International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 736 v. Donald J. Collins c.o.b. as Diamond Steel et al.
Board File No.: 3885-00-R, 3884-00-G Date: June 6, 2001 Ontario Labour Relations Board
Between: International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 736, Applicant v. Donald J. Collins c.o.b. as Diamond Steel, Donald J. Collins in his personal capacity Collin Erectors Inc., Responding Parties.
And Between: International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 736, Applicant v. Collins Erectors Inc., Responding Party.
Before: Mary Ellen Cummings, Alternate Chair, and Board Members J. G. Knight and G. McMenemy.
Decision of the Board
1This is an application for a declaration that two or more employers are a single employer for the purposes of the Labour Relations Act, 1995 (the "Act") and or for a declaration that all or part of the business has been sold to another entity, and a referral of a grievance in the construction industry.
2By decision dated May 9, 2001, the Board noted that the responding parties had failed to file responses to the application in Board File 3885-00-G. In accordance with Rule 41 of the Rules of Procedure, the Board indicated that it would make a decision on the basis of the material in front of it. However, since it appeared that the responding parties had also not posted the application so that it would come to attention of affected employees, the Board ordered a Labour Relations Officer to post at a project identified by the applicant as one where affected employees were working. The Officer posted the Notice to Employees on May 11, 2001. The Notice invited employees to make submissions. The time for making submissions has passed, and the Board has received none.
3The Board will proceed to consider the application in Board File 3885-00-R. Having regard to the material filed by the applicant the Board makes the following findings of fact. The applicant holds bargaining rights for a company called Diamond Steel, which is a sole proprietorship owned and operated by Donald J. Collins. Mr. Collins entered into a voluntary recognition agreement with the applicant on September 7, 1999, in which he agreed to be bound to the collective agreement between the International Association of Bridge, Structural, ornamental and Reinforcing Workers, and the Ontario Erectors Association. The current collective agreement is effective to April 30, 2001 and covers the employment of iron workers in all sectors of the construction industry in the Province.
4Diamond Steel is a steel erection company active in the south and southwestern part of the Province with its address at 35 Marchbank Crescent, which is also the residence of Donald J. Collins. Mr. Collins is the directing mind of Diamond Steel, hiring employees, obtaining jobs, overseeing operations and supervising jobs.
5In response to a grievance filed by the applicant with respect to work performed at the Owen Sound Courthouse, Diamond Steel indicated that it was insolvent and had not operated since August 2000. Diamond Steel is in significant arrears to the applicant in respect of the payment of pension, welfare and other contributions.
6Collin Erectors Inc. is a steel erection company that incorporated on October 18, 2000. Its registered office address is 35 Marchbank Crescent, which is also the residence of Donald J. Collins and Diamond Steel. The sole officer and director of Collin Erectors Inc. is Michelle Collins, whose address is 35 Marchbank Crescent.
7In September 2000, the applicant made enquiries about the contract for the erection of structural steel at the new Court House in Owen Sound. The applicant was advised by the company that was supplying the steel that it had subcontracted the erection of the steel to Diamond Steel. But Diamond Steel gave no notice to the applicant of the project, nor did it acquire iron workers through the applicant's hiring hall.
8When the applicant's representative visited the job site, it identified Donald J. Collins as the person directing the erection of steel that started around February 17, 2000. Some of the employees working with Mr. Collins were members of the applicant, but none of them had been hired through the applicant's hiring hall, and at least one of them thought he had been hired by Mr. Collins to work for Diamond Steel.
9The applicant filed a grievance with respect to Diamond Steel's failure to engage employees in accordance with the collective agreement. Diamond Steel responded by indicating that it had not performed the work; that it had been performed by Collin Erectors Inc. and asserted that Mr. Collins was not a director, officer or shareholder at that company.
10The Board finds that there has been a sale of a business within the meaning of section 69 of the Act from Diamond Steel to Collin Erectors Inc. on October 18, 2000, the date Collins Erectors Inc. was established. The information provided by the applicant indicates that Mr. Collins was a key man in Diamond Steel, a sole proprietorship. When Diamond Steel ran into financial difficulties and/or sought to escape its collective bargaining obligations, the expertise of Mr. Collins was transferred to Collin Erectors Inc., as is demonstrated by his ability to get the work at the Owen Sound Court House from a steel supplier, based on its understanding the work was being done by Diamond Steel.
