[1999] OLRB REP. MAY/JUNE 469
2646-97-R International Brotherhood of Electrical Workers, Local Union 1687, Applicant v. R.M. Belanger Limited, Responding Party
Certification - Construction Industry - Employer - General contractor disputing that it was employer of electricians identified in union's certification application - Board finding that electricians who were formerly employed by electrical subcontractor "A" and who were later employed by electrical subcontractor "B" were employed by general contractor "C" on the certification application filing date - Board directing that ballots cast in representation vote be counted
BEFORE: Inge M. Stamp, Vice-Chair.
APPEARANCES: Mark Wright, Larry Lineham, John Charlebois and Victor Fragomeni for the applicant; Denis Michel and Ronald Bt~langer for the responding party.
DECISION OF THE BOARD; June 22, 1999
This is an application for certification filed pursuant to the construction industry provisions of the Labour Relations Act, 1995 (the "Act").
A representation vote was held in this matter. The ballot box was sealed pending the Board's determination as to who was the employer of the individuals on the voters' list.
At the outset the responding party, R.M. B6langer Limited ("RMB"), took the position that it did not employ any electricians and therefore there were no employees in the bargaining unit.
This matter was heard over the course of three days. A total of four witnesses testified regarding the issue in dispute. In reaching this decision, I have considered all of the oral evidence, the exhibits and materials filed, the submissions of the parties and the cases cited. Where there are differences in the evidence I have considered the demeanour of the witnesses, the clarity of their evidence, the witnesses' apparent ability to recall events and to resist the tug of self-interest in their responses to the questions, and what seems most reasonable and probable in all of the circumstances having regard to the evidence as a whole. The following are the facts as I have found them.
This application for certification was filed on October 16, 1997. The employees in the bargaining unit affected by this application were employed by 715720 Ontario Inc. c.o.b. as Tri-Star Electric ("Tri-Star") until sometime prior to October 16, 1997. Records of Employment ("ROE") forms completed by Tri-Star indicate October 2 and 3, 1997 and September 25, 1997 as "last day for which paid" for the employees. Mr. Charlebois' last day of employment with Tri-Star is shown as October 2, 1997. Mr. Fragomeni's last day is shown as October 3, 1997.
Tri-Star was an electrical subcontractor to RMB. The sole owner and/or principal of TriStar is Wayne Lytle. The work at the time of this application was performed at Coll~ge Bor6al in Sudbury, Ontario.
Tri-Star and Mr. Lytle ran into serious financial difficulties. By July or August of 1997 some paycheques had bounced. At this time Tri-Star paid the electricians by cash or certified cheques or money orders.
On October 6, 1997 Revenue Canada directed RMB to pay any monies owing to Tn-Star to Revenue Canada with respect to Tri-Star's income tax debt for $386,864.41. These monies were to be paid to the Receiver General on behalf of the tax debtor, Tri-Star. The order states that failure to pay the Receiver General as required would result in RMB becoming liable to pay those amounts to Her Majesty.
Lytle handed out paycheques to Tri-Star's electricians working on the Coll~ge Bordal site for the week September 28 to October 4, 1997. Later in the day Lytle asked the cheques be returned to him. Lytle told the employees there was no money in the bank. Subsequently, Lytle delivered new cheques issued by RMB. Lytle told the employees to retain the Tri-Star pay stubs for the record of deductions. The net amount on the RMB cheques corresponded to the net amount on the Tri-Star pay stubs. The October 9, 1997 cheques issued by RMB were marked as "Advance". The October 16, 1997 cheques had no such notation.
Lytle explained to the employees that he had a problem with Revenue Canada, they closed his account and he had to get Ron &langer to issue the cheques directly to the men rather than deposit the money into Tri-Star's account.
Prior to the next paycheques of October 16, 1997 Wayne Lytle requested the employees to sign TD1 forms with individuals names already inserted. It was the understanding of Mr. Charlebois and Mr. Fragomeni that this was done at the request of the RMB and/or Mr. Belanger.
On October 16, 1997 cheques (without the word "advance") were issued by RMB and delivered by Lytle. The appropriate deductions were made as indicated on a handwritten stub in the envelope with the cheque. Mr. Charlebois, one of the electricians, and a sub-foreman, considered himself as an employee of Bdlanger at this point in time. The application for certification is filed with the Board on October 16, 1997.
On the following pay day, October 23rd, Wayne Lytle informed the employees that he had no paycheques for them. Lytle informed the crew that he was picking up his stuff and was going to leave and suggested unless the men wanted to work for nothing they should probably do the same. Mr. Charlebois called Larry Lineham at the union and told him what had happened.
At some point after the two pay periods in which RMB issued cheques to employees, Tyco Electrical ("Tyco") was awarded the subcontract to complete the electrical work at College Boreal for RMB. A meeting took place at the Boreal site with the union on October 27, 1997. The electricians signed TD 1 forms for Tyco and started to work for the new subcontractor.
