Labourers' International Union of North America, Ontario Provincial District Council v. The Jackson-Lewis Company Limited, 1981 CanLII 917

[1981] OLRB Rep. December 1794

0540-81-M Labourers' International Union of North America, Ontario Provincial District Council, Applicant, v. The Jackson-Lewis Company Limited, Respondent

BEFORE: N. B. Satterfield, Vice-Chairman and Board Members J. Wilson and H. Kobryn.

APPEARANCES: A. M. Minsky, T. Connolly and F. Spera for the applicant; B. W. Binning for the respondent; James B. Noonan, Glen Peister and Barry Ryan for McLean-Peister Ltd.

DECISION OF THE BOARD; December 14, 1981

1. The applicant has referred a grievance concerning the interpretation, application, administration or alleged violation of a collective agreement to the Board for final and binding arbitration pursuant to section 124 of the Labour Relations Act.

2. The grievance alleges that the respondent has violated clause 2.05 of the provincial collective agreement ("the agreement") between the labourers designated employer bargaining agency and the labourers designated employee bargaining agency. The agreement is a provincial agreement within the meaning of clause (e) of section 137 of the Act. Clause 2.05, which is contained in Article 2 — Union Security, Work Jurisdiction, Assignment of Work, Subcontracting of the agreement, states as follows:

"The Employer agrees to engage only subcontractors who are in contractual relations with the Union and! or its affiliated bargaining agents for all work covered by this Agreement, or work forming part of an I.C.I. General Contract, except the work described in Schedule "D" hereof.".

Schedule "D" to the master portion of the agreement lists the following exceptions to clause 2.05:

"(1) Province-wide: all waterproofing and cement finishing work.

(2) Local 108 l's area:

(a) landscaping

(b) site service, only when forming part of the mechanical contract

(c) when a general contractor not bound by this Agreement is tendering on the work, the following additional work is also excepted:

(i) roads, asphalt, curbs and sidewalks;

(ii) excavation, backfilling and compaction.

4. The violation is alleged to have occurred when the respondent subcontracted certain landscaping work (more fully described hereunder in the "Agreed Statement of Facts and Point in Issue") to McLean-Peister Ltd., an employer which is not in a collective bargaining relationship with the applicant or any of its constituent local unions. McLean-Peister Ltd. has filed an intervention in this matter, to which reference is made in paragraph 7 of the Agreed Statement of Facts and Point in Issue ("the agreed statement"). The style of cause and text of the agreed statement is set out below in full. It has been signed on behalf of the applicant, respondent and McLean-Peister Ltd., by their respective counsel Mr. A. M. Minsky for the applicant; Mr. B. W. Binning for the respondent and Mr. J. B. Noonan for McLean-Peister Ltd.:

O.L.R.B. File No: 0540-81-M

BEFORE THE ONTARIO LABOUR RELATIONS BOARD

BETWEEN:

Labourers' International Union of North America,

Ontario Provincial District Council

Applicant,

• and -

The Jackson-Lewis Company Limited

Respondent

AGREED STATEMENT OF FACTS AND POINT IN ISSUE

For the purpose of this Referral, the parties agree with one another on the following facts and agree to submit to the Board for determination the following point of law in dispute between them:

1. The applicant and respondent are bound by the Provincial Agreement between the Labourers' Employer Bargaining Agency and Labourers' Employee Bargaining Agency dated June 26th, 1980 ("the Provincial Agreement"), which is marked hereto as Exhibit 1 in these proceedings;

2. By grievance dated June 2nd, 1981, the applicant grieved that the respondent had unlawfully subcontracted the landscaping and the necessary and related work thereto, including formwork and concrete work at the C.I.L. House Project (commercial office building), 90 Sheppard Avenue East, Willowdale, Ontario ("the Project") to McLean-Peister Ltd. who is not in contractual relations with the Council and/or its affiliated bargaining agents, contrary to the Provincial Agreement and, in particular, Article 2.05 thereof. The said grievance is marked as Exhibit 2 in these proceedings;

3. The primary business of the employers bound by the Provincial Agreement including the respondent herein, is neither agricultural nor horticultural work and in any event, they do not normally employ persons in such work;

4. The following additional facts are agreed to by the parties but the applicant specifically denies the relevance of same:

(a) McLean-Peister Limited is an employer whose primary business is horticulture;

(b) A large majority of contractors performing horticulture work on ICI sites in Board Area 8 are employers whose primary business is horticulture;

(c) A minority of these employers are each bound by a collective agreement with the Labourers' Union covering such work;

(d) Of the contractors performing such work whose business is not primarily horticulture, a minority are each bound by a collective agreement with the Labourers' Union covering such work.

