Ontario Labour Relations Board
[1995] OLRB Rep. December 1417
2331-95-G International Union of Operating Engineers, Local 793, Applicant v. Canadian Highways International Constructors, Responding Party v. Metropolitan Toronto Road Builders Association, Intervenor
BEFORE: Lee Shouldice, Vice-Chair, and Board Members W. N. Fraser and G. McMenemy.
APPEARANCES: S. Wahl and M. Gallagher for the applicant; D. Bannon, J. Hanson and J. Has-sell for the responding party; J. Liberman for the intervenor.
DECISION OF THE BOARD; December 21, 1995
I. Introduction
- This is a referral of a grievance in the construction industry to arbitration, pursuant to what is now section 133 of the Labour Relations Act, 1995 ("the Act"). On October 11 and 12, 1995, the Board entertained argument from counsel for the applicant, responding party, and the Metropolitan Toronto Road Builders Association (hereinafter the "MTRBA") on the preliminary issue of whether the MTRBA ought to be provided with status to intervene in this proceeding. The factual basis for the argument heard by the Board consisted of fourteen exhibits entered by the participants, and the testimony of Michael Gallagher, the Labour Relations Manager of the applicant (hereinafter "Local 793").
II. The Facts
It is appropriate at this stage to briefly set out the facts upon which this preliminary issue was argued. The grievance underlying this application relates to work being performed on what will be referred to as "the Highway 407 project". Highway 407 is a controlled access toll highway which is currently being constructed between Highways 403 and Highway 48 in South-Central Ontario. Boiled down to its most fundamental elements, the grievance alleges that the responding party (hereinafter "CHIC") has not properly paid members of Local 793 for certain overtime work performed on the project.
The terms and conditions of employment on the Highway 407 project (as they relate to Local 793, at the very least) are governed by a Project Agreement dated February 28, 1995 which binds CHIC, Local 793, Labourers' International Union of North America, Local 183, and International Brotherhood of Teamsters, Local 230. It should be noted here that there is no dispute that CHIC is a joint venture of four road builders: Monenco AGRA Inc., Armbro Holdings Inc., Dufferin Construction Company and The Foundation Company Inc.
The Government of Ontario has contracted with Canadian Highways International Corporation to develop the Highway 407 project. In turn, Canadian Highways International Corporation let a contract for the exclusive performance of all work during construction on the Highway 407 project to CHIC. By way of a Letter of Intent executed on January 10, 1994 by the three above-noted unions and CHIC, the parties to that Letter of Intent indicated a desire to promote a construction project agreement governing the terms and conditions for employment on the Highway 407 project. The Letter of Intent has appended to it a Schedule "A" which sets out various collective agreements to which the three unions are individually a signatory (including that between "The Metropolitan Toronto Road Builders Association and the International Union of Operating Engineers, Local 793 in effect from time to time"). The Letter of Intent further provides that CHIC "agrees to recognize and be bound by" the collective agreements listed in Schedule "A", and that all work on the Highway 407 project will be performed by contractors and/or subcontractors who are bound by the collective agreements therein listed.
The Letter of Intent expressly states that the parties to that Letter will enter into a Project Agreement containing, amongst other things, certain modifications respecting the collective agreements contained in Schedule "A" to the Letter. The Letter of Intent reflects an expectation that the Project Agreement would be entered into on or before February 15, 1994. As noted above, a Project Agreement was subsequently entered into by the parties to the Letter of Intent, although not by February 15, 1994. The Project Agreement, rather than reflecting that CHIC "recognizes and is bound by" the Schedule "A" collective agreements, states only that all work on the Highway 407 project will be performed under the Project Agreement, and that all of the terms and conditions in the Schedule "A" collective agreements "are incorporated and form part of this Project Agreement" with the amending modifications contained in the Project Agreement. One of the modifications in question relates to make-up time, and is raised, in part, by the grievance before the Board.
