[1999] OLRB REP. JULY/AUGUST 603
3558-97-R Labourers' International Union of North America, Local 183, Applicant v. Gibraltor Building Corp. Ltd., Harrowston Developments Corporation, First City Trust Company c.o.b. as Archway Homes, and 585753 Ontario Limited c.o.b. as New Age Homes, Responding Parties
BEFORE: M. A. Nairn, Vice-Chair, and Board Members J. G. Knight and G. McMenemy
APPEARANCES: Mark Lewis for the applicant; Brian D. Mulroney for the responding parties.
DECISION OF THE BOARD; July 12, 1999
Board File No. 3558-97-R is an application brought pursuant to sections 69 and 1(4) of the Labour Relations Act, 1995 (the "Act"). At the hearing the parties filed an agreed statement of fact. The documents referred to in that agreed statement were filed as exhibits. In its submissions, the applicant pursued the argument that Gibraltar Building Corp. Ltd. ("Gibraltor") and 585753 Ontario Limited were one employer within the meaning of sub-section 1(4) of the Act. There was no dispute that there was common control or direction in that Mr. Somer Rumrn is the principal of both relevant entities. There is a dispute between the parties as to whether or not the entities carry on associated or related activities. However, the responding parties allege that the union had abandoned any bargaining rights that it held in respect of Gibraltor and cannot now pursue a section 1(4) declaration in respect of Gibraltor and the numbered company.
The agreed statement of fact provides as follows:
Somer Rumm is the principal of Gibraltor Building Corporation Limited, one of the Responding Parties in these proceedings.
In 1991, Somer Rumm was a member of management of First City Trust Company and its predecessor, Consolidated Building, for many years.
First City Trust Company was a property developer which had a number of unsold lots in two residential housing developments: one at Trelawny Crescent and Tenth Line, Mississauga, the other at Heart Lake in Brampton.
First City Trust Company decided to build on the lots and to sell them. At the time, First City Trust Company was undergoing financial problems. In order to limit liabilities to an extent, Gibraltor Building Corporation Limited was incorporated.
On June 30, 1992, First City Trust Company entered into an agreement with Gibraltor Building Corporation Limited to complete the construction on unsold lots in the Trelawny and Heart Lake developments. The agreement between First City Trust Company and Gibraltor Building Corporation Limited is found at Tab 6 of the Respondents' Documents Brief. Gibraltor Building Corporation Limited was paid from the revenues arising from the sale of the houses.
Subsequently, the Labourers' International Union of North America, Local 183, brought proceedings under the related employer/sale of a business provisions of the Labour Relations Act against a number of companies including First City Trust Company and Gibraltor. These proceedings were resolved by Minutes of Settlement dated April 30, 1993. The Minutes of Settlement are found at Tab 9 of the Respondents' Documents Brief. [Tab 8 filed contains the Minutes of Settlement. Tab 9 is the decision of the Board issued pursuant to those Minutes of Settlement.]
Under the terms of the Minutes of Settlement between the Labourers and Gibraltor Building Corporation Limited and the subsequent Order of the Ontario Labour Relations Board, Gibraltor agreed to be bound to the collective agreement then in effect between the Labourers and what was then called the Toronto Housing Labour Bureau. A copy of the Memorandum of Settlement pertaining to that collective agreement is found at Tab 3 of the Respondents' Documents Brief.
Following the execution of the Minutes of Settlement, Gibraltor Building Corporation Limited completed both the Trelawny and Heart Lake developments in accordance with the terms of the collective agreement.
Gibraltor was not involved in any construction prior to its work on the Heart Lake and Trelawny projects. It has not been involved in any construction in Board Area 8 since that time.
In 1994, Mr. Rumm sought to build on land where First City Trust Company was not the owner. To do so, he used 585753 Ontario Limited, a company incorporated in 1984 and owned by his wife. 585753 Ontario Limited had not previously been involved in residential construction. In or about 1994, Mrs. Rumm transferred the shares of 585753 Ontario Limited to Mr. Rumm. The two were concerned that if Mrs. Rumm remained a shareholder in the company, she might somehow incur liability, for example, with respect to workplace safety.
In 1994, 585753 built two houses in Brampton. Mr. Rumm believed that if he was building on property other than property owned by First City Trust Company, he was not required to build in accordance with the terms of the collective agreement. The Union filed a grievance concerning these 2 houses against Gibraltor Building Corporation but did not pursue the grievance to arbitration. No related employer/sale of a business proceedings occurred. The grievance and related correspondence are found at Tabs 10, 11 and 12 of the Respondents' Documents Brief.
