[1999] OLRB REP. NOVEMBER/DECEMBER 1110
2064-99-G United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Local 46, Applicant v. Trafalgar Mechanical Inc. and Irene Penkarski, Responding Parties
Construction Industry - Construction Industry Grievance - Employment Standards Act - Board finding that employer failed to deliver timely remittance reports and to make timely contributions with respect to health, pension and other funds required by collective agreement -Board directing employer to make required payments as calculated and to pay additional interest payment for delinquent contribution - Board, however, declining union's request to make order under the Employment Standards Act("ESA") against director of employer after concluding that contributions in issue do not fall within definition of "wages~~ under ESA
BEFORE: Mary Ellen Cummings, Alternate-Chair.
APPEARANCES: Melvin I Rothman and Don Hogarth for the applicant; no one appearing for the responding parties.
DECISION OF THE BOARD; November 17, 1999
1This is a referral of a grievance in the construction industry, pursuant to section 133 of the Labour Relations Act (the LRA). In addition to seeking recovery from Trafalgar Mechanical Inc. (the employer), pursuant to the collective agreement, the applicant seeks an order against Irene Penkarski in her capacity as a director of the employer, pursuant to the Employment Standards Act (the ESA).
2Although both the employer and Ms. Penkarski received notice of the claims against them, and notice of these proceedings, neither attended at the hearing. Consequently, the Board made its determination on the basis of the material provided by the applicant, pursuant to its powers in section 133 of the LRA.
3The applicant established that the employer is bound to the collective agreement between the applicant and the Metropolitan Toronto Plumbing and Heating Contractors Association.
4The applicant had alleged that the employer had failed to file contribution reports and make remittances for the period June 1999 to the present, contrary to Article 15 of the collective agreement. Prior to the hearing, the applicant received the following letter:
I am solicitor for Trafalgar Mechanical Inc. and have been provided with a copy of your letter of October 13, 1999 [the grievance]. My client confirms liability as follows:
- June 1999-440 hours $ 3,262.78 2. July 1999-600 hours 4,449.24 3. August 1999-248 hour 1,839.02 4. September 1999-248 hours . TOTAL $11,390.06
This outstanding sum shall be paid on or before November 12, 1999.
5Counsel for the employer did not seek an adjournment. The date for payment fell nearly two weeks after the hearing. Counsel for the applicant also noted that it had served Steve Zupanic, a principal of the employer, with a summons, and he had failed to comply with the summons. Counsel asked the Board not to take any action at this time with respect to the failure to appear.
6Counsel for the applicant asked the Board for an order in the amount of $11,390.06, based on the admission of liability. However, counsel reserved his right to seek to have this matter reconvened in the event it discovers that the employer owes more money for the months of June through October 1999. Counsel also asked the Board to order the employer to file its contribution reports for June to October 1999 so that the applicant can verify information with the employees, and so that the applicant can ensure that contributions are credited to the correct members.
7Counsel also turned the Board's attention to Article 16 of the collective agreement. It provides that when a contractor is in default in remitting payments, and the default continues for 10 days or more, the applicant is entitled to interest in the amount of 10%. The applicant asks me to award the interest. I am prepared to order interest on the remittances for June to September 1999, but at the time the hearing commenced, the employer was not in default of the October remittances for a period in excess of 10 days.
8Having regard to the foregoing, the Board makes the following declarations and orders with respect to the employer:
a) the employer is bound to the collective agreement between the applicant and the Metropolitan Toronto Plumbing and Heating Contractors Association.
b) the employer has violated Article 15 of the collective agreement in failing to deliver timely remittance reports and make timely contributions with respect to health, pension and other funds required by the collective agreement;
c) the employer is ordered to deliver to the applicant its contribution reports for the months of June to October 1999;
d) the employer is ordered to pay $11,390.06 to the applicant forthwith on account of remittances from June 1999 to October 1999. The applicant may return to the Board, in the event it determines the information provided by the employer is not accurate with respect to the number of hours worked by members in those months;
e) the employer is directed to pay interest on the June 1999 to September 1999 remittances, in the amount of $955.10. Such payment shall be made forthwith.
