Sheet Metal Workers' International Association, Local 30 v. Duffy Mechanical Contractors Limited, 1995 CanLII 9987

[1995] OLRB Rep. January 14

2016-93-G Sheet Metal Workers' International Association, Local 30, Applicant v. Duffy Mechanical Contractors Limited, DuraSystems Barriers Inc., Responding Parties

BEFORE: D. L. Gee, Vice-Chair and Board Members F. B. Reaume and R. Weiss.

DECISION OF D. L. GEE, VICE-CHAIR, AND BOARD MEMBER R. WEISS; January 30, 1995

1. This is an application under section 126 of the Labour Relations Act (the "Act"). This application was filed with the Board on September 21, 1993 in conjunction with a related section 1(4) application (Board File No. 2017-93-R) in which the applicant sought a declaration that Duffy Mechanical Contractors Limited ("Duffy Mechanical") and DuraSystems Barriers Inc. ("DuraSystems") are one employer for the purposes of the Act. The instant application was adjourned pending determination by the Board of the section 1(4) application.

Issue

2. The section 1(4) application initially came on for hearing before a panel of the Board chaired by Vice-Chair Stamp at which time the respondents raised a preliminary issue that the ICI agreement does not cover the fabrication work performed in the shop of Duffy Mechanical. By decision dated June 13, 1994 the Stamp panel ruled that, if the work was work in the ICI sector of the construction industry, it was covered by the agreement, and, if it was not work within the ICI sector of the construction industry, it was not. The matter was then relisted for hearing before the instant panel of the Board. For reasons set out in the Board's decision of August 30, 1994, the parties litigated the section 1(4) application while deferring determination of whether the ICI agreement applies to the shop of Duffy Mechanical and/or DuraSystems, to the instant application. In its decision of August 30, 1994, with respect to the section 1(4) application, the instant panel ruled that the respondents are to be treated as one employer for the purposes of the Act and declared that DuraSystems is bound to the ICI agreement as if it had been a party thereto.

3. The instant application was then listed for hearing on November 28 and 30, 1994 for the sole purpose of hearing the parties' evidence and representations on the issue of whether the work performed by DuraSystems falls within the ICI sector of the construction industry.

Facts

4. The parties agreed that evidence adduced at the hearing with respect to the section 1(4) application could be considered by the Board in determining the instant application. We do not propose to review the evidence in detail except to the extent necessary given our determination in this matter. Detailed facts with respect to the products and operations of both Duffy Mechanical and DuraSystems are set out in the Board's decision of August 30, 1994 [1994] OLRB Rep. Aug. 992.

5. Duffy Mechanical is both a fabricator and installer of ductwork. Ninety to 95 percent of the fabrication work done by Duffy Mechanical is ductwork for the ventilation portion of projects within the ICI sector of the construction industry. Duffy Mechanical installs all of the ductwork it fabricates and does not act as a supplier of ductwork to other contractors for installation. Duffy Mechanical currently employs approximately three employees in its fabrication shop and 20 to 25 installers. Duffy Mechanical has applied the ICI agreement to its shop for the past 20 years. Duffy Mechanical asserts that it has done so voluntarily and not because the work performed in its shop is covered by the ICI agreement. Duffy Mechanical's shop employees participated, without complaint from Duffy Mechanical, in the 1988 and 1990 strikes under the ICI agreement.

6. DuraSystems fabricates sheets of durasteel into various products. The applicant only claims that the fabrication of ductwork which is subsequently installed on an ICI job site is covered by the ICI agreement. During the period July 1992 to July 1993 ductwork accounted for 38 percent of DuraSystems' sales. DuraSystems does not do any installation work. The ductwork fabricated by DuraSystems is sold to contractors who install it on ICI projects using sheet metal workers. In one instance, ductwork was sold to Duffy Mechanical and installed on an ICI job site by installers employed by Duffy Mechanical.

