United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local Union 46 v. Robert B. Somerville Company Limited, 1986 CanLII 1530

Ontario Labour Relations Board

[1986] OLRB Rep. December 1773

1309-86-M United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, Local Union 46, Applicant, v. Robert B. Somerville Company Limited, Respondent

BEFORE: G. T. Surdykowski, Vice-Chairman, and Board Members R. J. Gallivan and W. F. Rutherford.

APPEARANCES: Paul Timmins and Chris Thurrott for the applicant; Carl W. Peterson, Jim Abraham, Tom Dunleavy, and Patrick Davies for the respondent.

DECISION OF THE BOARD; December 18, 1986

Reasons for Decision

1. This is a referral of a grievance to the Board pursuant to the provisions of section 124 of the Labour Relations Act.

2. The applicant trade union alleges that the respondent has violated the job notification and pre-job conference requirements, the hiring procedures, and the wages and benefits provisions of the United Association Mainline Pipeline Agreement for Canada between the Pipeline Contrac­tors Association of Canada and United Association of Journeymen and Apprentices of the Plumb­ing and Pipefitting Industry of the United States and Canada (hereinafter the "Mainline Agreement") with respect to pipeline construction by the respondent along Highways 35/115 in May, June and July 1986. The respondent's position is that the collective agreement applicable to the project in question was the United Association Distribution Pipeline Agreement for Canada between the Pipeline Contractors Association of Canada and the United Association of Journey­men and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (hereinafter the "Distribution Agreement") and that that collective agreement was complied with in every way. The applicant and the respondent are bound by the terms and conditions of both of the aforesaid collective agreements. In argument, the applicant union abandoned its claims with respect to all but alleged breaches of the wages and benefits provisions. It was common ground that the work in question proceeded in accordance with the distribution agreement. Consequently, the sole issue before the Board is which collective agreement applied to the project.

3. Of necessity, the Board must interpret and apply the provisions of the two collective agreements. Article 1 of the Mainline Agreement contains the following provisions:

A MAINLINE PIPELINES shall include:

1. Cross-country pipelines including portions of such pipelines within private property boundaries which are an integral part of the pipeline system.

2. Pipelines to or from storage facilities.

3. Pipelines constructed as underground cable conduits between originating plant termi­nals and town border stations.

4. Pipelines transporting water slurries for irrigational, waste disposal, industrial, com­mercial, institutional or residential use, other than process water supply or discharge lines and water or sewage laterals, the construction of which employs the same or sim­ilar methods, equipment, or organization as used in performing the work described above.

C. EXCLUSIONS from the coverage of this Agreement shall be:

1. Distribution Pipelines as defined in and covered by the United Association Distribu­tion Pipeline Agreement for Canada.

F. DEFINITIONS of terms contained in and for purposes of this Agreement shall include:

1. "First metering station or connection" means that point which divides mainline trans­mission lines or higher pressure lateral and branch lines from lower pressure distribu­tion systems. If a metering station or connection is located on a mainline transmission line, then the mainline pipeline construction includes construction of all pipelines up to the point at which lower pressure distribution systems take off from higher pressure lateral and branch lines. This definition shall be interpreted as being subject to the definition of distribution work as contained herein;

2. "Town border station" means that point at which deliveries to the distribution sys­tems begin and are transformed, metered, or measured;

The Distribution Agreement provides, in Article 1, as follows:

A DISTRIBUTION PIPELINES shall include:

I. All pipelines for distribution of gas, oil, and/or products and water which are down­stream from the first metering station or connection or the town border station and up to the industrial, commercial, or institutional meter.

2. All service lines including portions of such pipelines within private property bounda­ries up to and including the domestic meter, and the first joint or connection through the wall.

3. Distribution piping could be manufactured from iron, steel, aluminum, copper, brass, plastic or any other materials which might be substituted for the aforementioned.

4. Oil and gas gathering lines which connect directly from the well to the mainline or to or from products extraction or processing plants.

