[1982] OLRB Rep. October 1540
1605-81-M; 1607-81-M MHG International Ltd., Applicant, v. International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers & Helpers, Local Union 128, Respondent v. Boilermaker Contractors' Association, Intervener
BEFORE: Ian Springate, Vice-Chairman, and Board Members J. A. Ronson and B. L. Armstrong.
APPEARANCES: Paul Cavalluzzo, Matt Bakker, Bob McDonald, Stan Petronski and John Carroll for the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, Local Union 128; B. W Binning and Gerry Binette for MHG International Ltd.; R. C. Filion and D. A. McDonald for the intervener.
DECISION 0F IAN SPRINGATE, VICE-CHAIRMAN, AND BOARD MEMBER J. A. RONSON; October 18, 1982
The International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers Local 128 (which along with its parent international union will henceforth be referred to as "the union") as well as MHG International Ltd. (which, along with a related company, Monenco Limited, will be referred to as "the company") have both referred the same grievance to the Board for determination pursuant to section 124 of the Labour Relations Act.
The union and the company are bound by the provisions of a collective agreement entered into between the union and the Boilermaker Contractors' Association. The agreement covers employees engaged on field construction work. The union contends that the company violated a letter of intent incorporated by reference into the collective agreement by having certain vessels to be used at the Polysar Butyl II expansion project in Sarnia fabricated in a non-union shop.
The relevant article in the collective agreement, as well as the letter of intent, are set out below:
"Article 29:00 – Employers’ Responsibility
29:01
It shall be the responsibility of all Employers signatory to this Agreement to comply with the letter of July 1967 relating to subcontracting of work within the jurisdiction of the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers.
"Letter Referred to in
Article 29:00
To: All signatory companies to the Boiler Erection and Field Construction Agreement (Canada) - 1966-1969.
Gentlemen:
During negotiations of this Agreement in June and July of 1966, the Union had requested inclusion of a clause covering subcontract work on the various projects to be included in the National Agreement. Subsequently this was omitted because of the difficulties in arriving at suitable language which would be satisfactory to both the Union and the signatory companies. However, it was agreed at that time that even though a sub-contract clause was not part of the National Agreement, this did not allow a signatory company to subcontract their work to a non-union or non-signatory contractor and thus avoid their contractual obligations with the Boilermakers Union. Therefore any sub-contract work for field construction should be awarded only to another signatory contractor.
During negotiations, the question of farbrication in various shops of work coming under the jurisdiction of the Boilermakers' Union on field erection, was discussed. It was pointed out to the representatives of the member companies present that considerable difficulty was being experienced and much pressure made to bear by industrial fabricators in agreement with the Boilermakers' Union to having work done in their shops. Further it was pointed out that due to the fact that national contractors had a contractual obligation to the various pipefitting work and fabrication done in shops in agreement with the United Association, on a local or national basis, consideration should be given to the Boilermaker Fabricators when work was being awarded.
The Boilermakers pointed out that contractually there was no obligation for contractors to solicit only companies in agreement with the Boilermakers to do their fabrication work. It was suggested that in order to minimize difficulties that might be encountered in areas where such work is scheduled and which are highly union organized, that contractors try to place their fabrication work in Boilermaker shops or shops which are organized by other A.F.L. or C.I.O. unions. If, however, it became necessary to place orders in non-union shops because of scheduling or by reason of particular manufacturing needs or requirements, then the matter should be discussed with the Boilermakers' International in order that agreement can be reached and any subsequent problems in connection with the field erection of this work be avoided.
International Brotherhood of
Boilermakers,
Iron Ship Builders, Blacksmiths,
Forgers and Helpers
John D. Carroll,
International Vice-President
Eastern Canada.
Donald G. Whan,
International Vice-President
Western Canada.
Negotiating Committee of the Signatory Companies to the Boiler Erection and Field Construction Agreement (Canada)
W. J. Gibson, Chairman.
E. F. Dubose, Secretary.
DATED this 17th day of July, 1967."
