International Union of Operating Engineers, Local 793 v. Elirpa Construction and Materials Limited
[1994] OLRB Rep. April 372
2348-93-G; 3808-93-G International Union of Operating Engineers, Local 793, Applicant v. Elirpa Construction and Materials Limited, Responding Party
BEFORE: K. G. 0'Neil, Vice-Chair, and Board Members J. A. Ronson and G. McMenemy.
APPEARANCES: In Board File No. 2348-93-G L. Steinberg and R. Kennedy for the applicant; C. E. Humphrey, A. Renton and M. Aprile for the responding party.
DECISION OF THE BOARD; April 27, 1994
1These are referrals of construction industry grievances to arbitration under section 126 of the Act. The issues underlying Board File No. 2348-93-G are two: i) has the union abandoned its bargaining rights in the road building sector, and (ii) what is the effect of what is known as a "cross-over clause" on an employer who is not a member of the accredited employer organization who negotiated it.
2By decision of the Board, differently constituted, Board File No. 3808-93-G was consolidated with this matter as similar or related issues are involved. The evidence and argument in File No. 2348-93-G on which this decision is based were heard before that consolidation order was made. In due course the parties will have an opportunity to address any unresolved issues in File No. 3830-93-G.
3The applicant, ("the union" or "Local 793"), obtained bargaining rights for employees of the responding party ("Elirpa")on January 31, 1986 in the industrial, commercial and institutional ("ICI") sector and all other sectors of the construction industry in Board Area No. 8. The employer says the union has since abandoned its rights in the road sector through disuse. The union says it has not. In any event of the abandonment question, the union says the employer must pay union rates for roads work because of a cross-over clause in a sewers and watermain collective agreement to which the parties are bound. The employer agrees it is bound to that collective agreement in the sewers and watermains sector, but resists being bound in the roads sector. This is because Elirpa maintains that the accredited employer association which negotiated the cross-over clause had no right to bargain beyond the sector for which it was accredited, at least for non-members. We will deal with the abandonment issue first.
I
4Has the union abandoned its rights in the road building sector?
5After the union was certified, as set out above, the parties unsuccessfully attempted to negotiate a collective agreement for the roads sector in Board Area 8 in early 1986. (The evidence was unclear as to which of the employer's 1986 projects was the certification site.) There was one brief meeting where the union presented a collective agreement which the company did not sign. Conciliation ensued and a "no board report" was issued on June 23, 1986. There were two contacts by the union after that, one to notify the employer of what the "no board" meant and the other a "drop in" visit by two business agents, at which the engineer on site said he had no authority to talk to the union. Vito Montagnese, a union business agent, put the last of these meetings as likely in early 1987.
6In 1987, Elirpa had only one roads project, lasting three to four months, worth $800,000. The union says it did not approach the employer in regards to that project because Elirpa had made it clear there was "no way" it was going to sign a collective agreement.
7In 1988, Elirpa had two good sized contracts from the Region of Durham. The union set up a picket line at a site on Liverpool Road for two days. This did not result in a meeting or a collective agreement. The union attributes this to the poor configuration of the site for effective picketing, and notes that the company did not formally challenge the union's right to be there. However, Mr. Montagnese did acknowledge that Mike Aprile, one of Elirpa's principals, told him individually that the union had no right to be there. After the Liverpool road job, there was one more job in 1988, which overlapped with the Liverpool Road job for about one month on which the union took no action.
8From the summer of 1988, to the spring of 1992, there is no evidence that the union contacted the employer concerning its bargaining rights on any roads sector job . Elirpa had six roads jobs during that period, of varying sizes. of two jobs that occurred during that time, the union says that a significant portion was contracted to union contractors, and thus did not raise significant issues for them. Richard Kennedy, the Local President, was aware of two jobs which they decided not to picket, for various reasons including difficulty with being effective and safety. During this time, the company never called the union for operators or made any remittances of any kind to them. Elirpa was operating openly, and several of the jobs were publicly tendered and awarded.