7. It is estimated that between 350 and 500 contractors are signatory to the ICI agreement. Sixty, and perhaps as high as 75, percent of those contractors have fabrication shops that produce ductwork. They do so under the ICI agreement. Two contractors were identified as operating only fabrication shops, i.e. they do no installation work. These contractors fabricate ductwork under the ICI agreement. Those contractors that do not have fabrication shops purchase ductwork from one that does. There was no evidence of ductwork, destined for an ICI job site, not being fabricated under the ICI agreement.

8. Mr. Bert Gardner, the Executive Director of the Ontario Sheet Metal and Air Handling Group, the Employer Bargaining Agency, was called as a witness by Local 30. Mr. Gardner's job includes administering the ICI agreement. Mr. Gardner testified as to the facts in the preceding paragraph and further testified that it is the EBA's position that the ICI agreement covers everything, including shop fabrication, contained in the air stream system. That is why the ICI agreement defines "employee" and "member" as including individuals employed "in the shop". Mr. Gardner testified that he was not aware of any companies that fabricate ducting outside of the ICI agreement. During the 1988 and 1990 strikes, shop employees participated without challenge from contractors.

9. Local 30 is signatory to what is referred to as a "production" agreement with approximately 13 contractors. All 13 of the contractors in question are also signatory to the ICI agreement. Mr. Collins, a Business Representative of Local 30, testified that no contractor performs ICI work under a production agreement. Amongst the contractors signatory to a production agreement, some, such as Chicago Blower and Royce Metal Products Limited, do not perform any work claimed under the ICI agreement. With one exception, all of the production agreements specifically state, in the recognition provision, that the agreement excludes work under the ICI agreement. Mr. Collins testified that items such as dampers, grills and fire stop flaps, which are installed on ICI job sites, are produced under the production agreement on the basis that they are production or mass produced items. Mr. Collins disagreed with the suggestion that spiral pipe or metal flex destined for an ICI job site is manufactured under a production agreement. In any event, Mr. Collins testified that spiral pipe and metal flex are mass produced by a machine such that it is not comparable to the fabrication of ductwork. There was no evidence of traditional ductwork destined for an ICI site being fabricated under a production agreement.

Argument

10. Counsel for the respondents argued, based on the definition of "construction industry" contained in section 1 of the Act, that the work performed by DuraSystems' employees is not work within the construction industry because the work is not performed "at the site". It was argued that the definition of "employee" set out in section 119 of the Act is only applied where some part of the employee's work is at the site. Finally, it was argued, that work which is claimed by the Sheet Metal Workers under the ICI agreement, such as the manufacture of spiral duct and paint booths, is being performed under a production agreement. The Sheet Metal Workers cannot pick and choose what work is to be done under the ICI agreement and what work is to be done under a production agreement.

11. Counsel for Local 30 disputed the suggestion that the work in question is not work within the construction industry and that a worker must go to the site to fall within the definition of "employee". Counsel argued that DuraSystems' shop employees fall within the definition of "employee" because they have a direct connection to the site. Ductwork fabricated by DuraSystems is installed by sheet metal companies using sheet metal workers. The only reason for fabricating any particular piece of ductwork is the ICI site to which it is destined. Counsel argued that there is no evidence of ductwork being fabricated under a production agreement, but if such was occurring, the production agreement in question would be null and void as the work must be done under the ICI agreement.

Decision

12. "Construction industry" is defined in section 1 of the Act as follows:

"construction industry" means the businesses 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.

"Employee" is defined in section 119 of the Act as follows:

"employee" includes an employee engaged in whole or in part in off-site work but who is commonly associated in work or bargaining with on-site employees.

