[1998] OLRB REP. JANUARY/FEBRUARY 68
1367-96-FC International Union of Operating Engineers, Local 793, Applicant v. Maray Construction Ltd., Responding Party
BEFORE: Inge M. Stamp, Vice-Chair.
APPEARANCES: Mike McCreary, Brian Madigan and Ken Lew for the applicant; Yvon Renaud and Ray Parsons for the responding party.
DECISION OF THE BOARD; January 22, 1998
The Board (differently constituted) directed that a first collective agreement be settled by arbitration pursuant to the provisions of section 43 of the Labour Relations Act, 1995. The parties requested the Board arbitrate the settlement of the first collective agreement.
During the course of the hearing the parties were able to agree on all outstanding issues with the exception of whether there should be a rate increase in the second year of the collective agreement.
The parties agreed to and signed four identical collective agreements including attached letters of understanding effective January 1, 1997 until December 31, 1998 for Board Areas 21, 22. 23 and 24 covering that portion of the District of Algoma south of the 49th parallel of latitude, the District of Thunder Bay, the District of Rainy River and the District of Kenora including the Patricia portion.
The only outstanding issue between the parties is with respect to a wage increase in the second year of the collective agreement. The applicant proposed a 2% increase, the responding party proposed a 0 increase in the second year.
The parties had agreed to the base rates for the different classifications effective January 1, 1997. For example classification no. I effective January 1, 1997 is $17.37. The applicant provided collective agreements in the road builders/sewer and watermain sectors in Northern Ontario for a number of companies. I will refer to the classification no. I base rate for comparison. This classification covers engineers operating backhoes, hydraulic excavators, clams, shovels, draglines, gradalls & similar equipment. The responding party's rate effective January 1, 1997 for classification no. 1 is $17.37. Classification No. I in other collective agreements in the road builders/sewer and watermain sector in Northern Ontario in effect or effective January 1, 1997 are:
LeBrun Northern Contracting $17.92 F. & E. Seegmiller $17.35 Makkinga Equipment Rentals $18.00 Towland-Hewitson $17.60 Leo Alarie & Sons* $18.75
*(Classification 33 - operators of clams, cranes, including pile driving, cable shovels, draglines, party chief.)
A collective agreement was put before the Board for Tera North Construction which expired February 28, 1997. This collective agreement covered all of Ontario for all work except EPSCA, Pipeline and ICI sectors. The base rate in effect January 1, 1997 was $17.00.
Base rates effective or in effect January 1, 1998 in similar agreements for classification no. 1 are:
LeBrun Northern Contracting $18.37 Makkinga Equipment Rentals $18.45 Towland-Hewitson $17.81
A 2% increase would bring the responding party's classification no. 1 rate of $17.37 to $17.72 (plus .35—). This rate is below rates in effect January 1998 in similar agreements in the area.
The responding party took the position that by agreeing to a substantial wage increase effective January 1, 1997 its labour cost increased significantly. The company operates essentially in the road building industry dependent on provincial contracts. The responding party does not expect any increase in its sales over the last year. The responding party referred the Board to a document produced by the Labour Management Services, Office of Collective Bargaining Information which showed 0 to 0.2 increases in the second and third quarter of 1996 in base wage rates in the construction industry. It is the responding party's submission that by agreeing to the January 1997 rate the employees received a 12% to 15% increase by becoming unionized.
The responding party asserts the 1997 rates are already above average. The three companies, LeBrun, Alaire and Makkinga are home-based companies. They are not required to mobilize and demobilize as frequently as the responding party. Maray Construction Ltd. evolved from a logging company into a construction company in 1992. Its head office and garage are in Dubreuilville. Because of the distances involved the responding party asserts it is at a real disadvantage in the industry. The above three companies are working at home base with available work year-round in the mines. The responding party has come up 12% to 15% which is a significant increase and should be left in place for the next two years.
II. The applicant submits the agreements provided to the Board cover road builders. The applicant disagrees that they are "home companies". The applicant further points to page 2 of the Collective Bargaining Settlements report indicating the average annual increases in the private sector were 1.9% in the second quarter 1996 and 2.5% in the third quarter 1996.
Having reviewed the base rates in the Road Builders' collective agreements in Northern Ontario which were put before me it is my view that a 2% increase is not unreasonable. The information with respect to the construction increases in the Labour Management Services report is too general to be of assistance. Page 7 of that report does not indicate what sector of the construction industry that it refers to.
A 2% increase effective January 1, 1998 will mean a base rate of $17.72 for the responding party's classification no. 1 employees as compared to $17.81 for Towland, $18.45 for Makkinga and for LeBrun $18.37. Compared to similar agreements in the industry a 2% increase is reasonable. I therefore award a 2% increase to the base rates effective January 1, 1998.