The Project Agreement itself is effective from February 28, 1995, to April 30, 2000, and continues from year to year thereafter unless either party serves a notice to bargain within 60 days prior to April 30, 2000, or any anniversary thereof. Furthermore, the Project Agreement specifically lays out the hourly construction labour costs for the Highway 407 project. These costs are, in essence, the current costs under the Schedule "A" agreements, as amended from time to time, with certain percentage cap increases through to April 30, 2000. A Letter of Understanding appended to the Project Agreement states that any terms and/or conditions of employment that are negotiated as part of any Schedule "A" agreement which treat the Highway 407 project less favourably than other construction work covered by that collective agreement will not form part of the Highway 407 Project Agreement.
As noted above, the Board heard testimony from Mr. Michael Gallagher, Labour Relations Manager of Local 793. Mr. Gallagher testified that during the negotiations leading up to the signing of the Project Agreement, CHIC indicated a desire not to be bound by the Schedule "A" collective agreements, including the MTRBA collective agreement. Mr. Gallagher stated that CHIC negotiators were concerned that the MTRBA could successfully challenge the Project Agreement if CHIC specifically agreed to be bound by the MTRBA agreement. In fact, the MTRBA did refer a grievance to the Board for arbitration on October 17, 1994 (Board File 2526-94-G), in which it grieves that the three unions violated the respective collective agreements between them and the MTRBA by negotiating on an individual basis with its members (in particular, Dufferin Construction Company and The Foundation Company of Canada Limited, two of the four companies that are partners in the CHIC joint venture). An unfair labour practice complaint based on the same facts was also filed with the Board by the MTRBA (Board File 2652-94-U). Both of these proceedings were withdrawn, with leave of the Board and at the request of the MTRBA, by way of a decision dated June 7, 1995.
In cross-examination Mr. Gallagher conceded that the Highway 407 project was predominately a road building project, and that the MTRBA collective agreement would be the predominate collective agreement applied on the project. He also concurred with counsel for the MTRBA that the collective agreement negotiations between Local 793 and the MTRBA for a renewal agreement were completed by way of a Memorandum of Agreement prior to the MTRBA's request for withdrawal of its Board proceedings in June, 1995. The renewal agreement contains a Letter of Understanding which provides that, if Local 793 enters into discussions with any employer not bound to the MTRBA collective agreement for work on special projects, which discussions may result in the signing of an agreement which contains more favourable terms than those in the MTRBA agreement, then Local 793 is to consult with the MTRBA prior to signing any such agreement or other document which may lead to such an agreement. Mr. Gallagher confirmed that the Letter of Understanding was a means of settling the grievance and unfair labour practice complaints filed by the MTRBA against the unions.
Mr. Gallagher also agreed that the difference in wording between the Letter of Intent and the Project Agreement respecting the relationship between CHIC and the Schedule "A" collective agreements did not affect how Local 793 treated CHIC; and that Local 793 expects CHIC to observe all the terms of the MTRBA collective agreement (as modified) as if it were bound to the collective agreement. It was conceded that CHIC was treated no differently by Local 793 than any other company bound to the MTRBA agreement. Further, it was the testimony of Mr. Gallagher that construction on the Highway 407 project commenced in the summer of 1994, that CHIC was operating during the summer of 1994, and that it voluntarily observed the terms of the MTRBA agreement with Local 793, until Local 793 executed the Project Agreement in February, 1995.
On the basis of the above evidence, the issue of the granting of status to the MTRBA was argued before the Board.
III. Decision
A large number of cases were provided to the Board during argument. In our view, the applicable principles are outlined in the Board's decision of Ontario Hydro, [1986] OLRB Rep. May 663, at paragraphs 19 to 24, which read as follows:
This Board is not a court with an inherent jurisdiction to deal with any legal dispute which may exist between the parties who appear before it. The Board derives its jurisdiction from the Labour Relations Act, which provides in subsection 102(13) that:
(13) The Board shall determine its own practice and procedure but shall give full opportunity to the parties to any proceedings to present their evidence and to make their submissions, and the Board may, subject to the approval of the Lieutenant Governor in Council, make rules governing its practice and procedure and the exercise of its powers and prescribing such forms as are considered advisable.
Section 79 of the Board's Rules of Procedure, R.R.O. 1980, Reg. 546, provides:
- The Board may direct that any person be added as a party to a proceeding or be served with any document, as the Board considers advisable.
