Canadian Union of Skilled Workers v. Four Seasons Site Development Ltd., 2024 ONSC 6398

2024 ONSC 6398

DIVISIONAL COURT FILE NO.: 661/23-JR

DATE: 20241127

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Lococo, Matheson and Sheard JJ.

BETWEEN:

CANADIAN UNION OF SKILLED WORKERS

Applicant

– and –

FOUR SEASONS SITE DEVELOPMENT LTD. and WESTPORT PAVING INC. and ONTARIO LABOUR RELATIONS BOARD

Respondents

Ben Katz and Hong Hua (Emily) Li, for the Applicant

Mark D. Contini and Anthony Kwong, for the Respondents Four Seasons and Westport

Andrea Bowker, for the Respondent Board

HEARD at Toronto: September 25, 2024

REASONS FOR JUDGMENT

R. A. Lococo J.:

I. Introduction

[1] The applicant Canadian Union of Skilled Workers (the “Union” or “CUSW”) brings an application for judicial review of the decision of the respondent Ontario Labour Relations Board (the “Board” or the “OLRB”) dated November 30, 2022, reported at 2022 119930 (the “Decision”), and the Board’s reconsideration decision dated October 23, 2023, reported at 2023 102883 (the “Reconsideration Decision”, and together with the Decision, the “Decisions”).

[2] In the Decision, the Board dismissed the Union’s application for a declaration that the respondents Four Seasons Site Development Ltd. (“Four Seasons”) and Westport Paving Inc. (“Westport”) are related entities and constitute one employer for labour relations purposes. The Board found that granting the application would be an improper expansion of the Union’s existing bargaining rights for Westport. In the Reconsideration Decision, the Board denied the Union’s request for reconsideration.

[3] The Union submits that the Decisions were unreasonable since, among other things, the Board disregarded the Union’s submission that to give meaningful effect to the employees’ bargaining rights, the Union must be able to bargain with Four Seasons, the entity that maintains fundamental economic control over the work and the employees.

[4] As explained below, I would dismiss the judicial review application.

II. Background

[5] The factual background for this matter arose from the involvement of Four Seasons and Westport in the installation of electrical infrastructure in Toronto Transit Commission (TTC) stations for self-serve reload machines for “Presto” fare payment cards (the “Presto project”).

[6] Four Seasons is in the business of road construction and related activities in the Greater Toronto Area. It performs some of its work directly and subcontracts the rest. Four Seasons has never directly done any electrical work. It always subcontracts that kind of work: Decision, at para. 4.

[7] Since 2005, Four Seasons has regularly subcontracted work to Westport, a paving company. The vast majority of Westport’s work has come from Four Seasons: Decision, at para. 6.

[8] In 2015, Four Seasons was awarded a contract to install the electrical infrastructure (wiring and conduits) for Presto machines in TTC stations. Four Seasons subcontracted with a third party, DMS, to perform the required electrical work, but DMS was removed from the Presto project in 2016: Decision, at para. 11. Four Seasons then subcontracted with Westport and other firms to perform the electrical work for the Presto project: Decision, at paras. 11, 44-45. Prior to Westport’s involvement in the Presto project, it did not employ any electricians or electricians’ apprentices (collectively, “Electricians”): Decision, at para. 12. However, some of DMS’s former employees ended up working for Westport on the Presto project: Decision, at para. 60.

[9] On April 13, 2016, the Union filed an application for certification under the construction industry provisions of the Labour Relations Act, 1995, S.O. 1995, c. 1, Sched. A (the “LRA”), seeking the right to bargain for a bargaining unit of Electricians employed by Four Seasons and Westport. The Union named both Four Seasons and Westport as responding parties to the certification application: Decision, at para. 6. At the time the application was made, “more than 55% of Westport’s employees in the proposed bargaining unit were CUSW members”, but Four Seasons took the position that it (i) had no employees who were Electricians, and (ii) was not related to Westport under s. 1(4) of the LRA: Decision, at paras. 7-8.

