factors which may influence the exercise of our discretion.

74. The question which occupied the bulk of the parties' evidence and submissions was the relationship between the work and functions of marketing assistants and composing room employees. The respondents assert that unless it is established that the work of the marketing assistants is work which (but for it being performed for the News) would fall exclusively within the scope of the composing room collective agreement, no relief should issue. The union maintains that so long as we are satisfied that there is a significant overlap in the core functions of the two groups we should provide the requested relief.

75. The respondents rely on Board decisions such as Dominion Stores Limited, [1979] OLRB Rep. June 506 and Valdi Inc., [1979] OLRB Rep. Aug. 833. In both cases the Board declined to grant the relief sought since it was of the view that the work in question (operation of gasoline service stations and a "limited assortment" discount outlet) did not fall within the defined scope of existing bargaining rights which the Board found covered retail food supermarkets.

76. Clearly, there is extremely limited utility to a related employer declaration if the work in question does not fall within the scope of the applicant's bargaining rights. In this context it is understandable that the Board may decline to exercise its discretion in such a case. We should not lose sight, however, of the fact that the determination of what constitutes bargaining unit work is not the primary inquiry in a related employer application. Furthermore, such a determination, as the facts of the present case tend to highlight, may not be as simple and straightforward as the cases just referred to may suggest. That is why the Board may not always finally determine the question of the scope of bargaining rights, which, by its very nature, is one more appropriately determined by a Board of Arbitration in accordance with the relevant collective agreement and the Act.

77. In Brink's Canada Limited, [1987] OLRB Rep. May 647 the respondents argued that the Board should not exercise its discretion since the work performed by the employees of the entity sought to be brought within the collective agreement was vastly different from that performed under the agreement and, consequently, only an ancillary portion of the work performed by the affected employees would be captured within the applicant's bargaining rights. The union in that case asserted that the determination of the scope of the applicant's bargaining rights was a matter for arbitration under the agreement:

The applicant believed, probably correctly, that an arbitrator would not deal with the issue of whether ATM was a related employer bound to the Toronto Truck Agreement and, unless ATM could be shown to be bound to the agreement, the arbitrator would not be able to make any orders with respect to that company.

[at paragraph 31, emphasis added]

The Board ultimately allowed the application but left questions regarding the extent and manner of the application of the collective agreement to the parties (or, if necessary, an arbitrator) to resolve.

78. Section 1(4) is designed to insure the stability of bargaining rights and to prevent the obfuscation of economic and labour relations realities which may (intentionally or not) result from the structure and organization of entities not operating at arm's length. A major decision was made to implement new technology. The persons ultimately responsible for taking that decision could have decided to implement the system in the composing room rather than the News. Had the system been introduced directly into the composing room, the applicant would have been able to claim the resulting work and, if disputed, have the matter determined by arbitration. Although the issue at arbitration might have been more complicated had the system been introduced not in the composing room but elsewhere within the Wolfedale facilities, the result, at least in terms of access to arbitration, would have been similar. Is the applicant to be precluded from making its claim and ultimately having it adjudicated, if necessary, only because the system was introduced into the premises of a related employer? We think not. Were we satisfied that the work performed by marketing assistants bears no relation to that previously done in the composing room~ we might have been persuaded to refrain from exercising our discretion.

79. The respondents also point to what they claim is the applicant's delay in bringing the application as a factor which should cause us to deny relief. In this regard reliance is placed on the fact that the News has previously contracted out composing room work, has previously done some composing room work in-house (through the "creative" groups) and has periodically employed composing room employees outside their employment in the production division and all this without any complaint by the union. First of all we fail to see why the fact that work may have been legitimately contracted out to an entity operating at arm's length should affect our decision (see Cronkwright Transport Limited, [1990] OLRB Rep. July 768). It was not entirely evident to us that work performed "directly" by composing room employees might not fall in this category as well. In any event the remaining instances relied upon are simply so sporadic and marginal so as to pale in significance in the face of the events giving rise to the present litigation. More important, however, is the fact that there is absolutely no prejudice claimed to have inured to the respondents as a consequence of the claimed delay. This is not a case where the respondent has entered into onerous contractual obligations on the basis of representations that the applicant would not enforce its bargaining rights. Neither was there any suggestion that the applicant had abandoned those rights. To the extent that delay may be relevant, we simply are unpersuaded that the delay, such as it is in the present case, ought to prevent us from exercising our discretion.

80. The respondents have other bargaining units (represented by this applicant and at least one other bargaining agent). Concern was expressed about the impact related employer relief might have on those other units. In this context and in view of the position of the applicant on this point, we are prepared to limit our relief accordingly.

81. The applicant has held the bargaining rights in question for nearly a decade. Almost all other newspapers within the Metroland chain had their own composing rooms. Not so the News. Its composing work was performed in the composing room which, although part of the production division, was located in a portion of the building which otherwise houses the News. The News became the composing room's principal client. But the relationship between the two was different from the traditional business-client relationship. The decision to implement new technology at the News was, effectively, a decision to cease the operations of the composing room. Newly hired employees at the News continue to perform functions previously performed in the composing room. In these circumstances we do not believe that the union ought to be entirely precluded from even asserting its claim merely because the system was implemented at the News rather than in the composing room or elsewhere within the production division.

82. Having found that the respondents are carrying on associated or related activities under common control or direction we hereby direct that, for the purposes of the Act and the union's bargaining rights as currently reflected in the composing room collective agreement, they be treated as constituting one employer. We further declare that the News is bound to the composing room collective agreement as if it had been a party thereto.