[1994] OLRB Rep. April 386
2029-91-G Labourers' International Union of North America, Local 1036 and Labourers' International Union of North America, Ontario Provincial District Council, Applicant v. Ellis-Don Limited, Responding Party
BEFORE: S. Liang, Vice-Chair, and Board Members F. B. Reaume and J. Redshaw.
APPEARANCES: S. B. D. Wahl and William Suppa for the applicant; Walter Thornton and .Richer for the responding party.
DECISION OF S. LIANG, VICE-CHAIR AND BOARD MEMBER J. REDSHAW; April 13, 1994
This is a referral of grievance to arbitration brought pursuant to the provisions of section 126 of the Labour Relations Act in which the Board, by decision dated July 29, 1993 (now reported at (1993] OLRB Rep. July 589], found Ellis-Don Limited ("Ellis-Don") in violation of the provincial collective agreement to which it and the applicant are bound.
The Board remained seized of the issue of remedy. Failing any resolution of this remaining issue between the parties, a further hearing was scheduled. The Board heard the evidence of William Suppa, the Business Manager of the applicant (also referred to herein as the "Labourers" or the "union"). Ellis-Don called no evidence.
In its previous decision, the Board (Board Member F. B. Reaume dissenting) found that the work performed by Final Touch at the Lotto Centre in Sault Ste. Marie, under subcontract from Ellis-Don, was work in the construction industry and covered by the Labourers' collective agreement. The Board found that Ellis-Don was in violation of Article 2.05 of that agreement in failing to subcontract the work to a company in contractual relations with the Labourers. That Article reads:
2.05 The Employer agrees to engage only subcontractors who are in contractual relations with the Union and/or its affiliated bargaining agents for all work covered by this Agreement, or work forming part of an I.C.I. General Contract except as provided in Schedule "D" hereof.
During the course of the hearing on remedy, certain procedural and evidentiary issues arose, on which the Board made directions or rulings. It is useful to set out some of these. At the outset, both parties took the position that there was no merit to the other's position with respect to the availability of damages. Both parties took the position that, on the basis of undisputed facts or facts already found in the Board's previous decision, there was no argument to be made by the other party. In effect, both parties sought to have the Board limit the nature of the hearing by making certain rulings on the legal issues raised without hearing evidence.
The Board ruled that it would proceed to hear the remaining issues in their entirety. We directed both parties to call all their evidence and make final submissions on all issues remaining in dispute.
During the course of the hearing, at several junctures, counsel for Ellis-Don alluded to the inadequacy of particulars provided by the union prior to the hearing. As it turned out, both parties' positions on the particulars were entangled with their positions on the merits of the damages issues. It appears that counsel for Ellis-Don requested from counsel for the union a list of subcontractors that the union asserted were available and suitable to perform the work done by Final Touch. The union took the position that any contractor bound to its collective agreement was a potential subcontractor, and it was not the union's role to assess their suitability for Ellis-Don. Because of its position, it was apparent that it was not the union's intention to call evidence with respect to the particular cleaning capabilities of all of the contractors bound to its collective agreement. On this basis, counsel for Ellis-Don ultimately did not object to the Board receiving the general evidence of Mr. Suppa on this issue.
A related dispute arose during counsel's cross-examination of Mr. Suppa. Counsel sought to determine the basis of Mr. Suppa's assertion that any of the contractors bound to the Labourers' collective agreement were capable of performing the work done by Final Touch. Counsel questioned Mr. Suppa, for instance, as to the particular cleaning equipment owned by some of these contractors. However, at the same time, counsel objected to the Board receiving this evidence and in the alternative requested an opportunity to investigate the evidence. The Board ruled that it would not refuse to hear evidence which was elicited as a result of cross-examination. The Board further indicated that if at the end of cross-examination, Ellis-Don wished to request an
adjournment for the purpose of investigation, on the basis that the evidence was unanticipated and should have been particularized before the hearing, the Board would consider such a motion at that time. At the completion of the evidence by the union, counsel for Ellis-Don made no such motion, and called no evidence.
The evidence of Mr. Suppa, supported by the union's out-of-work list, was that during the period in question, there were more than enough members of the union who were out of work and available to perform the work done by Final Touch employees. He also provided the Board with copies of some referral slips showing that members of the Labourers have been referred to construction contractors in the classification of "janitor". Mr. Suppa also confirmed that at the time in question, Ellis-Don employed members of the Labourers at the Lotto Centre.
