National Automobile, Aerospace and Agricultural Implement Workers Union of Canada v. Nichirin Inc., 1991 CanLII 6036

[1991] OLRB Rep. January 78

2200-90-R National Automobile, Aerospace and Agricultural Implement Workers Union of Canada, Applicant v. Nichirin Inc., Respondent v. Group of Employ­ees, Objectors

BEFORE: S. A. Tacon, Vice-Chair, and Board Members R. W. Pirrie and H. Peacock.

APPEARANCES: L. N. Gottheil, Craig Grant and Cheryl Chaput for the applicant; J. Liberman and Frank Johnson for the respondent; Mary Hammond, Ernest Crawford, Helen Lewis, Derek Hammond, Kath Spedding and Linda Littlewood for the objectors.

DECISION OF THE BOARD; January 9, 1991

1. The name of the respondent is amended to read, "Nichirin Inc.".

2. This is an application for certification in which the parties met with a Board Officer and resolved a number of matters.

3. Having regard to the agreement of the parties, the Board finds that the following consti­tutes a unit of employees appropriate for collective bargaining:

all employees of the respondent in the City of Brantford save and except supervisors, those above the rank of supervisor, office, clerical and sales staff.

4. The applicant asserted that four persons should be added to the list of employees filed by the employer, namely, Pat Milancey, Susan Leach, Gary Bassett and Darrin Ballard. The appli­cant contended that the four were employees of the respondent performing bargaining unit work on the application date. The respondent and the employee objectors took the position that the four should not be included on the basis that the respondent is not their employer.

5. A hearing was convened to deal solely with this issue. At that hearing, the parties agreed that the persons were at work on the application date and were performing bargaining unit work. The sole basis for the position of the respondent and the employee objectors was that the respondent was not the employer of the four. It should also be noted that, at the hearing, counsel for the respondent indicated that one person listed on Schedule D should be deleted from that list as the individual in question had not returned to work as anticipated on December 19, 1990. The parties agreed that the person did not satisfy what is known colloquially as the "30/30 rule" and should not be included in the bargaining unit for the purposes of the count. The Board informed the parties that this agreed deletion did not affect the issue presently before the Board.

6. The parties were afforded full opportunity to lead evidence, question witnesses and make submissions with respect to the issue in dispute. The Board does not regard it as necessary to recount that evidence in detail nor to set out separately the submissions of the parties. The Board has carefully considered the testimony of the witnesses and the parties' representations and the rel­evant jurisprudence in reaching its decision.

7. It is useful to begin with the following passage from K Mart Canada Limited, [1983]

OLRB Rep. May 649:

36. One of the issues which the Board must decide in these proceedings is whether or not the grievors are employees of the respondent. The Board's power to make that determination is derived not only from section 89. but also from section 106(2) of the Act, under which "the decision of the Board thereon is final and conclusive for all purposes". Counsel for the union contended that the grievors were employees of the respondent for purposes of the Labour Rela­tions Act. In support of that contention, he referred the Board to a number of Board decisions and arbitration awards. Counsel for K Mart, on the other hand, argued that the persons in ques­tion were employees of the respective agencies which supplied their services to the respondent. He also referred the Board to a number of judicial and administrative authorities, and empha­sized that "control"~ which originated as one of the primary tort law criteria pertinent to the issue of an employer~ s vicarious liability, should be entirely disregarded, or given very little weight in determining whether the respondent is the employer of the "temporary" employees supplied to K Mart by various employment agencies.

37. The criteria which the Board considers helpful in determining which of two (or more) enti­ties is the employer for purposes of the Labour Relations Act include the following:

(1) the party exercising direction and control over the employees;

(2) the party bearing the burden of remuneration;

(3) the party imposing discipline;

(4) the party hiring the employees;

(5) the party with authority to dismiss the employees;

(6) the party who is perceived to be the employer by the employees; and

(7) the existence of an intention to create the relationship of employer and employee.

(See, for example, Windsor Airline Limousine Services Limited, [1981] OLRB Rep. March 398; Sutton Place Hotel, [1980] OLRB Rep. Oct. 1538; Toronto Arts Productions, [1980] OLRB Rep. Sept. 1556; and The Tower Company (1961) Ltd., [1979] OLRB Rep. June 583; and the numerous authorities cited therein.) The cases have generally not assigned any particular order of priority to those factors, but rather have tended to indicate that the weight to be given to each factor must depend upon the facts of each case. However, the Board has tended to attach con­siderable significance to "overriding control" in determining which of two or more entities is the employer of certain persons. Moreover, the Board has consistently found that neither private arrangements as to who is the employer, nor administrative paymaster arrangements, are indica­tive of the true employer.

