International Brotherhood of Electrical Workers, Local 105 v. Jaddco Anderson Limited, 1998 CanLII 18253

[1998] OLRB REP. JANUARY/FEBRUARY 38

1132-95-G International Brotherhood of Electrical Workers, Local 105, Applicant v. Jaddco Anderson Limited, Responding Party v. General Presidents' Maintenance Committee for Canada, and The Electrical Trade Bargaining Agency of the Electrical Contractors Association of Ontario, Intervenors

BEFORE: Jules B. Bloch, Vice-Chair, and Board Members W N. Fraser and G. McMenemy

APPEARANCES: Raj Anand, M. Kate Stephenson and John Grimshaw for IBEW Local 105; Roy C. Filion, F. G. Hamilton and Daryn Jeffries for Jaddco; Chris Paliare for General Presidents' Mainte­nance Committee; Scott Thompson for Electrical Contractors' Association of Ontario.

DECISION OF THE BOARD; February 18, 1998

1. This is an application brought pursuant to the provisions of section 133 the Labour Relations Act, 1995. The parties to this dispute agreed that they would conduct the hearing on the basis of a consultation-style brief. Underpinning this approach was an agreement entered into by the parties dated March 25, 1997 which is reproduced below:

March 25. 1997

The Applicant and Respondent agree that the Scope of Work (Tab 38) contains the work done by Jaddco at Dofasco Blast Furnace No. 3.

The Respondent asserts, and the Applicant disputes, that the items listed in Schedule "A" were not done, despite the fact that they appear in the Scope of Work.

The parties agree that they are not precluded from relying on other documents in support of their respective positions regarding the nature of the work done as per the scope of work.

"Raj Anand" "Illegible"

FOR GRIEVOR FOR RESPONDENT

Schedule "A"

The Respondent asserts that the following items contained in the scope of work were subsequently removed:

5.3.1

5.3.2

5.3.3

5.4.17

5.4.18

5.4.19

5.4.31

5.4.32 ) and reference to same at Tab 38,

5.4.33 ) page 2 (item #18)

5.4.34

5.5.11

5.5.12

5.5.13

5.6.16

4.6.19

2.6.13

The work referred to in this memorandum is described below.

2. The applicant and responding party requested the Board to review the work performed on Dofasco Blast Furnace No. 3 in its totality and on that basis decide whether the totality of work should have been done pursuant to the ICI agreement. The intervenor Electrical Contractors Association of Ontario ("ECAO") took the position that we should review each item of work and make our decision on whether or not that specific piece of work should have been done under the ICI provincial agreement or pursuant to the General President's Maintenance Committee for Canada Project Agreement for Maintenance ("the General President's Maintenance Agreement").

3. The Board ruled that it would review the totality of the project and decide whether the work was properly performed pursuant to the General President's Maintenance Agreement.

4. A review of the General President's system can be found in Delta Catalytic Industrial Services Limited, [1996] OLRB Rep. March/April 233. We do not intend to review in this decision the role of the General President's Maintenance Committee or the decisions made under that collective agreement.

5. Our task here is straightforward. We are to review the scope of work referenced in the parties' agreement which the parties assert is the work done by Jaddco at Dofasco Blast Furnace No. 3. At the end of our review we are to decide whether the project in its totality was properly performed pursuant to the terms and conditions of the General President's Maintenance Agreement ("GPMA") or whether the work was construction work and consequently should have been done under the ICI collective agreement.

6. No. 3 blast furnace at Dofasco was shut down in 1994. The documents are replete with references that the furnace had come to the end of its campaign life. In our view it is not necessary to decide whether the furnace was at the end of its campaign life or simply was "mothballed" as a consequence of some other reason. The furnace was decommissioned in June 1994. Work was carried out at that time to quench the furnace and to make the furnace safe in its mothballed state.

7. A decision to bring the furnace back into service was made in September 1995. The documentation is clear and unequivocal that Dofasco and the various engineering firms it retained reviewed the furnace with an eye to putting it back on line. There were many different ways of putting this furnace back in service, involving many different levels and complexities of work. In the end Dofasco decided to use the scope of work found in the agreement of the parties (Tab 38), to put the furnace back on line.

8. The panel has reviewed the scope of work on the basis of dividing the furnace into its components and assessing what type of work has been performed in its totality.