Beginning April, 1996 585753 Ontario Limited built 38 homes in Ajax and 12 homes in Mississauga. Again, because these homes were built on land not owned by First City Trust Company Limited, Mr. Rumm believed that he did not have to apply the collective agreement. Construction on these houses continued into late 1997.
The collective agreement to which Gibraltor was bound had a term extending from May 1, 1992 to April 30, 1995. The collective agreement was subject to a year to year automatic renewal provision.
The Union did not attempt to renew the 1992 to 1995 agreement upon its expiration until the filing of this Application. Indeed, the Union did not contact Gibraltor Building Corporation Limited at all from May 17, 1994, the date of the grievance referred to in paragraph 10 above, and found at Tab 10 of the Respondents' Documents Brief until December, 1997, when it filed a grievance pertaining to the Ajax work after that work had been completed and more than six weeks after the homes had been occupied.
Gibraltor Building Corporation Limited was located at 885 Don Mills Road, Suite 320, Don Mills until September, 1994. In September, 1994, Gibraltor moved to its current location at 30 Intermodel Drive, Unit No. 4, Brampton. At all times, Gibraltor Building Corporation Limited was listed in either the Toronto or Halton/Peel telephone directories. Following the move, Gibraltor's mail and telephone calls were redirected to the Brampton office for a number of months.
The Union's grievance of December, 1997, was settled on the basis that Gibraltor Building Corporation Limited would complete work on the final 6 houses in the Mississauga project in accordance with the provisions of the collective agreement, without prejudice to the right of Gibraltor Building Corporation Limited to assert that the Union had abandoned its bargaining rights in the interim. The settlement also contemplated that no further work would be performed by Gibraltor prior to resolution of the bargaining rights issue by the Board. The Minutes of Settlement settling the grievance are found at Tab 17 of the Respondents' Documents Brief.
Gibraltor Building Corporation Limited owns land in Board Area 8 upon which it may seek to build houses. Gibraltor Building Corporation Limited and the Union have had the meeting referred to in paragraph 2 of the Minutes of Settlement found at Tab 17 of the Respondent's Documents Brief but have been unable to resolve the issue with respect to the Union's bargaining rights. Accordingly, the parties have submitted this matter to the Board for resolution, as contemplated in those Minutes of Settlement.
In order for there to be a finding pursuant to section 1(4) of the Act there need be three things established. The first factor, that there be more than one entity, exists without dispute on the facts of this case, those entities being Gibraltor and the numbered company. Secondly, as noted, there is no dispute that the second factor, the existence of common control or direction, also exists. The third factor is that the entities carry on associated or related activities, whether simultaneously or not. Both Gibraltor and 585753 Ontario Limited are residential contractors engaged in the construction industry. The only distinction made between the activities of the two was with reference to the ownership of the land on which the companies built. An assessment of "activities" relates to the nature of the work being performed. Ownership of the land is irrelevant. As the Board noted in Frank Plastina Investments Ltd. (1986) OLRB Rep. June 720 at para. 20:
... it is apparent that the section was intended to apply to a wide variety of commercial activities, even when an employer's main or principal business concern may be something else. ... The fact is, that a firm engaged in the construction business can, with relative ease, become involved, from time to time, in various sectors, subdivisions, phases, or specialized kinds of construction work, depending largely upon the business opportunities which present themselves, and we do not think we should readily hold that those activities are "unrelated" - particularly if they are being undertaken at the same time and involve common managerial or employee ......... The fact that FPI is a sewer and watermain contractor while Sherwood is a builder is not, in our view, significant. Not only are these both parts of the construction industry, but the FPI collective agreement specifically recognizes the possibility of doing that kind of work.
The collective agreement between Gibraltor and the applicant recognizes the union as the bargaining agent for all of Gibraltor's "construction employees engaged in on-site construction of all types of low-rise housing" in Board Area 8. That general description encompasses the same work that 585753 Ontario Limited was performing. We have no hesitation in concluding that these entities carry on associated or related activities.
Thus, it is the case that the factors necessary for making a finding pursuant to sub-section 1(4) of the Act exist in this case. There is more than one entity under common control or direction carrying on associated or related activities, whether simultaneously or not. However, the responding parties argue that the trade union had abandoned any bargaining rights it held with Gibraltor prior to the bringing of this application and therefore no declaration can or should issue. The union disputes that it had abandoned its bargaining rights, but in the alternative argues if it has been lax in asserting those bargaining rights, that may weigh as a factor in the exercise of the Board's remedial discretion. The applicant made clear that it was not seeking any damages, as the last project had been completed in accordance with the terms of the collective agreement pursuant to the settlement of the December 1997 grievance. The applicant seeks prospective declaratory relief only. We note that the applicant did not pursue any claim pursuant to section 69 of the Act. That aspect of the application is hereby dismissed.
