United Brotherhood of Carpenters and Joiners of America, Local 1988 v. Shell Canada Limited, 1992 CanLII 6783

United Brotherhood of Carpenters and Joiners of America, Local 1988 v. Shell Canada Limited

[1992] OLRB Rep. November 1231

2702-90-G United Brotherhood of Carpenters and Joiners of America, Local 1988, Applicant v. Shell Canada Limited, Respondent

BEFORE: N. B. Satterfield, Vice-Chair, and Board Members D. A. Mac Donald and J. Redshaw.

APPEARANCES: Harold Caley, Cindy Watson and Gary Rees for the applicant; Joseph Liberman and Glenn Pickell for the respondent.

DECISION OF THE BOARD; November 30, 1992

1This referral of a grievance in the construction industry for final and binding arbitration was made under section 124 [now section 126] of the Labour Relations Act on January 16, 1991. The grievance alleges that Shell Canada Limited ("Shell") violated the subcontracting provisions (Article 4) of the Provincial Collective Agreement between the Carpenters Employer Bargaining Agency and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America effective from May 1, 1990 to April 30, 1992 on Shell's "Project Excel" in Brockville, Ontario. When these matters came before the Board for hearing on March 20 and 21, 1991, counsel for Shell raised two defences to the grievance.

2Its primary defence was that Shell was not bound to the 1990-92 Carpenters Provincial Collective Agreement because Local 1669, an affiliated bargaining agent of the carpenters designated employee bargaining agency had abandoned its bargaining rights for carpenters and carpenters' apprentices employed by Shell prior to September 6, 1978, the effective date of the first Carpenters Provincial Collective Agreement. In the alternative, if Local 1669 did not abandon its bargaining rights as aforesaid, Shell contends that it was not bound by the 1990-92 Carpenters Provincial Collective Agreement respecting Project Excel because it was the owner or purchaser of construction with respect to the project and, therefore, was not an employer within the meaning of the construction part of the Act with regard to the project.

3During the two days of hearing, the Board heard the viva voce evidence of Gaetan Roy and John McMahon. Roy is Shell's project manager for Project Excel. McMahon is employed by Kilborn Inc. as a project manager and was responsible for the execution of its duties respecting Project Excel. Kilborn was under contract to Shell as construction manager for Project Excel. Their viva voce evidence and the documentary evidence admitted through them or on agreement of the parties related primarily to Shell's alternative defence.

4The Board set June 26 and 27, 1991 and August 27 and 28, 1991 for continuation of hearing into these matters. The June dates were subsequently adjourned at the request of the parties and the August dates were adjourned because of the illness of a member of the Board panel. The application was brought back on for hearing on August 13 and 14, 1992. At the hearing on these dates, the Board accepted the agreement of the parties that each would stipulate the remaining facts on which it would be relying, particularly regarding the issue of abandonment of bargaining rights, and make legal arguments respecting both issues based on those facts and on the viva voce and documentary evidence admitted during the first two days of hearing.

5Project Excel involved the construction of a $70 million lubricant blending and packaging plant, including a very large warehouse, filling and packaging building with attached office building, a tank farm for above-ground storage of base oil, additives and finished product, and areas where rail tank cars and highway tank trucks are filled. Shell engaged Mid-America Design Engineering to design the project and Kilborn, as construction manager, to procure all materials and equipment and to construct the project.

6The applicant's claim that Shell is bound to the 1990-92 Carpenters Provincial Collective Agreement relies on a Board certificate issued to Local 1669 of the United Brotherhood of Carpenters and Joiners of America ("Local 1669") on August 2,1967 as exclusive bargaining agent for carpenters and carpenters' apprentices employed by Shell in the District of Thunder Bay. Local 1669 and Shell executed an agreement effective August 8, 1967 binding Shell to the collective agreement then in existence between the Lakehead Builders' Exchange and Local 1669 ("the Exchange Agreement"). The full text of their agreement reads as follows:

WHEREAS: The Union and the Lakehead Builders' Exchange negotiate and establish by agreement certain terms and conditions of employment,

and

WHEREAS: The parties hereto desire to promote and maintain harmonious relations between the Employer and Employees:

WITNESSETH: That the parties hereto accept and agree each with the other to be bound by all terms and conditions contained in the current agreement between the Union and the Lakehead Builders' Exchange, and as it may be changed or renewed from time to time by negotiations and/or by lapse of time, to the same extent as though the Contractor has executed such agreement as a member of the Lakehead Builders' Exchange and such terms and conditions are hereby made part of this agreement and effective on all projects of the Contractor in the geographical Districts of Rainy River, Kenora, Thunder Bay and that part of the District of Algoma and Coebrane, north of the 49th Parallel and west of the North Driftwood, Abitibi and Moose Rivers to the James Bay including the rivers herein named.

7Clause 24.01 of the Exchange Agreement provided for it to operate from June 10, 1966 to March 31, 1968. Clause 24.02 set the following terms for the giving of notice to bargain and for renewal of the agreement if neither party gave notice to bargain:

24.02 Should the Exchange or the Union desire to change, add to or amend this Agreement, each agrees to give to the other, written notice to the effect on or before the thirtieth day of November, 1967, or 120 days prior to the termination date of this Agreement. All changes are to be specified at this time. Provided that no such notice is given, this Agreement shall remain in effect from year to year. No additions, amendments or changes are to take place prior to the date of termination as specified except as may be mutually agreed upon by the Union and the Exchange.

