[1994] OLRB Rep.April .438

2191-90-G; 2192-90-R United Brotherhood of Carpenters and Joiners of America Local 1256, Applicant v. Maaten Construction Limited; 865541 Ontario Inc., Responding Parties

BEFORE: Ken Petryshen, Vice-Chair, and Board Members W. N. Fraser and J. Redshaw.

APPEARANCES: N. L. Jesin and R. Carlton for the applicant; Bruce Binning, Ken Maaten and Peter Maaten for Maaten Construction Limited; Brian T. Daly and Alex Jon gsma for 865541 Ontario Inc.

DECISION OF THE BOARD; April 26, 1994

1. These applications are amended to reflect the correct name of the responding parties as:

"Maaten Construction Limited; 865541 Ontario Inc.".

2. Of the two applications before the Board, one is an application by the United Brother­hood of Carpenters and Joiners of America, Local 1256 (Local 1256") in which it claims that Maa­ten Construction Limited ("Maaten") and 865541 Ontario Inc., which carries on business under the name Days Inn Sarnia ("Days Inn"), constitute one employer for purposes of the Labour Rela­tions Act. The other is a section 126 application in which Local 1256 alleges that Maaten and Days Inn contravened the Carpenters' Provincial Agreement (the "Agreement").

3. The dispute between the parties arises out of the construction of a hotel in Sarnia (the "Project") by Mr. A. Jongsma in 1990 called the Days Inn. Days Inn engaged Maaten as a con­struction manager for the Project. Local 1256 and Maaten are bound to the Agreement. Local 1256 argues that the relationship between Maaten and the Days Inn on this Project entitles it to the section 1(4) relief it requests. Local 1256 also contends that Maaten has contravened Article 4 of the Agreement, the subcontracting provision. In particular, it is alleged that Maaten has contra­vened the construction management provision of that clause. The parties advised the panel that this was the first occasion the Board has been called upon to interpret the construction manage­ment provision of a provincial agreement.

4. In their submissions, the parties made extensive reference to the decision of the Board in Dalton Engineering & Construction Limited, [1988] OLRB Rep. June 567 (the "Dalton deci­sion") and the provisions of the 1988-1990 and 1990-1992 provincial agreements. Since the Dalton decision and the provisions of these agreements provide the context for this dispute, we find it use­ful to refer to them at the outset.

5. In the Dalton case, the Board was confronted as well with a section 1(4) application and a construction industry grievance. Labourers Local 506 ("Local 506") brought the applications against Dalton Engineering & Construction Limited, ("Dalton") and Rumble Pontiac Buick,

(1985) Inc. ("Rumble"). Dalton is a general contractor and Rumble operates a General Motors dealership. Dalton entered into a construction management relationship with Rumble in connec­tion with the building of a new automobile showroom and for the renovation of some existing facil­ities. Dalton and Local 506 were bound to the Labourers' Provincial Agreement. This agreement limited Dalton to engaging subcontractors who are in contractual relations with the Labourers' for the performance of work coming under the scope of the collective agreement. Certain demolition work that was covered by the collective agreement was also covered by Dalton's commercial con­tract with Rumble. This work was performed by A.B.C. Demolition ("A.B.C.") who was not in contractual relations with the Labourers. The contract for the performance of the demolition work was between Rumble and A.B.C.

6. Acting as construction manager, Dalton became an integral part of the project manage­ment team. Dalton's services included the preparation of a list of contractors in each trade for bid tendering purposes, the preparation of bid specifications and arranging for tenders to be submitted to Rumble, the evaluation of tenders and recommending the awarding of contracts to Rumble. Dalton assumed total responsibility for all work covered by its contract with Rumble and war­ranted for one year the work of trade contractors. The commercial agreement provided that Rum­ble would let the contracts to the trade contractors, not Dalton.