1997 T4 statements were prepared for Vic Fragomeni and John Charlebois and several other electricians by Revenue Canada from the payor's records. The payor is shown as "R.M. B~langer Ltd." These statements were sent to the employees that are affected by this application by Revenue Canada and cover the period in which the two cheques were issued by RMB, October 9 and 16, 1997. Each one of these T4 - 1997 "Statement of Remuneration Paid" is stamped: "Prepared from payor's records by Revenue Canada".
Mr. Belanger testified he first became aware of Tri-Star's financial problems when he received the garnishee from Revenue Canada for $396,964.41 sometime after October 6, 1997, the date of the order to pay the Receiver General any monies owing by RMB to the tax debtor Tri-Star.
In examination-in-chief Mr. B6langer when questioned whether he had instructed Lytle to have TDl 's signed stated "I don't remember telling Mr. Lytle to have TD1 signed." When asked about the 1997 - T4 forms prepared by Revenue Canada from the payor's records Mr. Bdlanger testified "no I did not provide any information that I know of to Revenue Canada." He indicated he did not check with his staff.
RMB received correspondence from Revenue Canada saying it was the employer of the electricians from October 6 to October 24, 1997. Letters from Revenue Canada dated May 29, 1998 to Mr. Charlebois ruled that he was an employee of RMB for the purpose of the Canada Pension Plan and the Employment Insurance Act from October 6 to 24, 1997. The correspondence sent to RMB was not put in evidence before the Board. A memo dated June 19, 1998 from a Chartered Accountant to the responding party's counsel discusses Revenue Canada's factors indicative of employee status. The memo is worded: "DRAFT - for discussion purposes". There is no evidence that RMB appealed or intended to appeal Revenue Canada's ruling with respect to the assessment for the period of October 6 to 24, 1997.
Mr. Belanger's evidence that he was not aware of Tri-Star's financial difficulties until the Revenue Canada garnishee of October 6, 1997 is not credible. His answers in cross-examination were not responsive. There were indications before the garnishee of October 6, 1997 of serious financial problems. A decision of the Board (differently constituted) dated January 20, 1997 directs RMB prior to making any progress billing payment to Tri-Star, under its contract or subcontract, to obtain written confirmation from the union that all payments owing by Tri-Star under the collective agreement and then Minutes of Settlement dated January 14, 1997 have been made. If RMB failed to comply with the Board's order it would become liable to the union for the payments.
Counsel for the applicant submits this is a simple case - who was the employer on the date of application, October 16, 1997? All electricians received their paycheques from RMB on the 16th. On the 9th of October cheques were received marked advance from RMB with a Tri-Star deduction slip. Employees were asked to sign TD1 forms for Bdlanger as told to them by Lytle. Revenue Canada determines RMB is the employer from the payee's records for purposes of Canada Pension Plan and Unemployment Insurance. Both Mr. Charlebois and Mr. Fragomeni believed RMB was their employer when they received the second paycheque from RMB. Counsel submits RMB is the employer until Tyco took over the subcontract. The applicant relies on Ellis-Don Limited, [1986] OLRB Rep. Aug. 1076, in support of its position.
Counsel for the responding party submits the period between October 16 and 23 is a short period of time after which period Tyco takes over the contract. It is the garnishment that changes everything on this project. It is the applicant's burden of proof and the applicant has not brought Wayne Lytle or Tri-Star's foreman, Doug Walter to testify. Counsel asserts the union is relying on the responding party to make its case. It is not the responding party's responsibility to bring Tri-Star to the hearing. Counsel for RMB submits it is not reasonable for the employees to conclude they are working for RMB because they received cheques from RMB.
Counsel for the responding party submits the evidence regarding the Thl forms is third hand evidence. There is no evidence of any bankruptcy of Tri-Star or any evidence that the relationship between Tri-Star and RMB was terminated before October 23, 1997. Tri-Star was on site, nothing changed except cheques are issued by RMB. Doug Walter and then Lytle supervised the electricians, collected the time sheets and handed out the cheques. The alleged TD1 forms are not before the Board.
Counsel asserts RIvIB was the general contractor who hires the subcontractors. Any control exercised by RMB was in its capacity of general on site. Mr. Belanger was not on site directing the work. He did not exercise any control over the employees. Buying materials for a subcontractor does not create control over the employees. Tri-Star is not told to leave the site until October 23rd. What occurred are advances made to a subcontractor, whether wrongfully or not. Counsel asserts the monies paid are deductions to contract not paycheques to employees. There is no direction and control over the employees performing the work. Counsel states remuneration does not create an employee-employer relationship, it is one factor to look at.