9. The dichotomy between construction and maintenance has produced much jurisprudence. It is difficult for a contractor at the beginning of a job to assess what work is "construction" work and what work is "maintenance" work and consequently what collective agreement should be applied to any given project.

10. This panel has spent many months attempting to identify guidelines which would serve to help a contractor faced with the construction maintenance dichotomy. Unfortunately after reviewing all the material in great detail and in attempting to express general guidelines which would have helped contractors make proper decisions about maintenance/construction, we are unable to do so. In Levert & Associates Contracting Inc., [1989] OLRB Rep. June 630, the Board said the following at paragraphs 12 to 15:

11. The Board has recognized a distinction between maintenance work and construction work since its decision in Tops Marina Motor Hotel, 64 CLLC ¶16,004, the first reported decision interpreting the definition of construction industry in what is now clause (f) of subsection 1(1) of the Act, even though the words maintenance or maintaining are not used in the definition or elsewhere in the Act. The problem always is to make the distinction in a particular fact situation because there is no clear demarcation between maintenance work and construction and, in the Board's experience, what the parties see generally as being one or the other appears to be very much in the eye of the beholder. See, for example, Kidd Creek Mines Ltd., [1984] OLRB Rep. Mar. 481, at paragraphs 46 and 47. The Board, of course, must determine whether or not work characterized by a parry as maintenance work is construction work for purposes of the Act, not for some more general purpose. The Board's decision in Master Insulators', supra, is the first reported decision which lends some definition to the task of distinguishing maintenance work which is not construction work from repair work which is.

12. The facts here are clear. The dissolving tank and the vapour pipe were functioning fully immediately prior to the shutdown. But, because they both had developed thin areas, it was decided, in the case of the tank, to reinforce those areas and, in the case of the pipe, to replace it because that was more economical than patching or cutting out and replacing the thin areas. The work was not an addition to the recovery and steam plant and was not for the purpose of increasing its production capacity. It was work done for the purpose of avoiding having the tank or pipe fail while the mill was operating. Clearly, it was work which would assist in preserving the functioning of the recovery and steam plant and it was not work done for the purpose of restoring a system which had ceased to function or function economically.

13. These facts distinguish this case from Inscan, supra, on which the applicant relies, where fire damage at a refinery stopped production for three weeks of a feedstock for lubricating oils. That process represented approximately ten per cent of the total product capacity of the refinery. The facts herein are much more analogous to those in Gallant Painting, supra, on which the respondent relies. In that case the Board found that the painting of ". pipes, tanks and other containers...amongst other things, in two petrochemical plants, was work which "will preserve and protect the structures from corrosion and thereby extend their useful lives.". The patching of the tank and replacement of the vapour pipe served to extend the useful life of the recovery systems in the recovery and steam plant of the mill.

14. The fact that there were other contractors in the mill who may have been employing boilermak­ers pursuant to the boilermakers provincial agreement, an agreement which has application in the industrial, commercial and institutional sector of the construction industry, is of no assistance to the Board in this case. The question the Board must answer is whether the respondent was performing work in the construction industry and was an employer within the meaning of clause (c) of section 117 of the Act. That requires an analysis of the work which the respondent's employees were performing. There is no evidence that the work which they were doing had any connection whatsoever with the work being performed by the other contractors.

[emphasis added]

11. The Board in that case came to the conclusion that the dichotomy between construction and maintenance is based primarily on a factual context. It is an analysis of the factual underpinning of any given work which allows an adjudicator to decide whether the work is construction or maintenance. In certain situations replacements of components might lead to the conclusion that the work in that context is maintenance. However in another context the replacement of components when viewed in their totality might lead to a conclusion that the work is construction because when one replaces all the components he or she is in fact rebuilding the entire system or structure.

12. In the context of the facts before us we find that as a consequence of a reduced need for steel production, Dofasco decided to take one of its furnaces out of service. The decision to take blast furnace no. 3 out of production, rather than any of the other furnaces, was based on a myriad of factors which included the fact that blast furnace no. 3 was at or near the end of its campaign life and needed a lot of repairs.