7. In the Dalton decision, the Board summarized the position of Local 506 as follows:

4. The applicant contends that the performance of the work by ABC was a violation of the Agreement by Dalton because Rumble and Dalton were under common direction or control within the meaning of subsection 1(4) of the Act and should be treated as constituting one employer, making Rumble bound to the Agreement, or, in the alternative, in substance, it was Dalton which contracted with ABC notwithstanding that the form of the contract was between Rumble and ABC. Local 506 counsel claims that the arrangement under which Rumble entered into a contract with ABC to perform the work was a sham designed to allow Dalton's subcon­tracting obligations to be circumvented. Whether or not that was the intention of the arrange­ment, the result was still a violation of their Agreement according to applicant counsel.

8. The Board ultimately dismissed the grievance and the section 1(4) application. In dis­posing of the grievance, the Board made the following comments:

38. The language of the Agreement referred to above at paragraph 35 clearly gives any employer who, like Dalton, is bound by it, a choice of performing work with his own employees or engaging ". . sub-contractors who are in contractual relations with [Local 506]..". It is implicit in that language that, in order to be in a position to make that choice, the employer must have control over the work. If the employer is not the owner of the project, this means that the employer must have acquired some right or obligation to perform the work. The facts of this case are clear: Rumble owned the Project and, at the point when it contracted with Dalton for the construction services described at paragraph 14 of this decision, it was Rumble and not Dalton which was in the position of deciding whether to construct the Project by hiring its own tradesmen or by contracting to have it constructed by the tradesmen of another employer or other employers. When Rumble decided to enter into the arrangement with Dalton, it expressly reserved to itself the choice of the contractors who would construct the Project and the right to bind them directly to Rumble for the performance of the work. Wood's conduct with respect to awarding and executing the trade contracts for Rumble was wholly consistent with that express reservation. Under the terms of the trade contracts, the trade contractors warranted their work to Rumble for two years. It was only after each trade contract was executed by Rumble that Dalton became responsible for supervising the performance of the trade contract and for war­ranting to Rumble for one year the quality of the finished work. The fact that Dalton made itself independently liable for the work of the trade contractors who had been selected by Rumble and bound by contracts with it to perform the work of constructing the project does not alter the fact that Rumble, having exercised the initial choice to have the work done by the employees of other employers, expressly withheld from Dalton the right, obligation or opportunity to make that choice or to choose the employers who employees would construct the Project. On the facts of this case, Dalton did not acquire the right or obligation to make those choices. Consequently, at the time each trade contractor was engaged, Dalton did not have control over the work being awarded essential for it to have engaged the contractor either directly or indirectly. Nor, on the facts of this case, can it be said that Rumble did nothing more than sign the trade contracts, that its awarding and executing of contracts was a mere matter of form and a subterfuge. Rumble, through Wood, engaged three contractors, Keith Plumbing, Electriclee Ltd., and Tomas Masonry, because Wood knew them. Even with ABC, without waiting for any recommendation from Dalton, Wood simply instructed it to prepare a contract for Rumble to execute with ABC, the obvious low bidder.

39. The substance of the contractual arrangement between Dalton and Rumble, on the facts of this case, was that Rumble and not Dalton engaged the trade contractors regardless whether the form of the arrangement was that of a construction management contract, a cost plus general contract or a general contract. Therefore, in all of the foregoing circumstances, the Board finds that it was Rumble Pontiac Buick (1985) Inc., and not Dalton Engineering & Construction Lim­ited which engaged A.B.C. Construction Limited to perform the demolition work. In the result, Dalton Engineering & Construction Limited has not violated clause 2.05 of the Labourers Pro­vincial Agreement which was in effect from June 25, 1986 to April 30, 1988.

9. The Board's reasons for dismissing the section 1(4) application are set out in the follow­ing paragraphs:

40.... Even were the Board to find that the preconditions exist for the Board to have the discre­tion to make the declaration requested, in the circumstances of this case, the Board would not make the declaration. Rumble was not under any statutory or contractual prohibition from seeking to have the Project constructed with non-union labour. Dalton's contractual obligation under the Agreement was to engage only subcontractors who are in contractual relations with Local 506 for work covered by the Agreement. That obligation is not a prohibition against Dal­ton selling its construction expertise to purchasers of construction in such a manner as to not require or cause it to engage subcontractors. If, when the parties to the Agreement negotiated clause 2.05, their objective was to prohibit employers from entering into contracts like the one between Dalton and Rumble, it was open to them to negotiate language which would achieve that purpose. Building trades unions have demonstrated an ability to negotiate a wide variety of conditions aimed at preserving employment opportunities for their members and protecting the bargaining rights of the unions. For example, clauses have existed in construction industry col­lective agreements in Canada for many years which allow employees to refuse to work with materials which have not been fabricated by members of the union party to the collective agree­ment. Similarly, there are agreements in the construction industry which permit members of a trade union employed by an employer under collective agreement with the union to refuse to work for the employer on a project where "non-union" trades are employed. In the Board's view, the bargaining table is the appropriate forum for a union to seek those kinds of protec­tions for its bargaining rights.

