Labourers' International Union of North America, Local 1081 v. Traugott Construction (Kitchener) Limited, 1996 CanLII 11165

[1996] OLRB REP. JANUARY 45

2714-95-G Labourers' International Union of North America, Local 1081, Applicant v. Traugott Construction (Kitchener) Limited, Responding Party

BEFORE: Lee Shouldice, Vice-Chair, and Board Members S. C. Laing and G. McMenemy.

APPEARANCES: S.B.D. Wahl for the applicant; Ian S. Campbell for the responding party.

DECISION OF THE BOARD; January 12, 1996

I. Introduction

1. The name of the responding party is amended to read "Traugott Construction (Kitchener) Limited".

2. This proceeding consists of two grievances in the construction industry which have been referred to the Board for arbitration pursuant to what is now section 133 of the Labour Relations Act, 1995 (hereinafter referred to as "the Act"). Labourers' International Union of North America, Local 1081 (hereinafter "Local 1081") complains that Traugott Construction (Kitchener) Limited (hereinafter "Traugott") has assigned work on two particular projects to companies which are not in contractual relations with Local 1081, contrary to the terms of the Labourers' Provincial I.C.I. Agreement (hereinafter "the Provincial Agreement"). Local 1081 further asserts that after the grievances were lodged with Traugott, a settlement was reached between it and Traugott, which settlement has not been satisfied by Traugott. Accordingly, Local 1081 requests that the Board issue a declaration to the effect that Traugott is both bound by the settlement and that it has violated same.

3. Traugott, in its response to the grievance referral, disputes the jurisdiction of the Board to arbitrate the issues raised by Local 1081, on the basis that the work in question does not fall within the I.C.I. sector of the construction industry, but rather is work falling within the sewers and watermains sector and the roads sector of the construction industry for which Local 1081 does not have bargaining rights with Traugott. Accordingly, Traugott has requested that the Board make a sector determination pursuant to what is now section 166 of the Act. Additionally, Traugott disputes that the grievances were settled as alleged by Local 1081.

4. Counsel for Local 1081, in his opening remarks, asserted that it was not necessary for the Board to direct the parties to apply for a sector determination, on the basis of the Board's jurisprudence and the wording of the Provincial Agreement. Counsel for the parties indicated to the Board that they desired the Board to entertain argument on that issue, render a written decision, and then direct the parties to proceed as appropriate. Accordingly the parties proceeded to argue the issue of the necessity of directing a sector determination in the circumstances.

II. Facts

5. For the purposes of arguing this discrete preliminary matter, there was no dispute as to the facts. Traugott is the general contractor with respect to the two projects in question, one in Kitchener, Ontario (at Gateway Park Drive and Sportsworld) and a second project in Cambridge, Ontario (at Saginaw Parkway and Franklin Boulevard). The work at issue is characterized by Traugott as the installation of sewers, watermains and catchbasins, the construction of a parking lot and perimeter curbing. Traugott has subcontracted the work in question to Drexler Construction Limited, Cambridge Curbs and Sidewalks Limited, and the Murray Group, none of which are in contractual relations with Local 1081.

6. Traugott acknowledges that it is bound by the Provincial Agreement. Traugott is a member of the Grand Valley Construction Association, which is, in turn, an affiliate of the Ontario General Contractors Association. The Labour Bureau of the Ontario General Contractors Association is a constituent member of the Labourers' employer bargaining agency, and was so designated by the Minister of Labour on or about April 21, 1978. Furthermore, it is not disputed that the Grand Valley Construction Association negotiates the Local Union Schedule to the Provincial Agreement which applies to Local 1081.

7. Counsel for Local 1081 took the Board through the history of his client's bargaining rights with Traugott. A predecessor company to Traugott was a signatory to an agreement with Local 1081 dated August 6,1970, in which the predecessor company recognized Local 1081 as the exclusive bargaining agent for "all labourers" employed by the company in a specified geographic area consisting of Waterloo, Wellington, Dufferin, Grey, Norfolk and Brant. This agreement is stated to be effective until April 30, 1973. A subsequent agreement to similar effect was entered into on May 8,1973, and was effective until April 30, 1975, as was one dated May 1, 1977, effective until April 30, 1978. On March 11, 1974, the Board issued a certificate accrediting the Kitchener-Waterloo Construction Association (the predecessor to the Grand Valley Construction Association) as the bargaining agent for all employers for whom Local 1081 has bargaining rights in the counties of Waterloo, Wellington, Dufferin, Grey, Brant and Norfolk, in the I.C.I. sector of the construction industry. There is no dispute that Traugott's predecessor was bound by that accreditation order.

