Ontario Labour Relations Board
[1983] OLRB Rep. October 1603
0903-80-M International Union of Operating Engineers, Local 793, Applicant, v. Alnor Earthmoving Limited, Respondent, v. Operating Engineers Employer Bargaining Agency, Intervener.
BEFORE: Ian C. Springate, Vice-Chairman, and Board Members J. A. Ronson and B. L. Armstrong.
APPEARANCES: B. Chercover for the applicant; R. A. Werry for the respondent; B. Binning and J. Thomson for the intervener.
DECISION OF IAN C. SPRINGATE, VICE-CHAIRMAN AND BOARD MEMBER B. L. ARMSTRONG; October 12, 1983
1This is a referral of a grievance to the Board pursuant to section 124 of the Labour Relations Act.
2Although the Toronto & District Excavators Association was given notice of the hearing at which the matters dealt within this decision were litigated, the Association chose not to attend at the hearing.
3The grievance before the Board alleges a violation of the 1980-1982 provincial agreement entered into between the Operating Engineers Employee Bargaining Agency and the Operating Engineers Employer Bargaining Agency. The evidence before us indicates that prior to the advent of provincial bargaining, the International Union of Operating Engineers, Local 793 ("Local 793") was certified by this Board to represent equipment operators in the employ of the respondent, Alnor Earthmoving Limited ("Alnor") in all sectors in the Board's geographic area #8, which takes in the greater Toronto area. Local 793 and Alnor never entered into a collective agreement. However, due to the effect of the provincial bargaining sections of the Act, Alnor became bound to the terms of the provincial agreement in the industrial, commercial and institutional sector of the construction industry (the "ICI sector"). The provincial agreement purported on its face to be a multi-sector agreement. However, the parties are in agreement that it was binding on Alnor only with respect to ICI work.
4Alnor is an excavating firm which is very active in road construction. Although not contractually required to do so, when performing road work in the Toronto area Alnor has apparently always applied the terms of a collective agreement between Local 793 and the Metropolitan Toronto Road Builders Association. The company has not only paid its employees the wage rates specified in the agreement but has also made payments to certain trust funds provided for in the agreement. Insofar as its work in the roads sector is concerned, Local 793 has no complaint with Alnor. Indeed, in giving his testimony, Mr. E. Ford, the Local's labour relations manager, commented, "Alnor is a good contractor, he's a good employer".
5The grievance arises out of certain work performed by Alnor at the Toronto International Airport. This work apparently involved site preparation for a new Wardair hanger, as well as the construction of an apron, taxi-ways, roads and a parking lot. Alnor employed members of Local 793 to do the work, and paid them the rates provided for under the road builders collective agreement. Local 793, however, contends that the work in question fell within the ICI sector, and that the employees were entitled to the higher wage rates provided for in the provincial agreement.
6Alnor initially took the position that the work at the airport came within the roads sector of the construction industry and accordingly the provincial agreement did not apply. This contention resulted in an application being made to have the Board make a determination under section 150 of the Act as to whether or not the work came within the ICI sector. When the section 150 issue came on for hearing, Local 793 and Alnor advised the Board that rather than have the matter litigated, they had entered into an agreement in the following terms:
"The parties have agreed that without admission as to whether the work in question falls within the industrial, commercial and institutional sector or not, and without prejudice to the parties in any future sector determination, the respondent agrees to pay the rates under the Provincial Collective Agreement."
7The agreement that Alnor would pay the wage rates under the provincial agreement did not result in a settlement of the grievance. The provincial agreement contained a number of appendices, with each appendix providing for different wage rates and other conditions of employment. Local 793 contends that the schedule applicable to Alnor was Schedule "J", whereas Alnor contends it was Schedule "D" which provided for a lower rate of wages. At the hearing, the parties reviewed the historical development of the schedules, and in particular the origin of Schedule "D".