41. Were the Board to declare that Dalton and Rumble be treated as constituting one employer for purposes of the Act, the effect would be to bind Rumble to the Agreement and make it in breach of clause 2.05 for having engaged ABC to do the demolition work. That would have the effect of giving the parties to the Agreement a result which they failed to negotiate and would be analogous to the Board using its discretionary powers under subsection 1 (4)to extend bar­gaining rights rather than to preserve them. The purpose of subsection 1(4) is to preserve rather than extend bargaining rights. Accordingly, the Board has consistently declined to exercise its discretion and declare that two or more entities be treated as one employer for purposes of the Act where the effect of the declaration would be to extend bargaining rights.

42. The Board long has recognized that bargaining rights and the employer obligations flowing from them attach to a business or activity which gives rise to employment. In the present case, the Agreement defines Local 506's bargaining rights and Dalton's obligations in respect of those rights. The business or activity carried on by Dalton to which those rights and obligations attach is its performance of work covered by the Agreement. As the dissent correctly points out at paragraphs 29 and 30, an employer like Dalton who is bound to the Agreement and acquires work covered by it, is obliged to have the work performed by members of Local 506. However,it is implicit in all of the clauses creating Dalton's obligation under the Agreement that, in order to be bound to the terms of the Agreement, Dalton first must have acquired in the commercial sense the right or obligation to determine whether to hire and assign the work or to engage another contractor to do the work with that contractor's employees. As the dissent recognizes at paragraph 31, Dalton did not acquire the right or obligation to perform the demolition work at issue. In the view of the majority, that fact is as pivotal a consideration to the exercise of the Board's discretion under subsection 1(4) as it was to finding that Dalton had not violated clause 2.05. This is because subsection 1(4) can be triggered to protect bargaining rights when a busi­ness or activity to which they attach is transferred to a related business or activity without any of the usual indicators of a transfer of a business which would attract section 63 of the Act. See Brant Erecting, supra, at paragraph 14. Were one to agree with the dissent that Dalton and Rumble carried on associated or related activities under common control or direction, and had Dalton transferred to Rumble a business or activity in the form of work covered by the Agree­ment which it had the right or obligation to perform, a one employer declaration well may have been an appropriate remedy. On the facts before the Board in this case, however, Dalton did not have any business or activity to transfer to Rumble.

43. While the Board has concluded that it should not issue a single employer declaration on the facts presented by this particular case, such a conclusion does not preclude the Board, in the appropriate circumstances, from finding that contracts between purchasers of construction and contractors in the nature of the Contract form an appropriate basis for making a single employer declaration under subsection 1(4). Different facts might well lead the Board to the conclusion that a contractor had acquired work protected by a subcontracting clause, had circumvented its subcontracting obligation by entering into a scheme to have the purchaser award the work and that a one employer declaration should issue as relief to the offended trade union.

10. One of the issues during bargaining for the 1988-90 provincial agreement was the con­struction management issue. Although the parties to those negotiations did not have the Dalton decision, they were well aware of the circumstances which gave rise to the dispute. In order to address the problem, the parties agreed to alter the subcontracting provision of the Agreement to read as follows:

ARTICLE 4-SUBCONTRACTING

4.01 Any work that is the work of the union under the provisions of Article 9 of this Agree­ment shall only be contracted or subcontracted to an employer bound by this Agreement.

4.02 Violation of this Article shall be subject to grievance and arbitration notwithstanding any reference of any jurisdictional dispute to any tribunal over the same work.