13. The definition of "employee" was introduced into the construction industry provisions of the Act in 1970. Shortly, thereafter, in 1972, in Hamilton and District Sheet Metal Contractors Inc. v. Sheet Metal Workers' International Association Local Union 537 Hamilton Ontario Branch et al. (unreported, Board File No. 384-71-R) [now reported at [1971] OLRB Rep. Sept. 562], an application for accreditation, the Board commented on the effect of the definition as follows:

7. The agreement upon which this application is based deals with sheet metal workers who engage in both on-site work and work in various sheet metal shops. The definition of "construction industry" in the Act refers to on-site work. The recent amendments to the Act, however, extend the definition of "employee" in the construction industry provisions of the Act to those who are engaged in whole or in part in off-site work but who are commonly associated in their work or bargaining with on-site employees. It would appear, therefore, that the unit of employers in this application can extend to the whole of the bargaining rights of the respondent set out in the collective agreement and still come within the construction industry provisions of the Act, and therefore be the subject matter of an application for accreditation.

The Board thus determined that, following the introduction of the definition of "employee" into the Act, the construction industry provisions were no longer confined to work performed at the site but were also applicable to work performed by employees engaged in whole or in part in off-site work provided they are commonly associated in their work or bargaining with on-site employees.

14. The Board's determination in Hamilton and District Sheet Metal Contractors Inc. was endorsed by the Board in Wraymar Construction and Rental Sales Ltd., [1989] OLRB Rep. June 682 as follows:

17.... Prior to the enactment of what is now section 117(b) [now section 119] in 1970, the Board excluded shop, yard and other off-site employees from construction industry bargaining units. subsequent to the enactment of that provision, the Board has had to determine, as a question of fact, whether employees engaged in off-site work are commonly associated (in their work or bargaining) with the on-site employees in question. The wording of section 117(b) is such that, once the Board finds that an employee is so commonly associated, such an employee must be considered to be a construction employee. The Board has no discretion to find that s/he is not.

(See also Ridsdale Steel Fabricators Inc., [1987] OLRB Rep. April 601 at paragraph 10.)

15. As a result of the introduction of the definition of "employee" into the construction industry provisions of the Act in 1970, it is no longer necessary for work to be performed at the site in order for the construction industry provisions of the Act to apply. The definition of "construction industry" must now be read subject to the definition of "employee" in section 119. Thus, a question which we must determine is whether the employees who work exclusively in DuraSystems' shop (entirely off-site) are commonly associated in their work or bargaining with on-site employees. If they are so commonly associated, they are construction employees, and the work they perform in connection with the fabrication of ductwork destined for ICI construction site, is covered by the ICI agreement.

16. It is our determination that the employees employed exclusively in DuraSystems' shop are construction employees as they are commonly associated (at least) in bargaining with on-site employees. Our reasons follow.

17. The applicant is claiming only that portion of the fabrication work performed by DuraSystems' employees in connection with ductwork destined for an ICI job site.

18. As the facts set out above indicate, between 350 and 500 contractors are bound to the ICI agreement. Sixty to 75 percent of those contractors operate fabrication shops that produce ductwork. All of those shops operate under the ICI agreement. There are two contractors who, similar to DuraSystems, fabricate ductwork but do not install it. Both operate their fabrication shops under the ICI agreement. Contractors who install ductwork on ICI job sites but do not operate a fabrication shop, purchase ductwork from one of the contractors that fabricates ductwork under the ICI agreement. We heard no evidence of ductwork which was later installed on an ICI project being fabricated under any agreement other than the ICI agreement. Thus, the evidence before us is that all contractors bound to the ICI agreement who fabricate ductwork for ICI job sites do so under the ICI agreement. During the 1988 and 1990 strike under the ICI agreement, employees engaged in shop fabrication participated in the strike without challenge from the EBA or individual contractors.

19. The EBA responsible for negotiating the ICI collective agreement is of the view that the agreement covers shop fabrication of ductwork. The ICI agreement defines "employee" and "member" as inclusive of individuals employed "in the shop". The language of the ICI agreement supports the EBA's assertion that the shop fabrication of ductwork is covered (see the Stamp panel's decision of June 13, 1994 in Board File 2017-93-R for specific references to the ICI agreement). As the preceding paragraph indicates, the ICI agreement has been consistently applied throughout the industry in a manner consistent with the EBA's position that it covers shop fabrication of ductwork.