It is undisputed that the Exchange (and later its successor, the General Contractors Section of The Construction Association of Thunder Bay Incorporated) and Local 1669 negotiated successor collective agreements which were in effect during the following terms:

March 21, 1968 to March 31, 1970;

June 1, 1970 to April 30, 1973;

July 1, 1973 to April 30, 1975;

July 21, 1975 to April 30, 1977;

July 16, 1977 to April 30, 1978.

8Article 21 - Work Subcontracted of the first Exchange Agreement provided as follows:

21.01 all work of the Carpenters and Joiners, as defined in Article 4 of this Agreement, performed on the job site of the Employer, sub-contracted in any form, shall be subject to this Agreement.

There is no evidence that the substance of that clause was amended in any of the subsequent agreements between the Exchange and Local 1669.

9The evidence is uncontradicted that, from August 8,1967 to April 30, 1978, Shell had large and small construction projects within the geographic jurisdiction of the Exchange Agreement and its successor agreements listed above, about which Local 1669 was aware or, with due diligence, ought to have been aware. The projects involved work traditionally performed by the carpenter trade and claimed to be the work of carpenters under those agreements. Shell did not employ any construction tradesmen, including carpenters, on those projects, or act as its own general contractor. Instead, it engaged both union and non-union general contractors or specialty trade contractors, or construction managers or project managers to perform the construction.

10On February 21, 1969 the union complained in writing to Shell about its use of nonunion contractors for construction of a bulk plant in Emo, Ontario. The union notified Shell by letter dated March 20, 1969 that it was referring a grievance to arbitration about Shell's use of those contractors, appointed its nominee to an arbitration board and requested Shell to appoint its nominee. On March 21, 1969, Local 1669 received a letter dated March 19th from Shell in which Shell took the position that it was not bound by the Agreement "... in situations where the work is not performed by the owner (Shell) but by a contractor". The letter went on to state:

The work being done at Emo, Ontario referred to in your letter is not performed by Shell or its employees nor is the work sub-contracted by Shell, but is being performed by a contractor who has in turn sub-contracted some of the work. Accordingly, we cannot agree with the premises which are the basis of your letters.

Shell advised the union by telegram dated March 25, 1969 of the name of its nominee to the arbitration board. On April 3, 1969 the union advised Shell in writing that it was withdrawing its request for arbitration of its grievance about the work contracted by Shell on the construction of the bulk plant. Local 1669 did not file any other grievance against Shell up to April 30, 1978, when, by operation of what is now section 147(2) of the Act, the Exchange Agreement ceased to operate with respect to carpenters employed in the ICI sector of the construction industry for whom Local 1669 held bargaining rights in that sector.

11Local 1669 was the respondent trade union to an application for accreditation made by The Construction Association of Thunder Bay Incorporated on May 15, 1973. The Association was seeking to represent in collective bargaining those employers with whom Local 1669 was entitled to bargain in the industrial, commercial and institutional sector, the sewers, tunnels and watermain sector and the heavy engineering sector of the construction industry in the same geographic area to which the Association's collective agreement with Local 1669 applied. Local 1669 named Shell as an employer with whom it was entitled to bargain as at May 15, 1973. Shell made an employer filing respecting the same application. That document bears the date July 30, 1973. In making its filing, Shell did not deny that Local 1669 was entitled to bargain on behalf of Shell's employees. The Association's application for accreditation was dismissed on October 16, 1973.

12By letter dated March 6, 1978, Local 1669 served the following notice on Shell and other employers for whose employees it claimed bargaining rights:

Please be advised that the agreement that we now hold with your Company will cease to operate on the 30th April 1978.

We are negotiating a Provincial Agreement for the Industrial Commercial and Institutional Sectors which may affect your company.

At the same time, Local 1669 also advised the carpenters designated employee bargaining agency that it claimed bargaining rights for Shell's carpenters and apprentices.

13The first Carpenters Provincial Collective Agreement in the industrial, commercial and institutional sector of the construction industry became effective September 6, 1978 and, by statute expired April 30, 1980. Successive renewals were negotiated biennially until May 1, 1990, the effective date of the Carpenters Provincial Collective Agreement under which this grievance was made. Clause 4.01 of Article 4 - Subcontracting of each of those agreements placed limits on an employer bound by them when letting contracts for work claimed by the union under the agreements. Before the 1982-84 agreement, Clause 4.01 provided that work covered by the provincial agreement "... only be sub-contracted to an Employer bound by this Agreement." The 1982-84 Carpenters Provincial Collective Agreement was amended by adding the words "contracted or" to the clause to provide that such work"... only be contracted or sub-contracted to an Employer bound by this Agreement".

14During the entire period from at least April 1969 when Local 1669 withdrew its arbitration request until the filing of this grievance, Shell completed many large and small construction projects throughout Ontario involving work of the carpenter trade. The jobs were performed for Shell by general contractors, specialty trade contractors, construction managers and project managers selected under Shell's open tender policy. The projects were divided approximately equally between union and non-union contractors. Shell did not employ directly any construction trades on these projects. Approximately 15 of the jobs performed within Local 1669's geographic jurisdiction prior to April 30, 1978 were performed by non-union contractors. Approximately 130 of the jobs, totalling millions of dollars, were performed between that date and the making of this grievance throughout the province by non-union contractors, including a large one in Mississauga, on which both union and non-union trades were employed.