III. Relevant Statutory Provisions and Provincial Agreement References

8. During argument, counsel made reference to the following provisions of the Provincial

Agreement:

ARTICLE 1. RECOGNITION

1.01 The E.B.A. recognizes the Union as the sole and exclusive bargaining agent for all construction labourers, including masons' or bricklayers' tenders, plasterers and plasterers' apprentices and all employees engaged in cement finishing, waterproofing or restoration work and all other construction employees engaged in the industrial, commercial and institutional sector of the construction industry in the province of Ontario, for whom the Union has bargaining rights.

1.02 The Union recognizes the E.B.A. (the several parties are listed on Schedule 'C") as the sole and exclusive bargaining agent for all Employers whose employees are represented by the Union and for whom the Union has bargaining rights who are engaged in the industrial, commercial, and institutional sector of the construction industry in the Province of Ontario.

1.04 This agreement shall also apply to an Employer in all other sectors where the Union or any of its affiliated bargaining agents have bargaining rights in such other sectors for the employees of such Employer, provided that such Employer may become signatory to the various Collective Agreements applicable in such other sectors.

ARTICLE 2 - UNION SECURITY, WORK JURISDICTION, ASSIGNMENT OF WORK, SUBCONTRACTING

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.

2.06 (a) Schedule "E" to this Collective Agreement constitutes a list of work that is claimed by the Union.

(b) Where work within Schedule "E" is claimed by the Union and is within the IC. I. Sector and there is no work claim dispute within the meaning of Article 8.01 the work will be assigned to employees represented by the Union.

(c) In the event an Employer is found to have violated the provisions of 2.06(b) above the Employer shall re-assign such work to employees represented by the Union and no claim for damages will be made.

SCHEDULE "D"

The following are exceptions to Article 2.05 the Master Agreement:

1. The Employer agrees to engage only subcontractors who are in contractual relations with the Union and/or its affiliated bargaining agents or an AFL-CIO Affiliated Union for waterproofing and cement finishing work.

as well as the following provisions of the Act:

151.-(1) In this section and in sections 144 and 152 to 168,

"affiliated bargaining agent" means a bargaining agent that, according to established trade union practice in the construction industry, represents employees who commonly bargain separately and apart from other employees and is subordinate or directly related to, or is, a provincial, national or international trade union, and includes an employee bargaining agency; ("agent negociateur affilie")

"bargaining", except when used in reference to an affiliated bargaining agent, means province-wide, multi-employer bargaining in the industrial, commercial and institutional sector of the construction industry referred to in the definition of "sector" in section 126; ("negociation")

"employee bargaining agency" means an organization of affiliated bargaining agents that are subordinate or directly related to the same provincial, national or international trade union, and that may include the parent or related provincial, national or international trade union, formed for purposes that include the representation of affiliated bargaining agents in bargaining and which may be a single provincial, national or international trade union; ("organisme negociateur syndical")

"employer bargaining agency" means an employers' organization or group of employers' organizations formed for purposes that include the representation of employers in bargaining; ("organisme negociateur patronal")

"provincial agreement" means an agreement in writing covering the whole of the Province of Ontario between a designated or accredited employer bargaining agency that represents employers, on the one hand, and a designated or certified employee bargaining agency that represents affiliated bargaining agents, on the other hand, containing provisions respecting terms or conditions of employment or the rights, privileges or duties of the employer bargaining agency, the employers represented by the employer bargaining agency and for whose employees the affiliated bargaining agents hold bargaining rights, the affiliated bargaining agents represented by the employee bargaining agency, or the employees represented by the affiliated bargaining agents and employed in the industrial, commercial an institutional sector of the construction industry referred to in the definition of "sector" in section 126. ("convention Provinciale")

(2) Where an employer is represented by a designated or accredited employer bargaining agency, the employer shall be deemed to have recognized all of the affiliated bargaining agents represented by a designated or certified employee bargaining agency that bargains with the employer bargaining agency as the bargaining agents for the purpose of collective bargaining in their respective geographic jurisdictions in respect of the employees of the employer employed in the industrial, commercial or institutional sector of the construction industry, referred to in the definition of "sector" in section 126, except those employees for whom a trade union other than one of the affiliated bargaining agents holds bargaining rights.