[10] On February 27, 2017, the parties entered into Minutes of Settlement (“MOS”), settling all outstanding disputes relating to the certification application. Four Seasons was removed as a responding party and the application proceeded on an uncontested basis, without prejudice to the Union’s right to file a related employer application: Decision, at para. 9.

[11] On April 3, 2017, the Union was certified as bargaining agent for the bargaining unit consisting of:

all electricians and electricians’ apprentices in the employ of Westport Paving Inc. in all sectors of the construction industry in the City of Toronto, the Regional Municipalities of Peel and York, the Towns of Oakville and Halton Hills and that portion of the Town of Milton within the geographic Townships of Esquesing and Trafalgar, and the Town of Ajax and the City of Pickering in the Regional Municipality of Durham, save and except non-working foremen and persons above the rank of non-working foreman.

III. The Union’s related employer application

[12] On April 21, 2017, the Union filed a related employer application with the Board under s. 1(4) of the LRA, as contemplated by the MOS.

[13] Section 1(4) provides:

(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. [Emphasis added.]

[14] In the application, the Union sought a declaration that Four Seasons and Westport were under common control and direction and therefore constituted one employer bound by the bargaining rights held by the Union for Electricians in Toronto. The application came before Vice-Chair Adam Beatty for determination.

[15] As set out in the Decision, at para. 15, the parties agreed that the Union was required to establish the following three elements before the Board would consider whether to make a declaration under s. 1(4):

1. There must be more than one corporation, individual, firm, syndicate or association involved;

2. Related or associated activities or business must be carried on by the entities concerned; and

3. The activities or businesses must be under common control or direction.

[16] The parties also agreed that even if these three prerequisites were satisfied, the Board maintained the discretion over whether to declare two entities as related employers under section 1(4): Decision, at para. 16.

[17] Before the Board, there was no dispute that Four Seasons and Westport satisfied the first requirement, but the remaining elements were in dispute: Decision, at para. 17. As well, if the Board found that the three prerequisites were established, the parties did not agree on whether the Board should exercise its discretion and grant the requested declaration. The Board, at para. 18, set out the parties’ positions on the Board’s discretion as follows:

CUSW emphasized that [the Board] should grant the declarations sought because there was a possibility that not doing so would result in the erosion of its bargaining rights with Westport. Conversely, Four Seasons [with Westport’s support] argued there was no labour relations reason to issue the declarations sought by CUSW. Four Seasons argued that nothing had changed with respect to how it had its electrical work done and that there was no erosion of CUSW’s bargaining rights. To the contrary, Four Seasons argued that granting CUSW’s request would result in an expansion of its bargaining rights.

[18] On November 30, 2022, the Board released the Decision, dismissing the Union’s application.

[19] The Board found that the three criteria outlined above had been met. There was no dispute that multiple entities were involved, meeting the first criterion: Decision, at para. 104. Four Seasons and Westport engaged in related activities concerning both paving work and the Presto project, fulfilling the second criterion: Decision, at paras. 105-107.

[20] The Board also found that the third criterion, common control and direction, was met: Decision, at paras. 108, 120. The Board found that Four Seasons exercised significant economic control over Westport, stating: “[p]ut simply, Four Seasons dominated Westport economically. Without Four Seasons, it is difficult to see how Westport could have survived as an economic entity”: Decision, at para. 113. In reaching its conclusion, the Board considered various factors, including: a significant level of cooperation between the two entities; equipment and material supply by Four Seasons, unique contract terms; shared offices and addresses; Four Seasons’ involvement in managing Westport’s work on the Presto project which included providing a ready-made workforce; seed funding of $100,000; and direct supervision and control of the employees: Decision, at paras. 108-120.