A number of vessels and exchangers were required on the Polysar project. Some time in July of 1980 Mr. W. Colborne, the senior company official associated with the project happened to meet Mr. J. McManus, a union official. At this meeting, Mr. McManus told Mr. Colborne that the company better not buy vessels from nonunion shops, for if it did they would not be installed. Mr. Colborne's response was that it was none of Mr. McManus' concern where the vessels were obtained from.
In October of 1980 the company sent to Polysar's project manager a list of possible bidders for the vessels in question. The list included the names of a number of shops which had collective agreements with the union, as well as a number of non-union shops. One of the non-union shops was O'Connor Tanks. On October 30, 1980 the bid list was signed as approved by an official of Polysar and returned to the company.
The firms a included on the list were invited to tender for the work. After the bids had been received, they were analyzed by Mr. Colborne. On the basis of price, (with a check to ensure an acceptable delivery date) Mr. Colborne decided that the O'Connor Tanks bid should be accepted. The company did not contend at the hearing that the unionized firms which bid on the work could not meet the company's scheduling or production requirements. On April 14, 1981 the company sent a recommendation to Polysar that O'Connor be awarded the work. The document was signed as approved by Polysar's project manager and returned to the company. O'Connor Tanks was advised as early as March 11, 1982 that it was the successful bidder.
In late April or early May of 1981 Mr. S. Petronski, a Vice-President of the Boilermakers International, visited Mr. Colborne. During this meeting Mr. Petronski asked to be given a list of manufacturers of the vessels to be used on the project in question. Mr. Colborne responded to this request on May 27, 1981 by providing Mr. Petronski with a list of manufacturers. Included on the list was O'Connor Tanks. This appears to be the first time that the union was advised that vessels fabricated by O'Connor Tanks were to be used.
Early in September of 1981, Mr. Murray, the company's construction manager, met with Mr. Carroll and Mr. Bakker from the union. It was agreed at the meeting that the company would at some later time provide justification for having directed work to O'Connor Tanks. On October 2, 1981 a meeting was held between representatives of the union and the Boilermaker Contractors' Association. The meeting was chaired jointly by Mr. Carroll of the union and Mr. McDonald of the Association. During the meeting, the Polysar project and the interpretation to be given to the letter of intent were discussed. Apparently, Mr. Carroll stated that the letter meant that vessels built in non-union shops could not be used without prior union approval, and Mr. McDonald agreed with this interpretation. At some point during the meeting, Mr. Carroll stated that non-union vessels would not be installed on the Polysar site. Mr. Colborne testified that he had been in attendance at this meeing with documents to justify to the union the company's decision to order vessels from O'Connor Tanks. The documents related only to the price and delivery dates contained in the various bids for the work. According to Mr. Colborne, once Mr. Carroll stated that non-union vessels would not be installed on the project he concluded there was really nothing to discuss with the union, and accordingly, he left the meeting.
The first O'Connor vessels arrived at the job site in September of 1981. Apparently, one vessel was off-loaded by members of the union, but then they refused to install it. Later as other vessels arrived, members of the union refused even to off-load them. The company responded to this action by applying to the Board for a cease and desist order against the employees for engaging in an unlawful strike. The Board issued such an order on October 16, 1981. In issuing its order the Board rejected the union's contention that no order should be made because the company had violated the letter of intent. The Board indicated that any such alleged violation should be dealt with through the grievance procedure and not through unlawful industrial action. Following the issuing of the Board's cease and desist order, the union members both off-loaded and installed the O'Connor vessels, and the union filed the grievance which is now before us.
The union takes the position that the company violated the letter of July 17, 1967 in two distinct ways, namely, it failed to consult with the union prior to ordering vessels from a non-union shop, and it failed to provide the union with justification on the basis of either scheduling or particular manufacturing needs for having gone to a non-union shop. We are satisfied that the company did, in fact, fail to do either of these things. The question remains, however, as to whether its failure to do so amounted to a breach of the letter of intent and hence of the collective agreement.
