2148-00-U Ontario Provincial Conference of the International Bricklayers and Allied Craftworkers, Jerry Coelho, Tom Oldham, Kerry Wilson, John Haggis, Luigi Scodellaro, and Robert Watson, Applicants v. International Union of Bricklayers and Allied Craftworkers, John T. Flynn and Joe Bognar, Responding Parties.

BEFORE: David A. McKee, Vice-Chair.

DECISION OF THE BOARD; May 2, 2001

1. This is an application under sections 147, 149, 76, 87, 96(7), and 162 of the Labour Relations Act, 1995, S. O. 1995 ch. 1 ("the Act") and a request that the Board state a case to Divisional Court for contempt against certain persons. The applicant alleges that the International Union of Bricklayers and Allied Craftworkers (the “IU”) has violated several sections of the Act in a number of ways. The application arises out of the imposition of a “receivership” (usually referred to as a trusteeship) by the IU on the Ontario Provincial Conference of the International Union of Bricklayers and Allied Craftworkers. On January 15, 2001, the Board held a consultation with respect to the allegation of a violation of section 149 only. On January 17, 2001 the Board released a brief decision finding that the IU lacked just cause to place the OPC in receivership and accordingly had violated section 149. By a further brief decision on February 1, 2001, the receivership was declared to be null and void. This decision represents the more extensive reasons for the decision which were promised in the January 17, 2001 decision.

Background

2. This decision must be read in the context of the lengthy history among these parties, and more particularly in the light of the decision issued on this date in Board File No. 2532-98-U, 1904-99-U, 2736-00-U and 2737-00-U. Much of the background is set out in that decision and is worth repeating here:

3. At some time before 1995, a movement began to take shape in Canada, or at least Ontario, seeking greater autonomy for Canadian Locals within the IUBAC. In 1995 there was a General Convention of the IUBAC. Those Canadian locals in favour of this autonomy attended the Convention and supported the slate which lost the election.

4. Nonetheless, a convention of the OPC and the Ontario Locals was called for December 2, 1995 to discuss further autonomy measures. In response, the IUBAC placed the OPC in receivership (the term in the IUBAC constitution for a trusteeship). The Convention was held anyway and certain resolutions with respect to autonomy were passed.

5. A complaint under section 96 alleging a violation of sections147 and 149 was filed in response to the receivership. (Board File No. 3041-95-U). This was settled in March 1996. The parties agreed to talk further about concrete steps for greater Canadian autonomy.

6. In February 1997 the Ontario locals held a mailed ballot referendum. The results of this referendum were largely in favour of self-government and autonomy within the IUBAC for Canadian Locals. These general resolutions were distilled to more specific plans to take action leading to local autonomy at an OPC Convention in June of 1997.

7. In December of 1997 the OPC filed two applications under section 154 seeking to have itself declared as the sole Employee Bargaining Agency for the two Provincial Collective Agreements under which members of the union work in Ontario. The Board heard these matters starting in February 1998.

8. In the midst of those proceedings, the IU imposed a receivership on the OPC and, on the authority of that receivership, purported to withdraw the applications. The Board did not permit it to do so. The OPC filed another complaint alleging a violation of sections 147 and 149 (Board File No. 4532-97-M). In an interim decision in April, 1998, the Board suspended the receivership under its then interim powers. The matter never came back on for hearing.

9. The Board ultimately granted the relief sought in the section 154 applications. The OPC bargained as the Employee Bargaining Agency without the IU at the table at all. It then proceeded to bargain with its two counterparts Masonry Employers Industrial Council of Ontario (“MEICO”) for the “Brick” agreement and the Terrazzo, Tile and Marble Guild of Ontario Inc. (“Tile Guild” or “TTMGO”) for the “Tile” agreement. As will be discussed further below, one of the issues that arose in the bargaining was a demand by the OPC for an “autonomy” clause (more properly called an “independence clause”). MEICO filed a bad faith bargaining complaint against the OPC (Board File No. 1745-98-U). The IU intervened. This matter too was settled.

10. One of the matters agreed to at the OPC Convention and in bargaining was that the Provincial Collective Agreements with MEICO and the Tile Guild would no longer contain an hourly “dues check off” provision for dues to the International. The IU was given no notice of this bargaining agenda. In July of 1998 the OPC and the Ontario Locals ceased to send any dues to the IU. Ultimately, the IU was so incensed that it revoked the charters of the OPC and of the 11 Locals which had withheld dues. It set up a new OPC and 11 new Locals to supplant the old locals in Ontario. Ultimately the “New” OPC and “New Locals” failed to gain any acceptance at all.

11. This act of the IU was also met by a complaint alleging a violation of sections 147 and 149 – Board File No. 2532-98-U, one of these applications. In addition to these applications, the OPC and the Ontario Locals decided to declare independence and take certain steps to achieve that end. They held a founding convention of the Brick and Allied Craft Union of Canada (“BACU”). They represented to the entire world that they were either the same organization as the “Old OPC” (and “Old IUBAC Locals”) with a new name, or alternatively they were the successors to the OPC and the Old Locals.

12. In two decisions of this Board (differently constituted) in Board File No. 2532-98-U, the Board found that the IU had violated sections 147 and 149 in revoking the charters of the OPC and the Ontario Locals.

13. The focus of litigation thereafter shifted from Board File No. 2532-98-U. In an application for certification involving Kvaerner Jaddco (Board File No. 2784-98-R), and in Board File No. 1904-99-U (one of these applications) the BACU attempted to persuade the Board that it was in fact either the OPC transformed and renamed, or that it was the successor to the OPC. In the September 15 Decision, this panel of the Board rejected that assertion. The facts outlined above are set out in much greater detail in the September 15 Decision, and those findings of fact are relied on, to the extent necessary for this decision.

