Labourers' International Union of North America, Local 527 v. AXOR Construction Canada Inc., 1999 CanLII 20174

Labourers' International Union of North America, Local 527 v. AXOR Construction Canada Inc.

[1999] OLRB REP. NOVEMBER/DECEMBER 933

2489-98-R Labourers' International Union of North America, Local 527, Applicant v. AXOR Construction Canada Inc., Responding Party

BEFORE: Janice Johnston, Vice-Chair and Board Members G. Pickell and A. Haward.

APPEARANCES: Daniel Randazzo, Luigi Carrozzi and Real Cote for the applicant; Michael McFadden and Marion Breen for the responding party.

DECISION OF THE BOARD; November 4, 1999

1This is an application for certification in the construction industry. By decision dated October 29, 1998, the Board (differently constituted in part) ordered that a representation vote be taken of the individuals in the following bargaining unit:

all construction labourers in the employ of AXOR Construction Canada Inc. in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario and all construction labourers in the employ of AXOR Construction Canada Inc. in all other sectors of the construction industry in the Regional Municipality of Ottawa-Carleton, and the United Counties of Prescott and Russell, save and except non-working foremen and persons above the rank of non-working foreman.

2The vote was held on November 2, 1998 and more than fifty per cent of the employees who cast ballots voted in favour of representation by the applicant, the Labourers' International Union of North America, Local 527 (the "union").

3After the vote was held, but prior to the issuance of certificates to the union, the responding party, AXOR Construction Canada Inc. (the "company” or "AXOR"), challenged the Board's constitutional jurisdiction to deal with this matter on the basis that the employees in the bargaining unit were engaged in work on federal property and within federal jurisdiction.

4The Board (differently constituted) by decision dated November 18, 1998, directed that this matter be set down for hearing to deal with the jurisdictional challenge. Hearings were held on March 26, 1999 and June 22, 1999. At the hearing the parties agreed that the only thing standing between the union and the issuance of certificates was the jurisdictional challenge.

5The parties agreed to the facts in this case and provided the Board with the following written summary:

1. Axor is a registered general contractor in the province of Quebec, and has a number of projects ongoing in both Ontario and Quebec. and has in the past had projects in New Brunswick. Axor is the general contractor in respect of a contract ("the Contract") let by the National Capital Commission ("NCC") for the rehabilitation and expansion of the Champlain Bridge ("the Bridge"), which connects Ottawa, Ontario with Aylmer, Quebec, spanning the Ottawa River.

2. The Contract requires, among other things, that Axor rehabilitate the existing Bridge structure, and construct a new Bridge structure to be integrated with the existing Bridge structure, using concrete girders. At the completion of the Contract, what was a 2-lane Bridge will be a 4-lane Bridge.

3. The Contract was let by the NCC to the lowest tender, and Axor was not the only construction company which bid on the Contract.

4. The Contract requires that Axor, among other things, maintain the existing Bridge decking, roadways and recreational pathways in use during construction. Such responsibilities include the removal of snow and the salting of the Bridge roadways, which activities were tendered by Axor and ultimately awarded to the municipality of the City of Ottawa. Axor is also required to maintain the existing Bridge decking in a state of good repair. Some of this work will be done directiy by Axor and some will be done by way of subcontract.

5. During the term of the Contract, Axor will be required to maintain traffic control on the Bridge (which traffic control would be no different than the traffic control required by any other construction project). During the term of the Contract, police authority on the Bridge will remain vested with the police authorities who have always had jurisdiction over the Bridge.

6. The Bridge is supported by 33 piers which are anchored into the Ottawa River. Seventeen of the piers are located in Quebec and 16 of the piers are located in Ontario. To date, pier work that has been performed has been predominantly undertaken within Ontario, but the Ontario-side pier work is not yet complete. Although there has been some work performed on piers located in Quebec, most of this work is yet to be completed. The work on the piers is not proceeding on a "pier-by-pier" basis.

7. The piers and Bridge sections must be built simultaneously. The roadway approach work in both Ontario and Quebec, which must be performed by Axor pursuant to the Contract, may take place at the same time as work on the Bridge continues.

8. In terms of the total work to be performed by Axor pursuant to the Contract, about 40% of the work is located in Quebec and about 60% in Ontario. Axor has subcontracted some of the work, and some of those subcontractors are bound to and apply the collective agreement between the Applicant and the National Capital Road Builders Association ("NCRBA collective agreement").

9. The placement and movement of traffic barners has been subcontracted by Axor to Utilities Structures Inc., who are performing the work in accordance with the terms of the NCRBA collective agreement.