15Neither Local 1669 nor any other affiliated bargaining agent of the carpenters designated employee bargaining agency filed any grievance against Shell respecting those projects until the instant one.

16At no time since 1969 was Shell ever served with a notice to bargain by Local 1669 or any of its affiliates, nor has Shell ever bargained subsequent to 1969 with the United Brotherhood of Carpenters and Joiners of America or any of its local affiliates, nor received from the Minister of Labour any "no board" letter.

17Shell entered into an agreement with Kilborn on or about March 13, 1990 to procure all equipment and material for, and to construct Project Excel. The agreement is between Shell Canada Products Limited and Kilborn Inc. It is styled an "Agreement for the Construction of Shell's Brockville Lubricant Manufacturing Plant". For ease of reference, the Board will call it "the Agreement". It made Kilborn responsible for construction management services and for the procurement of all process equipment and construction material for the project, including tanks and piping. The Agreement is for cost plus fixed fee; that is, Shell pays Kilborn the actual cost of procurement and construction, and a fixed fee for its services.

18The applicant Local Union 1988 of the United Brotherhood of Carpenters and Joiners

of America filed the grievance referred herein with Shell by letter October 29, 1990 alleging that

Shell had violated the provisions of Clause 4.01 of the 1990-92 Carpenters Provincial Collective

Agreement.

19In keeping with its responsibility for procurement and the provision of construction management services to Shell, Kilborn brought its own policies and procedures respecting such things as procurement, safety and health and alcohol and drug abuse. However, in order to fulfil its obligations under the agreement, Kilborn expanded its own policies and procedures to include certain policies and procedures of Shell. For example, Kilborn's procurement policies and procedures were expanded to incorporate Shell's vendor quality program which includes standards for the selection of vendors and procedures to be followed in the procurement of equipment. Kilborn was required also to submit its safety and health policies and procedures and its alcohol and drug abuse policies to Shell for its approval and, where necessary, these policies and procedures were amended to include terms and conditions from Shell's policies and procedures. The agreement made Kilborn responsible for assuring strict compliance by subcontractors and their employees with Shell's policies and procedures. For that purpose, Shell required that the bid packages which Kilborn sent to potential subcontractors contain conditions which required the subcontractors and their employees to comply strictly with the policies and procedures respecting safety and health and alcohol and drug abuse.

20Kilborn did not employ directly any construction trades on the project, rather it subcontracted all of the work of constructing the project. It did this by organizing the work into suitable packages and, based on the content of each package, identified contractors whom it knew to have the capacity to perform the work and, in this way, established a list of potential contractors for each package. These contractors received from Kilborn a "Request for Proposal" the request for proposal was an invitation to bid on a particular package of work and included a complete set of the contract documents, including a pro forma contract, drawings and specifications. At the outset of the project, Kilborn had submitted to Shell for its approval a complete set of the documents it would be using for the Request for Proposal. Contractors returned their Request for Proposal documents to Kilborn sealed. After tenders closed, Kilborn evaluated the bids and developed a short list of two or three bidders. It met with those contractors individually, evaluated the technical and cost elements of their bids and selected the successful bidder.

21Kilborn then provided Shell with a bid tabulation containing information on such things as the cost of the work, the schedule for its performance and information on the subcontractor's project team, along with Kilborn's recommendation that Shell accept the bid. The terms of the Agreement allowed for Shell to accept or reject the bid. Before Kilborn actually awards a contract, and without letting the successful bidder know that it is going to get the contract, Kilborn met with the contractor to clarify and confirm the terms of contract. Shell can be represented at these preaward meetings and was represented at separate pre-award meetings with each of four mechanical contractors.

22Kilborn relied on a variety of other on-site meetings in the course of managing the project. A site safety committee comprised of all contractors on the project met weekly and conducted safety audits of the project. Jean-Paul Boisclair, Shell's construction foreman on the project, was a member of the committee. Kilborn also had weekly progress review meetings with the contractors working on site and its construction manager met regularly with the site superintendents of the contractors. Kilborn also met from time to time with all of its staff on-site. Shell was not excluded from any of these meetings and occasionally attended Kilborn's staff meetings. Boisclair attended Kilborn's progress review meetings with subcontractors.

23In the early stages of the project, Kilborn had 15 employees on-site under the supervision of its construction manager who is also located on-site. Kilborn did not employ directly any employees in the construction trades. Shell also had three employees on-site~ Roy, Boisclair and Susan Lounsbury, senior project engineer. They were located on-site in the same office trailer complex where Kilborn's employees were located. Roy, Lounsbury and Boisclair were there to represent Shell's interests under the Agreement.

24Kilborn was responsible for supervising all of the contracts which it let for the construction work, the scheduling of when contractors were to be on site to perform their work and overseeing their work on a daily basis. Kilborn also reviewed requests from contractors for change orders and~if Kilborn approved the request, it submitted the request to Shell for its approval. Kilborn was responsible for getting all of the permits requirement from various levels of governments and government agencies for the construction of the project, although Shell did obtain directly the permits respecting water and air quality. While Kilborn was responsible for obtaining the remaining permits, Lounsbury co-ordinated the gathering of the data required to make application for the permits.

25Boisclair's responsibility as Shell's construction foreman was to assure that safety was looked after on the site and that the construction was being done according to acceptable construction practices. While he was on the site daily for this purpose, neither he nor anyone else from Shell is involved directly in the daily contact between Kilborn and the contractors or in any direct contact with the contractors.