The facts on the issue of abandonment can be summarized as follows. In April 1993 Gibraltor agreed to be bound to the collective agreement. In May 1994, a grievance was filed against Gibraltor for failing to use members of the applicant and for failing to comply with the terms of the collective agreement. That grievance names a Brampton site in its opening reference. In the body of the grievance a Markham site is named. Counsel for Gibraltor advised the union at that time that Gibraltor was not involved in the Markham site. The union responded on May 24, 1994 by agreeing that the only location concerning "your client" was the project in Brampton. In fact that Brampton project was being built by 585753 Ontario Limited. However the grievance was not pursued even as against Gibraltor and no section 1(4) application was filed by the union at that time.
On April 30, 1995 the collective agreement with Gibraltor expired. On May 1, 1995 the collective agreement automatically renewed for a period of one year. On May 1, 1996 the collective agreement with Gibraltor automatically renewed for a second one year period. On May 1, 1997 the collective agreement with Gibraltor automatically renewed for a third time. In December 1997, some eight months later, the trade union filed a grievance and this application.
There is no evidence that Gibraltor engaged in any construction activity after April 1993. There is also no evidence that Gibraltor went out of business during this period. The evidence is that Gibraltor continued to exist as an inactive builder, and remained listed in the telephone book. There is no evidence of any contact from the trade union between May, 1994 until December, 1997, during which time the collective agreement automatically renewed three times.
Between May, 1994 (the completion of the 2 homes in Brampton) and April, 1996, 585753 Ontario Limited was not engaged in any construction activity. In April 1996, 585753 Ontario Limited began residential construction in Board Area 8. In December, 1997, the union became aware of the two projects involving 585753 Ontario Limited and brought this application.
In Aloia Bros. Concrete Contractors Inc. (as yet unreported decision of the Board dated April 26, 1999, Panel: MacDowell, Chair), [now reported at [1999] OLRB Rep. Mar./April 127] the Board recently summarized its approach to the issue of the abandonment of bargaining rights as follows:
88.It is now well established that the continuation or "abandonment" of bargaining rights is a question of fact to be determined by the Board, as necessary, in the course of proceedings before it (see John Entwhistle Construction Limited, [1979] OLRB Rep. Nov. 1096; confirmed by the Divisional Court at (1980) 1980 CanLII 1826 (ON HCJ), 33 OR. (2d) 670). That finding depends upon the behavior of the union in the particular circumstances under review.
89.In a typical case, there has been some obvious inaction by a trade union in circumstances where action might be expected; and this has prompted the Board to conclude that the union has abandoned its bargaining rights. However, there is no particular form of behavior which is necessarily determinative in every situation. What the Board looks for, is some unequivocal evidence of action or inaction from which an abandonment of bargaining rights might reasonably be inferred. And like any other finding of fact, the Board makes that determination on the balance of probabilities.
(and see G. S. Wark Limited [1996] OLRB Rep. Sept./Oct. 811 at paras. 9-14 inclusive).
- The issue between the parties is very narrow. The responding parties rely on Belleville and District Exchange [1963] OLRB Rep. May 114, where the Board concluded that,
……as a general rule [the Board] will have regard to a second automatic renewal but thereafter the onus is on the union to satisfy the Board that it has not abandoned its bargaining rights. This it may do by showing that it retained an interest through contact with the other party to the agreement. Just what contact is necessary depends on the facts in each particular case. In this case there was none.
(And see Clifton Hotel [1963] OLRB Rep. Dec. 519; Pinkerton's of Canada Limited [1986] OLRB Rep. June 818; O.& W Electronics Limited [1970] OLRB Rep. Jan. 1213; Lang Lake Forest Products Inc., [1994] OLRB Rep. Oct. 1343; and G. S. Wark Limited supra).
The applicant referred us to the Board's decisions in KNK Limited [1991] OLRB Rep. Feb. 209; E.S. Fox Limited [1991] OLRB Rep. July 819; and PCL Constructors Eastern Inc. [1995] OLRB Rep. Oct. 1277. Each was an application brought pursuant to section 1(4) of the Act and each dealt with the effect of trade union inactivity or delay. Those cases, however, stand for the proposition that the Board may well be prepared to grant a modified remedy in a section 1(4) application in response to trade union inactivity or delay in bringing the application after it learns of the related activity, unless that conduct amounts to an abandonment of bargaining rights. In this case the union acted once it learned of the activity of the numbered company and its connection to Mr. Rumm. It is the union's inaction in relation to Gibraltor that is challenged here.
