3078-99-R Carpenters and Allied Workers Local 27, United Brotherhood of Carpenters and Joiners of America, Applicant v. City of Toronto and Toronto Parking Authority, Responding Parties.
2646-99-G Carpenters and Allied Workers Local 27, United Brotherhood of Carpenters and Joiners of America, Applicant v. City of Toronto and Toronto Parking Authority, Responding Parties.
APPEARANCES: Michael A. Church, Michael Yorke and Lister Tenant for the applicant; William LeMay and Barry Martin for Toronto Parking Authority; Heather Crisp and Issic Berger for City of Toronto.
BEFORE: Mary Ellen Cummings, Alternate Chair, and Board Members G. Pickell and A. Haward.
DECISION OF THE BOARD; June 15, 2000
Board File 3078-99-R is an application by the Carpenters and Allied Workers, Local 27, United Brotherhood of Carpenters and Joiners of America (the Carpenters) for a declaration that the City of Toronto (Toronto) and the Toronto Parking Authority (the TPA) are a single employer within the meaning of section 1(4) of the Labour Relations Act (the Act) or that Toronto has "sold" part of its business to the TPA, within the meaning of section 69 of the Act. Board File 2499-99-G is a referral of a grievance in the construction industry. It is common ground among the parties that the construction grievance must await the determination of the sale of business and related employer applications.
At the hearing, the Board heard preliminary motions advanced by Toronto and the TPA. They first argued that a proceeding held pursuant to the Public Sector Labour Relations Transition Act (the PSLRTA) and the decisions and agreements that resulted, rendered the issues the Carpenters were bringing in these applications res judicata. The responding parties then argued that even if the Carpenters established the legal and factual foundation necessary for the Board to concluded that the TPA and Toronto carried on related activities under common direction and control, the Board would not exercise its discretion in favour of the Carpenters and make a declaration pursuant to section 1(4) that they were a single employer for the purposes of the Act. In determining the second motion, as is the usual practice, the Board accepted all the Carpenters' allegations as set in their application as proven.
1. The facts, taken only from the Carpenters' application
The Carpenters hold bargaining rights for Toronto in all sectors of the construction industry. The Carpenters held bargaining rights in some of Toronto's municipal predecessors, most notably the former City of Toronto and the Municipality of Metropolitan Toronto. The Carpenters have no bargaining rights for the TPA nor for any of its predecessors.
The predecessors to the TPA have consistently built parking garages with general contractors in contractual relations with the Carpenters and all formwork (which is significant) has been performed by subcontractors in contractual relations with the Carpenters. In other words, the predecessors to TPA have built all their garages using "unionized" contractors, although they have been under no obligation to do so. The land on which the parking garages were built was owned by the former City of Toronto.
Toronto is revitalizing its downtown area with the Dundas Square project. One aspect of that project is a parking garage. The Carpenters allege that Toronto and/or the TPA have contracted with a contractor not in contractual relations with the Carpenters to build the garage. The Carpenters have referred to arbitration a grievance alleging that Toronto has breached its contractual obligations in contracting with a contractor not in contractual relations with the Carpenters. In addition, the Carpenters have asked the Board to find that Toronto and the TPA carry on associated or related activities under common control and direction and that the Board should exercise its discretion and determine that they are a single employer for the purposes of the Act. Again, as set out above, for the purposes of this motion the Board assumes that Toronto and TPA carry on associated or related activities under common control and direction. The Board specifically notes and accepts for the purposes of this motion, that when parking garages were built in the past "…no distinction had been drawn between the old City of Toronto and the old Parking Authority of Toronto, and work that fell within the jurisdiction of the Carpenters' Provincial ICI Collective Agreement had been done in accordance with the Agreement".
2. The PSLRTA proceedings and decisions, and their consequences
- The nature of the PSLRTA proceeding is set out succinctly in the third paragraph of the Board's decision in City of Toronto [1998] OLRB Rep. Sept./Oct. 772:
This application was filed in the wake of the merger of several local municipalities, that together, make up the new City of Toronto (the so-called "megacity"). CUPE Local 79 asks the Board to determine the number and description of the bargaining units that are appropriate for the new City's operations; and further, to determine which trade union will represent the employees in those bargaining units.
- One of the many issues canvassed in the decision was the request by CUPE Local 79 that TPA's bargaining units, represented by CUPE Local 416, be folded into those of Toronto. At the risk of oversimplifying the Board's analysis in that case, the Board reviewed the legislative framework that constituted the new TPA out of its predecessors, the legislative framework that formed the new Toronto out of its predecessor municipalities and concluded;
The inference, I think, is that the Legislature envisaged the TPA continuing as a separate employer, much as PAT (the former Parking Authority of Toronto) did in the past. [emphasis in the original]
The Board then went on to consider CUPE Local 416's request that the Board should apply section 1(4) of the Act and declare Toronto and the TPA to be a single employer for the purposes of the Act. The Board wrote:
Now, there is certainly a plausible case to be made that the conditions for making a 1(4) declaration are made out ‑ that the new City and TPA are engaged in "related activities or businesses under common control or direction". However, it is less clear that this would solve the "Bill 136" problem, because section 1(4) allows the Board to make a related employer declaration only "for the purposes of this Act" ‑ which is to say, the Labour Relations Act. It is not obvious that such declaration could make two entities "one employer" for the purposes of a different Act ‑ Bill 136.