5. Pipelines constructed as underground cable conduits from town border stations to industrial, commercial, institutional, and residential meters.

6. Pipelines or pressurized liquids or slurries within the limits of cities or towns, other than service lines or laterals, the construction of which employs the same or similar methods, equipment or organization as used in performing the work described above.

7. All pipeline 6" diameter and under.

B. EXCLUSIONS from the coverage of this Agreement shall be:

1. Mainline pipelines as defined in and covered by the United Association Mainline Pipeline Agreement for Canada.

D. DEFINITIONS of terms contained in and for the purposes of this Agreement shall include:

1. "First metering station or connection" means that point which divides mainline trans­mission lines or higher pressure lateral and branch lines from lower pressure distribu­tion systems. If a metering station or connection is located on a mainline transmission line, then the mainline pipeline construction includes construction of all pipelines up to the point at which lower pressure distribution systems take off from higher pressure lateral and branch lines. This definition shall be interpreted as being subject to the definition of distribution work as contained herein.

2. "Town border station" means that point at which deliveries to the distribution systems begin and are transformed, metered, or measured.

3. The essence of the applicant trade union's position is that any pipeline construction per­formed "downstream" from a station at which there is a relatively large reduction in pressure like that at "farm taps" and at the regulating station outside of each of the Towns of Lindsay and Peter-borough is distribution work to be performed under the distribution agreement and that all other pipeline construction is to be performed under the mainline agreement. Counsel for the union agreed that as a practical matter this interpretation would generally require that pipeline construc­tion in an urban area be done as distribution work while pipeline construction in a rural area would generally be mainline work. In that regard also, the applicant submitted that the relevant provi­sions of the collective agreements are ambiguous and sought to adduce evidence with respect to the language in past collective agreements and the past practice relating thereto.

4. The respondent's position is that there is no ambiguity, patent or latent, in the provisions of the collective agreements which counsel submits specify that any pipeline construction downstream from the first station that either reduces the pressure under which the natural gas is transmitted, or "transforms", or measures the gas passing through it is distribution pipeline work. In the alternative, counsel submits that the relevant past practice supports the respondent's inter­pretation.

5. In proceedings such as this, the Board sits as an arbitrator. It is an accepted rule of contract interpretation where the words of an agreement are clear and unambiguous, the intent or pur­pose thereof must be gleaned from the words used and extrinsic evidence with respect thereto is not admissible. However, an arbitrator is entitled to refer to extrinsic evidence to assist in ascertaining the true intentions of the parties where the agreement is patently ambiguous, or to deter­mine whether there exists any latent ambiguity and, if one is found, the true intentions of the par­ties (see Noranda Metal Industries Ltd., Fergus Division and International Brotherhood of Electrical Workers, Local 2345 et al. (1984) 1983 CanLII 1690 (ON CA), 44 O.R. (2d) 529 (C.A.); Re International Union, United Automobile, Aerospace and Agricultural lmplement Workers, Local 1967 and McDonnell Douglas Canada Ltd., (1984) 1984 CanLII 2055 (ON HCJ), 47 O.R. (2d) 78 (Div. Ct.); The Brant County Board of Education, [1984] OLRB Rep. Oct. 1349). Consequently, the Board admitted evidence of prior collective agreements and past practice from both parties.