38. In the present case the respondent exercises a high degree of control over the workers in question. The respondent's supervisors not only tell them what tasks they are to perform, but also direct them in the manner in which they are to be performed. It is the respondent which determines what hours will be worked by those workers at its premises, when they will take their breaks, and when they will eat lunch. Although the particular workers to be assigned to the respondent's premises are initially determined by the various employment agencies as the respondent's agents, it is the respondent which makes the ultimate determination concerning whether an individual will be permitted to continue to work at the Centre or will be discontin­ued or replaced. Thus, the respondent exercises substantial control over those workers, similar in many respects to the control which it exercises over regular full-time K Mart employees. Although the agencies serve as paymasters for K Mart in respect of the workers which they sup­ply to the Centre, it is the respondent that bears the ultimate burden of their remuneration; as indicated above, after paying the workers, the agencies immediately invoice K Mart for each hour of work performed by them at the Centre. The evidence concerning imposition of disci­pline is of little assistance to the Board in resolving this matter since little or no disciplinary action is taken against any of the employees in question by either the respondent or the agen­cies. Instead of using any form of progressive discipline, the respondent simply removes any unsatisfactory agency worker from the Centre through a direction that the agency cease refer­ring that person to the respondent's premises. That removal is tantamount to a discharge vis-a­vis the respondent, although the individual in question may thereafter be assigned by the agency to provide services to another client. Thus, the respondent clearly has the authority to direct that any of the employees in question cease working at its premises.

39. Although neither of the two agency workers who testified before the Board identified the respondent as their employer, their signatures on the grievance provide some indication that their perception in that regard is not unequivocal. Moreover, the perception of the employees is but one of the factors to be considered and is not conclusive see [Re Seafarers' International Union of Canada and Kent Line Ltd. (1972)], 1972 CanLII 1085 (FCA), 27 D.L.R. (3d) 105 (Fed. CA.)], particularly in a situation where an employer has structured its affairs in a manner which deliberately attempts to evade collective agreement obligations in respect of a substantial number of individuals per­forming bargaining unit work on its premises. Similar observations are applicable to the seventh criterion, i.e., the existence of an intention to create the relationship of employer and employee. On balance, we find that the respondent's intention was to create an arrangment [sic] whereby it could have all of the advantages of an employer-employee relationship without incur­ring the collective agreement obligations that apply to an employee in the context of a unionized operation such as the Centre. While its original intention of using temporary employees in peak periods to minimize layoffs among its regular full-time employees may not have been objection­able, the respondent's intention took on an anti-union aspect after the union duly obtained bar­gaining rights and the respondent directed virtually all of its increased work load to "temporary employees" whose numbers and length of service increased dramatically, thereby enabling it to avoid hiring regular full-time employees who would unquestionably be within the bargaining unit. Moreover, the respondent's reference to cost-saving is not a valid defence to its actions. It 15 common knowledge that unionization of a work place can have an economic impact on an employer's business. Indeed, it is the potential for increased remuneration which (at least in more prosperous economic times) constitues [sic] one of the primary "selling points" of the union movement. In dealing with somewhat similar considerations in Westinghouse Canada, [19801 OLRB Rep. Apr. 577, the Board:

"63. The purpose of The Labour Relations Act is to provide a statutory framework within which employees are encouraged to join together and bargain collectively with their employer. The underlying assumption is that employees who bargain collectively are on a more equal footing with their employer than unorganized employees and have a greater say in determining their terms and conditions of employment. It is axi­oniatic, therefore, that collective bargaining as established under the Act has an eco­nomic impact in terms of both the price of labour and the scope of the employer's uni­lateral authority. Under our Act the employee's share of the economic pie and the scope of management's authority vis-a-vis employee relations must be determined at the bargaining table and against the backdrop of possible economic santions [sic] by either side. An employer whose employees have decided to bargain collectively can­not escape his obligations under Labour Relations Act and any decision taken to avoid these obligations or to defeat the legitimate collective bargaining aspirations of his employees is in violation of the Act. Under our statute accommodation is sought at the bargaining table. An employer who contracts out his work, relocates or closes his plant or takes any other major business decision to avoid having to deal with his employees collectively through a trade union or to avoid the possibility, in the abstract, of being subject to economic sanctions is guilty of an unfair labour practice and the Board has so found in a number of cases....