Although on a referral under section 124 the Board acts as "an arbitrator to which ... the Labour Relations Act applies" within the meaning of section 3(2)(d) of the Statutory Powers Procedure Act, R.S.O. 1980 c. 484, the Board's jurisdiction and procedure are still determined by those provisions of the Labour Relations Act and Rules of Procedure which govern the Board's proceedings generally: Re International Association of Heat & Frost Insulators & Asbestos Workers Local 95 and Master Insulators Association of Ontario et at. (1979), 1979 CanLII 1622 (ON HCJ), 25 OR. (2d) 8 (Ont. Div. Ct.), and Ontario Erectors Association et at v. International Union of Operating Engineers, Local 793, (1980) 2 A.C.W.5. (2d) 307 (Ont. Div. Ct.)
- Section 79 of the Board's Rules of Procedure impose [sic] no express limit on the circumstances in which the jurisdiction to add a party may be exercised, leaving it entirely in the discretion of the Board. This section of the Rules would be inapplicable to arbitration referrals only if it were inconsistent with the language of section 124 of the Act. There is no inconsistency. Section 124 requires that an applicant be a party to the collective agreement, but it is silent as to who may be a party respondent or intervener. As the Board observed in Ontario Hydro, [1978] OLRB Rep. Mar. 304 at paragraph 7:
7.... It is well settled that a person whose interests may be directly and adversely affected by an adjudication in respect of a collective agreement is a proper party to those proceedings notwithstanding that he may not, strictly speaking, be one of the two parties to the collective agreement. In that circumstance a board of arbitration has a duty to give notice of its proceedings to the person or company in question and to afford them a full opportunity to participate. (Re Bradley and Ottawa Professional Fire Fighters Ass'n, (1967) 1967 CanLII 160 (ON CA), 63 DLR (2d) 376 (Ont. CA.), Re Hoogendoorn and Greening Metal Products and Screening Equipment Co., (1968) 1967 CanLII 20 (SCC), 65 DLR (2d) 641 (S.C.C.).) Thus the parties to a collective agreement and the parties to proceedings relating to that agreement need not always be one and the same. And that is so no less under section 112a [now s. 124] of The Labour Relations Act than in other arbitration proceedings.
In that case the Board held that Ontario Hydro was a proper party to a referral to arbitration of a grievance that Hydro had violated the provisions of a collective agreement between the Ontario Allied Construction Trades Council and EPSCA. The Hoogendoorn and Bradley cases illustrate that persons other than parties signatory to a collective agreement will have the right to participate in an arbitration thereunder if they are bound by the agreement and their own rights thereunder are directly in question and may be determined in the arbitration. There is no discretion in such cases to permit or deny standing as an intervener when it is sought by such persons - they are entitled to participate as of right. Since it involves the exercise of a discretion, the Board's power under section 79 of its Rules of Procedure obviously extends to persons other than those entitled to participate as of right. As we understood its submission, 3-L did not claim it had a right to standing but, rather, that we had a broad discretion to grant it standing - a discretion which we should exercise in their favour in the circumstances of this case.
While it was well understood by all involved, it is worth noting here that the undoubted right of either the applicant or the respondent to involve 3-L in these proceedings as a source of evidence relevant to the issues either of them raised before the Board was not in question here. The question raised by 3-L's motion was whether 3-L had or would be given the same right to participate as a party. Having regard to the analysis in Napev #1 of which the Divisional Court approved and the similar analysis in the other Board decisions referred to earlier, we were and are satisfied that 3-L was not entitled to standing as of right. We were and are also satisfied that we did have a discretion to grant 3-L standing if we considered it appropriate to do so.
In deciding how to exercise its discretion to permit intervention by a person not entitled to intervene as of right, the Board must be sensitive to the nature and limits of the jurisdiction it exercises in the particular proceedings before it and, for that reason, cautious about drawing analogies with the courts' experience in exercising a facially similar discretion. One of the factors weighed by the courts in many of the cases cited by counsel for 3-L was that the effect on the proposed intervener of the result sought by one of the parties before the court might become the subject of subsequent legal proceedings in the same court involving the proposed intervener and one or more of the original parties; thus, by adding the proposed intervener the court could bind it to the result and so avoid a multiplicity of proceedings. The Board's permitting intervention in its proceedings could only avoid a multiplicity of proceedings if the potential proceedings involve matters within the Board's jurisdiction. As the Board's jurisdiction is considerably narrower than that of the courts, there will be a narrower range of cases in which avoidance of a multiplicity of proceedings can weigh in favour of granting intervener status. This is clearly not one of those cases, as 3-L took the position that this Board would have no jurisdiction to resolve any of the legal issues which would or might arise between it and Hydro should this referral be decided in the applicant's favour.