[21] Having found that the three prerequisite conditions for a common employer declaration were met, the Board then exercised its discretion to dismiss the application. At para. 144, the Board explained its decision not to grant the related employer declaration:

There has been no erosion of CUSW’s bargaining rights. Four Seasons’ operations predate Westport’s. Nothing has changed, from Four Seasons’ or Westport’s perspective, with respect to how it gets its electrical work done. Prior to CUSW gaining bargaining rights for Westport, Four Seasons sub-contracted this work. It continues to do so. Nor has the type of electrical work it has done changed. Four Seasons continues to have electrical work done as part of his road construction business. Westport has never done any of that work. In these circumstances there is no erosion of CUSW’s bargaining rights with Westport.

[22] At paras. 146-147, the Board accepted Four Season’s argument that since the Presto project was a “one off project”, granting the related employer declaration “would result in an expansion of CUSW’s bargaining rights into electrical work on road construction projects.” The Board also stated, at para. 148 that while it “certainly may be the case that the Board will exercise its discretion to grant a related employer declaration where there is a possibility of an erosion of bargaining rights (as argued by CUSW), that is not this case.” The Board further noted that in this case, “not only is there no erosion of bargaining rights, there is no possibility of such an erosion”: Decision, at para. 148.

[23] On October 23, 2023, the Board released the Reconsideration Decision of Vice-Chair Beatty (for the Board), denying the Union’s request to reconsider the Decision: Reconsideration Decision, at para. 13. The Board, at para. 10, rejected the Union’s submission that the Board erred in deciding not to exercise its discretion to grant a related employer declaration based on the erroneous conclusion that doing so would constitute an expansion of the Union’s bargaining rights. The Board found that the Union’s position “amounts to nothing more than an attempt to relitigate an issue dealt with in the hearing on the merits”, noting the Board “has held, repeatedly, that a request to reconsideration is not an opportunity for a party to relitigate an issue already addressed in the decision on the merits.”

[24] At paras. 11-12, the Board also declined to consider two Court of Appeal decisions that were released on November 16, 2022, two weeks before the Board issued its Decision: Turkiewicz (c.o.b. Tomasz Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent Union of Canada, Local 1, 2022 ONCA 780, 476 D.L.R. (4th) 421, and Enercare Home & Commercial Services Limited Partnership v. UNIFOR, Local 975, 2022 ONCA 779, 476 D.L.R. (4th) 342. The Board reasoned that the Union “had ample opportunity to bring these decisions to the Board’s attention prior to the release of the November 30, 2022 decision.”

[25] By Notice of Application to this court dated November 22, 2023, the Union seeks judicial review of the Decisions.

IV. Jurisdiction and standard of review

[26] The Divisional Court has jurisdiction to hear this judicial review application: Judicial Review Procedure Act, R.S.O. 1990, c. J.1, ss. 2, 6(1).

[27] Upon judicial review of an administrative decision, there is a presumption that the standard of review is reasonableness: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 2 S.C.R. 653, at paras. 23-25. The parties agree that the reasonableness standard of review applies in this case: see also Turkiewicz, at para. 53; Enercare, at para. 40.

[28] Reasonableness review “finds its starting point in the principle of judicial restraint” but remains “a robust form of review” rather than “a ‘rubber-stamping’ process or a means of sheltering administrative decision makers from accountability”: Vavilov, at para. 13. A reasonable decision is one that is based on an internally coherent and rational chain of analysis that is justified in relation to the facts and law that constrain the decision maker. The reasonableness standard requires a reviewing court to defer to such a decision: Vavilov, at para. 85. The relative expertise of administrative decision makers with respect to the questions before them is a relevant consideration in conducting reasonableness review: Vavilov, at paras. 31, 92-93.

[29] The burden is on the party challenging the decision to show that it is unreasonable. Before a decision can be set aside on that basis, “the reviewing court must be satisfied that there are sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency”: Vavilov, at para. 100.

[30] The courts have consistently afforded labour relations boards “the highest levels of judicial deference on matters within their exclusive jurisdiction”: Maystar General Contractors Inc. v. International Union of Painters and Allied Trades, Local 1819, 2008 ONCA 265, 90 O.R. (3d) 451, at para. 42. The Board has exclusive jurisdiction under s. 114(1) to exercise the powers conferred upon it by the LRA, including under s. 1(4).