157. Where an employer bargaining agency has been designated under section 153 or accredited under section 155 to represent a provincial unit of employers,

(a) all rights, duties and obligations under this Act of employers for which it bargains shall vest in the employer bargaining agency, but only for the purpose of conducting bargaining and concluding a provincial agreement; and

(b) an accreditation heretofore made under section 136 of an employers’ organization as bargaining agent of the employers in the industrial, commercial and institutional sector of the construction industry, referred to in the definition of “sector” in section 126, represented or to be represented by the employer bargaining agency is null and void from the time of such designation under section 153 or accreditation under section 155.

161.-(1) Subject to subsection (2), any collective agreement in operation on October 27, 1977 in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in the definition of "sector" in section 126 and represented by affiliated bargaining agents is enforceable by and binding on the parties thereto only for the remainder of the term of operation of the agreement, regardless of any provision respecting its renewal.

(2) Despite subsection 58 (1), every collective agreement in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in the definition of "sector" in section 126 and represented by affiliated bargaining agents entered into after January 1, 1977 and before April 30, 1978 shall he deemed to expire not later than April 30, 1978, regardless of any provision respecting its term of operation or its renewal.

(3) Where any collective agreement mentioned in subsection (1) ceases to operate, the affiliated bargaining agent, the employer and the employees for whom the affiliated bargaining agent holds bargaining rights shall be bound by the provincial agreement made between an employee bargaining agency representing the affiliated bargaining agent and the employer bargaining agency representing the employer.

(4) After April 30, 1978, where an affiliated bargaining agent obtains bargaining rights through certification or voluntary recognition in respect of employees employed in the industrial, commercial and institutional sector of the construction industry referred to in the definition of "sector" in section 126, the employer, the affiliated bargaining agent, and the employees for whom the affiliated bargaining agent has obtained bargaining rights are bound by the provincial agreement made between an employee bargaining agency representing the affiliated bargaining agent and an employer bargaining agency representing a provincial unit of employers in which the employer would have been included.

(5) Despite subsection 58 (1) where, under the provisions of this section, an employer, affiliated bargaining agent or employees become bound by a provincial agreement after the agreement has commenced to operate, the agreement ceases to be binding on the employer, affiliated bargaining agent or employees in accordance with the terms thereof.

162.-(1) An employee bargaining agency and an employer bargaining agency shall make only one provincial agreement for each provincial unit that it represents.

(2) Subject to sections 153 and 161, no person, employee, trade union, council of trade unions, affiliated bargaining agent, employee bargaining agency, employer, employers’ organization, group of employers’ organizations or employer bargaining agency shall bargain for, attempt to bargain for, or conclude any collective agreement or other arrangement affecting employees represented by affiliated bargaining agents other than a provincial agreement as contemplated by subsection (1), and any collective agreement or other arrangement that does not comply with subsection (1) is null and void.

(3) Every provincial agreement shall provide for the expiry of the agreement on April 30 calculated triennially from April 30, 1992.

166. The Board shall, upon the application of. a trade union, a council of trade unions, or an employer or employers' organization, determine any question that arises as to whether work performed or to be performed by employees is within the industrial, commercial and institutional sector of the construction industry referred to in the definition of "sector" in section 126.

We note here for clarification that this issue was argued prior to the passage of the Act, and accordingly during argument reference was made by counsel to the provisions of the previous legislation which correspond to those set out above. As the Act has not changed the substance of the provisions referred to, the argument made by counsel is not affected in any way. Statutory references herein shall be to the current Act.

IV. Argument

9. Counsel for Local 1081 asserts that the sector issue raised by Traugott does not truly arise in the circumstances of this case as a result of prior Board jurisprudence and the particular wording of the Provincial Agreement. Article 1.01 of the Provincial Agreement reflects the recognition by the Labourers' employer bargaining agency of the Union (as defined by the Provincial Agreement) as the exclusive bargaining agent for construction labourers in the I.C.I. sector of the construction industry. Accordingly, I.C.I. bargaining rights are clearly covered by the Provincial Agreement.

