1086‑99‑G United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 787, Applicant v. R N Mechanical Ltd., Responding Party.
BEFORE: Brian McLean, Vice‑Chair, and Board Members G. Pickell and A. Haward.
APPEARANCES: L. Steinberg and J. Caricatto for the applicant; George Vuicic, Paul Rigby and Rob Walters for the responding party.
DECISION OF THE BOARD; January 12, 2000
This is a referral of a grievance in the construction industry pursuant to section 133 of the Labour Relations Act, 1995 ("the Act").
At the commencement of the hearing, the employer raised a preliminary objection with respect to the arbitrability of the grievance. The parties agreed that the Board should decide the preliminary issue before hearing the merits of the grievance. This decision deals with that preliminary issue.
The Issue
- The employer argues that this grievance is unarbitrable because it is not bound to a collective agreement with the union. The employer acknowledges that it is among those employers listed in the collective agreement as being bound to the collective agreement, that its name appears on the list of employers that the Ontario Refrigeration and Air Conditioning Contractors Association ("ORAC") provides to the union prior to the commencement of bargaining and that it has remitted union dues and other remittances on behalf of employees. However, its position is that the union has never been certified to represent its employees and it has never entered into a written voluntary recognition agreement with the union. Under these circumstances, the employer argues it cannot be bound by a collective agreement regardless of how often its name appears in the agreement or in other documents. For its part, the union acknowledges that it has never been certified to represent the employer's employees and that there is no specific written voluntary recognition agreement. However, it argues that the employer gave ORAC the authority to voluntarily recognize and bargain with the union on its behalf.
The Facts
Joe Caricatto testified on behalf of the union. He is the union's business manager and has been the union's chief negotiator for nearly 20 years. In those capacities, Mr. Caricatto negotiated with ORAC, the designated employer's bargaining agency in negotiations for both ICI and non-ICI (repair and maintenance) collective agreements since 1979. Such negotiations have taken place every 2 or 3 years since then.
Mr. Caricatto has known the principal of R N Mechanical Ltd. ("R N"), Paul Rigby, for approximately 20 years. Mr. Rigby was a union member and Mr. Caricatto was aware that he established his own company, R N in or about 1987. Over the years R N has employed Local 787 members, applied the terms and conditions of the appropriate collective agreement to them and deducted dues, health and welfare and industry fund contributions for those employees and remitted them to the union.
On a couple of occasions, Mr. Caricatto became aware that R N was employing persons who were not members of the union. On those occasions, Mr. Caricatto advised Mr. Rigby that under the collective agreement R N was required to employ union members, and on each occasion Mr. Rigby sent the employee to Local 787’s office to become a union member. Prior to this grievance, R N has never taken the position that it was not bound by the collective agreement.
Mr. Caricatto testified that prior to negotiations with ORAC, the union delivered a notice to bargain to ORAC and to each member employer of ORAC. Any employer who had remitted union dues was delivered a copy of the notice to bargain. The notice to bargain includes a section which the employer is requested to complete and return to the union as acknowledgement of receipt of its notice to bargain. R N has been sent a copy of a notice to bargain and return a signed copy to the union as receipt of the notice on several occasions. A copy of a notice to bargain relating to the most recent round of collective bargaining was introduced as an exhibit before the Board. In addition, at the commencement of bargaining, the union requests and is provided a list of employers for whom ORAC is bargaining at that round of collective agreement negotiations. R N's name has been on the list of employers provided by ORAC for many years and has been included on the list of employers found in the collective agreement since 1988.
Prior to this grievance, R N has never suggested that it was not a party to the collective agreement. Had they done so, Mr. Caricatto testified the union would have tried to certify it.
Under cross‑examination, Mr. Caricatto agreed that to the best of his knowledge R N had never been certified by the Ontario Labour Relations Board and had never signed a voluntary recognition agreement. He was also asked whether he recalled a conversation he had with Mr. Paul Rigby, during which, on two occasions, Mr. Rigby asked to have R N become a union company but Mr. Caricatto said it was not necessary. Mr. Caricatto denied having these conversations. Mr. Caricatto acknowledged that R N had never participated in Local 787’s collective agreement negotiations with ORAC.