9The applicant also asked me to exercise my powers pursuant to section 64. 5 of the ESA to make an order against Irene Penkarski in her capacity as a director of the employer. Section 58.20 makes a director liable for "wages" on the following terms:
The wages that directors are liable for under this Part are wages, not including termination pay and severance pay as they are provided for under this Act, under a contract of employment, or under a collective agreement and not including amounts that are deemed to be wages under this Act.
10Section 1 of the ESA defines wages as "..any monetary remuneration payable by an employer to an employee...", then specifically excludes "contributions made by an employer to a fund, plan, or arrangement to which Part X of the Act applies."
11Section 33(1) [the first provision in Part X] sets out the plans to which the Part applies:
This Part applies to a fund, plan or arrangement provided, furnished, or offered or to be provided, furnished or offered by an employer to the employees,
a) under a term or condition of employment; or
b) in which an employee may elect to participate or not and to which the employee contributes or does not contribute, that directly, or indirectly provides benefits to the employees, their beneficiaries, survivors or dependents, whether payable periodically or not, for superannuation, retirement, unemployment, income replacement, death, disability, sickness, accident or medical, hospital, nursing or dental expenses, or other similar benefits or benefits under a deferred profit sharing plan in which employees participate in profits of the employer where the profits accumulated under the plan are permitted to be withdrawn
12The plans at issue in this case are the usual health and welfare, pension, training fund, supplementary employment benefit fund, and drug and alcohol program.
13I asked counsel for the applicant if I had the jurisdiction to make an order against the director. I asked whether the contributions to these plans fell within the definition of "wages". Counsel responded that the remittances were part of wages. He argued that outside the construction industry employers provide benefit plans, but in the construction industry, the union and employer agree on a wage rate, and the union and the employer than agree that an amount will be "deducted" from that wage at source, and remitted to the union. The union then hold these funds in trust, and allocates them to various funds, for the benefit of either the individual employee or all employees. In other words, these are not funds or plans "furnished...by an employer to employees...", but are funds and plans administered by unions on behalf of employees. Consequently, counsel asks me to conclude that fund and plan contributions are "wages", and as such, orders with respect to those amounts can be made against directors.
14This appears to be an issue of first impression, and it would have been helpful to have had the submissions of the director. However, I have concluded that the fund contributions in this collective agreement are not wages within the meaning of the ESA, but are "contributions to a fund, plan or arrangement to which Part X of the Act applies". Although it is true that the applicant administers the plans and funds, the contributions come from employers. Indeed this case is all about an employer's failure to remit the contributions in a timely way, and the applicant's efforts to require the employer to comply with its collective agreement obligations, and make the contributions. I also note, that the collective agreement wording with respect to each of the benefit plans begins with the words "each contractor shall contribute to the Local 46. While too much emphasis should not be placed on the parties' choice of words, the overall context appears more consistent with a regime in which employers contribute to plans, pursuant to a term or condition of employment (i.e. the collective agreement) which directly or indirectly, in this case under the administration of the union, provides benefits.
15Consequently, I have concluded that these contributions do not fall within the definition of "wages" under the ESA, and I cannot order that the director, Irene Penkarski, is liable for them.
DISPOSITION
16I make no order against the director, Irene Penkarski. I have made the following declarations and orders with respect to Trafalgar Mechanical Inc:
(a) the employer is bound to the collective agreement between the applicant and the Metropolitan Toronto Plumbing and Heating Contractors Association;
(b) the employer has violated Article 15 of the collective agreement in failing to deliver timely remittance reports and make timely contributions with respect to health, pension and other funds required by the collective agreement;
(c) the employer is ordered to deliver to the applicant its contribution reports for the months of June to October 1999;
(d) the employer is ordered to pay $11,390.06 to the applicant forthwith on account of remittances from June 1999 to October 1999. The applicant may return to the Board, in the event it determines the information provided by the employer is not accurate with respect to the number of hours worked by members in those months;
(e) the employer is directed to pay interest on the June 1999 to September 1999 remittances, in the amount of $955.10. Such payment shall be made forthwith.
17This matter is adjourned sine die. If neither party brings it on for hearing within one year of the date of this decision, the matter will be deemed to be terminated without further notice to the parties.