5. The parties request that the Board answer and determine the following point of law in dispute between them, namely:

"Whether the inclusion and coverage of horticulture (landscaping) work in the Provincial Agreement such as is being performed by McLean-Peister Ltd. at the Project, was a lawful subject for bargaining by the designated bargaining agencies, including whether the subcontracting of such horticulture (landscaping) work may be lawfully regulated by the subcontracting provision of the said Provincial Agreement, namely Article 2.05 thereof."

6. The respondent irrevocably waives and withdraws all other defences or objections which it may have to the grievance herein;

7. It is understood and agreed that McLean-Peister Ltd. may make representations only with respect to the determination of the above mentioned point of law in issue without concession or admission by the applicant of McLean-Peister Ltd.'s status as Intervener in these proceedings or in any other future proceedings between the parties herein.

8. The agreed statement was filed with the Board at the hearing scheduled for this application and all counsel made their submissions thereon to the Board. Those submissions, together with the agreed statement raise the following issues, the first two of which are preliminary in nature:

(a) whether the work in question is work captured by the definition of the construction industry in section l(1)(f) of the Act;

(b) whether the scope of the Board's jurisdiction to determine the "point in issue" of the agreed statement is limited to the authority of an arbitrator under the agreement so that it cannot resolve the issue by reference to the Labour Relations Act; or in other words whether the Board, when it is determining a referral under section 124 of the Act, has only the powers of an arbitrator or has all of its usual powers under the Act; and

(c) whether horticulture work is a lawful subject for collective bargaining by the designated labourers employee and employer bargaining agencies and whether horticulture work may be regulated lawfully by the subcontracting provision of the agreement, namely clause 2.05 thereof.

6. It is clear from the submissions that counsel do not wish the Board to interpret clause 2.05, determine whether the work in question is work within the industrial, commercial and institutional sector of the construction industry or determine whether McLean-Peister Ltd., has status as a party to the application. It is unnecessary, in any event, for the Board to determine that status of McLean-Peister Ltd., because its status for purposes of the agreed statement and the issues flowing therefrom is the same as the applicant and respondent by the very terms of the agreed statement.

7. Having reviewed and considered fully the submissions of counsel, the Board's determination of the issues are set out below.

8. The issue whether the horticulture work in question is the kind of work contained in the definition of the construction industry in section l(1)(f) of the Act was raised by Mr. Noonan who argued that, if the Board viewed together sections l(l)(f) and 2(c), it should conclude that section 1(1 )(f) does not include horticulture work and that the legislature did not intend it to be included. He argued further that, were the Board to reach that conclusion, it would have no jurisdiction under section 124 to hear the grievance.

9. Section 2(c) excludes from the application of the Act

..... a person, other than an employee of a municipality or a person employed in silvaculture, who is employed in horticulture by an employer whose primary business is agriculture or horticulture;".

(emphasis added)

Section l(l)(f) defines the "construction industry" to mean

"... the businesses that are engaged in constructing, altering, decorating, repairing or demolishing buildings, structures, roads, sewers, water or gas mains, pipe lines, tunnels, bridges, canals or other works at the site thereof;".

It is clear from a plain reading of section 2(c) that the Act excludes persons who are “… employed in horticulture by an employer whose primary business is agriculture or horticulture;” (emphasis added). The corollary of that exclusion is the conclusion that the Act does not exclude employees who are employed in horticulture work by an employer whose primary business is not agriculture or horticulture. By the same reasoning it can be said that the Act does not exclude horticulture per se. Therefore section 2(c) of the Act does not operate to exclude either horticulture work or all persons engaged in that work from the application of the Act, or in particular from the application of the "construction industry" definition in section 1(1)(f) of the Act.

