Dow v. International Union of Operating Engineers, Local 793, 1981 CanLII 914

[1981] OLRB Rep. June 692

0634-80-U Peter Walter Dow, Complainant, v. International Union of Operating Engineers, Local 793, Respondent, v. Operating Engineers Employer Bargaining Agency, Intervener.

BEFORE: George W. Adams, Chairman and Board Members C. G. Bourne and C. Ballentine.

APPEARANCES: Philip J. Wolfenden for the complainant; A. M. Minsky and E. A. Ford for the respondent; and B. W. Binning for the intervener.

DECISION OF THE BOARD; June 5, 1981

1. This complaint alleges that the respondent has acted contrary to sections 60, 60a, 61 and 136(1) of The Labour Relations Act. The complaint arises out of an amendment negotiated to Article 3 of the Ontario Provincial Agreement for Operating Engineers (hereinafter referred to as "the provincial agreement") on July 19, 1979 between the respondent and the intervener. This amendment, Article 3.4(b), provides:

Owner-operators who perform work covered by this Agreement shall be

signatory to an agreement with the Union and shall also be:

(i) a member in good standing of the Union; and

(ii) in good standing on contributions under the Health Plan, Pension

Plan and for Working Dues, as required by this Agreement.

If the Union advises an employer bound by this Agreement that an owner-operator engaged by such employer is in violation of this Article, the employer shall within 24 hours replace such owner-operator.

2. The complainant has been an owner-operator of a 25 ton mobile Grove crane since April 1978. On March 1, 1980 he began work with Archer Crane Rentals Limited (hereinafter referred to as "Archer") through Dow's Crane Rental Limited (of which the complainant is the sole shareholder) supplying his own crane. At the time, the complainant was a member of the respondent but at no time did he have an agreement with the respondent union within the meaning of the above amendment. On or about March 11, 1980 Archer was performing work for Schaeffer-Townsend Limited at a Dofasco construction site. The evidence reveals that Bill Pedder, a business agent of the respondent, advised Lloyd Spalding of Schaeffer-Townsend Limited that the complainant did not have an agreement with the respondent and that Schaeffer-Townsend Limited was therefore in violation of its subcontracting obligation under the provincial agreement. In response, Schaeffer-Townsend Limited had the complainant removed from the site. The complainant's written request for an agreement with the respondent was subsequently refused by letter dated March 25, 1980 over the signature of J. F. Kennedy, Business Manager of the respondent union. Following a grievance dated April 19, 1980 filed by the respondent union against Archer under the provincial agreement, Archer terminated its relationship with the complainant. The grievance complained that Archer had subcontracted work to persons not in contractual relations with the respondent and that there had been a failure to deduct and remit various contributions. Because so much of the industrial, commercial and institutional sector (hereinafter referred to as the "ICI sector") of the construction industry in the crane rental field is organized and subject to the provincial agreement in one way or another, the respondent's continuing refusal to provide the complainant with an agreement has effectively denied him work opportunities as an owner-operator in this important sector. The evidence reveals that the complainant as a member has the same kind of access to the hiring hall as any other member seeking referral as an employee-operator. The complainant, however, has alleged that agreements have been signed with other owner-operators since March 11, 1980 and the evidence in this respect will be reviewed below. The complainant also alleges that he was "a dependent contractor of Archer Crane Rentals Limited and as such was and is in the bargaining unit represented by the respondent union." The evidence relating to this allegation must also be reviewed below. The complainant therefore submits that his services were terminated by Archer because of the unlawful actions of the respondent including:

(a) the negotiation of Article 3.4(b) of the provincial collective agreement;

(b) the requirement that the complainant member of the respondent union have an agreement but then refusing to sign him to an agreement;

(c) the respondent union's position that it intends to put owner­ operator members of the respondent union out of business [an allegation reviewed below];

(d) in acting in a manner that is arbitrary, discriminatory and, in bad faith in the representation of the complainant; and

(e) in acting in a manner that is arbitrary, discriminatory and in bad faith in the selection, referral, assignment, designation or scheduling of the complainant to employment.

3. Prior to the July 19, 1979 amendment, Article 3.4 provided:

The Employer agrees to engage only those subcontractors and equipment rentals (except equipment dealers) who are in contractual relations with the union to perform work set out in the classifications of this agreement or as otherwise agreed to by the parties.

The recognition clause of the agreement provided and continues, in the current agreement, to provide:

ARTICLE 2 - RECOGNITION

2.1 The Employer recognizes the Union as the exclusive bargaining agent for all employees of the Employer for whom the Union has bargaining rights engaged in work covered by the schedules and classifications set out in this agreement, and any additional classifications as may be agreed to by the parties.

Both the 1978-80 and 1980-82 agreements go on to provide for, inter alia, holidays, vacation pay, training find, hours of work, overtime, meal breaks, reporting allowances, recall premium, other allowances, a health plan, a pension plan, working dues check-off, and an employer labour relations fund. Schedule "A" of the 1978-80 agreement sets out the wages for engineers on mobile Grove cranes and other types of cranes. For example, as of May 1, 1979 the schedule provided:

Vacation Benefit Pension Wages Pay Plan Plan TOTAL

13.69 1.37 .30 .40 15.76

The only explicit contractual reference to "owner-operators" in the recent history of bargaining in he crane rental field was injected by the July 19, 1979 amendment to the provincial agreement (Article 3.4(b)).

4. This complaint requires the Board to ask: "Are owner-operators covered by the provincial agreement in the sense that they are employed in the bargaining unit or referred to employment pursuant to the collective agreement and are therefore persons to whom the respondent trade union owes a duty of fair representation? And, regardless of the answer to the foregoing question: "Has the respondent's impugned conduct violated either sections 61 or 136(1)?"

5. Peter Dow has been a member of the respondent trade union for thirteen years, but mere membership does not, by itself, indicated that the respondent has acted as his bargaining agent for all of this time. He has been in possession of a hoisting engineer's certificate for ten years. From 197) to 1975 the grievor worked as a regular employee for S. MacNally & Sons, a general contractor in the Hamilton/Toronto area. He did not own his own equipment and was an employee within a bargaining unit represented by the respondent. His hours of work, wages, overtime, statutory holidays, vacations, etc. were determined by the applicable collective agreement. He subsequently worked as a regular employee for Cooper Construction Ltd. in the Hamilton area and was on the respondent's negotiating committee for the general contractor's agreement in 1977. He admitted that as an employee he was covered by the appropriate collective agreement from 1975 to 1978. In 1975, presumably before joining Cooper Construction Ltd., he worked as a regular employee for Bay City Crane Rentals (hereinafter referred to as "Bay City") and, after he ended his employment with Cooper Construction Ltd. in February of 1978, he bought a crane from Bay City in mid-April of 1978 which was his beginning as an owner-operator. He testified that he bought the 25 ton mobile Grove crane for $70,000. It was financed by the Canadian Acceptance Corporation and Bay City guaranteed the note. Dow testified that he "put up' the $5,000 sales tax and "that part of the deal [was] that [he] would work for Bay City as an owner-operator." He made $1,800 monthly payments to the Canadian Acceptance Corporation and was not obligated to advise Bay City that such payments had been made. He gave out business cards, advertising (presumably on behalf of Bay City) and carried a Bay City rate sheet. Bay City dispatched him and paid him eighty percent of the total billing for the services rendered on its behalf. His crane had Bay City markings and was painted Bay City colours. He testified that in April of 1978 there were ten regular operators employed by Bay City and six owner-operators. By February 1980 there were fifteen regular operators and three owner-operators. Bay City decided who went out of its shop and Bay City was responsible for the accounts receivable.

