0021-00-R Drywall Acoustic Lathing and Insulation Local 675, United Brotherhood of Carpenters and Joiners of America, Applicant v. Lisi Brothers Construction Limited, 745265 Ontario Limited c.o.b. as Elite Construction, Andan Drywall Ltd., 1184062 Ontario Limited, Lisi General Construction, Responding Parties.

BEFORE: Marilyn Silverman, Vice-Chair.

APPEARANCES: Michael McCreary for the applicant; Joseph Liberman and Bruno Lisi for Andan Drywall Ltd.; Marc Drudi for Elite Construction.

DECISION OF THE BOARD; July 11, 2001

1. This is an application filed under sections 69 and 1(4) of the Labour Relations Act, 1995, S.O. 1995, c.1 (“the Act”). The applicant (“the union”) seeks to have the Board declare that the responding parties 745265 Ontario Limited c.o.b. as Elite Construction (“Elite”) and Andan Drywall Ltd (“Andan”) are bound to the collective agreement to which the union and the responding parties Lisi Brothers Construction Limited (“Lisi Brothers”) and 1184062 Ontario Limited, Lisi General Construction (“Lisi General”) are bound either by reason of a sale of a business or because the corporations carry on related businesses under common control and direction such as to lead the Board to exercise its discretion under section 1(4) of the Act to declare that they are a single employer for the purposes of the Act.

2. Prior to hearing the case on the merits on the date scheduled for hearing (May 30, 2001), the applicant sought to add another responding party to the application. The applicant had previously been successful in adding Lisi General as a responding party on the first scheduled day of hearing, by decision dated February 14, 2001. Following that decision the applicant sent a letter to the Registrar dated April 19, 2001 with a request to add Sager Drywall Ltd. to these proceedings. The Board (differently constituted) by decision dated April 20, 2001 sought submissions to this request and Andan objected to the request by letter from counsel dated May 10, 2001. The applicant did not respond and the Board denied the request by decision dated May 23, 2001. Counsel for the applicant states that it did not receive a copy of the Board’s April 20, 2001 decision requesting submissions although it did received counsel’s letter of May 10, 2001 objecting to the applicant’s request and it also received the Board’s May 23, 2001 decision denying the request.

3. In these circumstances, on May 30, 2001 I denied the applicant’s request to add another responding party to the proceedings. The applicant did not do anything to rectify this matter prior to the scheduled day of hearing even though it received both a letter from counsel for Andan referring to an April 20, 2001 decision and a decision dated May 23, 2001 denying the applicant’s original request. The applicant was permitted at the last day of hearing in February 2001 to add Lisi General as a responding party. If there were other parties that it wanted to involve, that was the time to do so, not when the parties came to the Board prepared to proceed with the case.

The Facts

4. Lisi Brothers operated as a drywall contractor in the institutional, commercial and industrial sector of the construction industry for approximately 20 to 25 years. It is bound to the Carpenters Provincial Collective Agreement between the Carpenters Employer Bargaining Agency and the Ontario Provincial Council United Brotherhood of Carpenters and Joiners of America and the Carpenters Residential Collective Agreement between Drywall Acoustic Lathing and Insulation Local 675, United Brotherhood of Carpenters and Joiners of America, and the Interior Systems Contractors Association (the “collective agreement”). Lisi Brothers has not been operational since about 1996 when its two owners, Germano Lisi and Silvano Lisi retired. Germano and Silvano are brothers. Germano Lisi and Silvano Lisi were the sole shareholders, officers and directors of Lisi Brothers. Only they had authority to sign cheques. Silvano Lisi appears to have been the driving force within Lisi Brothers although both brothers were integral to its operation.

5. Lisi General is also a drywall contractor bound to the collective agreement. Its sole shareholder, officer and director is and always has been Enrico Lisi, the son of Silvano Lisi. Lisi General began operation in 1996.