8Prior to the advent of provincial bargaining a number of employer groups negotiated separate collective agreements with Local 793. One of these employer groups was the Toronto & District Excavators Association which bargained on behalf of certain of excavating firms in the Toronto area. Excavating firms tend to work in a number of different sectors, particularly the ICI sector and the roads sector. Apparently, in most parts of Ontario, an excavating firm employing Local 793 members works under a "Roads" agreement in the road sector, and a different collective agreement, with a much higher wage rate, in the ICI sector. So as to avoid this situation in the Toronto area, the Toronto & District Excavators Association negotiated a multi-sector agreement with Local 793 which called for the association's member companies to pay a single wage rate regardless of the sector in which they were working. This single wage rate was higher than the rate called for in an agreement between Local 793 and the Metropolitan Toronto Road Builders Association but less than the rate called for on ICI work. Because of its position between these two wage rates, the Excavators Association wage rate came to be referred to as a "mid-line" rate.
9With the advent of provincial bargaining in 1978 the Toronto & District Excavators Association, and seven other employer associations, were jointly designated as the Operating Engineers Employer Bargaining Agency. In negotiations for a first provincial agreement, it was agreed that the provincial agreement would consist of a "master portion" as well as a series of schedules setting out various wage rates, and other conditions of employment. These schedules reflected the bargaining structure in existence prior to provincial bargaining. There was a schedule for each part of the province setting out certain "general" wage rates, as well as schedules for a variety of specialty contractors. The general appendix for the Toronto area was Schedule "J" which read as follows:
"This Schedule shall cover and apply to Employers engaged in all work other than the work covered by Schedules ''A'', ''B'', ''C'' & ''D'' hereof and without limiting the generality of the foregoing BUILDING AND CONSTRUCTION WORK within Metropolitan Toronto, the Regional Municipalities of Peel, York, Durham, the Counties of Simcoe, Muskoka, Victoria, Haliburton, Peterborough and that portion of Northumberland lying west of a line running north from Colborne to McCrackens Landing and that portion of the Regional Municipality of Halton lying east of #25 Highway".
10The Schedules "A" through "D" referred to in Schedule "J" each dealt with a specialized part of the construction industry which historically had been covered by a separate collective agreement. The headings to the first three schedules were as follows:
Schedule "A"
This Schedule shall cover and apply to Employers engaged in the CRANE AND EQUIPMENT RENTAL BUSINESS within the Province of Ontario.
Schedule "B"
This Schedule shall cover and apply to Employers engaged in the STEEL ERECTION OR MECHANICAL INSTALLATIONS BUSINESS within the Province of Ontario.
Schedule "C"
This Schedule shall cover and apply to Employers engaged in the FOUNDATION, PILING AND CAISSON BORING BUSINESS within the Province of Ontario.
11Schedule "D" was the "excavating schedule" to the provincial agreement. The heading to Schedule "D", was different from the headings on Schedules "A" through "C" in that it referred not simply to employers engaged in the excavating business, but to employers who are members of the Toronto & District Excavators Association engaged in the excavating business. The evidence indicates that during the negotiations for the first provincial agreement, the headings to all of the schedules were drafted by Mr. Ford, Local 793's labour relations manager. Mr. Ford testified that the reference in Schedule "D" to members of the Toronto & District Excavators Association had been inserted at the insistence of Mr. White, the manager of the Association, who indicated he felt that non-members should not have access to Schedule "D", but instead should be required to pay the higher rates under Schedule "J". The heading to Schedule "D" read as follows:
Schedule "D"
This Schedule shall cover and apply to Employers that are member Companies of the Toronto & District Excavators Association engaged in the EXCAVATING BUSINESS within Labour Board Area #8.
12Although the heading to Schedule "D" was drafted by Mr. Ford after his discussion with Mr. White, it was approved by both the employee and employer bargaining agencies. Alnor called as witnesses Mr. J. Thomson, an officer of the Ontario General Contractors Association, as well as Mr. B. Binning, legal counsel to both the Association and the Employer Bargaining Agency. The Ontario General Contractors Association was one of the eight employer associations jointly designated as the Operating Engineers Employer Bargaining Agency. Both Mr. Thomson and Mr. Binning indicated that at the time the first provincial agreement was entered into, it was their understanding that a general contractor directly employing Local 793 members to do excavating work in the Toronto area was required to apply Schedule "J", but that if the work was contracted out to an excavation contractor, the contractor could pay the lower wage rates provided for in Schedule "D". Mr. Thomson and Mr. Binning both stated that they had understood Schedule "D" to be applicable to all excavating contractors working in Board Area #8, and not only to members of the Toronto & District Excavators Association. Mr. Binning testified that in his view the Employer Bargaining Agency would never have agreed to the wording of Schedule "D" had it been aware that the wording might be interpreted to limit access to the schedule only to members of the Toronto & District Excavators Association. In this regard, Mr. Binning stated that such an interpretation would effectively limit the number of excavating firms that general contractors could sublet work to. Mr. Binning also indicated that he felt that such an interpretation would give an unlawful preference to members of the Toronto & District Excavators Association.