10. Once the Contract is complete, Axor will have no further responsibilities in respect of the Bridge.

11. Excerpts from the Contract have been filed with the Board (see "Respondent's Book of Documents"), which include detailed specifications of the work to be performed, certain relevant diagrams and some Contract prices.

6In addition, the parties agreed to the following facts which are contained in correspondence from the employer to the Board dated November 9, 1998:

(a) AXOR contracted with the National Capital Commission to reconstruct the existing Champlain Bridge. This construction contract will require demolition, reconstruction of certain bridge structure components and construction of entirely new bridge structure components. It is expected that the project will take approximately three years to complete.

(b) The Champlain Bridge is an interprovincial bridge that crosses the Ottawa River linking Ontario with Quebec. The bridge itself is a federal work. [See letter from the National Capital Commission, attached, which confirms that the bridge is a federal property.]

(c) All work performed by the AXOR labourers is performed inside the bridge cofferdam enclosure in the Ottawa River riverbed. The Ottawa River is a federal waterway.

(d) Specifically, the labourers are performing the following work in the reconstruction of the Champlain Bridge:

• Truck flagman for construction of cofferdams required for bridge reconstruction;
• installation of bridge and construction signage;
• Cofferdam de-watering, including the installation and the supervision of dewatering pumps and hoses;
• Foundation de-watering and preparation in the riverbed for construction of bridge pier extensions;
• Foundation de-watering and preparation in the riverbed for construction of bridge abutment extensions;
• Partial demolition of existing bridge piers in order to permit construction of new bridge pier extensions;
• Drilling into existing bridge piers for installation of steel dowels for bridge piers;
• installations and grouting of steel dowels for bridge piers;
• Partial demolition of existing bridge abutments in order to permit construction of new bridge abutment extensions;
• Drilling into existing bridge abutments for installation of steel dowels for bridge abutments; and,
• installation and grouting of steel dowels for new bridge abutment extensions.

7It was also agreed that AXOR's primary business is that of a general contractor performing work in all sectors of the construction industry. It is a federally incorporated company with offices in Ontario and Quebec.

Submissions of the Parties

8The employer took the position that the Board did not have the constitutional jurisdiction to deal with this application, as the bridge upon which AXOR is performing work, is a federal work or undertaking. Counsel stressed that an important consideration in this case was the fact that the bridge remains in operation during the rehabilitation and construction and that AXOR is responsible for the operation of the bridge during the life of the contract. A second consideration employer counsel stressed as critical in this case, was the fact that AXOR was standing as a proxy for the NCC ensuring that the bridge continued to operate during the three year life of the contract between AXOR and the NCC. The third point relied upon by counsel for AXOR was the fact that as almost half of the work on this project is located in Quebec, the Board does not have jurisdiction over approximately half of the work at issue, as it is work outside of the provincial boundaries of Ontario.

9Employer counsel conceded that labour relations as such and particularly as it relates to construction work, falls within provincial jurisdiction. But, this is not true if the construction work being performed is integral to the operation of the federal work or undertaking. In counsel's view, the percentage of work which is integral to the federal work is irrelevant. In support of this latter proposition counsel referred the Board to: Regina v. Toronto Magistrates (Tank Truck) (1960) 1960 CanLII 120 (ON HCJ), O.R. 497 (O.H.C.); R. v. Cooksville Magistrates Court (Liquid Cargo Lines) (1964) 1 O.R. 84 (O.H.C.); and Ottawa-Carleton Transit and Amalgamated Transit Union (1983) 44 O.R.(2d) 561 (Ont. C.A.).

10Counsel for the employer next reviewed the relevant jurisprudence. He started with the case of Construction Montcalm Inc. (1979) 1978 CanLII 18 (SCC), 1 S.C.R. 754 ("Montcalm"). Although acknowledging that this case was applicable, counsel distinguished it on the basis that the work in Montcalm took place entirely within the geographic boundaries of Quebec and that the airport upon which the work was being performed was not yet operational. Had the airport in the Montcalm case been operational, counsel urged us to accept that the court would have come to a different conclusion. Employer counsel stressed that the fact that the bridge will be in use during the three year period of rehabilitation and construction, and that AXOR is obligated under the contract it signed to operate the bridge during this period, is sufficient to distinguish this case from Montcalm.

