0006‑96‑U International Brotherhood of Electrical Workers, Local 586, Applicant v. K2 Contracting Inc., Kantec Corp. Inc., Kantec Builders Inc., Cranham Holdings Limited, Boldt Electrical Co. 1991 Ltd., James Davies, Carling Electric Inc., Responding Parties.

0007‑96‑R International Brotherhood of Electrical Workers, Local 586, Applicant v. K2 Contracting Inc., Kantec Corp. Inc., Kantec Builders Inc., Cranham Holdings Limited, Boldt Electrical Co. 1991 Ltd., James Davies, Carling Electric Inc., Responding Parties.

0008‑96‑G International Brotherhood of Electrical Workers, Local 586, Applicant v. K2 Contracting Inc., Kantec Corp. Inc., Kantec Builders Inc., Cranham Holdings Limited, Boldt Electrical Co. 1991 Ltd., James Davies, Carling Electric Inc., Responding Parties.

BEFORE: Inge M. Stamp, Vice-Chair.

APPEARANCES: Michael Gottheil, Tom Reid and Ken Scott for the applicant; David Cowling and Ray Boldt for Boldt Electrical Co. 1991 Ltd.; James Davies, Michael S. Ruddy and Geoff McMilllan for K2 Contracting Inc., Kantec Corp. In., Kantec builders Inc. and Cranham Holdings Limited; no one appearing for Carling Electric Inc.

DECISION OF THE BOARD; May 1, 2001

1These are related matters. Board File 0006-96-U is an application under section 96 of the Labour Relations Act, 1995 (the “Act”) in which the applicant alleges the responding parties have violated sections 70, 72, 76, 87 and 96(7) of the Act. Board File No. 0007-96-R is an application under section 69 and 1(4) of the Act asserting that there has been a sale of a business from K2 Contracting Inc. (“K2”) and/or Kantec Corp. Inc., Kantec Builders Inc. (“Kantec”) to Boldt Electrical Co. 1991 Ltd. (“Boldt”). In the alternative the applicant contends that all of the responding parties are carrying on business under common direction and control and/or are associated or related businesses such that they should be treated one employer for the purposes of the Act. Board File 0008-96-G is a referral of grievance alleging breaches of the collective agreement the applicant asserts is binding on all of the responding parties.

2At the commencement of the hearing the responding parties indicated that as a preliminary matter the applicant should have to establish that it has bargaining rights with respect to at least one of the named responding parties. The applicant requested, and was granted, an adjournment to deal with this issue. The applicant further requested leave to add Carling Electric Inc. as a responding party and to file amended particulars. The Board (differently constituted) granted leave to file amended pleadings by the applicant and the responding parties. Carling was added as a party to the proceedings and the applicant was directed to serve Carling with the applications and the amended pleadings.

3The Board (differently constituted) determined that the issue of the bargaining rights would be dealt with as part of the merits of the application under section 69 and 1(4). That panel of the Board determined that the evidence which the Board would hear in the context of determining whether the union has bargaining rights overlaps with that which the Board would have to hear in the context of the section 69 and 1(4) application and it would therefore be more expeditious to hear all of the evidence at the same time. The Board further directed that the responding parties proceed first with their evidence.

4For reasons beyond the parties’ control this matter took almost over two years to complete, from July 31, 1996 to September 1, 1998. The evidence of Mr. Davies took a total of 8 days. Cross-examination of Mr. Davies took in excess of four days. Ray Boldt testified in chief for two days and in cross-examination for two days. Mr. Tom Reid and Mr. Ken Scott testified on behalf of the applicant. The applicant requested and the Board directed the production of numerous documents pursuant to s. 1(5) and 69(13).

5The applicant asserts it has bargaining rights for at least one of the named responding parties in two alternative ways as stated in the Board’s earlier decision in these matters. The union asserts it has bargaining rights with respect to Carling Electric Inc. (“Carling”) and that one or more of the remaining responding parties are related to or successor employers of Carling.

6In the alternative the applicant asserts it has bargaining rights as a result of a Memorandum of Settlement signed in May 1994.

7That memorandum was entered into as a result of a settlement in earlier Board proceedings between the applicant and a number of responding parties, some of which are responding parties in these proceedings. That agreement provides as follows:

Board Files 4005-93-G

4006-93-R

Memorandum of Settlement

Between

International Brotherhood of Electrical

Workers, Local 586

(the Union)

and

K-2 Contracting Inc.

K-2 Contracting Inc. c.o.b. as Enersave Lighting Ottawa

Kantec Electric Inc.

Carling Electric Inc.

(Responding Parties)

The Parties agree to the following:

1. The Respondents K-2 Contracting Inc., K-2 Contracting Inc. c.o.b. as Enersave Lighting Ottawa, and Kantec Electric Inc. agree that if they, or any associated or related businesses or successor employers within the meaning of the Labour Relations Act engage in any work coming within the scope of the Collective Agreements, they or the associated or related companies or successor employers within the meaning of the Labour Relations Act agree to be bound to those Collective Agreements, and will sign those Collective Agreements.

2. The “Collective Agreements” referred to above include the Provincial ICI agreements and the Residential Agreement.

3. Notwithstanding the provisions of paragraph 1 above, the parties agree that the Respondents K-2 Contracting Inc., K-2 Contracting Inc., c.o.b. as Enersavae Lighting Ottawa, and Kantec Electric Inc. shall be permitted to complete the following work which has already commenced, and the completion of such work shall not constitute work within the meaning of paragraph 1 above such that the work may be performed without regard to any of the provisions of the Collective Agreements.

A) Newbridge situated in City of Kanata

B) Betz situated in City of Kanata

C) University of Ottawa situated in City of Ottawa

4. The Union hereby requests leave of the Board to withdraw the grievance (Board File 4005-93-G) and the Application (Board File 4006-93-R) without prejudice or precedent.

5. The Union agrees to release the Responding parties from any and all claims arising under the Collective Agreements of the Act that it ever had, now has or may ever have as of the date of the execution of this Memorandum of Settlement relating to these matters.

6. The Union agrees that it does not allege any improper conduct on the part of Carling Electric in relation to this matter.

