[1999] OLRB REP. NOVEMBER/DECEMBER 1005
0179-99-G Sheet Metal Workers' International Association Local 269, Applicant v. E.
S. Fox Limited, Responding Party
Construction Industry - Construction Industry Grievance - Discharge – Employment Standards Act - Union seeking to enforce entitlements to termination and severance pay under Employment Standards Act("ESA") for one of its members - Board rejecting employer's assertion that grievor engaged in willful misconduct so as to disentitle him to termination pay and severance pay - Board finding that grievor had no right to be recalled under collective agreement and that any entitlement crystallized at the point he was terminated - Board rejecting employer's submission that grievor's employment fell within "construction exemption" where he spent 75% of his time fabricating in the employer's shop and 25% of his time on a construction site installing what had been fabricated - Board directing payment of severance pay and termination pay under ESA
BEFORE: Mary Ellen Cummings, Alternate Chair.
APPEARANCES: I. Raso, Steve Cronkright, Richard England and Lani Gozian for the applicant; W I. McNaughton and Allan Newton for the responding party.
DECISION OF THE BOARD; November 30, 1999
This is a referral of a grievance in the construction industry, pursuant to section 133 of the Labour Relations Act, 1995 (the "LRA"). The applicant is seeking to enforce entitlements to termination and severance pay under the Employment Standards Act (the "ESA") on behalf of one of its members,Richard England.
The responding party (the employer) resists the claim on three bases: that Mr. England was guilty of "... willful misconduct or disobedience or willful neglect of duty that has not been condoned by the employer" [sections 57(l0)(c) and 58(6)(c)]; that he was employed in the construction industry, an occupation exempt from termination and severance provisions; and that he refused a right to recall, thereby refusing to exercise "seniority rights to obtain reasonable alternative employment" [section 58(6)(b)1. If the employer is successful on any one of these grounds, the applicant will not succeed in its claim for termination and severance pay.
Turning first to the facts that give rise to the allegation that Mr. England engaged in willful misconduct, Mr. England is a sheet metal worker, who has worked on and off for the employer since 1973, on referral from the union's hiring hall. Mr. England was sent to the employer on February 8, 1999. Alan Newton, the employer's Area Manager explained that the company had a contract to do some work for Chalk River which required the use of "ticketed" welders. In the past, the employer had done most of the work at the site, but decided this time to do most of it at the shop. He testified that not many ticketed welders are available through this union, because, while sheet metal workers regularly weld, they are not ticketed to do, for example, TIC or MIG welding. Mr. Newton's plan was to train
referrals from the union who had some welding experience, then get them tested, so they would be ticketed. Mr. Newton did not request the referrals himself, but asked Mr. Tooley to do so. I did not hear evidence from Mr. Tooley.
Mr. Tooley phoned Mr. Cronkright, the union's business manager. Mr. Cronkright testified that Mr. Tooley wanted people who would like to do some welding. Mr. Cronkright understood that there would be some training, and then the employees would be tested. According to Mr. Cronkright, he read out a few names, and Mr. Tooley indicated who he wanted to have sent, including Mr. England.
Mr. England testified that when Mr. Tooley explained that he would have to be tested to be ticketed for gas welding, Mr. England picked up his tools, and replied "well I might as well go home, I'll never pass the test". At that point, Mr. England testified Mr. Tooley told him to put down his tools, and he had other work that he could perform for the week. On all accounts, Mr. England performed a week's work on another contract then was laid off. Mr. England gave no evidence to suggest that he was ever asked again to take the test. His record of employment indicated that he was laid off for lack of work. His notice of indefinite lay off is deemed notice of termination, in accordance with section 8(3) of Regulation 327 to the ESA.
Returning to Mr. Newton's evidence, he had no contact with Mr. England, and relies on what Mr. Tooley told him. Mr. Newton testified that when Mr. Tooley told him that Mr. England would not take the test, Mr. Newton instructed Mr. Tooley to give him another week, and see if he changed his mind. Then when he did not, Mr. England was let go.