6. He worked for Bay City until the end of February 1980. He refinanced the crane with United Dominions and at this time $47,000 was outstanding. No guarantee was required by that finance company, the market value of the crane being approximately $75,000 in February 1980. (By the time of the hearing the value had risen to $85,000.) He testified that, having refinanced the crane, he was in a good position to change "brokers" and so went to Archer. Therefore Archer provided no guarantee to the finance company as Bay City had done and paid Dow eighty-five percent of the total billing for services rendered. The complainant passed out business cards which listed him as a "representative" of Archer and bearing Archer's and his own telephone number. He was dispatched by Archer and invoices were issued in the name of Archer. The May 1980 Archer rate sheet takes the following form:

MAY 1980

CRANE RENTAL RATE SCHEDULE

RATE PER HOUR

30 Ton Grove Rough Terrain $53.00 (92' Boom 26' Jib)

(2) 25 Ton Grove Truck Mount $50.00 (92' Boom 24' Jib) (106' Boom 20' Jib)

20 Ton Rough Terrain $47.00

(80' Boom 20' Jib)

18 Ton Rough Terrain $45.00 (70' Boom 24' Jib)

8 Ton National hydraulic $36.00 Truck Mounted Crane,

18 foot flat bed

15 Ton Tagalong float $10.00

(24' x 8¼' platform)

(NOTE: There is a 3 (three) hour minimum on above except for float.)

Any of above may include: 'A, 3/4 or 1 yd. concrete bucket, Single man-basket, double man-basket, Lifting beams, nylon belts, at no extra charge.

NOTE: Weekly and monthly rates are available upon request.

Discounts: 5% Discount on Weekly rental

10% Discount on Monthly rental

All rates on operated equipment include insurance, fuel and

maintenance.

Premium Time is charged before 8:00 a.m. and after 4:30 p.m.

at $20.00 per hour.

On Saturdays. Sundays and Statutory Holidays a 4 (four) hour minimum rental period plus operator's premium will be charged.

Travel and/or board allowance as per Union Agreement.

The complainant made out the invoice; made a note of it for his personal records; and then received a monthly statement from Archer. The complainant has his own workmen's compensation number but only makes payments when he employs someone. Neither Bay City nor Archer male workmen's compensation payments on his behalf and no one else operated his crane during the relevant period of time. The complainant took out his own disability insurance; made his own RRSP contributions; and paid his own OHIP. Bay City and Archer did not deduct Canada Pension Plan contributions or income tax from payments made to him.

7. The complainant testified that he became an owner-operator "to better" himself because he thought he could make more money. In 1979 he earned approximately $6,500 a month or about $80,000 for the year. From this amount he had to make payment on and maintain his machine and provide for cables, buckets, tires, gas, grease, oil, licence fees, insurance, etc. He estimated that he paid tax on approximately $40,000. During 1978 Dow's Crane Service was the registered name of the sole proprietorship by which he carried on business. However, on June 4, 1979 the complainant caused the incorporation of Dow's Crane Rental Limited. He and his wife are officers and directors of the company. He is the sole shareholder and president. He said he incorporated for tax and liability reasons. Payments received from the operation of his crane were made to Dow's Crane Rental Service Limited after June of 1979. This company paid the complainant's wages (approximately $2,000 per month) plus expenses (i.e. motel rooms, gasoline, etc.) and made the appropriate employee deductions. During the period when he or his company was receiving $6,500 a month, a regular employee under the crane rental provincial collective agreement received $15.00 per hour or $600.00 per week. When the complainant started with Archer there was only himself and Archer. He said Archer did not have any employees at the time but by April of 1980 Archer had three employees and Peter Dow. At no time when working for Bay City and Archer was he paid monies in accord with the provincial collective bargaining agreement. The wages, deductions, premium rates, vacation pay, etc. were simply not relevant to his activity except by way of comparison. As long as he was making more money than a regular employee, his commitment to being an owner-operator was worthwhile.

8. The complainant candidly admitted that he did not request the respondent to file the grievance that it did against Bay City on December 29, 1978. The complainant said it was not part of the deal that Bay City was to pay working dues or contributions to the welfare plan, pension plan, training fund and labour relations fund. Indeed, the complainant was not happy with the filing of the grievance and clearly aligned himself with Bay City who was represented by the lawyer representing the complainant in the instant case. The grievance dated December 29, 1978 was sent to Bay City with a covering letter from Jack Redshaw, a business agent of the respondent. The letter and grievance read:

REGISTERED MAIL

December 29, 1978.

Bay City Crane Rentals

369 Dewitt Road

Stoney Creek, Ontario

L8E 2T1

Dear Sir:

Enclosed please find a copy of a grievance, filed on behalf of Joseph Kiss, Ken McConnell, Larry Short, Bendon MacDonald, Bill Walton, Paul Marchildon, Peter Dow and Simchison.

Would you please meet me in my office, 110 Catherine Street, North, Hamilton, Ontario on January 8, 1979 at 11:00a.m., in order to settle this matter.

Yours truly,

J. Redshaw,

Business Representative JR/ja

encl.-l

c.c. E.A. Ford

E.B.A.

GRIEVANCE FORM

INTERNATIONAL UNION OF OPERATING ENGINEERS

LOCAL 793

STYLE OF GRIEVANCE (a) EMPLOYEE GRIEVANCE (Struck out)

(b) UNION GRIEVANCE

STYLE OF GRIEVANCE: Employer Bargaining Agency and Bay City Crane Limited

PROJECT SITE: Various

TYPE OF AGREEMENT: Employer Bargaining Agency Collective Agreement

SECTION(S) OF AGREEMENT VIOLATED: Articles 3 and24 and Schedule "A" Article S

TIME PERIOD CONCERNED: June 19, 1978 and outstanding

THIS GRIEVANCE IS FILED ON BEHALF OF:

Joseph Kiss, Ken McConnell, Larry Short,

Bendon MacDonald, Bill Walton,

Paul Marchildon

Peter Dow

Lloyd Simchison

The nature of the grievance is as follows:­

That the Employer has failed to remit regular monthly dues,

working dues, Welfare and Pension and Employer Lab our

Relations Fund contributions on behalf of all employees

covered under the Collective Agreement.

Remedy Requested: That the Employer immediately remit all delinquent regular monthly dues, working dues, Welfare and Pension and Employer Labour Relations Fund contributions, together with interest where applicable, in accordance with the Collective Agreement.

Action Taken . Or Company Comments:

This grievance was subsequently withdrawn.

9. Similar grievances were filed November 10, 1978 against nine companies carrying on business under the name of Empire Crane. They were all settled and the terms of this settlement are outlined in a letter dated March 23, 1979 over the signature of the lawyer representing the respondent to the lawyer representing the Empire Crane companies. It provides:

Messrs. Cassels, Mitchell, Somers,

Dutton & Winkler,

Barristers and Solicitors,

390 Bay Street,

Toronto,

Ontario,

MSH 2G3.

Attention: D. I. Wakely Esq.

Dear Sirs,

Re: international Union of Operating Engineers, Local 793 and T. Buchanan & Associates Ltd., et al

Re: O.L.R.B. File No. 1801-78-M

We confirm our meeting with you and Bruce Binning at the Board's offices on March 14th, 1979 in connection with the within grievance-arbitration proceedings against the owner-operators herein.

We wish to confirm that the parties have now settled these proceedings on the basis of the following agreement, namely, that:

1. The owner-operators of each of the respondents are, and shall be treated, as employees for the purposes of the application and coverage of the provincial collective agreement between the Applicant and the Employer Bargaining Agency effective from June 19th, 1978 until April 30th, 1980 ("the Collective Agreement");

2. The respondents shall forthwith pay and remit the contributions in respect of pension benefits under the Pension Plan which are due and owing for the period June 19th, 1978 until February 28th, 1979, together with the supporting information on the requisite Reporting Form for each hour earned by each owner-­operator. The parties have agreed that the amount owed for this pension benefits in respect of each of the owner-operators for this period amounts to One Hundred and Eighty ($180.00) Dollars. The contributions for pension benefits from and after March 1st, 1979 until the termination of the Collective Agreement shall be made by the respondents on behalf of the owner-operators as and when required by the said Collective Agreement;

3. From and after April 1st, 1979 until the termination of the Collective Agreement, the Respondents agree to deduct from each of the owner-operators working dues and forward same together with the requisite supporting information on the Reporting Forms as and when required by the Collective Agreement;

4. From and after July 1st, 1979 until the termination of the Collective Agreement, the Respondents agree to pay and remit welfare contributions in respect of each of the owner-operators as and when required by the Collective Agreement and remit same together with the supporting information on the Reporting Forms;

5. Contributions are not required by any of the owner-operators to the Employer Labour Relations Fund in view of the parties' agreement that such owner-operators are employees for the purposes of the Collective Agreement;

6. In the event that the Respondents/ owner-operators employ or engage any employees, then the parties agree that the Respondents/ owner-operators shall apply the full terms and provisions of the said Collective Agreement to these employees, including the contributions required for the Employer Labour Relations Fund;

As you will recall, the parties have adjourned the within proceedings on a sine die basis and the Applicant has undertaken to withdraw such proceedings in the event that the terms of the parties' settlement herein are complied with by the Respondents. We are taking the liberty of forwarding a copy of our letter to Mr. Binning and request that each of you duly confirm the contents of the within agreement.

