Canadian Union of Restaurant and Related Employees v. Telkom Corporation, 1986 CanLII 1514

Ontario Labour Relations Board

[1986] OLRB Rep. June 900

0130-86-R Canadian Union of Restaurant and Related Employees, Hotel Employees and Restaurant Employees Union, Local 88 (AFL - CIO - CLC), Applicant, v. Telkom Corporation, c.o.b. Electronic Warehouse, Respondent, v. Group of Employees, Objectors

BEFORE: Patricia Hughes, Vice-Chairman, and Board Members F. W. Murray and D. A. Patter­son.

APPEARANCES: Tom Kees, James Whyte and Roberto Peticca for the applicant; W. J. Hayter, B.A. B. Simpson and M. Teodorescu for the respondent; Pam Brundritt and Wayne Blake for the objectors.

DECISION OF PATRICIA HUGHES, VICE-CHAIRMAN, AND BOARD MEMBER D. A. PATTERSON; June 19, 1986

1. This is an application for certification.

2. The Board finds that the applicant is a trade union within the meaning of section l(l)(p) of the Labour Relations Act.

3. The parties are agreed that the bargaining unit should be described as

All employees of the respondent in the City of Windsor save and except supervisors, persons above the rank of supervisor, office and sales staff, per­sons regularly employed for not more than twenty-four hours per week and students employed during the school vacation period.

4. The parties disagree about the status of six individuals who perform work for the res­pondent. The applicant claims that they are employees who should be part of the bargaining unit. The respondent argues that they are not its employees. Neither party raised the possibility that any other entity might be the employer of these individuals.

5. The respondent has been in business for only a few months. Of its sixty-one employees, forty-eight are in some way subsidized by funding programs run by one of the three levels of gov­ernment. Of the six disputed individuals, five are totally funded by a government program called the Futures Program, and the sixth is almost totally funded by a work activity program run by the City of Windsor. The other funded employees are partially funded by external sources and par­tially paid by the respondent. The respondent does not question the employee status of the par­tially subsidized employees, but argues that the six other persons are not its employees for the pur­pose of the Labour Relations Act because they are exclusively funded by the two different programs.

6. One of the six employees, George Thibert, is a recipient of municipal welfare assis­tance. As a condition of receiving welfare assistance, he must find work and to this end he has been hired by the respondent under a municipal work scheme (the "Windsor Program"). In addi­tion to his welfare payments, he receives $3.00 a day plus transportation costs. Under this city pro­gram, persons are hired for thirty days, a period which can be extended with the agreement of the municipality. Thibert has been under this program since February 24th, 1986 and is now in his third thirty-day period. Two other people who were on the Windsor Program are still employees of the respondent, but are now working under the Job Development Program, a one-year federal programme with no extensions. Thibert has been doing mainly odd jobs for the respondent, but there are no constraints imposed on the scope of duties which the respondent can assign to persons on the Windsor Program.

7. The other five disputed persons are under the Futures Program which is funded by the provincial government and run through St. Clair College ("the College") in Windsor. Persons between the ages of eighteen and twenty-four, who have graduated from grade 12 and who have been out of work for twenty weeks are eligible for the Futures Program. Under the Program, they take part in a three-day training workshop and then work for employers for a sixteen-week period. The respondent has engaged the services of eight Futures participants; three of them have "gradu­ated" from the program and of these three, the respondent has hired two as "regular" employees. The other five are scheduled to work until sometime in May or June of 1986. No decision has been reached about rehiring any of these persons.

8. Under the Futures Program, the respondent, the College and the individual enter into a contract which sets out the obligations of each party. In the contract, the respondent is referred to as "the employer" and "the placement", the individual as "the participant" and the Futures Pro­gram as the "delivery organization". Any of the parties may terminate the contract. The contract requires the employer to provide the participant with employment experience, provide "adequate day-to-day supervision", provide training with respect to tools or machinery, maintain an atten­dance record which is forwarded to Futures, and evaluate the participant. The employer is required to inform Futures about any accident or injury in order to comply with the Workers Com­pensation Act and to maintain third party liability insurance. If the employer changes the training given the participant, it must inform Futures. Three provisions of particular interest are numbers 7, 8 and 11:

(7) Supplementation of wages is not allowed for participants while on the program.

