[1993] OLRB Rep. December 1332
0769-92-M United Brotherhood of Carpenters and Joiners of America, Local 18, Applicant v. Matthews Contracting Inc., Responding Party v. Labourers' International Union of North America, Ontario Provincial District Council, Intervenor
BEFORE: S. Liang Vice-Chair, and Board Members D. A. MacDonald and J. Redshaw.
APPEARANCES: David McKee and Bill Veitch for the applicant; Richard J. Charney, Oliver Toffol and Brian Chambers for the responding party; and John Moszynski, Tony LaMacchia and Mike Popovich for the intervenor.
DECISION OF THE BOARD; December 16, 1993
This is a sector determination. On August 24, 1993, the Board provided its "bottomline" ruling on this case, finding that the work at issue is work in the industrial, commercial and institutional sector ("ICI") of the construction industry of Ontario. We now provide our reasons for that ruling.
We begin with a summary of the facts, which we have necessarily abbreviated in our recounting. In providing the following summary, we have reviewed the oral evidence, the written documents and materials provided to us, and the representations of the parties. Where necessary, we have reconciled conflicts in the oral evidence. The latter part of this case proceeded in a particular manner which was agreed to by the parties (see our decision of June 3, 1993), and which involved the submission of written factual statements in place of a number of witnesses. In making our findings, we have not found it necessary to rely on any factual assertion contained in the written materials to which the other parties have not specifically indicated their agreement (in writing or in their representations), nor have we found it necessary to resolve any factual disputes as between the oral evidence and the written statements of fact.
The work which is the subject of this dispute is an underground concrete water storage tank on Strachan St. in Hamilton, adjacent to the waterfront. The work started on April 1, 1992. The work was contracted for by the Regional Municipality of Hamilton Wentworth ("the Region"), and was performed by Matthews Contracting Inc. (herein called "Matthews", "the company" or "the employer").
The Region is responsible for sewage treatment. The project essentially consisted of building an underground water storage tank about 40 metres by 80 metres. On top of the tank is a parking lot. Before the tank was built, storm water and sewage overflow ran into the bay. The purpose of the tank is to receive that material and store it until there is capacity at the sewage treatment plant to process it. There is a pumping station connected to the tank which will pump the dirty water to the treatment plant, about 4 to 5 miles away. Once the water is treated at the plant, it will then go back into the bay. The tank was located at this site for convenience, as there were existing pipes into the bay, the site was available, and there was an existing sewage pumping station on the site that could be modified.
The building of the tank is at the core of the contract undertaken by Matthews. However, the contract also included work which was necessitated by the building of the tank, such as roadwork and sewer and watermain work, which is not the subject of the present sector dispute.
In addition to serving a holding function, the tank also performs a settling function. The water sitting in it will settle out and if more comes in before it can be treated, the water on top, which is cleaner, will flow out. There is a flushing device in the tank so that the sludge that settles at the bottom of the tank can be be flushed. The Region has built a previous storage tank with the same function. In deciding on the design of the Strachan tank, they reviewed the operation of the other tank and decided to use a different and better flushing system.
A typical water treatment plant receives water from a river or lake, which goes through a chemical process to be treated. Then the chemicals are removed, the water is made clear, fluorinated if necessary, and is sent into a water line. Sewage treatment requires liquids to go through clarifiers and settlers, sludge digesters, and a chlorine contact chamber, which are then sent back into the river/lake or a water line. The end product in every case is cleaner water. Typically, water and sewage treatment plants are run by a municipality. Industries, such as Ontario Hydro and mining companies, may also have their own water treatment plants.
The evidence was that the City of Hamilton required a building permit for the work on the tank. No architect was involved in the project; however, the project required an engineer.
The equipment used included a mobile crane. A mobile crane was more suitable than a tower crane because the project did not require the height of a tower crane and did require the mobility. Bulldozers and backhoes were used for the excavation and backfill. These are the same machines that would be used for building construction, though a greater number were used on this site because there was a larger area and bigger volume to be excavated.