4.03 Construction Management - Without restricting in any way the application of the subcon­tracting provision contained in Article 4.01 of this Agreement, an Employer who undertakes a contract with an owner to provide construction management services shall be subject to said Article 4.01 unless:

(i) The owner solicits directly bid(s) for work covered by this Agreement from contractor(s) not bound by this Agreement; and

(ii) The owner accepts bid(s) from such contractor(s); and

(iii) The owner contracts or subcontracts directly with such contractor(s) with­out contractual obligation of the Employer for the work of such contrac­tor(s) other than for the negligent acts or omissions of the Employer.

ii. In the next round of bargaining, Article 4 was altered again. The subcontracting provi­sion within the 1990 - 1992 agreement reads as follows:

ARTICLE 4-SUBCONTRACTING

4.01 Any work that is the work of the Union under the provisions of Article 19 of this Agree­ment shall only be contracted or subcontracted to an employer bound by this Agreement.

4.02 Violation of this Article shall be subject to grievance and arbitration notwithstanding any reference of any jurisdictional dispute to any tribunal over the same work.

4.03 Construction Management - Without restricting in any way the application of the subcon­tracting provision contained in Article 4.01 of this Agreement, an Employer who undertakes a contract with an owner to provide construction management services shall be subject to said Article 4.01 unless:

(i) The owner selects contractor(s) not bound to this Agreement to bid on work covered by this Agreement and solely and directly solicits or obtains bid(s) for such work from such contractor(s) without any involvement or participation by the Employer in the selection of such contractor(s) (except as to the validity of the bid(s)) or the solicitation or obtaining of any bid(s) from any contractor(s) regardless of whether it (they) is (are) bound or oth­erwise to this Agreement.

(ii) The owner accepts bid(s) from contractor(s) not bound to this Agreement; and

(iii) The owner contracts or subcontracts directly with contractor(s) not bound to this Agreement without contractual obligation of the Employer for the work of such contractor(s), other than for the negligent acts or omissions of the Employer.

4.04 Any failure to comply with Article 4.03 of this Agreement shall render the employer liable for damages equivalent to those for the breach of the subcontracting provision set forth in Arti­cle 4.01 above.

4.05 The employer shall advise the owner of the provisions of Articles 4.03 and 4.04 when undertaking the construction management service contract.

12. With the above provisions, the parties have addressed the reality of construction man­agement in a way that benefits general contractors and the trade unions in the ICI sector. The sub­contracting provision will not apply as long as construction managers limit their role in the con­tracting out of work covered by the Agreement. A failure to comply with the restrictions contained in subsection 4.03 will make the construction manager subject to section 4.01 of the Agreement.

13. Counsel for Maaten called Peter and Ken Maaten to testify. Each is a Vice-President of Maaten and both were involved with the Project. Counsel for Days Inn called A. Jongsma to give evidence. Counsel for Local 1256 called J. Lapp, an estimator for one of the contractors involved in the Project, and R. Watt, the site superintendent employed by Maaten on this Project, to give evidence. In making its factual determinations the Board has carefully reviewed the oral and docu­mentary evidence and the parties submissions relating thereto.

14. In deciding to build the Days Inn, A. Jongsma wanted to retain as much control as pos­sible. He, along with family members, own other properties which required some construction work. He owns and operates the 401 Motor Inn which is close to the Days Inn. After buying the 401 Motor Inn, he gutted and renovated the building. He and his family took on these previous construction tasks without anyone's assistance. Given the size of the Days Inn Project, Jongsma determined it would be wise to obtain some outside help. The architect and engineering firm he retained advised him about the different methods of construction available. He selected the con­struction management route since it gave him the control and flexibility he wanted.