26The Board has considered the full submissions of the parties on both issues, but, for purposes of this decision will set out summaries only of the submissions.

27With respect to the abandonment issue, counsel for Shell submits that the following particular facts establish the factual basis for the Board to conclude that Local 1669 had abandoned its bargaining rights for carpenters and their apprentices. Shell maintained an active and visible construction presence in Local 1669's territory from 1969, when Local 1669 failed in its attempt to get Shell to recognize Local 1669 on jobs contracted out by Shell and also withdraw its request for arbitration of the issue, until September 6, 1978 when the first Carpenters Provincial Agreement superseded the Exchange Agreement respecting carpenters represented by Local 1669 in the ICI sector of the construction industry. During the entire period, Local 1669 did not file any grievances respecting the jobs described at paragraph 14, did not give notice to bargain any renewals of their collective agreement, did not bargain with Shell or do anything else to pursue and protect its bargaining rights. Nor did Shell receive any "no board" letter from the Minister of Labour during that period. Subsequent to September 6, 1978 up to the filing of this grievance, Shell continued to maintain an active and visible construction presence in Local 1669's territory and throughout Ontario. During this period, neither Local 1669 nor any of the other carpenters affiliated bargaining agents filed grievances alleging that Shell had violated the Carpenters Provincial Agreement, attempted to assert in any manner the bargaining rights the applicant is now asserting in this application, or conducted themselves in any manner consistent with the belief that Shell was bound to the agreement. In particular, after the 1982-84 Carpenters Provincial Agreement was amended to provide in Clause 4.01 that work covered by the agreement "shall only be contracted or sub-contracted to an Employer bound by this Agreement." (emphasis added), none of them filed grievances alleging that Shell had breached the requirement that work covered by the agreement be contracted only to employers bound to the agreement.

28On those facts, Shell counsel's argument that Local 1669 had abandoned its bargaining rights prior to the commencement of provincial bargaining in the ICI sector of the construction industry runs as follows. First, Local 1669 knew, or by the exercise of reasonable diligence, ought to have known of Shell's construction activities in Local 1669's territory between 1969 and 1978, and it did nothing to pursue, protect and exercise its bargaining rights despite Shell's active construction presence. Second, Local 1669's conduct after September 6, 1978 when the first Carpenters Provincial Agreement came into effect, and the conduct of the other carpenters affiliated bargaining agents after 1980 when they would have acquired bargaining rights within their own geographic jurisdictions by operation of what is now subsection 139(2) of the Act, is consistent with the fact that they neither acquired nor believed that they had acquired bargaining rights for carpenters vis - vis Shell. In that respect, their conduct after Clause 4.01 was amended in the 1982-84 agreement is particularly relevant. Even assuming that, prior to the amendment, the affiliated bargaining agents believed that Shell was bound to the Carpenters Provincial Agreement but was not breaching Clause 4.01 because it was not "subcontracting" when it did not act as its own general contractor, construction manager or project manager, none of the affiliated bargaining agents has alleged after 1982 that Shell had breached the requirement that work covered by the agreement be contracted only to employers who are bound to the agreement. Accordingly, even if Shell was bound by the agreement, the affiliated bargaining agents did nothing to enforce it after Clause 4.01 was amended. That conduct serves to demonstrate and confirm that Local 1669's bargaining rights had expired before province-wide bargaining because of lack of pursuit or administration of the bargaining rights after they were acquired in 1967.

29In support of his argument that Local 1669 had abandoned its bargaining rights prior to

the commencement of provincial bargaining, counsel referred the Board to Marineland of Canada Inc. [1990] OLRB Rep. Dec. 1298, particularly for the proposition that trade union activity following the start of province-wide bargaining is relevant in determining whether abandonment occurred in the period prior to its commencement; Culliton Brothers Limited, [1982], OLRB Rep. March 357; Lorne's Electric, [1987] OLRB Rep. Nov. 1405; Ellis-Don Limited, [1992] OLRB Rep. Feb. 147 and other cases referred to therein, particularly R. Reusse Co. Ltd. [1988] OLRB Rep. May 523.

30With respect to Shell's contention that it is the owner and purchaser of construction for Project Excel and not bound by the 1990-92 Carpenters Provincial Collective Agreement, the main thrust of counsel's argument runs as follows. Shell has not operated a business in the construction industry since 1967 when Local 1669 was certified as exclusive bargaining agent for carpenters and apprentices employed by Shell in the District of Thunder Bay, or, at the very least, since 1969. Instead, Shell has fulfilled its construction requirements by purchasing the construction services of general contractors, specialty contractors, construction managers and project managers. It has not been its own contractor, construction manager or project manager and has not employed directly any carpenters or other construction trades. Therefore, up to and including Project Excel, Shell has conducted itself as an owner of construction and not as an employer in the construction industry, as employer is defined in section 119 of the Act. Its contract with Kilborn for Project Excel and the involvement of Shell's representatives on the project is not a departure from that approach and is entirely consistent with it. Their involvement is nothing more than what any prudent owner of a $70 million construction project would do and, as a prudent owner, Shell was not going to sit back and simply wait to be told when the project was complete. In summary, Shell did not act any differently than any other owner not bound by the Carpenters Provincial Collective Agreement and should not be treated any differently than any owner not bound to that agreement. In this respect, counsel referred the Board to The Municipality of Metropolitan Toronto, [1981] OLRB Rep. March 300 (Metro Toronto #1); and, The Municipality of Metropolitan Toronto, [1989] OLRB Rep. March 279 (Metro Toronto #2).