Mr. Caricatto was also questioned briefly about the fact that Mr. Rigby had been charged under the union’s constitution. Mr. Caricatto was asked by counsel whether the charges were brought because Mr. Rigby, who retained his union membership, was operating R N without being certified. Mr. Caricatto testified that he could not recall the reason for the charges and that he did not attend the hearings into those charges.
The employer also called only one witness, Mr. Rigby. Mr. Rigby testified that R N came into existence in 1987. At that time Mr. Rigby, who was previously a member of the applicant and still carried his union card, asked Mr. Caricatto about the possibility of R N "signing up" to the union. Mr. Rigby testified that Mr. Caricatto's response was that it was not necessary since R N had no employees and that he should wait until the company had a "couple" of employees. Mr. Rigby testified that one year later he hired an employee and tried to sign up again. Mr. Rigby testified that Mr. Caricatto again declined and suggested only that the one employee go to the union office to sign a union card and become a member of Local 787.
Mr. Rigby also testified that he remitted dues and other remittances mandated by the collective agreement. Mr. Rigby testified that the only reason he remitted dues on behalf of employees (and himself) was so that he and any other employees he employed could take advantage of the union's benefit plans. However, R N was not a member of ORAC and never paid membership dues to ORAC. In addition, R N was charged the non-member rate for ORAC’s educational conferences.
Under cross-examination, Mr. Rigby acknowledged that he was aware that ORAC was purporting to bargain on his behalf and that he was aware for many years that R N’s name was in the collective agreement. He also agreed that he generally abided by the terms of the collective agreement and that when he was not abiding and was caught he quickly came into compliance.
Mr. Rigby acknowledged that R N signed and returned to the union a copy of the notice to bargain, although his wife signed it, not him. Mr. Rigby also testified that he was aware that the industry fund remittances which he paid to the union went to ORAC.
Mr. Rigby also testified that R N’s name appeared in the collective agreement after 1992 when the charges against him were laid. He also testified that he usually bid on non-union jobs. He only got four or five union jobs. He testified that if anything he “tried to hide the fact” that he was a “union company”.
Decision
A trade union can only acquire bargaining rights in respect of an employer through certification by the Board or by voluntary recognition.
In this case, there is no dispute that the Board has not certified the employer. There is also no dispute that the parties have not signed a document which is entitled “voluntary recognition agreement”.
On the basis of the evidence before us, we also find that the employer was not a member of the employer's association, ORAC. The only evidence on this point, which was not seriously challenged by the union, was that the employer was not a member, did not pay membership fees (other than to the industry fund through the collective agreement) and did not participate in ORAC’s affairs except for educational conferences and other events sponsored by the association. When the employer participated in ORAC sponsored events it paid the non-member fees. We find therefore that the employer's name was on the list of employers which ORAC purported to represent by accident, probably as a result of the union's practice of submitting to ORAC a list of employers who deducted and remitted union dues.
Furthermore, while we find that R N complied with the collective agreements, as they existed from time to time, for a number of years, we agree that alone such conduct does not constitute voluntary recognition by R N. It is not uncommon in the construction industry for employers to pay union rates and apply terms of collective agreements without entering into a collective agreement. Such conduct does not by itself confer bargaining rights on the trade union. (See Steel-Tech (November 17, 1999, Board File 1878-99-R, at para. 10; Ecodyne, [1979] OLRB Rep. July 629 at 636)
Under normal circumstances, these facts would be fatal to the union's grievance as the employer would not be bound by the collective agreement with the trade union. However, the union asserts that these are not normal circumstances as the employer has, it argues, through its agent ORAC, voluntarily recognized Local 787.
The employer’s reply is there is no collective agreement binding against R N because there is no collective agreement in writing as required by the Act. (We note that the employer was not challenging the ORAC collective agreements with the union.) .
R N also asserts that a voluntary recognition agreement must be in writing and in this case there is no written voluntary recognition agreement in place. R N disputes the fact that ORAC was its agent because R N did not give ORAC authority or proxy, either written or oral, to act on its behalf with respect to collective bargaining generally, and specifically to recognize the trade union.
We do not agree with the employer’s argument that there is no collective agreement in writing. There clearly are two written collective agreements one in respect of the I.C.I. sector and one in the Non-ICI (service and maintenance) sector. The issue is not whether there is a collective agreement but whether R N is bound to it.