13. The Board's decision in Master Insulators' Association of Ontario Inc., [1980] OLRB Rep. Oct. 1477 is an often referred to case which attempts to explain the dichotomy between construction and maintenance. The following paragraphs are helpful in attempting to understand the theoretical framework that underpins the discussion about maintenance and construction:

14. With the exception of the work performed at the premises of Fearman and the work on a new emergency shower and minor work in a change house at Stelco, the work performed by the employers who were named in this complaint was essentially similar in nature. In our view, the work at the premises of Fearman, which involved an addition to an existing facility and involved both relocation of producing units and the expansion of existing capacity, was clearly new construc­tion. Similarly, the work on the emergency shower and change house at Stelco was an addition for the safety and comfort of Stelco's employees and represented new construction. This work is clearly within the industrial, commercial and institutional sector of the construction industry. The rest of the work referred to in the compliant was, for the most part, clearly work which sustained and maintained an operating facility and enabled that facility either to operate efficiently or to attain its designed or production capacity and is to be regarded as maintenance work. Maintenance work is to be distinguished from construction work which involves the addition to an existing facility or which will increase the designed or production capacity of an existing facility. However, in so far as there was work of new construction, which was purportedly done under the maintenance agreement, it was a violation of section 1341 a(1) of the Act.

15. Maintenance work performed by the employers who were named in this complaint is in reality part and parcel of the production and maintenance operations of the industrial clients for whom the work is performed. These industrial clients may, and frequently do, perform their own maintenance work with either their own employees who are included in their own industrial bargaining units. In the context of the work affected by this complaint "maintenance" is difficult to distinguish from "repair". In our view, it is a question of the context of any given work and the degree of addition or subtraction of such work to an existing system or part of a system. Where the work assists in preserving the functioning of a system or paint of a system such work is maintenance work. Where the work is necessary to restore a system or part of a system which has ceased to function or function economically such work is repair work. "Maintenance " and "repair" are not mutually exclusive concepts, and lack of adequate maintenance will surely produce a situation where repair becomes inevitable. In our view, the performance of adequate and timely maintenance forestalls or reduces the requirement for repair.

[emphasis added]

14. At paragraph 16 of National Elevator and Escalator Association, [1991] OLRB Rep. April 555 the Board says the following:

15. As is evident from the Master Insulators, supra case and the Board's subsequent jurisprudence. there is no clear distinction between construction and non-construction work. It is particularly difficult to draw a distinction between "repair" work, which is construction work. "maintenance" work, which is not (see, for example. Levertt & Associates Contracting Inc. supra. Briecan Const. Limited, [1989] OLRB Rep. May 417. Inscan Contractors (Ontario) Inc.. [1986] OLRB Rep. May 640. Kidd Creek Mines Ltd., [1984] OLRB Rep. March 41, Quinard Limited, [1982] OLRB Rep. July 1054). Whether something is repair or maintenance work will depend upon the nature and purpose of the work in question in the context of the facility of system in or to which the work is being performed. Generally, work performed on existing equipment in an existing facility for the purpose of keeping the facility or a system in it operating properly before the facility or system has ceased to do so. is appropriately characterized as maintenance work. On the other hand, work involving the addition to or replacement of equipment for the purpose of either increasing the capacity of the facility or system, or restoring the ability of a facility of system to function properly. is appropriately characterized as repair work. The amount, apparent significance, or value of the work in question may be part of the context in which the assessment is properly made but are in no way determinative of the question. Similarly, whether a facility or system is shut down while the work in question is being performed may also be relevant, but will not be determinative.

16. Jaddco asserts that there has been no production increase or efficiency increase as a consequence of the work performed on blast furnace no. 3, and absent those factors the Board should find that the work being performed on the system is maintenance work and properly performed pursuant to the General President's Agreement. Jaddco asserts that the replacements made to the furnace brought the furnace in line with modern technology. They assert that in the context of returning a furnace to service, replacing components with updated technology is not construction work.

17. The cases are clear that every fact situation needs to be analyzed by reviewing the context of the work. It may be that when one upgrades components in the context of a facility or system where the purpose is to keep the facility or system properly operating those types, of in-kind, replacements would lead to the conclusion that one is maintaining the facility or system and that the work in question is not construction work. The answer may be very different where the part of the system that is being worked on has been out of service and work is being performed to put the components of that system back into service and consequently the entire system back into service.

