Quality Control Council of Canada v. Babcock and Wilcox Canada Ltd., 1988 CanLII 3736

Quality Control Council of Canada v. Babcock and Wilcox Canada Ltd.

[1988] OLRB Rep. December 1198

0315-86-M Quality Control Council of Canada, Applicant v. Babcock and Wilcox Canada Ltd., Respondent

BEFORE: R. O. MacDowell, Alternate Chair, and Board Members R. M. Sloan and H. Peacock.

APPEARANCES: A. J. Ahee, J. L. McMahon and M. Bakker for the applicant; M. Patrick Moran, D. M. Sanderson, J. Griffith and R. Takacs for the respondent.

DECISION OF THE BOARD; December 21, 1988

I

1. This is a referral of a grievance to arbitration pursuant to section 124 of the Labour Relations Act. Section 124 reads, in part, as follows:

124.-(1) Notwithstanding the grievance and arbitration provisions in a collective agreement or deemed to be included in a collective agreement under section 44, a party to a collective agree­ment between an employer or employers' organization and a trade union or council of trade unions may refer a grievance concerning the interpretation, application, administration or alleged violation of the agreement, including any question as to whether a matter is arbitrable, to the Board for final and binding determination.

Section 124 should be read in conjunction with section 1(1)(f) and section 117:

1.-(1) In this Act,

(f) "construction industry" means the businesses that are engaged in construct­ing, altering, decorating, repairing or demolishing buildings, structures, roads, sewers, water or gas mains, pipe lines, tunnels, bridges, canals or other works at the site thereof;

117. In this section and in sections 118 to 136,

(a) "council of trade unions" means a council that is formed for the purpose of representing or that according to established bargaining practice represents trade unions as defined in clause (f);

(b) "employee" includes an employee engaged in whole or in part in off-site work but who is commonly associated in his work or bargaining with on-site employees;

(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;

(d) "employers' organization" means an organization that is formed for the purpose of representing or represents employers as defined in clause (c);

(e) "sector" means a division of the construction industry as determined by work characteristics and includes the industrial, commercial and institu­tional sector, the residential sector, the sewers and watermains sector, the roads sector, the heavy engineering sector, the pipeline sector and the elec­trical power systems sector;

(f) "trade union" means a trade union that according to established trade union practice pertains to the construction industry.

2. For ease of reference, the applicant, the Quality Control Council of Canada, may be referred to either as "the union" or "the Council". The respondent may be referred to as "Bab­cock & Wilcox". The Non-Destructive Testing Management Association may be referred to either as the "NDT" or "the Association". The agreement between the Council and the NDT will be referred to as the "NDT agreement".

3. In this grievance the Council contends that the respondent has contravened the terms of a collective agreement by which it is bound. In particular, the Council asserts that certain work performed by employees of the respondent at the Pickering Nuclear Generating Station was cov­ered by the NDT agreement, and that, therefore, the employees doing that work should have been union members working in accordance with the terms of that agreement. The Council seeks a dec­laration to that effect. The respondent concedes that it is bound by the NDT agreement in respect of its "construction" activities, but maintains that it is not bound to apply that agreement to "no construction work performed in the field". In the alternative, the respondent maintains that the evidence does not establish a breach of the collective agreement, that the union is estopped from asserting its current claim, and that the Board has no jurisdiction to entertain it.

II

4. This matter originally came before a differently constituted panel of the Board. The result was an interim decision dated August 6, 1987 resolving certain issues which the parties char­acterized as "preliminary". The respondent argued that section 124 is only available to employees engaged in construction work (which by statute includes "repair"), and to the extent that the activi­ties underlying a particular grievance are not "construction", any alleged contravention of a collec­tive agreement must be pursued through the grievance arbitration procedure in that agreement. The respondent asserted that the expedited process prescribed by section 124 is not available, because section 124 applies only to the construction industry. If the employees are engaged in a mixture of construction and non-construction activities, that portion of their duties labelled "con­struction" can be pursued under section 124, but that portion classified as non-construction must follow the "private route" mandated by section 44.