31Further, counsel submits, the evidence demonstrates that the carpenters affiliated bargaining agents have accepted the fact that Shell has been performing construction as an owner and not as an employer because, even after the start of province-wide bargaining in the ICI sector, none of them took the position that Shell was bound to the series of Carpenters Provincial Agreements which were the product of that bargaining. More significantly, after Clause 4.01 was amended in the 1982-84 agreement in response to the result in Kapuskasing Board of Education, [1981] OLRB Rep. Mar. 300 (Kapuskasing #2), so as to require employers who were bound to the agreement to contract work only to other employers who were bound to it, none of the affiliated bargaining agents claimed that Shell was bound by that or subsequent agreements until this application was made in 1991. In view of the fact that Shell has not changed the way in which it has purchased construction since at least 1969, it would be a repugnant result to say now that Shell was anything other than an owner.

32Thus, counsel argues, from the conduct of Local 1669 prior to province-wide bargaining and of all of the affiliated bargaining agents since then, the Board ought to conclude that they either believed that they had no bargaining rights vis ~ vis Shell, or they believed that Shell has been operating as an owner and, therefore, not bound by successive provincial agreements. It must be one or the other because, without Shell having changed the way it has operated, there is no foundation for the applicant's claim that Shell has suddenly become an employer bound by the Carpenters Provincial Collective Agreement.

33Applicant counsel argued that both branches of Shell's "abandonment of bargaining rights" defence to the grievance contain internal inconsistencies. Abandonment is about bargaining rights and, according to Shell, Local 1669's bargaining rights only applied to it when Shell was acting as an employer and did not apply when it was acting as an owner. Therefore, if that premise is accepted along with Shell's evidence and argument that, ever since Local 1669 was certified Shell has acted as an owner and not as an employer, Local 1669 had no bargaining rights to abandon with respect to Shell as an owner. Similarly, if the successive Exchange Agreements and the provincial agreements which followed them were not binding on Shell as an owner, as it has argued, Shell could not have breached any of those agreements, including the agreements from 1982-84 to 1990-92 containing the amended Clause 4.01. Therefore, there were no grounds on which Local 1669 or the other affiliated bargaining agents could have pursued a grievance. For the same reason, counsel submits, the conduct of the affiliated bargaining agents after 1978 is irrelevant to determining whether Local 1669 had abandoned its bargaining rights prior to province-wide bargaining.

34Furthermore, counsel argues, the facts establish that not only did Local 1669 assert its bargaining rights on the few occasions when it was called upon to do so~ Shell failed to disclaim those bargaining rights when it had an opportunity to do so. In that respect, Local 1669 asserted its bargaining rights in the ICI sector and other sectors vis 2[ vis Shell when it responded to the application for accreditation made by the Construction Association of Thunder Bay Incorporated. It did so by naming Shell as an employer with whom it was entitled to bargain in those sectors respecting carpenters and their apprentices in the relevant sectors of the construction industry. When Shell made its Employer Return respecting the same application, it had the opportunity to expressly deny that Local 1669 was entitled to bargain with it. It did not do so. This was in 1973, and was Shell's first opportunity since 1969 to say that Local 1669 did not have bargaining rights. According to counsel, the facts show that Local 1669 did not have any further opportunity to assert its bargaining rights until the introduction of province-wide bargaining. At that time, Local 1669 gave notice to Shell that the Exchange Agreement would cease to be binding on them in the ICI sector as at April 30, 1978 and that the union would be bargaining a provincial agreement. Local 1669 also notified its designated employee bargaining agency that Shell was an employer for whose carpenters and apprentices Local 1669 held bargaining rights in the ICI sector. On those grounds, counsel argues, Local 1669 not only did not abandon its bargaining rights between 1969 and 1978, it exercised them on the only opportunities it had. Therefore its bargaining rights in the ICI sector remained intact when the first provincial agreement was negotiated, were subsumed by that agreement and remained intact under successive provincial agreements until this grievance was made under the 1990-92 agreement.

35With respect to Shell's alternate defence that it was not bound by the 1990-92 Carpenters Provincial Collective Agreement on Project Excel because it was the owner and purchaser of construction for the project and not an employer within the meaning of the construction part of the Act respecting the project, applicant counsel relies primarily upon Metro Toronto #2, supra. He submits that it represents the current law on the issue and stands for the proposition that, once it has been established that a party to a grievance referred under section 126 of the Act is bound by a provincial agreement (and the 1990-92 Carpenters Provincial Collective Agreement is one) by reason of that party being a person for whose employees affiliated bargaining agents have bargaining rights, the only relevant question about that party's activities on the project which is the subject of the grievance is whether those activities violated some provision of the agreement. For that reason, counsel submits, the Board in Metro Toronto #2 rejected the notion that, except for any question of interpretation of the agreement, the Board is bound to consider whether a party to a referral to arbitration under section 126 was acting as a person operating a business in the construction industry in respect of the subject matter of the grievance. Counsel argues further that, even if there can be a threshold question of whether a party was acting as a person operating a business in the construction industry, the question should be answered in the affirmative if the person was responsible for bringing about the construction and had the power to choose how and by whom the construction would be performed. He submits that the Board applied that test in Metro Toronto #2 when it found at paragraph 34 that Metro's power to choose "...how and by whom the construction would be performed is enough to make it a 'person who operates a business in the construction industry' for any relevant statutory purpose.". The same test applied here would lead to the same conclusion, he argues, because the facts establish that Shell had the power to choose how and by whom the construction of Project Excel would be performed.