40. This is not the first case in which the Board has been called upon to determine whether workers supplied to a company by an employment agency are employees of the agency or employees of the company. For example, in The Welland County Board of Education, [1972] OLRB Oct. 884, the Board found that certain secretaries who had been transferred by the School Board to the payroll of Office Overload, an existing employment agency, remained employees of the School Board for purposes of the Labour Relations Act. Similarly, in Ralston Purina Canada Inc., [1979] OLRB Rep. June 552, the Board found that persons applied [sic] to that company by International Personnel Ltd. were employees of the former on the basis of the following facts (set forth in paragraph 3 of the decision):

"Ralston Purina is party to a verbal agreement with International Personnel under which International Personnel assigns persons who are selected by Ralston Purina to work for Ralston Purina at a leased facility in Mississauga. International Personnel is responsible for paying these persons an hourly rate agreed to in negotiation with Ral­ston and for providing and administering the benefit plans covering these persons. The Unemployment Insurance premiums and Ontario Health Insurance Plan premi­ums are paid through International Personnel on behalf of these persons. Interna­tional Personnel is paid a fee by Ralston which allows it to recoup its costs and to real­ize a profit. The persons supplied by International Personnel work for Ralston, are supervised by employees of Ralston and may be terminated by Ralston. The facility at which these persons work is a temporary facility. The company occupies a permanent facility in Mississauga for which the Grain Millers Union holds bargaining rights cov­ering that specific location. The officials of Ralston were never of the view that the persons supplied by International Personnel to work as [sic] its temporary location were its employees."

41. The issue of whether a personnel agency ("Manpower Business Services") or its client (Templet Services) was the employer of "five or six persons" who were installing library shelv­ing at a research centre came before the Board in Templet Services, [1974] OLRB Sept. 606. In that application for certification by Carpenters' Local 93, the Board found the individuals in question to be employees of the agency. Although a number of the pertinent facts of that case are similar to those of the present case, it is distinguishable on the basis of the relative perma­nence of the relationship between a number of agency workers (including the grievors) and K Mart, the existence of bargaining unit employees who work side by side with agency workers performing identical tasks under common supervision and control and the anti-union animus which we find to have been a significant element in the respondent's substantially expanded use of such workers at the Centre in 1981 and 1982.

42. There are also a number of arbitration awards which have found workers supplied to compa­nies by employment agencies, under arrangements similar to those between K Mart and the agencies described above, to be employees of those companies for labour relation purposes. See, for example, Re Regional Municipality of Waterloo and London and District Service Work­ers' Union, Local 220 (1977), 1977 CanLII 2965 (ON LA), 16 L.A.C. (2d) 280 (Brandt); Re Goodyear Tire & Rubber Co. of Canada Ltd. and United Rubber, Cork, Linoleum and Plastic Workers, Local 232 (1977), 1977 CanLII 2969 (ON LA), 16 LAC. (2d) 177 (Gorsky); Re Board of Governors of Riverdale Hospital and Canadian Union of Public Employees, Local 79 (1974), 1974 CanLII 2341 (ON LA), 7 L.A.C. (2d) 40 (Shift); and International Association of Machinists and Philco Corp. of Canada Ltd. (1963), 13 LAC. 291 (Hanrahan). (Cf. Re City of Kelowna and Canadian Union of Public Employees, Local 38 (1980), 1980 CanLII 4062 (BC LA), 25 LAC. (2d) 314 (Lar­son), in which an arbitration board found that although workers obtained from an employment agency did not normally become employees of the City, the City had "an obligation to contract for them upon terms consonant with the collective agreement mutatis mutandis. See also Re Ford Motor Co. of Canada Ltd. and Plant Guard Workers, Local 1958 (1981), 1981 CanLII 4460 (ON LA), 1 L.A.C. (3d) 141 (MacDowell), which contains a useful review of the pertinent arbitral and Board jurispru­dence. In that case, the arbitrator found that security guards provided by a security service com­pany remained employees of that company and did not become Ford employees since all of the indicia, except control, pointed to the security company as employer, and "control" presented a "mixed and equivocal" picture.)

43. Accordingly, having regard to all of the circumstances and the relevant jurisprudence, the Board finds that the grievors were at all material times employees of the respondent for pur­poses of the Labour Relations Act. We further find that at the time the grievance was filed, the grievors were bargaining unit employees under the collective agreement in that they were "em­ployees of the [respondent] Company working at its distribution centre in Brampton, Ontario" and were not foremen, those above the rank of foreman, office and sales staff, persons regularly employed for not more than twenty-four hours per week, or students employed during the school vacation period.

