Canadian Paperworkers Union v. Canadian Paperworkers Union, Local 1199, 1993 CanLII 7799

[1992] OLRB Rep. February 99

3021-91-T; 3022-91-T; 3023-91-T; 3691-91-T Canadian Paperworkers Union, Applicant v. Canadian Paperworkers Union, Local 1199, Respondent; Canadian Paperworkers Union, Applicant v. Canadian Paperworkers Union, Local 309, Respondent; Canadian Paperworkers Union, Applicant v. Canadian Paperwork­ers Union, Local 934, Respondent; Canadian Paperworkers Union, Applicant v. Canadian Paperworkers Union, Local 1335, Respondent

BEFORE: Ken Petryshen, Vice-Chair, and Board Members W. N. Fraser and K. Davies.

APPEARANCES: J. James Nyman and Andre Foucault for the applicant; Frederick Caplan and Gary Buccella for the respondents.

DECISION OF THE BOARD; February 1, 1993

1. These are four applications by the Canadian Paperworkers Union ("CPU") seeking consent of the Board to continue its supervision or control with respect to four local unions for a further period of twelve months.

2. Section 84 of the Act provides as follows:

3. (1) A provincial, national or international trade union that assumes supervision or control over a subordinate trade union, whereby the autonomy of such subordinate trade union, under the constitution or by-laws of the provincial, national or international trade union is suspended, shall, within sixty days after it has assumed supervision or control over the subordinate trade union, tile with the Board a statement in the prescribed form, verified by the affidavit of its principal officers, setting out the terms under which supervision or control is to be exercised and it shall, upon the direction of the Board, file such additional information concerning such super­vision and control as the Minister may from time to time require.

(2) Where a provincial, national or international trade union has assumed supervision or control over a subordinate trade union, such supervision or control shall not continue for more than twelve months from the date of such assumption, but such supervision or control may be contin­ued for a further period of twelve months with the consent of the Board.

3. In the Operative Plasterers and Cement Masons International Association of the U.S. & Canada, [1978] OLRB Rep. March 223, the Board made the following comments concerning the general purpose and operation of section 84:

4. Section 73(1) [now 84(1)] requires that when a trade union places a subordinate local under trusteeship (using that term to refer to all manner of supervision and control) it must file certain information concerning the trusteeship with the Board. The Act, however, places no impedi­ments or constraints on a union when it places a local under trusteeship. This lack of impedi­ments or constraints would appear to reflect a recognition on the part of the Legislature that most trusteeships are imposed as a result of real and legitimate concerns on the part of the union involved. For example, a trusteeship may be imposed because of mismanagement or dishonest use of local funds, because a local has become so torn by dissent that it cannot function prop­erly, or perhaps to remove officers who have either become dictatorial or who have failed to administer the local in a responsible manner. At times, particularly with small locals, a trustee­ship may be imposed simply because none of the members of the local are willing to assume the responsibilities of elected office.

5. The Legislation recognizes that trusteeships generally have a legitimate purpose, but it also places restrictions on their duration. Trusteeship is inevitably accompanied by a restriction on the ability of the local's membership to participate in the government of the local or to have a say in the policies adopted by the local. The longer the trusteeship is allowed to continue the more serious will become the resulting denial of self-government and the greater will the likeli­hood that the policies and practices adopted by the local will not be reflective of the wishes of the local's membership.

6. In essence then, section 73 [now 841 appears to be an attempt by the Legislature to balance the legitimate interests of a union which may require the suspension of a local's autonomy against the desirability of local self-government through officers elected by, and responsible to, the local membership. The section allows a full twelve months in which a union can resolve the problems which led to the trusteeship being imposed. The very existence of such a time limit should prompt responsible union officials to move with reasonable dispatch to correct the prob­lems which led to the imposition of trusteeship. The section, however, also makes allowance for the fact that not every problem which leads to a trusteeship being imposed may be able to be resolved in 12 months, and thus some flexibility has been provided by stipulating that trustee-ships can be continued for a further period of 12 months with the consent of the Board. Because of the Act's obvious concern with the length of trusteeships, the most reasonable interpretation of the section is not that a trusteeship must be extended for a further 12 month period in every case, but rather that it can be extended for any period of time up to 12 months. This is clearly the view which was adopted by the Board in The United Brotherhood of Carpenters and Joiners of America case, [1972] OLRB Rep. Sept. 833 where just prior to the expiration of the first 12 months of a trusteeship the Board agreed to the continuation of the trusteeship until such time as it issued a further decision in the matter. Approximately 4 months later the Board issued a second decision wherein it refused to grant its consent to any further continuation of the trustee­ship.