September 15 Decision

22. This decision was a disappointment to the BACU. Aside from the result, there were a number of bases on which they criticized that decision. These are summarized briefly in Hyde Park Masonry [2000] OLRB Rep Nov/Dec 1133. Some time was devoted by the BACU in the course of the evidence in this application to attempting to contradict findings of fact in the September 15 Decision. As noted in the Hyde Park decision, that decision does contain one error in paragraph 30. That is, the trusteeship of Local 10 (Kingston) of the IUBAC referred to in that paragraph in fact occurred after the meeting in Boston rather than before that meeting. That much is evident from reading the decision in International Union of Bricklayers and Allied Craftworkers, [2000] OLRB Rep. Jan. 70. It is evident that the departure of Ontario representatives from that meeting had nothing to do with the imposition of a trusteeship on Local 10. However, that error was of no consequence to the result in the September 15 Decision. The other evidence proffered to challenge the findings of fact or assessments of credibility in the September 15 decision (which I permitted to be led over the objections of the IUBAC and Locals 6, 7 and 25) did not persuade me that there was anything else in that decision which was incorrect.

Facts

3. Because this matter was dealt with as a consultation, I did not hear evidence from any witnesses. The conclusions I have drawn from these letters are based solely on the documents. The parties never met face to face. All they had to work with were each other’s letters, and they based their actions entirely on the content of those letters. Thus, the basic evidence would be exclusively documentary.

4. The facts are relatively straightforward. The Kvaerner decision was released September 15, 2000. From the argument in this case and in Hyde Park Masonry (unreported Board File No. 2158-00-R, decision dated Nov. 21, 2000) it is apparent to me that both parties had invested so much in the outcome of that decision, that they had lost sight of the primary litigation among them. It is true that, had the BACU been successful in its argument, it would have left much less scope for remedies in Board File 2532-98-U. It would not have rendered that case moot. Since the BACU was not successful in the Kvaerner decision, all the issues in 2532‑98-U were still open to the parties, including the BACU’s submission that the appropriate relief was a severance of the relationship between the IUBAC and the Ontario Locals.

5. However, both parties believed at the time that there was little, if anything, left to decide in Board File 2532-98-U and that the major issue in this dispute had been resolved. In that context, both parties started off in an appropriate manner, but their attempts to commence any dialogue soon fell off the rails.

6. On September 25, 2000 counsel for the BACU wrote to counsel for the IU as follows:

I confirm my verbal advice to you the other day at the Labour Relations Board that I would welcome a general outline in writing of the International Union’s proposals, if any, to settle all of the outstanding issues.

If you have any concrete proposals to make, my clients are willing to consider them.

7. The International Union’s President, Mr. John Flynn, wrote directly to the Ontario Locals as follows:

Mr. Jerry Coelho

Mr. Tom Oldham

OPC of IUBAC

4800 Dundas Street West, Suite 201

Toronto, ON M9A 1B1

CANADA

Dear Brothers Coelho and Oldham:

We have just received the decision of the OLRB that “the attempt by the old OPC to transform itself into the BACU … was ineffective.” The Board says “that the OPC and the eleven locals are therefore still affiliated Local Unions and an affiliated council of the IUBAC.”

It is time to bring this conflict to an end by opening a dialogue among all bricklayers. The IU is holding its convention in Atlantic City, New Jersey next week. This is the right time to begin the healing process.

We would like your participation, at least as a guest and observer, at the Atlantic City Convention. Because time is short, please contact us as soon as possible to work out the details. If you choose to accept our invitation, please call Vickie Dippel at the Convention Center at 609-449-3605.

Sincerely and fraternally,

“John J. Flynn”

John J. Flynn

President

8. While the letter contained no concrete proposals, the tone is an open and welcoming one which merited a response on the same level. It did not receive one.

9. Mr. Tom Oldham replied by letter dated September 21, 2000. It was on BACU letterhead. The text of the letter read:

I am responding on behalf of President Coelho to your letter of September 19th, 2000. On behalf of the BACU and its Locals we appreciate your invitation to your convention.

However the “healing process” you refer to is not likely to begin while you taking [sic] this fight to the work sites in Ontario. You have sent IU representatives onto jobsites to disrupt the work and the tradespeople. You have no rights of access to these sites. The healing process will take more than words.

In our view the international convention is not the place to discuss a settlement of this conflict.

We invite the newly elected General Executive Board to come to Toronto after the convention to discuss the International’s views on what concrete steps it is prepared to take to resolve our differences.

10. Mr. Flynn wrote back and stated in part:

I have received your correspondence dated September 21, 2000 and as I indicated in my letter to you I welcome the opportunity to discuss issues of concern to Ontario Trowel tradespeople. However, as Vice-Chair McKee’s decision makes clear, the BACU is not a successor union to the OPC and the OPC of the International Union of Bricklayers and Allied Craftworkers continues to be the Employee Bargaining Agency for the Brick and Tile sectors.

With respect to these issues, Vice Chair McKee decided, at paragraphs 154-156:

This conclusion means that the OPC and the eleven Locals are therefore still affiliated Local Unions and an affiliated council of the IUBAC. The purported revocation was ineffective after the filing of the s. 147 application and was withdrawn by the IU on August 16, 1999. The OPC and the Locals retain all of the rights duties and privileges which they held immediately prior to the revocation.”

As Vice Chair McKee’s decision makes clear, the OPC is still an affiliated local conference of the IUBAC. Specifically, Vice Chair McKee decides that the OPC retains all of the rights, duties and privileges which they held immediately prior to the revocation.

Given Vice-Chair McKee’s decision, the International Union urgently needs to know whether you are ready, willing and able to continue in your position as Secretary-Treasurer of the OPC in accordance with the IU Constitution and the OPC Constitution.

I hope that you are prepared to resume your role as Secretary-Treasurer of the OPC. Please confirm that you are prepared to do so within seven (7) days of receipt of this letter.