6. The actual work that gave rise to this dispute was the construction of 6600 meters of 12' diameter stainless steel natural gas pipeline running along Highways 35/115 from just north of Orono to approximately where Highways 35 and 115 separate. The project, on which 6 of the applicant's members were employed, lasted approximately 7 weeks, from late May, 1986 to mid July, 1986. This section of pipeline is part of the Consumers Gas system. The natural gas transmit­ted through this piece of pipeline comes from a major Trans Canada Pipeline that brings natural gas from Alberta to Ontario and which runs parallel to and just north of Highway 401 from Maple to Montreal. There are also Trans Canada pipelines running from North Bay to Morrisburg (also known as the North Bay Short Cut) and from Morrisburg to Ottawa. It was common ground that these Trans Canada pipelines are mainline pipelines within the meaning of the collective agree­ments before us. The major Trans Canada pipeline along Highway 401, is really 2 pipelines, one being 30' in diameter, the other 36' in diameter. Natural gas is pumped through them at an average pressure of 800 to 1000 pounds per square inch (hereinafter "p.s.i."),depending on the demands placed upon the system. Near the intersection of Highways 35/115 and 401, a short piece of pipe­line "branches off", north toward Orono. It leads into a Trans Canada metering station where the gas is 'sold' to Consumers Gas. The gas then flows into an adjacent Consumers Gas station (the "Bowmanville Station") where the gas is measured again (as a secondary check), odorized, heat­ed, and regulated to a lower pressure of between 500 and 600 p.s.i. (depending on what is being required of the system). To odorize the gas is to transform it. This is the only station in this partic­ular branch of the Consumers Gas system where the gas is odorized (i.e. transformed) and, but for the individual customer meters, it is the only point at which the gas is metered or measured. The gas then flows north toward to the Towns of Orono, Kirby, Lindsay, and Peterborough. Along the way to and between those urban areas other customers are served by means of "farm taps", which are individual regulating stations outside of significant urban areas that reduce the pressure at which the gas is transmitted in order to serve individual customers. At each town, there is a regu­lating station where the gas pressure is reduced to below 60 p.s.i. for distribution through the town distribution grid (which grid both parties agree is distribution pipeline within the meaning of the two collective agreements). There are further pressure reducing regulators commonly found in subdivisions and even on individual streets. Finally pressure is reduced still further at each individ­ual customer's building and at each appliance within the customer's premises until it is at a level of approximately 1/4 p.s.i. when it is consumed in a typical family residence. The dispute between the parties is whether the pipeline between the Bowmanville station and the regulating station at each town is mainline pipeline or distribution pipeline.

7. In our view, the respondent's position is the correct one. We find that the words of the collective agreements, though not a model of clarity, are unambiguous. The scheme of the collective agreements contemplates an emphasis on distribution pipeline work. Further, the definition of mainline pipeline is restrictive. It defines mainline pipeline as being only that pipeline which trans­mits gas and oil (and their by-products) either cross-country or to or from storage facilities, or which acts as a particular kind of cable conduit, or which transmits water slurries for certain pur­poses where the same or similar construction processes or equipment are used. All other pipeline is distribution pipeline. The project in question did not involve construction of a cross-country pipe­line. It did not involve storage facilities. It did not involve any relevant cable conduits. Its purpose is to carry natural gas, not water slurries. It is therefore not mainline pipeline work.

8. Looked at another way, the definition of distribution pipeline, though quite precise, is broader in scope than that of mainline pipeline. In our view, the work in issue in this proceeding falls squarely within the definition of distribution pipeline. This work was downstream from the Bowmanville Station which, as we have already noted, is the first station or point at which the pressure under which the natural gas in that particular branch of the Consumers Gas system is transmitted is reduced. In our view, the words "higher pressure lateral and branch lines" in article I D I. of the Distribution Agreement (and article 1 F I. of the Mainline Agreement) refer to pipelines like those running between North Bay and Morrisburg, and between Morrisburg and Ottawa and not to pipeline like that along Highway 35/115. Consequently, the Bowmanville Station is “point which divides mainline transmission lines…from lower pressure distribution stations" and is therefore a "first metering station or connection" as defined in the collective agreements. The Bowmanville Station is also the first and only station or point at which the natural gas is trans­formed and metered or measured. It is therefore also a "town border station" as defined in the col­lective agreements. The project in question involved the construction of pipeline which is down­stream from both the first metering station or connection, and the town border station, which in this case are the same point. Though it would be sufficient for the work to have been downstream of either for it to be properly characterized as being distribution pipeline work, it satisfies both criteria. It is therefore clearly distribution pipeline work within the meaning of Article 1 A-i of the Distribution Agreement.