Mr. Suppa provided the Board with a list of contractors in and around the Sault Ste. Marie region who were, at the time that provincial bargaining came into force, bound to collective agreements with the Labourers' or a fellow local. This list is not current, and there has not been an official update to it by the contractor's association since that time. In cross-examination, Mr. Suppa testified as to a number of companies on this list which in his understanding are no longer in operation. In his evidence, any contractor which is currently signatory to the Labourers' collective agreement is capable of performing the work done by Final Touch. In particular, Mr. Suppa made reference to para.8 of the Board's prior decision, containing the description of services offered by Final Touch to Ellis-Don with respect to the Lotto Centre project. Mr. Suppa testified that any contractor bound to the Labourers' collective agreement is capable of performing that work. Most of the contractors on the list provided, who are still in business, are general contractors.
Mr. Suppa also testified that in the normal course, an employer is responsible for supplying the necessary equipment to a site in order to carry out construction labourers' work. Most contractors have their own equipment; where they don't, they can obtain equipment from a construction rental firm. Mr. Suppa was unable to state whether any of the contractors on the list owns the specific type of equipment which was used by Final Touch in its cleaning. He did point out, however, as an example, that one of the companies owns its own construction rental outfit. He also testified with respect to another contractor, that he had personally worked on a crew whose sole function on a job site was cleaning.
In argument, it was the primary position of the union that the only fact it needs to prove to show its entitlement to damages is that it had members of the union who were willing and able to perform the work in question at the time of the project. This fact has been proven by the evidence. It is irrelevant to the issue of damages whether these persons would have been employed by Ellis-Don, or by a subcontractor to Ellis-Don.
In any event, the union has also provided a list of contractors which are bound to its collective agreement, and has proven that some of these contractors have employed members of the Labourers to do cleaning work on construction job sites. The union ought not to be placed in the position of having to show the particular cleaning capabilities of each of these contractors with reference to the work that was actually performed at the Lotto Centre. The union cannot assess the suitability of the contractors; this is Ellis-Don's function. The collective agreement provides that an employer who is bound by it is obligated to perform work covered by the agreement with either direct employees who are members of the Labourers, or a subcontractor which has an agreement with the Labourers. It is a management right and a management decision as to which of these routes is taken, but an employer must take one of these routes.
Counsel for the union contrasts Article 3 of the collective agreement with Article 2.05. Article 3, relating to the hiring of workers, provides that an employer is entitled to hire any labour which is available if the union is unable to fulfill a request to the hiring hall, subject to the non-member obtaining a referral slip from the union and applying for membership within seven days. Article 2.05 contains no similar "saving". Therefore, if an employer chooses to subcontract work covered by the agreement, it must be to another contractor bound to an agreement with the Labourers.
In any event, the employer here has called no evidence that could satisfy the Board that it could not have done the work itself.
Counsel for the employer focused on the union's acknowledgement, during the course of the hearing which led to the Board's finding on liability, that the subcontract in question is a bona fide subcontract. This issue arose in the prior hearing when counsel for the employer sought to question a witness on new developments in the cleaning industry since the witness began business. The question was objected to on the basis of relevance. Counsel for the employer stated that the question related to the issue of whether there are appropriate union subcontractors available to perform the work. In argument in support of the objection, union counsel stated that it is the Labourers' position that Ellis-Don has the obligation to find a union subcontractor or use its own forces to perform the work. The Labourers do not dispute that this subcontract is bona fide.
Relying on the bona fides of the subcontract, counsel for the employer agrees that it is a management function to decide whether to perform work covered by the collective agreement with its own employees, or to engage a subcontractor. Counsel states that having conceded that the subcontract was a "bona fide" subcontract, taken for proper business reasons and no other reason, the union cannot now submit that there has been wrongdoing. It is an employer's right to make decisions based on business principles.
Counsel for Ellis-Don submits that the Board cannot determine the soundness of the decision to subcontract. It would be impossible for an employer to prove that it could not have performed the work itself. If money and efficiency are irrelevant, any business could decide to take on any work. This cannot be the issue. Therefore, once it is accepted that it is a proper exercise of management rights to decide to perform work directly or engage a subcontractor to perform work covered by the agreement, the scope of the Board's scrutiny of the decision taken must be limited to its bona fides. In counsel's submission, therefore, there is nothing for the Board to decide in the case before it.
In any event, the evidence of the union regarding the availability of subcontractors is problematic. The evidence amounts to a general assertion that any general contractor is capable of performing the work in question, since most of the contractors referred to are general contractors. The suggestion is either that Ellis-Don could have done the work with its own forces, or else that Ellis-Don should have subcontracted the cleaning work to another general contractor. This cannot be proof of the availability of suitable union subcontractors. The Board cannot accept the notion that a general contractor should be obliged to subcontract cleaning work to another general subcontractor. There is no evidence tendered by the union of union subcontractors in the cleaning business.
Counsel agreed that Ellis-Don made no attempt to find out whether there were any union subcontractors available and suitable to perform the work. At the time, Ellis-Don did not view the work as being in the construction industry. It has been proved wrong. At the time, however, its decision was made honestly.