18. The following is our review by subject area of the scope of work found at Tab 38.

(a) Stockhouse

18. The work done on the stockhouse is found at Tab 38 between scope index no. 2.0 and 2.8.5. The stockhouse is where Dofasco stores raw material in preparation for the transport of the material to the blast furnace. We find that the stockhouse was in serious need of repair. The responding party asserts that in effect the stockhouse refit was done to update the facility. He asserts that when one makes changes to update a facility one is simply maintaining the facility. In our view while some updates may be directly related to maintaining a facility, the work done in the stockhouse was done to bring the stockhouse up to a standard where it could be properly used for the purpose of storing raw material which would be transported to the blast furnace. It is our view that without these upgrades the stockhouse could not have been used for its intended purpose. We find that the stockhouse was repaired.

(b) Furnace Charging

19. The scope of work for furnace charging begins at Tab. 38 scope index no. 3.0 and continues up to and including 3.3.15. The function of furnace charging is to carry raw materials, via "skips", from the stockhouse area to the receiver hoppers at the top of the furnace. At the top of the furnace, the materials are dumped into a small bell hopper, and from there into a large bell hopper. The large and small bell hoppers provide a double seal at the top of the furnace to prevent gas from escaping. The large bell remains closed until the small bell has transferred its material. Equipment in this section includes the skip incline, hoist house, receiver hopper, and the large and small bell hoppers. The responding party asserts that there was a replacement in kind to the furnace changing, and that any design work associated with that replacement was in fact to replace components. It is our view that a "replacement in kind" of most of the components of the furnace charging amounts to a complete reconstruction of the furnace charging.

(c) Furnace Proper

20. Dofasco Blast Furnace No. 3 is approximately 30 feet in diameter and stands 230 feet in height. The main sections of the furnace, starting from the base, are the hearth bottom, hearth, bosh and stack. The raw materials are fed into the receiving hopper, and pass through the small and large bells where they enter the furnace stack. The materials are heated in the stack, melting occurs in the bosh area and the hot metal and slag (waste material) are collected in the hearth. The outside shell of the furnace is steel construction. The inside walls are lined with cooling staves (piping) located between the shell and refractory, which forms the inside of the furnace. The scope of work done to the furnace proper is found at Tab 38 between scope index no. 4.0 and 4.10.5. The responding party asserts that the furnace proper and parts of the furnace proper were replaced in kind. We find that the vast majority of the components of the furnace proper were replaced. We find that replacing most of the components of the furnace proper is work done to repair the furnace.

(d) Casthouse

21. The casthouse refers to the building which houses the blast furnace and includes the system of guns, drills, troughs and runners by which molten product is removed and transported away from the furnace. In respect of the casthouse and in particular the runner system, Dofasco chose not to put in a newly-designed runner system but rather to repair the system that had previously existed. In our view this repair included an upgraded approach to the runner system. In particular there was a redesign in respect of the foundations for the air trough, and air cooling system.

22. The parties provided the Board with two blueprints. One reflected the runner system as it existed prior to the work performed and the second described the work done on the runners. What is clear from an analysis of the two blue prints is that the work done was a complete reconfiguration of the runner system and that the reconfiguration included what is typically construction work i.e., concrete forming, anchoring, and foundation repair.

23. In our view, the scope of work in respect of the casthouse includes aligning the runner system. Although the "cadillac" runner system referred to in Tab 39 was rejected in the final project, it is our view that the work in respect of reconfiguring the runner system is clearly an alteration from what was previously there.

(e) Stoves and Hot Blast System

24. The function of the stoves and hot blast system is to preheat air for the blast furnace. Normal stove operation consists of two cycles and therefore requires a minimum of two stoves to operate. Prior to this project, a three stove operation was used at this furnace. A decision was made by Dofasco to redesign the furnace to create a two stove operation.

25. In our view, the change from a three stove operation to a two stove operation includes the redesign of the stove system. The stove and hot blast system was radically altered from the previous three stove system.

(f) Gas Cleaning

26. The gas cleaning system is found at scope index no. 7 through to and including 7.10.9 at Tab 38. The function of the gas cleaning system is to remove dust particles in the off-gas leaving the furnace top, before the gas can be used in either the hot blast stoves or the boiler house. The dirty gas first passes through the dustcatcher which captures the larger particles and then through a wet cleaning system which removes the finer particles. The gas cleaning system has been entirely changed. The No. 3 furnace formerly used a gas cleaning system that employed an electrostatic precipitator. In our view, this is a completely new system and consequently in our view, is construction work.

