International Association of Bridge, Structural & Ornamental Iron-Workers Local Union 786 v. Stone & Webster Canada Limited, 1990 CanLII 5747

[1990] OLRB Rep. July 801

1098-89-G International Association of Bridge, Structural & Ornamental Iron-Workers Local Union 786, Applicant v. Stone & Webster Canada Limited, Respondent

BEFORE: Inge M. Stamp, Vice-Chair, and Board Members D. A. MacDonald and C. A. Ballentine.

APPEARANCES: Elizabeth Mitchell, Daniel Girard, Andrew Beith and Terry Smith for the applicant; Mark Contini and Don Muio for the respondent.

DECISION OF THE BOARD; July 9, 1990

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

2. The applicant is grieving the respondent's refusal to hire Andy Beith and Terry Smith alleging violation of Article 2(a) of the collective agreement. The company contends that due to the grievors' being discharged for cause in 1985 it was entitled to refuse to hire them.

3. The applicant submits that by relying on a 1985 discharge in 1989 the employer's position is unreasonable, arbitrary and in bad faith.

4. The parties submitted an agreed statement of facts as follows:

AGREED STATEMENT OF FACTS

1. Stone & Webster Canada Limited ("the Company") is a construction contractor that has carried on business for a number of years at the Algoma Steel Corporation Limited plant site in Sault Ste. Marie Ontario.

2. The Company and the International Association of Bridge, Structural and Ornamental Ironworkers, Local 786 ("the Union") are bound to the current provincial collective agreement between the Rodmen Employer Bargaining Agency and the Rodmen Employee Bargaining Agency, a copy of which has been filed with the Board.

3. The Company and the Union were bound to the Rodmen Provincial Agreement covering the period May 1, 1984 to April 30, 1986 and the Rodmen Provincial Agreement covering the period May 1, 1986 to April 30, 1988 in Sault Ste. Marie.

4. The Company is a major employer of rodmen in Sault Ste. Marie and, on average, employs approximately 60% of the Union's rodmen.

5. The Grievor, Terrance Smith ("Smith") was referred by the Union to the Company and was employed by the Company at its Algoma Steel site from April 22, 1985 to August 7, 1985. On August 7, 1985 Smith was discharged for reporting to work "under the influence of alcohol" and for "other previous violations" (see exhibit 1 attached). No grievance was filed contesting the discharge of Smith.

6. The Grievor, Andrew Beith ("Beith") was referred by the Union to the Company and was employed by the Company at its Algoma Steel site from June 25, 1985 to August 7, 1985. On August 7,1985 Beith was discharged for reporting to work "under the influence of alcohol" and for "other previous violations" (see exhibit 2 attached). No grievance was filed contesting the discharge of Beith.

7. Prior to their discharges, each of the grievors had received two written warnings from the Company. On July 24, 1985 each was warned for going in an off-limits area during work hours (see exhibits 3 and 4 attached). On July 17, 1985 each was warned about leaving the work site early (see exhibits 5 and 6).

8. Neither Beith nor Smith were again referred to the Company for employment until May 15, 1989. On May 15, 1989, Beith and Smith were referred by the Union to the Company for employment at the Algoma Steel site. However, the Company refused to hire Beith and Smith because of their record of misconduct and discharge in August of 1985.

9. On May 19, 1989, a grievance was filed by the Union as a result of the Company's refusal to employ Beith and Smith (exhibit 7). The grievance was responded to by the Company on May 17th, 1989 (exhibits 8 and 9). the matter was not settled during the grievance procedure and the grievance was then referred to the Ontario Labour Relations Board pursuant to section 124 of the Labour Relations Act by the Union on July 27, 1989. The original hearing of August 9, 1989, was adjourned at the request of the Respondent and on agreement of the parties.

The Company agrees to accept that these statements were made by the authors of the letters indicated. The Company will not require the said authors to attend at the hearing to give evidence confirming that these letters reflect the true beliefs of these authors.

10. The Company and the Union agree that the Board should remain seized of this matter with respect to any issue of damages, compensation or other remedial relief. Should it become necessary for the Board to deal with such issues, the Company and the Union agree that a further hearing should be convened at which time other evidence relevant to these issues may be brought forward.

DATED at Toronto this 15th day of November, 1989.