[emphasis in original]

(8) Since the program does not provide funds for overtime, the employer must ensure that the participant does not work more than the agreed upon weekly hours as stated in the employer application and training plan.

(11) The employer will ensure that no regular full-time or part-time employees are dis­placed in any way by the introduction of the participant.

9. The participant will not be paid for absences for any reason, must contact Futures if any problems arise and "inform the placement supervisor immediately if involved in an accident or injury during the placement". The participant must arrange his or her own OHIP. (All the respon­dent's employees must arrange their own OHIP.)

10. Futures will monitor the participant and is responsible for workers' compensation claims. Of particular interest is term 4:

(4) The delivery organization will provide the participant with an hourly minimum wage of $4.00 during the placement, plus 4% vacation allowance. Deductions will be made for the following: Canada Pension, Unemployment Insurance and Income Tax.

With respect to its other employees who are subsidized and whose status is not disputed, the res­pondent establishes the wages which are then subsidized by the external agencies.

11. The contract states that "Participants are employees of the delivery organization for the duration of this agreement and may be assigned to, or removed from a work placement at the dis­cretion of the Futures Manager".

12. Counsel for the respondent indicated that the practice might be somewhat different than the contract itself indicates. He stated that the respondent determines the working conditions and the work to be done, although if work not agreed upon is to be given, the respondent must inform the College, since work had to be approved in advance by the College. The respondent has given these individuals a variety of work, however, and does not appear to have been restricted by their status as "participants". It may be that the nature of the work they can do is limited by the type of training they are receiving, but within that limit, the respondent appears to be able to assign a range of duties similar to that it would assign to a regular employee in the same kind of job position. The respondent determines which of the persons available to it it wishes to hire. How­ever, counsel for the respondent argued that it was a "red herring" to look only at the actual employment relationship and to ignore what "went on before" with respect to the contract. He emphasized that the wages and hours of work are determined by Futures and are not negotiable and that to some extent the nature of the work which the participants can perform is also limited by the contract. He pointed out that the contract is for a specific period of time and that the only connection between the respondent and the participants is for that short period. He argued that the respondent is entitled to direct the participants, just as it would be entitled to direct anyone on its premises, and that such direction does not indicate an employment relationship. He submitted that the test must be a tangible, real connection; here there was only a tenuous connection because of the short period of the contract. The important point, he submitted, was that there is no connec­tion between the respondent and the participants with respect to funding.

13. Both persons appearing for the objectors are themselves participants under the Futures Program. The chief spokesperson for the objectors stated that the participants do the same job as anyone else and that she considers herself an employee of the respondent. She said that the Col­lege evaluates the job, but that the supervisor on the job can discipline participants, although she gave no examples of when that had occurred. She further stated that she had no contact with the College other than her paycheque; she said that if she had a problem with her paycheque, she would approach the Futures office. But her view was that the respondent "control[s] me".

14. The applicant's representative stressed that the employees' own perception was that the respondent was their employer. However, he referred only to the objectors' chief representative as the source of his position and made no mention of other employees. He argued that the respon­dent gives the participants instruction, evaluates them and can fire them and that these responsibil­ities or powers establish an employment relationship for the purposes of the Labour Relations Act.

15. It is our view that despite the contractual restrictions and the fact that the participants are paid by Futures, all the disputed individuals under the Futures program are employees of the respondent. We also consider George Thibert to be an employee of the respondent despite his receipt of municipal assistance in lieu of "wages" directly from the respondent. In all six cases, the respondent benefits from the work performed by the disputed individuals and controls entirely or in large part these persons in their day-to-day duties.

16. The Board has considered the question of who is an employee for the purpose of certifi­cation on several occasions. In particular, the Board has been required to determine whether per­sons who are in fact paid by entities other than the employer are employees of the employer for purposes of collective bargaining. In other cases, the Board has had to determine which of two potential employers is the employer for the purposes of collective bargaining.

