United Brotherhood of Carpenters & Joiners of America, Local 494 v. The Kinsmen Club of Leamington, 1983 CanLII 859

[1983] OLRB Rep. November 1850

1365-83-R United Brotherhood of Carpenters & Joiners of America, Local 494, Applicant, v. The Kinsmen Club of Leamington, Respondent

BEFORE: Owen V. Gray, Vice-Chairman and Board Members W. Gibson and S. Cooke.

APPEARANCES: Dave Watson, Dale Chappell and Jim Carron for the applicant; George W King and Jacob de Jong for the respondent.

DECISION OF THE BOARD; November 23, 1983

1. This is a construction industry certification application in which the respondent says it is not the "employer" of the persons who would be included in the bargaining unit described in the application, namely:

(a) all carpenters and carpenters' apprentices employed by the employer in the industrial, commercial and institutional section of the construction industry in the Province of Ontario; and

(b) all carpenters and carpenters' apprentices employed by the employer in Board Area 1, excluding the industrial, commercial and institutional sector, save and except non-working foremen and persons above the rank of non-working foreman.

In the alternative, the respondent says that the proper employer may be a joint venture consisting of the respondent, the Ontario Government and the Federal Government. The applicant made no attempt to add those governments as parties to this application.

3. The parties were in agreement on the facts which they felt would be necessary for a determination of the question raised by the respondent.

I

4. The respondent is a non-profit incorporated service organization with 57 members. Adopting for a moment the neutral language employed by applicant's counsel, it is "involved" in a project to build a sports complex to be known as the Frank T. Sherk Recreation Centre. The building is being built on lands owned by the respondent and located on Sherk Street in Leamington, Ontario. Project costs are expected to exceed 5 million dollars. The project has created employment for some 300 or more people, including members of the applicant. The parties are agreed that the project falls within the industrial, commercial and institutional sector of the construction industry.

5. Financing for phase 1 of the project, which is expected to be complete at the end of December, 1983, and involve over $3 million in project costs, comes from the Federal and Ontario governments under their "N.E.E.D." and "B.I.L.D." programs, respectively. This funding is the subject of an agreement dated May 24, 1983 between the Canada Employment and Immigration Commission, the Government of Ontario (as represented by the Minister of Labour) and the respondent (which is referred to in the body of the agreement as the "Project Sponsor"). The recitals to this agreement read as follows:

WHEREAS CANADA AND ONTARIO have agreed to contribute equally to a job creation program known as the CANADA ONTARIO EMPLOYMENT DEVELOPMENT PROGRAM;

AND WHEREAS CANADA conducts a program known as New Employment Expansion and Development program pursuant to which contributions may be made to assist PROJECT SPONSORS to carry out approved projects specifically designed to create incremental employment in Canada for unemployed persons who have exhausted all available unemployment insurance benefits or are in receipt of social assistance;

AND WHEREAS ONTARIO contributes to job creation programs through the Board of Industrial Leadership and Development pursuant to which contributions may be made to assist PROJECT SPONSORS to carry out approved projects;

AND WHEREAS the PROJECT SPONSOR has implemented or intends to implement such a project and has presented a Project Proposal which has been approved by CANADA and ONTARIO;

AND WHEREAS CANADA and ONTARIO are prepared to make a contribution to the PROJECT SPONSOR with respect to the approved project;

NOW, THEREFORE, THIS AGREEMENT WITNESSES that, in consideration of the covenants and undertakings herein contained, the parties agree as follows:

Relevant provisions of the agreement itself include:

1 .A) The PROJECT SPONSOR hereby undertakes and agrees to carry out the project described in Schedule A to this agreement in a manner acceptable to CANADA and ONTARIO.

B) CANADA hereby undertakes and agrees to make a contribution not exceeding the Maximum Federal Contribution specified in Schedule A for each item identified therein which CANADA in its absolute discretion considers to be directly related to and necessary for the efficient management of the project and to the attainment of the project objectives.