Nor is it obvious that the Board should exercise its discretion in this way or at this time, even if it has jurisdiction to do so.
The Board has not heretofore collapsed local municipalities and local boards into one another, when there is a history of separate bargaining. (See the analysis of the Board in Etobicoke Public Library Board [1989] OLRB Rep. Sept. 935). Nor would such exercise of discretion be consistent with the scheme of the legislation now before the Board. Bills 103 and 148 quite clearly envisage the separate existence of local agencies and their separate "employer status".
The TPA was created by statute and made a separate successor employer. In light of that, it would certainly be a curious exercise of discretion for the Board to declare that these two statutorily based entities, with a separate labour relations history and distinct treatment for employment purposes, are really "one employer" after all. It would, in effect, be creating the kind of relationship with a local board that the Legislature prescribed expressly for the health board via section 46(6)of Bill 148 ‑ but not for the TPA.
Finally, given the different procedural and jurisprudential foundation of section 1(4) of the Labour Relations Act, I have some doubt that its application should be mixed in with the exercise of the Board's responsibilities under Bill 136; and, in any case, I am not persuaded to do so here.
Such determination is, of course, without prejudice to any application that anyone wishes to make outside the context of Bill 136.
For the foregoing reasons, the Board accepts the submissions of the City and the TPA on this aspect of the case.
Although the Carpenters were not an "active" participant in this aspect of the case, they were parties, because one of the other issues that the Board was to determine was the scope and description of the construction bargaining units in the new Toronto. In a separate decision, dated November 19, 1998 (unreported), the Board noted that the parties had initially agreed that the building trades issues could be deferred, and were ultimately settled. The Board's decision reflects those agreements and determined that the following bargaining unit was appropriate for the operations of Toronto.
Carpenters
all carpenters and carpenters' apprentices employed by the City and/or by Metro Housing in O.L.R.B. geographic area No. 8 in all sectors of the construction industry, save and except non-working foremen and persons above the rank of non-working foremen.
Counsel for the TPA argued that the PSLRTA proceeding set out above determined the bargaining structure for the new Toronto and its agencies, including the TPA. In fact, the very question of whether the bargaining units in the TPA should be "swept" into Toronto's was specifically addressed by the Board in a proceeding to which the Carpenters were a party. To permit this application to go forward would be to permit the Carpenters to re-litigate a matter that had already been decided by the Board, contrary to the principles of res judicata.
Counsel for the TPA argued that the heart of this application is the same as the PSLRTA proceeding; should the TPA have a separate bargaining structure from Toronto. The Carpenters, as parties to the PSLRTA proceeding, had an opportunity to make submissions on the issues, and should not now be able to revisit them, particularly in the face of the subsequent agreement, incorporated in a Board decision, which gave bargaining rights to the Carpenters only in respect of Toronto and the Metro Housing Authority.
Counsel for Toronto adopted the submissions of the TPA and added that in the course of the PSLRTA proceedings, the Carpenters, like the other parties. had a wide opportunity to view the new city, its agencies and operations, with the goal of making sure everyone understand the ambit of the work, organizational structure and bargaining rights that were at issue. Having had that opportunity, and making an agreement about the extent of the bargaining rights the Carpenters would enjoy with Toronto and its agencies, it is too late for the Carpenters to come back and seek more.
The Board did not call upon the Carpenters to respond to this preliminary issue. The Board was not satisfied that the issue before the Board in the PSLRTA matter was the same as the one before us. It is accurate to say that the PSLRTA proceeding was about bargaining structure in the new city and its agencies, but within the parameters and mechanisms of the PSLRTA. But the proceeding before this panel is quite different. First, the sale of business and related employer applications are made pursuant to a different statute, the Act. Both section 69 and section 1(4) offer different remedial relief and proceedings under those section of the Act contain different procedural aspects. As the Board commented at paragraph 103 of the City of Toronto decision, it is doubtful that section 1(4) of the Act can be mixed with the exercise of the Board's powers in the PSLRTA. Put another way, I think that all parties to the PSLRTA proceeding would have been surprised if the Board had seriously entertained CUPE Local 416's request to "add on" what was essentially a request for relief pursuant to section 1(4) of the Act, without notice. And because the Board did not seriously entertain that submission, the Carpenters cannot be found to have lost their opportunity to litigate the matter.
The Board rejects the preliminary argument that the PSLRTA proceeding renders this application res judicata.
3. Even assuming a legal and factual foundation for a "single employer" declaration, would the Board exercise its discretion and make the declaration?
