[1995] OLRB Rep. October 1270
1277-95-M Donald Paquette, Applicant v. International Union of Operating Engineers, Local 793 & Edgar Doull, Responding Parties
BEFORE: Ken Petryshen, Vice-Chair, and Board Members W. N. Fraser and G. McMenemy.
DECISION OF THE BOARD; October 12, 1995
This is an application in which Mr. Paquette complains on behalf of himself and other members of the International Union of Operating Engineers, Local 793 ("Local 793") that an audited financial statement furnished by Local 793 is inadequate. Local 793 takes the position that the membership has been provided with an adequate financial statement and that this application should be dismissed without a hearing.
Section 87 of the Labour Relations Act provides as follows:
87.-(1) Every trade union shall upon the request of any member furnish the the member without charge, with a copy, of the audited financial statement of its affairs to the end of its last fiscal year certified by its treasurer or other officer responsible for the handling and administration of its funds to be a true copy, and, upon the complaint of any member that the trade union has failed to furnish such a statement, the Board may direct the trade union to file with the Registrar of the Board, within such time as the Board may determine, a copy of the audited financial statement of its affairs to the end of its last fiscal year verified by the affidavit of its treasurer or other officer responsible for the handling and administration of its funds and to furnish a copy of the statement to the members of the trade union that the Board in its discretion may direct, and the trade union shall comply with the direction according to its terms.
(2) Where a member of a trade union complains that an audited financial statement is inadequate, the Board may inquire into the complaint and the Board may order the trade union to prepare another audited financial statement in a form and containing the particulars that the Board considers appropriate and the Board may further order that the audited financial statement, as rectified, be certified by a person licensed under the Public Accountancy Act or a firm whose partners are licensed under that Act.
On or about December 21, 1994, Mr. E. Doull was appointed as International Supervisor to conduct the business and finances of Local 793 by the International President. It appears that the International took this course of action due to concerns of the members about the financial viability of Local 793. It is those same concerns which have undoubtedly led to the filing of this application.
The audited financial statements to the end of 1994 were not completed until May 1995. Once completed, they were made available to all members requesting copies. In addition, the audited financial statements were published in a publication of Local 793, which was sent to all members of Local 793. Local 793 contends that it has complied with its obligations under section 87 of the Act by providing its members with adequate audited financial statements certified by Mr. Doull.
Local 793's financial statements for the period ending December 31, 1994 were audited by BDO Dunwoody, a national firm of chartered accountants. The auditors' report indicates that the audit was conducted "in accordance with generally accepted auditing standards". The chartered accountants also gave their opinion that:
. . . these financial statements present fairly, in all material respects, the financial position of the Union as of December 31, 1994 and the results of its operations and the changes in its financial position for the year then ended in accordance with generally accepted accounting principles.
- In a letter dated August 14, 1995, Mr. Paquette requests that Local 793 provide him with the following information:
(a) all contributions made by all contractors for pension and benefit contributions, monthly dues and working dues;
(b) all moneys paid by the contractors to the Union in trust for grievances filed,
(c) a complete accounting of the business manager and agents' credit cards.
Attached to the August 14, 1995 letter is a list of what Mr. Paquette refers as 16 discrepancies concerning the audited financial statements. These alleged discrepancies are set out below:
The scope of audit did not extend to an examination of the payroll records — it should as the payroll is substantial.
Membership dues verification should not be limited to the amounts recorded in the records of the union.
Members' equity dropped from prior year amount of $8,253,078. to $1,186,160.— was there not a warning in 1993 or reference in the 1993 reports.
Administrative costs are up significantly due to consulting fees (more detail — to whom and what?) and interest charges.
Salaries & related costs of $4,996,381 are a high percent of the expenses — should be audited as noted in (1.) and broken done [sic] by function in a schedule.
Net loss from Morrisburg operations need further review: professional fees $151,429 vs $9,679 in 1993, salaries & benefits of $662,821 vs $187,184 & severance pay of $53,046.