15. K. Maaten negotiated the commercial agreement with Jongsma. When he heard about the project, K. Maaten talked to Jongsma about preparing a quote. Jongsma advised K. Maaten that he would consider non-union trades on the Project and wondered if that would be a problem. Jongsma was reluctant to get involved with union contracts only to the extent that he wanted the best contractor at the best price. He was quite prepared to receive bids from both union and non­union contractors. K. Maaten referred to the collective agreements Maaten was bound to and made reference to the construction management provision. An initial construction management proposal based on a management fee of five percent of the actual cost of the Project was rejected by Jongsma since he wanted a fixed fee. They eventually agreed on a management fee of $110,000.00. Since this was the first occasion Maaten was to provide construction management ser­vices, K. Maaten sought advice from the Ontario General Contractors Association (O.G.C.A.). He was advised that a standard form contract referred to as CCA5 was the best one to sign. With some modifications, the parties executed the CCAS contract prepared by K. Maaten. K. Maaten candidly testified that in preparing the commercial contract for execution with Days Inn, he did not consider the implications of subsection 4.03 of the Agreement.

16. We find it unnecessary to review the terms of the commercial contract in detail. Many of the terms found therein are common to the typical construction management arrangement. The general conditions of the commercial contract set out the construction managers' responsibilities during the pre-construction, the construction and post-construction phases of the Project. During the pre-construction phase, Maaten is obliged to assemble all bid documents for the solicitation of competitive bids, to analyse the bids received and recommend awards to Days Inn. The contracts entered into were to be between the trade contractor and Days Inn. The commercial contract did not require Maaten to warrant the work of the trade contractors. In many key respects the com­mercial contract entered into here was not unlike the one between Dalton and Rumble. Most signi­ficantly, the owner of the Project in both cases was a party to the contracts with the trade contrac­tors, not the construction manager. As in the Dalton case, the commercial contract requires the construction manager to play a role in the solicitation of bids and recommending awards. This did not cause any difficulties for the construction manager in the Dalton case given the provision of the subcontracting provision as it then was. However, Maaten would clearly run afoul of the conditions in subsection 4.03 of the Agreement if it participated in the bidding process as contemplated by the commercial contract it had with Days Inn.

17. In approximately April 1990, Maaten prepared and put out tenders for the foundation work as agent for Days Inn to both union and non-union contractors. This approach was consistent with the advice he had received previously. K. Maaten was again quite forthcoming in admitting that his intention was to follow the same practice with all contracts for the Project. Shortly after sending out the tenders for the foundation work, K. Maaten received a telephone call from Ron Carlton, Business Manager for Local 1256. Carlton expressed his displeasure at the construction management arrangement and told K. Maaten that he would watch and get them. As a result of Carlton's call, K. Maaten obtained further advice from a representative of the Sarnia Construction Association as well as Brute Binning. After obtaining advice from Mr. Binning, Mr. Maaten deter­mined that he should no longer act as an agent for Days Inn. K. Maaten testified, and we accept as evidence in this regard, that Maaten did not intend to enter into a construction management arrangement with the Days Inn that would cause it to contravene its collective agreements and that Jongsma was aware of this. Having obtained legal advise from Binning, Maaten intended to con­duct its construction management functions so as not to contravene the subcontracting provisions of the Agreement. Partly because of the advice he received, the decision was made that Maaten's own forces would perform the foundation work using members of the Carpenters' and Labourers'. This decision was also made because of a change in design from concrete to block construction.

18. The legal advise from Binning obviously necessitated further communication between Maaten and Days Inn. K. Maaten met with Jongsma in mid-May, explained his understanding of Maaten's collective agreement obligations and, in effect, indicated that Maaten would no longer be involved in soliciting and awarding contracts as long as Days Inn intended to pursue non-union contractors. In early July, 1990, K. Maaten sent to Jongsma the provisions of the new subsection 4.03 along with a written explanation of how the clause worked prepared by the Labour Relations Bureau of the O.G.C.A.. Jongsma was not happy with the situation concerning the foundation work and was quite content to assume complete control over the bidding process, a degree of con­trol he thought he had in any event given his view of the commercial contract.