"Illegible" 'Don Muio"

For the Union For the Company

5. Article 2(a) of the collective agreement reads as follows:

ARTICLE 2

UNION SECURITY

(a) As a condition of employment, it is agreed that only members of the International Association of Bridge, Structural and Ornamental Iron Workers shall be employed on work coming within the Scope of the Agreement. All Employees shall keep up to date with their dues and assessments. The Employer agrees to only hire Employees who present referral slips issued by the Local Union in whose territory the work is being performed. Local members who solicit their own jobs may be requested by the Company. These members must present a written request to the Union who will issue them a referral slip. This right to request shall not be abused. The Company also agrees to hire unemployed members off the out-of-work lists of the Unions. Employee members who are transferred within the territory of their Local Union by an Employer will not require an additional referral slip. However, such transfer will not result in lay-offs of Employee members presently on these projects.

6. Andy Beith has been a rodman since 1980. Beith gave evidence surrounding the August 7, 1985 discharge suggesting that the problem that day involved "brassing" in late. He agreed he did have "four or five beers" before coming to work, but that the night general foreman did not say anything about being drunk or being fired. Beith was not advised at the time of termination that he was not eligible for rehire at Stone & Webster.

7. Beith had been employed by the company previously in 1982 and had been discharged. His reasons for not filing a grievance in 1985 was that he understood the Business Agent would look after it. Beith went to work in Toronto the day following the discharge in 1985. On the day of hearing (November 15, 1989) Beith was employed with St. Mary's Paper in Sault Ste. Marie. From 1987 until mid July 1989 Beith was employed by Harris Rebar, both as a rodman and foreman. He has worked for Northern Reinforcing as general foreman at a shut-down in Algoma Steel supervising 28 men at peak. Beith has been working away from home for 1Y2 years travelling home every weekend. When an open call from Stone & Webster for rodmen came in to the hall, Beith got a referral slip to go to work. He was refused employment. Beith returned to work as foreman for Harris Rebar in Thunder Bay. Beith took the opportunity to work at home on a shut-down and returned to Harris Rebar after completion of the work at Algoma. It appears he has worked without any further suspensions, terminations or warnings apart from safety infractions.

8. Terry Smith has been a rodman since 1979. He had been continuously employed until laid off by Stone & Webster in 1982 and was rehired in 1985. Smith went to work in Toronto after being terminated in 1985. He had a number of jobs and was on compensation at one time. He did not work as a rodman for a period of time and was reinstated in the union in January of 1989. Smith got a referral to go to Stone & Webster and when he was refused employment he instructed the union to file a grievance. Smith was unemployed from May 15 to July 1 when he went to work with Northern Reinforcing at Algoma Steel. He broke his ankle and was off work until three weeks prior to the hearing when he went to work for Northern Steel at Algoma where he is presently employed. His evidence is that he has not been discharged or disciplined on the other jobs, nor did he receive any written warnings. He was not told in 1985 that he was not eligible for rehire.

9. Exhibits 8 & 9 are identical letters dated May 17, 1989 sent to the applicant re Beith and Smith which read as follows:

May 17, 1989

International Assoc. of Bridge, Structural

and Ornamental Ironworkers, Local 786,

30 Durham St. N., Suite 311,

Sudbury, Ontario.

P3C 5E4.

Att'n: Mr. Daniel Girard

Re: MR. T. SMITH (MR. A. BEITH)

Dear Sir:

At our meeting on May 15, 1989, I indicated Stone & Webster was not interested in the re-hire of Mr. Smith (Beith). You, in turn, asked that we reconsider our position.

Accordingly, I have reviewed our records and must advise that Stone & Webster will not offer employment to Mr. Smith (Beith) at this time.

However, Stone & Webster would be prepared to reconsider its position should Mr. Smith (Beith) be able to factually present a changed attitude and a demonstrated commitment to work.