One of the specific problems that had to be overcome on this project was the problem of ensuring that the tank would stay in place. Because of wet soil conditions, when the tank is empty, there is a risk of floating upwards in the soil. Therefore, the tank had to be anchored down. Because of the wet soil, the method used was 12 metre caissons. Soil caissons have been used in the building of a number of structures along the Hamilton waterfront, but in those structures, the caissons served a load bearing purpose. If the tank had been built on a hill, instead of near the water table, anchors would not have been required to hold the tank down. If instead of a tank, the Region had built a building on this site, there would have been the same problem of upward pressure. Caissons are also used in road building and bridges.
Another construction problem posed by the site was the need to keep water out of the excavated areas. Matthews used Coffer dams, which are sheet piles driven into the ground to form a dam around an excavated area so that it can be worked in without water flowing in. Again, the construction of a building on this site would have posed the same problem. If the project was a building instead of a tank, a different method of keeping water out might have been used. For instance, Matthews might have employed a type of pile that would have been incorporated into the structure itself, instead of temporary sheet piles. In any event, however, the problem that required the use of the piles was the site condition, and not the type of structure being built. The choice of piles to be used may depend on the structure to be built but is essentially a matter of economics.
Matthews used the EFCO forming system for the tank, which is a steel formwork system used in concrete forming regardless of sector. The forming for the job was straightforward and involved standard procedure. The forms were assembled for a section. Once the concrete was cured and dried, the form was then lifted as a whole panel to be used on the next section. No unique skills were required for this forming. The same skills are used in the formwork of this structure as on typical ICI work. The same set of formwork was used for both the tank and the box culverts. Matthews used the same work force of Labourers interchangeably for the work on the tank and on the box culverts. Matthews asserts that it would be inefficient to have a different crew of people for the forming on the box culverts as on the tank because one crew could be kept continuously occupied going back and forth between the parts of the project.
Matthews is a general contractor involved in many kinds of work in many different sectors. It doesn't restrict itself in the type of work it will bid on. Matthews has had collective agreements with the Labourers for many years, although not with the Carpenters until recently. With the signing of a "peace agreement" between the Carpenters and Labourers in Board Area 8, which precluded the Labourers from doing Carpenters' work in the ICI, Matthews entered into negotiations with the Carpenters which culminated in a voluntary recognition agreement.
Thus, until recently, it has never been an issue for Matthews what was ICI work and what was not ICI work, since it had agreements with the Labourers which covered a broad range of sectors. If work was arguably Labourers work, Matthews would use the Labourers to do it, under whatever agreement the Labourers were prepared to apply. On this project, the work was done by the Labourers under the terms of the HAND agreement, which is a local agreement between Local 837 of the Labourers and the Hamilton and Niagara District Association of Sewer, Watermain and Road Contractors. This agreement is incorporated by reference into the Labourers' Civil Engineering Agreement between the LIUNA Ontario Provincial District Council on behalf of its affiliated local unions and the employers signature to it, including Matthews, covering work in the sewer and watermain, road building and heavy construction sectors.
There were a variety of trades on the project as a whole. There was some electrical/mechanical work, some reinforcing steel, masonry, and work which required operating engineers. All work other than electrical/mechanical, reinforcing steel, and operating engineers' work was done by the Labourers. The electrical work was done by a hon-union sub-contractor. The mechanical work was done under the provincial ICI agreement covering the pipefitting trade. Both the reinforcing steel work and the operating engineers work was done under collective agreements covering both heavy engineering and the ICI.