11Employer counsel next referred the Board to Moncton Northeast Construction Ass 'n and CJA, Local 1386 (1995) 31 C.L.R.B.R. (2d) 232 (N.B.I.R.B.) ("Moncton"). In the Moncton case, Strait Crossing Joint Venture ("SCJV") had been contracted to design, build, finance and operate the "fixed crossing" that was to connect New Brunswick ("N.B.") and Prince Edward Island ("P.E.I."). The issue in that case was whether or not the labour relations of SCJV fell within provincial or federal jurisdiction. While conceding that there were aspects of the Moncton case which were different than the case before us, counsel urged us to apply the concept of "proxy" developed in the Moncton case to the facts before us. In the Moncton case, the New Brunswick Industrial Relations Board (the "N.B.I.R.B."), concluded that SCJV was acting as proxy for the government of Canada in the fulfilment of its ongoing constitutional obligation to P.E.I. to establish and maintain a transportation and communication link between it and the mainland. This factor, amongst others, was considered to be determinative of the characterization of SCJV as a federal undertaking. Counsel suggested that in our case AXOR is acting as the proxy for the NCC, a federal undertaking, and is responsible for operating the bridge during the life of the contract. Thus AXOR is a federal undertaking for the life of its contract with the NCC as it is standing in the shoes of the NCC.

12Employer counsel submitted that a finding of provincial jurisdiction in our case, would result in a fragmented bargaining relationship, as work is going on in two provinces at the same time. As the Board's jurisdiction ends at the border, the employees could be covered by two different labour relations regimes depending on where they were working at any given time. Counsel pointed out that this consideration was a factor relied upon in the Moncton case for a finding of federal jurisdiction.

13For all of the above noted reasons counsel urged the Board to decline jurisdiction on the basis that this matter falls under federal jurisdiction and to dismiss the application for certification.

14Counsel for the union argued that, in determining the constitutionality of the work, the Board should not focus on the bridge or the structure upon which the work is being performed, but on the company performing the work. He urged the Board to look at AXOR over a period of time and not focus just on this project.

15Union counsel pointed out that the jurisprudence, particularly Montcalm and Northern Telecom Ltd. v. Communications Workers of Canada et. al. (1979) 1979 CanLII 3 (SCC), 98 D.L.R. (3d) 1 (Northern Telecom No. 1), established a four part test for determining constitutional jurisdiction. He paraphrased the test in the context of this case as follows:

1. an analysis of the general nature of AXOR's operation as a going concern and the role of the construction crews of AXOR within that operation;

2. the nature of the corporate relationship between AXOR and the NCC;

3. the importance of AXOR's construction work to the operation of the bridge or the NCC as a going concern. This review is not done as a snapshot in time i.e. on the date of application, but over the life of the undertaking;

4. the degree of operational integration between AXOR's construction crews and the ongoing operation of the bridge.

16Union counsel suggested that the jurisprudence makes it clear that the construction of federal works and undertakings is prima facie provincial, as is the regulation of these employees. In reviewing the ordinary business of AXOR, it is clear that it performs construction work in various sectors of the construction industry, for a variety of clients, located in more than one province. AXOR is in the business of building. As was noted in the Montcalm case, what it builds is accidental. AXOR is not a federal undertaking, service or business, and when the construction of the bridge is completed, AXOR's employees will have nothing more to do with that federal undertaking. In support of his argument counsel referred to: Montcalm, supra; Northern Telecom No. 1; and Northern Telecom Ltd. et. al. v. Communication Workers of Canada et. al. (1983) 1983 CanLII 25 (SCC), 147 D.L.R. (3d) 1 (Northern Telecom No. 2).

17For jurisdiction to be established, union counsel pointed out that the relationship between the subsidiary operation and the core federal undertaking had to be examined from a functional, practical point of view. To fall under federal jurisdiction, there must be a high degree of operational integration between the two companies, and the integration must be of an ongoing nature. In support of this proposition, counsel referred the Board to Re Canada Labour Code (1986) 1986 CanLII 3986 (FCA), 34 D.L.R. (4th) 228. In our case the work of AXOR on the bridge, which is the federal undertaking, is time limited and discrete rather than of an ongoing nature.

18Union counsel distinguished the Moncton case, supra, on its facts. In the Moncton case the employer designed, built, financed and operated the bridge for 35 years. In the case before us, AXOR has been hired to rehabilitate and expand the bridge. As part of that three year project it is required to keep the bridge open and this includes such things as snow removal and salting. In counsel's view this does not amount to operating the bridge.

19Counsel for the union did not dispute the employer's submission that the Board does not have jurisdiction over the work taking place in Quebec. However, he pointed out that on the application date the employees in the bargaining unit were working in Ontario and the employer did not challenge any of them as not performing work in the bargaining unit. Therefore, in his view, it is not appropriate for the employer to attempt to challenge the employees at this point in the proceedings. In addition, counsel stressed that as the border between Ontario and Quebec is in the middle of the river, the parties should not have any difficulty determining which work is bargaining unit work.