36Applicant counsel submits also that the Board's decision in Metro Toronto #2 supra, has significance for the abandonment issue as well. In his view, until that decision, the law was unsettled and equivocal respecting whether a distinction ought to be made between someone acting as an "owner" such that no one can be bound by a construction industry collective agreement when acting in that capacity in the purchase of construction services. The Board should take that state of the law into account, counsel argues, when assessing Shell's claim that the failure of any of the carpenter affiliated bargaining agents to file a grievance after Clause 4.01 was amended in the 1982-84 Carpenters Provincial Collective Agreement to require that work covered by the agreement be contracted only to parties bound by the agreement was conduct consistent with Local 1669 having abandoned its bargaining rights prior to province-wide bargaining in the ICI sector. According to counsel, the uncertain state of the law until Metro Toronto #2 was such that it was reasonable for carpenters affiliated bargaining agents to believe, as Shell had contended in 1969 to Local 1669, that the provincial agreement did not apply to Shell when it was operating as an owner in the purchase of construction services.

37The Board turns first to consider whether Local 1669 had abandoned its bargaining rights prior to province-wide bargaining in the ICI sector. The concept that a trade union can abandon bargaining rights acquired through the certification process or voluntary recognition has been established in the Board's jurisprudence for more than thirty years. See for example Hugh Murray Limited, [1979] OLRB Rep. July 664, which, at paragraph 10, relies on J. S. Mechanical, [1979] OLRB Rep. Feb. 110 to demonstrate that the Board has jurisdiction to conclude that a trade union has lost its bargaining rights through abandonment; and, Lorne's Electric, [1987] OLRB Rep. Nov. 1405. The Board's jurisdiction to determine whether a trade union has abandoned bargaining rights was confirmed by the Divisional Court in Re Carpenters' District Council and Hugh Murray [1974] Ltd. (1980), OR. (2d )670. The question of whether bargaining rights have been abandoned is a question of fact.

38Counsel for Shell acknowledged that the question of fact in this case is whether Local 1669 abandoned its bargaining rights prior to the commencement of province-wide bargaining in 1978. However, counsel argued that the Board ought to determine that question by examining events both prior to and after that time and, in that respect, referred the Board to Marineland of Canada, supra. In that case, the Board was deciding whether one of the carpenters affiliated bargaining agents (Local 38) had abandoned by March 3, 1978 its bargaining rights for carpenters employed by Marineland. The Board described in paragraph 16 how it should approach that question, stating in part:

16.... As the question of whether abandonment has occurred is a question of fact, we must take into account all of the circumstances. See Lorne's Electric, (supra) for a discussion of the principIes of abandonment. In this respect, we do not consider only the events between September, 1977 and March, 1978, in deciding whether abandonment had occurred by the latter date. Events occurring after March 3, 1978 can be relevant in assessing the meaning or effect of the union's inactivity before that date. Just as events occurring after a collective agreement has been negotiated and signed can assist an adjudicator in determining the intended meaning of particular clauses in the agreement, so too can subsequent events shed light on the question of whether abandonment had occurred by March 3, 1978.

The Board went on to examine events during a 12-year period commencing September 1977 when the Minister of Labour issued a "no board" letter to Local 38 and Marineland and 1989 when Local 38 sought to enforce the terms of the carpenters 1988-90 Provincial Collective Agreement. The Board's assessment of those events and Local 38's conduct during those 12 years led it to conclude that Local 38 had abandoned its bargaining rights by March 3, 1978. Counsel for Shell asks the Board to come to the same conclusion respecting Local 1669 based on the events spanning the period 1969 to the making of this grievance on January 16, 1991 and on the conduct during that period of Local 1669 and the other carpenters affiliated bargaining agents.

39March 3, 1978 is a relevant date for this application too. It is the date on which Local 1669's authority to bargain and conclude a collective agreement for the ICI sector was transferred to the carpenters designated employee bargaining agency. By operation of statute, on that date that agency was given the sole authority to bargain and conclude a provincial agreement on behalf of Local 1669 binding on Shell and other employers for whose carpenters and apprentices Local 1669 held bargaining rights in the ICI sector. At about the same time, a designated carpenters employee bargaining agency was authorized by operation of statute to bargain and conclude a provincial agreement on behalf of Shell and other employers for whose employees Local 1669 held bargaining rights in the ICI sector. See the discussion of the operation of the statutory provisions at paragraph 18 of Lorne's Electric, supra. The same thing was taking place with respect to other carpenters affiliated bargaining agents and the employers for whose carpenters and apprentices the agents held bargaining rights in the ICI sector. The two designated bargaining agencies negotiated the first Carpenters Provincial Agreement, the Provincial Collective Agreement effective September 6,1978 to April 30, 1980. In 1980, what is now subsection 139(2) was added to the Act. Its effect was to deem that Shell (and other employers like it for whose carpenters and apprentices Local 1669 held bargaining rights in the ICI sector) had recognized the bargaining rights of all other carpenters affiliated bargaining agents in the province. Thereafter, the two designated bargaining agencies bargained for and concluded a series of two-year (as required by the Act) provincial agreements beginning with the 1980-82 agreement to the 1990-92 agreement under which this grievance was made. Through that bargaining regime, Shell became bound to the Carpenters Provincial Collective Agreement throughout Ontario and remains bound until the bargaining rights under the agreement are terminated by the Board in an application for termination of bargaining rights or by a finding that the union can no longer rely on those rights because Local 1669 had abandoned them by March 3, 1978, as claimed by Shell.