Apart altogether from the fact that we could not adjudicate the rights inter se of the respondent and proposed intervener if the latter were permitted to participate as a party in this proceeding, there are other important distinctions between the facts of this case and those in Union Natural Gas Co. v. Chatham Gas, supra. There, the trial judgement enjoined the defendant from fulfilling its obligations under its contract with the sugar company which the appeal court ruled ought to be a party to the action. As the appeal court observed about the trial decision:
This adjudication virtually annuls the sugar company's agreement, or at all events deprives that company of any right to specific performance, and places it under such a disability that it cannot make an agreement with the defendants except by the permission of the Court...
Hydro's primary obligation to 3-L is not to supply goods, but to pay money. No decision the Board would or could make in this referral would enjoin Hydro from paying money to 3-L. It is hard to see how any such decision would deprive 3-L of a right (if it would otherwise have one) to specific performance or to any other remedy for breach by Hydro of its agreement with 3-L. In the Union Natural Gas case, the appeal court noted that the agreement between the defendant and the sugar company was not merely an agreement for the supply of natural gas generally but for the supply of the particular gas obtained by the defendant from the plaintiff pursuant to the terms of the agreement between the latter two parties. The terms of that agreement were recited in the defendant's contract with the sugar company, the defendant's obligation to supply gas under the latter contract was conditional on its being able to obtain it from the plaintiff pursuant to the terms of its agreement with the plaintiff and the sugar company's contract with the defendant gave it the right to act in the defendant's name to compel supply under the agreement between the defendant and the plaintiff. The appeal court observed that:
……these provisions distinguish this case from others in which it might be said that a contract for the supply of a commercial article between two parties may be attacked in litigation between them without bringing in a sub-purchaser or a person to whom the purchaser is to hand over the article bargained for under the contract. In that case the remedy would be in damages, and the sub-purchaser would be expected to go into the market and supply himself. Here, however, while such a course might be open and might be taken by the sugar company - see Erie County Natural Gas and Fuel Co. v. Carroll, [1911] AC. 105 - the other rights given by the contract would entitle the sugar company to a larger remedy than mere damages. Besides this, if the learned trial Judge's view of the relations of the plaintiffs and defendants, as that of partners, is sustainable, then there is all the more reason why the outsider should be heard in his own interest, and not left in the lurch in the settlement of the partnership difference.
3-L's contract with Hydro is not intertwined in these ways with the collective agreement before us here. 3-L did not argue that its contractual or proprietary rights under or arising out of the performance of its contract with Hydro were in any way contingent on the scope of Hydro's collective agreement obligations. It may be that Hydro might cancel its contract with 3-L if this referral were decided in the applicant's favour, but that possibility exists independent of these proceedings, and it was not suggested that Hydro's obligations to 3-L upon cancellation would be altered by a Board decision in the applicant's favour.
Proceedings before this Board under section 124 were intended by the Legislature to be an analogue of the private arbitration process which section 44 of the Act requires be provided for in each collective agreement as the final mechanism for resolving disputes over its interpretation, application, administration or alleged violation. This arbitration process is intended to be private and expeditious. The concern for expedition is particularly reflected in the prompt hearing requirements of section 124. The need for expedition will ordinarily militate against permitting intervention by a third party not entitled to participate as of right. Common sense suggests, and experience confirms, that the time consumed in hearing a matter will increase if the number of participants increases, because the mechanics of conducting and even scheduling the hearing become more complex. The essential nature of grievance arbitration as a private system for dispute resolution also militates against permitting intervention by a third party not entitled to participate as of right.