44. The K Mart case, supra, dealt with a number of matters beyond the "who is the employer" issue, including alleged unfair labour practices. The Board herein is dealing solely with the question as to whether the four persons are employees of the respondent for purposes of the Labour Relations Act. Nonetheless, the Board regards the reasoning in the excerpt quoted above as persuasive and apposite to the instant case.

45. Two of the four persons were referred to the respondent through Kelly Temporary Ser­vices; the other two were referred through Manpower Temporary Services. The four are paid directly by their respective agencies although the respondent is apparently billed at an hourly rate by the agency for their services. In the Board's view, it is the respondent which bears the ultimate burden of the workers' remuneration notwithstanding that the agencies act as paymaster for administrative purposes. As in K Mart, supra, the Board herein finds that it is the respondent which exercises a high degree of control over the workers in question. The four are directed by the respondent's supervisors as to their specific duties and the manner in which those duties are to be performed. The fact that the on-site training is not extensive does not undercut this factor as point­ing to the respondent as employer. That the agency may show a general safety video and provide general WHMIS information does not alter the Board's conclusion as to who exercises effective control over the persons in the work place. Again, as in K Mart, the evidence in this case indicates that the respondent determines whether the individual will continue to work at its premises. That is, the respondent may direct the agency to remove the individual and/or to replace that person and the agency would comply. Although the persons may be reassigned by the agency to another firm, the reality is that the respondent controls its "temporary" workforce in all crucial aspects, including discipline and discharge. Indeed, the Board heard evidence that, at least in one instance, the respondent directly disciplined one of the four persons in dispute. Pat Milancey testified that the respondent's policy on lateness was applied to her. That is, the first time she clocked in one minute late was considered a "grace period" but on the second occasion she was docked fifteen minutes pay for arriving two minutes late.

46. Other of the factors referred to in K Mart include who is perceived to be the employer by the employees and the existence of an intention to create the relationship of employer and employee. As to the first point, the evidence here is somewhat equivocal. Only one of the four workers testified. She acknowledged candidly that Manpower Temporary Services told her that she was their "employee". But she also testified that she felt she worked for the respondent. With respect to the intention to create an employer-employee relationship, the Board finds that, even if it is assumed that the respondent did not intend to create a situation where the individuals were their employees, the respondent so structured the circumstances in which the four performed their duties that it exercised overriding control over the persons in dispute. In this regard, the Board stresses that the anti-union animus context of K Mart, supra, is not applicable herein. That is, the conclusion that the respondent exercises such fundamental control is not grounded in anti-union motivation and such animus is not required to support such a finding of fundamental control.

47. The counsel for the respondent and the employee objectors stressed the facts that the persons in question were not issued company uniforms, did not attend regular meetings and, with one exception, were not invited to the Christmas party. However, the Board regards these aspects as peripheral to the basic issue as to who exercises overriding control over the workplace activities of the four. Moreover, it appears that full company uniforms were not issued to "regular" employ­ees until after completion of the probationary period. Thus, this factor does not unequivocally dis­tinguish the "temporary" from the "regular" workers.

48. The Board does not intend to go into further detail with respect to the evidence. Only those matters considered particularly relevant have been set out. On balance, and having weighed all the evidence, in the context of the parties' submissions and the jurisprudence, the Board finds

that the four persons in dispute are employees of the respondent for purposes of the Labour Rela­tions Act. Given the parties' agreement that the four performed bargaining unit work on the appli­cation date, the four persons are to be included in the bargaining unit for purposes of the count.

13. The Board is satisfied on the basis of all the evidence before it that more than fifty-five per cent of the employees of the respondent in the bargaining unit, at the time the application was made, were members of the applicant on December 4, 1990, the terminal date fixed for this appli­cation and the date which the Board determines, under section 103(2)(j) of the Labour Relations Act, to be the time for the purpose of ascertaining membership under section 7(1) of the said Act.

14. A statement of desire (petition) in opposition to the application was filed with the Board. Given the overlap between the persons signing the petition and those who previously signed membership cards in support of the applicant, the Board will inquire into the voluntariness of the petition. In this regard, the Board notes the applicant's position challenging the voluntari­ness of the petition.

15. The Board notes as well that revocations or reaffirmations of support for the applicant were also filed. However, the overlap between those persons signing the revocations and those who previously signed the petition is not sufficient to cause the Board to inquire into the voluntari­ness of the revocations.

16. Accordingly, the Board directs the Registrar to schedule this application for hearing to determine the voluntariness of the petition. This panel is not seized.