9In 1989 the Board, differently constituted, issued its decision in an application for accreditation in the sewers and watermains sector. See Metropolitan Toronto Sewer and Watermain Contractors Association, [1989] OLRB Rep. Dec. 1226. At paragraph 14 of that decision the Board recites the history of the issue of whether Elirpa should be on final Schedule "E", which defines the composition of the unit of employers to which the double majority test of what is now section 129(2) is applied. After the Board issued the accreditation certificates in November 1989 without the Elirpa issue being resolved the matter was listed for hearing. The parties then agreed that Elirpa should be added to the list of employers in the accreditation decision, over the initial opposition of the employer. The union's bargaining rights which were recognized in that decision derive from the same multi-sector certificate as the disputed roads sector bargaining rights.
10In April, 1992, the union required the removal of what it believed, on the basis of its operator's statements, to be Elirpa's backhoe from a site. The union's evidence was that Elirpa was doing culverts for a unionized contractor, Crupi. Although the company denies it had equipment on this site, the union queries why an operator would make up its name.
11In the spring and summer of 1993, Elirpa had a couple of road projects which were of relatively short duration. These included two occasions when the union found operators working for Elirpa and had them removed. Although the union says these incidents were clear assertions of its bargaining rights with Elirpa, the company observes that Local 793 treated this equipment in the way it would treat any non-union contractor's equipment. They arranged for its replacement with someone in contractual relations with the union. They did not contact the company at all, to suggest they had an obligation to bargain, or for any other reason. Thus, Elirpa argues that this evidence is consistent with the union's having abandoned its rights before this time.
12In 1993, Elirpa did two jobs of two months duration in East Gwillimbury, before the Valley Farm Project which was the site of the immediate dispute before us. This site was also visible to the public, and the union did not approach Elirpa about it.
13The grievance in Board File No. 2348-93-G was filed on September 21, 1993, alleging a breach of the sewer and watermain agreement in that Elirpa was not using Local 793 men or making the remittances required under the collective agreement. Union representatives went to the site and asked the company if it wanted to enter into a collective agreement. When it declined, picketing commenced and continued from September 22 through 24.
14The picket line effectively stopped work on the project and Elirpa agreed to meet. The meeting on September 24 lasted about 20 minutes. At the meeting, the union presented the low-rise and independent road builders agreement for the employer's consideration. Elirpa agreed not to perform work at the project while it reviewed these agreements. Montagnese testified no one at that meeting said the union did not have bargaining rights. On September 28, 1993, Mike Aprile, one of Elirpa's principals, met again with Montagnese and informed the union that it would not enter into a collective agreement with it. There was no challenge to the union's bargaining rights or right to picket at that meeting either. Union counsel underlines that the employer did not challenge the union's right to picket up to and including the meetings to consider the collective agreement the union was proposing. The union says this was bargaining, i.e. trying to persuade the company to sign a collective agreement, between September 24 and 28, 1993, and that it constitutes a waiver by the company of any earlier abandonment. The union was asked to take the picket line down and did not.
15Mike Aprile testified that he had not had legal advice at that point, and did not clearly understand his legal position. He understood that the union wanted him to sign a collective agreement, however, and he was desirous of resolving the situation created by the pickets. That is why he met with the union. Aprile said he kept saying to the union, "Why are you bothering us when you have not bothered us for so long," and that the union answered because they had a "no Board". He agreed that the union was relying on the "no Board" to try to get the company to sign a collective agreement.
16The company had not performed work on the project in question on September 29, 30, and October 1,1993. On about October 4, Elirpa attempted to resume work on the site, and was again met with picketing. An application was made to the Board in respect of the picketing and what the respondent considered an illegal strike. As a result of the settlement of that application, the matter of the abandonment of the union's bargaining rights in the roads sector is raised in the context of this grievance.
17Union counsel says there should be no doubt that the bargaining rights were live through the no-board and the subsequent meetings and up to the 1988 picketing. Although not successful, counsel stresses that the 1988 line is a clear assertion of the union's bargaining rights. Counsel queries whether it should matter that the picket line was unsuccessful, or that it only lasted two days. Counsel asserts that the test for abandonment should not be the quality or efficacy of the union's use of its bargaining rights, but rather whether they gave up their rights by inaction. The union was not required to engage in an academic exercise to put up picket lines where it knew they would not be effective. Counsel refers to Traugolt Construction, [1981] OLRB Rep. Nov. 1680 at para. 26 to support its argument that the steps taken in September by the employer to negotiate constitute acceptance of the union's right to picket and the fact that it had bargaining rights. Without the section 137 application, there would have been no doubt that what happened from Sept. 24 to Sept. 28 was collective bargaining.