5. The earlier panel of the Board held that, at the very least, it had jurisdiction to deal with those activities which, arguably, fell within the ambit of the construction industry; however, the Board also suggested, without finding, that if the parties to a section 124 application met a lit­eral reading of the statutory definition of "union" and "employer" found in section 117, the Board would have jurisdiction to consider the grievance even though some of the work in question might not be characterized as construction work. The Board suggested that so long as the applicant is a "trade union" within the meaning of section 117(f), and the employer operates a business in the construction industry under section 117(c) (albeit not necessarily exclusively so) either party may resort to the expedited arbitration procedure contemplated by section 124.

6. In our view, the interpretation of section 124 suggested by the earlier panel is the cor­rect one. It also makes the most "industrial relations sense~~. It is often very difficult to distinguish ''repair'' which is specifically mentioned in the definition of construction industry (see section 1(1)(f)) and "maintenance" which is not - although the practice in the construction industry is to accord them separate legal treatment even when the employees or required skills may be the same. Indeed, one set of functions will often be done in close cooperation or conjunction with the other, by the same tradesman, employing the same craft skills, tools and equipment. It would make for much mischief and procedural uncertainty if a simple problem such as the non-payment of over­time had to be settled in two different forums at once, with the potential for conflicting interpreta­tions of the collective agreement or contradictory notions about what is construction work and what is not. Furthermore, since the Ontario Labour Relations Board is responsible for interpreting and applying the special statutory framework applicable to the construction industry and, at the same time, is the designated arbitrator for collective agreements in that industry, it is both sensible and hardly surprising that section 124 is drafted broadly enough to encompass any grievance arising out of any collective agreement between a construction industry trade union and a construction industry employer. And it is the Board which has the exclusive jurisdiction to interpret and apply the complex statutory provisions which generally underlie construction industry collective agree­ments.

7. Does this literal application of section 124 to employers or trade unions which meet the literal terms of section 117 "open the floodgates" to claims that could not reasonably have been within the contemplation of the Legislature? Does it lead to anomalous results? We do not think so. Since unions which meet the test of section 117(f) are almost invariably craft unions confined to their historic craft units, it is most unlikely that they will have collective agreements entirely unre­lated to their construction industry base. For example, it is unlikely that the Boilermakers' Union would find itself representing the clerical employees of a construction industry employer. But even if it did, what would be the result: access to an arbitration process which is far faster and cheaper than that contemplated by most "industrial" collective agreements, with the added advantage of a Board-appointed Labour Relations Officer to assist the parties to resolve their differences without recourse to litigation. Thus, the interpretation suggested by the earlier panel of the Board is not only attractive from the perspective of labour relations policy, but also provides aggrieved parties (employers or trade unions) with an expeditious and relatively inexpensive method for resolving their disputes. When weighed against the respondent's suggestion of bifurcated proceedings and potentially competing forums, we prefer an interpretation which makes section 124 available to any union or employer that meets the section 117 requirements - whether or not the work in ques­tion, or some of it, is properly regarded as "construction work". (See, generally: Caroll Electric (1982) Limited, [1983] OLRB Rep. Aug. 1282.)

8. We should make it clear, however, that in concluding that section 124 is broadly avail­able to construction industry employers and unions, we do not decide whether any particular work falls within the ambit of those collective agreements, nor whether such agreements are confined solely to construction work. That is a matter of interpretation of the agreement itself, and lies at the heart of the matter currently before us.

III

9. Before turning to the events which precipitated this grievance, it may be useful to

sketch in some of the factual and contractual background - beginning with a description of "non­destructive testing". Such description can be found in a decision of the Board dated January 26,

1983:

8. The purpose of non-destructive testing is to find cracks in metals. These cracks result from the stresses created in metal during welding operations or from simple metal fatigue after extended use. As the name implies, non-destructive testing involves testing without destroying the material being tested, and therefore, it uses a variety of techniques such as radiography (similar to X-ray techniques), ultrasonic analysis, iron filing patterns and penetrating dyes. These techniques disclose cracks or faults in the material. The tools used include portable X-ray cameras, portable ultrasonic devices, portable materials for magnetic particle or liquid pene­trant analysis, mobile dark rooms for developing X-rays and specialized vehicles to transport these tools, including the transporting of certain radio-active materials. Non-destructive testing work performed on construction projects includes work on pipelines, gas plants, petro-chemical installations, heavy water plants, oil sands plants, reconstruction of pulp mills, refineries and mining installations, bridge construction, dam construction, watermain and subway construc­tion. Obviously, the work is very specialized and the testing contractor is only on a construction job site for very specific times during which the testing of the materials can be performed.