6. Elite is a non-union general contractor. Its sole shareholder, officer and director is and always has been Enrico Lisi, a son of Germano Lisi. I shall refer to Enrico Lisi, the son of Silvano Lisi as “Enrico Lisi (S)” and Enrico Lisi the son of Germano Lisi as “Enrico Lisi (G)”. Elite began operation in 1988 and continues to date.

7. Andan is a non-union drywall contractor whose sole shareholder, officer and director is Bruno Lisi, another son of Germano Lisi. Andan was created by Enrico Lisi (G) with a number of other companies in order for Elite (his primary company) to have its own sub-trades to sub-contract work. Bruno Lisi began working at Andan in 1993 or 1994. Enrico Lisi (G) sold his entire interest in Andan to Bruno Lisi in 1996. Bruno Lisi has been operating Andan ever since. Before then, Bruno Lisi did pricing, ran the jobs and ensured the availability of materials. As the business improved in the ensuing years his salary and bonuses increased and, as stated, he eventually bought the business from his brother.

8. Each of the witnesses testified as to their connection to Lisi Brothers and to their other educational and work experiences. None of these witnesses, the sons and or/nephews of Silvano Lisi and Germano Lisi, were ever shareholders, officers or directors in Lisi Brothers.

9. Enrico Lisi (S) worked at Lisi Brothers as a site supervisor from approximately 1986 to 1996. He left in 1996 when he was the only employee other than the two senior Lisi brothers. The complement of employees shrunk from ten employees in 1990 to just those three in 1996.

10. In 1996 when Lisi Brothers began to accumulate debt and fell on hard times, Enrico Lisi (S) established Lisi General. When he started Lisi General, Enrico Lisi (S) obtained some customers from Lisi Brothers. On February 6, 1997 Enrico Lisi (S) signed a voluntary recognition agreement with the union on behalf of Lisi General.

11. Enrico Lisi (G) was not involved in Lisi General nor has Elite ever performed services for Lisi General. Enrico Lisi (G) worked for Lisi Brothers as a summer student from 1978 into the early 1980’s. He studied architectural technology at Humber College in the early 1980’s and worked at various formwork companies, including as a project manager and estimator for Style Construction from 1983 to 1987. In 1988 he established Elite.

12. Bruno Lisi also initially worked for Lisi Brothers as a summer student. He then began working regularly for them after he finished school for approximately six (6) months. His duties were clean-up, picking up and delivering materials. He then went to work for a company called the Georgian Group, a home-builder, for over a year. In his position with Georgian Group he dealt with clients, preparing interior sketches which were forwarded to various sub-trades for pricing. Bruno Lisi then worked for Style Construction, performing the same sort of function he had with the Georgian Group, with greater responsibility. He remained in that position for a year. Bruno Lisi left Style Construction because his brother, Enrico Lisi (G) (who had also worked there) was starting his own business which would compete with Style Construction. The owner of Style Construction did not want Bruno Lisi working there under those conditions. Bruno Lisi then returned to Lisi Brothers. He worked as an estimator. He did the quantity take-offs to which Silvano Lisi added the profit and overhead. He was not involved in negotiating with general contractors or sub-contractors without Silvano Lisi present. He was there from approximately 1988/89 to 1993. He was subsequently laid off when business slowed but then was re-hired temporarily after his employment insurance benefits were exhausted. During his brief return Bruno Lisi spent most of his time in the office as there was very little of his former work to do. The business continued to decline at Lisi Brothers and Bruno Lisi went to work at Andan.

13. Neither Silvano Lisi or Germano Lisi have been involved with directing the work forces, bidding or pricing jobs in Andan. None of Andan’s equipment was from Lisi Brothers. Elite was a client of Lisi Brothers. One drywall installer from Lisi Brothers went to work for Andan. Lisi Brothers did do a substantial amount of work with Elite. Elite is a substantial customer of Andan’s.

14. Neither Germano Lisi or Silvano Lisi have held any positions in either Andan or Elite or been involved in the running or operation of these companies.