C) ONTARIO hereby undertakes and agrees to make a contribution not exceeding the Maximum Provincial Contribution specified in Schedule A for each item identified therein which ONTARIO in its absolute discretion considers to be directly related to and necessary for the efficient management of the project and to the attainment of the project objectives.

3. The project and all persons employed thereon shall be at all times under the direct supervision, management and control of the PROJECT SPONSOR or of an agent of the PROJECT SPONSOR who has been approved by CANADA and ONTARIO.

4. All payments required by federal and provincial law to be made by an employer including Income Tax, Workman's Compensation, Unemployment Insurance, Canada Pension and holiday pay shall be the sole and absolute responsibility of the PROJECT SPONSOR and, unless waived by CANADA and ONTARIO, the PROJECT SPONSOR shall establish prior to receipt of any contribution that all registration requirements pertaining to such payments have been completed.

5. The PROJECT SPONSOR shall be solely and absolutely responsible for any liability arising from a contract between the PROJECT SPONSOR and any sub-contractor engaged to undertake a portion of the project.

6. Nothing in this agreement shall be deemed to authorize the PROJECT SPONSOR to contract for or incur any obligation on behalf of CANADA or ONTARIO.

Recruitment

12. Unless otherwise authorized by CANADA, the PROJECT SPONSOR shall use the services of Canada Employment Centres to recruit employees for the project.

13. All persons to be employed by the PROJECT SPONSOR on the project shall be legally entitled to work in CANADA and must be unemployed and have exhausted all available unemployment insurance benefits or must be unemployed and in receipt of social assistance.

24.A) If a portion of the contribution made by ONTARIO made under the terms of this agreement has been used for the purchase of assets which have not been physically incorporated into the final product of the project, ONTARIO, at its discretion, may direct that the assets so purchased

(i) be sold at a fair market value and the funds realized from such sale be applied to project costs,

(ii) be turned over to registered charitable organizations,

(iii) be retained by the project in cases where the PROJECT SPONSOR satisfies ONTARIO that the project is able to continue.

B) If a portion of the contribution made by CANADA under the terms of this agreement has been used for the purchase of assets which have not been physically incorporated into the final product of the project, CANADA, at its discretion may direct that the assets so purchased either:

(i) be sold at a fair market value and the funds realized from such sale be immediately paid over to CANADA,

(ii) be turned over to a registered charitable organization,

(iii) be retained by the project in cases where the PROJECT SPONSOR satisfies CANADA that the project is able to continue,

or

(iv) be turned over to CANADA for transfer to the Crown Assets Disposal Corporation;

(emphasis added)

6. The respondent's application for assistance under the NEED and BILD programs is incorporated as a schedule to and forms part of this agreement. Relevant stipulations in the application include the following:

LIAISON AND HIRING

The sponsor shall appoint one club member as primary contact/liaison person responsible for the construction phase of the project. This person will be responsible for any liaison between the sponsor and the site supervisors, Employment Development Branch, Valdez Engineering Ltd. and the Town of Leamington.

The sponsor shall appoint one club member as primary contact/liaison person responsible for financial control of the project. This person will be responsible for any liaison between the sponsor and the site supervisors, Employment Development Branch, and Valdez Engineering Ltd.

Sponsor shall form a hiring committee composed of 1) Kinsmen members, preferably one representative should have some construction expertise; 2) Valdez Engineering.; 3) a third party with construction expertise. This committee will be responsible for hiring the Superintendent, the Expediter, the Project Coordinator, the Comptroller, and Safety Inspector.

JOB DESCRIPTIONS

The sponsor shall ensure that detailed job descriptions for the Superintendent, Expediter, Project Coordinator, Comptroller, and Safety Inspector are developed on/or before June 6, 1983. Copies of the job descriptions should be distributed to: 1) Personnel hired on all of the above positions; 2) Liaison persons appointed by the Kinsmen; 3) Employment Development Branch.

these job descriptions should clearly designate lines of authority and responsibility.