In their submissions, counsel referred the Board to: Re Blouin Drywall Contractors Ltd. and United Brotherhood of Carpenters and Joiners of America, Local 2486 (1975) 1975 CanLII 707 (ON CA), 57 D.L.R. (3d) 199 (Ont. C.A.); Re McKenna Brothers Ltd. and Plumbers Union, Local 527 (1975) 1975 CanLII 2128 (ON LA), 10 L.A.C. (2d) 273 (Shime); Napev Construction Limited [1980] OLRB Rep. Feb. 260; Eton Construction Limited, [1981] OLRB Rep. July 872; George Ryder Construction Ltd., [1981] OLRB Rep. Dec. 1785; Piggolt Construction Limited, [1985] OLRB Rep. Aug. 1290; Steve's Sheet Metal Company, [1986] OLRB Rep. Sept. 1309; Bechtel Canada Inc., [1993] OLRB Rep. May 400; Bechtel Canada Inc., [1993] OLRB Rep. July 581, and Ontario Hydro, [1978] OLRB Rep. April 331.
At the hearing, the union submitted a detailed chart showing its summary of damages owing. The chart is based on the hours of work performed by employees of Final Touch, with appropriate calculation for shift premiums, overtime and the like. Counsel for Ellis-Don had not been provided with this chart prior to the hearing, and requested an opportunity to review the chart to confirm its accuracy in terms of number of hours and when they were worked. Counsel stated that the employer did not dispute the principles applied to the calculations, but simple wanted to "double-check" the hours. The Board agreed to permit the employer this opportunity, and to receive written representations on this point.
The Board does not agree with counsel for the employer that the focus of the Board's inquiry is whether or not there was a bona fide decision taken to subcontract the work. Further, the Board does not accept that the bona fides of the decision taken in the case before us is determinative of the remaining issues.
Counsel referred the Board to Ontario Hydro (1978), supra, in which the Board analyzed the relationship between management rights and the specific provisions of a collective agreement:
From this review of the arbitral jurisprudence there emerges a general principle that management does have a right to implement retirement policies that remains unfettered by general collective agreement language relating to seniority or discharge. This right, however, is not entirely unqualified, being subject to curtailment by specific collective agreement language and by the implied qualification that it not be exercised in an arbitrary, discriminatory, or unreasonable manner.
To the extent that the above excerpt is a restatement of the general proposition that specific collective agreement language curtails general management rights, this would seem to be obvious and indisputable. However, we do not find it to support the position of Ellis-Don in these proceedings. Ellis-Don asserts that the employer's right to choose whether or not to subcontract is subject only to the principle of bona fides, which we take as analogous to the implied qualification of "arbitrary, discriminatory, or unreasonable." Such a position ignores totally the fact that Article 2.05 is a specific curtailment of the employer's management rights, as are virtually all of the provisions of this agreement. As such, the provisions of the agreement are, as set out in the excerpt above, restrictions on management rights over and above the bonafides requirement.
Under this agreement, an employer has the right to choose, for bona fide business reasons, to subcontract work covered by the collective agreement to another employer. However where the employer has decided to organize its work in this way, it must comply with the terms of the collective agreement. Similarly, if the employer decides to perform the work using its own forces, it must do the work subject to the terms of the collective agreement. It would come as a great surprise to the union if an employer were to take the position that, for proper business efficiency reasons, it would not apply the wage rates, hours of work, union security or any other provision in the agreement relating to its employees. Yet that is the logical extension of the arguments of Ellis-Don before us.
The union asserts that the combination of the union security provision and the subcontracting provision in this agreement form a complete circle. In other words, it states that an employer which undertakes work covered by the collective agreement must hire union members to perform the work directly or ensure that a union subcontractor is engaged to perform the work. There is no other alternative so long as there are union members who are available to perform the work.
We do not have to decide whether the obligations in this agreement are an absolute in the way suggested by the union. We will assume for the purposes of this next part of our decision that they are not, and that it is possible to read the obligations of the agreement in such a way that an employer is, in certain circumstances, relieved from the restrictions on subcontracting.
Even accepting this assumption, we are satisfied that this union has established its entitlement to damages as a result of the employer's violation of the collective agreement.
In Re Blouin Drywall Contractors Ltd., supra, the Ontario Court of Appeal upheld an award of damages arising out of an employer's use of non-union employees, stating:
Having found that the employer was in breach of the agreement, the amount of the wages lost, and that there were union members available to do the work, the board had jurisdiction to make the order in question.
- In Pig gott Construction Limited, sup ra, the Board stated:
Since Blouin Drywall and McKenna Brothers, it has generally been sufficient for a trade union claiming damages for violation of the hiring hall or subcontracting provisions of its collective agreement, to simply establish that it had sufficient unemployed members at the times material to the grievance to have supplied the needs of the employer directly or through its subcontractor.