Fraternally,

“John J. Flynn”

John J. Flynn

President

11. Mr. Jerry Coelho wrote back, again on BACU letterhead, and stated:

The Executive Board wrote to you on September 21, 2000 to invite you and your executive board to discuss a settlement of this conflict. Our lawyer has also written yours to the same effect.

We take it that your letter of September 28th is the International’s response and we conclude from this response that settlement discussions with the International are pointless and we will not pursue that course of action any further.

As to your letter of September 28th, we point out the following:

The International Union unlawfully revoked the charters and has consistently taken the position that the officers of the Locals and the OPC were replaced by your appointees. In your sworn testimony before the Board, you indicated the International’s position that we were not officers of local unions or the OPC. The International launched a court action and sought injunctions confirming our removal from office and restraining us from using the name OPC or IU. The International set up new Locals and a new OPC and still maintains their existence.

On the other hand the elected officers of our Union have never taken the position that they were removed from office. There is no need for us to tell you whether we agree to resume elected positions that we never left.

It is up to the International to tell us what its position is now. If you want us to use the name OPC and local union of the IU, we expect you to end the court cases against us, advise us in writing of the names we can use, confirm that you have revoked the charters of the new Locals and new OPC, and confirm that all officers in office on October 18, 1998 remain in office, except where those officers have been replaced by election or appointment since.

If you are not willing to resolve the dispute between the Ontario membership and the American Union through a mutually agreed settlement, then we will leave the solution with the Ontario Labour Relations Board as Mr. McKee, whom you quote, has directed.

12. Mr. Flynn, responded with a lengthy letter which concludes as follows:

We urgently require that you confirm by close of business on Tuesday October 17th, 2000 that you are prepared to resume your duties as an officer of the OPC of the IU subject to the OPC and the IU Constitutions and not the BACU constitution. This is a simple yes or no question and we expect that you will provide a yes or no answer. Without a straight answer we must assume that you are unwilling to fulfill the terms of your office under the OPC and IU Constitutions and the IU will have no choice but to act accordingly.

We require you to agree to do the following assuming that you are prepared to resume your duties as an officer of the OPC of the IU:

1. YOU MUST FILL OUT, SIGN, HAVE WITNESSED AND RETURN THE ATTACHED OFFICERS PLEDGE. THIS PLEDGE IS REQUIRED OF ALL IU AFFILIATE OFFICERS AS SET OUT IN ARTICLE III (B) (PAGE 5) OF THE IU CONSTITUTION.

2. YOU MUST DO EVERYTHING IN YOUR POWER TO RETURN ALL PROPERTY OR FORMER PROPERTY TO THE OPC WHICH IS IN THE POSSESSION OR CONTROL OF THE BACU.

3. YOU MUST AGREE TO ALLOW AN IU REPRESENTATIVE OR DESIGNATE TO INSPECT ALL BOOKS, RECORDS AND PROPERTY OF THE OPC.

These 3 conditions are non-negotiable. You must accept these conditions or we will have no option but to place the OPC into receivership pursuant to the IU Constitution and to remove you from office. You have until 5:00 p.m. Tuesday October 17th, 2000 to agree without reservation to these non-negotiable conditions.

As long as you agree to continue in office by accepting the above-noted conditions, we will agree to the following:

1. We will revoke the charter of the “new” OPC chartered by the IU on or about November 5, 1998, but inactive since July 1999.

2. We will seek the dismissal of the court cases that were the subject of the proceedings before Mr. Justice Sharpe without costs against the individual defendants of which you are one and against all other individual defendants as long as they agree to the 3 conditions set out above. We are not prepared to drop or dismiss any court action against the BACU, its officers or any individual who wishes to continue their affiliation with the BACU.

3. We will ensure that you are full and active participants in the new Canadian Congress which was established by constitutional amendment at the recent IUBAC Convention.

We are prepared to discuss all other outstanding issues without preconditions and we trust that reasonable people being members of the same union can reach a mutually acceptable understanding.

To be clear, failure to agree to the above-noted conditions will result in the IU placing the OPC into receivership pursuant to the IU Constitution without further notice.

Messrs. Oldham and Coelho did not respond to this letter. On October 19, 2000 the IU imposed a receivership on the Ontario Provincial Council of the IUBAC. In the decision imposing the receivership, Mr. Flynn reviewed the correspondence and concluded as follows:

The foregoing causes me to believe: that the affairs of the Ontario Provincial Conference of the International Union are not being conducted by its officers in accordance with the Constitution and laws of the International Union but rather in accordance with the Constitution and laws of a rival trade union, the Brick and Allied Craft Union of Canada (BACU); and that the affairs of the OPC are being conducted by its officers so as to advance the interest of the BACU and to jeopardize the interest of the International Union, the interest of the OPC as an affiliate of the International and the interest of the IU/OPC membership in Ontario. On that basis and so as to assure that the affairs of the OPC of the IU are conducted in accordance with the Constitution and laws of the International Union, including the Constitution and laws of the OPC itself, and in the interest of the International Union, of the OPC and of the IU/OPC membership in Ontario, I am, this day, exercising my Article XV of the IU Constitution authority to suspend the OPC’s officers and to appoint Brother Joe Bognar, Jr. as Receiver to take charge of and control the OPC’s affairs in the manner specified in this Order.

General Analysis

13. In a decision in Board File No. 2532-98-U and others released contemporaneously with this decision, I have dealt extensively with the primary issues which arise in the on-going relationship between an international parent union and it locals or provincial councils. It is not necessary to repeat that analysis here, and the reader is referred to paragraphs 121to 146. This particular chapter in the history of the Bricklayers Union focuses on what I have described as the tension between the IU’s constitutional authority to be responsible for the internal governance of the union and the statutory right of a local union to act in an autonomous manner, even where that action (if it is protected by statute) brings the local union in conflict with its parent.