Yours very truly,

ROBINS AND PARTNERS

An apparent reference to this settlement is found in the Minutes of the respondent's general membership meeting of March 25, 1979 at page 3 which reads:

J. F. Kennedy gave a report on the owner-operators. There has been an agreement that they are employees and must pay the conditions of the agreement.

More similarly worded grievances were filed against other brokerage type arrangements in May of 1979. Filed with the Board was a grievance dated May 7, 1979 filed against Ward Crane Rentals Limited (hereinafter referred to as "Ward Crane"), inter alia, but these companies rel used to settle matters along the Empire Crane lines and the respondent decided against pursuing the matter before the Board.

10. The complainant testified that in June 1978 he tried to pay working dues, pension and welfare payments but Jack Redshaw of the respondent told him the union was not taking contributions. He testified he asked the respondent's Bill Baird on October of 1978 whether he could pay working dues and was advised that the union had not decided "what to do yet" and so was not taking any payments at the time. He admitted that he had not tried to make payments since then. Finally, he testified that when Bill Baird refused him an agreement after the Dofasco incident he asked what he was to do. He testified that Baird said he could work non-union." lie said Baird stated the union "was going to put owner-operators out of business in order to prevent this trade from going the way of the truckers." Baird agreed that he spoke to Dow in March of 1980; that he explained that the respondent "was not signing anymore owner-operators"; that he probably indicated this meant Dow could not work in the ICI sector but could work in the non-union field; and that he explained the union's position in terms of the trucking industry which he believed had been hurt by brokerage arrangements. He denied saying the respondent was going to put owner-operators out of business. Baird further testified that it is very difficult to detect violations of the collective agreement by the improper use of owner-operators in that there is only Bill Pedder and himself monitoring the situation. Jack Redshaw also testified. He stated that he received instructions from Ernie Ford of the respondent in October 1978 not to sign anymore agreements with owner-operators. He testified that when he filed the Bay City grievance in December of 1978 he thought the arrangements there were similar to "the Arlington scam" where the Board had found so-called owner-operators to be employees. See Board File No. 1652-76-M. Helena Chippett who is a clerk in the respondent's benefits department testified. She monitors payments to the plans by checking the contribution forms sent in by companies. She said she would not know whether a company or individual had an agreement with the union and indicated that the monitoring also provided by the benefit administrator was designed to detect non-payments or inaccurate payments. If there was nothing on a form that looked unusual, she would not single it out. She testified that benefit payments made by a Ron Lewzoniuk were accepted on this basis. She said his contribution form looked like that of a owner-operator and she assumed he had an agreement.

11. Andy Hall testified on the complainant's behalf. He identified himself as a member of the respondent union and an owner-operator. He said that he made an application for membership in the union on December 11, 1979 and was accepted. He apparently was working at the time as an operator. He testified that he has continued to operate as an owner-operator; that he does not have a collective agreement with the union; and that he has made contributions to the respondent's pension and welfare plans. He testified that he had been refused a collective agreement by Mr. R. Allain, a business agent for the respondent union. Mr. Joseph McDonald was called by the complainant to give evidence in reply to the respon­dent's defense and his testimony is usefully reviewed at this juncture. He testified that he has been a member of the trade union since 1966 and has worked as an owner-operator for the last fourteen months. He testified that he works at Belmont Crane and that he has no agreement with the union. He was refused an agreement by Chris Dowdall, Recording Secretary for the union. However, he stated that he had made benefit contributions under the provincial agreement since becoming an owner-operator. Introduced as an exhibit was a letter to him from Mr. Allain dated December 17, 1979 acknowledging his payment of $672.00 for the months of July to December 1979 and providing him with additional remittance forms for subsequent months. The employer's name on the forms is "Joe's Crane Service." He testified that he had no written agreement with Belmont Crane and that it paid him eighty-six percent of the invoiced price of the service to its customers. He said that he bought his crane from a Tony Formica after borrowing from a bank. Mr. Formica had been working for Belmont Crane at that time. He said he is dispatched by Belmont Crane but that Belmont Crane dispatches its regular employees first and he gets "what is left over." He testified that Belmont Crane did not make workmen's compensation payments on his behalf and that if he got hurt it was his own "tough luck". He has his own liability insurance; purchases his own oil and gas; and performs his own maintenance.

12. A major witness testifying on behalf of the complainant was John Ward. He is the president and owner of Ward Crane Rentals Limited. He has been a member of the respondent trade union for twenty-two years. He became an owner-operator in 1973 and noted that there were about twenty owner-operators in the Toronto area about that time. By 1980 there were over forty. In recent years he has acted as a broker through Ward Crane dispatching the services of other owner-operators. He has never employed regular employees to operate cranes owned by the Ward Crane company. His company competes against the large crane rental houses but he specializes in the smaller mobile cranes sometimes referred to as the "taxis" of the industry. He employs two full-time and one part-time dispatcher; one full-time and one part-time secretary; and one office manager. His company has a collective agreement with the union and he now dispatches twelve owner-operators, all of whom have agreements with the respondent union. He agreed that owner-operators were not paid under his collective agreement with the union testifying that "his owner-operators wanted better and they were satisfied to cut separate deals." He said he controls the owner-operators 'lust like employees" although he does not have an agreement with them in writing. They are paid eighty percent of the invoice price submitted to the customer. He testified that at one time he was in violation of the union's policy that owner-operators must have an agreement with the union but no longer is this the case,

13. He acknowledged that a grievance had been filed against him on May 7, 1979 in relation to the use of owner-operators and that he refused to accept the Empire Crane settlement as a basis for settling this grievance. The grievance, by letter dated May 2, 1979, contended that Ward Crane had failed or refused to:

(a) pay proper wages and overtime pay to its employees, contrary to the Collective Agreement and, in particular, Articles 15, 16 and 17 thereof and Appendix "A" and Schedule "A" thereto;

(b) pay the requisite vacation and statutory holiday pay at the rate of ten per cent(10%) of gross wages earned on termination and/or on the first pay day of June and December of every year, contrary to the Collective Agreement and, in particular, Article 13 thereof;

(c) make and pay the required contributions, deductions and allowances with respect to Union Dues, in the Union's Trades Training Fund, Health Plan, Pension Fund, for Working Dues Check-Off, and to the Employer Labour Relations Fund as and when required by the Collective Agreement and remit same on or before the 15th day of the month following the month in which the same were deducted or earned, contrary to the Collective Agreement and, in particular, Articles 3, 14,21 and 24 thereof and Schedule "A" thereto.

The union decided against pursuing the matter before this Board and it was adjourned sine die in accord with Board policy by decision dated May 29, 1979. However, after the amendment to the provincial agreement on July 19, 1979, the union filed another grievance against Ward Crane by letter dated March 19, 1980. The wording of this grievance reflects the new contractual commitments contested in the instant case and their effectiveness is suggested by the terms of the settlement endorsed by the Board in a decision dated April 15, 1980.