Thank you,

STONE & WEBSTER CANADA LIMITED

"Don Muio"

GENERAL SUPERVISOR, EMPLOYEE RELATIONS

Argument

10. Counsel for the applicant contends that the employer blacklisted the grievors based on a 1985 incident. The 1985 discharge was not of such a nature as to threaten the employer's business interests. The letters of May 17 are in bad faith making an offer to reconsider and then not reconsidering. The respondent has not acted reasonably and in good faith and without discrimination when it refused to hire the grievors. (See paragraph 38 of Ontario Hydro, [1983] OLRB Rep. Jan. 99.) What distinguishes Ontario Hydro, supra, from this case is that the grievors here are being disciplined twice, once in 1985 and again in 1989. Since Stone & Webster employs 60% of the local rodmen, a refusal to be hired is not insignificant. They are forced to work out of town for extended periods of time. Article 24, the Management Rights Clause, contains similar language to that found in the Ontario Hydro hiring hall provision. The applicant contends that the employer is breaching the test set out in Ontario Hydro. It is unreasonable to rely exclusively on the discharges in 1985 in refusing to hire the grievors in 1989.

11. The collective agreement does not allow unbridled discretion to the employer. Its decision has to be reasonable. The fact of the discharge in 1985 should only be one factor weighted in all the circumstances in 1989. Counsel submits that the Board should look at the circumstances surrounding the discharge in 1985 citing Comstock, [1987] OLRB Rep. May 667. The applicant submits that had the matter been grieved in 1985 it may well have been reduced. The seriousness of the offence should have been a factor considered by Stone & Webster in its 1989 decision to refuse to hire the grievors. The failure to grieve does not mean that there was just cause. It has been over four years since the discipline. At some point discipline becomes stale and should not be used to justify employer action four years later.

12. The misconduct here has clearly been repeated. The employer has continued to refuse to hire even after evidence of increased responsibility. Beith has been consistently rehired by other employers and promoted. There has been no subsequent suspension or discipline from other employers. There were no reasonable steps taken by the employer to investigate. The decision not to rehire the grievors was arbitrary, unreasonable and made in bad faith.

13. Respondent counsel submits that in this particular case, in the context of the collective agreement the Ontario Hydro test does not apply. The respondent does not have to satisfy the Board that the refusal to hire was reasonable or unreasonable, arbitrary or in good or bad faith. The fettering of Hydro's discretion came about as a result of the particular provision of the EPSCA agreement. The agreement in this case is much different. But even if the Ontario Hydro test is applied, clearly the decision here was a reasonable one.

14. There are some material differences between this agreement and EPSCA. There appears to be only one restriction on management's prerogative, the right to hire any employee referred to it. That obligation is found in Article 2(e) (because of age). The parties have turned their minds to discrimination in hiring and have only limited an otherwise unbridled right as it relates to age restrictions. All that Article 2 requires is that the person be a member of the union or have clearance from the union. It does not provide expressly or by implication that any company bound to its terms is obliged to hire any particular individual whether referred to or not. There are six different ways under this agreement that employees can be obtained. It does not, in the respondent's assessment, obligate them to hire any particular individual and should not be taken as fettering their right to hire any qualified individual. Counsel referred the Board to Article 24 of the collective agreement, Management Rights, which provides as follows:

The Union agrees and acknowledges that the Company has exclusive rights to manage the business, and to exercise such rights without restrictions, save and except as such prerogatives of management may be specifically modified by the terms and conditions of the Agreement.

Without restricting the generality of the foregoing paragraph, it is the exclusive function of the Company.

• To maintain order, discipline and efficiency and to:

• Hire, discharge, transfer, promote, demote, suspend or discipline Employees, provided that a claim that an Employee has been discharged or disciplined without reasonable cause may be the subject of a grievance, and dealt with as hereinafter provided.

• Generally manage the enterprises in which the Employer is engaged, and, without restricting the generality of the foregoing, to determine the locations of the work places, the materials, methods, machines and tools to be used in the execution of the work, and the working schedules, subject to the terms of this Agreement.

15. Considering the wording of the Union Security Clause together with the Management Rights Clause, counsel submits that Ontario Hydro, supra, does not apply. The respondent does have a discretion in respect of the acceptance for hire. There are a number of differences between this case and Ontario Hydro. There was no management rights clause in Ontario Hydro. The agreement in this case is different. The respondent submits that there is no fettering of its discretion or none should be found and that this grievance should be dismissed.

16. In the alternative, if the Board requires this standard of review or test in this case, the test as articulated in Ontario Hydro, supra, is clearly satisfied here. This is the leading case on the subject and the Board took the time to examine the very issue before us. Where an employer has taken steps to discharge an employee for cause, the employer should not ever be obligated to rehire (para. 36 of Ontario Hydro.)