The Union does not dispute that a voluntary recognition agreement must be in writing. However, it asserts that this has in fact been done through articles 5 (recognition clause) of both the I.C.I. and non-ICI collective agreements. Article 1 of the ICI agreement states:
The purpose of this Collective Agreement is to establish and maintain terms and conditions of employment between O.R.A.C., the Employers listed in Appendix “E” and the members of the Union, and to provide a method of settling any differences which may arise between them.
R N is listed in Appendix “E”. Article 4 of the ICI agreement states:
The term Employer in this Collective Agreement is construed to mean O.R.A.C., any Company, partnership, sole proprietorship or otherwise which is bound by this Collective Agreement.
Article 5:01 of the ICI agreement states:
5:01 O.R.A.C. and the Employers of Local 787 members recognize Local 787 as the sole and exclusive bargaining agent for all Journeyperson and Apprentice Refrigeration and Air Conditioning Mechanics, save and except persons above the rank of working Forepersons, employed by Employers in the Province of Ontario engaged in the Industrial, Commercial and Institutional Sector in the Refrigeration and Air Conditioning trade (hereinafter referred to as the I.C.I. Construction Sector).
(a) The Union recognizes O.R.A.C. as the sole and exclusive bargaining agent for Employers of Local 787 members employed in the I.C.I. Construction Sector of the Province of Ontario.
The first page of the non-ICI Agreement states:
Non I.C.I. Construction,
Service and Maintenance
Collective Agreement
1998-2001
between:
O.R.A.C.
and
U.A. Local 787
on behalf of:
the O.R.A.C. Non I.C.I. Construction, Service and Maintenance Collective Agreement list of Employers in Appendix “G”
together with
such other Employers, also listed in Appendix “G”, for whom the above noted Association may subsequently establish the right to bargain collectively in this bargaining unit and any other Employer who may execute an acceptance of the terms and conditions of this Collective Agreement.
R N is listed as an employer in Appendix “G”. Similarly, Article 1 of the non-ICI agreement states:
The purpose of this Collective Agreement is to establish and maintain terms and conditions of employment between O.R.A.C., the Employer and the members of the Union, and to provide a method of settling any differences which may arise between them.
Article 4 states:
The term Employer in this Collective Agreement is construed to mean O.R.A.C., any company, partnership, sole proprietorship or otherwise which is bound by this Collective Agreement.
There is no dispute that R N is an employer named in the collective agreements as being bound by the collective agreements. Therefore, so long as ORAC was bargaining with authority on R N’s behalf, the Articles in the collective agreement have the effect together of conferring voluntary recognition on the union.
Therefore, the real issue in this case is whether it can be said that ORAC was R N’s agent when it agreed that the trade union was recognized as the bargaining agent on behalf of all of the employers listed in the collective agreement. As noted, R N asserts that ORAC was not its agent because R N did not give ORAC authority or proxy to act on its behalf in collective bargaining and more importantly did not give ORAC the authority to voluntarily recognize the union on its behalf. The union relies on R N’s conduct, which it says, conferred agency status on ORAC.
The Board has, under somewhat different circumstances, discussed the principles of agency in relation to certification. In Hussey Seating Company (Canada) Ltd., [1981] OLRB Rep. Aug. 1138, the Board stated at paragraph 13:
The doctrine of apparent or express authority has been analyzed in Freeman and Lockyer v. Buckhurst Park Properties (Magnal Ltd.), [1964] 2 Q.B. 480 (C.A.), the leading case on the subject. In that case a group of four formed a limited company in order to purchase an estate with the intention of reselling it for development. While the four had the power to appoint a managing director, they never did so. Nevertheless, one of the four assumed the duties of a managing director with the knowledge and approval of the others. Without express approval of the others the same person hired a firm of architects and surveyors to prepare an application for planning. The company refused to pay the architects' fees on the grounds that the "agent" had no authority to enter such a contract. In his reasons for finding that the company was bound by the contract, Diplock, L.J. defined apparent or ostensible authority, in contrast to actual authority as:
a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the "apparent" authority so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.
