Ontario Labour Relations Board
0176-00-R Sheet Metal Workers’ International Association, Local 30, Applicant v. Inter Wide Sheet Metal Ltd., Royal Windsor Mechanical Inc., Responding Parties.
BEFORE: Harry Freedman, Vice-Chair, and Board Members J. G. Knight and G. McMenemy.
DECISION OF THE BOARD; May 10, 2000
1This is an application under sections 69 and 1(4) of the Labour Relations Act, 1995, S.O. 1995, c. 1 (the "Act") for declaratory and other relief. The applicant seeks an order declaring that the responding parties are bound by the collective agreement between the Ontario Sheet Metal and Air Handling Group and the Sheet Metal Workers’ International Association and Ontario Sheet Metal Workers’ Conference effective from May 1, 1998 until April 30, 2001 (the “Collective Agreement”) by virtue of a sale of part of a business from Inter Wide Sheet Metal Ltd. (“Inter Wide”) to Royal Windsor Mechanical Ltd. (“Royal Windsor”) and because Royal Windsor and Inter Wide are “related employers” for purposes of section 1(4) of the Act.
2The application was made on April 17, 2000. The accompanying Certificate of Delivery (Form A-24) states that the responding parties were served on April 14, 2000 by delivering a copy of the necessary documents required by Rule 25 of the Board’s Rules of Procedure to the responding parties by facsimile transmission. The Registrar faxed a Confirmation of Filing of Application Under Section 69 and/or Subsection 1(4) (Form B-16) to the fax numbers provided for the responding parties in the application, (416) 213-8679 on April 20, 2000 at approximately 1:00 p.m.
3As of the date of this decision, the responding parties have not filed a Response to Application Under Section 69 and/or Subsection 1(4) of the Act (Form A-25). The Board’s Rules of Procedure explicitly stipulate the consequences of failing to comply with the filing requirements contained in the Rules. Rule 41 of the Board’s Rules of Procedure provides:
If a party receiving notice of an application does not file a response in the way required by these Rules, he or she may be deemed to have accepted all of the facts stated in the application, and the Board may cancel a hearing or consultation, if one is scheduled, and decide the case upon the material before it without further notice.
A responding party in a proceeding under sections 69 and 1(4) must, within 10 days (excluding Saturdays, Sundays and holidays) after the application was delivered to it, file its response. Furthermore, the Notice to the Responding Party of Application Under Section 69 And/Or Subsection 1(4) Of The Act (Form C-9) delivered to the responding parties states in paragraph 7:
If you do not file your response and other required documentation required by the Board’s Rules, the Board may not process your response and documents, and may decide the application without further notice to you. Furthermore, you may be deemed to have accepted all the facts stated in the application.
If there is, in any event, not enough time to prepare a response and more time is needed to compile the information and draft a response, a responding party may request that the Board exercise its power under Rule 49 to lengthen the time for filing its response if it provides adequate reasons for the Board doing so and makes its request before the time for filing the response has expired. Where, however, the responding party does nothing after having an application served on it, there is no reason for the Board to exercise its discretion to extend the time for filing a response.
4An application under sections 69 and 1(4) of the Act affects the employees, if any, of the responding party in respect of whom the applicant seeks a declaration that it holds bargaining rights (the “target”) by virtue of a sale of a business or by reason of the Board declaring that the responding party for whom the applicant already holds bargaining rights and that “target” responding party are a single employer for purposes of the Act. The Board requires the responding parties to post a notice of the application together with the application where they are most likely to come to the attention of the employees affected. Paragraphs 3, 4 and 5 of the Confirmation Of Filing Of Application Under Section 69 And/Or Subsection 1(4) Of The Act (Form B-16) sets out the posting requirement. Paragraph 5 of Form B-16 states:
The applicant should also verify the posting and should complete and file section 2 of the Confirmation of Posting form (Form A-26) immediately. If there has been a failure to post notices, the applicant should notify the Registrar immediately.
There is nothing in the file which indicates that either of the responding parties has posted the requisite notice. The applicant has neither filed a verification of the posting nor contacted the Registrar to advise that the posting had not been done. Nevertheless, the application may proceed to disposition since Inter Wide was, prior to the application, bound by the Collective Agreement and Royal Windsor (the “target”) advised the Board, by letter dated May 8, 2000: “…we did not have any Sheet Metal workers or apprentices Sheet Metal workers in our employment yet.” As the application only affects employees who would be covered by the Collective Agreement, that is sheet metal workers and sheet metal worker apprentices, and as Royal Windsor did not have any such employees at any time material to this application, no notice to employees is necessary.
5The applicant alleges that Inter Wide operated a sheet metal business in the ICI sector of the construction industry, but is no longer active. It alleges that Royal Windsor currently operates a sheet metal business in the ICI sector of the construction industry and has either employed persons or engaged subcontractors to perform work at construction sites including a project at 200 Morton Way in Brampton. The applicant also alleges that Bruno DeGasperis was the principal of Inter Wide and is the president and treasurer, as well as being a director of Royal Windsor. It further alleges that Mr. DeGasperis exercised managerial control over Inter Wide when it was actively engaged in construction work and currently exercises managerial control over Royal Windsor and runs its business on a day to day basis.