For the most part it appears that there have been two discrete sets of contractors doing the work of installing concrete water storage tanks, whether underground or as part of sewage or water treatment plants. Generally speaking, one set of contractors works under ICI provincial agreements, employing both Carpenters and Labourers under their respective ICI agreements. Also generally speaking, another set of contractors, which does not have bargaining rights with the Carpenters, does the work using only Labourers to do the forming, under non-ICI agreements. It is fair to say that where the contractor has a bargaining relationship only with the Labourers, the parties treat the work as non-ICI. Where the contractors have a bargaining relationship with both the Labourers and the Carpenters, they have almost always performed the work under the ICI agreements, including, in two cases, contractors which were bound to both the Labourers ICI and Civil Engineering Agreement.
Where similar work has been done as part of the construction of a sewage treatment plant or water treatment plant, the work has, to a much greater degree, been done by the first set of contractors (ie. working under ICI collective agreements). Where the work has been the installation of a tank only, the work has been done more often by the first set of contractors, though the difference is narrower. Sometimes, the two sets of contractors bid on the same work, as was the case on this project.
Although the Labourers take the position, which was disputed, that the Carpenters ICI agreement in fact covers work in the heavy engineering sector, on our review, we do not find that it does. We are therefore satisfied that when similar work has been done by other contractors under the terms of the Carpenters' provincial agreement, it was done under the terms of an ICI agreement.
The Carpenters were contacted about the availability of workers under their ICI agreement by some of the contractors in preparation for their bids on this project. Many of the contractors on the list of bidders are bound to either the Labourers' Civil Engineering Agreement or the HAND agreement directly, or another Labourers' non-ICI agreement. Three of the bidders are bound to the ICI agreements with the six civil trades (including carpenters and labourers) and two of these three submitted their bids on the basis of the ICI agreements.
Similar work to the Strachan tank has been done in the Hamilton and Niagara region under the terms of the HAND agreement on at least six previous projects. From about 1980 to the early 1990's, Matthews has been responsible for the construction of or additions to about 7 or 8 water or sewage treatment/water pollution control plants throughout the province, involving the construction of large concrete tanks, on which it applied non-ICI collective agreements.
The Labourers assert that this project is in the heavy engineering sector of the construction industry. In the alternative, they state that it is open to the Board to find that it is work in the sewer and watermain sector. Counsel submits that the Board should inquire first as to the end use of the project. If the end use is clearly industrial, commercial or institutional, then the work is ICI, notwithstanding that the work is similar to work which may also be undertaken in the heavy engineering sector. Here, there is no industrial, commercial or institutional element to the use for which the tank is intended. The purpose of the project is to improve the flow of sewers, not to serve some ICI use.
In the submission of the Labourers, the Board can draw no meaningful distinction between the work included in this project which all parties acknowledge is in the sewer and water-main sector, and the work on the tank itself.
Further, the construction problems which were presented by this project were engineering problems. No architect was engaged in the project. The problems and solutions encountered on this project are similar to the problems and solutions arising in work on locks, dams and bridges, all of which are clearly in the heavy engineering sector.
It is submitted that most of the employers bidding on this project saw it as falling under the Labourers Civil Engineering collective agreement. There has been much work which is similar to this project which has been done throughout Ontario under non-ICI collective agreements. Clearly, where a contractor has a bargaining relationship with the Labourers only, those parties have treated similar work as non-ICI work. Ultimately, the evidence as to the characteristic employment relations on this type of project reveals that different contractors bid on the work and treat it as coming within a given sector depending on the particular collective bargaining relationships to which they are party.
In the submission of counsel for the employer, the Board should ask itself whether this structure is more like structures in the ICI, or more like infrastructure like bridges which are designed to support other things. It is important for the Board to have regard to the fact that no architects were required for this project. The problems faced on this project were primarily engineering problems as distinct from design or architectural problems. On this basis alone, this project can be characterized as a project in the heavy engineering sector. If this is not enough, the evidence of the end use of the project points to its use as part of a sewer and watermain process. Either way, what is clear is that the project has no connection to the ICI.