The third paragraph of the letter of July 17, 1967 expressly provides that "contractually there was no obligation for contractors to solicit only companies in agreement with the Boilermakers to do their fabrication work". The letter does go on to state that "it was suggested ... that contractors try to have their fabrication work done in Boilermaker or other shops with A.F.L. - C.I.O. unions", but it is important to keep in mind that this is a suggestion only. The last sentence of the letter provides that "If, however, it became necessary to place orders in non-union shops because of scheduling or by reason of particular manufacturing needs or requirements, then the matter should be discussed with the Boilermakers' International." This wording, if used in another context, might well be interpreted to suggest that shop fabrication work could only be given to non-union firms if it became necessary due to scheduling or manufacturing needs. Given the thrust of the entire paragraph, however, and in particular the fact that it was only a suggestion that companies try to place their fabrication work in union shops, we do not interpret the sentence as implicitly creating a requirement that absent any special scheduling or manufacturing considerations fabrication work must be done in union shops. Instead, we view the sentence as relating to contractors who adopt the suggestion that they try to place their work in unionized shops, but find themselves unable to do so because of manufacturing or scheduling requirements. The letter indicates that contractors in this situation "should" discuss the matter with the Boilermakers Union in order to avoid any subsequent problems. In this context we believe the word "should" is to be interpreted as a suggestion and not as a mandatory command. Given this interpretation, we are satisfied that the letter created no actual obligation on the part of the company to justify to the union why it directed the work to a non-union shop.
Although we are of the view that the company did not violate any mandatory requirement contained in the letter of July 17, 1967, we would add that in our view the company certainly ignored the underlying spirit of the letter, which is that although not compelled to do so, contractors should try to place their fabrication work with unionized shops or, if unable to do so due to manufacturing or scheduling requirements, discuss the matter with the union.
Having concluded that the company's action did not involve a breach of any mandatory requirement under the letter of July 17, 1967, the grievance is hereby dismissed.
DECISION OF BOARD MEMBER B. L. ARMSTRONG;
I have read the decision of the majority which dismisses this grievance and I find that I must disagree with their interpretation of this collective agreement, including the letter of intent. My view is that the employer has violated the collective agreement in this case, and that this Board should uphold the intent of the parties which is made clear by the letter of July 17, 1967 incorporated by reference into their collective agreement.
The first part of the letter, which deals with field construction work, concludes with the words “any sub-contract work for field construction should be awarded only to another signatory contractor”. It is an accepted rule of interpretation that the terms "shall" or "should" (as opposed to “may” or “might”) denote mandatory obligations. The third paragraph of the letter seems to qualify this obligation created by paragraph #1 with respect to the fabrication of vessels in shops. The parties realized the difficulties in always using union shops for this type of work so the employers agreed to try to place their fabrication work in union shops. In my view, this imposes an obligation on the company to make a reasonable effort to place fabrication work in union shops.
Even if this obligation is only regarded as not being a legally enforceable one, because of paragraph three of this letter (as the majority has done) this does not affect the second obligation imposed by the third paragraph. This second obligation is introduced by the phrase, "If, however, it became necessary to place orders in nonunion shops…”. The word "however", separates this second obligation from the first, and imposes on the company an independent duty to discuss the matter with the union even if there is no strict obligation to try to place fabrication work in union shops.
The same structure of words is used to conclude the third paragraph as the first … namely, "the matter should be discussed with the Boilermakers' International….”. In my view the use of the term "should" clearly imposes an enforceable obligation to discuss. The letter conclusively indicates that sub-contract work for field construction should be awarded only to another signatory contractor and that the placement of orders for the fabrication of vessels in non-union shops should be discussed with the Boilermakers' International. In my view, both of these obligations are mandatory ones which may be enforced by this Board. However, even if the former is qualified, there is no question in my mind as to the obligation to discuss.
The interpretation I have suggested is a reasonable one having regard to the words of the letter of intent, and a necessary one having regard to the "underlying spirit of the letter" (as the majority has phrased it). I would adopt the view that "an arbitration board is entitled to give effect to the underlying aim of a clause ... where it can do so by imputing to the clause a meaning which it can reasonably bear" Standard (Canada) Ltd., 1971 CanLII 1911 (ON LA), 22 LAC 377 (Weiler), and apply it to this case.
In my opinion, the company violated the collective agreement by failing to consult with the union prior to ordering vessels from a non-union shop, and by failing to discuss the matter with the union even after it had ordered the vessels.