20. Duffy Mechanical itself has applied the ICI agreement to its shop fabrication for the past 20 years.

21. The definition of "employee" for the purposes of the construction industry provisions of the Act includes an employee engaged entirely in off-site work provided such employee is commonly associated in (work or) bargaining with on-site employees. In our view, the evidence before us establishes that employees engaged in the shop fabrication of ductwork are commonly associated in bargaining with the on-site employees who install the ductwork. Both groups of employees have been consistently considered by the parties to the ICI agreement to be covered by its terms. When a strike under the ICI agreement occurs, both groups of employees, without challenge by any party to the agreement, go out on strike. As the decision in Hamilton and District Sheet Metal Contractors Inc. indicates, in 1972 this Board accredited an employer's organization to represent employers who employ sheet metal workers who engage in on-site work and work in sheet metal shops. Hence, there has been a long-standing practice in the sheet metal industry for employees who fabricate ductwork off-site in fabrication shops to be associated in bargaining with on-site employees. On this basis, it is our determination that the employees of DuraSystems are construction employees and, when they engage in the fabrication of ductwork destined for an ICI job site, their work is covered by the ICI agreement.

22. This mater will continue on February 1, 2 and 3 to deal with all remaining issues.

23. This panel is seized.

DECISION OF BOARD MEMBER F. B. REAUME; January 30, 1995

1. I respectfully dissent from the majority award in this case as I do not find that Duffy's shop is covered by the ICI agreement for any fabrication work.

2. I am brought to this decision by the scope of the collective agreement, the definition of the construction industry in the Act and the more compelling argument of the responding party in this case.

3. Clearly article 3 states "This is a provincial agreement within the meaning of the Labour Relations Act of Ontario and as such applies to the industrial, commercial and institutional sector of the construction industry".

4. The "construction industry" as defined in section 1.1 of the Act:

“means the businesses that are engaged in constructing, altering, decorating, repairing or demolishing buildings, structures, roads, sewers, water or gas mains, pipelines, tunnels, bridges, canals or other works at the site thereof."

(emphasis added)

5. The definition of "employee" in section 119 recognizes an employee engaged in whole or in part in off-site work but who is commonly associated in work or bargaining with on-site employees. It is equally clear that the decision to utilize these tradesmen off-site is a voluntary business decision of the employer.

6. The applicant claims that duct work fabrication is covered off-site by their agreement because the ductwork will be installed on an ICI project. The evidence showed that there are other air handling items for use on ICI projects and fabricated off-site in shops that the applicant doesn't require that a journeyman construction sheet metal worker fabricate under the ICI agreement. It just isn't reasonable that the applicant can pick and choose what products must and what products need not be produced under the ICI agreement for installation on an ICI project.

7. DuraSystems is not handling tin sheets. It is a sandwich panel product with a number of uses involving fire protection and is new to Canada. Its use as a fire protective ductwork system replaces the need for the conventional tin ductwork and protective sheath applied by at least one other trade. Even the installation could lead to a jurisdictional dispute.

8. As concluded in Metro Railings Ltd., (Board File Nos. 2265-86-R, 2266-86-R, 2267-86-R) [now reported at [1986] OLRB Rep. Dec. 1731]:

“…..employees who perform shop work only do not come within the definition of employee in section 117(b) [now 119] since they are not commonly associated in work with the on site employees".

This is clearly the case with DuraSystems shop employees.

9. Nothing changes the scope of the agreement although it does provide that journeymen and apprentices working in the shop when assigned by the employer will receive the same terms and conditions as provided in the provincial ICI agreement.

(emphasis added)

10. Furthermore, if the scope of the ICI agreement is interpreted to include shops, then all of the shop agreements with this union are illegal since there can only be one agreement in the ICI sector. Article 3.1 cannot be interpreted to include shops.

11. As a result of all the above, I would find that shop fabrication is not covered by the ICI agreement and dismiss the grievance.