0003-01-U; 0004-01-R United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local 71, Applicant v. Rideau Plumbing and Heating Ltd.; Gilles Plumbing and Gilles Patenaude, Responding Parties.

BEFORE: Mary Ellen Cummings, Alternate Chair, and Board Members J. G. Knight and G. McMenemy.

DECISION OF THE BOARD; July 4, 2001

1. This is an application for a declaration that two or more employers are a single employer for the purposes of the Labour Relations Act, 1995, S.O. 1995, c. 1, as amended (the “Act”) and/or for a declaration that all or part of the business has been sold to another entity. The applicant also alleges that the responding parties have committed unfair labour practices.

2. In our decision of May 10, 2001, we determined that since the responding parties had not filed responses, the Board would decide the applications on the basis of the material filed by the applicant. In a decision dated May 31, 2001, the Board directed a Labour Relations Officer to post a Notice to Employees of the applications at a project where the applicant believed affected employees were working. No submissions from employees have been received.

3. Based on the information provided by the applicant, the Board makes the following finding of facts. The applicant is bound to a collective agreement with the Mechanical Contractors Association of Ottawa, known as the Ottawa and Renfrew Area Residential Sector (High Rise Apartments) Collective Agreement, effective from October 27, 1999 to November 30, 2001 (the collective agreement). Rideau Plumbing and Heating Ltd. (Rideau) is a plumbing and heating contractor, bound to the collective agreement, as recently confirmed by another panel of the Board in a decision dated January 23, 2001.

4. In late September, 2000 the applicant discovered what it thought was Rideau working on a project for Claridge Homes on Montreal Road, Ottawa, that would have been covered by the collective agreement. The applicant determined that the work was being done by persons who were not members of the applicant. The applicant served a grievance on Gilles Patenaude, the principal of Rideau. It appears Mr. Patenaude sought to avoid service, and then when the grievance was referred to the Board, Mr. Patenaude failed to respond to the summons served upon him. On the eve of the hearing, Mr. Patenaude wrote to the applicant and the Board advising that Rideau had ceased operations in 1998, and consequently, did not intend to comply with the summons. In Rideau’s absence, the Board heard the grievance, and determined that Rideau had violated the collective agreement in having non-union employees perform work on the Claridge Homes project. The Board awarded damages of $36,873.60 and reimbursement of the applicant’s filing fees in the amount of $749.60.

5. At that point, the applicant sought to serve a Notice of Garnishment at the Claridge Homes site. The applicant was advised that an entity called “Gilles Plumbing”, not Rideau, was performing the work. The applicant was further advised that the principal of Gilles Plumbing was Gilles Patenaude, which had claimed to be a non-union contractor when it entered the contract with Claridge Homes.

6. The applicant can find no corporate records of registration of “Gilles Plumbing”, nor is that entity listed in any local telephone directories.

7. On the basis of the applicant’s materials, it is abundantly clear that Gilles Patenaude, the principal of Rideau, is operating as a sole proprietorship, performing exactly the same work that was performed when Gilles Patenaude was the principal of Rideau. It is equally clear that Gilles Patenaude, in operating Gilles Plumbing, is relying on the skill and knowledge he exercised while at Rideau. Based on the information provided by the applicant, the Board finds that Giles Patenaude is a “key man” in both Rideau and Gilles Plumbing. It appears that after Rideau ran into financial difficulties, Mr. Patenaude started again in the plumbing and heating contracting business, in the same sector of the construction industry where he had previously worked, but without honouring Rideau’s collective bargaining obligations.

8. In CSE Corp. (cob. Concept Systems Electric), [2000] OLRB Rep. January/February 3 the Board identified elements that typically comprise a “business” in the construction industry:

34. The Board has emphasized that in the construction industry, the economic entity that creates employment includes both the managerial expertise to develop competitive pricing in order to bid successfully for work with adequate margins to ensure the ongoing viability of the business and the skills and abilities of the persons to perform (or supervise the performance of) the work within the budget established for the project.