40The events between August 2, 1967 when Local 1669 was certified and March 3, 1978 and its conduct during that period, in the Board's view, point clearly in the direction of Local 1669 not having abandoned its bargaining rights by March 3, 1978. To the contrary, whenever it had an opportunity to assert its bargaining rights, it did so. Following certification, Local 1669 quickly signed a collective agreement with Shell which bound them to the Exchange Agreement and subsequent changes to or renewals of it "...to the same extent as though [Shell] has executed such agreement as a member of the Lake head Builders' Exchange...". Local 1669 subsequently negotiated successive renewals of the Exchange Agreement which were in effect in the ICI sector of the construction industry until April 30, 1978. During the first renewal, Local 1669 attempted to exercise its bargaining rights again by notifying Shell in March 1969 that it was referring a grievance to arbitration alleging that Shell had breached the agreement requirement to subcontract only to other contractors bound to the Exchange Agreement. Local 1669 withdrew its request in the face of Shell's claim that it was owner of the project in question, was not the employer of any carpenters or apprentices on it and had not subcontracted any work to other contractors. Local 1669 next asserted its bargaining rights when it responded to the application for accreditation made on May 15, 1973 between the expiry date of the second renewal and the effective date of the third renewal of the Exchange Agreement. Finally, as a direct consequence of the designation of the carpenters employee bargaining agency on March 3, 1978, Local 1669 asserted its bargaining rights when it notified Shell that the Exchange Agreement would cease to operate April 30, 1978 with respect to the ICI sector and that a provincial agreement was being negotiated for that sector which might affect Shell, and notified the carpenters employee bargaining agency that Local 1669 had bargaining rights in the ICI sector vis 2[ vis Shell for carpenters and their apprentices. Shell also acknowledged Local 1669's bargaining rights twice between 1969 and March 3, 1978; first, when it named its nominee to a board of arbitration respecting the March, 1969 grievance; and second, when it failed to deny in its Employer's Return to the application for accreditation that Local 1669 was entitled to bargain with it respecting carpenters and their apprentices.

41The fact that Local 1669 did not file any grievances with Shell after March, 1969, or serve any notice on Shell to bargain, does not detract from the fact that Local 1669's conduct points to it having asserted its bargaining rights rather than having abandoned them. The absence of grievances alleging that Shell had breached the Exchange Agreement is entirely consistent with Local 1669's withdrawal of its grievance in 1969 and the fact that after Shell and Local 1669 became bound to the Exchange Agreement, Shell did not employ any construction trades on its projects.. within the geographic scope of that Agreement, and had all of the projects performed for it by general contractors, specialty trade contractors, construction managers and project managers. With respect to the fact that Shell did not receive any notice to bargain from Local 1669, having regard to the terms of their collective agreement set out at paragraph 6, the absence of any express terms for its termination, Shell's agreement that it be bound by the Exchange Agreement and subsequent changes to or renewals of it "...to the same extent as though [Shell] has executed such agreement as a member of the Lakehead Builders' Exchange...", and the notice provision of the Exchange Agreement set out at paragraph 7, it is not surprising that Local 1669 did not serve Shell with notice to bargain under either agreement. Even if Local 1669 erred in not giving Shell notice, its failure to give notice in those circumstances is not indicative that Local 1669 had abandoned its bargaining rights during that period.

42In asking the Board to consider the conduct of Local 1669 and the other carpenters affiliated bargaining agents after the start of province-wide bargaining, counsel for Shell focused primarily on the continued absence of notice to bargain and the failure of Local 1669 and the affiliated bargaining agents to file grievances alleging violation of Clause 4.01 even though Shell had many construction project on which non-union contractors were engaged to do carpentry work within the jurisdiction of several of the affiliated bargaining agents, including Local 1669. The absence of notice to bargain does not signal any failure to assert bargaining rights because no purpose would have been served by such notice since neither the carpenters affiliated bargaining agents nor their designated employee bargaining agency was obliged to serve Shell with notice to bargain under the province-wide bargaining scheme. While the failure of Local 1669 and the other affiliated bargaining agents to file grievances against Shell after March 2,1978, until this grievance, might suggest that they did not realize that they held the bargaining rights which the applicant is now asserting, the absence of grievances during this period is also suggestive, in the circumstances, of a belief that the Provincial Collective Agreement was not being breached, rather than a belief that no bargaining rights were held. In this respect, the Board has considered the fact that Shell had not altered the way it executed its construction activities since 1969 when Local 1669 withdrew its grievance at arbitration; that, until the Board issued its decision in Metro Toronto #2, supra, the Board's jurisprudence as represented by its decision in B rant County #1 and B rant County #2, supra, left the impression that an employer operating in a manner similar to Shell might not be bound by the terms of a construction industry collective agreement; and, that this grievance was brought within a reasonable period after the law in that respect was clarified by Metro Toronto #2. In all of the circumstances, including post 1978 behaviour of the carpenters affiliated bargaining agents, the more likely inference is that Local 1669 had not abandoned its bargaining rights.