Submissions of the parties

15. Both employers submit that the union has not made out a case for the application of either section 69 or section 1(4). They contend that the evidence I heard does not establish that either Enrico Lisi (G) or Bruno Lisi were key men in the operation of Lisi Brothers. The existence and operation of both companies pre-dated Lisi Brothers. Counsel for Andan reviewed the relevant case law in support of its position. The cases relied on were Brant Erecting and Hoisting, [1980] OLRB Rep. July 945; Inplant Contractors Inc., [1993] OLRB Rep. May 421; Merit Contractors of Niagara, [1994] OLRB Rep. February 152; Tri-Corps Industrial Contractors, [1994] OLRB Rep. October 1446; Joe Pantalone Masonry Co. Ltd. [unreported] OLRB July 1996; Highview Plumbing & Heating Ltd., [1997] O.L.R.D. No. 1791 May; Hallman Construction Ltd., [1999] O.L.R.D. No. 1277 May; Beldin Electric Limited [unreported] OLRB January 2000; Peter Curkovic Ltd. [unreported] OLRB August 2000.

16. The union contends that this is the case of a “key family”. It lists five facts that it says distinguishes this case from the ones relied on by the employers. First, there is the close family relationship of the principals. Second, the timing of the wind down of Lisi Brothers corresponded with the incorporation and operation of Andan. Third, the union conceives of a “key family” where each member is not key but collectively they are. It asserts that each member did some work that was integral to the business and that the departure of Bruno Lisi and Enrico Lisi (S) and (G) had the effect in these circumstances of extending rights to the businesses that they subsequently operated. Fourth, Bruno Lisi did estimating and that is an integral part of the drywall construction business. Fifth, Lisi Brothers did not survive the departure of the brothers/nephews. In short the union contends that the Board must preserve the rights in whatever entity is currently filling the void for Lisi Brothers which it says is the drywall operation of Elite and Andan.

17. The union puts forward three distinct scenarios in respect of the sale of business portion of its case. It says that that there has been a sale (or part sale) from Lisi Brothers to Andan and then to Elite. Alternatively it says there has been a sale from Lisi Brothers to Elite and then to Andan. In the further alternative there has been a sale from Lisi Brothers to Lisi General and then to Elite and finally to Andan. The union makes clear that its only interest is in the drywall work of Elite and it is not attempting to attach the general contractor part of Elite’s business. The union asserts that the businesses all have a close sub-contracting relationship. It relies on the cases of Booth Fisheries, [1991] OLRB Rep. August 947 and R.R. Projects Inc., Golden Arm Flooring Inc., [1992] O.L.R.D. No. 2210.

Decision

18. The Act was amended after the filing of this application and part of those amendments relate to sections 69 and 1(4).

19. The parties are agreed that the new enactments do not apply as the statute changed after the application was filed. For context however, the thrust of the change significant to this application is that the Board can no longer consider “blood relationships” in a determination under these sections of the Act. While the employers assert that the new legislation merely codifies the Board jurisprudence on the issue of familial relationships, the union submits that the new legislation completely changes the law in this area and the Board was required to look at those relationships before. Therefore since this case must be decided on the basis of the jurisprudence that existed before the new enactments, the familial ties are key in the union’s view.

20. The relevant sections of the Act read in part as follows:

21. (1) In this Act,

(4).......... Where, in the opinion of the Board, associated or related activities or businesses are carried on, whether or not simultaneously, by or through more than one corporation, individual, firm, syndicate or association or any combination thereof, under common control or direction, the Board may, upon the application of any person, trade union or council of trade unions concerned, treat the corporations, individuals, firms, syndicates or associations or any combination thereof as constituting one employer for the purposes of this Act and grant such relief, by way of declaration or otherwise, as it may deem appropriate.

69. (1) In this section,

"business" includes a part or parts thereof; ("entreprise")

"sells" includes leases, transfers and any other manner of disposition, and "sold" and "sale" have corresponding meanings. ("vend", "vendu", "vente")

(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.