14. The grievance dated March 19, 1980 alleges that Ward Crane failed or refused to:

(a) engage only subcontractors who are in contractual relations with the Union to perform work set out in the classifications of the Collective Agreement, contrary to the Collective Agreement and, in particular, Article 3.4 thereof;

(b) further, or in the alternative, remove owner-operators engaged by it

from its projects who are not signatories to agreements with the

Union and who are not

(i) members in good standing of the Union; and

(ii) in good standing on contributions under the Health Plan, Pension Plan and for Working Dues as required by the

Collective Agreement,

contrary to the Letter of Understanding dated July 19th, 1979 ("the Letter of Understanding"):

(c) further, or in the alternative, pay proper wages, overtime pay, vacation and statutory holiday pay to its employees and to make and pay the required contributions, deductions and allowances with respect to Union Dues, the Union's Trades Training Fund, Health Plan, Pension Fund, for Working Dues and to the Employer Labour Relations Fund as and when required by the Collective Agreement, all of which is contrary to the Collective Agreement and, in particular, Articles 3, 13, 14, 15, 16, 17,21 and 24 thereof and Appendix "A" and Schedule "A" thereto;

At all material times to this grievance there have been and still are:

(i) subcontractors who are in contractual relations with the Union;

(ii) owner-operators who are signatories to agreements with the Union; and,

(iii) members in good standing of the Union

we are required to perform the work herein covered by the Collective Agreement and these subcontractors, owner-operators and members, as the case may be, are and have been ready, willing and able to perform this work for the Employer at its construction projects.

The minutes of settlement contained in the Board's reasons of April 15, 1980 record:

MINUTES OF SETTLEMENT AND CONSENT ORDER

The Union and Employer agree to settle the within proceedings and agree with each other to request the Board to endorse its record with the following minutes of settlement and make and issue the following orders and declarations requested by the parties:

1. The Employer acknowledges and admits that it has improperly sub­contracted work covered by the Provincial Collective Agreement between the Operating Engineers Employer Bargaining Agency and the Union, in effect between June 19, 1978 and April 30, 1980 ("the Collective Agreement") to James Ingham and/ or James Ingham

Enterprises Ltd.; Brian Dwight; and Harry Brown and/or H.D. Crane Rentals, contrary to the Collective Agreement and, in particular, Article 3.4 thereof.

2. That the Board order that the Employer do forthwith abide by all of the terms and conditions of the said Collective Agreement and, without limiting the generality of the foregoing, the provisions of Article 3.4 of the Collective Agreement in respect of the subcontracting of work covered by the Collective Agreement.

3. That the Board order that the Employer cease and desist from violating the Collective Agreement, and without limiting the generality of the foregoing, cease and desist from sub-contracting work to or engaging the owner-operators referred to in paragraph 1 hereof in a manner that is contrary to the said Collective Agreement.

4. That the Employer forthwith pay damages to the Union calculated as follows:

(a) damages equivalent to the contribution and deductions owing in respect of union dues, pension fund, health plan, working dues check-off and the Employer Labour Relations Fund pursuant to the Collective Agreement for all hours worked by James Ingham, Brian Dwight, Harry Brown and Michael Ingham for the period January 1, 1980 to the date hereof, if not already paid;

(b) damages equivalent to the wages and vacation and statutory holiday pay for all hours worked by Brian Dwight pursuant to the Collective Agreement for the period January 1, 1980 to the date hereof.

5. The parties agree that all damages in respect of contributions to health and pension plans paid on behalf of James Ingham, Harry Brown and Michael Ingham, will be credited to the accounts of the said persons with the pension and health plans.

6. The parties agree that the Board remain seized as to the amounts of damages payable in the event that the quantum of the said damages referred to in paragraph 4 hereof cannot be settled by the parties.

7. The parties agree that the settlement herein is without prejudice to the Union's right to take proceedings against the Employer in respect of any violations of the Collective Agreement which are not the subject of these proceedings, and without limiting the generality of the foregoing, in respect of the subcontracting of work to or engaging of owner-operators or employees other than those names in these minutes of settlement.

8. John Ward testified that he had attended many union meetings on the issue of owner-operators over the last few years and that this issue was discussed openly on numerous occasions. The many copies of minutes of union meetings filed with the Board also attest to this fact. However, he testified that owner-operators were not consulted on the July 19, 1979 amendment. He stated that in June of 1977 Ernie Ford, Labour Relations Manager of the respondent union, told him that owner-operators did not have to make benefit contributions unless they hired someone. But he also admitted that he has known since 1978 that if an owner-operator "sits in the seat" he must pay full fringes and he admitted that pension benefits, welfare benefits and working dues were first introduced into the provincial agreement in June of 1978 with the exception of a modest beginning on pensions in the 1977 so-called extension agreement. He also acknowledged that the owner-operators have formed their own association of which Ward Crane has been the president and to which the complainant's lawyer is counsel.

9. William White, Manager of the Crane Rental Association, was called on behalf of the complainant. He testified that in the early 1970's there had been a strike over the forty-hour work week. Through this strike the union was successful in imposing the requirement of forty hours of pay if an employee worked any amount of time in a particular week. It was his opinion that this provision drove a number of employers out of the industry. They sold all of their equipment and many others who stayed in the industry disposed of their smaller cranes. As a result, a large number of owner-operators were created and they in turn took full advantage of their freedom to compete outside the collective agreement causing more problems for the regular employers who could not compete. He said that prior to 1973 there had been very few owner-operators (i.e. four to five in the Toronto area). He testified that in 1978 the employers managed to move from the forty-hour work week to the eight-hour day after many discussions on the owner-operator problem. The various fringe benefits were also introduced at that time although, as noted above, the pension plan had been introduced in 1977 in the one year "extended agreement." After the 1978 negotiations the employers began to receive many complaints from the respondent union that owner-operators were not making the appropriate benefit contributions. White said that the union could not enforce the fringe benefit payments unless it had an agreement with the owner-operator and even when this was the case it proved very "difficult" to enforce. Hence, the employers finally agreed to the amendment dated July 19, 1979 which could be enforced like any other subcontracting clause. He denied that there was an understanding with the union at the time that no more owner­-operators would be signed to agreements. He testified that one of the reasons regular employers could not compete against owner-operators was because owner-operators did not have to pay the wages, make the benefit contributions or honour the other provisions of the provincial agreement to which the employers were bound. The more recent and successful enforcement of benefit contributions has alleviated this problem somewhat, he said. He also testified that before 1979 collective bargaining in the crane rental field had never dealt with owner-operators in any respect. There was never any demands by the union on behalf of owner-operators. He said there had only been discussions about their "unfair competition."

Ernie Ford, Labour Relations Manager of the respondent union, testified that the union had approximately seventy "independent agreements" with employers and that fifty-five of these agreements were with owner-operators. In 1977 the first fringe benefit was negotiated in the form of a pension plan. In 1978 fringe benefits were expanded to include a health and welfare plan, labour relations fund and working dues. He testified that after this bargaining development the union encountered a delinquency problem on the part of owner­-operators who were under agreement. He stated that "ninety percent" were not contributing and that the existing policy of the union as reflected in article 3.4(b) evolved to meet this problem but only over a considerable period of time and debate within the union. The matter was a particularly difficult one for the. union because many of the owner-operators were members and friends. Indeed, it was the prior association with many owner-operators that prompted the union to sanction their use on "union sites" by purporting to sign them to "collective agreements" thereby permitting them to comply with the basic subcontracting clause in the collective agreement and reproduced at paragraph 3 below. He said the current policy which is under attack in this case evolved from the early decision by the union not to sign anymore owner-operators to agreements. He said this decision was made in the fall of 1978 although a few isolated mistakes were made by subordinate union officials until the policy became firmly understood. He said that since the conception of this policy "scores of members" have been refused agreements.