10. Since section 2(c) of the Act does not operate to exclude horticulture per se from the definition of the "construction industry", the remaining question in this preliminary issue is whether the specific work in question falls within that definition. That work in question falls within that definition. That work is described in paragraph 2 of the agreed statement as the landscaping and the necessary and related work thereto, including formwork and concrete work at the C.I.L. House Project (commercial office building),. . .". Counsel are agreed that the landscaping work on the project is horticulture (see the definition of the point in issue in paragraph S of the agreed statement). In addition to the landscaping and horticulture references in the agreed statement, it is uncontradicted that the respondent operates a business in the construction industry and its general contract for the C.I.L. House Project includes the landscaping work in question which is to be performed at that site.

11. There is nothing in the wording of either section l(l)(f) or section 2(c) to suggest that the terms "construction" and "horticulture" are mutually exclusive and the Board finds support for this observation from the comments at page 293 of the Board's decision in McLean-Peister Ltd., [1962] OLRB Rep. Nov. 290. The Board found in that case that McLean-Peister Ltd. was an employer whose primary business was agriculture or horticulture and consequently dismissed an application for certification from a constituent local of the applicant.

Combining these [dictionary] definitions of cultivation and garden, horticulture may thus be defined as 'The art or practice of cultivating or tilling and preparing a piece of ground appropriated to the cultivation of herbs (including grass), plants, flowers or vegetables'.

Having regard to the operations of the respondent and to the work performed by the employees on the project involved in this application, all as outlined above, we are of the opinion that the primary business of the respondent falls within this definition, as does the employment of the employees in question. We are unable to agree that the fact that the major portion of the respondent's operation is now in commercial, industrial and institutional landscaping as opposed to residential work or nursery work can alter the fact that the respondent is engaged in cultivation or tilling and preparing a piece of ground appropriate to the cultivation of herbs (which includes grass), flowers and plants. Nor can we accept the argument that because the work (or part of it) may fall within the definition of 'construction industry' as defined in section 1(1/da) [now section 1(1)(f)] of The Labour Relations Act, this takes it out of horticulture. It appears to us that some work on construction sites may very well be horticultural by nature. But what is important is what is being done, not where it is done.

(emphasis added)

While the words of section l(l)(f) "...engaged in constructing, [or] altering, . . . buildings, structures,. . . or other works at the site thereof;" are broad enough to encompass the landscaping work, in the absence of evidence such as the specific nature of the work and the tools and equipment used, the Board is of the view it should not rely on the "basket" phrase ..... or other works at the site thereof;" to make such a finding. This case, however, lacks both the type of evidence just referred to and any cogent evidence that the work in question is not construction work. In these circumstances, the fact that the respondent:

(a) operates a business in the construction industry;

(b) has entered into a contract making it responsible for the performance of work which falls squarely within the section l(l)(f) definition of construction industry; and

(c) that work includes landscaping the construction site property,

persuades the Board to conclude that the landscaping work at issue here is work which falls within the definition of construction industry. Where landscaping work is so clearly part and parcel of new construction, as it is here, any other conclusion would seem absurd.

12. In view of the foregoing conclusion, the Board finds that the landscaping work at issue here is work which falls within the definition of construction industry. The Board, therefore, has jurisdiction under section 124 to determine the matters placed in issue before it.

13. The applicant raised the second of the three issues. Mr. Minsky argued for the applicant that, when the Board is sitting as an arbitrator under section 124 of the Act, it has only the powers of an arbitrator, those powers being obtained from the collective agreement. He contends, therefore, that the Board cannot refer to the Labour Relations Act to determine the point in issue, but is limited to construing the agreement for that purpose. The Board finds it unusual, to say the least, that a party which has asked the Board to decide whether it is lawful to bargain about a particular subject matter takes the position that the Board cannot refer, when deciding the question of lawfulness, to the very statute from which the parties themselves derive their rights and duties with respect to collective bargaining. Nonetheless, the Board is disposed to answer in the following terms the question of what is the scope of its powers when the Board sits as an arbitrator under section 124.