18Employer counsel said that the appropriate test on abandonment is to answer the question: What would a reasonable person observing the union's behaviour conclude about the union's rights. It is an objective test, not an inquiry into the subjective intention of a party.
19As to the suggestion that by talking to the union in the face of a picket line that had stopped its operation the employer waived its right to argue abandonment, counsel answers that intention is required for waiver, and the employer did not know any such thing was at stake. How could it waive? It makes no sense to say that by engaging in a very aggressive illegal strike you can force someone to talk to you and create a waiver of any abandonment argument.
20The evidence overall, in employer counsel's submission, shows that the union did basically nothing to assert its bargaining rights. If a collective agreement could not be reached without effort, they were not going to bother. Even in 1988, observes counsel, when they put up a picket line, there is no evidence of any attempt to talk. Then they disappeared for five years. Not one word to the employer between June 1988 to September, 1993, while Elirpa is going about its business in a highly public way. Counsel says it is just not credible that the union did not know of Elirpa's jobs. The union acknowledged it knew the Daily Commercial News was a good source for the industry; Aprile says the jobs Elirpa had were reported there.
21Employer counsel argues that the evidence is clear that Elirpa was using subcontractors in contractual relations with the union; it must have been aware of its presence on these jobs. Counsel says there is really no explanation for the lack of activity. They say it was not convenient to picket, but there is no explanation for the lack of action in the many other ways the union could have asserted its rights. As to 1988, employer counsel says Montagnese acknowledged that Aprile had told him the union had no right to be on the picket line, and besides, the five years since 1988 is enough time to constitute abandonment.
22Company counsel characterizes the 1993 picketing as an aggressive attempt at recognition picketing. The union realized it had let the rights lapse and tried to use overwhelming force to get Elirpa to recognize them again, submits counsel.
23In reply the union says that intention is not necessary for waiver to have occurred if a party acts inconsistently with rights it may have. As well, counsel objects to what he termed insinuations about violent or aggressive behaviour on the 1993 picket line when there has been no finding of illegal behaviour, and the union denies any illegal behaviour.
24We have carefully considered the evidence and argument on the abandonment issue. The evidence discloses a situation where the union pursued its bargaining rights to the "no-Board" stage and then considered negotiations at an impasse as indicated by its picketing activity in 1988.
It is clear that both then and in 1993 Mr. Aprile understood the union to be relying on its certificate and the valid "no-Board". We are not persuaded that the period of inaction in the roads sector between 1988 and 1992 is sufficient to warrant a finding of abandonment in that sector of the rights granted by the multi-sector certificate.
25The state of affairs by 1988 was that Mr. Aprile had made it clear he was not interested in signing a collective agreement with terms and rates similar to the collective agreements that the union has entered into with other employers. We are of the view that both parties' expectations would reasonably have been that the union would continue to look for the signing of a standard agreement, given the widespread concern for a "level playing field" in the unionized construction industry on the part of both employers and unions. There were three road building seasons, 1989 to 1991, in which the union did not do anything visible to try to get such a roads sector collective agreement signed. The union has explained the practical reasons for not picketing in this period. Further, it was enforcing the rights flowing from its multi-sector certificate in 1989 as evidenced by the contest over Elirpa's status set out in the Board's 1989 accreditation decision in the sewers and watermains sector, which the union views as giving it rights to enforce union rates in the roads sector as well. By 1992 it was asserting its rights more visibly in the roads sector again, albeit in an ambiguous manner. We are not satisfied that an objective observer of the facts taken as a whole would conclude that the union had abandoned its rights. This is not to say that the union could not have done more. It clearly could have. Although the idea that picketing is the only effective way to enforce bargaining rights, in circumstances like the above, may have considerable currency in the construction industry, there are many other ways to proceed, and legislative provisions which the union could have used.