13The first provincial agreement was replaced by the 1980-82 provincial agreement, which was the agreement under which the grievance now before us was filed. The 1980-82 agreement continued the format of the earlier agreement, and apparently during negotiations no consideration was given to the heading on the various apppendices. It appears that prior to these proceedings, the issue never arose as to whether an excavating contractor not belonging to the Toronto & District Excavators Association was required to apply Schedule "J" to excavation work in Board area #8. Alnor had previously done some excavating work in Board area #8, but had always contended that the work involved was within the roads sector. In that Alnor was only bound to the provincial agreement in the ICI sector, it was not obliged to apply either Schedule "D" or "J" on road work and in fact Alnor paid the lower wage rates called for in the road builders agreement. From the evidence we surmise that most excavators who are bound to the provincial agreement and who perform ICI work in the Toronto area are in fact members of the excavators association and accordingly pay the excavation rate on both road sector and ICI sector work. There are, however, a number of excavating contractors who are in contractual relations with Local 793 and who do excavation work in Board area #8 but who do not belong to the Excavators Association. These firms, which Local 793 refers to as "independents", have signed "pick-up" agreements with the local which require them to apply the master portion of view the Employer Bargaining Agency would never have agreed to the wording of Schedule "D" had it been aware that pay the wage rates provided for in Schedule "D" on both road and ICI excavation work notwithstanding the fact that they are not members of the Toronto & District Excavators Association.
14There is nothing in the evidence to suggest that membership in the Toronto & District Excavators Association is not open to all excavating contractors active in the Toronto area. When a contractor joins the Association during the term of a provincial agreement, the procedure is for the Association to so advise Local 793. The Local then either agrees, or notes its objection in writing to the contractor becoming bound to Schedule "D". Mr. Ford was not contradicted when he testified that the Local has only raised such an objection once, and that was with respect to a firm whose owner had a history of ignoring the terms of collective agreements entered into by companies under his control.
15It might be noted at this point that certain employers belong to both the Metropolitan Toronto Road Builders Association and the Toronto & District Excavators Association and accordingly appear to be bound to both Schedule "D" and the road builders agreement. The evidence indicates that when these firms are the prime contractor on a road building job, Local 793 does not object to them paying the lower wage rate under the road builders agreement, but when they are engaged on a road project as an excavating contractor, they are expected to pay the rates set out in Schedule "D" of the provincial agreement.
16In these proceedings, Local 793 takes the position that since Alnor was not a member of the Toronto & District Excavators Association it was not entitled to pay its employees the "mid-line" rate under Schedule "D", but rather should have paid the higher rates provided for in Schedule "J". It is the local's contention that it would be inequitable for Alnor to be allowed to pay the lower road rate on road excavation work and the mid-line rate on ICI work. The union further contends that if Alnor had wanted to take advantage of Schedule "D" it should have either joined the Excavators Association or signed a "pick-up" agreement. Alnor objects to it being required to take either step, since to do so would mean that it would be obliged to pay the Schedule "D" "mid-line" excavators rate in all sectors of the construction industry, including on road excavating work where it currently pays the lower road rate.
17Both Alnor and the Operating Engineers Employer Bargaining Agency contend that when Schedules "D" and "J" of the provincial agreement are read together, it is reasonable to conclude that Alnor was entitled to pay the wage rates provided for in Schedule "D". In this regard they note that Schedule "J" states that it is applicable to employers "engaged in all work other than the work covered by Schedules "A", "B", "C" & "D". It is their contention that in order to ascertain the relevant work exempted from Schedule "J", one must look only at the work covered by Schedule "D", which is excavating work, the type of work Alnor was performing at the airport. We are unable to agree with this reasoning. We are satisfied that the most reasonable interpretation to be given the Provincial Agreement is that work is exempted from Schedule ''J'' under Schedule ''D' ',if it is being performed by an employer member of the Toronto & District Excavators Association engaged in the excavating business in area #8. To reach any opposite conclusion would be to ignore completely part of the heading to Schedule "D". We do not believe that much weight can be given to the fact that Mr. Binning and the Ontario General Contractors Association understood that all excavators could take advantage of the wage rates provided for in Schedule "D" since this understanding was not shared by either Local 793 or the Toronto & District Excavators Association.