9. Even if the union's suggested interpretation was correct, and we find that it is not, the result would be the same because the reduction in pressure at the Bowmanville Station is such that it is a point at which there is a large relative reduction in transmission pressure. To apply the union's interpretation in the manner that it suggests would itself cause an uncertain and ambiguous result, unless it could be said that distribution pipeline is limited to farm taps and pipeline down­stream from a pressure regulating station outside an urban area. In our view this is not a meaning that can reasonably be given to the words of the collective agreements.

10. Even if the provisions of the collective agreements are ambiguous, and we have already decided that they are not, the extrinsic evidence clearly establishes that the project in question involved the construction of distribution pipeline. The union led evidence with respect to four pre­vious projects, all of which were completed prior to 1977. The respondent led evidence with respect to 19 distribution projects, all of which were begun and completed subsequent to 1977. In addition, we had before us collective agreements spanning the period from May 31, 1968 to the present. These collective agreements contain what we consider to be significant changes in the wording of the relevant provisions. The collective agreement for the period May 31, 1968 to April 30, 1971 covered both mainline and distribution pipeline construction. The relevant provisions are as follows:

A. MAINLINE PIPE LINES shall include:

1. Cross-country pipe lines including portions of such pipe lines within private property bounda­ries up to the first metering station or connection;

2. Oil and gas gathering lines which connect directly from the well to the main line or to or from gasoline extraction or gas dehydration plants;

3. Pipe lines to or from storage facilities;

4. Steel pipe lines transporting water for the purpose of water flood and repressuring systems, irrigation and domestic or industrial use, the construction of which requires the same or similar methods, equipment or organization as used in doing the work described above.

B. DISTRIBUTION SYSTEMS, for which special conditions are contained in Article XV shall include:

1. All pipe lines for distribution of gas, oil and/or products and water which are downstream from the first metering station or connection or the Town border station and up to the industrial or commercial meter;

2. All service lines including portions of such pipe lines within private property boundaries up to and including the domestic meter;

3. Distribution piping could be manufactured from iron, steel, aluminum, copper, brass, plastic or any other material which might be substituted for the aforementioned.

E. DEFINITIONS of terms contained in and for purposes of this Agreement shall include:

I. First metering station or connection means that point which divides mainline transmission lines or higher pressure lateral and branch lines from low pressure distribution systems. If a metering station or connection is located on a mainline transmission line, then the work covered by the Agreement includes the construction of all pipe lines up to the point at which lower pres­sure distribution systems take off from higher pressure lateral and branch lines. IT IS UNDER­STOOD that this definition shall be interpreted as being subject to the definition of distribution work as contained herein;

2. Town border station means that point at which deliveries to the distribution system begin and are metered or measured;

In the next collective agreement, for the period May 1, 1971 to April 30, 1974, these provisions were unchanged except that A-2 was deleted. The provisions in the collective agreement for the period May 1, 1974 to April 30, 1977 are identical to those in the 1968-71 agreement. The collective agreement for May 1, 1977 to April 30, 1979 put the provision that was A-2 into B-4 but was otherwise identical to the 68-71 agreement. The collective agreement for the period May 1, 1979 to April 30, 1981 contains the following provisions:

A.MAINLINE PIPELINES shall include:

1. Cross-country pipelines including portions of such pipelines within private property boundaries which are an integral part of the pipeline system;

2. Pipelines to or from storage facilities;

3. Pipelines constructed as underground cable conduits between originating plant terminals and Town border stations;

4. Pipelines transporting water or slurries for irrigational waste disposal, industrial, com­mercial, institutional or residential use, other than process water supply or discharge lines and water or sewage laterals, the construction of which employs the same or simi­lar methods, equipment, or organization as used in performing the work described above.