Dated May 6, 1994 at Ottawa

(“Jim Davies”) (“Ken Scott”)

For the Union

For the Respondents Ken Scott

K-2 Contracting Inc. and

K-2 Contracting Inc. cob as Enersaave

Lighting and Kantec Electric Inc. (“Diane Ford”)

Jim Davies Diane Ford

Carling Electric Inc (“Carling”)

8Carling was an electrical contractor in the Ottawa area. The shares were held by Jim and Susan Davies. Jim Davies signed a voluntary recognition agreement in 1977 on behalf of Carling Electric Inc. agreeing to be bound to the collective agreement between the Electrical Contractors Association of Ottawa and Local Union No. 586.

9The business of Carling was sold to 813642 Ontario Inc. That numbered company was wholly owned by Anthony and Diane Ford. The sale of the business became effective January 31, 1989. Anthony Ford had worked as an electrician and subsequently became a Vice-President for Carling prior to the purchase.

10In 1993 the applicant filed a grievance and a 69/1(4) application alleging Mr. Davies’ group of companies and Carling were related employers for the purposes of the Act or alternatively that there had been a sale of a business between Carling and K-2 and Kantec Electric. Minutes of Settlement referred to above resulted in these applications being withdrawn. There was no Board Order with respect to those Minutes.

11There is no evidence of any common directors or ownership as between Carling and the K-2 companies.

Boldt Electrical Co. 1991 Ltd. (“Boldt 1991”)

12The applicant alleges that either a sale of a business took place from K 2 Contracting Inc., Kantec Electric Inc. (the predecessor employer) to Boldt Electrical Co. (1991) Ltd. or they are related employers for the purposes of the Act.

13There is no evidence of any common directors or ownership as between Boldt 1991 and the Davies’ group of companies.

14The Boldt family has operated an electrical contracting business for approximately 40 years. Bold Electrical Co. Ltd. (Boldt Electrical) was started by the Father of Ray Boldt. In 1991 Ray Boldt together with his partner, Steve Wilson, purchased the company from his brother, Ed Boldt.

15In 1993 Ray Boldt bought out his partner and became the sole owner of Boldt 1991. For family reasons not relevant to the issue before this Board, Ray Boldt went to work for Ruddy Electric. Boldt Electric remained dormant for a period of time. In 1994 Ray Boldt left Ruddy Electric and moved his company, Boldt 1991, from the Renfrew area to the city of Kanata where he believed there were more opportunities for his company.

16Prior to purchasing Boldt Electrical from the family Ray Boldt had spent ten years in the electrical wholesale, distribution and manufacturing business in the Ottawa area.

17Ray Boldt knew Jim Davies through his work in the electrical wholesale business. Ray Boldt rented office space from Jim Davies and arranged to pay for shared office services including phone, fax, office supplies and clerical support. Boldt paid for those shared services.

18In order to do business as an electrical contractor in Ottawa it is necessary to hold a masters licence. Ray Boldt applied and obtained his electrical masters licence on behalf of Boldt Electrical Co. 1991 Ltd..

19Ray Boldt started to build up his business with former Boldt Electrical customers and his contacts he made in the industry over the years.

20Mr. Priday, Jim Davies’ brother-in-law is employed as a journeyman electrician by Boldt 1991. There is no evidence that Mr. Priday has any ownership interest or is an officer of Boldt 1991.

21When Boldt 1991 used a van owned by Davies, Boldt 1991 was billed for the use of the van and the time for the driver.

Kantec Group of Companies (Kantec)

22These companies include K 2 Contracting Inc. (“K 2”), Kantec Electric Inc. now Kantec Corp Inc. (“Kantec Corp.”), Kantec Builders Inc. (“Kantec Builders”), Cranham Holdings Limited (“Cranham Holdings”).

23Jim Davies is the sole shareholder, director and officers of each of the above named responding parties. There is no evidence that Ray Boldt has any ownership interest or is an officer or director of any of the above named companies.

24K 2 was incorporated in April 1991. At the time the head office was listed as the Davies’ home address. In 1991 K 2 moved its office to 106 Schneider Road in Kanata’s North Business Park. In December 1992 K 2 registered the business name “Enersave Lighting Ottawa”. K 2 carried on as K 2 o.a. Enersave Lighting Ottawa.

25Kantec Electric was incorporated in October of 1993 and operates out of 106 Schneider Road. The name of Kantec Electric was changed February 1996 to Kantec Corp. Inc.

26Kantec Builders was incorporated July 1994 and has been active in the construction industry since its incorporation. It operates out of 106 Schneider Road in Kanata.

27Cranham was incorporated in June of 1976. It is a holding company and does not at the present conduct any business in the construction industry. Its head office is located at the home of the Davies.

28In the late 80’s after selling his electrical business (Carling Electric) Jim Davies concentrated on his real estate developments. Business was not going as well as he hoped and Jim Davies accepted a position with Newbridge Networks Corporation (“Newbridge”) to oversee their construction and renovation projects. Davies was retained on a contract basis, rather than become an employee of Newbridge. Davies used his company K 2 to do the work at Newbridge as well as looking for work as a general contractor using K 2.

29When the minutes of settlement were entered into in May of 1994, three jobsites were excluded from the requirement to comply with the collective agreement. These were Newbridge, Betz in Kanata and the University of Ottawa.

30Jim Davies testified he signed the minutes of settlement with the understanding that he would get out of the electrical business and pursue his opportunities as a general contractor.

31The applicant filed a tape recording together with a transcript of a telephone conversation between Mr. Reid and Mr. Davies in support of their allegations that the responding parties violated sections 70, 72, 76, 87 and 96(7) of the Act. At the end of the day the applicant did not pursue allegations under sections 70, 76 and 87 but asked for declaratory relief under section 72 and a finding that there had been a breach of the memorandum of settlement.

Argument – Kantec Group of Companies (Kantec)

32Counsel for the Kantec group of companies submits the applicant takes the position that K2/Kantec violated paragraph one of the memorandum of settlement because they have contracted for electrical work directly or because they have sub-contracted such work in its capacity as the general contractor. Counsel notes that paragraph one does not have the words “contracting” or “subcontracting”.