17. Counsel submits that the respondent has a right to discharge under the Management Rights provision and that when paragraph 36 of Ontario Hydro, supra, is reviewed, the case before us is the "easy" case. In the Ontario Hydro case, it was clearly stated that it has to be reasonable to refuse to rehire a person discharged in the past. The respondent certainly has a right to discharge under its provision in the Management Rights Clause. Counsel agrees with the Board's analysis in Ontario Hydro that it would be rendered effectively of no import if there was an obligation on the employer after the discharge to re-employ.

18. Counsel contends that we know the employees were discharged for a cause - intoxication and prior violations. If we want to consider whether it was just cause or reasonable, their agreement uses reasonable cause for management rights for discharge. The fact of the discharge and failure to grieve led to that conclusion. The applicant cannot say after the fact that there must be a judicial announcement that there was cause. The failure to grieve was not an acknowledgement that the discharge was for cause. It was left to the bargaining agent to handle and he said "Don't worry". The decision not to grieve was the bargaining agent's. There is an onus on the person who made the decision not to grieve to come forward and explain. Counsel suggested that they did not come forward because they agreed with the decision. The other reason for no grievance being filed was because the grievors found employment the next day. Counsel contends that the applicant now wants a finding that the discharges were not for just cause. Counsel submits that the applicant's position in effect is that it is now asking for a determination that the 1985 discharges were without just cause, four to five years after the fact.

19. Counsel contends that if the matter had been litigated in 1985 we would know a lot more about what happened in 1985. We heard the grievors' evidence that four or five beers had been consumed. The Board can make some qualified assessment as to how serious it was in 1985. But we do not know what happened in 1985. If they decided not to challenge it at the time it should be regarded as having been for just cause. Counsel contends that he does not know what could be more serious or detrimental to the interest of a construction company than tradesmen reporting for work at 4:30 in the afternoon after having consumed four or five beers. Cases in the industrial setting are not applicable in the construction industry. The Board has commented on the similarities of the construction and industrial setting. In support of its position counsel referred the Board to paragraph 11 of Canadian Engineering and Contracting Co. Ltd., [1983] OLRB Rep. July 1017 which stated:

20. We accept, of course, that the employer-employee relationship in the construction industry is not a close one, and is not comparable with relationships that arise between employers and their employees in an industrial setting. Employment relationships are transitory and, as in the present case, workers will be referred from the hiring hall and employed for short periods of time without the kind of pre-selection which would be undertaken by an industrial employer before engaging workers who could conceivably be employed on a long-term basis. Accordingly, we accept the need for a certain amount of realism and arbitral restraint in determining what constitutes just cause for discharge in a construction context. However, we are not persuaded that either the arbitral jurisprudence or the language of the collective agreement before us requires us to apply considerations that are totally different from those applied by arbitrators to employers who use the same language in collective agreements in other industries. In particular, the Board is of the view that the employer must at lest warn a grievor that his job is in jeopardy prior to discharging him for "unsatisfactory performance" - which is what we found has happened in the circumstances of this case. In Re Harold R. v. Stark Limited et al. (1972) 1972 CanLII 2050 (ON LA), 1 L.A.C. (2d) 405 (Egan), the majority of the Board observed (at pages 406-407):

It was argued by the company that because of the special nature of the construction industry, different considerations ought to apply with respect to the discharge of employees to those obtaining in industry in general. In this regard, it is of some significance to note that the grievors are not in the position of long-term employees whose previously acceptable work performance has deteriorated. The grievors were assigned to the company by the union under the terms of the collective agreement. That is, of course, an arrangement quite common in the construction industry. In consequence of this practice, the grievors were taken on without any pre-hiring or qualifying interview such as might enable the company to make a pre-employment assessment. They entered into the employment of the company purporting to be competent tradesmen and were not subject to any probationary period of evaluation by the company. Therefore, there is no question of any knowledge, on the part of the company, as to the proficiency of the grievors at the time of their engagement as tradesmen qualified in the classifications which they hold.