PERSONNEL GUIDELINES

Sponsors are required to establish personnel guidelines for all employees on Employment Development Branch projects. A copy of the personnel guidelines signed by each employee, will be kept on file. The personnel guidelines will include hours of work, rate of pay, duration of the project, place of employment, travel and overtime requirements and compensation, name or position of supervisor, procedures for handling unsatisfactory performance and termination of employment and other items contained in the personnel guidelines are to be consistent with the Agreement between the sponsor and Canada/Ontario.

UNIONS

The sponsor hereby certifies that arrangements have been made with all unions involved permitting the implementation of the project.

(emphasis added)

7. Persons engaged on this project have been obtained from or through the appropriate Canada Employment Centre office. The parties agree that the respondent has the power to terminate these employees and has in fact fired employees. Employees on the project are paid by cheque drawn on an account maintained and controlled by the respondent. The payor named on these cheques is "Kinsmen Club of Leamington — Leamington Sports Complex Task Force Payroll Account."

II

8. Counsel for the respondent argues that it is in a position analogous to that of the owner on a construction project on which a general contractor is engaged. In the ordinary manifestation of that arrangement, the owner's position is that it wants a building built. It seeks out a general contractor, who supplies the material and labour necessary to construct the building. The general contractor engages its direct work force and the services of subcontractors in these tasks. If the persons supplying labour and materials are not paid in accordance with their arrangements, they become entitled to register Mechanics' Liens against the land. These liens provide them with the ultimate right to cause the building to be sold in the event the owner's obligations remain unfulfilled.

9. The analogy drawn by the respondent is this. It also wanted a building built. Its position differs from that of the typical owner only in that it cannot pay to have the building built. The relevant governments, on the other hand, want to employ people. The respondent agrees to give them an opportunity to do so, in return for the governments' undertaking to provide the necessary monies for labour and materials. The respondent merely volunteers its services as supervisor and acts as an accounting and "paymaster" office in the dispersement of the governments' money to the employees, subcontractors and material suppliers engaged in the project. At the end of the project, the respondent receives a completed building, just as the owner does in the conventional situation. To complete the analogy, the respondent argues that its failure to properly supervise distribution of funds may result in the seizure and sale of its building under paragraph 24 of the agreement, a result which it sees as the equivalent of the ultimate remedy available to mechanics' lien claimants against the lands of an owner in the conventional construction situation.

10. On the basis of this analysis, the respondent argues that it is not an employer within the meaning of section 117(c) of the Labour Relations Act, and that this application cannot, therefore, be treated as an application for certification within the meaning of section 119 of the Act. Section 117(c) of the Act reads as follows:

(c) "employer" means a person who operates a business in the construction industry, and for purposes of an application for accreditation means an employer for whose employees a trade union or council of trade unions affected by the application has bargaining rights in a particular geographic area and sector or areas or sectors or parts thereof.

The respondent notes that "employer" is defined only in section 117. He maintains that this may lead to results different from those which have been reached in cases outside the construction industry. This is said to be because there are special circumstances in the construction industry, one of which is that a different set of rights flow from a successful certification application. Counsel did not say which of these differences should result in a different approach to identifying an employer. Relying on the analogy he draws with the conventional construction arrangement, however, counsel for the respondent suggests that section 117(c) applies to the general contractor, but not to the owner. As he maintains that the respondent is in a position analogous to an owner and not to that of a general contractor, he says that the respondent cannot fall within that definition.

11. The respondent acknowledges that there is in the language of the agreement between it and the Federal and Ontario government’s language which would point to it as being the employer. It argues that it is, at most, an employer in name only. But for government money, it says, there would be no building. It argues that the use of the respondent as a pay-master is intended merely to give the otherwise unemployed workers on the project a sense of genuine employment rather than the feeling that they are "working on pogey". We are asked to take into account that this is a "one shot", "make-work" project. We are invited to consider the degree of control exercised by the governments through the provisions of the agreement which give those governments the right to inspect the project from time to time, to review the books and records which the agreement requires the respondents to maintain and to withhold payment if the respondent fails to comply with any provision of the agreement or if either government is otherwise not satisfied with the progress of the project. This range of controls is said to be aptly summarized in section 1(a) of the agreement, by which the respondent undertakes to carry out the project "in a manner acceptable to Canada and Ontario." The respondent argues, in short, that the Federal and Ontario governments control all matters of substance in this construction project. The respondent especially relies on paragraph 12 of the agreement, which it characterizes as a stipulation that the governments in question do the hiring of the employees.