(g) Services

27. Services include various plant services and utilities which are required to operate the blast furnace they include: water, steam and condensate, nitrogen, oxygen, compressed air, instrument air, natural gas. coke oven gas (COG) hydraulic, pneumatic, lube and miscellaneous piping including heating, ventilating and air conditioning (HVAC) systems. All the services were reconfigured to match the changes that were made to the stockhouse, furnace charging, furnace proper, casthouse, stoves and hot blast system and gas cleaning system. The reconfiguration on its own would not have been necessary except that these systems had to match up with the what can only be called the reconstruction of no. 3 furnace.

(h) Instrumentation

28. Instrumentation is found at scope index no. 9.0 through to and including 9.10.2 of Tab 33. Much of the instrumentation work was needed as a consequence of the upgrade that Dofasco did in 1993 by replacing the Fox 3 instrumentation system with the Bailey Infi Net 90 system. This type of upgrade to the instrumentation system would have been necessary in any event had Dofasco not shut down this furnace. In our view, the instrumentation system that was taken out was replaced in its entirety as a consequence of the logic necessary to run the Bailey system.

(i) Electrical

29. Electrical processes are required for all aspects of the furnace functioning. The electrical work is support work and one would expect that whatever electrical work is done it is in support of either maintaining the furnace or, in the alternative, constructing or repairing the furnace. This involves work performed on the stockhouse, the furnace charging, the furnace proper, the casthouse, the stoves, the gas cleaning system, services for the furnace and instrumentation and electrical work in respect of the above named components.

Decision

30. In our view almost every component in this furnace had some type of work done to it. Much of the work included re-design work and consequently work had to be performed to meet the require­ments of the new design. An example of this would be taking a three stove furnace and turning it into a two stove furnace. The overall redesign had an impact on the runner system which needed to be reconfigured to serve a two stove system.

31. When viewed in its totality, the type of changes done to blast furnace no. 3, to bring it back into service, are the type of changes one would associate with repair work and/or alteration. That is, "construction work".

32. In our view the work performed on blast furnace no. 3 at Dofasco is work which properly falls within the ICI portion of the IBEW's Principal Agreement.

33. The responding party, and the intervenor General Presidents' Maintenance Committee assert that the work has historically been performed pursuant to the General President's Maintenance Agreement and consequently we should find that the work was properly performed pursuant to the General President's Maintenance Agreement. In our view the issue of past practice does not help us in determining whether the work performed was construction work or maintenance work but rather whether damages should issue as a consequence of the fact that work of this nature has been historically performed pursuant to the General President's Maintenance Committee Agreement.

34. It is not clear, and certainly the applicant contested, the arguments relied on by the General President's Maintenance Committee and Jaddco in respect of the consistency of the past practice. We would therefore remit this matter back to the parties in respect of the issue of damages. We expect the parties to review their past practice and review the damages in the context of our comments above.

35. This panel remains seized for any matters consequently arising from this decision.

CONCURRING OPINION OF G. McMENEMY; February 18, 1998

1. The General President's Maintenance Agreement ("G.P.M.A.") has over its history gener­ated a substantial amount of work for the members of the Building Trades Unions and their employers.

2. This decision should not be interpreted to mean that this is the end of the G.P.M.A. That is not the case. The G.P.M.A. will continue to be an agreement that will be used for maintenance work in the Province of Ontario.

3. The Building Trades Unions over many years have recognized the importance of mainte­nance work and that the G.P.M.A. historically has been part of that recognition. It is likely and quite possible in this day and age that without the G.P.M.A. large maintenance projects could be lost to the unionized sector of the construction industry in Ontario.

4. However, it is obvious that the parties to the G.P.M.A. must develop a better structure to recognize what work is actually maintenance and what is construction. What appears to be a blanket approach taken by the General President's Maintenance Committee over the years to what work this collective agreement covers has caused great confusion for the members of their respective trades who actually do the site work under this agreement.

5. The need to involve the local unions and their members in arriving at the terms and conditions of the G.P.M.A. has never been greater, especially when one considers the recent changes to the Labour Relations Act, 1995.