[31] After noting the Board’s exclusive jurisdiction under s. 114(1) and the “strong privative clause” in s. 116, the Court of Appeal characterized the Board as “a highly specialized tribunal with considerable expertise, placing it in an elevated position to interpret its home statute”: Turkiewicz, at para. 77; Enercare, at para. 64.

[32] With respect to the Board’s discretion under s. 1(4), the court stated that provision “gives the OLRB the discretion to make a related employer declaration when the statutory preconditions are met. The exercise of that discretion warrants deference”: Turkiewicz, at para. 91.

V. Issues for determination

[33] The Union submits that the Decisions were unreasonable and should be set aside.

[34] The Union’s principal argument is that in exercising its discretion to decline to grant the related party declaration, the Board unreasonably failed to engage with the Union’s central argument relating to economic dominance. As a result, the Union says that the Board’s reasons failed to exhibit the requisite degree of justification, intelligibility and transparency.

[35] The Union’s factum also challenges the reasonableness of the Decisions on other grounds, which I consider to be without merit. Since the Union did not advance those grounds in oral argument, they are not addressed further in the balance of these reasons.

[36] As explained below, I have concluded that the Union has not established that the Decisions were unreasonable.

VI. Analysis

The Board acted reasonably with respect to the exercise of its discretion to decline to grant the related employer declaration

[37] The Union submits that the Board erred in exercising its discretion to decline to grant the related party declaration. The Union says that Board unreasonably failed to engage with the Union’s central argument relating to economic dominance.

[38] The Union submits that its central argument was that Westport was functionally and economically dependent on Four Seasons. Therefore, the Union’s bargaining rights should also attach to Four Seasons so that the Union can negotiate a collective agreement for the employees with the entity that holds economic control over the business. The Union says that without a common employer declaration, the existing bargaining rights that the Union has for Westport employees are rendered meaningless.

[39] When assessing whether Four Seasons and Westport fulfilled the threefold criteria for a related employer under s. 1(4), the Board detailed its factual determinations and found that Westport was functionally integrated with and economically reliant on Four Seasons.

[40] The Union submits that despite the Board’s full acceptance of the Union’s main argument relating to economic dominance when finding that the three related employer criteria were met, the Board erred in failing to address that argument at all in its analysis regarding the exercise of remedial discretion under s. 1(4). The Union says that the Board instead focused solely on Four Season’s argument that there was no erosion of bargaining rights: Decision, at paras. 144-149. The Union submits that the Decision does not address any of the Union’s fundamental arguments that are derived from established Board jurisprudence regarding related employer declarations: there are no references to Four Seasons’ dominance over Westport; no references to the effects of this dominance on the Union’s ability to bargain effectively; no references to the jurisprudence cited by the Union in support of this position and why it does not apply; and no references to the all-sectors certificate the Board issued to the Union.

[41] The Union also submits, among other things, that the Board did not explain why Four Seasons’ erosion and expansion arguments overwhelmed the Union’s functional dependence argument and the labour relations concern of ensuring direct dealings between the union/employees and the entity possessing real economic control.

[42] As a result of these failures to meaningfully engage in the Union’s central argument, the Union submits that the Board’s reasons failed to exhibit the requisite degree of justification, intelligibility and transparency: see Vavilov, at para. 100.

[43] I disagree.

[44] In the Decision at paras. 124-143 under the heading “Exercise of Discretion”, after finding that the threefold prerequisites of making a common employer declaration were met, the Board set out in detail the submissions of both parties with respect to whether the Board should exercise its discretion to grant the declaration. The Board, at paras. 124-131, specifically referenced the Union’s economic dominance argument in this context, as well as the Union’s rejection of Four Seasons’ submissions relating to erosion/expansion of bargaining rights, including as follows:

124. CUSW argued that this was an appropriate case for the Board to exercise its discretion and to make the requested declarations. CUSW argued that the requested declarations were necessary in order to ensure that it had bargaining rights with the source of fundamental economic control over the employees. In this case, that is Four Seasons.