9. Mr. Patenaude’s ability to get work and complete a project is a significant asset that has been transferred to and is now benefiting Gilles Plumbing. Consequently, the Board finds that all or part of the business of Rideau has been transferred to Mr. Patenaude, carrying on business as Gilles Plumbing, within the meaning of section 69 of the Act.

10. Having regard, then to the provisions of section 69, Mr. Patenaude, carrying on business as Gilles Plumbing, is bound to the collective agreement, in the same manner as Rideau. Having regard to the applicant’s information that Gilles Plumbing has been operating since at least late September 2000, when the applicant discovered Mr. Patenaude working on the Claridge Homes site, the Board concludes that the sale of business took place on or about September 30, 2000, and the collective agreement is binding on Gilles Patenaude operating as Gilles Plumbing from that date.

11. The applicant has asked that the Board find Gilles Patenaude operating as Gilles Plumbing liable for the damages awarded by the Board on January 23, 2001 against Rideau in the amount of $36,873.60. The Board has long held that a successor employer in a sale of business is liable for grievances relating to the conduct of the predecessor business, regardless of whether the successor has not had notice of the collective agreement and whether the arbitration proceedings were pending at the time of the sale of business (see for example Winchester Press [1982] OLRB Rep. Feb. 284). That legal conclusion is rooted in the language of what is now section 69(2) of the Act which reads:

69. (1) …

(2) Where an employer who is bound by or is a party to a collective agreement with a trade union or council of trade unions sells his, her or its business, the person to whom the business has been sold is, until the Board otherwise declares, bound by the collective agreement as if the person had been a party thereto and, where an employer sells his, her or its business while an application for certification or termination of bargaining rights to which the employer is a party is before the Board, the person to whom the business has been sold is, until the Board otherwise declares, the employer for the purposes of the application as if the person were named as the employer in the application.

12. The provisions of the Act make the successor a party to the collective agreement from the point of the sale onwards (in this case, from September 30, 2000) unless the Board declares otherwise. Consequently, the Board concludes that Gilles Patenaude, operating as Gilles Plumbing is liable for the $36,873.60 damages awarded by the Board in the grievance arbitration.

13. The applicant has also asked the Board to make a declaration pursuant to section 1(4) of the Act that Rideau and Gilles Patenaude are a single employer. Although a factual foundation exists for such a declaration, because the Board has found that there has been a sale of business from Rideau to Mr. Patenaude, it is not necessary for the Board to issue the single employer declaration.

14. The applicant has filed an application pursuant to section 96 of the Act, alleging that Mr. Patenaude’s efforts to evade the application of the collective agreement, and the applicant’s proper enforcement efforts amount to unfair labour practices. The applicant alleges that the responding parties have violated the Act because their conduct constitutes an interference in the applicant’s representation of its members and its right to enforce the collective agreement. The applicant is concerned that the previous conduct foreshadows a continuing plan to violate the collective agreement. The applicant asks for a declaration that unfair labour practices have been committed; publication of that determination on the Ottawa Construction News, and a direction to Claridge Homes that it post the decision in its workplace.

15. In the past, the Board has been prepared to find that continued and egregious breaches of a collective agreement amount to an interference in a trade union’s representation of its employees. Without commenting whether such a threshold has been met in this case, the Board declines to issue the remedies sought in the circumstances. The Board is satisfied that through its declaration of a sale of business from Rideau to Mr. Patenaude, and a declaration that Mr. Patenaude is liable for the damages awarded at arbitration against Rideau, the Board has remedied the presenting “mischief” in this case. The Board’s remedies protect the applicant’s bargaining rights and ensure that Mr. Patenaude’s efforts to evade the application of those bargaining rights do not succeed. Consequently, the unfair labour practices application in Board File 003-01-U is dismissed.

Disposition

16. The Board declares that Rideau has sold all or part of its business to Gilles Patenaude, within the meaning of section 69 of the Act, effective September 30, 2000. Mr. Patenaude is bound to the collective agreement with the applicant. Mr. Patenaude is liable to pay $36,873.60 to the applicant.

“Mary Ellen Cummings”

for the Board