In the submission of counsel for the Carpenters, the Labour Relations Act defines “sector” as a “division of the construction industry as determined by work characteristics”. The factors which the other parties rely on to support their position that this project is in the heavy engineering sector are not very helpful because they do not actually distinguish one sector from another. For instance, the major problem on this project was the soil conditions, which necessitated the use of caissons. Since this problem would have existed regardless of the type of structure built on this site, it would be incorrect to rely on the use of caissons (as an engineering type of problem as contrasted with an architectural type of problem) as determining the sector in which this work belongs. In fact, the only “work characteristic” on this project which can meaningfully distinguish between the ICI and other sectors is the fact that a building permit was required.
The fact that no architect was required on the job cannot be determinative, since architects are not essential to many industrial structures. Under the Architects Act and Professional Engineers Act, both architects and professional engineers are entitled to provide designs for large buildings intended for industrial occupancy, although only a professional engineer may provide services in connection with such a building that relate to engineering issues.
Counsel disputes that this tank should be considered as part of the sewer system. Rather, this tank is part of an industrial process, whose end product is clean water. As contrasted with other projects in other sectors, such as bridges and canals, the process which the tank serves transforms raw materials, ie. Dirty water, into an end product.
Counsel for the Carpenters analyzed the evidence of the employment relations on other similar projects, arriving at the conclusions set out in our summary of facts above with respect to the type of contractors and collective bargaining relationships that have characterized this type of work.
The Board was referred to the following cases in argument: The Heavy Construction Association of Toronto, [1973] OLRB Rep. May 245; Ecodyne Limited, [1979] OLRB Rep. July 629; West York Construction Ltd., [1983] OLRB Rep. Dec. 2132; Sword Contracting Limited, [1985] OLRB Rep. May 743; Ambro Materials and Construction Limited, [1987] OLRB Rep. July 948; Steen Contractors Limited, [1989] OLRB Rep. Nov. 1173; Future Care Limited, [1990] OLRB Rep. Aug. 844; Dufferin Construction Company, The Foundation Company of Canada Limited, Dufferin Construction Company et a!, Aug. 31, 1992 [unreported]; The General Contractors’ Section of the Toronto Construction Association, [1971] OLRB Rep. Nov. 719; Mechanical Contractors Association Hamilton, [1972] OLRB Rep. Nov. 923; National Capital Roadbuilders Association, [1988] OLRB Rep. June 604; Sikora Mechanical Ltd. [1982] OLRB Rep. June 941; Bird Construction Company Limited, [1984] OLRB Rep. Dec. 1688; Sutherland-Schultz Limited, [1988] OLRB Rep. June 632; Gisar Contracting Limited, [1985] OLRB Rep. April 528; Ellis-Don Limited, [1988] OLRB Rep. Dec. 1254; Shearwall Forming (East) Ltd., [1989] OLRB Rep. Dec. 1254.
Section 119 of the Act defines "sector" in the following manner:
"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;
The Heavy Construction Association of Toronto, supra, an early Board case to which all parties referred, applies and interprets the notion of "sector" under the Act. In that case, the Board analyzed the definition of "sector" (which, with one change that does not concern us, has remained the same throughout the intervening years) and in particular, how one of the enumerated sectors contained in that definition could meaningfully be distinguished from another:
We must thus turn to an examination of the meaning of section 106(e) [now 119] of the Act which defines the term sector. An examination of that definition indicates that it contains three components. The first component is that sector is a division of the construction industry. The term construction industry is defined in the Labour Relations Act in section I(1)(f) [now 1(1)] which reads as follows:
1 .-(1)(f) "construction industry" means the business 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.
Although certain terms appearing in the definition of construction industry also appear in clause (e) of section 106, the relationship between these two definitions is not sufficient to afford any assistance in interpreting the meaning of the term sector.
The second component of the definition in clause (e) of section 106 sets out the method by which divisions of the construction industry are to be determined. Thus, the divisions of the construction industry which constitute sectors are to be "determined by work characteristics". On the other hand the expression "work characteristics" is one which is open to a variety of meanings and the problem of interpreting this section is largely one of ascribing the correct meaning to this expression.