(See NDT Management Association and Quality Control Council of Canada, [1983] OLRB Rep. Jan. 140.) That decision also traced the history of the applicant, and the origins of the collective agreement upon which it now relies:

9. The jurisdiction over non-destructive testing work has been claimed by both the United Asso­ciation and the Boilermakers' Union. The claim by the United Association relates to piping sys­tems whereas the claim of the Boilermakers relates to the testing on pressure vessels. Given the nature of the specialized business of non-destructive testing employers, it is easy to see that on a job site which involves both piping systems and pressure vessels, these two historical claims by the two trade unions could lead to extensive and complicated jurisdictional claims being made by each of the two unions claiming jurisdiction in this area. Thus, by forming a council, the respondent, Quality Control Council of Canada, the two unions claiming jurisdiction have elimi­nated the possibility of jurisdictional disputes arising over the performance of particular work by the two constituent trade unions. Indeed, apparently half of the employees of an employer join the United Association and the other half join the Boilermakers. However, they all work with­out restriction on either piping or pressure vessels. There are two other important characteristics of the non-destructive testing industry and the collective agreement upon which this application is made. First, it is the undisputed position of the applicant in this matter that new employees are not hired through the union hiring halls of either of the constituent trade unions in the coun­cil of unions. Rather, employees tend to be trained specifically in the skills of non-destructive testing. In accordance with this they are required to pass tests set up by the Canadian Standards Bureau in radiography and ultrasonics. These skills are not typically skills exercised by the trades which claim the work, but are quite clearly specialty skills learned as employees of a non­destructive testing company. The other important characteristic is that the collective agreement itself is not an agreement which refers to or picks up terms of other collective agreements. Rather, it is in fact a specialty agreement which is negotiated by the parties to that agreement and sets specific wage rates for the classifications of non-destructive testing technicians of vari­ous qualification....

10. In view of the foregoing history and explanation of the background up to the present period, we are of the view that the request by the applicant to describe the unit of employers as all employers of non-destructive testing technicians, trainees and helpers is indeed an appropriate way of describing those affected by this application. In so doing we are not creating a new craft "unit" for the construction industry. That decision can only be made by a panel of the Board dealing with an application for certification for the employees of an employer in the non-de­structive testing industry.

11. The NDT Management case mentioned above was an application for accreditation in which the Association was ultimately accredited as the exclusive bargaining agent, in the construc­tion industry, for the non-destructive testing employees of a number of employers. Babcock & Wil­cox was included among them. The work in question is described in the NDT agreement as fol­lows:

2.01 This Agreement shall apply in respect of all non-destructive testing work performed by the Employer or by any person, firm or corporation owned or financially controlled by the Employer in Canada. Non-destructive testing includes ultrasonics, radiography, magnetic parti­cle, dye penetrant, and eddy current, but does not include visual inspection or destructive test­ing unless the Council or one of its affiliated Unions gains certification or written voluntary rec­ognition for the visual inspectors of an employer, in which case the Employer, through the NDTMA (if an NDTMA member), will negotiate rates for his visual inspectors and include them under this Agreement.

11. For the purpose of this case however, it is important to note that Babcock & Wilcox is not now and never has been a member of the Association, nor has Babcock & Wilcox ever autho­rized the Association to bargain for it outside of the construction industry. Babcock & Wilcox is primarily a manufacturer. It is occasionally engaged in the construction industry, but not exclu­sively so. Accordingly, bargaining or contractual rights held by the applicant (or indeed any other union) outside the construction industry must be based upon either certification or voluntary rec­ognition. The accreditation order cannot, in itself, extend bargaining rights beyond the company's construction activities.