14. This case focuses specifically on the use of the IU’s constitutional authority to take control of the OPC. That is, it deals with the use of the “trusteeship” power in its traditional sense of the word: an international union takes control of a subordinate body, evicts the local officers from office and replaces them with persons appointed by the international union. By virtue of section 89 such a trusteeship is limited in time. It does not deal with wider issues brought into play by sections 147 or 149 about the on-going relationship between the parent and the local union or the internal bargaining structure of the union.

15. Constitutionally there is very little that would restrain or govern the motives or action of the IU. The statute, however, limits the use of that authority to situations where the IU has just cause to take the action it did. There is no definition of “just cause” in the statute. Section 149 directs the Board to have regard for the union’s constitution, but not only does it give it no particular weight, it states the Board “shall consider such other factors as it considers appropriate.”

16. The Board does not have a general mandate to supervise the content of union constitutions or to regulate the internal affairs of a trade union. Further, section 149 does not prohibit the use of a parent union’s constitutional authority, and indeed contemplates its exercise within the limits set by the standard of just cause. Section 149 is a statutory limitation on the exercise of a private contractual power, but not one which supplants or eliminates that power. It does so as part of the statutory scheme governing the basic activities of a trade union in Ontario – organizing employees, negotiating and administering collective agreements. Accordingly, the definition of a just cause standard which restricts the otherwise lawful exercise of constitutional authority must be drawn from the values expressed in the Act. Essentially, if the parent union’s use of its “private law” power disrupts the healthy functioning of a local union in the manner in which it exercises a right, duty or privilege defined by the Act, then section 149 is engaged. Just cause will be found only where the parent union’s actions are consistent with its own internal values, and likely to protect or enhance in the long run, the statutory rights, duties and privileges of the local union.

17. There may be a weighing of competing values in this analysis. The statutory rights duties and privileges of a local union are the first consideration under section 149. A parent union may not, as this IU attempted to do in 1998, place a provincial council in trusteeship to prevent it from making an application under section 154 to displace the IU as the Employee Bargaining Agency, regardless of how detrimental that application is to the interests of the parent union. The provincial council has a statutory right to make the application. If the IU has a valid objection under the statute, the place to bring that dispute is before the Board, the forum for litigating statutory rights. It has no right to use its constitutional authority to subvert the statutory process.

18. On the other hand, if a parent union were to intervene in a local unions affairs to settle a jurisdictional dispute with another trade, where the conflict was likely to do long term damage to the union as a whole, that level of supervision or control might be justified. If a parent were to engage in a restructuring of the union which is found to meet the just cause requirement of section 147 (e.g. Labourers International Union of North America Board File No. 0673-00-U, unreported March 29, 2001), and if it proved necessary to take control of a local to give effect to the decision, that trusteeship might well meet the just cause standard for section 149. That is, while the statutory rights, duties and privileges of a local union are the first consideration, they are not the only factor and may not be determinative. Such considerations will depend heavily of the facts of each case.

19. The concept of “just cause” has received very little elaboration due to the small number of cases decided by this Board. Those few decisions do provide some assistance, although each case, like this one, needs to be seen in the context of its own facts.

20. The first decision of the Board dealing with “just cause” dealt with a complaint of a violation of section 147: International Brotherhood of Electrical Workers, [1996] OLRB Rep. Feb. 70 (IBEW #1). That case involved the alteration of a local’s jurisdiction rather than the imposition of a trusteeship. In that case, the Board articulated the test as:

21. We are satisfied that “just cause” in section 147 of the Act creates an objective standard which requires something other than that a parent trade union act in a manner which is not arbitrary, discriminatory or in bad faith. While that may be part of the question which is properly asked in any given case, the question to be asked under section 147 is this: “Was the parent union’s decision a fair and reasonable one having regard to all of the circumstances?”

22. The nature of section 147 and the factors which the Board is directed to consider under it requires that the Board not limit itself to an examination of the parent union’s conduct in the decision-making process, and the factors which it considered. It may be that a parent union can do everything wrong in that respect and still end up with a decision which is fair and reasonable in the circumstances. That is, the question is not: “Could a parent union, acting honestly and looking at the situation and circumstances as a whole, and weighing the interests of all concerned, have reached the conclusion and made the jurisdictional decision it did?” Instead, the question is: “Having regard to the evidence before the Board, does that parent union’s decision yield a result which is fair and reasonable.”

While this is a definition of “just cause”, the context of a section 147 case will of necessity be different from the context of an imposition of a trusteeship challenged under section 149.

21. In cases dealing with trusteeships under section 149, the Board has focused more narrowly on the specific events which led to the trusteeship. In Interior Systems Contractors Association of Ontario, [1995] OLRB Rep. Aug. 1082, the Board said:

22. The evidence establishes that by the end of March 1995, the affairs of Local 675 were in disarray. Its senior officers had defected to Local 183, which was then mounting a campaign against Local 675 that threatened the very existence of the Local. Subordinate officials had also departed. There were serious doubts about the loyalty of administrative staff. A number of union members had deserted the local to join the rival union. And no one knew the extent to which the administration of the local had been subverted or whether funds had been misused or misappropriated. The ongoing activities and the day to day direction of the Local had been seriously undermined.

23. In International Brotherhood of Electrical Workers and Ken Woods, [1997] OLRB Rep. Dec. 1022, the Board found that a trusteeship was not justified on the facts found in that decision and stated:

24. … The IBEW asserts that the Local Executive Board or its members cannot take an action that effectively destroys the Local. The IBEW asserts that any motion brought to the Executive Board or to the membership which effectively destroys the Local Union or undermines the Local Union is not a lawful motion. In the face of such a motion, asserts the IBEW, the Local should be put into trusteeship.