The third and remaining component of the definition of sector is the enumeration of seven sectors of the construction industry which are included as meanings of the term sector of the construction industry. These, in turn, raise the additional problem of ascribing the correct meaning to each of the individual sectors so enumerated.
Although the definition of sector can be broken down into these three component parts, clearly the starting point in interpreting the statutory language used in the definition is the observation that they constitute one definition in the Act. Thus, it is clear that when the legislature enumerated the specific sectors set out in the definition it must be taken to have applied the test set out in that section when enumerating the sectors named therein. That is to say the enumerated sectors are divisions of the construction industry determined by work characteristics. Thus, the enumerated sectors give us a key to interpreting the expression "work characteristics" and in turn once the expression work characteristics is clarified this will provide assistance in the correct interpretation of each of the enumerated sectors.
An examination of the enumerated sectors in clause (e) of section 106 leads to the conclusion that for all but one of the sectors listed the names given to these divisions of the construction industry relate to the use which is ultimately made of the construction. At first this may appear to be somewhat of a puzzle in that the connection between the use of the construction and the work characteristics may not be obvious. Upon examination, however, it becomes clear that the use that is ultimately made of the construction will to a large extent determine the task or the work to be performed at the construction site. The task in turn will have certain characteristics which make that project distinguishable from other types of construction. Thus, each of the sectors enumerated, by focusing on the different end uses of the construction, distinguishes one type of construction from other types of construction on the basis of peculiar tasks which are common to that type of project. The work characteristics which distinguish one sector from the other sectors of the construction industry may be shown in terms of the type of problems to be dealt with at the job site, the types of solutions resorted to at certain job sites, the material used, the relative importance of various specifications, the variety of skills and trades, and certain characteristic relations with employees. This list of characteristics is not to be thought of as exhaustive, but as examples of particular characteristics which differ between the various sectors enumerated in the Act.
Having given a meaning to the test for determining sectors on the basis of work characteristics we can now turn to use this meaning as a tool for obtaining the criteria which separate one sector from another sector of the construction industry. However, as noted above there is one sector which unlike the other sectors enumerated in the Act does not refer to the end use made of the construction in that sector. This is the heavy engineering sector, which is the subject matter of this application. The name of this sector comes from the view that the division of the construction industry with which it is concerned has distinct peculiarities. As the name implies the problems faced in such construction projects are primarily engineering problems as distinct from design or architectural problems. Thus, for instance, these are projects in which it is more important that they serve their intended function rather than be attractive. The other characteristic of construction in this sector is that it involves the use of "heavy equipment". That is equipment which is capable of lifting, for example, heavy steel or concrete beams or equipment that is capable of moving huge amounts of earth, stone or concrete. Perhaps the classic example of a heavy engineering project is the construction of a large bridge.
However, if we try to define the heavy engineering sector in terms of the emphasis of engineering problems and the use of large scale equipment, we are confronted with the problem that these two characteristics are not sufficient to distinguish projects which clearly fall into the other enumerated sectors. Thus, for instance, the construction of a large refinery, steel mill, power station or sewage settling basin may have these same characteristics. We are thus faced with the potential conflict that any project in any of the other sectors can arguably be placed in the heavy engineering sector if the problem is an engineering problem and the equipment used is large scale or heavy equipment. Clearly, section 106(e) should not be interpreted in a way to allow such an ambiguity or uncertainty as to the meaning of the term "sector". The problem, however, is not difficult to overcome. As pointed out earlier, the other sectors are defined in terms of the use ultimately made of the construction. This has the clear advantage of determining the sector at the earliest stages of the project. Thus any uncertainty as to whether the project falls in one sector or another can be removed even before work has commenced at the job site. The removal of such an uncertainty is, of course, a desirable goal in labour relations and indeed the legislature in its wisdom has seen fit to remove the uncertainty from the definition by labelling the other sectors with names designating the end use of the project.