B. DISTRIBUTION AND GATHERING SYSTEMS shall include:

1. All pipelines for distribution of gas, oil, and/or products and water which are down­stream from the first metering station or connection or the Town border station and up to the industrial, commercial, or institutional meter;

2. All service lines including portions of such pipelines within private property bounda­ries up to and including the domestic meter;

3. Distribution piping could be manufactured from iron, steel, aluminum, copper, brass, plastic or any other materials which might be substituted for the aforementioned;

4. Oil and gas gathering lines which connect directly from the well to the mainline or to or from products extraction or processing plants;

5. Pipelines constructed as underground cable conduits from Town border stations to industrial, commercial, institutional, and residential meters;

6. Pipelines for pressurized liquids or slurries within the limits of cities or towns, other than service lines or laterals, the construction of which employs the same or similar methods, equipment or organization as used in performing the work described above.

F. DEFINITIONS of terms contained in and for purposes of this Agreement shall include:

I. "First metering station or connection" means that point which divides mainline trans­mission lines or higher pressure lateral and branch lines from low pressure distribu­tion systems. If a metering station or connection is located on a mainline transmission line, then the mainline pipeline construction includes construction of all pipelines up to the point at which lower pressure distribution systems take off from higher pressure lateral and branch lines. This definition shall be interpreted as being subject to the definition of distribution work as contained herein;

2. "Town border station" means that point at which deliveries to the distribution sys­tems begin and are transformed, metered, or measured.

[emphasis added to indicate changes from previous collective agreement]

The collective agreement for the period May 1, 1981 to April 30, 1983 is labelled "Mainline" but contains provisions with respect to both mainline and distribution pipelines. Its provisions are iden­tical to those in the 79-81 agreement except that B-7 was added as follows:

7. All pipelines 6" diameter and under.

The 1983-85 and present collective agreements contain provisions identical to the 1981-83 agreement but in separate collective agreements as set out at paragraph 3 above. In addition, the 1968-71 collective agreement has appended to it a schematic diagram showing a gas pipeline transmis­sion system and on which the union wished to rely. It is found after the signature page and is not specifically marked as an appendix or addendum. Nor is it referred to or referenced in the body of the agreement itself. We have no direct evidence of what use this diagram was put to during that period and no such diagram was appended or affixed to any collective agreement after 1971. Arti­cle 2-D of the 1983-85 and present agreements does refer to the work covered by the terms of the agreements being "illustrated in the accompanying charts", but there are no such charts. It was the union's evidence that the chart appended to the 1968-71 collective agreement has been used for internal union purposes since the mid 1970's but not in any relations with the respondent or other contractors. In the result we are of the view that even if the diagram was once a part of a collective agreement between the parties, a proposition which is not entirely free from doubt, it is not a part of the present collective agreements. Nor, because of the paucity of evidence in relation to its preparation, use, and interpretation, is it of any real value to us as an interpretive aid.

12. The evidence of past practice does not disclose any ambiguity. It also establishes to our satisfaction that the relevant provisions of the collective agreement have been consistently applied in a manner which confirms our interpretation and application of that language as being the correct one. The "past practice" evidence of the applicant union was of little value. All of the pipeline pro­jects with respect to which the union led evidence preceded what are in our view some significant changes in the language of the relevant provisions subsequent to May 1,1979. That and the lack of clarity and detail in the evidence itself fails to establish any ambiguity. It also fails to establish either that the work in question was in fact mainline work or that it was work substantially the same as that in issue in this proceeding. The union has not led any evidence that persuades us that there is any meaning inconsistent with our interpretation that could reasonably be given to the applicable provisions. Nor does its evidence establish any conduct or acquiescence unambiguously based upon what it suggests is the correct meaning and application of those provisions. On the other hand, the evidence of the respondent company establishes that the work involved in those previous projects was both distribution pipeline work and substantially the same as the work in issue before us. Indeed, taken as a whole, the evidence of past practice satisfies us that it is the first reduction in pressure, if that comes before or in conjunction with a transformation or metering of the product, that is the dividing point between mainline and distribution pipeline.

13. In the result, the pipeline construction work in question was properly done in accordance with the provisions of the Distribution Agreement. This grievance is dismissed.