17. Counsel for the respondent referred us only to York Condominium, [19771 OLRB Rep. Oct. 645 and Sutton Place Hotel, [1980] OLRB Rep. Oct. 1538. Both these cases involve determin­ing which of two potential employers is the actual employer. In both cases, the Board used seven criteria derived from the Board's earlier jurisprudence and first set out in York Condominium. Although this case does not involve more than one potential employer, the respondent's counsel urged us to apply these criteria. While the facts in this case do not unequivocably lead to the con­clusion that the respondent is the employer of the disputed individuals, we are of the view that they do permit us to conclude that the respondent satisfies at least five of the criteria. For the sake of comparison, we refer to Futures as the other potential employer. We apply the seven criteria as follows:

18. The party exercising direction and control over the employees perform­ing the work.

To the extent that Futures does exercise some control, it appears to be mainly in restricting the nature of the work, while the respondent exer­cises day-to-day control, assigns work and evaluates the participants.

2. The party bearing the burden of remuneration.

Futures is entirely responsible for wages.

3. The party imposing discipline.

Futures can remove an individual from the program, but the respondent can discipline on the job, including firing a participant.

4. The party hiring the employees.

Futures selects the participants for the program, but the respondent can hire as it wishes from the available pool.

5. The party with the authority to dismiss the employees.

Futures can remove an individual from the program, but the respondent, too, can fire participants.

6. The party which is perceived to be the employer by the employees.

The only evidence before us indicates that the respondent is perceived to be the employer.

7. The existence of an intention to create the relationship of employer and employees.

The contract entered into by all three parties refers to the respondent as the "employer". However, it also refers to the respondent as "the place­ment". Furthermore, it specifically states that the participants are employees of Futures.

We conclude that the respondent can be said to be the employer under criteria 1, 3, 4, 5 and 6. Only criteria 2 and 7 are clearly applicable to Futures, while criterion 6 is applicable only to the respondent. While criteria 1, 3, 4 and S apply to both the respondent and Futures, the evidence indicates that the respondent has more involvement with the participants on a day-to-day basis.

18. In addition to these factors, we also note two others. The work performed by the dis­puted individuals is performed on the respondent's property, not at the College or in the Future's office. Furthermore, the sole beneficiary of the labour produced by these individuals is the respon­dent.

19. In Sutton Place, supra, the panel's review of the Board's jurisprudence indicated that no single factor has consistently determined that a particular entity is the actual employer. The Board concluded at paragraph 43:

The weight to be accorded the various indicators 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 concluded [sic] 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.

In our view, this statement of the interrelationship among the factors requires us to assess the rela­tionship as a composite whole and not as comprised of discrete elements.

20. The respondent's counsel stressed that Futures sets wages and hours. The respondent is permitted to have no impact on either of these factors. However,the ambivalent status of the source of remuneration as a determinative factor is revealed in Templet Services [1974] OLRB Rep. Sept. 606, Ralston Purina [1979] OLRB Rep. June 552, Ontario Board of Internal Economy, Quorum Inc., [1984] OLRB Rep. Dec. 1760 and Waterloo County Roman Catholic Separate School Board, [1977] OLRB Rep. Dec, 856. A focus on the source of payment to the exclusion of other factors may obscure the true nature of the employment relationship. In more general terms, while a mechanical "check-off' of specified criteria aids predictability, it is also easier to avoid or evade than an assessment based on an appreciation of the essential nature of the employment rela­tionship and the place of the disputed individuals in the respondent's total enterprise. The impor­tance of the role played by the individuals in the respondent's enterprise was pointed out in Guelph Beef Centre Inc., [1977] OLRB Rep. Mar. 184. There the Board was required to determine whether. inmates of a provincial correctional institution who were involved in a rehabilitation pro­gram run at the respondent's premises on the grounds of the institution and funded by the provin­cial government were employees of the respondent. The inmates worked as trainees, were paid by the respondent (although the payments were held in trust by the Ministry of Correctional Services) and could work overtime. The Board concluded at paragraph 13 that

21. …most of the normal indicators of an employment relationship, hiring, control and direc­tion of the work force, payment of wages, promotion and discipline are present in the relation­ship between the inmates and the respondent although perhaps to a somewhat lesser degree than is normally the case in the industrial setting.

More generally, however, the Board found at paragraph 14 that

14.... from the point of view of the respondent, which is the alleged employer, the services pro­vided by the inmates are an integral and significant part of its meat-packing operation ... The services which the inmates provide are not only of substantial benefit to the respondent, they are services which would otherwise have to be obtained from another source.