18. He testified that as the interest in buying equipment increased in 1978, the union came to see the owner-operators in the context of three very different problems. First was the issue of enforceability of the agreements to which owner-operators had been signed. It was extremely difficult to detect when an owner-operator was failing to apply the agreement to himself except for the so-called "visibles", i.e. the benefit contributions. And even in this latter regard, the owner-operator had to be detected on a union site where the provincial agreement and its subcontracting prohibition applied. There was also the problem of the legal status of the agreements with owner-operators. Could the owner-operator be an employer and an employee at the same time within the meaning of The Labour Relations Act? It appears to have been this latter problem that discouraged the union from actually litigating the owner-operator grievances filed before July 19, 1979. Ford testified that a second major problem was that the failure of owner-operators to comply with their agreements was eroding the effectiveness of the collective agreements under which regular employees were employed. Employers were at an unfair disadvantage because the union required them to honour their collective agreements. As the owner-operators grew in number, the job opportunities for employee members declined. Over time, the crane rental employees' opposition to any increases in contractual benefits also stiffened. Thirdly, Ford stated that the union was worried that iii the long term the trend toward the owner-operator would seriously undermine the trade union s survival as a bargaining agent for employees. Mention was also made of a concern for possible lawsuits by the estates of owner-operators in the event of death should the estates view the deceased owner-operators as having claims to collective agreement benefits.

19. To deal with these concerns the union began by discussing the issues directly with the brokerage houses. Ford held several meetings with those associated with Belmont Crane, Ward Crane, Empire Crane and many others. He testified that the union's position with these people was that they had to comply with their agreements with the union to the extent that they had to honour "the visibles." By this he meant that they were to consider themselves as employees when operating the equipment and that they had to make the various benefit contributions required by their agreements. Ford testified that these discussions proved fruitless. The owner-operators did not wish to make any of the contributions because many of them had made their own pension and welfare arrangements and because of a feeling that the union was not doing anything for them. These discussions took place in late 1978 and Ford described this as the first stage of the respondent union's reaction to the owner-operator problem. The second stage was the filing of grievances against owner-operators and brokerage houses under contract in late 1978 and 1979; the decision not to increase the number of owner-operator agreements; and a policy of "non-renewal" of agreements with owner-operators who were in conciliation at the time and who failed to bring their benefit contributions in order. It was this latter strategy that seems to have produced the Empire Crane settlement during that period of time. Ford testified that in the case of Bay City the union did not believe those persons operating cranes were truly owner-operators and that this was the principal reason for the grievance referring to them as employees. But Ford testified that aside from the Empire Crane situation, the filing of grievances proved unproductive and the benefit payment delinquencies and growth of owner-operators continued. The brokerage houses took the position that the owner-operators were not employees but self-employed owners and the union had considerable doubt about its legal position under the agreements with them. This then brought the union to the third stage in dealing with the owner-operators - the negotiation of the July 19, 1979 amendment to the provincial agreement with a unilateral continuation of the union s policy, commenced in 1978, of not signing additional owner-operators to agreements. Ford testified that since the negotiation of the July amendment "everything has fallen into place.

20. Ford told the Board that the union is no longer taking owner-operators into membership because it seemed unfair to do this and then immediately deny them an agreement. He admitted, however, that some mistakes in this respect may have been made, particularly by Ron Allain, and the Andy Hall situation was such a mistake. However, Ford held a meeting of union officials in April of 1980 to explain the union's policy and eliminate continuing errors in this area. Ford pointed out that the complainant had tried to become covered by the provincial agreement by joining the Crane Rental Association of Ontario but that White had been informed by a letter dated June 17, 1980, over the signature of Ford's assistant, that the respondent did not accept his company as being covered by the provincial agreement. He testified that Ron Lewzoniuk had attempted this approach as well and was rejected in the same manner and for the same reasons. He agreed that in March of 1979 the union was taking the position that owner-operators were employees when operating their equipment and that therefore they had to pay the visibles. On the other hand, owner-operators had been given agreements so they could comply with the subcontracting provision contained in the provincial agreement. This dual nature of the owner-operator is also revealed in the applications for conciliation pertaining to over fifty owner-operators initiated March 21, 1980. He stated that the grievances in late 1978 and early 1979 assumed that the individual owner-operator agreements could not be enforced against the owner-operators as employees. The union therefore tried to assert that they were employees under the agreements pertaining to certain brokerage houses. He testified that over six hundred grievances were filed during this period in relation to benefit contribution delinquencies. Finally, he denied knowledge that either a Warren Hackett or Joe McDonald had been making benefit contributions while working as owner-operators subsequent to the amendment. He said the union monitors delinquencies not payments. He said that neither individual had an agreement with the union. Ford insisted that in negotiating the impugned amendment the union was not trying to benefit the crane rental employers but rather was seeking to represent its member employees as best it could. He denied that the union had represented the owner-operators at any time in the crane rental industry. He said the union's policy has been based on what it perceives to be the good of the majority of its members. He further said that over the last three years he had made the union's position abundantly clear to owner-operators and at no time did he seek to mislead them.

21. The Board was advised that the respondent admitted persons to its membership when there was a shortage of qualified operators and provided the persons are properly licenced. An exception is made where specially licenced operators are required. If there is no shortage of qualified members available to work, one can only become a member by working for an unorganized employer. Ford was not aware of any instance in which Andy Hall had been found working on a job site at the request of a contractor bound to the provincial agreement. The respondent did not have a collective agreement with Empire Crane in that the name was only a "banner" or trade name under which a number of owner-operators worked. Thus a grievance could not be brought directly against Empire Crane in relation to Hall. Ford testified that ~e was surprised that Baird had thought Lewzoniuk was covered by the provincial agreement by virtue of his membership in the Crane Rental Association and that White had corresponded with Baird. Ford said that Lewzoniuk was not covered and White was so advised. Ford was unaware that White sent correspondence to anyone other than him. On cross-examination by Mr. Binning, Ford testified that the recognition clause of the provincial agreement was based upon the terms of the Minister of Labour's 1978 designation order although the crane rental agreement itself is multi-sector in nature. He also said that when the agreement was first negotiated the parties to it did not consider a bona fides owner-operator to be an employee. He said that Article 3.4, as originally cast, required that when a general contractor bound by the provincial agreement subcontracted work affected by the agreement, the work had to be subcontracted to an employer having a collective agreement with the respondent union. Because an owner-operator was not an employer, a general contractor could not subcontract to him without being in violation of the Article. However, as a matter of practice, the union has not enforced the provision where the general contractors have used owner-operators who have "agreements" with the union whether or not these agreements are collective agreements. Ford agreed that the employers bound by the provincial agreement complained to the union about the way in which owner-operators were engaging in unfair competition and in violation of their agreements with the union. Ford said that because of the difficulties of trying to file grievances on behalf of owner-operators against the same owner-operators, the parties designed Article 3.4(b) to deal with the problem. In order for a general contractor to properly subcontract work to an owner-operator, the owner-operator has to (a) be a member of the union; (b) have an agreement with the union; and (c) not be in arrears with respect to the "visibles". Where any of these conditions are not met, the general contractor is in violation of the provincial agreement and, on the request of the union, is contractually obligated to remove the unqualified owner-operator. In other words, testified Ford, Article 3.4(b) was designed as a subcontract clause to deal specifically with work subcontracted to owner-operators. Mr. Binning requested Ford to review the Ward Crane rate sheets and Ford agreed that the nine different rates therein, depending on the size of the crane, had nothing to do with the provincial agreement which has only one wage rate to be paid to any employee-operator regardless of crane size. Ford agreed there is nothing in the provincial agreement which remotely relates to the way in which an owner-operator would run his business. He also agreed that the welfare and pension plans were central funds or group plans for the benefit of the entire membership. The larger the contributions the larger the benefits that could be paid out. The Board was advised that over two thousand employers throughout the province in all sectors make contributions on a monthly basis.