21. The conditions precedent for a determination under section 1(4) have been set out by the Board on many occasions. They are:

(1) there must be more than one corporation, firm, individual, syndicate or association;

(2) these entities must be engaged in associated or related businesses or activities; and

(3) these entities must be under common control and direction.

22. Even without an analysis of the other factors, it is clear to me on the evidence presented there is no common control or direction between the union companies Lisi General and Lisi Brothers and either Andan or Elite.

23. Lisi Brothers was an operation that was at all times owned, operated and controlled in all respects by Silvano Lisi and Germano Lisi. The fact that Lisi Brothers employed some of their relatives over some period of time in these circumstances does not assist the union. Enrico Lisi (G) worked for Lisi Brothers in the summer, took construction related courses, worked for two large forming companies and then started Elite in 1988 as a non-union general contractor. Out of Elite and the initiative of Enrico Lisi (G) a number of other companies were formed, one of which was Andan.

24. Bruno Lisi performed some estimating work for Lisi Brothers. It is clear that the jobs were not finally priced or agreed to without the ultimate decision making of Silvano Lisi.

25. There is no common share structure or corporate connection between Lisi Brothers or Lisi General (the union companies) and either Andan or Elite. I agree with counsel for Andan when he says that Lisi Brothers was Germano Lisi and Silvano Lisi. Neither of these individuals have anything to do with Andan or Elite.

26. The union argues that this is a case of a “key family” and as such fits into the jurisprudence regarding “key man” cases. Andan grew out of Elite and the efforts of Enrico Lisi (G). Enrico Lisi (G) had a very tenuous business connection to Lisi Brothers and one that dated back a substantial number of years. By the time Bruno Lisi took over, Andan was an established non-union company. Even the introduction of Bruno Lisi into the Andan picture does not assist the union as his connection with Lisi Brothers, although more significant than Enrico Lisi (G)’s, is not enough to establish him as a key man. The most significant work he did was quantity take offs – he was not instrumental in establishing or confirming prices with customers. His comings and goings from Lisi Brothers did not change the nature or success of that business. His impact was not significant. This impact of a “key man” is described at paragraph 14 of Merit Contractors of Niagara, supra:

27. As the Board pointed out in Gallant Painting, supra, not every movement of a person significant to a business will constitute a sale of business within the meaning of the Labour Relations Act, or otherwise attract labour relations consequences. In that respect, the applicants were unable to point to any “key person” case in which the Board found a sale of business where the “key person” did not hold an ownership interest in the alleged predecessor or a vendor entity which subsequently ceased to operate. It is conceivable that an individual could be a “key person” and that a business could survice [sic] his/her departure. But however important a person may be to the operation of a business, s/he will not be a “key person” within the meaning of the Board’s sale of business jurisprudence unless the business is substantially different without him/her. That is, for an individual to be “key person”, s/he must be identified with a business or some significant part of it.

28. The union asserts that the timing of the set up and operation of Andan directly corresponds to the wind down of Lisi Brothers. Bruno Lisi left Lisi Brothers because there was not sufficient work. I do not conclude that the demise of Lisi Brothers happened because Bruno Lisi left Lisi Brothers to work for Andan. The work did not flow out of Lisi Brothers and to Andan with the departure of Bruno Lisi. The fact that Andan later benefited from some of the work that Lisi Brothers did does not alter this conclusion.

29. I have reviewed the cases presented by the union. I am not bound to find in its favour on the simple basis of the familial relationship between the principals of the parties. Both the decisions in Highview, supra, and Beldin, supra, involved familial relationships. Although such relationships were factors in these cases they did not of themselves determine the cases. In this case those there is very little to substantiate the union’s position other than those relationships.

30. Finally, there has been no sale or movement of anything from Lisi Brothers to either Andan or Elite. There was no evidence of transfers or dispositions from the union companies to the non-union companies as would meet the requirements of section 69.

31. Having regard to the reasons provided above, the application under section 69 and subsection 1(4) is hereby dismissed.

“Marilyn Silverman”

for the Board