However in R. Reusse Co. Ltd. [1988] OLRB Rep. May 523; Steds Limited [1992] OLRB Rep. Jan. 67 and M. C.A. Carpentry Ltd. and Labourers' International Union of North America, Local 183 [1998] OLRD No. 2392 decision of the Board dated July 3, 1998 the Board does comment on the effect of a trade union's inactivity in the face of inactivity on the part of the employer with whom it holds bargaining rights, and concluded, in MCA Carpentry Ltd., supra, that:
... inactivity on the part of a union is not in and of itself sufficient to establish abandonment. One must look at whether the employer in the construction industry was working within the geographic area for which the union holds bargaining rights; and, there must be some reasonable basis upon which to conclude that a union ought to have known that the employer was active, e.g. a union is not required to search all building permits in an area or if there is no reason to believe that a union ought to have known about an employer's activity in a particular area, the union is not required to apply for conciliation services.
(emphasis added)
Based on an assessment of factors present in that case, the Board found that the union had not abandoned its bargaining rights. However the Board did make its declaration effective only from the date of the decision with no resulting retrospective relief.
This juxtaposition of both employer and trade union inactivity was earlier considered in Able Construction (Kitchener) [1963] OLRB Rep. Sept. 317 at pages 318-319 as follows:
……we must determine whether, in all the circumstances of this case, the union has abandoned its bargaining rights. The circumstances are as follows: under its terms the collective agreement remained in force until May 1st, 1960, and, by its terms, would continue in force for successive one-year periods if no notice of termination or amendment was given.
During the first and second of these one-year periods, that is, between May 1st, 1960, and May 1st, 1962, there was an interruption in the company's operations in the area affected by the agreement from the fall of 1960 to July or August, 1961. Thus it is only from the date in July or August, 1961, on which the company resumed its operations in the Kitchener area until March, 1963, the date on which the union representative first approached the company, that it can be argued that the union has "slept on its rights". Having in mind that the parties agreed to be bound by a collective agreement that would continue in effect until terminated by one or the other of them, and that the company ceased its operations in the area affected by the agreement during a considerable part of the time that the agreement has been allowed to continue in force, we are not prepared to hold that the union has abandoned its bargaining rights in this case.
In this case we are left with the question of assessing the relative effect of the inactivity of both Gibraltor and the applicant. Gibraltor did not operate throughout the period that the collective agreement automatically renewed three times. The applicant initiated no contact with Gibraltor. The line of cases from Belleville and District Builders Exchange, supra, all appear to be cases where the employer was operating. If the employer is inactive the decisions in R. Reusse Co. Ltd., Steds Limited and MCA Carpentry Ltd. allow the trade union to respond in kind without fear of a finding that it has abandoned its bargaining rights. However, all of those cases also assume that the trade union was aware of the employer inactivity or had some reasonable basis for believing the employer to be inactive. We have no such evidence. To the contrary, the last communication between the parties suggested that Gibraltor was active. There is no evidence that Gibraltor had any intention to stop operating or that it had made any representation to the trade union to that effect. The settlement of the 1993 grievance binds Gibraltor to the collective agreement and work was then completed pursuant to the terms of the collective agreement. The 1994 exchange of correspondence does not suggest that Gibraltor is out of the business, merely that it had no involvement in the Markham project. The inference is that it may well have had something to do with the Brampton project, that it was active; a matter not pursued by the applicant. One can abandon a grievance without abandoning bargaining rights. However, after that exchange the automatic renewal of the collective agreement occurs three times without any notice or communication from the trade union. One phone call to verify that no work was being performed after the second automatic renewal might well have been sufficient evidence to meet the onus which the case law suggests had then shifted to the trade union. Even evidence of a reasonable but unsuccessful attempt to contact Gibraltor coupled with no evidence of activity might well be sufficient. Based on the limited evidence before us however, we are compelled to assess the facts on the basis that the union ought reasonably to have understand Gibraltor to be active. Although this is a construction industry situation it arises outside of the ICI sector where factors particular to the scheme of province-wide bargaining may complicate the assessment. This is not a situation where the trade union delayed after learning of the facts relevant for the section 1(4) application. It filed the application upon learning of the projects underway in Ajax and Mississauga. What it failed to do was maintain its bargaining rights in respect of Gibraltor.
Thus notwithstanding that the requisite factors for a section 1(4) declaration exist in the circumstances, we are persuaded that it is appropriate to exercise our discretion against issuing such a declaration on the basis that the applicant had abandoned its bargaining rights with Gibraltor by the time of the filing of the application. Although the mischief sought to be avoided by section 1(4) of the Act exists in this case, the trade union has failed to assert its bargaining rights in any respect.
Having regard to the above, this application is dismissed.