125. CUSW argued that this was not a case where the Union sought to expand its bargaining rights. Rather, CUSW was simply seeking access to Four Seasons because it held fundamental economic control over the employees in question.

126. In Canadian Union of Public Employees v. Meadowcroft (Livingston Lodge), [1998 18287 (Ont. LRB)](https://www.canlii.org/en/on/onlrb/doc/1998/1998canlii18287/1998canlii18287.html), at para. [53], the Board noted that section 1(4) is designed to achieve the following:

a) to preserve or protect from artificial erosion the bargaining rights of the union;

b) to create or preserve viable bargaining structures, and

c) to ensure direct dealings between a bargaining agent and the entity with real economic power over the employees.

127. In that decision, the Board concluded that it was appropriate to issue a common employer declaration “in order to ensure that collective bargaining” had a solid foundation and in order to ensure that the “bargaining agents are able to engage in direct dealings with the entity with real economic power over the employees in the bargaining units.” CUSW argued that the same conclusion should apply here.

[Emphasis added.]

[45] I see no merit in the Union’s assertion that the Decision did not address the Union’s central argument in its rationale for declining to exercise the Board’s discretion to grant the common employer declaration. In making that determination, the Board was faced with competing analyses from the parties.

[46] In summary, the Union argued, at para. 124, that a related employer declaration was necessary “in order to ensure that it had bargaining rights with the source of fundamental economic control over the employees”. Four Seasons argued, at para. 140, that there was “no reason to grant relief under section 1(4)” because, among other things, there had been no erosion of bargaining rights.

[47] It is evident from the Decision that the Board preferred Four Seasons’ approach to the “Exercise of Discretion” issue. In reaching that conclusion, the Board was not required to undertake a point-by-point analysis and address every aspect of the Union’s argument: see Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708, at para. 16; Vavilov, at para. 128. The Board, at para. 148, specifically concluded that “not only is there no erosion of bargaining rights, there is no possibility of such an erosion” given that the effect of a single employer declaration would be to expand the Union’s bargaining rights to cover “work that Westport has never been involved in.” It follows that the Board did not accept the Union’s assertions that a related employer application was necessary to ensure “direct dealings with the entity with real economic power over the employees in the bargaining units” given, among other things, that Westport did not and never had employed any employees to perform the work that would have been affected by a single employer declaration (electrical work on road construction projects): see Decision, at paras. 147-148.

[48] Reading the Decisions as a whole, the Union has not established that the Decisions were unreasonable. As previously noted, s. 1(4) of the LRA contemplates that the Board has the discretion to choose whether to issue a related employer declaration, even where the three elements that are the prerequisites to the issuance of a declaration are met. The Board’s exercise of that discretion is accorded considerable deference: see Turkiewicz, at para. 91. I would defer to the Board’s exercise of discretion in this case.

VII. Disposition

[49] For the above reasons, I would dismiss the judicial review application.

[50] In accordance with the parties’ agreement, I would order the Union to pay costs to Four Seasons and Westport in the amount of $7,500 all inclusive and order no costs for or against the Board.

___________________________ Lococo J.

I agree: ___________________________ Matheson J.

I agree: ___________________________ Sheard J.

Date: November 27, 2024

2024 ONSC 6398

DIVISIONAL COURT FILE NO.: 661/23-JR

DATE: 20241127

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Lococo, Matheson and Sheard JJ.

BETWEEN:

CANADIAN UNION OF SKILLED WORKERS

Applicant

– and –

FOUR SEASONS SITE DEVELOPMENT LTD. and WESTPORT PAVING INC. and ONTARIO LABOUR RELATIONS BOARD

Respondents

REASONS FOR JUDGMENT

R. A. LOCOCO J.

Date: November 27, 2024