25. The test under section 149 has previously been construed in International Brotherhood of Electrical Workers, [1996] OLRB Rep. Feb. 70 at page 91, par. 88:

We are satisfied that “just cause” in section 147 of the Act (now section 149) creates an objective standard which requires something other than that a parent union act in a manner which is not arbitrary, discriminatory or in bad faith. While that may be part of the question which is properly asked in any given case, the question to be asked under section 147 is this: “Was the parent union’s decision a fair and reasonable one having regard to all of the circumstances?”

36. The case referred to above dealt with a section 149(1) application. Counsel for Local 1788 asserted that there should be a different test for just cause for a section 149(2) application.

37. In my view, I do not have to decide whether the section 149(2) standard is appropriate or whether a higher standard is appropriate in a section 149(1) case. The decision that I come to is arrived at by applying the standard found [in] paragraph 36 above.

38. Local 1788 passed a motion saying that it was not going to appear at the judicial review of the application for certification. In its view, it was not appearing because of the cost involved and because it could not support the IBEW view and the Board’s decision. Local 1788 from the beginning has taken a consistent approach which is opposite to the view expressed by its International.

39. In my view, a local can reasonably dissent so long as its dissent does not irreparably affect the core values of the parent union.

In a case involving a trusteeship by this IU of Local 10 of the IUBAC in Kingston, reported as International Union of Bricklayers and Allied Craftworkers, [2000] OLRB Rep. Jan. 70, the Board said:

48. Local 10 did resist producing the financial books and records as ordered. Local 10 resisted full compliance with the Order until just prior to the first hearing date in this proceeding. Confronted with this resistance and a challenge to the authority of the IU President, which incidentally created a further suspicion that an investigation of the financial affairs of Local 10 was warranted, the IU placed Local 10 under receivership. Once Ms. Steele had the opportunity to review all of the financial books and records covered by the order, she made her reports to the IU, each of which disclosed an absence of receipts and other issues relating to Local 10’s record keeping. Based on Ms. Steele’s conclusions, the IU determined that it was appropriate to continue on with the receivership in order to resolve the outstanding issues.

49. These facts establish that the IU’s decision to issue the various orders against Local 10 were fair and reasonable in the circumstances. Although Local 10 initially appeared to believe that no one complained to the IU, the IU clearly did receive a complaint from Mr. Sauve and concerns were also expressed by Mr. Bailey and Mr. Ottenhoff. After investigating these concerns, the IU issued the order of August 15, 1996. The IU Constitution gives the IU the authority to make such an order and there is no requirement in the Constitution or otherwise for the IU to advise Local 10 about the complaint before issuing the order. The Board is satisfied that the IU did not breach any sort of natural justice obligations in making its orders against Local 10. The initial receivership order arose because of Local 10’s failure to comply with the August 15, 1996 order and the subsequent order to continue the receivership occurred when the IU determined, based on Ms. Steele’s reports, that there were some problems with respect to some aspects of Local 10’s financial record keeping.

50. Accordingly, the Board finds that the IU had just cause to make the orders that it did against Local 10. The Board notes that in reaching this conclusion, it has taken into account the nature of the IU’s response to the situation it was confronted with. The imposition of a gentle receivership was a measured response in the circumstances. If the IU had imposed a less than gentle receivership in these circumstances, the Board’s conclusion on the just cause issue may well have been different.

51. In another case involving these parties, referred to above (The Ontario Provincial Conference of the International Union of Bricklayers and Allied Craftworkers, [1998] OLRB Rep. April 285), the Board found at least on a preliminary basis, that it was a violation of the section 149 for the IU to attempt to prevent the OPC from exercising a statutory right that the Act gave it the right to exercise. As indicated above, I respectfully agree with those interim comments and adopt them as part of the ratio in this case.

52. Finally, in Board File 2532-98-U, the litigation referred to above, the Board issued an interim decision finding that the IU had violated section 147 and 149. In International Union of Bricklayers and Allied Craftworkers, [1999] OLRB Rep. July 622, the Board said:

53. Section 147(4) and section 149(3) of the Act mandates that the Board consider the constitution but is not bound by it and shall consider such other factors as it considers appropriate. These sections of the Act allow the Board the necessary jurisdiction to cure any deficiencies. By ousting the constitution as the only jurisdictional base for the Board to rely on, in its deliberations, the Legislature has mandated the Board to look at factors outside the constitution in determining just cause. If on the facts, after looking at all the factors, the Board concludes that the actions of the IU are fair and reasonable, then the Board may uphold the removal of the charters even though the process used by the IU was constitutionally flawed. The Legislature has empowered the Board with broad reviewing powers. Those powers include the affirmation of acts performed by a parent union even in a context where the acts performed are constitutionally flawed.

54. The BACU asserts that all actions taken by a parent union, where natural justice is not afforded, would amount to a lack of just cause. Again, it would depend on the actions taken by the parent union in a particular set of circumstances. The Board will require greater scrutiny of a subordinate’s procedural rights in a situation where the parent union has meted out a severe penalty. But even the most severe action taken by a parent union, in the proper context, with the right facts might lead the Board to uphold the penalty meted out even though the process is flawed and the parent union denied the subordinate procedural guarantees.

55. I find that the IU had cause to be concerned about the situation. They also had cause to investigate the situation. However, the IU did not have cause to revoke the charters without giving the OPC and the Locals a full opportunity to explain and defend their actions before the group that was to make the decision on the matter. I find, pursuant to section 149, that the IU did not act reasonably and therefore did not have just cause to take the actions it took.