Diplock, L.J. cautioned:
... that where the agent upon whose "apparent" authority the contractor relies has no "actual" authority from the corporation to enter into a particular kind of contract with the contractor on behalf of the corporation, the contractor cannot rely upon the agent's own representation as to his actual authority. He can rely only upon a representation by a person or persons who have actual authority to manage or conduct that part of the business of the corporation to which the contract relates.
Four conditions which must be fulfilled in order to allow a contractor to enforce a contract entered into on behalf of the company by an agent who has no actual authority to bind the company are set down. These are:
(1) that a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor;
(2) that such representation was made by a person who had "actual" authority to manage the business of the company either generally or in respect of those matters to which the contract relates;
(3) that the (the contractor) was induced by such representation to enter into the contract, that is, that he in fact relied upon it; and
(4) that under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent.
In the recent case of Rockland Industries Inc. v. Amerada Minerals Corporation 1980 CanLII 188 (SCC), 31 N.R. 393, the Supreme Court of Canada referred to Diplock's reasons in Freeman and Lockyer, supra, with the approval in accepting his interpretation of the doctrine of apparent authority.
The first condition set out in Hussey Seating Company (Canada) has clearly been met. The agent, ORAC, delivered to the union a list of the names of the employers on whose behalf it was bargaining. R N’s name was on that list. Moreover, we are satisfied that by its actions and inactions R N also represented to the union that ORAC had the authority to contract on it’s behalf. R N’s actions included signing and returning the union’s notice to bargain. R N’s inactions included not “setting the record straight” when it was aware for a number of years and over a number of rounds of collective agreement negotiations that ORAC purported to bargain on its behalf.
We are also of the view that the representations were made by someone who had actual authority to manage the affairs of R N. It was apparent that the principal of R N, Paul Rigby, was aware of the fact that ORAC purported to bargain on his behalf. Indeed, Mr. Rigby saw it in his interest to be perceived as being subject to the collective agreement because that would enable him to get employment benefits coverage. This was not a case of an employer mistakenly being included in the collective agreement.
As regards the third condition, we are satisfied that had the union been made aware that ORAC did not represent R N, the union would have taken steps to ascertain why R N was not participating. Had R N advised the union at that time that it did not consider itself bound (which we doubt since R N desired the benefits of being bound), on the evidence available we are satisfied that the union would have taken the steps to certify it.
Finally, there was no suggestion that R N did not have the capacity to enter the contract.
Accordingly, we are satisfied that ORAC, acting in the capacity of R N’s agent, voluntarily recognized the union on R N’s behalf. Such voluntary recognition can be found in writing in the collective agreements between the parties. Those collective agreements are drafted so as to have the effect of binding employers who are not members of ORAC to the collective agreements, in circumstances such as the ones before us.
The one fact which gave us pause in this case was the allegation that Local 787 brought charges against Mr. Rigby under the constitution because he ran a non-union company. This was evidence that Local 787 was aware of R N’s “non-union” status and yet did not attempt to certify R N. The difficulty is that we were presented with little evidence about the charges and what the outcome of these were. It appeared that both parties made a decision not to put those facts before us in any detail. While the Board declined to hear evidence about Mr. Rigby’s answer to the charges because it was improper reply evidence, we note that even if we had heard such evidence, it was to be limited to one question.) Under these circumstances, the fact that charges were brought is of no assistance to us. Moreover, it appeared that the charges were brought in the early 1990’s, after the date at which R N initiated its practice of returning Local 787’s notice to bargain and continued to be aware that ORAC bargained on its behalf.
In these circumstances, we are satisfied that R N is bound to the collective agreements. It is bound because it, through its actions and inactions, authorized ORAC to bargain on its behalf which bargaining resulted in voluntary recognition of Local 787 under articles 5 of the collective agreements. We agree that the mere fact that R N complied with the provisions of the collective agreements does not mean that it is bound to the collective agreements. However, in this case the employer did more than just comply with the agreement. It stood by without protest, as ORAC repeatedly advised the union that ORAC was bargaining on R N’s behalf. It acknowledged receipt of the union’s notice to bargain, again without protest. R N did all this because it believed that it was in its interests to do so, because being bound to the collective agreement would allow its employees to receive benefits.