33The issue of bargaining rights is important. Whether or not this memorandum is the source of such bargaining rights – whether the agreement has been violated. Bargaining rights existed with Carling Electric. There are no other bargaining rights. Paragraph 5 of the settlement released K2 and Kantec vis-à-vis Carling in terms of a related employer or sale of a business application.

34The parties entered into minutes of settlement in good faith. The Board has ruled in the past on this type of agreement as to whether or not it can lawfully establish bargaining rights. The evidence of Mr. Davies was that he told Mr. Scott he was no longer interested in pursuing the electrical contracting business. Mr. Davies was going to operate as a small general contractor providing retrofitting and construction services. Other than the jobs agreed to be completed under the minutes of settlement there was no anticipation of any future electrical work or the need to supply electricians by the applicant.

35In terms of Jim Davies being a party to these applications counsel takes the position that Mr. Davies is not an employer in a personal capacity and therefore is not a proper respondent in the grievance and the section 1(4)/69 application. Mr. Davies signed the minutes of settlement in his capacity as an officer of the responding parties and not in his personal capacity.

36Counsel submits Cranham is a development company which based on the evidence does not conduct any business in the construction industry and is therefore not a proper party in these applications – except for the section 96 complaint.

37Counsel referred to F.D.V. Construction Ltd., [1984] OLRB Rep. May 719 and Eighty-Five Electric, [1987] OLRB Rep. June 833 as being similar to the instant case. There were exempted jobs, no union, no anticipation at any time in the future that Mr. Davies or his companies would be conducting electrical work which would require referrals from the applicant.

38The parties entered the memorandum of settlement in good faith. However, the Board’s jurisprudence confirms what it will consider a valid collective agreement for the purposes of creating bargaining rights. Based on the above two decisions, counsel submits, this document cannot be a valid basis for creating bargaining rights.

39With respect to paragraph one of the settlement counsel takes the position that so long as the Kantec group of companies did not engage in any bargaining unit work they would not be obliged to become bound to the collective agreement. Counsel asserts no such work has been engaged in.

40The word “engage” is defined in Webster’s Dictionary, as “…..to busy oneself, to take into one’s employment…..” or in Black’s Law Dictionary as “…..to employ or involve one’s self…..”. According to paragraph one it is the Kantec group itself that must be doing the work and if they do the work they agree to be bound to the agreement. There is no reference in paragraph one to the words “contracting” or “sub-contracting”. There is no question that none of the Kantec companies is engaging in any of the work covered by the collective agreement. The Kantec group of companies has subcontracted electrical work.

41Counsel submits there was no intention by the parties to restrict the Kantec group of companies from subcontracting work. The applicant did not allege a violation of the minutes of settlement because of contracting or sub-contracting of electrical work in its applications. It was not until filing an amended application several months later that these allegations were raised, i.e. that Kantec engaged in the electrical contracting business.

42At the time the minutes were entered into, counsel submits, the applicant had knowledge that Mr. Davies was going to continue with his general contracting business. That business would have an electrical component to it. It is counsel’s position that as long as the Kantec group of companies did not do any of that work and subcontracted that work that was what was agreed to and was satisfactory to the parties. There was no sub-contracting contemplated by the minutes of settlement.

43Counsel submits Mr. Scott is a seasoned negotiator and knows the importance of a sub-contract clause or article. Mr. Scott acknowledged if there is no prohibition against sub-contracting a union contractor can sub-contract work non-union. It was a simple matter to include sub-contracting in the memorandum. The applicant should not now be able to ask the Board to imply such a material term into paragraph one of the settlement. That was not intended by the settlement.

44Counsel cited a number of cases with respect to language used by parties when entering into contracts or in this case a memorandum of settlement. (see Lefebvre v. HOJ Industries Ltd., 66 O.R. (2d), Machtinger v. HOJ Industries Ltd.; 1992 CanLII 102 (SCC), [1992] 1 S.C.R. 986; Knight et al v. Fairall, [1934], WWR, Vol l, 131; Lee Hing et al v. Green et al, [1927], WWR Vol 2, 729. Counsel submits it would have been quite simple to include a prohibition against sub-contracting or contracting out in paragraph one of this memorandum of settlement.

45Counsel submits Mr. Davies operated Carling Electric for many years starting in the early 1970’s. Around 1980/81 Tony Ford joined Carling and became Vice President of Carling in 1984/85. In January of 1989 Mr. Davies sold Carling to a numbered company owned by Mr. And Mrs. Ford. Prior to the sale Mr. Ford had been a key man with Carling. Prior to purchasing Carling Tony Ford was involved in the day to day running of the business with Jim Davies concentrating on his real estate and land development business. After the sale Carling continued to operate as a successful electrical business until Tony Ford died in February, 1994. At the time Carling was sold Jim Davies was no longer “key man” of Carling. That title had on to Tony Ford.

46Counsel submits on the basis of the evidence there is no common control and direction as between the Kantec group of companies and Boldt as contemplated by section 1(4) and there is no common control and direction as between the Kantec group of companies and Carling Electric.

47Effective control and direction over that Kantec group of companies was by Jim Davies. He prepared tenders, supervised the work and made sure the work gets done. He attends to all financial and budget matters, employment relations matters affecting his operations. Without Jim Davies there would not be a Kantec company.

48There is no evidence before the Board to suggest that the duties, functions and responsibilities Jim Davies has with respect to the Kantec group of companies are in any way whatsoever exercised with respect to Boldt 1991. As Jim Davies controls and exercises authority over his company, Ray Boldt does likewise over his company, Boldt 1991. The controlling mind with decision making authority over the affairs of Kantec resides with Jim Davies. There is no evidence to indicate any involvement of such a nature by Ray Boldt in Kantec. There is no link of any commercial ownership, decision making authority between Boldt 1991 and Kantec. There is no indication of any hidden agenda providing for profits or any other benefit being funnelled or redirected from Boldt 1991 to Kantec. There was no evidence of any work being redirected to Boldt 1991 that would otherwise be performed by Kantec.