56. The revocation of the charters, created serious labour relations harm to what has historically been a stable bargaining environment. Removing the charters from the OPC and locals undermines the Designated Bargaining Agency structure. The ABA’s and the EBA are the foundation of the province-wide bargaining scheme. The province-wide scheme does not contemplate the evaporation of the EBA and the majority of the ABA’s. This is especially true when the fight is about money. There was a myriad of approaches open to the IU, short of revocation of the charters, that could have rectified the problem. There is no evidence that the IU had any internal discussion about alternative approaches. It seems the IU was bent on the most severe approach in a situation that called for less drastic measures. The IU should have taken action aimed at solving the dues problem, rather than taking action exacerbating the autonomy question.

57. While it is unwise, particularly in light of the small number of cases decided, to generalize in any definitive way, the following principles emerge from the cases the Board has decided so far, in dealing with the imposition of a trusteeship or other form of control which is alleged to be a violation of section 149. This list is simply a summary of cases decided so far and cannot be a definitive list of all the considerations that apply in a section 149 analysis.

1. A parent union has the right to protect and advance the primary values and the institutional integrity of the Union. A parent and a local union may be in conflict, but they are not strangers in an arms-length relationship.

2. The parent union does not require the consent of the local union to take action.

3. The parent union may impose a temporary trusteeship on a local union to correct a specific problem and must relinquish that control of the local union once the problem has been corrected.

4. The power of the parent union to impose a trusteeship (in the classic sense) is limited by section 149. The section is in part an attempt to address a central tension in the internal affairs of most construction unions. That tension springs from the reality that while a union’s organizational authority is highly concentrated in the hands of the parent, the primary activities of the union (collective bargaining and benefit administration) are in the hands of the local. The Act has changed that relationship by statutorily mandating a level of institutional autonomy for local unions, notwithstanding anything in the parent union’s constitution.

5. Local unions are entitled to be in conflict with their parent unions. The extent to which they are entitled to be in conflict is inevitably fact driven. It will usually be the case that a local union is entitled to avail itself of any rights to which it is entitled by virtue of the statute, notwithstanding any degree of conflict with the parent that the exercise of such rights may generate. The issue of the institutional relationship between the parent union and local unions in Ontario is one which may lead to conflict. The fact that a local union may wish to pursue a more independent course from the parent than the parent would like is not, in and of itself, just cause for interfering in local union’s affairs by means of trusteeship or other methods of control. The steps a local union undertakes in pursuit of such greater autonomy may justify trusteeship.

6. The parent union may have just cause to impose a form of trusteeship when the actions of the local union go beyond “legitimate dissent” and constitute a threat to the values of a union, or to its ultimate institutional integrity, or to the financial or institutional stability or survival of the local union, provided that none of these factors would unduly prevent the local union from effectively exercising its rights, duties and privileges under the Act. Much will depend on an assessment of the facts in each case.

7. Process, which need not meet the standards of “natural justice” that a tribunal such as this Board must adhere to, will be of varying degrees of importance. In IBEW #1 the Board gave great weight to the result and little to the process. In contrast in Board File No. 2532-98-U the Board placed significant weight on a lack of process. That latter case seems to depend greatly on a finding that the IU failed to provide the Ontario Locals and the OPC with the opportunity to “explain and defend” their actions. On this issue, context will entirely define the degree to which process and the application of any standards of process are relevant to a finding of just cause or a lack thereof.

26. The above comments are fairly general, as any summary must inevitably be. The factual context of any dispute will determine the extent to which any principle is important or determinative.

Analysis of the Facts of this Case

27. The letters sent by the parties speak for themselves. It is possible to be critical of the tone of these letters, and of the absence of any attempt to engage in meaningful dialogue. The letters of Mr Oldham and Mr. Coelho seem designed to cause the maximum irritation on the very issues on which the IU was most likely to be sensitive. The use of BACU letterhead seems designed to provoke irritation or anger on the part of the IU. After all, the BACU was a rival trade union seeking to displace the IU in the Kvaerner decision and across the province generally. Even accepting counsel’s submission that Messrs. Oldham and Coelho believed they were potentially enjoined from using IU letterhead, even when replying to a letter addressed to them as the representative of the OPC of the IU, the use of a blank piece of paper would have been less provocative.

28. On the other hand, Mr. Flynn’s responses are on much the same level. The responses were entirely out of proportion even to the offensive portions of the letters and showed a zeal for conflict at least equal to that displayed by the OPC.

29. It is relatively easy for an adjudicator removed from the conflict among these parties to calmly review the letters and be critical of the tone and content of them. Those who have been at the centre of an intense conflict for up to five years, even with the advice of counsel, may say and write words that were better left unsaid. All of these gentlemen were talking about a fundamental conflict in a union to which they had devoted their lives, and one which carried with it enormously high personal and institutional stakes.

30. Section 149 does not, however, set out rules of etiquette for internal trade union discourse. Parties can say what they like to one another. However, the IU is the “parent union” and has a constitutional right to impose a receivership or other forms of control on subordinate bodies. It did so on the basis of this correspondence. When a parent union decides to take this step, it does not matter how rude vexatious or provoking the local union has been. The issue is whether the reason for the exercise of this power meets the standard of just cause. In this case, no matter how the issue is addressed, the IU’s imposition of a receivership did not.

31. I will deal with the application of section 149 in the context of the parties’ belief about the effect of the Kvaerner decision below. However, the legal reality for both parties was that the Kvaerner decision had little impact on the relief sought in Board File No. 2532-98-U. That case was in the same position on September 15, 2000 as on the day it was adjourned. The only difference was that the transformation/successor argument, based on actions taken before June of 2000, was no longer available to the applicant. The IU had been found to have violated sections 147 and 149 in revoking the charters of the OPC and the Ontario Locals. The IU acknowledged that the remedies needed to go beyond the restoration of the status quo ante. The Ontario Locals and the OPC were still asking the Board to sever the ties between the IU and the Ontario Locals and OPC.