20Union counsel asked the Board to conclude that there is nothing to suggest that AXOR is a federal work or undertaking on an ongoing basis. The work in question is within provincial jurisdiction and the request of the employer that the Board decline jurisdiction should be dismissed. Based on the vote results certificates should issue and the union requested that the Board do so as soon as possible.

21In reply, counsel for the employer asked the Board to bear in mind that the situation before us was different, as AXOR, unlike the employer in the Montcalm case, had responsibilities for operating the bridge on an ongoing basis. The employer in the Montcalm case was doing construction work on a pre-operational basis. Had the employer in addition to its construction responsibilities, also been responsible for operating the airport, the result might well have been different. Although employer counsel conceded that at some point AXOR's responsibilities with regard to the bridge would end, it does not, in his view, make sense to argue that cases in which the employer had no operational obligations provided the key to our case, where there are operational aspects.

22The submissions of counsel set out above have been significantly abbreviated and we did not refer to, or list, all of the jurisprudence referred to by counsel. We would like to thank counsel for the thoroughness and quality of their submissions.

DECISION

23Cases of this nature turn on their facts, and judges, labour boards and others regularly come to well reasoned but opposite conclusions based on the same facts. However, there are some principles that appear to have gained the acceptance of the majority, if not all of those individuals engaged in the determination of constitutional jurisdiction exercise.

24It is appropriate to commence our analysis with these often quoted passages from the Montcalm case:

The issue must be resolved in the light of established principles the first of which is that Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule: Toronto Electric Commissioners v. Snider, (1925) 1925 CanLII 331 (UK JCPC), A.C. 396. By way of exception however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one.

In submitting that it should have been treated as a federal undertaking for the purposes of its labour relations while it was doing construction work on the runways of Mirabel, Montcalm postulates that the decisive factor to be taken into consideration is the one work which it happened to be constructing at the relevant time rather than the nature of its business as a going concern. What is implied, in other words, is that the nature of a construction undertaking varies with the character of each construction project or construction site or that there are as many construction undertakings as there are construction projects or construction sites. The consequences of such a proposition are far reaching and, in my view, untenable: constitutional authority over the labour relations of the whole construction industry would vary with the character of each construction project. This would produce great confusion. For instance, a worker whose job it is to pour cement would from day-to-day be shifted from federal to provincial jurisdiction for the purposes of union membership, certification, collective agreement and wages, because he pours cement one day on a runway and the other on a provincial highway. I cannot be persuaded that the Constitution was meant to apply in such a disintegrating fashion.

To accept Montcalm's submission would be to disregard the elements of continuity which are to be found in construction undertakings and to focus on casual or temporary factors, contrary to the Agence Maritime and Letters Carriers' decisions. Building contractors and their employees frequently work successively or simultaneously on several projects which have little or nothing in common. They may be doing construction work on a runway, on a highway, on sidewalks, on a yard, for the public sector, federal or provincial, or for the private sector. One does not say of them that they are in the business of building runways because for a while they happen to be building a runway and that they enter into the business of building highways because they thereafter begin to do construction work on a section of a provincial turnpike. Their ordinary business is the business of building. What they build is accidental. And there is nothing specifically federal about their ordinary business.jurisdiction is an integral part of its primary competence over some other single federal subject: In the matter of a reference as to the validity of the Industrial Relations and Disputes Act [55 CLLC 26 15,223], 1955 CanLII 1 (SCC), 1955 SCR. 529 (the Stevedoring case). It follows that primary federal competence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence; thus, the regulation of wages to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral

25It was not disputed that labour relations generally fall within provincial competence unless they form an integral part of a core federal undertaking. Clearly the general nature of AXOR's operation as a going concern is that of a construction company. AXOR acts as a general contractor and performs construction work in a variety of sectors, for a variety of clients, on many projects across at least three provinces of Canada.

26In the case before us, AXOR bid on and was successful in obtaining the contract to refurbish and construct portions of the bridge. The employer makes much of the fact that as a part of this contract AXOR was required to "operate" the bridge. In our view, the fact that the bridge remained open and functional does not merit the significance suggested by counsel for the employer. Keeping the bridge open for business is not the same as "operating" the bridge. Operating the bridge is different from ensuring that vehicles and people may use it, while AXOR is engaged in construction work. It is important to stress that the primary work of AXOR is construction work. Keeping the bridge open is incidental to that.