49Counsel submits there are no common shareholder, directors or officers. There is no evidence of intermingling of employees. There are two separate companies operating side by side. Boldt 1991 was a sub-tenant to Kantec as well as the landlord at 106 Schneider. There were shared services, administrative and commercial expenses which were billed and paid for. Kantec subcontracted labour to Boldt 1991 which was invoiced and paid for. Boldt 1991 purchased general contracting materials using Kantec’s credit.

50There were two companies operating side by side and helping one another in the spirit of co-operation to a limited degree. However counsel submits, not to a degree that the Board would make a section 1(4) declaration.

51With respect to Kantec and Carling, after Mr. Davies sold the company to the Fords, Mr. Davies attended meetings, on his evidence on four occasions, because at the time Mr. Ford was seriously ill and unable to attend. Aside from that display of friendship Jim Davies had no involvement or participation in Carling Electric.

52While the Board has found that the movement of a key person to a new entity constitutes common direction and control those cases are distinguishable from the instant case. There is no evidence to suggest that Jim Davies had any control or direction with respect to the Carling operation after he sold it. When Davies sold the business in 1989 he was no longer the key person of Carling Electric. After the business was sold it continued to carry on and it only stopped when Mr. Ford died.

53There is a period of time material to the key man. See Jen-Ry Utility Contracting Company Limited [1984] OLRB Rep. December 1724; Tri-Corps Industrial Contractors [1994] OLRB Rep. October 1446. As in Jen-Ry (supra) there is no common direction and control as between Kantec and Carling.

54With respect to whether there was a sales of a business between Kantec and Boldt – did Boldt obtain all or part of Kantec’s business? Have sufficient elements of the predecessor company transferred to the successor company? Kantec continues to operate, has always operated. Boldt 1991 has been a going concern as well and on the evidence there has not been a transfer of anything let alone what we know as being the business in the construction industry, the economic activity. What are the essential elements of the predecessor company, Kantec? Mr. Davies’ skills; administrative abilities; his expertise and knowledge of the industry to put together a successful tender document; carry out the project at that price. This is not to say that skills and tools are not important but they are not the business. Employees’ skills and tools and equipment do not play a significant role in the business.

55Mr. Davies has been in this business in the construction industry for 30 years and this Board has said in the past the essence of a business frequently resides in the expertise and skill of its management personnel rather than in its physical assets. Mr. Davies was and is this management person in terms of Kantec and it is only because of his efforts that this company obtains work. This business has not been disposed off. It remains with Kantec and always has. There is no evidence before the Board that Mr. Davies has used his bidding/estimating expertise for or on behalf of Boldt 1991.

56On the evidence before the Board we have two distinct and separate entities. There is the Kantec group of companies under Jim Davies and Boldt 1991 under Ray Boldt. It is clear from the evidence that without Mr. Davies there would be no Kantec group of companies and on the basis of the evidence it is fair to say the same would apply to Boldt 1991.

57With respect to Carling counsel submits the bargaining rights attach to the business not to an individual. When Jim Davies left Carling the bargaining rights stayed with Carling. He was no longer a key man. Carling Electric continued to operate in the ordinary course. There is no evidence before the Board to indicate otherwise. Tony Ford was comfortable running the business when he purchased it. He did not ask Jim Davies to stay on and help him. In terms of Carling and Kantec the sort of factors the Board considers in a section 69/1(4) application do not exist. Counsel cites the following cases in support of his position, Metropolitan Parking Inc. [1979] OLRB Rep. December 1193; Gallant Painting et al [1991] OLRB Rep. Sept. 1051; Merit Contractors of Niagara et al [1994] OLRB Rep. Feb. 152; Stucor Construction Ltd. [1987] OLRB Rep. Apr. 614; Joe Pentalone Masonry Co. Ltd., OLRB Rep. Jul. 1996.

58There has not been any sale of any business from Carling to Kantec or from Kantec to Boldt on the basis of the evidence. While there were shared expenses between Boldt and Kantec and a benefit to Boldt to buy materials using Kantec’s credit that is not a consideration under which the Board must make its decision. (See para. 51 and 52 of Joe Pentalone (supra))

59Counsel makes the following submissions with respect to the telephone conversation of March 6, 1996 between Mr. Davies and Mr. Reid. Mr. Reid telephoned Boldt 1991 and asks for Jim Davies. The receptionist transfers the call to another lady, a Miss Morrow of Kantec and that call is relayed to Mr. Davies in his own office at Kantec. Mr. Davies does not know the caller placed the call to Boldt 1991. As far as he knows it is a call to Kantec and he speaks on behalf of Kantec. There is no mention of Boldt Electric in this telephone conversation. Counsel submits it is puzzling why Mr. Reid does not mention Boldt Electric throughout this conversation. It is no secret why he is making this telephone call but he does not go the extra step to entrap Jim Davies to say I am answering for both Boldt 1991 and Kantec and yes I am hiring for Boldt 1991.

60In terms of the conversation as a whole and the s. 96 allegations, there is no interview, Mr. Davies is talking about sub-contracting not employing him; there is no employment offer in terms of this conversation; Mr. Davies is telling it like it is and expressing his view which he is permitted to do.

Argument on behalf of Boldt 1991

61Counsel for Boldt 1991submits that the applicant appears to be seeking bargaining rights for Boldt Electric in two ways. One is through the memorandum of settlement, exhibit 3. The second is through Carling Electric. There is no issue that the applicant holds bargaining rights for Carling Electric.

62Counsel for Boldt 1991 asserts that exhibit 3, the memorandum of settlement does not and cannot create valid bargaining rights for Boldt 1991. If Mr. Davies’ group of companies is not bound to a collective agreement then the relationship between Davies’ companies and Boldt 1991 is no longer an issue.

63Whenever parties create documents dealing with bargaining rights they do so at their risk. Eighty-five Electric (supra) addresses the rights of employees to chose their bargaining agents. This settlement seems to be prospective in nature. Paragraph one says if certain things occur then the Kantec group of companies will be bound and will sign the collective agreements. It seems to be a promise or agreement to enter into a future voluntary recognition agreement at a point in time when this company engages in work coming within the scope of those collective agreements.