32. Little was said about Board File No. 2532-98-U in the Kvaerner decision, primarily because at that point I had not been appointed to hear and determine the question of remedy. However, even in that context, the result in the Kvaerner case was to a limited extent dependent on the potential outcome of Board File No. 2532-98-U. The last paragraph before the concluding summary dealing with part of the claim under section 68 states:

The Board has the power to order whatever remedies are required to remedy the IU’s violation in Board File No. 2532-98-U. Even the IU concedes that these remedies will have to go beyond the mere act of revocation (now withdrawn) and must include remedies dealing with the on-going relations between the parties. The attempt to transfer jurisdiction was a response to the IU’s unlawful behaviour. Until it is demonstrated that remedies in Board File No. 2532-98-U are ineffective to deal with the real concerns of the BACU there is no reason to exercise the Board’s discretion to issue a declaration which faces such enormous statutory and discretionary impediments.

33. In the context of the true legal position of the parties, the actions of the IU were entirely untenable. It sought to use its constitutional power essentially to require the OPC and the Ontario Locals to abandon all of the relief they sought in Board File No. 2532-98-U. It had done something similar in 1998. In The Ontario Provincial Conference of the International Union of Bricklayers and Allied Craftworkers, [1998] OLRB Rep. April 285, the Board dealt with an application under its authority, at that time, to issue interim orders. The OPC had applied under section 154 to displace the IUBAC as part of the Employee Bargaining Agency for the Union in both the “Brick” and “Tile” designations. The IU placed the OPC in receivership to prevent that application from proceeding. Although the decision is an interim one rather than a final one (no final decision was ever issued as the parties never pursued the matter), the Board’s comments are worth noting:

34. It is certainly arguable that the actions and sanctions initiated by the American parent were intended to, or had the effect of, interfering with the exercise of rights under the statute. Likewise, it is arguable that those actions might be construed as a form of “penalty” because the OPC and its officers have launched a proceeding under section 154 or propose to participate in that proceeding and give evidence as necessary. Moreover, I think that these propositions are “arguable”, whether or not, as the OPC claims, the American parent’s actions are tainted by inappropriate political motives.

35. I am also satisfied that it is quite arguable that the receivership was undertaken “without just cause”, and/or that the particular actions of the receiver in respect of the section 154 application or the Ontario bargaining, might be subject to successful review under section 149(4). It is, to say the least, a novel proposition to suggest that an American parent can effectively insulate itself from challenge under section 154 of the Act, by the simple expedient of putting all of the Ontario locals under trusteeship and dismissing their local officers; and while counsel for the union is correct that section 89 of the Act contemplates the possibility of a “receivership”, I am not aware of any body of law supporting what the receiver has tried to do, or reserves his right to do here – especially in light of the Bill 80 provisions referred to earlier.

36. As a party to the section 154 proceedings, the American parent would be able to make whatever argument it considers appropriate. However, I do not think that it is entitled to use the terms of its constitution to derail the proceeding, or usurp the role and voice of the Ontario locals – a role and voice which is historically entrenched and recognized in the statute itself. For not only is this constitutional assertion apparently inconsistent with the scheme of the Act, and “quite arguably unlawful” under Ontario law, but it must also be remembered that the very purpose of the statute is “to facilitate collective bargaining between employers and trade unions that are the freely-designated representatives of the employees”. And in this setting, the “freely-designated representatives of the employees” are the local unions: holding bargaining rights, situated in Ontario, and grouped together under the umbrella of the OPC.

37. The same is true in this case. I agree with the statements quoted above, and in particular apply the rationale set out therein to this case. As a general matter, a parent union may not impose a trusteeship simply to prevent an affiliate from exercising a right which the Labour Relations Act, 1995 permits that local union to exercise or apply to exercise. There may be exceptions to this general rule, but they will be few and limited. In the context of this case, the IU had no justification for requiring the OPC and the Ontario Locals to do what it demanded, and to place them in receivership when they refused to comply. In doing so it violated section 149.

Alternative Analysis

35. For the benefit of the parties, and because it will be of relevance in Board File No. 2532-98-U, I propose to assess the situation in the context of what the parties believed their legal positions to be. While strictly speaking, this is obiter dicta, it has a bearing on the appropriate relief in Board File No. 2532-98-U, an issue I must also decide.

36. The letters sent by Mr. Coelho and Mr. Oldham were inappropriate. Whether this was an expression of their anxiety about the likely actions of the IU or whether they had in fact no intention of ever coming to terms with the IU cannot be demonstrated by the evidence the IU had before it when it decided to impose a receivership. However, it hardly matters. As in so many of the disputes between these parties over the past 5 years, it is not about any substantive issue other than the relative power of the two parties. Had the IU attempted to engage the OPC on discussions of real substance about the issues facing the union, and about how governance issues could be dealt with in the context of those issues, it might have accomplished something. Had it found the OPC unwilling to engage in any dialogue at all, some institutional response might have been appropriate. However, the IU could not see beyond its need to establish absolute power in its relationship with the OPC, before any discussions of substance could occur.

37. The tone of Mr. Flynn’s the September 19 letter was entirely appropriate, but it contains no concrete suggestions. As a first step, an abundance of goodwill and an absence of such proposals was a good idea. However, by the third letter the IU had set out a rigid, combative and threatening position. Before it would even begin to talk to the Ontario Officers, it wanted them, in effect, to acknowledge that they had lost the entire dispute with the IU and to abjectly surrender. The three “non-negotiable” conditions were exactly the wrong place to begin. They included:

(a) A demand that the Officers sign the pledge set out in the constitution.

There is no such requirement in the constitution of the IUBAC. It was invented by the IU as a requirement for a particularly humiliating form of surrender by the Ontario Officers. While it was important to ascertain the intention of the officers, there was no need to do so in this manner.

(b) The Officers were required to do all they could to retrieve the property and assets of the IUBAC.