We acknowledge that the Board should be cautious in recognizing bargaining rights where there is no certificate, signed collective agreement or specific signed recognition agreement. On the other hand, in the circumstances of this case, where the employer wants the benefits of being bound by a collective agreement, and is aware that a third party who could well be the employer's agent, is holding itself out as the employer's agent and is purporting to bargain on its behalf, we are inclined to agree with the applicant.
We find support in our decision in the Board’s decision in Twin Electric, [1984] OLRB Rep. Feb. 393 for the proposition that an employer’s organization can voluntarily recognize a union on behalf of an employer which is not a member of that employer’s association. In that case the Board stated at paragraph 5 as follows:
The Board agrees that the province‑wide bargaining provisions of the Act, like the accreditation provisions before them, do not confer bargaining rights with respect to an employer in the first instance. The initial source of bargaining rights must be a certification or voluntary recognition. The Niagara Peninsula Electrical Contractors Association has, however, purported to enter into successive collective agreements on behalf of Twin Electric, inter alia, and those collective agreements specifically provided:
5.00 The Association, on behalf of its member companies agrees to recognize the Union as the Collective Bargaining Agent for all employees of the Association who perform electrical work coming within the scope of this agreement, while working within the boundaries of the jurisdictional area of the Local Union.
Not only did Twin Electric specifically authorize the Association, by its conduct, to enter into those collective agreements on its behalf, but it at all times behaved as if it were a "member" of the Association as well. The only thing which Twin could have done to demonstrate its membership that it did not do would have been to make formal application to be admitted some time prior to 1979. But it appears from the Association's records that that kind of formality was not engaged in by any member companies in the earlier years of the Association. We note that eligibility under the Association's constitution is extended to contractors who have "expressed a willingness to enter into negotiations for [a collective agreement]", but even if that is not technically sufficient to extend membership to Twin Electric in the first instance, we find that Twin has participated in the benefits of full membership for too long to now deny that status. There is, in the circumstances, no reason to find that the full effect of section 51(1) of the Act, which provides:
A collective agreement between an employers' organization and a trade union or council of trade unions is, subject to and for the purposes of this Act, binding upon the employers' organization and each person who was a member of the employers' organization at the time the agreement was entered into and on whose behalf the employers' organization bargained with the trade union or council of trade unions as if it was made between each of such persons and the trade union or council of trade unions and upon the employees in the bargaining unit defined in the agreement, and, if any such person ceases to be a member of the employers' organization during the term of operation of the agreement, he shall, for the remainder of the term of operation of the agreement, be deemed to be a party to a like agreement with the trade union or council of trade unions.
does not apply to Twin. This case is a far cry from one like Bechtel Canada (unreported), Board File No. 0745‑75‑R, released September 3, 1975, in which the company appears to have had nothing whatever to do with the employers' association other than to apply the terms of the collective agreement which it negotiated for the area.
[emphasis added]
The employer argues that either Twin Electric is wrong in law, particularly given the current scheme of the Act which requires a representation vote, or is distinguishable on its facts.
The facts in Twin Electric were similar to those before us. The main difference was that in Twin Electric the employer participated to a substantial extent in the affairs of the Contractors Association by attending meetings and participating in bargaining. In the case before us, there was virtually no participation at all. Does that factual difference mean that Twin Electric is not relevant? We think not. Twin Electric stands for the proposition that an employer can, through its conduct, confer authority on an employer’s organization to recognize a union.
We also do not think that the current scheme of the Act has any bearing on our decision. While it is true that representation votes are required to certify a union, it is equally true that the legislature has not removed the voluntary recognition provisions from the Act. There is nothing in the Act which prevents an employer from conferring on any agent the authority to recognize a trade union.
Finally, even had we not found that R N voluntarily recognized the union through its agent ORAC, we also would have held that R N voluntarily recognized the union in writing when it returned the notice to bargain to the union. Returning the notice to bargain to the union does more than simply acknowledge receipt of such notice. It effectively is notice that R N recognizes that a collective agreement is being bargained on its behalf by the union and ORAC.
For all of the foregoing reasons, we find that R N is bound to both the ICI and the non-ICI collective agreements between ORAC and Local 787. This matter is referred to the Registrar for the scheduling of new hearing dates. This panel is seized.
“Brian McLean”
for the Board