In our view the relationship of the disputed individuals to the respondent's work force as a whole and to the respondent's work structure is a major consideration in determining whether the respon­dent is their employer. This is particularly true when the alleged employer is benefiting from subsi­dization of its work force.

21. The Board has had the opportunity to consider the status of subsidized "employees" in several cases. In our view, these cases are of particular relevance to the facts in the instant case. The nature of the issue was stated explicitly by the Board in Waterloo County Roman Catholic Sep­arate School Board, supra. That case concerned the status of students employed by the respondent who were paid partially by the School Board and partially by government assistance programs. The Board considered whether the make-work schemes had the effect of excluding the students from the provisions of the Labour Relations Act. Although that is not precisely the issue in the instant case, the concern expressed by the Board at paragraph 7 in relation to that issue does apply:

22. In a time when many Canadians derive their wages through work support programs such as the Young Canada Work Program, Experience 77, L.I.P., D.R.E.E. and numbers of other schemes for the support of employment through the direct channelling of government funds, or through indirect forms of government subsidy to employers both public and private, that is a question of no small importance for the present and future scope of collective bargaining.

The Board held that the School Board was the employer of the students: "it interviews them, hires them and puts them to work for a period of time at a fixed wage computed hourly, weekly or monthly. The work performed is of benefit to the School Board and to that end it assigns, directs and supervises the tasks performed". The Board held further that "the entitlement of the employ­ees in question to the protection of The Labour Relations Act is not altered by the source of the funds which their employer uses to pay them".

22. In Regional Municipality of Hamilton-Wentworth, [1982] OLRB Rep. Aug. 1179, the Board had to deal with whether persons on the municipal welfare rolls who were employed by the respondent were employees of the respondent. In that case, the program, which provided services to the elderly, was funded by the province and the municipality. Those persons chosen to partici­pate in the program received a regular hourly wage plus a bus pass and drug card (Mr. Thibert is apparently not paid on an hourly basis, but continues to receive welfare). The Board found them to be employees. It stated at paragraph 18:

23. We do not attach much significance to the fact that an arrangement may be described as a make work' scheme funded in whole or in part by the public purse ... In today's society there is nothing particularly novel about employment in a publicly funded "make work" program of lim­ited duration where the participants have no real prospects of advancement. One may question the value of collective bargaining for such persons but that does not mean that they are not employees.

24. Finally, the facts in this case bear a considerable similarity to the facts in Elizabeth Fry Society of Ottawa, [1985] OLRB rep. July 1026. There the Society hired persons for a limited time under a variety of government-funded programs, particularly the Ontario Youth Corps Program­me. These persons were divided into Group A and Group B. Group A people had special difficul­ties in finding a job for various reasons such as low education or disabilities, for example. Group B people were qualified but nevertheless had difficulty finding work. The Board was concerned with the Group A people. Although there was no evidence that the persons in the instant case had the kind of special difficulties of the Group A people in Elizabeth Fry, the terms of the contract gov­erning them are similar. Group A persons were fully funded by the government, as are the individ­uals in the instant case. They had to be between 15 and 24, have left school and been unemployed for at least twelve weeks. In the instant case, the participants must be between 18 and 24, have grade 12 education and been unemployed for twenty weeks. The Youth Corps program lasted twenty-six weeks; here it is sixteen weeks. In particular, we note that the Youth Corps contract prohibited supplementation of wages which were at the minimum wage level and were limited to forty hours work a week. There was no pay when the participant was absent. In the instant case, the participants are paid $4.00 an hour which cannot be supplemented, they can work only forty hours a week and are not paid for absences. As in the instant case, the workers in Elizabeth Fry could not replace or encroach upon the work of regular employees. Furthermore, in both cases "[t]he terms and conditions of employment for the ... participants bear no relation whatsoever to the terms of the respondent's regular employees. They are prescribed and circumscribed by the provisions of the programme".