22. On cross-examination by Mr. Wolfenden, Mr. Ford admitted that in March of 1980 an owner-operator who did not qualify under the three conditions of Article 3.4(b) was unlikely to be able to work on "union jobs" in the ICI sector. Ford explained the union's current policy of refusing to expand the number of agreements with owner-operators on the basis that it permits more work for the union's employee-operator members. When counsel pointed out that work was expanding, Ford replied that if work is to be done the union wanted its members to perform it. Ford indicated that the union was not interested either in dispatching machines as well as operators or in negotiating the business arrangements for owner-operators. Ford said the union did not want to become a broker for owner-operators. Ford testified that he believed Andy Hall was the only owner-operator admitted into the union's membership after March 1980 and he knew of no new owner-operator being given an agreement by the union after that point in time. Ford admitted that when he spoke to the people at Ward Crane after the Empire Crane settlement he probably said that if they paid the visibles everything would be alright but that when he said this he was addressing himself to those owner-operators who had agreements with the respondent union. Ford said he knew of no instance in which the union's hiring halls had dispatched men and equipment. And, finally, he admitted that he may have explained the union's position on owner-operator contributions in 1977 in error but that this was all corrected from 1978 onward.

23. On behalf of the complainant it was submitted that the intentions of the parties, as evidenced by the union's conduct from 1977 to July 19, 1979, revealed that the owner-operators were and remained covered by the provincial collective agreement. Counsel emphasized Mr. Ford's statement to the owner-operators at Ward Crane and the evidence of Mr. Bill Baird. Mr. Wolfenden pointed out that the union had gone so far as to file grievances on behalf of the owner-operators and directed the Board's attention to the union minutes of March 25, 1979 indicating that the union considered the owner-operators to be employees. It was a further submission that the complainant was clearly a dependent contractor in relation to Archer and that, in fact, the control to which he was subject went so far as to demonstrate a conventional employment relationship. If the Board accepted the latter submission, the complainant undoubtedly fell within the relevant bargaining unit.

24. Counsel submitted that if the Board found that the complainant was owed a duty of fair representation, the respondent union should be held to the strictest of standards because of the monopoly position conferred on it by the province-wide bargaining scheme of the legislation. It was argued that the respondent had discriminated against the complainant by driving him out of work as an owner-operator while other owner-operators had been permitted to work and to make the necessary contributions under the provincial agreement. It was contended that all of the above, if accepted by the Board, would also establish a violation of sections 60a and 136(1). Finally, Mr. Wolfenden submitted the requirement in Article 3.4(b) that an owner-operator must have an agreement with the respondent was contrary to section 133(2) and that the alleged threat of Mr. Baird that the respondent union was going to put owner-operators out of business was contrary to section 61. Mr. Wolfenden asked the Board to place the complainant in the position he would have been in so far as money can do on declaring that the Act had been violated and that the Board direct the union to cease and desist from any further unlawful actions in respect of Mr. Dow.

25. Counsel for the intervener submitted that there was no such thing as a "right to work" in the construction industry. He contended that Article 3.4(b) was a subcontract clause designed to regulate the subcontracting of bargaining unit work to owner-operators and that there was no evidence, other than the Article, of an intention by the parties to apply the provincial agreement to owner-operators. He argued that Article 3.4(b) indicated an interest in the union to control the use of owner-operators and not to represent them. It was submitted that self-employment in this particular context is analogous to piece rate work which the respondent trace union and other trade unions have been fighting for years. It was pointed out that the respondent trade union's jurisdiction is very segmented and all of the people it now represents could become "self-employed." Most other trades, counsel contended, require more than one person to perform the entire task but in this particular industry one man with a machine, is sufficient. Counsel contended that the labour relations reality in the construction industry, and in labour relations generally, is to take wages out of competition and protect the work jurisdiction (i.e. jobs) of the union and its members. Counsel submitted that the respondent union had done no more.

26. Mr. Binning also submitted that there had been no evidence that Messrs. Hall, McDonald, Lewzoniuk or Hackett were permitted to perform work within the scope of the provincial agree ment. There was no evidence that they had performed work in the ICI sector. Mr. Binning submitted that the evidence was totally lacking in the complainant's effort to bring himself w thin the bargaining unit of the provincial agreement. The union did not want to negotiate on his behalf; the provincial agreement makes no mention of the terms and conditions of the work of owner-operators; and the owner-operators operate without regard to the requirements of that agreement. It was argued that if Dow was covered by the provincial agreement where Archer terminated his services he should have brought a complaint or grievance against Archer for unjust dismissal. Counsel submitted that the agreement required by Article 3.4(b) could not be a collective agreement within The Labour Relations Act when the owner-operator did not employ anyone. Mr. Binning asserted that the agreement, while contemplated by the provincial agreement and therefore not precluded by section 133(2), is a "fiction" designed to control a past practice that had permitted the growth of owner-operators. Mr. Binning submitted that all of the grievances filed by the union before July 19, 1979 would have failed had they come before the Board because the owner-operators clearly were not employees under the provincial agreement and the "agreements" with the owner-­operators were not collective agreements which could be enforced. It was submitted that the article which eventually evolved is designed to permit immediate self-enforcement and is, for all practical purposes, the only kind of subcontracting clause which can effectively control work subcontracted to owner-operators without employees. The article attempts to eliminate competition over wages and ensure that working conditions are the same for contractors bidding against each other for work falling within the respondent union's jurisdiction. Finally, Mr. Binning pointed out that the requirement of union membership and the payment of certain fringe benefit contributions for owner-operators was a very natural requirement in the construction industry where trade union's are very concerned about their work jurisdiction and where even certain management people may be required to be a union member if they are to give directions to tradesmen.

27. Counsel for the respondent union reviewed in detail the evidence relating to the history of owner-operators. It was submitted that in the early stages the owner-operator was tolerated and, indeed, the union gave owner-operators agreements so they could purport to comply with the subcontracting restrictions in area and provincial agreements. As conditions of work for regular employees improved, however, the use of owner-operators became more attractive to contractors to the detriment of the union's employed membership. Owner-­operators were performing work within the union's jurisdiction which its employed membership would otherwise perform. The first attempt at control was to permit the use of owner-operators but to require payment of "the visibles." This proved legally and practically feasible. In an effort to assert some control the union decided to discontinue giving agreements to owner-operators but this act alone proved insufficient. It then turned to amending the provincial agreement.

28. Mr. Minsky contended that the complainant never understood he was represented by the union or covered by the provincial agreement. He wanted to be left alone and had regard to the provincial agreement only as a measure of whether it was worthwhile to remain self-employed. Counsel argued that Mr. Dow considered himself an employer or self-employed when it was convenient as, for example, when he joined the Crane Rental Association, and when he incorporated. He also asked why this complaint was not brought in the name of his company. Mr. Minsky agreed with Mr. Binning's submission on the overall inadequacy of the evidence. He said that the union was moved to protect the interests of the majority of its membership. He submitted that mere membership in the union by the complainant was insufficient to create a duty owed to him by the union under section 136 of The Labour Relations Act. He had to be a member employed in a bargaining unit and he had clearly failed to show this on the facts presented. Mr. Minsky submitted that there had been no selective enforcement of Article 3.4(b) and that no ill-will had been directed at the complainant personally. He pointed out that there were thousands of employees covered by the provincial agreement and that the respondent union did not track the whereabouts of owner-operators. If it discovered a violation at a site the union would seek the removal of the owner-operators as Dow had been removed at Dofasco. Counsel also argued that only Archer had the status to contest selective enforcement of a contract to which it was bound and not the complainant who was a stranger to the contract. Counsel submitted that there was no evidence indicating the union had failed to remove others when it knew of their whereabouts. Mr. Minsky argued that there was no rule preventing an owner-operator from contributing to the benefit plans whether or not he worked under the provincial agreement and that, in any event, the union only was concerned about non-payments. It was submitted that Mr. Baird did not say the union was going to put owner-operators out of business but counsel argued that, even if he had, the statement would not violate section 61 because owner-operators have no right to work arising out of The Labour Relations Act.

29. Section 60 of The Labour Relations Act provides:

A trade union or council of trade unions, so long as it continues to be entitled to represent employees in a bargaining unit, shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employees in the union, whether or not members of the trade union or of any consistent union of the council of trade unions, as the case may be.