14. The Board obviously has not taken the narrow view of its powers that counsel has, but the Board has relied on its general powers to apply other provisions of the Act, such as section 1(4) or section 72, when determining applications under section 124. In J. G. Rivard Limited, [1980] OLRB Rep. July 1009, the Board, having found that it did not have jurisdiction under section 124 to determine the particular issue referred to it for final and binding arbitration, relied on other sections of the Act to find that the applicant could pursue its claim under section 89 of the Act. Support for this exercise of the Board's powers is found in decisions of the Ontario court. While it was prior to the enactment of section 124 of the Act, the High Court in Regina v. Ontario Labour Relations Board exparte Genaire Ltd., 1958 CanLII 130 (ON HCJ), [1958] O.R. 637, instructed the Board to .... exercise any jurisdiction given to it under the Act, notwithstanding that a particular section of the Act is referred to in the formal application". More recently, in International Association of Heat & Frost Insulators & Asbestos Workers Local 95 v. Master Insulators Association of Ontario, Incorporated(1980), 1979 CanLII 1622 (ON HCJ), 25 OR. (2d) 8, the Divisional Court held that the Board's proceedings under section 124 are exempted from the provisions of The Statutory Powers Procedures Act and in so doing stated, in part, that:

..... In my view, the Board, in fulfilling its duties under section II 2a [now section 124] sits as an arbitrator and gives its decision as an arbitrator, although in doing so the number of persons sitting and the procedure respecting majority decisions and minority decisions, for example, will be governed by the statutory provisions governing the Board's conduct of its affairs and the Board's normal practice."

[emphasis added]

This clear reference of the court to the Board's powers under section 102 suggests that the Board, even when sitting as an arbitrator will be governed by other relative provisions of the Act and that the Board's powers such as those under section 103 and section 106 are not removed from it when it is proceeding under section 124. Again in The Ontario Erectors Association and Sheafer- Townsend Limited v. International Union of Operating Engineers, Local 793 (1980), 2 A.C. W.S. (2d) 307, the Divisional Court, in finding that the Board had proceeded correctly when it declined to use extrinsic evidence which was before it to construe collective agreement language which it found to be unambiguous, stated:

"We believe the Board was right in taking this approach. Normally, the Ontario Labour Relations Board is largely protected from judicial review by section 97 [now section 108] of the Act which effectively limits review to matters of strict jurisdiction or breaches of natural justice. It is submitted by the applicant that section 97 [now section 108], known popularly as the privative clause, does not apply to the Board qua Arbitrators. The short answer to that submission, and the only one it is necessary for us to examine, is that section 97 [now section 108] on its face protects any decision, order, direction, declaration or ruling made by the Board. Had the Legislature intended a decision made by the Board qua Arbitrators to be excepted, it could easily have said so and it did not. Our powers of correction therefore are limited to errors of jurisdiction and we find none....

15. Even if the Board's powers were limited to those of an arbitrator under the agreement, as counsel argues, the Board would still be able to decide the point in issue in this case by reference, if needed, to the Labour Relations Act. In the Board's view, clause 15.01 of the agreement which is set out below provides an arbitrator with the authority to construe any federal or provincial legislation in order to determine whether a provision of the agreement is lawful. To construe legislation for this purpose is to construe the agreement.

15.01 In the event that any of the provisions of this Agreement are found to be in conflict with any valid and applicable Federal or Provincial law now existing or hereinafter enacted, it is agreed that such law shall supersede the conflicting provision without in any way affecting the remainder of the Agreement.

16. The final issue before the Board is the two-fold question posed by the point in issue in paragraph 5 of the agreed statement; that is:

(a) "Whether the inclusion and coverage of horticulture (landscaping) work in the Provincial Agreement such as is being performed by McLean-Peister Ltd. at the Project, was a lawful subject for bargaining by the designated bargaining agencies, [and]

(b) . . . whether the subcontracting of such horticulture (landscaping) work may be lawfully regulated by the subcontracting provision of the said Provincial Agreement, namely Article 2.05 thereof".

The Board attaches no significance to the reference in that question to “... horticulture (landscaping) work as is being performed by McLean-Peister ...” other than as a way to describe the work which the parties wish the Board to deal with.