18As an alternative position, Alnor contends that it cannot be barred from paying the wage rates set out in Schedule "D" due to section 151(2) of the Act which provides as follows:
"A designated or accredited employer bargaining agency shall not act in a manner that is arbitrary, discriminatory or in bad faith in the representation of any of the employers in the provincial unit of employers for which it bargains, whether members of the designated or accredited employer bargaining agency or not.
19Alnor's contention is that it would have been discriminatory and hence unlawful for the designated employer bargaining agency to require that a firm such as Alnor pay higher wages to its employees simply because it is not a member of the Toronto & District Excavators Association, one of the component parts of the Employer Bargaining Agency. This contention was supported by the Employer Bargaining Agency. For its part, Local 793 contends that was not discriminatory for Alnor not to have access to Schedule "D" in that the wage rates set out in the schedule are meant to be available only to firms that are willing to apply them in all sectors. According to the Local, Alnor is seeking an unfair advantage by being able to pay the "mid-line" rate on ICI jobs and an even lower rate on road excavation work.
20There can be no doubt that section 151(2) of the Act prohibits an employer bargaining agency from discriminating against an employer simply because it is not a member of the employer bargaining agency or one of its constituent parts. The instant proceedings, of course, do not involve a complaint by Alnor that the Employer Bargaining Agency discriminated against it. Rather, they arise out of an attempt by the union to enforce the terms of the provincial agreement. Notwithstanding this fact, for the purposes of this decision we are prepared to assume that if the application of an agreement provision will have a discriminatory result on an employer, then the discriminatory result should not be given effect to. We would note, however, that in our view, the term "discrimination" implies more than simply unequal treatment. Rather, it implies unequal or different treatment in situations where no reasonable basis exists to justify it. In this regard, we would refer to the fifth edition of Black's Law Dictionary (West Publishing Co., St. Paul, Minn. 1979) which defines discrimination, in part, as:
"A failure to treat all persons equally where no reasonable distinction can be found between those favored and those not favored."
21In this case, it cannot be said that no distinction existed between Alnor and members of the Excavators Association. The members of the association paid the "mid-line" rate on both road excavating work and ICI excavating work. Alnor, however, paid the lower "road" rate on road work. In our view, there is nothing inherently improper in requiring that a company which refuses to pay the "mid-line" rate to its employees on road jobs be required to pay the "regular" ICI rate on ICI jobs, and not the mid-line rate. The complicating factor in this case is that the heading to Schedule "D~' does not purport to make the wage rates therein set out available to all firms willing to consistently pay the "mid-line" rates but only the employer members of the Toronto & District Excavators Association.
22There is no question but that due to the way the heading to Schedule "D" is framed the potential exists for a discriminatory result to occur. The potential would become more immediate if Local 793 were to actually adopt the position that a firm not belonging to the Excavators Association but willing to pay Schedule "D" rates on both ICI and road excavating work was required to pay Schedule "J" rates on ICI work due to its non-membership in the association. (As already indicated, to date the local has not taken this position, but has instead signed "pick-up" agreements with such non-member firms). If such a situation were to arise, then the requirement of association membership in Schedule "D" might be of no force or effect, since otherwise it would lead to a discriminatory result. However, as we have indicated, in the instant case the application of the wording on Schedule "D" does not produce a discriminatory result. In that Alnor was not willing to pay the association "mid-line" rate on all its work, it had no legitimate claim to be able to pay the rate on ICI work. Given our reasoning set out above, we are satisfied that since Alnor was neither a member of the Toronto & District Excavators Association, nor in a situation comparable to that of the members of the Association, the applicable schedule of the provincial agreement binding on Alnor on the airport project was Schedule "J".
23Having regard to the above, we direct that Alnor now make the appropriate payments under Appendix '1". The Board will remain seized of this matter in the event the parties are unable to agree on the amount involved.
24The decision of Board Member J. A. Ronson will be forthcoming at a later date.