IV

12. Babcock & Wilcox is a major manufacturer of boilers and heat exchange systems with production facilities at Cambridge, Ontario. The company is also engaged in the installation repair, rebuilding and periodic testing of those systems. It employs a number of technicians who use a technique known as "eddy current testing" to check for faults in the piping systems of heat exchangers. By electronic and magnetic means these technicians can gauge the thickness of the tubing and detect cracks or splits. Some of these technicians work "in the field" in conjunction with the company's "construction group" installing or repairing the company's equipment. Others do not. The issue raised in this case is whether all eddy current testing done "in the field" falls within the ambit of the Quality Control agreement - whether or not the technicians are using that technique in conjunction with construction activities or are part of the employer's construction operations group.

13. The union's bargaining rights can be traced to a document executed on June 13, 1980 which reads as follows:

WHEREAS part of the Employer's business involves non-destructive testing and the employ­ment of persons skilled and qualified to perform the same;

AND WI-IEREAS the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, and the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, (hereinafter referred to as the "affiliated Unions") shall negotiate and administer this Agreement through the Council and shall empower it to act as agent for each and both of them;

AND WHEREAS the Council is party to a collective agreement for the period December 1, 1978 up to and including November 30, 1980 with the NDT Management Association and cer­tain non-destructive testing companies signatory thereto (hereinafter called the "NDT Agree­ment");

NOW THEREFORE this Agreement witnesseth that: Article 1.01 of the NDT Agreement is modified as follows:

1. The Employer recognizes the Council as the sole and exclusive bargaining representative for all Non-Destructive Testing Technicians, Trainees and Helpers in the employ of the Employer's Construction Operations within the scope of the NDT Agreement save and except office and sales staff, persons above the rank of working supervisor and persons covered by any subsisting collective agreement between the employer and trade union other than an affiliated union.

2. The Employer agrees, except as otherwise provided in this Agreement, to be bound by the terms and conditions contained in the articles of the NDT Agreement, attached hereto as Appendix "A".

3. Article 3.02 of the NDT Agreement shall not apply to employees engaged by the Employer prior to the date of this Agreement.

4. Employees shall continue to receive the Health and Welfare benefits provided by the Employer immediately prior to the date of this Agreement up to and including the 30th day of September, 1980. Accordingly, the provisions of Article XVI: Health and Welfare shall not apply until the 1st day of October, 1980.

5. All parties agree that the procedure for the transferring of Babcock & Wilcox Canada Ltd. employees will be in accordance with the Memorandum of Understanding (Attachment NO. 1) attached hereto.

DATED at Cambridge, Ontario, this 13th day of June, 1980.

The employer agrees, with some reservations and exceptions, to abide by the terms of the NDT agreement. The exceptions are important in our view because, while Babcock & Wilcox is recog­nizing the union and generally prepared to apply industry standards, it is also preserving its own individual relationship with the applicant.

14. Two further documents were put in evidence: one preceding and one following the above-mentioned voluntary recognition agreement. Both are letters over the signature of J. R. Ashton, then Manager of Employee Relations. In a letter dated April 8, 1980 to various union offi­cials he said:

It is our understanding that the Council and the affiliated unions are not concerned about our manufacturing operations in Cambridge and understand that they are represented by the United Steelworkers, therefore, the recognition and scope will only apply to the company's construction operations.

A letter dated July 9, 1980 reads as follows:

Mr. J. Russ St. Eloi

Director of Canadian Affairs

United Association et al

Suite 702- 310 Broadway

Winnipeg, Manitoba

R3C 0S6

Dear Sir:

This letter will clarify item #1 of our Agreement with the Quality Control Council of Canada which refers to Article 1.01 of the N.D.T. Agreement.

The scope of the Employer's Construction operations referred to in item #1 of the above stated agreement shall include New Construction, Repair, Revamp and Maintenance Work performed by the Employer's Construction operations in the field.

Later recognition agreements dated September 14, 1981 and May 2, 1983 reproduce without alter­ation Article 1.01 of the original recognition arrangement and again preserve certain terms and conditions of employment which are different from those appearing in the NDT agreement.