26The authorities referred to by the employer on the question of abandonment include J. S. Mechanical, [1979] OLRB Rep. Feb. 110 which involved a relationship where a collective agreement had been negotiated. The Board found that three and a half years of failure to act on the renewal of that collective agreement, including a failure to pursue the matter to the "no-Board" stage amounted to a withdrawal from the relationship. In R. Reusse Co. Ltd., [19881 OLRB Rep. May 523, the period of inactivity was over twenty years after the conclusion of a collective agreement, fifteen of which had elapsed prior to the onset of provincial bargaining. In Ameri-Cana Motel Limited, [1989] OLRB Rep. Oct. 1009 a period of approximately five years of total inaction after certification lead to a finding of abandonment. Abandonment is in large part a factual call. We are of the view that the facts of those cases are distinguishable, on either or both of the length of time of inactivity and the fact that the bargaining rights here derive from a multi-sectoral certificate. The bargaining rights flowing from that certificate were also being pursued in the sewers and watermains sector.
27Thus, we have concluded that the union has not abandoned its bargaining rights in the roads sector.
II
28Is the employer bound by the cross-over clause?
29The parties became bound by the collective agreement between the Metropolitan Toronto Sewer and Watermain Contractors Association and the union ("the sewer and watermain agreement") following a 1989 accreditation order. See Metropolitan Toronto Sewer and Watermain Contractors Association, [1989] OLRB Rep. Dec. 1226. Elirpa is not a member of the accredited association and disputes the union's claim that it is bound by the "cross over" clause in the sewer and watermain agreement to pay union rates in the roads sector, whether or not the union has abandoned its rights in that sector. The employer takes the position that the authority given to the
accredited association is only to bargain on behalf of Elirpa within the sector and geographical area for which it was granted accreditation. Company counsel says that the association simply does not have the authority to affect his client's rights outside that sector.
30The Metropolitan Toronto Sewer and Watermain Contractors Association was given notice in Board File No. 3808-93-G by the applicant of the fact that it sought to add it as a party, but the Association has not sought to intervene. In Board File No. 2348-93-G, although the responding party listed the Association as an affected party, it now appears that the Operating Engineers employer bargaining agency designated in the ICI sector was given notice by the Board instead, through inadvertence. In light of the consolidation of these matters, it appears appropriate to reserve on the cross-over clause issue and hear from the Toronto Sewer and Watermain Association as to whether it has any submissions to make on the applicant's request for it to be added as a party, and whether it has anything it wishes to add to the facts and submissions of the parties on the cross-over clause issue which are set out below.
31The parties are agreed that Elirpa is bound by the sewer and watermain agreement in the sewer and watermain sector. Since the accreditation order in 1989, Elirpa has only performed two jobs in the sewers and watermains sector, one for $18,000, considered a very small job, and the one which attracted the current grievance, for $184,940. It has been more active in road building. The union argues that whether or not it has abandoned its rights in the road building sector, section 15.5 of the sewer and watermain agreement requires Elirpa to apply the terms of the roads agreement. Section 15.5 provides as follows:
15.5 If an Employer covered by this Agreement engages in work other than Sewer and Watermain construction, and such other work comes within the purview of the existing Collective Agreement between the Union and The Metropolitan Toronto Road Builders' Association, the rates of pay and conditions of work of that Agreement shall apply. Similarly, if an Employer covered by this Agreement engages in work generally recognized as heavy construction (overpasses, bridges, etc.), the rates and conditions prevailing in the Collective Agreement between the Union and the Gperating Engineers Employer Bargaining Agency shall apply. It is further recognized that on all subway construction for the T.T.C., GG Transit or other public transportation systems, the rates and conditions of the Agreement between the Union and the Gperating Engineers Employer Bargaining Agency shall apply.
32There have been two collective agreements since the 1989 accreditation decision; language identical or similar to the above was to be found in both those agreements as well as in agreements between Local 793 and the Association which predated accreditation. Similar crossover wording is found in the existing road building agreements, to sewer and watermain work, as well as to other sectors. Richard Kennedy, President of Local 793, testified that the purpose of such a clause is to respond to the situation that when doing road or sewer and watermain work, it is often hard to distinguish where one starts and the other leaves off. The employer has the advantage of having only one collective agreement to cover both kinds of work. Sometimes it is the same crew which does both kinds of work.