Having regard to the nature of the grievance arbitration process, when sitting as an arbitration board under section 124 of the Labour Relations Act, this Board should not permit intervention by persons who are not entitled to standing as of right except when the special circumstances of the proposed intervener make it desirable from a labour relations perspective to permit such intervention. No such circumstances were demonstrated here. Accordingly, by telegram dated November 14, 1984, the parties and 3-L were advised that, for reasons to be delivered at a later date, the application of 3-L Filters Limited for standing as an intervener in the hearing of this arbitration referral was dismissed. These are the reasons then promised.
There are three separate bases which may support a person's participation in a referral of a grievance to arbitration pursuant to section 133 of the Act. First, the parties to the collective agreement in question are proper parties to an application under section 133 of the Act; there can be no doubt of that principle. Alternatively, a person may, as of right, be entitled to participate in a grievance referral if it is bound by the agreement and its own rights thereunder are directly in question and may be determined in the arbitration proceeding. In both of the above-noted situations the person desiring to participate is entitled to participate as of right, and there is no discretion in the Board to deny that person the opportunity to participate.
However, the Board, has, as well, retained the discretion to add parties to any particular proceeding if it determines that it is advisable to do so. As is evident from the decision of the Board in Ontario Hydro, supra, when exercising its discretion to add parties to a proceeding the Board must be cautious to exercise that discretion in a manner which recognizes the various competing interests at play, such as the desire to avoid a multiplicity of proceedings, and the necessity to ensure that grievance referrals made to the Board both commence and proceed in an expeditious and cost-effective fashion. As each and every case must be determined on its own factual base, the factors to be taken into account by the Board in deciding to exercise its discretion in favour of adding an intervenor to an application under section 133 of the Act cannot be (nor need they be) exhaustively listed.
Counsel for the MTRBA asserted that his client has status to intervene as of right in this proceeding, on the basis that, with few modifications, the MTRBA collective agreement with Local 793 has been incorporated by reference into the Project Agreement, and that it is, in reality, those terms and conditions that the Board will be interpreting when deciding this grievance. As the grievance filed by Local 793 "goes to the heart of' the MTRBA collective agreement, it is asserted that the MTRBA ought to have status as of right to intervene in the proceeding. Counsel for the MTRBA suggested that if one clause out of the MTRBA agreement had been plucked out for use by Local 793 and CHIC for its collective agreement, the situation might be different. However, when the MTRBA Agreement is picked up in its entirety, with minor modifications, status follows as of right. Counsel for CHIC agreed that the MTRBA ought to be provided status to intervene in the proceeding, for the reasons set out above.
We disagree that the MTRBA has status to participate in this proceeding as of right. It is evident to us that the collective agreement binding Local 793 and CHIC is the Project Agreement, which incorporates by reference the terms and conditions of a number of collective agreements, as modified by the Project Agreement itself. The MTRBA is not a party to that collective agreement. It is true that the wording in the Local 793/CHIC collective agreement is largely identical to the wording of the Local 793/MTRBA collective agreement. This does not, however, lead us to the conclusion that the MTRBA has party status as of right to participate in this proceeding. The MTRBA is not bound by the Local 793/CHIC collective agreement and none of its members would be bound by the determination of the Board in this proceeding. Accordingly, the rights of the MTRBA and its members are not directly affected by the arbitration; nor may the rights under the MTRBA collective agreement with Local 793 be determined in this proceeding. In that light, the assertion that the MTRBA has a right to participate in this proceeding must fail.
The question remains as to whether the Board ought to provide the MTRBA status to intervene in this proceeding, in the exercise of its discretion to do so pursuant to Rule 26 of the Board's Rules of Procedure. Counsel for the MTRBA argued in the alternative that to grant intervenor status to his client made sense, in order to avoid a multiplicity of proceedings with respect to the same language binding MTRBA members and Local 793. Counsel submitted that his client and its members could be placed in a difficult position in the future should CHIC lose this grievance arbitration to Local 793, as a subsequent grievance by Local 793 against a member of the MTRBA would be bolstered by the Board's decision in this proceeding. In counsel's submission, it makes labour relations sense in this proceeding to permit all of those governed by the language in question to participate in this arbitration.