12. The applicant union argues that the respondent's "owner/contractor" analogy is inapt. The applicant describes the respondent as an owner who has chosen to act as its own general contractor. The governments in question are merely involved as funding sources. They act in a capacity analogous to that of the bank or financial institution which provides the financing in the conventional construction project. Counsel for the union draws our attention specifically to paragraph 3 of the agreement, and invites us to draw the conclusion that its terms clearly constitute the respondent as the employer of workers on the project. He invites us to reject the alternate argument that the respondent has somehow formed a joint venture together with the governments, and in that regard draws our attention to paragraph 11 of the agreement. With respect to the respondent's argument based on paragraph 12 of the agreement, the union characterizes this as nothing more than a requirement that the respondent obtain its labour from a particular hiring hall. He argues that the fact that an employer hires through a hiring hall does not make it any less an employer.

13. Counsel for the respondent noted that no reported case deals with the questions before us in the context of the particular government programs involved here. He referred us, however, to the following cases involving the funding of wages of under government programs: Kelowna Centennial Museum [1977] 2 Can. LRBR 285 and Waterloo Catholic School Board, [1977] OLRB Rep. Dec. 856. He also cited the following cases as authority for the proposition that the funding source for wages will not always be the employer: Province of Ontario Board of Internal Economy, [1980] OLRB Rep. Jan. 88; the dissent of Mr. Justice Beyda in University of Regina v. CURE, (1979) 1979 CanLII 2187 (SK CA), 101 D.L.R. (3d) 633 (Sask. C.A.); and Board of Governors of the University of Alberta [1982] 1 Can. LRBR 78. With respect to the interpretation of section 117(c), the applicant refers us to the long line of cases beginning with Tops Marina Motor Hotel, [1964] OLRB Rep. Jan. 583.

14. In reply, the respondent acknowledges the several decisions of this Board dealing with government funded "make-work" programs. He distinguishes the case before us on the basis that none of those decisions dealt with a construction industry certification application.

III

15. No one suggests that the persons whom the applicant seeks exclusive authority to represent are doing work in any capacity other than that of employee. It is not suggested that they are volunteers or students or independent contractors. The argument and agreed statement of fact both assume that the workers affected by this application have an employment relationship with someone.

16. The fact that an employment relationship is brought into existence by a government "make-work" program does not itself take that relationship beyond the reach of the Labour Relations Act: Kelowna Centennial Museum Association, supra; Waterloo County Roman Catholic Separate School Board, supra; Regional Municipality of Hamilton-Wentworth, [19821 OLRB Rep. Aug. at 1179 (dissent reported at [1982] OLRB Rep. Oct. 1481); and, Industrial Resource Centre (Windsor/Essex) Inc., [19821 OLRB Rep. Oct. 1482.