As things turned out, Mr. Newton testified that only one of the welders passed the test, and the employer ended up doing more of the work on site than had been anticipated.
Mr. England tells a straightforward story of an apparently amicable discussion with Mr. Tooley in which Mr. England conveys that he does not have the skills for the job, seeks to leave as a result, then is asked to stay and perform other work which he does, and is laid off when that work is completed, as anticipated. I heard no evidence from Mr. Tooley, the only other person with direct knowledge of the exchanges, so Mr. England's testimony is the only direct evidence I have. In any event, even if I take into account Mr. Newton's understanding of what he thought Mr. Tooley was doing, it would be hard for me to find that Mr. England had "refused" to take the test, and therefore, engaged in disobedience that the employer did not condone. There is no evidence of a direct order to
Mr. England and a refusal. The employer retained Mr. England for another week, and there is no evidence that he was again asked to take the test. After the lay off, the employer sought to bring Mr. England back to perform more work. Even if I were to find that Mr. England were disobedient (and that would be quite unlikely) the employer's later conduct indicates that it condoned it. Consequently, I find no misconduct on Mr. England's part that would disentitle him to termination pay and severance pay.
- The second argument made by the employer is that when it sought to recall Mr. England in April 1999, the union's business agent refused on the basis that Mr. England was employed elsewhere,and it is the union's practice to refuse to provide employees where it would mean removing them fromanother job. The union relies on Article 7.1 of the Hiring Procedure of the collective agreement betweenthe Ontario Sheet Metal and Air Handling Group, the Ontario Sheet Metal Workers' Conference and the Sheet Metal Workers' International Association:
The immediate employer shall have the right to engage former employees, if available, but otherwise he will accept journeymen or apprentices sent by the Local Union Business Manager. The employer shall contact the union office in the event he is recalling a former employee. After recall the member must pick up a new work permit from the union office before commencing work.
Counsel for the employer said that the applicant cannot interpret "available" in a manner that prevents the employer from seeking to eliminate its obligation to pay termination and severance pay by recalling an employee before those entitlements arise. Counsel submitted that this is just the kind of situation that section 58(6)(b) was intended for; an employee is not entitled to severance pay where he "...refuses to exercise his or her seniority rights to obtain reasonable alternative employment".
But, counsel for the union argued, the employer's argument is premised on the assumption that Mr. England (or any other employee working under the collective agreement) had the right to be recalled. Counsel submitted that this agreement has no rights of recall for employees. The employer has a limited right to seek the return of former employees, but that is not a right of an employee.
Counsel for the applicant relies on the decision of the Divisional Court in E.S. Fox and Martin Hagt et. al., (March 29, 1999) a judicial review of an Employment Standards Adjudicator's decision, considering both the same collective agreement before me, and many of the same issues. Ironically, counsel before me took completely opposite positions in the Divisional Court on the question of the availability of recall rights under the collective agreement. The court concluded that the collective agreement had no recall rights. I agree. The majority then went on:
The adjudicator/referee's reasoning ignores the fact that not all employees have "a right to be recalled for employment under the terms and conditions of employment" Subsection 58(12) deals with the effect of the employees election to maintain the right to recall. In that case the employer must pay the severance monies to the Director in trust.
In the case of employees with no claim to a right to be recalled, the employer's obligation is to pay the severance monies to the employee forthwith.
[emphasis added]
Since Mr. England had no right to be recalled under the collective agreement, any entitlement crystallized at the point he was terminated. The union's determination that Mr. England was not available had no effect on either the employer's liability nor Mr. England's entitlement.
The third argument the employer relies on relates to the nature of the work performed by Mr. England, and how it fits within the statutory exemption for aspects of the construction industry. It is agreed that 75 per cent of Mr. England's time was spent fabricating in a shop, and 25 per cent was spent on a construction site installing what had been fabricated. It is agreed that everything that Mr. England fabricated was destined for installation on a construction site.