30. For this section to apply the complainant must establish that he is an employee in the bargaining unit. In this case the relevant unit is described in the Ontario Provincial Agreement for Operating Engineers. This unit is set out in paragraph 3 above. After a careful review of all the evidence adduced, we have come to the conclusion that the complainant owner-operator was never an employee within the meaning of that provision. Until July 19, 1979 there was no reference in the provincial agreement to owner-operators and it is abundantly clear that prior to 1977 there was not the slightest intention by the contracting parties to consider owner-operators as employees under the relevant province-wide agreement. No collective agreement preceding mandatory province-wide bargaining made mention of owner-operators. No crane rental collective agreement set out terms and conditions for their utilization. What had developed over time was a practice by the respondent union of granting "agreements" to members who became owner-operators on the understanding that such an agreement complied with the original subcontracting clause set out above also at paragraph 3. Accordingly, an owner-operator who was a member and who had an agreement with the union was deemed by the union to comply with the subcontracting requirements of the crane and equipment rental services collective agreement. This history does not, in our view, reflect representation. It reflects control and control of the type that trade unions have historically tried to assert over the subcontracting of bargaining unit work. However, the regulation of the use of owner-operators proved difficult to effect in any legally enforceable sense.

31. An 'agreement" with an owner-operator cannot be a collective agreement even if one is to assume that the contracting employer party in the complainant's case could be his company. If that company employs only one employee (the complainant), the unit of employees would consist of only one employee contrary to section 6(1) of The Labour Relations Act. We are of the view that the requirement of "more than one employee" is also mandatory for a voluntary recognition agreement as evidenced by the wording of sections 15(3) and 52. Moreover, the complainant, having the dual status of manager and worker, would run afoul of section 1(3)(b). Accordingly, any agreement between the union and an owner-operator is simply a device by which the union administers its contractual rights or discretion flowing from negotiated subcontracting clauses.

32. The requirement that an owner-operator be a member of the respondent probably even pre-dates the use of the agreements but again reflects the union's jurisdictional claim to bargaining unit work. Prior to 1975 an owner-operator could not be considered an employee under the Ac' and yet owner-operators were physically performing bargaining unit work unlike the employer who employs others and who, by the relevant subcontracting clause, has to employ union members. The only way the owner-operator could comply with the union security purpose of a subcontracting clause was for himself to become a member of the union in addition to having an agreement. This dual requirement clearly reflects the composite nature of self-employment or of "working for one's self." But, importantly, it arises in the context of the union trying to control the self-employed not in attempts to represent them.

33. The legal status of the self-employed for the purposes of collective bargaining was altered by the dependent contractor provisions enacted in 1975. As a result of this legal development, a dependent contractor can now be considered an employee for the purposes of The Labour Relations Act. Therefore, while section 6(4) adds no greater legal validity to the respondent's agreements with owner-operators, it could sanction their coverage as employees under the provincial agreement if this is what the parties intended. See General Concrete (1979), 1978 CanLII 2178 (ON HCJDC), 22 O.R. (2d) 65 reversing (1976), 1976 CanLII 2197 (ON LA), 11 L.A.C. (2d) 187 ([1975] OLRB Rep. Mar. 234). It is our opinion, however, that the evidence of such intention prior to 1977 is totally lacking. We are satisfied n the evidence before use that the complainant has been self-employed at all times; that his utilization by both Bay City and Archer could not be characterized as one of employment without having regard to the dependent contractor provisions of The Labour Relations At; and that on the evidence, the complainant appears to have been a dependent contractor in relation to both Bay City and Archer. Clearly, dependent contractors were not represented by the union prior to 1977.

34. Did the intention of the parties change in 1977 or at any time after that year? We think not. In 1977 the parties introduced a fringe benefit in the form of a pension plan for the first time. In 1978 the other benefits and contributions were negotiated. Just what payments were required of the owner-operators to whom bargaining unit work was subcontracted was in doubt from the onset because the respondent's policy in this respect was unclear. In 1977 it appears that the union first accepted that the owner-operators were unaffected by the crane rental collective agreement but as complaints by crane rental employers about unfair competition increased the union began to focus its attention on this problem. Indeed, little encouragement in this respect was needed because of the respondent's own concern for the erosion of its collective agreements through the use of owner-operators and over possible legal challenge by the estates of owner-operators in the event of death. The union's response was to discontinue signing owner-operators to agreements and to require those with agreements to make the requisite contributions. Such payments were to be made by the owner-operators directly and presumably under the agreements we have already found to be unenforceable. In our view, the required payments were simply another practical (not legal) condition that the owner-operator had to meet to get on a "union site" and perform the work subcontracted to him. It is also our view that the condition of making the appropriate contributions was not a condition of representation but rather a condition of control.

35. Difficulties, however, arose when the owner-operators failed to make the required contributions. How was the requirement to be enforced? It could not be enforced under the owner-operators agreements because they were not collective agreements. The only possibility therefore was to file grievances against the brokers utilizing their services where the brokers were subject to the provincial agreement. And for these grievances to have any chance of success, the union had to allege that the owner-operators were employed by the brokers within the meaning of that agreement and we have already decided that there was no basis in fact or law to such an allegation. This did not, of course, stop the respondent union from trying and at least one brokerage arrangement capitulated in the face of the respondent's policy of non-renewal at conciliation. But the respondent's unilateral assertion of employee status for the owner-operators in all the grievances filed prior to the July 19, 1979 amendment, could not and did not change the bilateral intention expressed in the wording of the provincial agreement and the practices of the industry up until that point in time. Nowhere in the Empire settlement is there any indication that the parties to the provincial agreement were agreeing to the terms and understandings set out in that settlement. And had that grievance or any of the other grievances been proceeded with before this Board, they would have been successful.

36. Against this background then, the July 19, 1979 amendment can be seen for what it was and still is — an effort to regulate the subcontracting of bargaining unit work to owner-operators and to provide an effective enforcement mechanism for the limitations agreed to. The amendment, therefore, does not evidence an intention to bring owner-operators within the coverage of the provincial agreement as employees. The complainant's complaint based on section 60 is therefore dismissed.

37. Section 60a of The Labour Relations Act provides:

Where, pursuant to a collective agreement, a trade union is engaged in the selection, referral, assignment, designation or scheduling of persons to employment, it shall not act in a manner that is arbitrary, discriminatory or in bad faith.

Prior to the enactment of this provision, the Board had held that section 60 did not apply where the complainant was an individual seeking employment in a bargaining unit through a trade union. See Operative Plasterers' & Cement Masons' International, L. 48, [1974] OLRB Rep. Mar. 169. The Report of the Royal Commission on Certain Sectors of the Building Industry 1974 pointed out the problem with this conclusion in the construction industry in 1974 in writing at Vol. 1, pp. 327-328.

"In the construction industry the employees do not enjoy the security of employment that is found in other industries. The only permanent relationship is that established with the union. It is understandable that the unions would wish to provide their members with a system of hiring that would provide maximum job security. But privileges and obligations go together. The only opportunity for a tradesman to find work might be through his respective union and hiring hall: if a work application by a qualified tradesman is not accepted, that tradesman is denied his right to work. Section 38 of The Labour Relations Act provides some protection for employees, and section 60 provides for fair representation of employees by the union. But what about the person who is still seeking to become an employee? In the case before the Ontario Labour Relations Board, A.]. Roberts and Plasters Union Local 48 (File No: 4715-73-U, dated 20 March 1974), it was held that the scope of a trade union's duty of fair representation was restricted to employees in a bargaining unit. Equally, the opportunity for an employer to find workmen would be through the union and hiring hall. There must be some assurance that he will he treated fairly. I do not feel that a case has been made for removing the hiring hall from union control. But, in view of the fact that the operation of hiring halls by unions with closed shop collective agreements places them in a position of complete monopoly, it would seem to me that some form of public inspection would be justified."