19. Subsequent to the tendering for the foundation work, all other carpentry contracts were handled by a procedure that would avoid Maaten contravening the Agreement. The Board heard evidence about how a lot of work was performed and how it came to be performed. We do not propose to detail that evidence here other than to highlight the following. Any contracts that were let to trade contractors were between Days Inn and the particular contractor. Jongsma determined who would bid for certain work, evaluated the bids and selected the successful bidder. In a limited number of instances, Jongsma requested the assistance of Maaten in order to assess the validity of the bids. Jongsma seldom reviewed bids with Maaten. Maaten prepared the scope of work and tender documents and eventually prepared the contract documents on instructions from Days Inn. Maaten did not warrant the work of the contractors. Each contractor warranted the work directly to the owner and each contractor was paid directly by the owner. Jongsma was on the site every day for approximately ten to twelve hours. He dressed in construction clothing and with his own forces performed a considerable amount of the construction work. For instance, his own forces under his direction installed windows, vanities, shutters, HVAC units, insulation, tubs and sinks. His forces kept the site clear and did material handling as well. R. Watt, Maaten's site superinten­dent, was engaged in scheduling and co-ordinating the work of the various trade contractors. Watt had no responsibility for Jongsma's forces except to the extent that he would treat them as he would the employees of any other contractor.

20. Days Inn entered into a contract with Edwards Door Systems Limited ("Edwards") for the supply and installation of double egress doors referred to by Edwards as the "Total Door" sys­tem, which is a particular type of fire door system. Edwards is a non-union contractor who has dealt with Maaten in the past. Local 1256 takes the position that Maaten's role with respect to the Edwards contract should lead us to conclude that Maaten contravened Article 4 of the Agreement.

21. J. Lapp testified about how he came to quote a price on the "Total Door" system. He indicated that he had attended at Maaten's premises to meet with Maaten's estimator in relation to another project. While there, he somehow saw the plans for the Project. The evidence does not suggest that anyone in Maaten directed Lapp's attention to the plans. Lapp requested permission to review the plans in order to prepare a quote. He reviewed the plans which at that time provided for regular fire doors, and submitted a quote to Maaten for the "Total Door" system. It is not clear from the evidence whether Lapp requested permission of Peter Maaten to review the plans or whether he only spoke with Maaten's estimator. Maaten, apparently at the request of Jongsma, reviewed the possibilities of the "Total Door" system. It appears that Jongsma decided to accept the concept of this system based on its aesthetics. Jongsma worked out a price with W. Cassidy, a vice-president at Edwards. Edwards is an exclusive supplier of the "Total Door" system so that Jongsma was unable to obtain any other bids. In order to obtain a warranty for this product, Edwards requires that it also perform the installation. It appears as well that the labour cost associ­ated with the installation of the "Total Door" system is minimal since the doors are simply installed on the frames.

22. Maaten investigated the feasibility of the "Total Door" system and also was involved in negotiating a credit. These represented legitimate functions of a construction manager. We do not accept the submission made by counsel for Local 1206 that the mere recommendation of a system that has an exclusive supplier necessarily involves one in the solicitation of the successful bidder. It is somewhat difficult to make an assessment having regard to the evidence before us as to whether Maaten was involved in soliciting or obtaining Edward's bid on the "Total Door" system. Counsel for Maaten argues that all that took place was that Edwards made a proposal to alter the plans which had nothing to do with bidding. We do not believe it is that simple. When we look at the evi­dence before us, it appears that Lapp saw the plans for the Days Inn Project and with the hope of obtaining some work decided that he would bid on the job. Maaten did not initiate the effort and it is difficult to tell precisely what Maaten's role was given Lapp's failure, which is not surprising, to recall some of the details of his interaction with Maaten. Peter Maaten testified that he had no involvement in soliciting or obtaining the Edward's bid and Jongsma testified that it was he and Edwards that negotiated the contract. On the evidence before us we are not satisfied that Maaten's conduct was such as to lead us to conclude that it solicited or obtained the Edward's bid.

23. In reviewing the evidence relevant to the subcontracting grievance, the Board finds that except for the foundation work, the circumstances in subsection 4.03 are not present which would make subsection 4.01 applicable. In our view, Maaten did contravene subsection 4 of the 1988-90 Agreement when it solicited bids from non-union contractors for the foundation work and we so declare. Since this work was ultimately performed by Maaten's own forces using members of the Carpenters' and Labourers' working under the relevant provincial agreements, no damages arise for this contravention of the Agreement. We agree with the submission of counsel for Maaten that each aspect of the work that is subcontracted must be examined on an individual basis. The intent of the parties as reflected by the subcontracting provision is to deal with each part of the work sub­contracted separately. In other words, if the construction manager were to solicit bids for drywall work, subsection 4.01 becomes operative and damages potentially owing only for the drywall sub­contracting and not for all subcontracting on the project. In this case, the violation of the Agree­ment relating to foundation work means that Maaten could have been liable potentially for only the foundation subcontracting on the Project.

