Labourers’ International Union of North America, Local 1059 v. Ekum Sekum Inc. c.o.b. as Brantco Construction, 2001 CanLII 7489

Labourers’ International Union of North America, Local 1059 v. Ekum Sekum Inc. c.o.b. as Brantco Construction

File No.: 1741-01-G Date: October 9, 2001 Ontario Labour Relations Board

Between: Labourers’ International Union of North America, Local 1059, Applicant v. Ekum Sekum Inc. c.o.b. as Brantco Construction, Responding Party.

Before: Harry Freedman, Vice-Chair.

Appearances: John Moszynski, Jim Mackinnon and Walter Medeiros for the applicant; Mark Contini, Jennifer Kerr and Joe Graci for the responding party

Decision of the Board

1This is a referral of a grievance to the Board for determination under section 133 of the Labour Relations Act, 1995, S.O. 1995, c. 1, as amended (“the Act”) in which the responding party denies that it is bound by a collective agreement with the applicant relating to the roads sector of the construction industry. The Chair of the Board authorized me pursuant to section 110(14)(a) of the Act to sit alone to hear and determine this matter.

2The grievance arises out of work performed by the responding party in respect of parking lot construction at a Wal-Mart project in St. Thomas. The parties agreed that for purposes of this proceeding, the construction of that parking lot came within the roads sector of the construction industry. The responding party acknowledged that if the Board found it was bound by the collective agreement as alleged by the applicant, the responding party violated that collective agreement and the Board would then be required to determine the damages, if any, the responding party would be liable to pay the applicant. The parties also agreed that the applicant obtained bargaining rights in relation to all sectors of the construction industry by reason of a decision and two certificates issued by the Board in October 1984.

3The responding party has raised, as a preliminary matter, three distinct but related issues. It claims that it and the applicant never entered into a collective agreement and puts the applicant to the strict proof of the alleged collective agreement. It also alleges that if there was a collective agreement entered into by the parties, that collective agreement had a term of operation expiring on December 31, 1991 and that as the applicant has taken no steps since that date to negotiate a renewal of the collective agreement, it has abandoned any bargaining rights it had for the responding party outside of the industrial, commercial and institutional sector of the construction industry. Finally, the responding party argues that the applicant, by failing to assert its bargaining rights or enforce its alleged collective agreement with the responding party is estopped from now asserting or enforcing bargaining rights in relation to the responding party.

4It was clear and the applicant accepted that it has the burden of proving the existence of the collective agreement it says is binding on the applicant. The applicant also acknowledged that it did not serve a notice to bargain on the responding party at any time after December 31, 1991. The responding party claims that it has carried out over 40 parking lot or other construction projects quite openly in Board Area 3 (the area within the geographic jurisdiction of the applicant) in and since 1991 and that the applicant either knew or should have known about the work done by the responding party during that period of time. The applicant denies that the responding party engaged in the construction work it claims it performed in Board Area 3 and puts the responding party to the strict proof of such work. The responding party alleges that the applicant, by doing nothing about the responding party’s construction work since 1991, abandoned its bargaining rights or created an estoppel. The applicant points out that the responding party has the burden of proving an abandonment of bargaining rights and the factual foundation for its estoppel argument.

5The different evidentiary burdens raised by the preliminary issues have created a procedural issue. The responding party accepts that it has the burden of proving the facts to establish an abandonment of bargaining rights and an estoppel. It points out, however, that once it is established that the alleged collective agreement had gone through two successive renewals without any attempt by the applicant to negotiate a new collective agreement or give notice to bargain, then the evidentiary burden shifts to the applicant to explain its lack of action. The responding party argued that as a matter of law, once an agreement has gone through two successive terms by reason of an automatic renewal clause in the collective agreement, unless the union demonstrates that it continued to have an interest in the responding party, it has abandoned the bargaining rights it may have had under that expired collective agreement.