7. The CPU complied with its obligations under section 84(1) which caused the Board to open the above-referenced files in 1991. A trusteeship was imposed on Locals 1199, 934 and 309 on October 21, 1991 and on Local 1335 on December 18, 1991. The above files were activated when the CPU made its requests to continue each of these trusteeships.

8. A hearing before the present panel with respect to these applications commenced on January 5, 1993. After counsel for each party made a detailed opening statement, it appeared clear that there were many facts which were not in dispute. It was also clear that there were a number of facts relied upon by the respondents which were disputed by the CPU. Without hearing any oral evidence, the Board called upon the parties to make their submissions having regard to the facts which were not in dispute, and assuming the facts relied upon by the respondents which were in dispute to be true. At the end of the hearing on January 5, the Board advised the parties that it would reserve its decision. If the Board was able to dispose of the case on this basis, it would of course do so. The Board also advised the parties though that if it was unable to decide the matter without having to resolve the facts in dispute, these applications would continue on the two remaining days already scheduled for the purpose of hearing evidence and further argument from the parties.

9. Having reviewed the material before it and the parties' submissions, the Board finds that it is in a position to dispose of these applications.

10. The relevant undisputed facts can be set out briefly. After the trusteeships were imposed on each of the Locals, the trustee attempted unsuccessfully to secure the assets and prop­erty of each Local. The dispute between the parties has made its way into the courts. We do not propose to detail the court proceedings but simply note that the respondents are challenging the validity of the trusteeship, and are seeking an accounting and return of the money while the CPU is attempting to secure assets and seeking damages. By the date of the hearing, the trustee had still been unable to secure all of the assets of each Local union. Counsel for the respondents made it very clear that even if the Board were to continue the trusteeship, the respondents would not coop­erate by providing the trustee with what he wanted. By the time of the hearing, each of the four CPU Locals had lost its bargaining rights, either by means of a termination application or by means of an application for certification. The CPU argues that the Board should consent to a con­tinuation of the trusteeship for a further twelve months in order to permit the trustee to complete his functions.

11. As noted earlier, the respondents rely on a number of facts which are disputed by the CPU. The respondents contend that the CPU imposed a trusteeship in bad faith and in a way that was contrary to the terms of the CPU Constitution. The respondents refer to Article 10, Section 8 of the CPU Constitution which provides that the assets of the local union are the exclusive prop­erty of the local union and its membership and may be only disposed of by a majority vote of the total membership. The respondents also refer to the various votes held by the membership with respect to the disposition of the assets. The respondents contend that there is no valid reason for continuing the trusteeship and they also contend that the sole reason why the CPU wishes the trusteeship to continue is simply to further delay the return to its former members of the assets which rightfully belong to them. The respondents contend that a continuation of the trusteeship may prejudice their efforts in the courts since a court may be unduly affected by the Board's grant­ing its consent to continue the trusteeship. Apart from the merits of the application, counsel for the respondents argued that the Board did not have jurisdiction under section 84 since section 84 was intended to deal with trusteeships in the context of collective bargaining relationships, and since there is no collective bargaining relationship to be concerned with here, section 84 was not designed to deal with this situation.

12. As the quotation from the Operative Plasterers decision referred to earlier makes clear, section 84 of the Act is intended to deal with more than simply the imposition of trusteeships within a collective bargaining context. The wording of the provision contains no such limitation. Section 84 of the Act is one of the few provisions in the Act which impact on internal union affairs. The Board is satisfied that it does have jurisdiction under section 84 in circumstances where the locals placed under trusteeship no longer hold bargaining rights.

13. Even if we assume all the facts relied upon by the respondents to be true, the Board is satisfied in the circumstances that it is appropriate to allow these applications by the CPU. The trustee has been unable to complete his functions and this has been the case primarily because of the desire of the respondents to frustrate his efforts. We also fail to see any prejudice to the respondents by consenting to the continuation of the trusteeship. The Locals no longer hold bar­gaining rights and arguably have no members. There is obviously a dispute between the parties concerning the disposition of the assets held by the four Local unions. The resolution of this dis­pute is clearly something that will have to be resolved by the courts. The issue of the validity of the trusteeship will ultimately have to be determined as well by the courts, and we wish to make it clear in this decision that we have not made a determination with respect to whether the trustee­ship was imposed in bad faith or contrary to the terms of the CPU Constitution. In weighing the various interests involved, the Board is satisfied that it is appropriate to allow these applications.

14. Having regard to the foregoing, the Board, pursuant to the exercise of its discretion under section 84(2). consents to the continuation of the supervision or control by the Canadian Paperworkers Union over the Canadian Paperworkers Union, Locals 1199, 934, and 309 for a further period of one year from October 21, 1992, and over Canadian Paperworkers Union, Local 1335 for a further period of one year from December 18, 1992.

15. The Registrar is directed to cancel the March 29, 1993 and April 2, 1993 hearing dates.