The Labour Relations Act, 1995 ("LRA") governs labour
relations in Ontario including union certification and termination
rights. The Ontario Labour Relations Board ("the
Board") is a tribunal that adjudicates labour relations
matters under the LRA. Under section 1(4) of the LRA, the
Board has the authority to find two corporations or operations as
one entity for purposes of unionization of the entities'
workforce. Through a section 1(4) designation, a
non-unionized company can, unintentionally through close
connections to another company end up with a unionized
workforce. Section 1(4) specifically provides:
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.
Put more plainly, if the Board is convinced that:
there is more than one corporation, firm, etc., including
divisions of the same corporation;
that associated or related activities or businesses are carried
that their activities/businesses are under common control or
the Board can find under s.1(4) of the LRA that the union
representing an existing workforce and the associated collective
agreement applying to that workforce also apply to the other
entity. For a business entity that does not want a union,
this can be a significant risk. As in other areas of risk,
knowledge and prevention can assist to reduce or manage
Often times, the first stage of the test is met.
As for the second stage of the test (ie. associated or related
activities or businesses that are carried on), the Board looks at
whether the two entities are:
of the same character,
serve the same general market,
employ the same mode and means of production,
utilize similar employee skills, and
are carried on for the benefit of related purposes.
For the third stage of the test, in assessing whether there is
common control and direction of the two entities, the Board looks
for signs of:
common ownership or financial control
inter-relationship of operations
representation to the public as a single integrated
centralized control of labour relations
All the facts are looked at collectively. The Board wants
a firm sense of control and direction coming from one source.
Some of the following specific features of the operation of
business entities may be taken into account by the Board as
suggesting a single source of control and direction:
common sales staff
interchange of employees
common directors and officers
common labour relations and personnel policies
similar work performed by employees of the different
common and inter-related sales techniques
functional integration and inter-dependance of operations
common cheques issued to all employees
common bookkeeping and accounting facilities
presence of signs indicating associated existence
It is never possible to guarantee that a section 1(4)
designation would not be made by the Board to an otherwise
non-unionized company but businesses can pay close attention to
their operations to try to avoid the above features to reduce
the risk of unintentionally having a unionized workforce.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).