Particularly significant to the case before us is the Board's discussion above of the distinction between the heavy engineering sector and the other sectors enumerated in section 119. We distill from that discussion the following principle for the purposes of the case before us: that the work in question is in the heavy engineering sector if its end use is not industrial, commercial, institutional (or related to sewer and watermain, which was the alternative argument proposed by the Labourers and by Matthews), if the problems faced on the construction project are primarily engineering as distinct from design or architectural problems, and if there is use of "heavy equipment".
In our view, the end use of the tank falls within the ICI. It is part of a process of sewage treatment and water pollution control. To the extent that industrial projects are about the processing or transformation of raw materials, this tank is one element or stage in the processing of sewage overflow and storm water overflow into clean water. If this tank were located directly in a processing facility, we would have no trouble considering it as part of the process. The fact that it is physically separate from the processing plant does not change its nature, in our view, since it was clearly built as an extension to the system of water and sewage treatment.
It is true that the tank is located at the juncture of two "systems", the sewer system and the sewage treatment system. It was urged on the Board that because the contract by Matthews included the installation of sewer lines which all parties accepted as part of the sewer and watermain sector, it was not logical to view the construction of the tank as being in a different sector. To the extent that Matthews performed all of the work itself, using an interchangeable work force, the responsibility for all aspects of the job has been integrated, regardless of sector lines.
Although at first blush, there is some logic to this position, we are not ultimately persuaded by it. First, this position gives undue weight to the manner in which this particular contractor viewed the project. It also gives undue weight to the particular collective bargaining relationship between Matthews and the Labourers on this site. As was clear from the evidence, these parties have never had to draw strict demarcation lines between sectors in respect to formwork, since Matthews has until recently only employed Labourers for this work, and has been bound to agreements with the Labourers covering forming in a number of different sectors. Although there are obvious advantages to such an approach for these two parties, it does not assist the Board to determine a sector issue once it has been raised, as it was here, by the introduction of another collective bargaining relationship which relies on a sector determination.
As well, where work exists at the juncture of two sectors, the Board will always have to find the appropriate dividing line. The parties acknowledge that if a similar tank were located inside an industrial facility, it would be considered as ICI work. Yet undoubtedly, such a tank would also be connected to outside sewer and watermain lines. Counsel for the Labourers asserts that this tank is no more in the ICI than is the toilet in one's home. This statement is telling, since we suspect that all parties would be surprised if it were asserted that the installation of a toilet in a home is work in the sewer and watermain sector since it is connected to outside sewer and water lines.
We thus conclude that the tank, as an adjunct to a system of treating sewage and water which we view to be an industrial process, is work in the ICI sector.
In keeping with the thoughts expressed in The Heavy Construction Association of Ontario, supra, it is unnecessary because of our conclusions as to the end use of this tank, to consider whether the work characteristics of this project are uniquely heavy engineering in nature. However, we provide some brief comments on these matters.
In general, we do not find the work characteristics of this project to point to a heavy engineering project. It is fair to say that the problems faced by this project were not primarily design or architecture, and in a sense they were engineering problems. But they were engineering problems associated with the site itself more than the structure, and therefore they were engineering problems which might well have been present if the project had involved the construction of a building on the same site.
We do not find that the type of equipment used on this project was distinctly "heavy equipment". There was no heavy lifting involved, of the kind necessary in the building of a bridge, for example. There was a lot of excavation in the sense that there was a large area to be dug, but the excavation was done with the same type of equipment that is used in virtually all other types of construction.
Our conclusion that the end use of this work is ICI is reinforced by the evidence as to the employment relations typical of this type of work throughout the province. Although the evidence is not totally unequivocal, we are satisfied that this type of work has tended to be performed by contractors bound to ICI collective agreements, using members of the trades which are covered by those agreements.
In answer to the issue put before us, therefore, we declare that the building of the Strachan Street water storage tank is work in the ICI sector of the construction industry.