27In support of the contention that it is "operating" the bridge, AXOR points to the fact that it is responsible for snow removal and salting the bridge. However, the removal of snow and the salting of the bridge is not being performed by employees of AXOR but has been contracted out to the Municipality of Ottawa. Therefore, just as the NCC has contracted out the bridge repair and construction to AXOR, so has AXOR contracted out the snow removal and salting to the Municipality of Ottawa. With all due respect, it goes too far on the facts of this case to conclude that simply because AXOR was responsible for maintaining the existing bridge decking, roadways and recreational pathways in use during construction (which is to take place over a three year period), that it is the proxy for the NCC and is actually operating the bridge. The facts of the case before us are dramatically different from the facts in the Moncton case, supra where the SCJV was contracted to design, finance, build and operate the bridge for thirty-five years.

28In any event, even if we are incorrect with regard to our conclusions concerning the minimal amount of bridge "operation" engaged in by AXOR, we are persuaded, given the lack of interconnection and interaction between AXOR and the federal government that the work performed by AXOR does not make it a federal work or undertaking. The cases make it clear that it is critical to look at the regularity and continuity of the connection between AXOR and the NCC. As was noted in Northern Telecom No: 1, supra, the "... mere involvement of the employees in the federal work or undertaking does not automatically import federal jurisdiction". To determine whether or not AXOR forms an integral part of the federal undertaking, or the operation of the bridge by the NCC, the Board must apply a functional or practical analysis. When we review the normal or habitual activities of AXOR as a going concern, it is obvious that AXOR's involvement in the bridge project is a fleeting one which will end when the construction work is finished. At that point the employees of AXOR will leave and barring any future projects that AXOR may successfully bid on, never return. Just as in the Montcalm case, supra, once the project is completed the AXOR employees will have nothing more to do with the federal undertaking. Simply working on a federal undertaking does not make AXOR a federal undertaking. As was pointed out by counsel for the union, to fall under federal jurisdiction there must be a high degree of operational integration between the two entities and the integration must be of an ongoing nature. Neither of these factors are present in our case. Of particular importance is the fact that the relationship will only last for three years, or the life of the project.

29There is no dispute that the Board does not have jurisdiction over the work on the bridge taking place on the Quebec side of the river. Counsel on behalf of the company argues that if we issue a certificate to the union for a bargaining unit of employees working in Ontario, we would be creating a fragmented and unworkable labour relations environment. We cannot accept this proposition. To do so would imply that any company, regardless of the constitutional nature of the work performed, that operates in more than one province and is therefore subject to different legislative regimes, has a fragmented bargaining relationship. While it is not ideal to split the work being performed on one contract between two legislative regimes, we have no doubt that it has occurred before and is not an insurmountable obstacle.

30Accordingly, for all of the reasons set out above it is our decision that this Board has jurisdiction to entertain the application before us.

31Section 160(1) of the Act, which states as follows, provides for the issuance of more than one certificate if the applicant has the requisite support:

160. (1) The Board shall certify the trade unions on whose behalf an application for certification is brought as the bargaining agent of the employees in the bargaining unit if more than 50 per cent of the ballots cast in the representation vote by the employees in the bargaining unit are cast in favour of the trade unions. The Board shall issue one certificate that is confined to the industrial, commercial and institutional sector and another certificate in relation to all other sectors in the appropriate geographic area or areas.

Therefore, pursuant to section 160(1) of the Act, a certificate will issue to the applicant affiliated bargaining agent on its own behalf and on behalf of all other affiliated bargaining agents of The Labourers' International Union of North America and The Labourers' International Union of North America, Ontario Provincial District Council in respect of all construction labourers in the employ of AXOR Construction Canada Inc. in the industrial, commercial and institutional sector of the construction industry in the Province of Ontario, save and except non-working foremen and persons above the rank of non-working foreman.

32Further, pursuant to section 160(1) of the Act, a certificate will issue to the applicant trade union in respect of all construction labourers in the employ of AXOR Construction Canada Inc. in all sectors of the construction industry in the Regional Municipality of Ottawa-Carleton, and the United Counties of Prescott and Russell, excluding the industrial, commercial and institutional sector, save and except non-working foremen and persons above the rank of non-working foreman.

33The Registrar will destroy the ballots cast in the representation vote taken in this matter following the expiration of 30 days from the date of this decision unless a statement requesting that the ballots should not be destroyed is received by the Board from one of the parties before the expiration of such 30-day period.

34The responding party is directed to post copies of this decision immediately, adjacent to the "Notice of Vote and of Meeting" posted previously. These copies must remain posted for a period of 30 days.