In the case before us, the union has established that there were "sufficient unemployed members at the times material to the grievance to have supplied the needs of the employer directly or through its subcontractor." Further, the union has proven that Ellis-Don has employed labourers to perform clean-up functions on a job site. It has proven that other contractors which are bound to its agreement have performed cleaning on construction sites. The employer does not deny this. What the employer questions is the expertise, supervisory capacity, and physical capacity (in terms of equipment) of either a subcontractor bound to the Labourers' agreement or of itself (Ellis-Don), to perform the work in question. The employer takes the position, essentially, that in order to prove its entitlement to damages, the union must not only show that its union members lost the opportunity to perform the work, but that there was a vehicle through which the work could have been done. Further, it puts the union to the proof that either Ellis-Don or a union subcontractor had the same equipment, expertise and supervisory capacity which was actually applied by Final Touch in performing this work.
The employer, in our judgement, holds too elevated a view of the union's evidentiary
obligations. We see no reason why the union should be put to such specific proof. The evidence as to the nature of the work for which Ellis-Don wished to engage a subcontractor is contained in the general contract, in which the obligations of the general contractor for final clean up is described. This portion of the general contract is set out in the Board's prior decision. It is a general description, using such phrases as "[o]n completion of work remove stains, dust, smudges caused by work within work areas of this Contract." There is no reference in this description to specific equipment, materials, or expertise required. There was no tender relating to the cleaning work in which Ellis-Don set out any specifications as to materials, equipment etc. As set out in the Board's previous decision, the relationship between Final Touch and Ellis-Don was described essentially in a general written proposal by Final Touch setting out its description of services. There is no reference in this description as well to any specialized equipment or materials.
In these circumstances, we see no reason why the Board ought to require the Labourers to prove, in order to establish its loss, that either Ellis-Don or a union contractor would have or could have performed the work of final clean up in exactly the same manner as Final Touch. There is no evidence that when Ellis-Don chose Final Touch to perform the work, Ellis-Don required the work to be performed in exactly the manner, and using the type of equipment and materials, as it was performed by Final Touch.
In these circumstances, we are satisfied that the union has proven its entitlement to compensation. It has shown that it had members available to perform the work as described above. It has also established to our satisfaction that it was within the capability of union contractors or of Ellis-Don to perform the work as described in the contract documents. Where Ellis-Don wishes to take issue with this, it seems to us to be a relatively modest burden to expect that it will call evidence to demonstrate why it could not have complied with the collective agreement obligations. In fact, it seems to us that the easiest way to establish the lack of suitable union contractors would be proof that the contract was advertised and no union subcontractors made a bid for the work.
We stress that our findings above are made on the assumption that there may be circumstances where an employer who chooses to undertake certain work may in some circumstances be excused from the application of both the union security provision and a subcontracting provision. We do not have to determine whether this is a valid legal theory because we have found, on the facts of this case, that there is no "excuse". In the result, we are satisfied that as a result of Ellis-Don's violation of the collective agreement, the union's members have suffered a loss of work opportunities for which they should be compensated.
As indicated above, counsel for Ellis-Don requested, and the Board granted an opportunity to Ellis-Don, to review the damages calculations submitted by the union, for accuracy. After the conclusion of the hearing, the Board received correspondence from the parties dated December 9, December 22, January 6, January 7, January 18, January 19 and January 22. On our review of this correspondence and the material before us, the Board makes the following findings.
Among the issues raised by Ellis-Don in the correspondence is the likelihood of a second shift rather than double-time for certain hours worked. At this stage of the proceedings, it is not open to Ellis-Don to dispute the principles upon which the union's damages calculations are based. Although Ellis-Don did not receive the union's damages summary until the hearing, it was open to it to request an opportunity to review it, and to leave open the option of disputing the principles upon which the calculations were based. In fact, counsel did make a request for some time to review the summary, but specifically confined the request to an opportunity to review the summary for accuracy of number of hours worked.
In our discretion, we will permit Ellis-Don a further period of two weeks from the date
of this decision to complete its review of the summary for accuracy. Unless the Board receives further submissions on this matter within that time, we will proceed to determine the sum of damages owing under this grievance on the basis of the materials before us.
DECISION OF BOARD MEMBER F. B. REAUME; April 13, 1994
Since I view the majority decision in this matter as untenable as far as the industry is concerned, I must dissent any award of damages.
Further to my prior dissent on the merits, I would not be surprised to see a nominal amount of damages to address that portion of the clean-up work which might have reasonably been considered construction work before the decision.
However, under the circumstances here which deal with the final clean-up of a commercial building, the respondent should clearly and unequivocally be relieved from any and all damages.