10. Counsel further argues that Article 1.04 extends the Provincial Agreement so as to govern the terms and conditions of employment in other sectors of the construction industry in which Local 1081 has bargaining rights (but no collective agreement) with a particular employer bound by the Provincial Agreement. Counsel notes that the documentary materials which are before the Board establish that Local 1081 has enjoyed "all sector" bargaining rights for construction labourers employed by Traugott since at least August, 1970. There is currently no collective agreement governing the terms and conditions of employment of members of Local 1081 working for Traugott in those non-I.C.I. sectors. Accordingly, by application of Article 1.04 of the Provincial Agreement, the terms of employment reflected by the Provincial Agreement apply to work performed by construction labourers for Traugott in all other sectors of the construction industry, which in this case includes the work at the two sites in question irrespective of how one characterizes that work. Finally, counsel notes that the subcontracting provision of the Provincial Agreement applies to all work "covered by this Agreement", which would include, on his interpretation of the Provincial Agreement, the work on the two sites in question. During argument counsel referred the Board to The Jackson-Lewis Company Limited, [1981] OLRB Rep. Dec. 1794; London Sandblasting & Painting Limited, [1982] OLRB Rep. Sept. 1322, and Rino Zanette (1981) Ltd., (unreported, Board File 2058-85-M, January 27, 1986).

11. Counsel for Traugott disputed the assertions of law made by counsel for Local 1081. Counsel took the position that as a matter of law an ICI. province-wide collective agreement cannot be extended beyond the I.C.I. sector of the construction industry. In the alternative, counsel states that, assuming that such a collective agreement could extend to other sectors of the construction industry beyond the I.C.I. sector, the Provincial Agreement by its terms does not.

12. Counsel observed that the term "provincial agreement" is defined by section 151 of the Act, and is limited in its applicability to employees "employed in the industrial, commercial and institutional sector of the construction industry". Similarly, section 161 of the Act, the transition provisions of the Act respecting agreements in effect in 1977 and 1978, refer only to the I.C.I. sector of the construction industry. Counsel submitted that the scheme of the Act makes it clear that province-wide bargaining was only intended to extend to the I.C.I. sector of the construction industry, and not to other sectors. Counsel also noted that the accreditation granted to the Kitchener-Waterloo Construction Association was limited to the I.C.I. sector. Nothing in the legislation, observed counsel, empowers the employer bargaining agencies designated under the Act to bargain beyond the I.C.I. sector of the construction industry. Without any evidence that the Labourers' employer bargaining agency was empowered by its members to negotiate beyond the I.C.I. sector, counsel submitted that the Board could not conclude that the Provincial Agreement extends beyond that sector. It was noted that section 166 of the Act, which provides the Board the authority to make sector determinations, fits in nicely with the scheme of the Act as described by counsel.

13. Counsel reviewed the case authorities relied upon by counsel for Local 1081 and asserted that the Board was, in those cases, being asked to determine only whether the work in question was construction work, and went no further.

14. With respect to the interpretation of the Provincial Agreement, counsel noted that Articles 1.01 and 2.06 refer only to the I.C.I. sector of the construction industry, and to no other sectors. With regard to the wording of Article 1.04, counsel stated that the wording of the provision was difficult to interpret. In his view, the wording speaks to a future event; that is, if an employer bound by the Provincial Agreement decided to sign an agreement with the Labourers' Union covering the sewer and watermain sector of the construction industry, then Article 1.04 would become applicable and the particular sector agreement would govern the relationship of the parties. Counsel further asserted that the jurisdiction of the Board flows only from the wording of the Provincial Agreement, in accordance with and subject to the Act. As nothing in the Provincial Agreement clearly states that the employers bound by it are bound in all sectors of the construction industry, such a conclusion cannot be reached by the Board.

15. In reply argument, counsel for Local 1081 asserted that the province-wide bargaining scheme established by the Act is not "maximum~~ but rather a "minimum" scheme, and that the employer and employee bargaining agencies can negotiate terms and conditions affecting their members beyond the I.C.I. sector of the construction industry, or even beyond the construction industry if they so desire. Counsel noted that the Act does not prohibit a province-wide I.C.I. sector agreement from extending beyond that sector, and that the cases relied upon establish that such a limitation does not exist. In any event, noted counsel, the Labourers' employer bargaining agency in this particular case represented to the Labourers' employee bargaining agency by agreeing to the clause in the Provincial Agreement that it had the authority to do so. In these circumstances, if there is a problem of authority then it is one internal to the Labourers' employer bargaining agency and cannot affect the interpretation of the Provincial Agreement.

V. Decision

16. In our view~ the Board does have the jurisdiction to arbitrate the issues raised in the referral to arbitration filed by Local 1081. Furthermore, we are of the view that it is unnecessary to direct a sector determination in this proceeding. Our reasons for these conclusions follow immediately below.