43For the foregoing reasons, the Board finds that Local 1669 had not abandoned its bargaining rights in the ICI sector of the construction industry for carpenters and carpenters' apprentices vis 2[ vis Shell Canada Limited by March 3, 1978.

44It is necessary, therefore, for the Board to deal with Shell's alternate defence to the grievance that it was acting in the capacity of an owner to purchase construction services with respect to Project Excel and, as a result, was not an employer in the construction industry and not bound by the 1990-92 Carpenters Provincial Collective Bargaining Agreement for purposes of that project.

45As the Board has already noted, after Clause 4.01 was amended in the 1982-84 Carpenters Provincial Collective Agreement, the Board's jurisprudence as represented by its decisions in Brant County #1 and Brant county #2, supra, left the impression that there may be a threshold question under a provincial agreement like the one at issue herein of whether a person like Shell is ''a person who operates a business in the construction industry'' when acting as an owner in the purchase of construction as described herein. If there is such a question and it is answered in the negative, the implication is that the person, while acting in that capacity, would not be an employer bound by the subject provincial agreement. The Board in Metro Toronto #2, supra, dealt with the issue of whether it was bound to consider whether a respondent employer in a reference to arbitration like this one was acting as a person operating a business in the construction industry in respect to the subject matter of the grievance. The Board reviewed the law in Kapuskasing #2, Brant County #1 and Brant County #2 at paragraphs 7 through 11 and, against that background, in paragraphs 12 through 33 assessed the parties' submissions, thoroughly analysed the relevant statutory provisions and jurisprudence and concluded that the Board is not bound to consider whether the respondent to a referral to arbitration under what is now section 126 of the Act "... was acting as a person operating a business in the construction industry in respect of the subject matter of the grievance.". The Board also held that, even were it wrong in that conclusion, the control test suggested in Brant County#2 was not the correct method of answering the question. Its conclusions are summarized as follows at paragraph 34.

34. In summary, once it is established that the respondent is bound by the subject provincial agreement by reason of it being a person for whose employees affiliated bargaining agents have bargaining rights then, in our view, the only relevant question about its activities in relation to the subject project is whether those activities violated some provision of that provincial collective agreement. We respectfully reject the conclusion of the panel in Brant #1 that there is a threshold question whether Metro is also a "person who operates a business in the construction industry", either generally or in relation to the project which is the subject of the grievance. If that is a threshold question, however, we reject the control test postulated in Brant #1 as the method of answering it. The fact that Metro was responsible for bringing about the construction and had it in its power to chose [sic] how and by whom the construction would be performed is enough to make it a "person who operates a business in the construction industry" for any relevant statutory purpose.

46In that case, Metro Toronto was the respondent in a grievance referral. It had engaged a consulting engineering firm to design and execute for Metro Toronto a construction project in the ICI sector. In terms of Metro's budget process, it was a capital works project. Metro was bound to the electricians provincial agreement for the ICI sector. The agreement obligated Metro to sublet work covered by the agreement only to another person bound to it. Metro let a contract for electrical work covered by the agreement to a contractor not bound by the agreement. When that action generated a grievance referred under the Act, one of Metro's defences to the grievance was that, for purposes of its capital works projects, when it was acting in the capacity of an owner to purchase construction services, it was not an employer in the construction industry within the meaning of section 119 of the Act. Its argument in support of that defence was similar in substance to that made here by Shell in support of its defence that, respecting Project Excel, it was acting in the capacity of an owner to purchase construction and, therefore, not an employer in the construction industry within the meaning of section 119 of the Act. The Board in Metro Toronto #2 rejected Metro's argument for the reasons given in paragraphs 12 through 33. The Board herein respectfully agrees with that reasoning.

47While the subject project in that case was relatively very small in comparison to Project Excel, the essential general facts of the business relationship between Metro and the firm of consulting engineers are not materially different than those respecting the relationships between Shell, Kilbom and Shell's design consultants, except possibly for Kilborn's equipment procurement responsibilities for the project.

48This panel finds the reasoning in Metro Toronto #2, supra, to be equally applicable to the circumstances of this case and adopts that reasoning. Further, and in any event, the Board is satisfied that the Agreement leaves no doubt that Shell, not Kilborn, was responsible for bringing about the construction on Project Excel and had the power to choose how and by whom the construction would be performed. Therefore, for the same reasons as expressed in Metro Toronto #2, the Board is satisfied that Shell had the sort of control over Project Excel which would make it an employer in the construction industry. It may well be that the terms of the Agreement were terms which any prudent purchaser of construction for a $70 million project would require in a contract with a construction manager, but that does not alter the fact that the terms gave Shell the power to choose how and by whom the construction would be performed. Therefore, with respect to Project Excel, the Board finds that Shell was bound by the Provincial Collective Agreement in effect from May 1, 1990 to April 30, 1992 between the Carpenters Employer Bargaining Agency and the Ontario Provincial Council, United Brotherhood of Carpenters and Joiners of America.

49The parties agreed that the Board need only determine the two preliminary issues and need not determine whether Shell breached that agreement on Project Excel. Indeed, applicant counsel acknowledged that, should the Board find Shell to be bound by the agreement, the Board's declaration to that effect likely would be sufficient remedy. In these circumstances, the Board remains seized with this application respecting any other matters which the parties are unable to resolve.

50Accordingly, the Board directs that this matter be adjourned sine die for a period not exceeding one year. Unless within that time either party requests that the Board proceed with the matter, it will be terminated.