25. There are differences between Elizabeth Fry and the instant case, however. In Elizabeth Fry a letter to the respondent from an official of the Ministry of Correctional Services stated that "Youth Corps participants are considered employees of your organization and should be covered under your Workers' Compensation schedule". In the instant case, the contract declares the partic­ipants to be employees of Futures who is responsible under workers' compensation. The Board in Elizabeth Fry considered the employee designation "interesting", but not determinative. In addi­tion, the Society paid the employees, making the usual deductions; the Society was then reim­bursed by the Youth Corps Programme. In the instant case, the participants are paid directly by Futures. But the effect in both cases is the same: the respondent (Society or Telkom) does not bear the burden of remuneration.

26. We adopt the conclusion of the Board in the Elizabeth Fry Society case:

If one applies the usual criteria to the relationship between the respondent and the participants in the programme, there is little doubt that it points to an employer-employee relationship. The participants are not volunteers, students, or independent contractors. They work for wages. They are referred to the respondent by others, but they are ... finally selected by the respon­dent, and paid at a fixed rate computed hourly from which the usual "employee" contributions (UIC, CPP, income tax, etc.) are deducted ... [T]heir tasks are not generically different from those performed by the respondent's regular employees ... [T]hey are providing services to the respondent, subject to the respondent's direction and supervision.

26. We therefore conclude that the five Futures participants and George Thibert are employees for the purposes of the Labour Relations Act and are to be included in the employer's list of employees for purposes of the application for certification. In our view, if the disputed indi­viduals were not being paid by a source other than the respondent, their status as employees of the respondent would not be in doubt.

27. It should be noted that the Board in the Elizabeth Fry Society case held that the Youth Corps workers should be excluded from the bargaining units which the applicant in that case sought to represent. In the instant case, neither the applicant nor the respondent sought to exclude the disputed workers from the bargaining unit, should we find them to be employees. Indeed, the parties agreed on a bargaining unit description which would encompass the disputed individuals should we find them to be employees. Accordingly, the disputed individuals are included in the bargaining unit which the applicant seeks to represent, the description of which is set out in para­graph 3, supra. We might add that in our view, it is appropriate to include these individuals in the bargaining unit since they are an integral aspect of the respondent's work force. It is not for the Board to determine the extent to which these particular employees will be able to benefit from col­lective bargaining or the extent to which the union can attempt to improve their terms of employ­ment through collective bargaining: Guelph Beef Centre Inc., supra. However, we note that collec­tive bargaining occurs with respect to both non-financial and financial aspects of the work environment.

28. The applicant challenges the inclusion of two persons on the employer's list under sec­tion 1(3)(b) of the Labour Relations Act on the basis that they are performing managerial func­tions. Accordingly, we order that a Labour Relations officer be appointed to inquire into and to report back to the Board on the duties and responsibilities of Robert Burditt and Dianne McLean.

29. The applicant filed 43 combination application for membership and receipt cards, 42 of which coincide with the names of employees included in the bargaining unit for purposes of the count. The objectors filed a petition expressing opposition to representation by the applicant bear­ing the names of 32 persons, 30 of whom also signed membership cards. It appears from the appli­cant's membership position and the extent of the overlap between employees who signed both union membership evidence and the statement of desire that it will be necessary for the Board to inquire into the voluntariness of the petition. The three revocations filed with the Board, two of which coincide with the list of employees, do not change that situation. In addition, the applicant has alleged violations of sections 64 and 70 of the Labour Relations Act which are relevant to the voluntariness of the petition.

30. This matter is accordingly referred back to the Registrar for rescheduling in order to permit the parties to address the voluntariness of the petition, including the allegations by the applicant under sections 64 and 70 of the Labour Relations Act.

31. This panel is not seized of this matter.

DECISION OF BOARD MEMBER F. W. MURRAY;

1. I dissent.

2. I would have found that the five persons that are under the Futures Program, and the sixth person who receives welfare assistance from the City of Windsor plus $3.00 per day and trans­portation cost are not employees within the meaning of the Act. If it were to be found that these persons are in fact employees, it is my opinion that they are not employees of the respondent.

3. No evidence was adduced as to what would happen to them if the respondent termi­nated them. For all we know, in such an event, they might well be immediately dispatched to another company.

4. No evidence was also adduced so as to cause me to believe as a result of their work at the respondent's premises that the respondent necessarily benefited from such endeavours.

5. Accordingly, I would have excluded these persons from the bargaining unit.