6The application alleges that the parties to this proceeding entered into a Memorandum of Agreement about two weeks prior to the filing of this application in which they agreed that Royal Windsor and Inter Wide “are associated or related activities or businesses under common control or direction, and as such…are related employers pursuant to subsection 1(4) of the Act.” The parties also agreed that there was a sale of a part of a business from Inter Wide to Royal Windsor “within the meaning of section 69 of the Act, and as such, they are predecessor and successor employers respectively, within the meaning of section 69 of the Act.” They also agreed that the Board should issue declarations with respect to successor status and related status to be effective April 6, 2000.
7Both the memorandum of agreement and the application itself indicate that the applicant seeks an order “declaring that Inter Wide and Royal Windsor are related employers pursuant to subsection 1(4), and are predecessor and successor employers, respectively, pursuant to section 69, of the Labour Relations Act, 1995.” Counsel for the applicant, by letter to the Board dated May 4, 2000, requested that the Board determine the application without a hearing on the basis of the material filed by the applicant as the responding parties had not delivered a response to the applicant. Royal Windsor, by letter dated May 8, 2000, in addition to advising the Board that it did not employ sheet metal workers also stated that it “…did not intend to file or respond to the application.”
8The Board is satisfied that it can proceed to determine this matter based on the material filed by the applicant. While there is no doubt that the facts alleged (and accepted by the responding parties pursuant to Rule 41) provide a basis for finding that there has been a sale of part of a business from Inter Wide to Royal Windsor and for finding that Inter Wide and Royal Windsor are related employers, a declaration that two employers are related pursuant to section 1(4) of the Act does not mean that the two related employers are one employer for purposes of the Act. The distinction between declaring two employers “related” and two employers “a single employer” is, in our view, significant. The former declaration need not result in both employers being bound by the collective agreement to which one of them is bound while the latter declaration does have that result. The Board in Malfar Mechanical Inc., [1998] OLRB Rep. Sept./Oct. 829 commented on that distinction at pages 832-834:
The Act does not use the term “related employers”; rather it speaks of “associated or related activities or businesses” being “carried on ... under common control or direction.” When those circumstances exist, the Board has the discretion to treat the entities that carry on associated or related activities or businesses under common control or direction as constituting one employer for purposes of the Act and to grant a declaration to that effect and other relief as is appropriate….
Where the Board issues a single employer declaration in respect of entities working in the ICI sector of the construction industry, the entities become one employer for purposes of the Act and the ICI collective agreement. The ICI collective agreement by which those two entities become bound applies to them as a single employer, albeit an employer comprised of two parts.
…there is, in my opinion, an important and significant distinction between having the Board declare that two entities are one employer for purposes of the Act and having the Board declare that two entities are related employers. Counsel for the applicant relied on the Board's decision in Dobben Group Inc., [1996] OLRB Rep. Feb. 57 to submit that the distinction between related employer and single employer declarations is well understood and that a finding of relatedness, i.e. related activities or businesses carried on under common control or direction, does not invariably result in the Board issuing a single employer declaration. The Board in Dobben Group Inc. wrote at page 58:
It is not disputed that all four of the responding parties are under the common control and direction of Lucas Dobb. Mr. Dobb is the sole officer and director as well as the individual responsible for the day‑to‑day operations of all of the responding parties. The issues to be determined are whether Con‑Ex and the Dobben group of companies carried on associated or related activities or businesses and whether the Board should exercise its discretion to declare Con‑Ex and the Dobben group of companies to constitute one employer for the purposes of the Act.
Although the Board held that Con‑Ex and Dobben group of companies carried on associated or related activities or businesses it was not appropriate to declare that Con‑Ex and the Dobben group of companies constituted one employer.
A finding of "relatedness" may give rise to a single employer declaration; it may also have significance in subsequent proceedings where the identities or functions of the persons who control the entities are in issue. There may well be other consequences that flow from a finding that two employers are "related". Finding two employers are related therefore may have some meaning other than being synonymous with a single employer declaration.
All of the parties agreed the responding parties are bound by the Collective Agreement and the necessary elements exist to enable the Board to issue a single employer declaration. Furthermore, since it appears that the applicant seeks declarations establishing the basis for Royal Windsor being bound by the Collective Agreement, the Board is satisfied that it should exercise the discretion under section 1(4) of the Act to declare that the responding parties are a single employer for purposes of the Act.
9Therefore, having regard to the material filed by the applicant, the Board hereby declares that:
(a) Inter Wide and Royal Windsor are a single employer for purposes of the Act, effective April 6, 2000;
(b) Inter Wide sold a part of its business to Royal Windsor and therefore Royal Windsor is the successor of Inter Wide within the meaning of section 69 of the Act, effective April 6, 2000; and
(c) Inter Wide and Royal Windsor are bound by the collective agreement between the Ontario Sheet Metal and Air Handling Group and the Sheet Metal Workers’ International Association and Ontario Sheet Metal Workers’ Conference.
“Harry Freedman”
for the Board