64The evidence is not in serious dispute. It is the understanding of the parties that Mr. Davies and his group of companies would exit in terms of his direct involvement in the electrical construction business. Although at the time there may have been employees employed by the Davies’ group of companies clearly that scope of the work was excluded. There is the prospective agreement that if the Davies’ group of companies engage in this work they will agree to be bound and sign the collective agreements. It is a contemplation of the parties that there would be no employees. No employees referred from the hiring hall under this agreement, nor were any of the current employees of Mr. Davies required to become members of the applicant. This puts it on all fours with Eighty-five Electric and distinguishes it from Nicholls-Radtke, [1982] OLRB Rep. July 1028.

65There is an exclusion to the ICI agreement. As a practical matter parties enter into agreements that the Board may not enforce because it is contrary to the Act and that is the situation in this case. This agreement is purported to bind all associated business at the time the agreement was entered into in 1994.

66There was a pre-existing legal entity, Boldt 1991 which in no way the union asserts was a related employer at the time of the memorandum of settlement. All these facts occurred after the memorandum of settlement was entered into. A separate legal entity cannot be bound prior to a related employer declaration. Exhibit 3 cannot create valid collective bargaining rights. The application as it pertains to the relationship between Boldt 1991 and Mr. Davies’ group of companies can be disposed of because you have heard all the evidence. Whether there is a related employer can be disposed of by a determination that there are no facts as in Eighty-five Electric to support a finding either under s. 1(4) or 69. It may be easier to conclude on the evidence there is no section 1(4)/69 than dealing with the memorandum. As in Eighty-five Electric there was an anticipation of operating completely separately.

67Assuming there are bargaining rights created by the memorandum the applicant has the onus to prove that there has been a sale of a business or they are related employers. The evidence proves that Mr. Davies is not involved in the running or calling the shots with respect to Boldt 1991. There is no evidence Mr. Davies has been involved in the project management on behalf of Boldt 1991 to assist in any contracts. The business resides in the expertise of its management in a bid oriented sector of the construction industry to obtain work and execute contracts. The essence of the business of Boldt 1991 is Ray Boldt. Ray Boldt is experienced in construction and in the electrical industry. He has a background in sales which contributes to his success. Boldt Electrical and Boldt 1991 have been in business since 1947. It is not a new business. Ray Boldt has been involved in that business throughout his life starting as a summer student and apprentice electrician in the family business. He acquired experience in the high tech industry with Mitel in 1985 before going to Westco in Ottawa. Ray Boldt established a number of contacts in the industry. In 1991 Ray Boldt buys Boldt Electrical/Boldt 1991. Ray Boldt meets Jim Davies in 1994. Ray Boldt has a pre-existing electrical contracting business. In 1993 because of a personal situation the business is dormant. The business is continued in Ottawa. Ray Boldt obtains his masters licence for Bold Electric. There is no involvement by Jim Davies. Ray Boldt used his own contacts and his own expertise in terms of bidding, estimating and executing contracts when he re-activated his business in the Ottawa area.

68Ray Boldt uses the same accountant, insurance company and electrical suppliers that he had used before coming to Ottawa. Nothing changes from the time Boldt 1991 moves from Renfrew to Ottawa..

69Ray Boldt is Boldt 1991. Counsel submits the sharing of the office space is not critical to Boldt’s business. There is nothing in the evidence to suggest that in the absence of the arrangement with Jim Davies that Boldt 1991 would not have succeeded. Location is not important in the construction industry. To bid successfully and execute contracts is important in construction and that ability rests with Mr. Boldt.

70After many days of evidence there is no evidence to contradict Ray Boldt’s evidence or Jim Davies’ evidence that Ray Boldt owns and runs Boldt 1991 and Jim Davies owns and runs Kantec. There is no evidence to the contrary. There is only the uncontradicted evidence as to who runs each company.

71With respect to Carling the evidence was clear that Tony Ford was the key man at the time Carling ceased to operate. There is no suggestion that Ford had any involvement in Boldt 1991 or had any relationship with Ray Boldt.

72Some of the employees that worked for Carling now work for Boldt 1991. That is not the basis for a section 1(4) declaration or the finding of a section 69. Former employees of a union contractor now working for a non-union company does not support a section 1(4)/69. That portion of the application as it relates to Carling and Boldt 1991 should be dismissed.

73Counsel for Boldt 1991 referred to the following cases in support of his submissions: Eighty-Five Electric, [1987] OLRB Rep. June 833; Twin Electric, [1986] OLRB Rep. Aug. 1320; Drycore Electric Inc., [1994] OLRB No. 2325 (June 20, 1994) File No. 0032-93-R; Highview Plumbing & Heating Ltd., [1997] OLRD No. 1791 (May 8, 1997) File Nos. 1588-96-R, 1877-95-R, 1878-95-G; Inplant Contractors Inc., [1993] OLRB Rep. May 421; Rivard Mechanical, [1981] OLRB Rep. May 550; 694643 Ontario Limited c.o.b. as O’Connor Electric and Morell Electric Ltd., [1995] OLRD No. 4180 (October 18, 1995) File Nos. 0119-94-R, 0120-94-G; Rosmar Drywall & Acoustics Ltd. and Canaan, Board decision dated May 14, 1993 File Nos. 0863-92-R;0864-92-R;0865-92-G; 1303-92-R;1656-92-G; 663925 Ontario Inc. c.o.b. as Q-Tech and G.B. Environmental Services (Niagara) Ltd., [1992] OLRD No. 1822 (May 20, 1992) File Nos. 1375-91-R, 1376-91-R and Steeles Electric, [1994] OLRB Rep. May 603.

74As in Twin Electric, supra, Counsel for Boldt 1991 submits the ultimate decision making of the business of Boldt 1991 rests with Ray Boldt. It is his business. As in Drycore Electric, supra, the success of Boldt 1991 is due to Ray Boldt’s efforts. There was some assistance and benefits in the arrangement with Jim Davies however the efforts that are critical to succeed were made by Ray Boldt. Jim Davies assistance was not critical to the success of Boldt 1991.