17. The definition of "employer" in what is now section 117(c) of the Labour Relations Act has been examined in numerous decisions of this Board, including: Tops Marina Motor Hotel, supra, Kanadia Niagara Falls Limited, [1966] OLRB Rep. April 9; Automatic Fuels Limited, [1966] OLRB Rep. April 22, Tricont Projects Limited, [19661 OLRB Rep. May 121, Hareb Development Limited, [1968] OLRB Rep. May 181, Loblaw Groceterias Co. Limited, [1969] OLRB Rep. June 392, Mattagami Lake Mines Limited, [1970] OLRB Rep. Feb. 1356, Kupuskasing Board of Education, [1972] OLRB Rep. June 587, Ameri-Cana Motel Ltd., [1972] OLRB Rep. Dec. 997, Group Thirty-Three Limited, [1974] OLRB Rep. Dec. 888, The Corporation of the City of Toronto, [1978] OLRB Rep. Dec. 145 (Judicial review denied sub. nom. Re City of Toronto and Carpenters' District Council of Toronto and Vicinity, 1980, 27 O.R. (2d) at 673), 258167 Vending Company Limited, [19791 OLRB Rep. June 595, The Municipality of Metropolitan Toronto, [1980] OLRB Rep. Jan. 62 (Judicial review denied, Ontario Divisional Court, January 29, 1981 (unreported)), The Board of Education for the City of Windsor, [1983] OLRB Rep. May 831; and City of Kitchener, [19831 OLRB Rep. Sept. 1490. These decisions establish that a person may be an "employer" within the meaning of section 117(c) even though its primary "business" is not in the construction industry, it does construction work only for its own benefit and not for others, and the project active at the date of the application is the only construction project in which it has ever engaged or ever intends to engage. A person may also fall within the s. 117(c) definition of employer even though it does not engage in construction or any other business with a view to or hope of making a profit. In effect, the Board asks whether the putative employer was engaged in construction activity at the date of the application, and broadly interprets the phrase "operates a business" as describing the state of being busily engaged in an activity (see Re City of Toronto and Carpenters' District Council of Toronto and Vicinity, supra, at page 674). Thus, a non-profit entity such as a board of education or municipal corporation may be an "employer" within the meaning of section 117(c) if it acts as its own contractor in building a swimming pool(Kupusaksing Board of Education, supra) engages carpenters to do restoration and remodelling (City of Toronto, supra, The Municipality of Metropolitan Toronto, supra) engages plumbers to do repair work (The Board of Education for the City of Windsor, supra) or employs bricklayers to erect partitions and walls in public buildings (City of Kitchener, supra).

18. The mere fact that construction activity is undertaken with the assistance of government funding under a "make-work" program has not affected the general principles outlined in the preceding paragraph. Indeed, in Kupuskasing Board of Education, supra, the respondent Board of Education was constructing a swimming pool with the assistance of a grant from the federal government under the Local Initiatives Program. In that case:

The respondent informed the Board that by virtue of the conditions attached to such grant, the respondent had agreed to operate as a general contractor and that it was also obliged to hire new employees required for such construction which it did not already have on its payroll through the Canada Manpower Centre.

The Board there concluded:

While it is quite clear that the general nature of the respondent's business is education, it is also apparent that it has entered the field of construction for the purpose of constructing a swimming poo1."

19. Accordingly, nothing in the nature of the respondent or of the project prevents the applicant from being found to be an "employer" within the meaning of section 117(c).

20. As noted earlier, the question about the workers affected by this application is not "Are they employees?" but "Whose employees are they?". In seeking an answer to that question we do not propose to pursue the analogies offered by the respondent any farther than to observe that an owner may also be a contractor and that lending institutions, particularly public ones like C. M . H. C., may exert a degree of control over aspects of a construction project comparable in degree and kind to that which may be exercised by the governments involved here, without thereby becoming the employer of the workers engaged on the project. The analogy is not particularly discriminating from a labour relations point of view. It is from that point of view that we must approach the problem, and from that point of view the Board's jurisprudence provides considerable assistance.

21. In York Condominium Corporation, [1977] OLRB Rep. Oct. 645, the Board developed seven indicia to assist it in determining which of two or more entities is the employer for the purposes of the Labour Relations Act. These are: (1) the parties exercising direction and control over the employees performing the work; (2) the party bearing the burden of remuneration, (3) the parties imposing the discipline, (4) the party hiring the employees, (5) the party with the authority to dismiss the employees, (6) the party who is perceived to be the employer by the employees, (7) the existence of an intention to create the relationship of employer and employee. These indicia have been used in a number of cases to assist the Board in identifying the employer. Some of these cases were reviewed in Sutton Place Hotel, [1980] OLRB Rep. Oct. 1538. The results of that review are summarized in the following passage from the Board's decision in that case:

A look at the jurisprudence highlights the wide variety of factual combinations that present themselves in cases where the Board is called upon to identify the employer. It is apparent on review that no one of the seven criteria set out in York Condominium is determinative in all cases. In G.E. M. and Alwell Forming, for example, the company which hired the employees was not found by the Board to be the employer. In Ralston, Tower Company, Board of internal Economy and Templet, on the other hand, the entity responsible for hiring was found to be the employer. In Ralston, Board of Internal Economy and G.E. M. the entity supervising the employees on a day-to-day basis was found to be the employer while in the Tower Company and Boeing of Canada it was not. In Templet and G.E. M. the company paying the wages was found to be the employer. In the Board of Internal Economy it was not. In Ralston and for some employees in AIwell Forming the Board concluded that the company from whose account the wages were drawn was not the entity which actually bore the burden of remuneration. In Ralston and Alwell Forming the group which bore the burden of remuneration was identified as the employer, and in Board of Internal Economy it was not. In G.E.T. and Alwell Forming the Board's finding was consistent with the perception of the parties. In Kent Line Ltd. this would appear not to have been the case.

The weight to be accorded the various indicia of employer status set out in York Condominium cannot be assigned in a vacuum. When one of the factors is combined with another in the hands of one company, the Board may conclude that they accurately identify the employer, though while standing alone or in some other combination they may not.. The significance of each indicator can only be ascertained through an appreciation of how they all fit together within the facts of each case. It is only then that the Board can decide which factors in the particular case most accurately reflect and identify the employer for collective bargaining purposes.

A particularly important question answerable through an evaluation of all of the factors set out in York Condominium is who exercises fundamental control over the employees. In some cases control over hiring may reflect fundamental control. In other situations, reminiscent of a hiring hall, it may not. In some cases day-to-day supervision may suggest fundamental control, in others it may not. Similarly with the payment of wages: in the factual mix of some cases the payment of wages may, along with other factors, suggest who holds the fundamental control while in other cases it may be of minor significance. No single factor listed in York Condominium inevitably points to the possession of fundamental control. The Board's ultimate evaluation of who holds fundamental control in any particular fact situation, however, is generally the single most determinative question in identifying the employer. In a word, to find the seat of fundamental control is generally to find the employer for the purposes of The Labour Relations Act.

22. It should be noted there is nothing unique about the construction industry which prevents the application of the tests outlined in York Condominium Corporation to a construction industry situation. Indeed, those tests have been applied in the construction industry:

Thunderhawk Developments, [1983] OLRB Rep. Aug. 1378.

IV

23. Applying the York Condominium tests, indicia numbered 1, 3, 5 and 6 unequivocally favour a finding that the respondent is the employer. With respect to test number 2, "the party bearing the burden of remuneration", we note that the respondent's agreement with the Federal and Ontario governments does not oblige those governments to pay wages, but merely to make a contribution toward those wages. While that contribution presently stands at 100 per cent of labour costs, there is nothing in the agreement that would prevent continuation of the project if the respondent becomes subject to increases in wage costs which are not covered by the subsidy presently provided in the agreement. This test, therefore, does not point strongly in any direction.

24. With respect to the fourth test, "the party hiring the employees", the question is whether the respondent's obedience to the requirement that it "use the services of Canada Employment Centres to recruit employees for the project" makes the respondent any less the person hiring the employees. We consider it does not.

25. With respect to the seventh test, "the existence of an intention to create the relationship of employer and employees", we take into account the provisions of the agreement cited in paragraphs 5 and 6 of this decision. The only other entities with the potential to be the employer are party with the respondent to this agreement. The language of the agreement evidences an intention on the part of all the potential employers that the respondent shall fulfill that role and that nothing in the agreement shall constitute either of the governments as joint ventures in the employment of anyone working on the project. While those governments retain a considerable degree of control over a number of aspects of the project, the agreement puts the respondent squarely in control of those matters which are the normal subject of collective bargaining.

26. However dependent the respondent may be on the Federal and Ontario governments for financing of this project, we conclude that the respondent alone exercises fundamental control over the incidents of employment of the employees for whom the applicant seeks exclusive bargaining rights, and must therefore be considered their employer.

[Balance of decision finding union status, bargaining unit appropriateness, membership support etc omitted].