One wonders how, if having fulfilled the first condition and, in conformity with the obligations on a member and officer of the union set out in Code 5 of the Constitution, resigned from all positions with the BACU, the Officers were expected to lawfully carry out this instruction.

(c) Permit an inspection of the books and records of the OPC.

At no time was there a suggestion that funds were being converted to the use of anyone other than the BACU. That is, there is no need to find out whether or not funds had been improperly used by particular individuals. It was also open and notorious that the assets and funds of the union in Ontario had been transferred into the name of the BACU. The purpose here was obviously to seek to identify all assets in respect of which the IU would have a potential claim to assist the IU in recovering them from the BACU.

38. The effect of placing these three demands as the primary “non-negotiable” demands which the IU required of the Ontario Officers before it would even talk to them was this. It indicated to the Ontario Officers and members (and frankly to this Board) that the primary concern about relations with Ontario locals centred on two things: first, a requirement of unquestioning and unwavering loyalty, and second, control of the assets and income of the union in Ontario. Apparently, of less importance to the IU were such matters as bargaining rights, representation of employees, ongoing governance of benefit plans, protocols for bargaining (although presumably the pledge might be seen as a commitment to reinstate the IU dues check-off), internal governance of the union, and autonomy for Canadian locals. Faced with this demand, it is hardly surprising that no response was received from the Ontario Officers.

39. In this case, even if its assessment of the Kvaerner case had been correct, the actions of the IU do not meet even the most generous definition of “just cause”. As stated above, there will be times when a parent union is forced to take the step of taking some control of an affiliate. October 19, 2000 was not one of them. Essentially, the IU believed that it had won the outstanding litigation between itself and the Ontario Locals. In fact, the Ontario Locals in the BACU thought so too. Even if that had been the case, in the context of five years of conflict and litigation, the IU was not entitled, upon being declared the “victor”, to burn down the walls and sack the city. This Board had repeatedly found the IU to be in violation of one or more sections of the Act because it was not prepared to recognise the legitimate aspirations for greater autonomy held by Ontario members, which aspirations are protected by the statute. To engage in the “healing process” which the IU claimed to search for, required the IU to proceed with patience and tact as well as firmness. It required the IU, as a “parent” to ignore the sometimes juvenile insults directed at it by the Ontario officers. Receivership would be justified only when the IU could demonstrate that it had made reasonable attempts to respond to the legitimate needs and aspirations of the Ontario Locals and that notwithstanding these efforts, the OPC was not willing to live up to the basic minimum obligations of a local union. It should not need to be repeated that what is reasonable in the circumstances of this case is determined by the history of the past five years. This history has been created in large measure by repeated violations of the Act by the IU.

40. At the very least, the IU ought to have realized that there were a number of practical problems in dealing with the Ontario Locals. Litigation was far from over. There was still a willingness on the part of some to use the BACU as a vehicle for driving the IU from the province. Even if the IU were in control of the OPC, the cost of recovering the assets might well consume the value of those assets. More importantly, there was a large number of those persons the IU wished to retain as members in Ontario who were entirely opposed to the International Union. The Ontario Officers and Locals, other than 6, 7 and 25, were, directly or through the BACU, legally or de facto in control of the organization and collective bargaining for the union in Ontario.

41. Institutionally, there was still a very real issue about Canadian autonomy. This was an issue the IU was prepared (with perhaps less enthusiasm than the situation required) to address in its ongoing discussions with other Canadian locals to create a “Canadian Congress”. Before taking the action it did, it was incumbent on the IU to engage the Ontario Locals in a discussion about that autonomy issue and to ascertain the extent to which agreement might be achieved. The IU might not have found this position comfortable because it would not have been dealing from a position of strength. This situation was largely a result of the IU’s making, and it was incumbent on the IU to understand this. Only if no reasonable accommodation with the Ontario locals could be achieved, and any action on the part of the IU gave appropriate weight relative weight to the rights and interests of both the IU and the OPC, would receivership be justified.

42. The IU was not at that stage in the process. It had not even begun down that road. Had it attempted to address the problem of the Ontario Locals as I have suggested above, it might have discovered a basis for dialogue. It might equally have quickly discovered the OPC had no interest in meaningful discussion at all. Certainly OPC/BACU representatives had previously said so publicly, and their counsel said so explicitly to the Board in the Kvaerner case. They had also said so in the context of a number of decisions from this Board which upheld the right, broadly speaking, of the OPC and the Ontario Locals to seek greater autonomy from the IU than it was prepared to agree to. However, the issuing of the Kvaerner decision might have changed the landscape. After all, both parties shared the same (erroneous) view of what the effect of the decision meant. Regardless of what might have happened, it cannot be said that the evidence of what the IU had before it on October 19, 2000 justified the imposition of a receivership.

43. The actions of the IU were not simply errors of judgement or a misplaced sense of timing. The IU did not display, on the facts of this case, any interest in paying more than lip service to the idea of re-establishing a working relationship with the Ontario Locals. It quickly revealed its primary interests and agenda: a demand for absolute obedience and immediate control of the assets and operations of the Union in Ontario. Only when it had established these “non-negotiable” objectives was it prepared to sit down and talk to the Ontario Locals about whatever else was on their mind. To proceed from that basic position was fundamentally to misconceive the role of a parent union under the Act. A parent union does have a role, but it is not that of an absolute dictator. This appears to be something the IU has not learned, despite ample opportunity to do so over the past five years.

44. For these reasons, the Board found that the IU did not have just cause to impose a receivership on the Ontario Provincial Council of October 19, 2000. By a decision dated February 1, 2001, the Board ordered that the receivership order was to be of no force and effect. Since the parties did not have the opportunity to address any further issues of remedy, that issue will not be dealt with further here, but will be reserved to another appropriate occasion.

“David A. McKee ”

for the Board