75Counsel submits this case is not unlike that of O’Connor Electric, supra. Mr. Scott of the applicant makes a telephone call to Boldt 1991 and asks for Jim Davies. The call is transferred. Mr. Scott does not ask “are you hiring for Boldt 1991. There is no evidence that any Boldt employees were directed by Jim Davies. The facts fall far short of demonstrating that Mr. Davies is a key person in Boldt 1991.

76The fact that there was a sublease is not a significant factor in the construction industry in a section 69/1(4) application. As in Q-Tech supra there is insufficient evidence of overall common control or direction over the activities of Boldt 1991 and Kantec. Counsel submits Rivard Mechanical, supra, is equally applicable here. When Carling went out of business so did the applicant’s bargaining rights.

77As in Inplant Contractors, supra, there is a pre-existing electrical contractor although not located in Ottawa has some work in Ottawa. Any arrangement or relationship with Mr. Davies that Boldt 1991 benefited from was at best a contribution to the amount of work Boldt 1991 can do but certainly not such that it would constitute a sale of a business and/or a related employer declaration.

78Counsel submits sales of a business provision and related employer provision do not attach to the work performed or the customer or employees – it attaches to the business. See paragraph 60 of Highview Plumbing & Heating, supra.

Argument - Applicant

79Counsel for the applicant submits there is ample evidence to establish the foundation of bargaining rights in respect of Boldt 1991. The evidence shows there is a clear business connection between the Kantec group of companies and Boldt 1991.

80The applicant asserts that Boldt is a successor to Kantec and K 2 or they are related businesses. Jim Davies exercises control and direction in terms of hiring and financial assistance to Boldt. Counsel submits the tape recording is evidence of Jim Davies hiring for Boldt. Jim Davies gave financial assistance to Boldt by not charging Boldt 1991 rent in the beginning and by giving Boldt 1991more than 30 days to pay their invoices.

81If they are related employers or a sale of a business has taken place then pursuant to section 96(7) they are bound to the ICI and the residential collective agreements. The applicant further requests a declaration that they violated section 72.

82It is the applicant’s position that Boldt 1991 was dormant in 1994 and that but for his relationship with Jim Davies and the Kantec group of companies, Boldt 1991would not have turned into a successful electrical contractor in the specialized market in Ottawa. Ray Boldt’s success was predicated on the start-up and support of Jim Davies.

83All of the facts in these circumstances should lead the Board to conclude that there is enough to make the findings the applicant is asking.

84There is a valid memorandum of settlement dated May 6, 1994. The terms of the settlement bind any related or successor companies. Boldt 1991 is such a successor and/or related company within the meaning of the memorandum of settlement which references the Act.

85Counsel for the applicant disagrees that it is necessary to first establish bargaining rights before dealing with the issue of whether Boldt is a successor or related employer, because this is about a breach of the memorandum of settlement under section 96(7). There has been a breach of the settlement through the operation of Boldt 1991.

86The applicant asserts the evidence shows that Kantec has engaged in work coming within the collective agreement using its own forces. In the alternative Kantec engaged in work coming within the scope of the collective agreement by taking work that has an electrical component and performing that work through a sub-contractor.

87At some point in 1991 Davies is approached by Newbridge, either as an employee or through one of his companies, the evidence is unclear, and hired by Newbridge to assist in construction management. Davies got the job because of his connection previously with Carling who worked for Z and W. Mr. Davies knew the principals of Z & W, the general contractor.

88The applicant disagrees with the evidence of Davies that he told Scott he intended to get out of the electrical contracting business but reserve his right to do general contracting and sub-contract electrical work. Scott’s evidence was that he was getting out of contracting business and going into real estate which was the same thing he said when he left Carling.

89It is the union’s position that Davies never does go into real estate. Scott signed the memorandum based on the representations of Davies that he was going out of the business and there would be no erosion of the union’s bargaining rights.

90The intent of the memorandum of settlement is clear, if the Kantec group of companies or any of its successors or related companies do work coming under the collective agreement, i.e. if you are going to take union work you are going to be bound.

91That is clear intent and to argue otherwise does not bear a reasonable interpretation of the memorandum of settlement. On the evidence there is no mutual intention. Counsel submits what Davies thought it meant is irrelevant and what Scott thought it meant is irrelevant because a) the language is clear and b) the intent is clearly derived from the document. There is no ambiguity. Leaving aside whether “engaged” includes sub-contracting in terms of the settlement it is clear if you come to work under this agreement you are going to be bound. That is the clear intent.

92It is not open to a party four years later to say that is not what I meant that is not what I said. Davies signs the memorandum of agreement in May 1994. June 1994 Boldt shows up at Davies’ door. Boldt starts working on one of the projects set out in this memorandum of settlement.

93Boldt 1991sets up a telephone line and a desk at 106 Schneider. Boldt 1991uses the fax and photo copier for free. Ray Boldt does not sign a sub-lease until 1995. In cross- examination Ray Boldt explained he received one year free rent because he worked for only $20.00/hour at the University of Ottawa project. Davies had some other explanation which did not make any sense whatsoever.

94Counsel for the union submits that when starting up a business from scratch and sending out letters and going to talk to people location and association is extremely important.

95You have 96.Ray Boldt who works for Davies and starts up his business. He needs Davies. Boldt 1991 becomes what it is because of Davies. But for Davies Boldt 1991 would not be where it is. If the Board does not believe that then the union is not successful in this application.

96Re: 85 Electric argument – this is not a voluntary recognition but a memorandum of settlement of a section 1(4)/69 application. There is no support for the proposition the purpose and intent of this settlement should be negotiated and settlement should be thrown out because the parties agreed to exempt certain work.

97The applicant submits it entered into the settlement in good faith but Davies did not. There was no intention of good faith in entering into this agreement on the part of Davies.

98Counsel takes the position that either Kantec breached the memorandum because it did work falling within the collective agreement or it subcontracted work falling within the collective agreement.