Write down of Morrisburg property of $3,633,858. What caused it so suddenly?
Accounts payable and benefits payable — mainly due to lien of $2,000.00. and $1,450,000 was accrued. Why a lien and for what and is the accrual sufficient?
An update should be available as to the resolution of the bankers and restructuring concerns.
Certain employees (who are they) signed a termination of employment & severance pay agreement. Who approved this.
Status of the petition in bankruptcy filed by the contractor.
Automobile & travel expense of $399,211 is high. A breakdown should be provided.
An interim financial report as at June 30, 1995 should be provided to show current position and trend.
A forecast and budget should be provided.
Internal controls should be reviewed and updated.
Management accounting consulting services are recommended to assist in the critical current financial demands.
By letter dated October 2, 1995, Mr. Paquette replied to Local 793's response. He submitted that the Act was not complied with since Mr. Doull is a Trustee and section 87(1) of the Act requires that a copy of the audited financial statement be "certified by its Treasurer or other officer responsible for the handling and administration of its funds ...". The other comments made in the reply and the affidavit of Brian McCarthy, which was attached to the October 2, 1995 letter, were either irrelevant or not helpful.
After considering the positions of the parties as set out in the application, the response and the letters filed with the Board, the Board finds that even if it accepted all of the facts as stated by the applicant to be true, the application does not make out a case for the remedy requested. The Board finds that Local 793 has met its obligations under section 87 of the Act to its members.
Section 87 is not an avenue by which union members can raise concerns regarding the administration of their union. In Edward Miller, [1983] OLRB Rep. Nov. 1864, the Board made the following comments at paragraph 14:
……From these submissions, we gather that Mr. Miller is unhappy with the manner in which the union is being run, and in particular, unhappy with the union's executive which he feels is operating in violation of the union's constitution. Mr. Miller is also of the view that the collective agreement negotiated by the union is "no good". In addition, Mr. Miller objects to a number of expenditures by the union, particularly those related to professional services. Mr. Miller concluded his submissions by charging the executive of the union with fraud and requesting that the Board place the union under trusteeship. From his submissions it is clear that Mr. Miller has misunderstood the purpose behind section 85 [now section 87], which is only to ensure that a union member can receive an audited financial statement of the union's affairs to the end of its last fiscal year. Mr. Miller has received such a statement. Further, at the hearing the union went further and indicated that in the future it will keep proper financial records, and on a yearly basis prepared audited financial statements. The section has served its purpose. If Mr. Miller is unhappy with the way the union is being run, he can seek to influence its affairs through its internal organs. If he feels the executive has breached the union's constitution, he has the right as a union member to seek recourse in the civil courts. Alleged breaches of the criminal law are a matter for the police and the criminal courts. Any alleged violations of provisions of the Labour Relations Act can be dealt with by filing proper complaints with this Board. However, none of these are matters that can be dealt with in the context of a proceeding under section 85 [now section 87].
The information the applicant requests as set out in paragraph 6 above would require a breakdown of various components of the audit. However interesting or useful such information might be, section 87 does not oblige a union to provide a financial statement containing such a breakdown. Underlining the discrepancies that are set out in paragraph 7 above are either the applicant's disagreement with items disclosed by the audit or the applicant's views or suggestions as to how Local 793 should be administered. The applicant and the members of Local 793 are entitled as a result of section 87 of the Act to receive an audited financial statement of Local 793's affairs to the end of the last fiscal year certified by an officer responsible for handling the administration of its funds. This is what the applicant and the members of Local 793 received. Whether he is an International Supervisor or a Trustee, Mr. Doull is an "officer responsible for the handling and administration of its funds ...". If the applicant were correct in his assertion, then no local under trusteeship would be in a position to comply with section 87(1) of the Act. The Board is satisfied that the members of Local 793 were furnished with adequate audited financial statements.
For the above reasons, this application is dismissed.