17. Section 2(c) of the Act, in the process of removing from the application of the Act those employees of employers whose primary business is agriculture or horticulture, distinguishes specifically those employers from the employers whose primary business is not agriculture or horticulture. The primary business of McLean-Peister Ltd. and the contractors included in item 4(b) of the agreed statement is horticulture and the Act does not apply to their employees. Thus their employees have none of the rights given by the Act such as the right to organize and bargain collectively for their terms and conditions of employment. The primary business of the respondent and the other employers bound by the agreement, on the other hand, is not agriculture or horticulture and their employees have all of the rights given by the Act, including the right to organize and bargain collectively. Consequently, while McLean-Peister Ltd. is doing the work in issue, the Act does not apply to its employees and were the other contractors like McLean-Peister Ltd. doing the work, the same situation would pertain to their employees. On the other hand, were the respondent or the other employers bound by the agreement to do the work, their employees would be covered by the Act. Since, as the Board found earlier in this decision, section 2(c) neither excludes horticulture work, per se, nor all employees engaged in that work, it seems to the Board that there is no reason why the two designated bargaining agencies could not bargain over horticulture work.

18. With respect to the question of whether the two bargaining agencies may lawfully regulate the subcontracting of horticulture work, Mr. Noonan argues that an affirmative answer to that question would foreclose McLean-Peister Ltd., as well as the other sub-contractors included in item (b) of the paragraph 4 of the agreed statement from obtaining landscaping work for which the applicant claims jurisdiction under the agreement. In the alternative, Mr. Noonan argues, McLean-Peister Ltd., and employers like it, would be forced to sign an agreement with the applicant in order to obtain the landscaping work in question here, an agreement which would not be a collective agreement within the meaning of section 1(1 )(e) of the Act and therefore not enforceable under the Act. It would appear from item (c) of paragraph 4 of the agreed statement that a few have already taken this step. Those agreements may not afford the parties any rights under the Act but they do allow those employers to obtain work while protecting at the same time the applicant's claimed work jurisdiction. If these agreements have no status under the Act insofar as they apply to employers engaged in agriculture or horticulture and their employees, that results from section 2(c) of the Act and not from any design of the parties. See Board of Education for the City of Windsor v. Ontario School Teachers' Federation, 1974 CanLII 569 (ON HCJ), 7 OR. (2d) 26 for an example of how the courts have viewed such agreements.

19. While it might well be the case that employers like McLean-Peister Ltd., have to sign such an agreement in order to compete for this kind of business, it does not follow automatically that the clause producing that result, in this case clause 2.05 of the agreement, is unlawful. The Board previously has dealt with challenges to the validity of sub-contracting clauses because of restrictions which they place on third parties. The Board has consistently found the legitimate aims of such clauses to override the interests of third parties whose commerce may be restricted by them. In Metropolitan Toronto Apartment Builders Association, [1978] OLRB Rep. Nov. 1022, (application for judicial review dismissed by Divisional Court at 24 O.R. (2d) 349), the Board, observing that a sub-contracting clause is generally designed to protect the work jurisdiction of a union, commented as follows at page 1033:

"These decisions [of the B.C. Labour Relations Board] appear to recognize that the primary purpose of the sub-contracting clause is to protect the work jurisdiction of the union which has obtained such a clause, a purpose not in conflict with any collective bargaining legislation."

20. The Board more recently considered the legality of a sub-contracting clause in International Union of Operating Engineers, Local 743, [1981] OLRB Rep. June 692. The sub-contracting provision of the collective agreement in that case prohibited the employer from sub-contracting work to owner-operators who did not sign an agreement with the union. The Board found at paragraph 31 that an agreement between an owner-operator and the union could not be a collective agreement under the Act, but was". . . simply a device by which the union administers its contractual rights or discretion flowing from negotiated sub-contracting clauses." The Board went on to hold, at paragraph 40, that the clause did not violate any provision of the Labour Relations Act.

21. Thus the Board has found that the regulations of sub-contracting of work for the protection of a union's claimed work jurisdiction is not unlawful per se. Since horticulture work is not excluded from the Act it seems to the Board that it would not be unlawful for a union to protect a claimed jurisdiction over that work by means of a sub-contracting provision. Therefore there is no compelling reason to deny the applicant in this case the opportunity to seek to protect its claimed work jurisdiction simply because section 2(c) of the Act excludes from its application employees of employers whose primary business is agriculture or horticulture.

22. The parties have asked the Board only to determine the point in issue and not the merits of the grievance. Accordingly the Board determines that horticulture (landscaping) work such as is being performed by McLean-Peister Ltd., at the C.I.L. House Project is a lawful subject for bargaining by the labourers designated bargaining agencies and the sub-contracting of such horticulture (landscaping) work may be lawfully regulated by the sub-contracting provision, clause 2.05, of the agreement.