6The responding party referred to Belleville & District Builders’ Exchange, [1963] OLRB Rep. May 114 in which the Board commented at page 115:

…the collective agreement between the parties was for a term of two years to September 30, 1959. The evidence is that no notice was given under the terms of the agreement and by virtue of clause 3, the agreement was automatically renewed for one year. Thereafter, until March, 1963, the parties had no dealings one with the other. There is no evidence to suggest that the applicant made any attempt to discuss the agreement or labour relations matters with the respondent Exchange. Nevertheless the applicant submits that the agreement has renewed itself each year and is currently operative.

In situations of this kind the Board has said that as a general rule it will have regard to a second automatic renewal but thereafter the onus is on the union to satisfy the Board that it has not abandoned its bargaining rights. This it may do by showing that it retained an interest through contact with the other party to the agreement. Just what contact is necessary depends on the facts in each particular case. In this case there was none.

In these circumstances the Board finds that the applicant has abandoned its bargaining rights which it had under the said collective agreement with the respondent.

In Cooksville Steel Limited, [1974] OLRB Rep. June 365 the Board, in finding that the union in that case had abandoned its bargaining rights stated at page 366

It has been noted by the Board previously that as a general rule the Board will have regard to a second automatic renewal of a collective agreement but thereafter the onus is on the union to satisfy the Board that it has not abandoned its bargaining rights. This it may do by showing that it retained an interest through some contact with the other party to the agreement. The degree of activity required on the part of the union so as to retain its bargaining rights must depend on the facts in each particular case. However, in the case before us there was no contact of any kind.

The responding party also relied on Gibraltor Building Corp., [1999] OLRB Rep. July/August 603 in which the Board concluded that the trade union had abandoned its bargaining rights in respect of an employer that was not active in the construction industry during the period in which the collective agreement had automatically renewed itself three times because the union had not had contact with the employer during that period.

7The Board in Gibraltor Building Corp. distinguished the line of cases that hold a union need not seek to bargain a renewal of its collective agreement with an employer if the employer is not working in the geographic area for which it holds bargaining rights for that employer. In MCA Carpentry Ltd., unreported decision dated July 3, 1998, Board File No. 0551-97-R, Q.L. cite [1998] OLRD No. 2392 the Board commented at paragraph 45:

…inactivity on the part of a union is not in and of itself sufficient to establish abandonment. One must look at whether the employer in the construction industry was working within the geographic area for which the union holds bargaining rights; and, there must be some reasonable basis upon which to conclude that a union ought to have known that the employer was active, e.g. a union is not required to search all building permits in an area or if there is no reason to believe that a union ought to have known about an employer's activity in a particular area, the union is not required to apply for conciliation services.

Similarly, in R. Reusse Co. Ltd., [1988] OLRB Rep. May 523 the Board discussed its approach to determining whether a union had abandoned its bargaining rights at page 527:

In making that determination, the Board evaluates the conduct of the union in the context of the duration of the period of inactivity, whether the employer continued to operate in the area, whether the terms and conditions of employment have been changed by the employer without objection from the union, whether the union has sought to negotiate or administer existing collective agreements and any extenuating circumstances which might account for an apparent failure to assert bargaining rights. For example, as a general rule, the Board has regard to a second automatic renewal of a collective agreement but thereafter the onus is on the union to satisfy the Board that its bargaining rights have not been abandoned by showing its interest in maintaining those rights through contact with the employer party to the collective agreement…. The Board’s jurisprudence also accepts the notion that a union is not expected to seek actively to pursue its bargaining rights during periods when the employer ceased operating within the geographic scope of the collective agreement (see Able Construction (Kitchener), [1963] OLRB Rep. Sept. 317; Inducon Construction (Northern) Inc., [1982] OLRB Rep. March 390) particularly where the union did seek to assert those rights at the first opportunity upon the employer’s return to the area: John Miller & Sons Ltd., [1979]OLRB Rep. June 540.