24. We turn now to Local 1256's request for section 1(4) relief. Counsel for Maaten argues that the material circumstances here are no different from those in the Dalton case and therefore should lead the Board to dismiss the section 1(4) application. As well, counsel submits that since the request for section 1(4) relief is based only on the construction management arrangement, the Board should not exercise its discretion in favour of granting any relief. By specifically addressing the construction management arrangement in bargaining, counsel contends it should not be open for Local 1256 to pursue this relief. Counsel for Local 1256 argues that the facts here are different from those in the Dalton case and accordingly warrant a different result. In particular, counsel con­tends that the new subcontracting provision in light of the facts should lead the Board to exercise its discretion in its favour. Counsel refers to the last sentence in paragraph 43 of the Dalton deci­sion in support of his view that the facts here would have caused the majority in the Dalton case to reach a different result. Again that sentence reads as follows:

43. ... Different facts might well lead the Board to the conclusion that a contractor had acquired work protected by a subcontracting clause, had circumvented its subcontracting obligation by entering into a scheme to have the purchaser award the work and that a one employer declara­tion should issue as relief to the offended trade union.

25. In our view, the circumstances in the Dalton case which led the Board to refuse section 1(4) relief are present in this case as well. In particular, as the Board noted in the Dalton decision, the fact that Dalton did not acquire the right or obligation to perform the work at issue was a "piv otal consideration to the exercise of the Board's jurisdiction under section 1(4)". In this case, Maa­ten also did not acquire the right or obligation to perform the work that was contracted out, either by the terms of the commercial contract by some other arrangement between the parties. Days Inn and only Days Inn had control over the work covered by the Agreement. In referring to the last sentence in paragraph 43, counsel argues that it is not only rights or obligations over the work that are significant. He submits that rights or obligations in relation to the work are sufficient such that when Maaten had some rights regarding bidding by the commercial contract and then gave them away in practice, one should conclude that Maaten provided a basis for the Board to grant the sec­tion 1(4) relief. We disagree. The Board's comment in paragraph 43 in the Dalton decision focuses only on the construction manager acquiring the right or obligation to perform work protected by the subcontracting clause. Although the relatively new Article 4 considerably restricts the role of a construction manager in the process of contracting out work, this does not lead us to conclude that our focus should be broader than the approach taken in the Dalton case.

26. As noted earlier, the parties since Dalton have specifically negotiated a provision deal­ing with the construction management arrangement. Rather than prohibiting such arrangements, the provision provides some legitimacy to a construction management arrangement while at the same time containing certain requirements to protect the trade union's interests. However, the mere negotiation of the construction management provision does not preclude a trade union from attempting to obtain section 1(4) relief. The facts of each case will determine whether the pre-con­ditions of section 1(4) have been met and whether it would be appropriate to exercise the discre­tion to grant a single employer declaration. It is unlikely that the Board would ever exercise its dis­cretion under section 1(4) in circumstances where the construction management provision was not contravened. If such a provision were contravened, the issue of whether section 1(4) relief would be appropriate may depend on the nature of the contravention. A contravention of the subcon­tracting provision arising out of circumstances where the construction manager did not acquire any right or obligation over the work covered by the Agreement, as in this case, would not likely result in a declaration being granted. On the other hand, a contravention of the construction manage­ment clause in circumstances where the construction manager acquires rights or obligations to the work covered by the Agreement may lead the Board to grant section 1(4) relief.

27. Without deciding whether the preconditions exist for the Board to exercise its discre­tion, and for the reasons given above, the Board finds it would be inappropriate in this case to grant a section 1(4) declaration.

28. In summary, except for the declaration relating to the foundation work, the Board finds that Maaten did not contravene the Carpenters' Provincial Agreement. Since the Board declines to exercise its discretion under section 1(4) of the Act, the application under section 1(4) is dismissed.