17. Dealing first with the issue of the authority of the Labourers' employer bargaining agency to bind its members to terms and conditions of employment beyond the I.C.I. sector of the construction industry, an almost identical argument to that made by counsel for Traugott was made by counsel for the employer in London Sandblasting & Painting Limited, supra. In that decision, the Ontario Painting Contractors Association negotiated with the Painters' employee bargaining agency a provision in the province-wide I.C. I. collective agreement which applied to both construction work and non-construction work. The union brought a grievance against London Sandblasting in which it alleged that the company was not abiding by the terms of the agreement. The employer asserted that it was only bound to the terms of the province-wide agreement for the purposes of I.C.I. work, for reasons similar to those asserted by Traugott in this case. At paragraph 19 of the decision, the Board addresses the argument made by London Sandblasting.

London, however, is not in the position such as that described in the preceeding paragraph, for London did become a member of the OPCA. Accordingly, the OPCA did have the right to negotiate on behalf of London for the non-ICI. sectors of the construction industry as well as for non-construction work. Rather than negotiate a separate agreement or agreements for this work, the Union and the OPCA decided to negotiate a single document which relates to all types of work. We are satisfied that insofar as the ICI. sector was concerned, the OPCA was acting on behalf of the designated employer bargaining agency and exercising rights vested under section 143(a) [now section 157(a)]. With respect to the other sectors of the construction industry and non-construction work, however, we are satisfied that it was acting as an employers' association on behalf of its members, including London. Accordingly, we are of the view that London is bound to the agreement not only as a provincial agreement covering the I.C.I. sector, but as a collective agreement covering the other sectors of the construction industry and non-construction work as well.

As noted above, there is no dispute that Traugott is a member of the Grand Valley Construction Association, which, in turn, is an affiliate of the Ontario General Contractors Association, which is a constituent body of the Labourers' employer bargaining agency. There was no suggestion by counsel for Traugott that any of the memberships held by Traugott limited the bargaining authority of the Labourers' employer bargaining agency to the I.C.I. sector of the construction industry.

18. A brief review of the other case authorities relied upon by Local 1081 confirms that the principle established directly above has been applied by the Board in other circumstances. In The Jackson-Lewis Company Limited, supra, one of the issues before the Board was whether the inclusion and coverage of "horticulture (landscaping)" work in the Provincial Agreement (as it then read) was a lawful subject for bargaining by the respective designated bargaining agencies. On the facts of that case, the Board concluded that the landscaping work in question was work which fell within the definition of work in the "construction industry", and the Board went on to conclude that, whether or not the work in question was within the I.C.I. sector of the construction industry (a question which was not for determination before the Board), "horticulture (landscaping)" work such as that before the Board was "a lawful subject for bargaining by the labourers' designated bargaining agencies and the subcontracting of such ... work may be lawfully regulated by the subcontracting provision, clause 2.05, of the agreement".

19. On the basis of these authorities, we are satisfied that it was not beyond the authority of the Labourers' employer bargaining agency to negotiate Article 1.04 into the Provincial Agreement.

20. Addressing the second question raised by counsel for Traugott; that is, whether the terms of the Provincial Agreement do not apply to the facts of this case, therefore leading to the conclusion that a sector determination of the work must be made, we are of the view that the terms of Article 1.04 of the Provincial Agreement preclude the need for a sector determination. Undoubtedly, the wording contained in Article 1.04 could be drafted more clearly. However, a plain reading of the words contained in the Article allow for only one conclusion: that the parties intended that each employer bound by the Provincial Agreement would apply the terms of the Provincial Agreement to all work performed in all sectors of the construction industry other than the I.C.I. sector if the Labourers' International Union of North America, or one of its affiliated local unions, has bargaining rights with the particular employer and the employer is not bound to another collective agreement governing the work in that sector. In the particular case before us, where it is clear that Local 1081 has previously obtained bargaining rights with respect to Traugott respecting all sectors of the construction industry, if Traugott performs work in the roads or the sewers and watermain sectors of the construction industry, then it is bound to apply the terms of the Provincial Agreement to that work. If Traugott determines that it will sign a roads or a sewers and watermains collective agreement with Local 1081, the terms of those agreements would apply to the particular work in question. This interpretation of Article 1.04 of the Provincial Agreement is supported by the conclusion of the Board in Rino Zanette (1981) Ltd., supra.

VI. Conclusion

21. For the reasons outlined above, we conclude that the Board does have the jurisdiction to arbitrate the issues raised in Local 1081's grievance referral, and that it is unnecessary to make a sector determination before continuing with this proceeding.

22. This proceeding will continue on a hearing date or dates to be set by the Registrar, after consulting with the parties regarding convenient dates for the hearing.

23. This panel is not seized.