The responding party cites Templet Services, [1974] OLRB Rep. Sept. 606 and the quote from Belcourt Construction (Ottawa) Limited, [1971] OLRB Rep. June 321 in support of its position. Counsel asserts there is no intent to create an employer-employee relationship. RMB tried to continue its project by advancing payments. RMB is not "certified" but goes out and finds a "certified employer", Tyco. Counsel submits RMB was not obligated to do that but it was trying to follow the Board's January 20, 1997 decision.
Decision
This is an application in the construction industry. The relevant time period is the date of application October 16, 1997. For reasons best known to RMB it continues to bail out Tri-Star. In January 1997, as part of Minutes of Settlement involving Tri-Star and RMB, the Board orders RMB to make sure that Tri-Star has made all the required payments under the collective agreement and the settlement. If Tri-Star failed to make the required payments RMB would be liable for the payments pursuant to the Board's order. The Board further directed RMB to subcontract the remaining work at College Bordal to a company bound to the applicant's collective agreement if Tri-Star did not complete the work. If RMB did not comply with the Board's order it would be liable for all damages suffered by the union or its members.
When RMB received the garnishee from Revenue Canada it decided to ignore the direction from Revenue Canada and paid the employees directly. The 1997-T4 income statements were prepared from RMB's records. Appropriate deductions and payments were made with respect to CPP and UIC. There is no evidence that RMB appealed Revenue Canada's treatment of these electricians as being in the employ of RMB.
RMB made a decision to put these employees on its payroll when their sub Tri-Star was no longer in a position to pay them. There is no direct evidence with respect to the TD 1 form signed by employees other than they were told it was for RMB. In light of the documentary evidence from Revenue Canada it is reasonable to accept that TD 1 forms were signed for RIVIB.
RMB's interest as the general contractor is to get the work done. RMB could have subbed to Tyco at the first sign of trouble with Tri-Star. As of the January 20, 1997 decision of the Board RMB was aware of financial difficulties with Tri-Star and possible consequences to RMB.
The criteria as set out in paragraph 26 of York Condominium Corporation, [1977] OLRB Rep. Oct. 645, are factors to assist in determining which of two or more entities are the employer for the purposes of the Labour Relations Act, 1995. At the point in time when RMB decided to pay the employees directly rather than risk the loss of the electricians when Tri-Star could no longer pay them it effectively took control. Wayne Lytle had no money to pay his employees. They were not going to work for free. In the circumstances, from the employees perspective it was reasonable to assume they were now on RMB's payroll. The fact that Lytle or Wilson were supervising them does not alter the fact that it was RIvIB that now controlled their employment and ensured they continued to receive a paycheque.
In Ellis-Don, supra, the Board dealt with a similar situation involving a bankruptcy. Paragraphs 5, 6 and 7 state:
It is agreed that during the period from September 13th to October 7th before TMT Limited took over the job, a series of interim arrangements were made at the job. As a consequence, the previous employees of Durie Mosaic and Marble were put on the payroll of Ellis-Don; contributions were made by Ellis-Don to the various funds under the collective agreement which Durie had been bound and the cheques that were issued were Ellis-Don cheques. Indeed, Mel Durie, the owner of Dune Mosaic and Marble continued to control the project, acting on the one hand as a representative of the trustee in bankruptcy, however, also retained as a consultant by Ellis-Don. From Ellis-Don's point of view, therefore, things continued as before with Mr. Durie looking after the job in the interim. That is, Ellis-Don did not specifically direct or control Mel Durie. On the other hand, Ellis-Don admits that they paid Durie but as a consultant not an employee.
Counsel for Ellis-Don therefore argues that Ellis-Don was not the employer of the tradesmen in question during this interim period. That the arrangements were essentially the same as before and, consequently, Ellis-Don did not assume the relationship of employer vis-a-vis the tradesmen in question.
Unfortunately we cannot accept the representations of counsel for the respondent in this matter. Clearly, in the interim period the relationship between Ellis-Don and the tradesmen on the site did change although we have no doubt that the respondent Ellis-Don acted with the best of intentions to protect the tradesmen in the face of the bankruptcy proceedings. In so doing, however, Ellis-Don became the employer of those tradesmen. Not only did the respondent Ellis-Don pay the employees and make the relevant contributions to the various funds pursuant to the collective agreement that Durie had in retaining Mel Durie, even as a consultant, Ellis-Don assumed ultimate control of the work being performed by the tradesmen. We have no doubt therefore that the respondent Ellis-Don became the employer of the persons in question for the period between September 13th and October 7th. Thus, on October 4th, the date of the making of this application, Ellis-Don was clearly the employer.
Having considered all of the relevant evidence and the submissions of the parties the Board finds that on the application date, for the purposes of the Labour Relations Act, 1995, the employees affected by this application were in fact employees of RMB.
This matter is referred to the Manager of Field Services to count the ballots.