Thus, it appears to me that although the employer has the burden of proof if it asserts that the union has abandoned its bargaining rights, the failure of the union to take steps to negotiate a renewal of collective agreement after the second automatic renewal of that collective agreement requires a union to assert the justification for it not doing so. In other words, the burden of proof shifts to the union to establish some justification for conduct that would, in the absence of an explanation, suggest that the union has abandoned its bargaining rights.

8The applicant is prepared to proceed first with its evidence about the collective agreement but argues that it should not have to call evidence about the “abandonment” issue until after the responding party has called its evidence about abandonment. The applicant submitted that because the onus is on the responding party to establish the abandonment of bargaining rights, it must proceed first on that issue with its evidence before the applicant adduces its evidence to explain why it took no steps to bargain a renewal of the collective agreement and why it did not seek to enforce the collective agreement. The applicant relied on G. S. Wark Limited, [1996] OLRB Rep. Sept./Oct. 811 at 819 to argue that the burden of proving abandonment of bargaining rights rests on the party asserting it. The Board wrote at page 819:

The courts have agreed that it is appropriate for the Board to apply a rebuttable presumption that a trade union does not intend to abandon bargaining rights. This merely means that abandonment must be demonstrated and is not to be assumed, and that the onus is on the party which asserts abandonment.

The Board in G. S. Wark Limited noted later in that decision when discussing the situation where the collective agreement has been automatically renewed more than two times that there is an onus on the union to come forward with an explanation. The Board wrote at page 820: “After the second such renewal, there is a positive onus on the union to satisfy the Board that it has not abandoned the bargaining rights in issue.”

9The applicant must proceed first to prove its collective agreement with the responding party. There is no dispute between the parties that the applicant did not seek to bargain any renewals of that collective agreement which, on its face, expired December 31, 1991 and would continue in force from year to year thereafter. Thus, when the applicant filed its grievance in this matter, it was relying on 9 successive automatic one-year renewals of the collective agreement to assert that the responding party was in violation of the collective agreement when it carried out the parking lot construction at the Wal-Mart project in St. Thomas in August 2001. In my view, on the undisputed facts that are before me, based on the parties’ representations, the applicant must at least proffer an explanation about its lack of activity in relation to the responding party and can do so when it is putting in its case in chief. The applicant is aware of the issue that has been raised by the responding party and is in a position to call evidence to refute what the responding party asserts is a prima facie case of abandonment of bargaining rights. For these reasons, I direct the applicant to proceed first with all of its evidence relevant to both the existence of a collective agreement binding on the responding party and bargaining rights in respect of the responding party.

10I indicated to the parties after the applicant had completed its argument with respect to the calling of evidence that the applicant would be expected to call evidence with respect to both the collective agreement and abandonment issues. The parties agreed that rather than start the testimony of the applicant’s first witness, the hearing should be adjourned as several days would be necessary to complete the case. In the interim period, the parties also agreed to a timetable for the exchange of detailed pleadings or particulars and the production of documents for inspection. On the parties’ agreement, the Board directs the parties to:

a) deliver a statement of material facts to the other party and the Board on or before November 9, 2001;

b) deliver a reply statement of material facts (if any) to the other party and the Board on or before November 23, 2001;

c) produce for inspection all documents relevant to the issues in this proceeding on or before January 4, 2002; and

d) file any motion requesting further particulars or better production of documents with the Board and the other party on or before January 18, 2002.

The Board, with the agreement of the parties also fixed continuation dated for the hearing of this matter.

11Although I did not raise the consequence of failing to file material within the time specified with the parties while discussions were taking place about the exchange of statements of fact and production of documents, I am also advising the parties that they will not be permitted to call any evidence with respect to any material fact not contained in their statements of material facts or reply statements of material facts, nor will the parties be permitted to rely on any document if that document has not been produced for inspection by the other party except with leave of the Board.

12This matter is referred to the Registrar to be listed for hearing before this panel of the Board on January 30, 31, February 1, 18 and 19 2002. The hearings will commence each day at 9:30 a.m. local time at the Board’s hearing room at 505 University Ave., 2^nd Floor Toronto.

“Harry Freedman”

for the Board