[Emphasis added]

Similar concerns were expressed in the Norris Report (1963) and in The Woods Task Force Report (1968). These reports presumably provided the rationale for using the duty of fair representation to regulate potential hiring hall abuse. Indeed, the following quotation from a recent American article suggests that that jurisdiction is also beginning to see some merit in the section 60a type approach (Robert M. Bastress, Application of a Constitutionally Based Duty of Fair Representation to Union Hiring Halls (1979), 82 West Virginia L. R. 31).

"Unfortunately, the referral systems are not always rational and fair. Too often there is no "system" at all and unions typically vest undue discretion in the hiring hall officials. Even in good economic times, such men :an have undue power over individuals' opportunities to earn a living The potential for abuse grows particularly acute, however, when jobs are scarce, as they are now in many sectors of the construction and maritime industries."

"There are compelling reasons why the DFR should apply to hiring halls and job referral systems. Union officials conducting such operations wield enormous power over the employees and hold unduly inflated discretion. The halls provide the only source of employment for union members and, in many regions, for all workers within a given industry.

That kind of power is so subject to abuse, and the stakes are so high. The issues go to the very core of all workers' primary concern - jobs. DFR protection in the grievance and collective bargaining processes is worth precious little to workers who cannot get employment because of union hiring hall abuses."

38. However, section 60a requires that a trade union be engaged, pursuant to a collective agreement, in the selection, referral, assignment, designation or scheduling of persons to employment. We have already held that owner-operators are not employees within the meaning of the provincial agreement and, for this reason, it cannot be said that the respondent was engaged in "the selection, referral, assignment, designation or scheduling of persons to employment" pursuant to a collective agreement in relation to owner-operators. Indeed, there was evidence that owner-operators had never been referred through the union s hiring hall and that when the complainant sought a referral as a true employee he was referred. On this ground alone the complaint, as it is based on section 60a, must be dismissed. The respondent does not wish to represent owner-operators and thereby become a broker of equipment as well as people. There is nothing in The Labour Relations Act which obligates it to adopt this responsibility.

39. Before moving to the next basis of the complaint, we wish to make the following findings although, because of our earlier determinations, they are not, strictly speaking, required. The union's policy has been uniformly applied in relation to all owner-operators not having an agreement with the union and the union decision to permit the continued subcontracting of work to owner-operators with agreements appears to be based on a benevolent distinction of "grand fathering" longstanding subcontracting privileges. We also point out that the complainant did not adduce sufficient evidence to establish that the respondent knowingly permitted employers covered by the provincial agreement to subcontract bargaining unit work to owner-operators not having an agreement with the union. The mere payment of contributions by owner-operators is insufficient to establish such knowledge. The most senior union officials were unaware of these payments and, in any event, the mere fact of such payments could not, in itself, fix the respondent with the knowledge that the payees were working within the ambit of the provincial agreement. Indeed, even if the respondent suspected this, it would have to find the owner-operators at work improperly. There was no evidence that this could be easily done or that the union's failure to do so amounted to a tacit approval or acquiescence of the subcontracting of work to them.

40. Section 61 of The Labour Relations Act provides:

No person, trade union or employers' organization shall seek by intimidation or coercion to compel any person to become or refrain from becoming or to continue to be or to cease to be a member of a trade union or of an employers' organization or to refrain from exercising any other rights under this Act or from performing any obligations under this Act.

This Board has held that the negotiation of a typical subcontracting provision restricting the assignment of work to employers having a collective agreement with the appropriate trade union does not violate any provision of The Labour Relations A ct. See Metropolitan Toronto Apartment Builders' Association, [1978] OLRB Rep. Nov. 1022 (Application for judicial review dismissed: (1979), 1979 CanLII 1762 (ON HCJ), 24 O.R. (2d) 394 (Div. Ct.). In the facts at hand we have concluded that Article 3.4(b) is such a provision although tailored to an owner-operator context. If Baird made the statement that the complainant recalls him making (i.e. that the respondent was going to put owner-operators out of business), that statement would have been a reference to the trade union' policy as reflected in Article 3.4(b). And if Article 3.4(b) is not contrary to the Act, neither is ~ threat to implement such a policy. We find that on the facts before us, the complainant was not threatened to become or to cease to be a member of the respondent nor was he attempting to exercise a right or perform an obligation under The Labour Relations Act. This aspect of the complaint is therefore dismissed.

41. Section 133(2) of The Labour Relations Act stipulates:

On and after the 30th day of April, 1978 and subject to sections 127 and 132, 110 person, employee, trade union, council of trade unions, affiliated bargaining agent, employee bargaining agency, employer, employers' organization, group of employers' organizations or employer bargaining agency shall bargain for, attempt to bargain for, or conclude any collective agreement or other arrangement affecting employees represented by affiliated bargaining agents other than a provincial agreement as contemplated by subsection 1, and any collective agreement or other arrangement that does not comply with subsection 1 is null and void.

We find that the agreement with an owner-operator required by Article 3.4(b) is not an agreement in substitution of a provincial agreement prohibited by this subsection. An agreement with an owner-operator is expressly contemplated by the provincial agreement and in no way conflicts with the exclusive nature of the provincial agreement. Moreover, the impugned agreements do not affect "employees represented" by the affiliated bargaining agents as contemplated by the provision. Accordingly, section 133(2) is not relevant to this complaint.

42. Section 136(l) of The Labour Relations Act provides:

A designated or certified employee bargaining agency shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of the affiliated bargaining agents in the provincial unit of affiliated bargaining agents for which it bargains, whether members of the designated or certified employee bargaining agency or not and in the representation of employees, whether members of an affiliated bargaining agent or not.

On its face, this section has no application. We have found that the respondent trade union has never represented the complainant in his capacity as an owner-operator and owner-operators are not employees within the meaning of the provincial agreement. This aspect of the complaint is therefore dismissed.

43. At the hearing the Board expressed concern over the requirement in Article 3.4(b) of union membership and the related contributions in relation to sections 38 and 12 of The Labour Relations Act. It can be argued that section 38, on its face, confines union security arrangements to employees in the bargaining unit and section 12, along with other sections, clearly forbids employer support of a trade union. Counsel for the complainant, however, candidly confessed a lack of interest in this issue because his principal objective was to achieve access to union sites by owner-operators not the striking down of union membership and payment requirements. Striking down only the membership and payment requirements of Article 3.4(b) would not obtain this end because of the additional requirement of trade union endorsement by way of an agreement. On the other hand, Messrs. Binning and Minsky each argued that section 12 was aimed at "sweetheart" arrangements and not at the type of labour relations problem giving rise to Article 3.4(b). They also argued that section 38 should not be read as exhausting union security arrangements particularly in the construction industry and in the context of the owner-operator problem. Because this issue was not considered germane to the complaint as pursued by the complainant, the Board has, on reflection, decided against passing on these matters.

44. Having regard to all of the above, the complaint is dismissed in its entirety.

DECISION OF BOARD MEMBER C. J. BOURNE;

1. While I concur with the reasoning set out in this case, and with the conclusion reached that the Act has not been breached, there are nevertheless some unsettling aspects to the decision.

2. While the award indicates no unlawful acts, the action of the Union in peremptorily refusing to give Peter Walter Dow an agreement is inconsistent with its hitherto ongoing policy of granting or renewing agreements to others. While the Union is entirely within its rights in regulating its affairs generally, it should not do so in a manner which is inconsistent or arbitrary.

3. Peter Walter Dow has been a member of the Union in good standing for 13 years. There is no doubt that, since 1978, he has pursued his trade as an owner-operator, and that the union has been deprived of certain revenues which it would have received if the work had been done by employees of a contractor. Nevertheless he believed he was entitled to work as he did and as he saw others do. The decision not to grant him an agreement was not the consequence of discussions about, or notices to him, but was suddenly conveyed to him by peremptory removal from a job site. He appears to have had no warning of this eventuality.

4. The Union's action are understandable in the light of protecting its own interests, but in this instance they have acted to deprive the grievor of his business because he is outside the scope of the provincial agreement. While, to repeat, the Union has not acted unlawfully, we are left to wonder whether the dilemma confronting those concerned has been solved in any satisfactory or conclusive fashion.