There have been numerous cases interpreting what are called the "construction exemptions" to the obligation to pay termination pay and severance pay under the ESA. Section 57 relieves an employer from paying termination pay to an employee working in an occupation excluded by the regulations. Section 2 of Regulation 327, the specific regulation relating to Termination of Employment excludes from entitlement to termination pay a person who:
is employed in the construction, alteration, decoration, repair or demolition of buildings, structures, roads, sewer, water or gas mains, pipelines, tunnels, bridges, canals or other works at the site thereof
[emphasis added]
- Section 58(6)(e) of the Act exempts from entitlement to severance pay:
an employee whose employer is engaged in the construction, alteration, maintenance or demolition of buildings, structures, roads, sewers, pipelines ,mains, tunnels or other works where the employee works at the site thereof'
[emphasis added]
Consequently, there are numerous decisions discussing where to draw the line between construction employees and construction employees who "work at the site thereof'. Adjudicators and referees under the ESA have generally required that the employee be "predominantly employed" at the site of the employer's construction, alteration, demolition or maintenance work in order to be excluded from section 58(6)(c) and section 57. On that test, Mr. England would not be excluded; he was predominately employed at the fabrication shop. The Divisional Court in E.S. Fox and Martin Hagt(above) endorsed the "predominantly employed" test, rejecting counsel for the employer's argument that there was no legislative basis for it. The Court also answered counsel's argument that since Mr. Hagt fabricated components that were used exclusively at the construction sites for the employer, there is a close nexus between the work and the construction site, such that one could conclude Mr. Hagt worked "at the site thereof'. The Court said:
Such an interpretation ignores the literal meaning of the words of the Act. Subsection 2(e) of O. Reg. 327 and subsection 58(6)(e) specifically exclude those employees who are employed atconstrubtion sites. By necessity, employees employed away from the work sites are covered by the termination and severance pay provisions of the Act, even if their work product is incorporated into the construction or renovations at a remote work site
[emphasis added]
On the basis of the Divisional Court's decision in E.S. Fox and Martin Hagt, Mr. England would be entitled to severance pay. However, counsel for the employer asked me to look at the definition of construction in Regulation 325 to the Act, the General Regulation to the ESA. It defines "construction" without any reference "to the site thereof', and in counsel's view, would encompass the work performed by Mr. England at the shop. Counsel proposed that this more expansive view of construction should be my guide, because it can fit within the definitions in section 58(6)(e) and Section 2 of Regulation 327. But when I asked what I am to make of the continued existence of "at the site thereof', counsel asked me to conclude that it was intended only to delineate the locus of the work.
I reject this analysis for three reasons. Section 58(6)(e) gives a rather comprehensive definition of construction for the purposes of that section, leaving no reason to look elsewhere for a different definition. Similarly, section 2 of Regulation 327, which is the specific regulation in respect of termination, has a comprehensive definition of construction for the purposes of that regulation, leaving no reason to look elsewhere for a different definition. Further, nowhere does the ESA suggest that the definition of construction in Regulation 325 is to apply elsewhere. The definition of construction in Regulation 325 is different, because that Regulation determines the exemptions for different minimum standards. For example those engaged in "construction" as defined in Regulation 325 are exempted from hours of work and statutory holiday provisions. It is entirely reasonable that the legislators chose to define "construction" differently for different purposes.
I conclude therefore that Mr. England is not excluded from entitlement to termination and severance pay. At issue then, is the quantum. The parties are agreed that Mr. England is entitled to one week's pay in lieu of notice of termination. I so order.
The parties are not agreed on the amount of severance pay. At the request of counsel for the applicant, I will give the parties an opportunity to reach agreement on the amount of severance pay to which Mr. England is entitled. I will remain seized of this matter in the event that the parties have any difficulty with respect to remedy.