33In argument on the effect of the cross-over clause, the union notes that it is a matter of record that Elirpa is a named employer in the accreditation decision, as the union had pre-existing bargaining rights. Elirpa was on the list from which the Board determined that there was the appropriate level of support for the Association to obtain accreditation. The union argues that once the Association has the authority to bargain on behalf of Elirpa, whatever it negotiates binds him. Counsel analogizes this to the fact that whatever collective agreement is negotiated by a union as exclusive bargaining agent binds all employees in the bargaining unit, whether or not they are members of the union, and whether or not they agree with the result. Counsel says it is trite law to say that parties can negotiate beyond the bounds of the certificate, including for groups excluded by the certificate; the certificate is spent once the collective agreement is negotiated. Counsel says that there is no reason apparent from the statute to treat the accredited relationship any differently.
34Further, counsel says that the cross-over clause makes good labour relations sense because it is so hard in some circumstances to distinguish road building from sewer and watermain work, which are very often done together. Since the union represents people doing both kinds of work, it is sensible to avoid disputes over which it is, which the cross-over clause achieves. As well, argues the union, it makes sense for employers because they do not have to spend the time to distinguish whether it is roads or sewer work and they do not have to maintain two crews.
35Counsel referred to Frank Plastina Investments Limited, [1986] OLRB Rep June 720, and CDC Contracting, [19821 OLRB Rep. Nov. 1589, as Board cases which indicate the importance of crossover clauses in the construction industry.
36The Union also referred to Re. International Association of Heat and Frost Insulators, 1993 CanLII 9383 (NS SC), 103 DLR (4th) 401 (N.S.C.A.) There the employer was a member of the association with rights to bargain under the equivalent Nova Scotia statutory provisions. Counsel refers to pages 403 and 405, and says the problem arose because the insulators were not so designated, and the question was whether it was bound when it had not specifically assumed those obligations. The union's fundamental argument is that where the Act speaks in such broad terms without any restrictions on what kind of agreement can be reached, it would be inconsistent with the scheme of the Act to accept the employer's proposition.
37Counsel reviewed the statutory scheme from sections 127 through 134 and said that the wording of section 131 (2) is key as it says the employers are bound as if the agreement was made by them. Union counsel says this prevents the Board from finding that certain terms of the collective agreement do not bind Elirpa. Counsel observes that one of the reasons for the whole scheme is to avoid whipsawing tactics in dealing with employers who are competitors. They all get the same deal, members or not, in counsel's submission. This is the purpose of section 133 which prohibits individual bargaining. If Elirpa does not feel that the Association is representing it properly it can apply under section 134.
38Counsel says the effect of the cross-over clause is to incorporate the road builders collective agreement by reference into the sewer and watermain agreement.
39Employer counsel, by contrast, underlines the very specific scope of the bargaining rights given to the Association. Gn p. 1241 of the 1989 accreditation decision, cited above, at B(v), specific things are excluded from the bargaining rights, including the agreement with the Metropolitan Toronto Road Builders Association. The company's position is that whatever the Association may be able to negotiate on behalf of its members, when it comes to those parties who are bound by operation of law, the bargaining unit description sets the limits of their jurisdiction. There are no limits on the union's proposition that as soon as you get accredited, even for a very narrow area, you can bargain whatever you want. Employer counsel says the fundamental flaw with the analogy to certification which underlies the union's argument is that there is a big difference in the situation when a union bargains with an employer compared to when it bargains with an association. The employer has all the rights it can give up; if that employer want to recognize the union for more than the union has authority for, the employer has the authority to do that. This is a fundamentally different situation than with accreditation. All the association got was the right to negotiate for a sector and a geographic area; all the other rights still belong to the individual employer. It is the employer's submission that accreditation does not take away the employer's right to bargain on his own behalf for anything other than the sectoral bargaining unit for which the Association is accredited. There is simply no mechanism, says counsel, by which the association can expand on the limited authority it has.
40Employer counsel refers to Beckett Elevator Company Limited, [1982] GLRB Rep. Sept. 1244. Acknowledging that the decision refers to the ICI sector, counsel says that it stands for the proposition that you cannot expand the area of authority granted by the Act. In other words, you can not bargain yourself more authority than the statute gives you. The employer refers to section 128(2) which defines what the unit of employers is; it is employers within a sector. The whole scheme has to be read subject to the particular geographic area and sector for which the rights are granted in the first place. The accredited Association only has the rights to which the Act speaks, not all the rights of all the employers bound by operation of law.