11In CSE Corp. (cob. Concept Systems Electric), [2000] OLRB Rep. January/February 3 the Board identified elements that typically comprise a "business" in the construction industry:
- The Board has emphasized that in the construction industry, the economic entity that creates employment includes both the managerial expertise to develop competitive pricing in order to bid successfully for work with adequate margins to ensure the ongoing viability of the business and the skills and abilities of the persons to perform (or supervise the performance of) the work within the budget established for the project.
12Mr. Collins' ability to bid work, get it and perform the project is a significant asset that has been transferred to and is now working for Collin Erectors Inc. As a consequence of the sale of business, Collin Erectors Inc. is bound to the collective agreement between the International Association of Bridge, Structural, Ornamental and Reinforcing Workers, effective October 18, 2000, the date of its incorporation.
13Based on the information provided by the applicant, the Board also concludes that Diamond Steel and Collin Erectors Inc. are a single employer, within the meaning of section 1(4), for the purposes of the Labour Relations Act, 1995. Section 1(4) reads:
1(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.
14Collin Erectors Inc. is in the same business as Diamond Steel and Collin Erectors operates out of the same premises as Diamond Steel. Mr. Collins is the directing mind in both enterprises, as is shown in his historic role in Diamond Steel and recent role in hiring of employees and directing the job at the Owen Sound Court House. The Board is satisfied that the two businesses of steel erecting are being carried under the common control and direction of Mr. Collins. Moreover, reasons for exercising the Board's discretion and making a declaration in this case exist; the applicant's bargaining rights are being eroded by Mr. Collins' operation of Collin Erectors Inc. Work covered by the collective agreement binding on the applicant and Diamond Steel has been diverted to Collin Erectors Inc. However, because the Board has found that there was a sale of business from Diamond Steel to Collins Erectors Inc. it is not necessary to make a declaration pursuant to section 1(4) of the Act.
15The applicant also asked the Board to declare that Donald J. Collins is bound to the collective agreement in his personal capacity. Mr. Collins is already bound in his personal capacity. Diamond Steel is a sole proprietorship or in other words, the name under which Donald Collins carries on business. It was he, not Diamond Steel (because Diamond Steel has no existence; it is merely a business name) in respect of whom the applicant holds bargaining rights.
16Having regard to the determinations made, the Board makes the following declarations and orders:
a) Donald J. Collins operating as Diamond Steel has sold all or part of its business to Collin Erectors Inc. within the meaning of section 69 of the Act on October 18, 2000.
b) Collin Erectors is bound to the collective agreement between the International Association of Bridge, Structural, Ornamental and Reinforcing Workers, effective October 18, 2000.
Grievance
17This panel of the Board also has before it the applicant's referral of a grievance in the construction industry, pursuant to section 133 of the Act, Board File 3884-00-G. The grievance was referred on March 30, 2001, against Collin Erectors. The applicant's ability to succeed on the grievance depended on the Board making a finding that Collin Erectors Inc. is bound to the collective agreement between the International Association of Bridge, Structural, Ornamental and Reinforcing Workers during the period that the work was performed at the Owen Sound Court House. Having made that finding, the Board can now go on to the grievance, once again, based only on the submissions of the applicant because Collin Erectors Inc. did not file a response.
18The applicant has established, based on its materials, that Collin Erectors performed work at the Owen Sound Court House starting around February 19, 2001 and continuing, (at least continuing when the grievance was filed). The work is being performed by a 7-man crew, none of whom have been hired through the applicant's hiring hall, in violation of the collective agreement. The total wage and benefit package for journeymen ironworkers is $37.27 per hour, with the result that the loss to the union and its members on account of wages and benefits is $56,352.14 to the date of the grievance referral. In addition, the union has lost retail sales tax on the benefit contributions and contributions to the industry fund in the amount of $325.08. Consequently, the damages owed to the applicant as of March 28, 2001 total $56,677.32.
19The applicant further submits that the damages would continue to accrue at the rate of $2,100.67 each day, assuming the continued use of a 7-person crew not hired through the applicant's hiring hall. At this point the Board can determine with certainty that the applicant is entitled to damages in the amount of $56,677.32 and so declares. However, to calculate the total amount of damages, the Board requires further particulars from the applicant about how long the project lasted and whether it is still continuing.
20In the interim, the Board declares that Collin Erectors Inc. owes $56,677.32 to the applicant.
21This panel is seized.
"Mary Ellen Cummings"
for the Board