15. By letter dated January 15, 1981 Mr. Ashton responded to a complaint that the com­pany was not complying with the agreement. The letter contained the following passages:

The company at the present time does not have a large staff of quality control technicians in the Construction Department. This is due primarily to the fact that we do not have any long-term construction projects on the go in Canada. Our Canadian work load is pretty well made up by strictly repair and revamp work, therefore, we are presently carrying two quality control techni­cians ... and both of these technicians are members of the Quality Control Council of Canada the difference in our contract is simply the recognition clause which recognizes the Council as the bargaining agent for our quality control technicians in our construction operations. This must be obvious to you because if we had accepted the recognition clause as set out in the N.D.T. Agreement, it would not exclude our shops ... as you can see with the exception of spec­ifying our construction operations in the recognition clause, and the memorandum of under­standing which allowed us to transfer people from staff to the bargaining unit, B&W do not have any other special arrangements under the collective agreement, therefore, B&W should be allowed to operate as any other contractor signed to the quality control agreement

In summary, B&W Canada is operating in its construction operation in accordance with the agreement signed with the Council on the 13th day of June, 1980. The company's staff of quality control technicians in the construction operations involves only two men who are not supervi­sors or on international assignments. Our construction operations are presently running with only these two people because of the workload in Canada, but when more technicians are required for short-term projects, these technicians will be augmented by subcontract personnel who are members of the Quality Control Council of Canada.

This passage draws a distinction between the "shop" and the company's "construction operations"

• as do the various agreements.

16. The union urges us to find that these documents, when read together, demonstrate an intention and oblige the company to apply the quality control agreement to all testing work done by NDT technicians engaged "in the field" whether or not their activities would be characterized as "construction work". The applicant asserts that its agreement with Babcock & Wilcox is not lim­ited solely to construction operations. The applicant concedes that its agreement does not cover NDT technicians working in the shop.

17. The company argues that the N~DT agreement only applies to its construction opera­tions. NDT technicians who do eddy current testing as part of other departments (the company mentions its "heat exchanger services group") which are not part of construction operations are not covered by the collective agreement. Counsel submits that if the agreement was intended to cover all NDT work done "in the field" or "away from the shop" it would have been easy to say so. The parties did not. The agreement is restricted to technicians working in the company's con­struction operations. It has not been extended beyond the ambit of the original recognition provi­sion or subsequent accreditation order.

V

18. This grievance was filed when an official of the applicant heard, indirectly, that eddy current testing was being done by employees of the respondent at the Pickering Nuclear Generat­ing Station; however, because the generating station is operational and not a construction site he was unable to personally verify that this was the case. A company official admitted to him that eddy current testing was being done at Pickering, but we have no direct evidence about what the technicians were doing or why. There is no evidence that they were part of, or working in conjunc­tion with, the respondent's "construction operations", and the company's submission is that they were not. There is no evidence that they were doing new construction, repair, revamp or mainte­nance work performed by the employer's construction operations "in the field"; nor do we know what Mr. Ashton may have meant 8 years ago by the word "maintenance" performed by the employer's construction operations in the field. We have no direct evidence concerning the deploy­ment of NDT technicians in the field, the extent to which they were engaged in non-construction activities, or how they were treated for collective agreement purposes. All that we know, is that a company official (who was not called as a witness) told a union official that some eddy current test­ing was being done at Pickering.

19. In this case the union bears the onus of establishing its interpretation of the collective agreement and that the collective agreement has been contravened. On balance, we do not think that it has done so. When the pattern of agreements is considered, as a whole, it appears to us that the employer was intending to restrict their application to its construction operations group, or at the very least to what is commonly considered construction work. The agreements do not, by their terms, cover all NDT technicians working away from the shop or all work of the kind described in the NDT agreement under whatever circumstances such testing might be done. Had the parties intended that result, language could have been drafted fairly easily to accomplish it. Moreover, as we have already mentioned, we have no direct evidence about what the NDT technicians were actually doing or what Mr. Ashton might have meant (assuming, without finding that it would be significant) by his use of the term "maintenance" in his letter of July 9, 1980. And we do not even know what the work in question was, except that it involved a diagnostic technique known as eddy current testing.

20. On the balance of probabilities we are not satisfied that the applicant has established a breach of the collective agreement. The grievance must therefore be dismissed.