We are not wholly persuaded, however, that totally different considerations from those applied to industry in general are applicable to discharge cases in the construction industry. In this connection, our attention was drawn to Re United Ass'n of Journeymen & Apprentices of the Plumbing and Pipefitting Industry, Local 221, and Fraser-Brace Engineering Co. Ltd. (1968), 1968 CanLII 1197 (CA LA), 19 L.A.C. 258 (Christie). This case involved the question of the discharge of an employee for "loafing" on a construction site. The company, in that case, argued that different considerations applied to discharge in the construction industry. The Board, in its decision in that case, stated that it was not unimpressed by the argument that rather different considerations may apply in the determination of what constitutes just cause for dismissal in the construction industry.

The grievor in the Fraser-Brace case, supra, appears to have been a chronic time waster, but received no admonitions from the company with respect to his conduct prior to his discharge. The Board went on to say, however, that "It is unnecessary to decide what differences it makes that we are dealing with the construction industry. Even if the requirements of 'cause' and just cause were considerably lower than they are in general industrial situations 'cause' for dismissal was not established here." The Board went on to find that the discharge was unjust because of the absence of a warning and reinstated the grievor.

See also Proweld Company Limited, [1982] OLRB Rep. March 437, and -White and Greer Company Limited, Board File No. 1404-81-M, decision dated November 23, 1981, unreported, in which this Board confirmed that prior to the discharge of an employee in the construction industry for lack of production or inadequate quality, the employee is entitled at least to a warning that the employer is dissatisfied.

There is some similarity which has now been recognized and a warning may well be required, but the differences are distinct and outweigh the similarities. As the Board said in Ontario Hydro, supra, discharge of itself should give rise to a finding that a refusal to rehire in the future is a reasonable one. This should satisfy the Ontario Hydro test if we are subject to it.

20. Counsel for the respondent submits that with respect to the grievor's rehabilitation and work commitment, when assessing the reasonableness of the employer's position, the evidence of improvement was requested in May and this information was not brought forward until the first day of hearing. Counsel also submits that the Board has to assess the reasonableness of the respondent's decision at the time it was made. If the applicant is suggesting that there has been a change which would alter our obligation to hire they have an onus to present their evidence as part of their efforts to secure employment for these grievors. Sometime in August this evidence was brought forward affecting a decision made in May. The only evidence that should be considered is contemporary with the event or before. This decision should not be found to be unreasonable or arbitrary based on information which we now have but which the respondent did not have in May when it refused to rehire the grievors. Counsel further submits that the grievances should be dismissed.

Decision

21. Whether or not the 1985 discharge of the grievors was for cause, several years after the fact, is not a question before this Board. However, the fact that the respondent failed to advise the grievors, at the time of the discharge in 1985, that they were not eligible for rehire does affect this grievance. Beith had previously been discharged and rehired and had no reason to believe he would be barred from working for the respondent in the future. It is reasonable to assume that had either grievor been aware that they were not eligible for rehire they would have taken steps to protect their future employment opportunities with the respondent.

22. The collective agreement does not refer to re-hires. Article 2(a) states that "Local members who solicit their own jobs may be requested by the Company" and that "The company also agrees to hire unemployed members off the out-of-work lists of the Unions". This has to be read together with the management rights clause in Article 24, Management Rights, which provides that "it is the exclusive function of the company" to "hire", "discharge", "save and except as such prerogatives of management may be specifically modified by the terms and conditions of the Agreement". The exclusive hiring function is modified by the hiring hall provision of Article 2(a), If there is any selection to be made under Article 2(a) it is the members of the union who can solicit their own jobs. There is no name hire provision at the sole discretion of the employer in the collective agreement. The hiring hall concept in the construction industry is quite different from the process followed in other industries where candidates are selected through a screening process.

The hiring hall's obligation under the collective agreement is to provide competent tradesmen. In the circumstances of this case, we find the employer acted unreasonably in refusing to hire the grievors who were properly referred to the company under the collective agreement. The grievors were not advised at the time of the discharge that they were not eligible for rehire. There is no evidence that the applicant was made aware that the grievors were not eligible for rehire at the time of the discharge. There may be circumstances where notwithstanding the hiring hall provisions it may be reasonable to refuse to hire a tradesman referred, but this is not the case here.

23. Pursuant to the parties' agreement, the Board will remain seized with respect to any issue of damages, compensation or other remedial relief.