Counsel for Local 793 asserted a number of grounds for denying intervenor status to the MTRBA. One of the bases for denying status was the suggestion that CHIC had "welched on" the deal reflected by the Project Agreement (and in particular the duration of the Project Agreement) by now asserting that the MTRBA ought to be provided with status to intervene in this proceeding, and that to grant status to the MTRBA would have the effect of "vacating" the underlying deal represented by the Project Agreement. Obviously, the Board was not present during negotiations between CHIC and Local 793, and we are unaware of the substance of the negotiations which took place. However, in the absence of any evidence that the "deal" struck by the parties was based on a representation by CHIC that it would actively attempt to deny the MTRBA any status in such a proceeding, the argument made by counsel for Local 793 is not sustainable. There is just no evidence before the Board to suggest that any deal has been "welched on" by the position CHIC has taken in this proceeding.
Counsel for Local 793 noted that the Board has in prior decisions denied intervenor status to entities desiring to participate in a section 133 referral, while at the same time observing that any legally relevant evidence that those entities possessed could be adduced by one of the parties to the proceeding (see, for example, Williams Contracting Ltd., [1980] OLRB Rep. Jan. 121, The Municipality of Metropolitan Toronto, [1986] OLRB Rep. April 574 and E.S. Fox Limited, [1992] OLRB Rep. April 431). Counsel urged the Board to adopt the same approach here; that is, should any legally relevant evidence be possessed by the MTRBA, counsel for CHIC could call such evidence as part of his case, if he so desired. Counsel also cited The Municipality of Metropolitan Toronto, supra, for the principle that the concern by a stranger to a collective agreement that any arbitration proceeding may well become a precedent for it is not a factor the Board will take into account in determining the entitlement to intervenor status.
Having considered quite carefully all of the evidence before the Board, and the cases provided by counsel, we are of the view that as a matter of discretion the MTRBA ought to be granted the status to intervene in this proceeding. The critical factor which leads us to this conclusion is that of the desire to avoid multiple proceedings and to ensure, to the greatest extent possible, that Board proceedings remedy the question in issue. During argument, counsel for CHIC directed the Board to Article 6 of the Project Agreement, which provides as follows:
CHIC Constructor and its Members shall let or sublet contracts for any work during construction on the Highway 407 Project covered by the Schedule 'A" Collective Agreement Terms, only to contractors and/or subcontractors who are bound to the applicable Schedule "A" Collective Agreements. CHIC Constructor and its Members shall also ensure and require that only contractors and/or subcontractors who are bound by the applicable Schedule 'A" Collective Agreements perform all work during construction on the Highway 407 Project covered by the Schedule "A" Collective Agreement Terms, under this Project Agreement, regardless of whether CHIC Constructor or its Members have a contractual relationship with the contractor and/or subcontractor performing the work on the Highway 407 Project.
The thrust of Article 6 of the Project Agreement is to require CHIC and its four members to subcontract all work on the Highway 407 project only to companies "bound to" the Schedule "A" agreement terms, including those contained in the MTRBA collective agreement. Any further subcontracting of work on the Highway 407 project must be to companies "bound by" the Schedule "A" agreement terms, including those contained in the MTRBA collective agreement. As was observed by counsel for CHIC during argument, if the MTRBA is denied status to intervene, the decision in this proceeding will bind only Local 793 and CHIC, but not the MTRBA or any of its members. Work which is subcontracted to contractors bound by the MTRBA/Local 793 collective agreement may well deny the applicability of the Board's ruling to the work being performed. Ultimately, we are left with the situation where the Board's ruling in this proceeding may have little practical effect as it binds only CHIC, and not those entities which will actually be responsible for the performance of the work.
The addition of the MTRBA to this proceeding will remedy this situation. The MTRBA and its members will be bound by the decision, and the issue in dispute will be resolved, one way or the other, for the purposes of all work performed on the Highway 407 project. In the circumstances before us, the addition of the MTRBA as a party to this proceeding makes sense from a labour relations perspective. Accordingly, the MTRBA is provided status to intervene in this proceeding pursuant to Rule 26 of the Board's Rules of Procedure.
Counsel for Local 793 wrote to opposing counsel on October 10, 1995, respecting certain procedural agreements reached by the parties with the assistance of a senior Labour Relations Officer. This matter is referred to the Registrar, in order to schedule, in accordance with the agreement of the parties, a pre-hearing consultation and dates for the hearing of this proceeding on its merits.
This panel is seized.