99Counsel submits the Board should find Davies evidence that he stopped doing electrical work not credible. The applicant asserts the evidence shows there were two employees, one electrician, Bob Cochrane, and one apprentice, Ashley Davies, who worked beyond the dates for the projects that were exempted. Further the Board should not accept the documentary evidence showing Ashley Davies and Cochrane being subcontractors to Boldt 1991. The Board should reject Davies’ evidence that the electrical component of Kantec’s contracts were subcontracted.

100Counsel asserts the evidence establishes that Jim Davies was engaged in the electrical business notwithstanding the memorandum of settlement that he was not going to do that. In the event the applicant is not successful in its section 69/1(4) application, counsel asks the Board to determine the issue of the memorandum of settlement.

101Counsel takes the position the memorandum of settlement includes “sub-contracting”. The intent was to protect the union bargaining rights. Bargaining rights include sub-contracting. The applicant filed a related employer/sale of business application and is told Davies is getting out of the electrical business.

102The memorandum of settlement does not say “engaged in the electrical contracting business” it says “engaged in work coming within the collective agreement”, meaning in the context of a section 69/1(4) settlement, in the context of the construction industry and in the context of a collective agreement which provides for sub-contract protection. This settlement includes “sub-contracting”.

103With respect to Bold 1991 counsel for the applicant submits the history of Ray Boldt’s activities as an electrical contractor is not in dispute. However it is the applicant’s position that his success in Ottawa would not have been possible without the support of Jim Davies and Kantec. It is the relationship between Ray Boldt and Jim Davies that leads to Boldt 1991’s success. Jim Davies gives support to Boldt 1991 through shared services, the use of Kantec’s credit with suppliers and introductions to clients such as Z&W, a general contractor at Newbridge.

104Both companies perform work for the same general contractors and are working at the same site or sites. Employees who worked for Carling are now working for Boldt 1991 including Mr. Priday, Mr. Davies’ brother-in-law. Counsel submits Priday was a key foreman at Carling.

105With respect to the tape recording of the telephone conversation between Mr. Reid and Mr. Davies, counsel for the applicant submits this conversation shows that Mr. Davies was hiring for Boldt 1991. This conversation takes place at a time when Boldt 1991 is taking on its largest project to date at Newbridge, the site referred to in the telephone conversation.

106Counsel submits Mr. Davies explanation of the taped conversation was not credible. The fact that he states the company has a policy of staying non-union is a violation of section 72 of the Act.

107With respect to Ray Boldt’s evidence counsel submits it is not credible that he did not use Jim Davies as a reference when soliciting work. Jim Davies knew Mr. Goldstein at Z & W one of the largest contractors in Kanata.

108Counsel for the applicant relied on the following cases: K2 Contracting Inc., [1996] OLRD No. 3143 (September 9, 1996) (Q.L.); The Tatham Company Limited, [1980] OLRB Rep. Mar. 366; Ian Somerville Construction ltd., [1988] OLRB Rep. Oct. 1022; Kent Acoustics Limited, [1990] OLRB Rep. Aug. 855; Stucor Construction Ltd., [1987] OLRB Rep. Apr. 614; KNK Limited, [1991] OLRB Rep. Feb. 209; STM Specialized Transit Management Corporation, [1991] OLRB Rep. July6 900; Gallant Painting, [1991] OLRB Sept. 1051; Economy Store Fixtures Limited, [1992] OLRB Rep. May 575; Kepic Wrecking Inc., [1993] OLRB Rep. June 516; Steeles Electric, [1994] OLRB Rep. May 603; Shin Ho Canada Ltd., Solid Wood Research Inc., [1995] OLRD No. 3610 (September 28, 1995) (Q.L.); Eighty-Five electric, [1987] OLRB Rep. June 833; Delux Electrical Contractor Ltd.,[1990] OLRB Rep. Nov. 1135; Ellis-Don Limited, [1992] OLRB Rep. Feb. 147; Rexway Sheet Metal Limited, [1989] OLRB Rep. No. 1154; Northield Metal Products Ltd., [1991] OLRB Rep. May 664; Peel Paper Products Ltd., [1995] OLRD No. 3800 (March 31, 1995) (Q.L.); Re United Brotherhood of Carpenters & Joiners of America, Local 3054 and Cassin-Remco Ltd. et al., 1979 CanLII 2013 (ON HCJ), [1979] 105 D.L.R. (3d) 138; Northern Mine Erectors Ltd., [1997] OLRD No. 2143 (June 26, 1997) (Q.L.); Gisborne Design Services Ltd., [1995] OLRD No. 3995) (Q.L.); Lawrence Construction, [1991] OLRB Rep. October 1160; Duffy Mechanical Contractors Limited, [1994] OLRB Rep. August 992 and B & M Millwork Ltd., [1991] OLRB Rep. April 438.

Decision

109Carling is no longer operating. It ceased operations when Anthony Ford died. Prior to his death Jim Davies attended some site meetings on behalf of Tony Ford because he was ill. There is no dispute that Anthony Ford was a key man with Carling when it was still owned by Jim Davies. There was no common control or direction as between Kantec and Carling after the sale to the Fords. There was no evidence of any common ownership or control and direction as between Kantec and Carling. The memorandum of settlement specifically states that the union agrees that it does not allege any improper conduct on the part of Carling Electric in relation to this matter (the 1994 related employer/sale of business application).

110The applicant amended its original application to add Carling as a party and took the position that it has bargaining rights either through Carling and/or as a result of Kantec’s violation of the memorandum of settlement dated May 6, 1994.

111The applicant seeks to rely on its bargaining rights with respect to Carling and that one or more of the remaining responding parties are related to or successor employers of Carling.

112The evidence taken in its totality do not support the assertion that Carling, after its sale to the numbered company owned by Mr. and Mrs. Ford, was either a related employer or a successor employer to any of the remaining responding parties. The evidence did not support any common direction and control with Kantec or with Boldt 1991. Carling ceased to operate because Mr. Ford died. The fact that Jim Davies attended site meetings for Mr. Ford because he was ill does not in these circumstances support a finding for either a section 1(4) declaration as between Carling owned by the Fords and Kantec, or a sale of a business from Carling back to Kantec.