41Counsel for Elirpa submits that problems are created in coherently applying the scheme if the union is right that unlimited bargaining rights flow with an accreditation order. He turns to section 133 which prohibits individual bargaining, and queries how that fits with unlimited scope for bargaining in the association. Implicit in the scheme is that the accredited bargaining agent is only going to be bargaining in the sector for which it is accredited. Counsel asks if 133(1) means that the employer is prohibited from negotiating what he pays for road building or TTC work? Once you move away from the sector for which the association is accredited, how does 133(1) work? Or what about 133(2)? Counsel asks if this means Elirpa cannot work on roads if there is a strike in the sewers and watermains sector?
42Employer counsel says that the Association has two roles; one as a statutorily accredited agency, and the other as a consensual association of its members. It bargained this collective agreement in both roles.
43Employer counsel says that the Association can do whatever it wants on behalf of its own members. However, because accreditation is an extraordinary mechanism which takes away bargaining rights that belong to the employer, but only in a specific sector, it should be very strictly and narrowly construed for non-members. Counsel for Elirpa urges the ICI model; a party may become bound to the provincial agreement in the ICI sector, but not in other sectors. The Association when operating within the scope of certification is acting as accredited employer, but outside the scope, it is not. In ICI, one would look at them almost as two collective agreements.
44Employer counsel cites Sandercock Construction, [1984] OLRB Rep. April 653 for the proposition that the sewer and watermain association has no right to affect what Elirpa has to pay for road building. In answering the union's criticism that what the company is proposing would lead to separate deals for members and non-members, counsel says that the construction industry makes deals for people all the time. If a company happens not to be bound by the sewer and watermain agreement, it can be doing the same work under another collective agreement like the independent road builders agreement. To prevent this kind of separate deal, there would have to be accreditation across several sectors.
45The Board should read the words "collective agreement within the sector and geographic area" into section 131(2) as the Act contemplates clean edges, in the employer's submis sion. Once you break that down, there are no limits. But the limits are there on the authority they had in the first place. They do not have the rest to give away.
46In reply, counsel for the union says that there is a problem with the clear boundaries theme in the employer's argument. It breaks down completely the moment he says that the Association can do this kind of bargaining for its members. The union says its point is that to the extent that the scheme needs clean lines, the clean lines should be that there are no special provisions for members as opposed to non-members.
47Union counsel rejects the employer's characterization of the accreditation scheme as extraordinary, saying it is no more extraordinary than certification. He maintains that the analogy to certification is still valid. The scope of the unit in both situations is an administrative convenience. There is nothing in the accreditation provisions whatsoever that limits the authority of the association and the union on how far they can go.
48Counsel distinguishes Becketi Elevator, cited above, by saying that the Board focused on the words of what is now section 145(a) "but only", whereas there is no similar limiting language in section 130 at all. Once an employer is subject to the accreditation order, it is bound by the collective agreement without limitation. Counsel says there is no justification for reading in any limiting language where there is none. There is no damage to the structure where the members can exceed the bounds in any event.
49Responding to employer counsel's concerns about the coherent application of the scheme, union counsel says that if there is no accreditation in roads, jurisdictional conflict may be caused, but the parties are not thrown into involuntary breach. Section 133(2) does not necessarily mean that the employer cannot do road work because of the operation of 15.5. None of the potential problems with cross over clauses should concern the Board with the application of section 15.5 in the union's submissions. If employer counsel has a valid point at all, it falls apart with his concession that members may bind themselves outside the accredited sector.
50As to the ICI analogy, union counsel says it is far more complicated, because the parties are designated on both sides.
51The employer did not dispute the union's assertion that the grievance should be allowed at least in respect of the sewers and watermains sector, and we so declare. We will remain seized if the parties are unable to work out the results which should flow from that declaration.
52This decision will be sent to the Toronto Sewer and Watermain Association who will have ten working days from its date to indicate whether they wish to add anything to the facts and arguments as to the effect of the cross-over clause set out above, and as to whether they have any position on the applicant's request to add them as a party in Board File No. 3808-93-G. If we do not hear from them in that time period, we will proceed to determine the cross-over issue on the basis of the above facts and submissions.