The Carpenters rely on their long participation and good relations with the TPA as a basis for their claim for relief. Counsel argued that until recent events the Carpenters had no reason to come to the Board; it consistently got the work it wanted. Counsel for the Carpenters argued that the TPA and its predecessors have been "related employers" with Toronto and its predecessors for ages, but there has been no need to come to the Board and seek a formal declaration that they are a single employer for the purposes of the Act because the work had always been performed in accordance with the Carpenters' ICI collective agreement. Counsel points out that the Dundas Square is a large, prominent project, which will have a large formwork element. Its loss is a significant financial loss to its members, as well as the loss of an opportunity to be part of a downtown revitalization plan which the Carpenters support. Until this project, counsel argued, there has been no labour relations "mischief" that would have caused the Carpenters to look for the Board's intervention and assistance. But the contracting to a "non-union" general is mischief which the Board should address by way of a single employer declaration.
Counsel for TPA argued that the Board has been unwilling to make section 1(4) declarations when the parties are a municipality and its local board, a reality pointed out by the Board in the City of Toronto case, relying on the decision in Etobicoke Public Library Board, [1989] OLRB Rep. 935. The Board has relied in part on the legislative scheme setting out the relationship between a municipality and its local board as well as the degree of interchange and control that actually occurs.
Counsel for Toronto argued that the predecessor to the TPA has been in existence since 1952. The Carpenters bargaining rights with the old City of Toronto originated in 1987. Over that lengthy period, both have openly carried on construction activities. Over that time period, the Carpenters have made no effort to certify the carpenters performing work on behalf of the TPA or its predecessors. To grant a section 1(4) declaration in light of that history would be to expand, not protect the Carpenters' bargaining rights. On numerous occasions, the Board has reiterated that the goal of section 1(4) is to prevent the erosion of bargaining rights, not to replace the usual mechanisms of acquiring bargaining rights through certification (see, for example, Capricorn Acoustics &Drywall Ltd., [1986] OLRB Rep. March 308).
Decision
- The purpose of section 1(4) of the Act has been reiterated in many decisions. One often quoted passage is found in Brant Erecting, [1980] OLRB Rep. 945, at paragraph 948:
Section 1(4) was enacted in 1971 and deals with situations where the economic activity giving rise to employment or collective bargaining relationships regulated by the Act is carried out by, or through more than one legal entity. Where such legal entities carry on related business activities under common control or direction, the Board is empowered to pierce the corporate veil. Section 1(4) ensures that the institutional rights of a trade union and the contractual rights of its members, will attach to a definable commercial activity, rather than the legal vehicle(s) through which that activity is carried on. In this respect the purpose of section 1(4) is similar to that of [now section 69] which preserves the established bargaining rights and collective agreement when a "business" is transferred from one employer to another. Section [69] has been part of the scheme of the Act since the mid 1960's. Neither remedial provision requires a finding of anti-union animus; their primary application is to bona fide business transactions which incidentally undermine or frustrate established statutory rights.
In this case, the Board finds that even if the legal and factual foundation for a section 1(4) declaration was made out, it would not exercise its discretion and declare the TPA and Toronto to be a single employer for the purposes of the Act. The reasons are quite simple; this case does not disclose any of the "mischief" which section 1(4) was intended to remedy. At its most basic, section 1(4) is in place to ensure there will be no erosion of bargaining rights caused by a unionized entity spinning off a new company, moving work or opportunities for growth from the old company, and operating the new company without regard to the collective agreement obligations of the old . The mischief in such an arrangement is obvious and this labour relations "sleight of hand" is remedied by the Board's discretion to make both companies a single employer for the purposes of the Act.
But in the case before the Board, there is no such mischief. Toronto did not set up a new entity and spin off the work of constructing a parking garage to that new entity. Both the municipality and the parking authority have existed and been carrying on construction activities for years. On the Carpenters' facts, the Dundas Square parking garage is being constructed in the same way that Toronto and TPA and its predecessors have always done it. The only difference this time is that a general contractor not in contractual relations with the Carpenters has been retained. This time it does matter who let the contract, and who is the true employer, because if it is the TPA, the Carpenters have no right to the work, and if it is Toronto, then they do. No doubt those will be issues canvassed when the Board hears the grievance referral.
But the difficulty the Carpenters find themselves in is not on account of the mischief section 1(4) was intended to remedy. Historically, the Carpenters were content to get the work, and if in the past, it was the parking authority that was the owner, then the Carpenters got more than they had a legal right to. Losing an opportunity for which there was no legal foundation is not the basis on which the Board should or would exercise its discretion pursuant to section 1(4) of the Act. For a long time, the Carpenters were content not to establish a legal foundation to claim the work. It is now too late to assert a legal basis to obtain the work. To make a single employer declaration in these circumstances would be to expand, not protect, the Carpenters' bargaining rights with Toronto.
Having determined that the Board would not issue the "single employer" employer declaration, there is no value to engaging in a factual enquiry with respect to the relationship between the TPA and Toronto. Consequently, that part of the application is dismissed.
However, there remains the Carpenters' sale of business application, and the grievance referral. The Carpenters are directed to advise the Board, and the other parties of its intentions with respect to both matters in advance of the continuation dates of June 27, 28 and 29, 2000.
"Mary Ellen Cummings"
for the Board