113The evidence does not support any finding that there is a common direction and control as between Carling and Boldt 1991. There are employees who worked for Carling and are now working for Boldt 1991. Mr. Priday is not a key man for Boldt 1991. There is no evidence of any common direction and control as between Carling and Boldt 1991. Carling had ceased to operate when its owner died. There is no evidence to support a sale of a business from Carling to Boldt 1991.

114In the alternative the applicant asserts bargaining rights as a result of the violation of the 1994 memorandum of agreement. As the Board understands the applicant’s position it asserts that there has been a breach of the settlement under section 96(7) through the operation of Boldt 1991. Boldt 1991 is a successor or related employer (to Kantec) and therefore there has been a breach of the settlement. The applicant also asserts the settlement was breached by Kantec doing work covered by the collective agreement either directly or by sub-contracting.

115Is Boldt a successor to Kantec? Based on the evidence at its highest there are shared services which are invoiced and paid. There is evidence that Boldt ordered material on Kantec’s account and was billed and paid for those materials. Boldt 1991 did not pay rent in the beginning. Both Boldt 1991 and Kantec were doing work on the same jobsites for some of the same general contractors and or owners.

116There is no key man situation here. Ray Boldt has many years of experience in the business as a journeyman, as an electrical contractor, as a salesman in the electrical supply field. It is the applicant’s contention that Ray Boldt would not have been as successful except for the assistance he received from Jim Davies. As stated before that assistance consisted of shared office services, a break on the rent and ordering materials on Jim Davies’ account and paying for it. That does not make Jim Davies a key man in Boldt 1991. Nor is it sufficient to find common direction and control. The applicant requested production of numerous documents and spent many days in cross-examination of Jim Davies and Ray Boldt. There was absolutely no evidence of any common ownership, directors, officers, supervision of employees by one or the other of each others employees. No evidence that Jim Davies assisted Ray Boldt in submitting bids or obtaining work or that they shared in any profits from each other’s work.

117Based on all of evidence the Board finds that there is no basis for finding either a sale of a business from Kantec to Boldt 1991or that they are under common direction and control.

118The applicant asks for a declaration that the responding parties have violated section 72 of the Act. That section provides for:

72. No employer, employers' organization or person acting on behalf of an employer or an employers' organization,

(a) shall refuse to employ or to continue to employ a person, or discriminate against a person in regard to employment or any term or condition of employment because the person was or is a member of a trade union or was or is exercising any other rights under this Act;

(b) shall impose any condition in a contract of employment or propose the imposition of any condition in a contract of employment that seeks to restrain an employee or a person seeking employment from becoming a member of a trade union or exercising any other rights under this Act; or

(c) shall seek by threat of dismissal, or by any other kind of threat, or by the imposition of a pecuniary or other penalty, or by any other means to compel an employee to become or refrain from becoming or to continue to be or to cease to be a member or officer or representative of a trade union or to cease to exercise any other rights under this Act.

119The Board carefully listened to the recording and reviewed the typed transcript having regard to section 72 of the Act. Based on the conversation between Tom Reid and Jim Davies the applicant asks the Board to conclude that Jim Davies was hiring for Boldt 1991. The first woman answers “good afternoon Boldt Electric”. There is a pause and a second person asks “may I tell him who is calling please”. It is not clear whether the call was “transferred” to Jim Davies at Kantec or whether he answered Boldt’s line. There is no mention by Davies or Reid of “Boldt” throughout the conversation.

120There is no suggestion that Reid was soliciting employment nor did anyone suggest that he would have accepted employment had he been offered such. The phone call was made and recorded in the hope to get Jim Davies to make statements that could be used for the purpose of establishing that Boldt 1991 and Kantec were related employers.

121Jim Davies remarks may well be an unfair labour practice in the context of refusing employment to a member of the union. Davies states that “…..we have a policy to stay non-union. If people have got an honorary withdrawal and they may be working for themselves we hire them.” However, there was not a refusal to hire as contemplated by section 72(a) of the Act. Mr. Reid was not applying for a job.

122In the circumstances the Board declines to make the declaratory relief requested by the applicant.

123That leaves the issue of the breach of the memorandum of settlement dated May 6, 1994. The applicant claims bargaining rights for the responding parties because Kantec has breached the settlement. The applicant takes the position that the evidence should lead the Board to find that Kantec has engaged directly in work covered by the agreement or in the alternative has subcontracted the work and has therefore violated the settlement.

124The evidence did not establish that Kantec “engaged in any work coming within the scope of the collective agreements” by performing electrical work on a direct hire basis. There was evidence that electrical work was sub-contracted.

125The responding party Kantec raised Eighty-five Electric, supra, to support its position that this settlement was not enforceable. It is not open to this responding party to make that assertion. The wording in the settlement is clear, if you engage in any work coming within the scope of the collective agreements, Kantec and its related or associated companies or successor employers will agree to be bound to those collective agreements.

126Does “engage in any work coming within the scope of the collective agreements” include subcontracting the work? The work “engage” is defined as “to take into one’s employment”. Black’s Law Dictionary’s definition of “engage” is “to employ”. If Kantec “employs” persons to do the work covered by the collective agreement it will agree to sign the collective agreement and be bound. The memorandum is silent with respect to sub-contracting work covered by the collective agreement. General contracting involves subcontracting electrical and mechanical work. If the applicant had wanted sub-contracting included in the memorandum it could easily have added the necessary language. HOJ Industries Ltd., supra, states the court will be reluctant to make any implication “where the parties have entered into a carefully drafted written agreement between them.” The applicant is asking the Board to imply that the word “sub-contract” is included in the memorandum of settlement. The parties who drafted the memorandum are experienced and are familiar with the importance of the sub-contracting provisions in the construction industry. It would have been a simple matter to include the term “sub-contract any work coming within the scope of the collective agreements”. The Board is not prepared to read those words into the memorandum. Therefore in these circumstances, the memorandum of settlement does not create bargaining rights. The Board finds there has been no breach of the settlement.

127Having regard to the above these applications are dismissed.

“Inge M. Stamp”

for the Board